Browsing the blog archivesfor the day Wednesday, September 19th, 2007.

How Did It Come to This?

Health Care

The AARP produced this video, which “tells the story of a real American family pushed to the brink of financial ruin by a personal health crisis.”

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Wingnut Alert

blogging, News Media

Watch ’em come unhinged when they see this.

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Losing Ground

American History, economy

The New York Times has dismantled the evil Times Select firewall (yay).

It’s also given Paul Krugman a blog, called “The Conscience of a Liberal.” Here’s the first post. It begins:

“I was born in 1953. Like the rest of my generation, I took the America I grew up in for granted – in fact, like many in my generation I railed against the very real injustices of our society, marched against the bombing of Cambodia, went door to door for liberal candidates. It’s only in retrospect that the political and economic environment of my youth stands revealed as a paradise lost, an exceptional episode in our nation’s history.”

That’s the opening paragraph of my new book, The Conscience of a Liberal. It’s a book about what has happened to the America I grew up in and why, a story that I argue revolves around the politics and economics of inequality.

He provides a thumbnail review of the past ninety or so years of the U.S. economy, divided into four periods, as shown on this chart:

Krugman says,

The chart shows the share of the richest 10 percent of the American population in total income – an indicator that closely tracks many other measures of economic inequality – over the past 90 years, as estimated by the economists Thomas Piketty and Emmanuel Saez. I’ve added labels indicating four key periods.

The four periods are the Long Gilded Age (which ended ca. 1937), the Great Compression (ca. 1937 to mid-1940s), Middle Class America (mid-1940s to late 1970s), and the Great Divergence (late 1970s to now).

I’ll get back to the Great Compression, but this is what Krugman says about the last couple of periods:

Middle class America: That’s the country I grew up in. It was a society without extremes of wealth or poverty, a society of broadly shared prosperity, partly because strong unions, a high minimum wage, and a progressive tax system helped limit inequality. It was also a society in which political bipartisanship meant something: in spite of all the turmoil of Vietnam and the civil rights movement, in spite of the sinister machinations of Nixon and his henchmen, it was an era in which Democrats and Republicans agreed on basic values and could cooperate across party lines.

The great divergence: Since the late 1970s the America I knew has unraveled. We’re no longer a middle-class society, in which the benefits of economic growth are widely shared: between 1979 and 2005 the real income of the median household rose only 13 percent, but the income of the richest 0.1% of Americans rose 296 percent.

Certainly, the Middle Class America period wasn’t perfect, especially since racial minorities were kept locked out. But if you’re as old as Krugman and I — I’ve got a couple of years on him, actually — you know that the American middle class ain’t what it used to be. Not even close. Relative share of wealth and, IMO, quality of life have declined in many ways. I see a whopping large chunk of American citizens struggling more and more frantically to maintain what they were brought up to think is a “normal” lifestyle.

But our ideas of “normal” came out of a period that Krugman calls “a paradise lost, an exceptional episode in our nation’s history.”

I’m going to skip Krugman for a moment and go to a Harold Meyerson column from last year (August 30, 2006).

Labor Day is almost upon us, and like some of my fellow graybeards, I can, if I concentrate, actually remember what it was that this holiday once celebrated. Something about America being the land of broadly shared prosperity. Something about America being the first nation in human history that had a middle-class majority, where parents had every reason to think their children would fare even better than they had….

…From 1947 through 1973, American productivity rose by a whopping 104 percent, and median family income rose by the very same 104 percent. More Americans bought homes and new cars and sent their kids to college than ever before. In ways more difficult to quantify, the mass prosperity fostered a generosity of spirit: The civil rights revolution and the Marshall Plan both emanated from an America in which most people were imbued with a sense of economic security.

That America is as dead as the dodo. Ours is the age of the Great Upward Redistribution. The median hourly wage for Americans has declined by 2 percent since 2003, though productivity has been rising handsomely. Last year, according to figures released just yesterday by the Census Bureau, wages for men declined by 1.8 percent and for women by 1.3 percent.

