DHE on Inequality
At yesterday’s debate with Austan Goolsbee, Doug Holtz-Eakin said the following on behalf of the McCain campaign:
[CORRECTION: This was during an appearance with Jason Furman on Bloomberg.]
So there arne’t any tax cuts for the wealthy in this and it’s not about concentrating income at the top. The reality is that we have seen not just in the United States but, as the OECD has now documented, across the blobe a widening wage distribution. It began in the ’80s with the top growing and getting more income and the bottom getting less. The bottom end stabilized in the 1990s. We’ve seen the top end continue to go up into the 21st century. The source of that is education.
Several points in response:
1. It’s odd to cite a time series in which the only the top does well during the 1980s and during the 2000s but there’s broadly shared prosperity during the 1990s as part of the case for electing a conservative president. Prima facie that data seems to back up the contention that electing progressives brings broad-based prosperity whereas electing conservatives concentrates wealth in the hands of the few.
2. Relatedly, the idea that inequality trends have no relationship to who holds the presidency is strongly at odds with the data:
3. While the OECD survey did indeed find a growing rich-poor gap in pretty much all countries, only a minority of countries — a minority that included the United States of America — are witnessing growth in the gap between the rich and the middle class.
4. Even if it is true that growing pre-tax inequality has nothing whatsoever to do with public policy, that would seem to strengthen the case that we should pay attention to the distributional consequences of changes in tax policy, not that we should become indifferent to them.
5. While there does seem to be an education-related component to the growth in inequality (specifically, the number of college graduates has not kept up with the growing labor market demand for college educated workers) there are also other factors, including the declining real value of the minimum wage and declining rates of unionization. In both cases, and all others I’m aware of, McCain takes the pro-inequality side.
6. McCain, breaking with longstanding conservative precedent, has decided that refundable tax credits such as the EITC constitute a form of “welfare” and “socialism” thus eliminating the possibility that he could embrace the traditional conservative alternative to minimum wage and unionization as a way to combat inequality.
7. You might think that someone who had identified increasing the proportion of college graduates in the population as the key to reducing inequality would have a higher education policy. You would be mistaken.
8. More generally on education, McCain’s proposed across-the-board spending freeze and opposition to federal assistance to cash strapped state government would have a devastating effect not only on schools, but kids’s nutrition, health care, and access to early childhood and prenatal services making these problems much worse.
I think that’s all I’ve got at the moment. It seems to me that conceptual space exists for a form of rightwingery that takes inequality seriously and would put forth policy solutions to the problem that differ from those preferred by the progressive establishment. I might even like some of those policy solutions. But to get there, you would need policymakers willing to take the issue seriously, not just kind of wave it away as if outcomes in the world have nothing to do with policy choices. If Doug Holtz-Eakin doesn’t think that policy decisions can impact this sort of issue, then why is he interested in getting involved in politics at all?
32 Responses to “DHE on Inequality”
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October 23rd, 2008 at 9:35 am
If Doug Holtz-Eakin doesn’t think that policy decisions can impact this sort of issue, then why is he interested in getting involved in politics at all?
Certainly not because someone paid him a bunch of money and let him be on TV…
October 23rd, 2008 at 9:35 am
Wow, whatever that chart is of goes down under Democrats, but shoots way up under Republicans. I guess the Republicans are doing something right.
(Just kidding. I know how to read the chart.)
October 23rd, 2008 at 9:40 am
Nice set of riffs. #4 is the one that continues to astonish me. Unless we just don’t give a shit about the overall well-being of our society (and not only its most impoverished parts–whose children’s fates are already stunted and scoured by the prevailing neglect of their needs), how can anyone possibly argue that in the face of this data we should not adopt MORE redistributionist tax and fiscal policies? I live in close enough proximity with the super-rich to see what it’s like to have millions and magnitudes more dollars at your disposal than you can really figure out how to spend to make your life existentially, psychologically, or materially better. At the same time, I live in close enough proximity to real poverty to see how it grinds away at people’s essential well-being.
So are we going to be more like Argentina, or are we going to be more like an OECD country? Are there even grounds for debate here among those who possess a shred of America’s traditional fabric of civic virtue? I really don’t think so. This is not a debate between sound, well-thought-out ideologies, but between common sense and a knee-jerk economic fundamentalism.
October 23rd, 2008 at 9:44 am
i think dhe is totally on to that thing with the education component.
i mean, i have a college degree, and i make over fifty thousand dollars.
but those people in the top 1-tenth of the top percentile? the ones making like 20 million per year?
every one of them has like 400 college degrees. a couple hundred b.a.s, and then at least two hundred j.d.s or mbas. sometimes a hundred of each.
what a fucking prick. he really just wants to flatly deny the existence of a self-perpetuating moneyed oligarchy in this country, doesn’t he? maybe because he works for the son of a son of an admiral, who wants to replace the son of a president who was the son of a senator.