The increase of two-income families masked the inequality for a while; people with two incomes were able to maintain the same level of “normal” that one wage earner provided in earlier times. But now the two wager-earners are working longer hours, skipping vacations, and living from paycheck to paycheck. They are clinging to Middle Class-ness by their fingertips.

Back to Meyerson:

According to a report by Goldman Sachs economists, “the most important contributor to higher profit margins over the past five years has been a decline in labor’s share of national income.”…

…For those who profit from this redistribution, there’s something comforting in being able to attribute this shift to the vast, impersonal forces of globalization. The stagnant incomes of most Americans can be depicted as the inevitable outcome of events over which we have no control, like the shifting of tectonic plates.

Problem is, the declining power of the American workforce antedates the integration of China and India into the global labor pool by several decades. Since 1973 productivity gains have outpaced median family income by 3 to 1. Clearly, the war of American employers on unions, which began around that time, is also substantially responsible for the decoupling of increased corporate revenue from employees’ paychecks.

But finger a corporation for exploiting its workers and you’re trafficking in class warfare. Of late a number of my fellow pundits have charged that Democratic politicians concerned about the further expansion of Wal-Mart are simply pandering to unions. Wal-Mart offers low prices and jobs to economically depressed communities, they argue. What’s wrong with that?

Were that all that Wal-Mart did, of course, the answer would be “nothing.” But as business writer Barry Lynn demonstrated in a brilliant essay in the July issue of Harper’s, Wal-Mart also exploits its position as the biggest retailer in human history — 20 percent of all retail transactions in the United States take place at Wal-Marts, Lynn wrote — to drive down wages and benefits all across the economy. The living standards of supermarket workers have been diminished in the process, but Wal-Mart’s reach extends into manufacturing and shipping as well. Thousands of workers have been let go at Kraft, Lynn shows, due to the economies that Wal-Mart forced on the company. Of Wal-Mart’s 10 top suppliers in 1994, four have filed bankruptcies.

For the bottom 90 percent of the American workforce, work just doesn’t pay, or provide security, as it used to.

Devaluing labor is the very essence of our economy.


On the political side, you might have expected rising inequality to produce a populist backlash. Instead, however, the era of rising inequality has also been the era of “movement conservatism,” the term both supporters and opponents use for the highly cohesive set of interlocking institutions that brought Ronald Reagan and Newt Gingrich to power, and reached its culmination, taking control of all three branches of the federal government, under George W. Bush. (Yes, Virginia, there is a vast right-wing conspiracy.)

Because of movement conservative political dominance, taxes on the rich have fallen, and the holes in the safety net have gotten bigger, even as inequality has soared. And the rise of movement conservatism is also at the heart of the bitter partisanship that characterizes politics today.

I have a lot of thoughts as to why this happened, but those will have to wait for another post. For now I’ll just say that you probably have to be a geezer like me or Krugman to appreciate the difference between Then and Now. The Fall of the Middle Class happened gradually enough that it took some time before we realized that steadily increasing prosperity had been replaced by ceaseless struggling just to keep from sliding further. If the change from, say, the economy of 1967 to the economy of 2007 had happened over a five-year period there would have been rioting in the streets.

On the other hand, if your earliest memories are from after the 1960s, you might not see the difference. Righties — and I still say they are disproportionately Gen X-ers — get a little boost in their stock portfolios and think life is fine, but they’re not seeing the big picture.

Ezra Klein:

In some ways, the conversation over whether inequality is being driven by impersonal, technical forces or government policy is neither here nor there (at least on a policy level — politically, people use it to justify inequality as something organic, inevitable, and even beautiful — like the tides). We live in a regulated economy governed by both public and private institutions, so there’s no such thing as “natural” forces. Even if superstar CEOs are taking home billions, they’re still reliant on our system of contracts, and limited liability, and stock market regulation. In other words, what public policy giveth, public policy can taketh away. Few doubt that we have the tools — using something called “the tax code” — to engage in some redistribution. The question is whether we have the will.