October 23rd, 2008 at 9:51 am
What a complete load of…
I know DHE from his CFR days.
He was a tool then and he remains so.
October 23rd, 2008 at 9:54 am
“If Doug Holtz-Eakin doesn’t think that policy decisions can impact this sort of issue, then why is he interested in getting involved in politics at all?”–easy–he would like to prevent anyone else from doing anything about these issues. To have a positive impact through public policy would undermine everything DHE stands for and, thus, must be prevented.
October 23rd, 2008 at 9:57 am
What you have to understand is that the people who pull the strings of the Republican Party really don’t. And they’re also not smart enough to realize that if things get bad enough they go down with the ship along with the rest of us. They’re simply pigs.
October 23rd, 2008 at 10:06 am
> It’s odd to cite a time series in which the
> only the top does well during the 1980s and
> during the 2000s but there’s broadly shared
> prosperity during the 1990s as part of the case
> for electing a conservative president
Yeah, I remember in 1998 when unemployment in our county hit 0.9% (that’s right; nine-tenths of a percent) and McDonalds was offering $9/hr to new hires and $12/hour after 1 year. You know what? EVERYONE was better off, even the well-off.
Not Really
Admittedly, the only super-rich we had in that county were high-tech millionaires and they have a different attitude about what “better off” means than old-money Texans and Connecticuters. Comes from spreading all that wealth via bonues and stock options while still keeping a reasonably huge chunk for the idea guys I guess.
October 23rd, 2008 at 10:20 am
Really? Because the core of his health care reform plan is a refundable tax credit. Not that I would ever suggest a Republican is being hypocritical.
October 23rd, 2008 at 10:32 am
It’s not that the right wing doesn’t take inequality seriously. It’s that they LIKE inequality.
October 23rd, 2008 at 11:31 am
Indeed. It’s a feature, not a bug. Inequality just means good people are being rewarded and bad people are being punished. Any attempt to argue otherwise or do something about it is socialism and evil.
October 23rd, 2008 at 12:13 pm
It’s odd to cite a time series in which the only the top does well during the 1980s and during the 2000s but there’s broadly shared prosperity during the 1990s
We’ve been over this. Inequality increased under Clinton. Inequality decreased under Bush.
October 23rd, 2008 at 12:26 pm
I just want to point out that if we are concerned about the share of college educated workers in this country being too low, and thus partly driving inequality, we can address this one of two ways: increasing the number of college educated workers or decreasing the number of less-educated workers. Either one will increase the wages of the less-skilled vs. college workers.
We have 10+ million low skilled illegal immigrants in this country and get around another 500k every year. Can anyone propose a policy that would improve the college/non-college balance in this country faster and more cost effectively than reducing or reversing the flow of low-skill illegal immigrants?
I don’t have any particular axe to grind on this, but I think it is funny that progressives have this huge blind spot when it comes to the effect of illegal immigration on low-skill American workers. There are all of these issues that we care about that could be substantially improved by taking illegal immigrants out of the equation. But somehow it’s not PC to talk about.
October 23rd, 2008 at 12:46 pm
One wonders if Mixner ever gets tired of being a total fucking moron. It’s like he posts without any understanding of what he’s posting. Under Clinton everyone did well. The top a little better than the rest, but that’s expected. Under Bush we’ve had very poor policies leading to disaster, especially in the stock market recently, but also throughout the economy (see foreclosures, home for evidence).
In other words, Mixner’s asinine talking point means nothing. Pretty much what every post from Mixner means.
October 23rd, 2008 at 1:03 pm
Under Clinton everyone did well. The top a little better than the rest, but that’s expected.
No, everyone did not do well under Clinton. No, the top did not do “a little better” under Clinton. The top made out like bandits under Clinton. Clinton shifted total wealth massively away from the poor and middle class and into the hands of the rich. Bush shifted it back towards the poor and the middle.
October 23rd, 2008 at 1:58 pm
elle loco,
Unless we just don’t give a shit about the overall well-being of our society (and not only its most impoverished parts–whose children’s fates are already stunted and scoured by the prevailing neglect of their needs), how can anyone possibly argue that in the face of this data we should not adopt MORE redistributionist tax and fiscal policies?
Because there are arguments against such policies.
Are there even grounds for debate here among those who possess a shred of America’s traditional fabric of civic virtue?
Yes.
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