I don’t think the tax code is the only tool we have, but it’s a start.

Very briefly I want to go back to the Great Compression. It’s interesting to me that the Compression began abruptly about seven or eight years into the Great Depression, which seems to me is an argument that the Great Depression was not a cause of the Compression, as this blogger argues. No doubt myriad factors were involved, and if I had more time today I’d go back to see exactly what New Deal policies were in place by 1936 or so that might have helped the Compression along. Yes, the industrial buildup during World War II was a huge factor, but that was instigated and overseen by the federal government during the FDR Administration.

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Do It

Bush Administration, Congress, Iraq War

About the Webb Amendment:

Senator Jim Webb (D-VA) today introduced a bi-partisan amendment to the National Defense Authorization Act requiring that active-duty troops and units have at least equal time at home as the length of their previous tour overseas. The amendment also sets a minimum 1-to-3 year ratio for National Guard and Reserve members and units.

Thirty-one members of the Senate have signed onto Webb’s amendment as original co-sponsors, including Senator Chuck Hagel, the lead Republican cosponsor. …

Senator Webb’s amendment sets a floor for minimum periods between deployments for both units and members. It states that if a unit or member of a regular component of the Armed Forces is deployed to Iraq or Afghanistan, they will have the same time at home—“dwell time”—before being redeployed. Guard and Reserve units and members will have a minimum floor of three years dwell time prior to being redeployed.

The amendment, however, states that the ideal rotation scenarios are a 1-to-2 deployment-to-dwell ratio for active duty troops and five years between subsequent deployments for the Guard and Reserve. The amendment also states the sense of Congress that units and members of Reserve components should not be mobilized continuously for more than one year.

John Amato:

Jim Webb made an exclusive video to explain why Congress must support the troops and pass the “Webb Amendment,” on Wednesday. He asks us to call our elected officials and tell them to support this very simple, but important measure. It received 56 votes last time it was introduced, but was filibustered by the Rubber Stamp Republicans which included McConnell and Warner.


The Webb Amendment is a powerful piece of legislation, backed by the Military Officers Association and many military families who are seeing their loved ones deployed over and over again until their marriages and their finances are at a breaking point. Although it may serve to force the administration to withdraw troops more quickly than they wish to, this is not a political ploy. Even before the surge, experts said that the Iraq war was breaking the military. Now it is far worse. Someone has to step in and do something about this problem and it’s obvious it isn’t going to be the Republican party.

Until today, it was looking very promising that Webb might get the 60 votes needed to override a filibuster. Vulnerable Republicans and those in states with a heavy military presence heard an earful from their constituents on this subject over the summer recess. But with His Eminence Warner now making little whimpering noises that he will accept the useless little Christmas sugar plum from the White House instead of backing it, he may give cover to enough wavering Republicans to derail this popular, necessary legislation.

Act for Change:

There is a lot of rhetorical abuse around the idea of supporting the troops. Well, Senators Webb (D-VA) and Hagel (R-NE) — both decorated veterans — have re-introduced legislation that is unambiguous on the subject. Anyone who votes against this bill is clearly a hypocrite who is simply supporting unending war.

Thanks to President Bush’s ill-conceived troop surge, our soldiers serving in Iraq face the daily stress of maintaining a military occupation under constant attack, all the while being away from their support network of friends and family for multiple — and often suddenly-extended — tours of duty.

Senators Webb and Hagel are introducing an amendment this week to provide relief for our overextended troops. It ensures that active-duty troops spend equal amounts of time at home between deployments as they did in a combat zone; it also mandates that Guard and Reserve units cannot be redeployed until they have been home for three times the length of their first tour of duty. This legislation will not only provide our troops with the rest & recovery periods they need and deserve; it will also clip President Bush’s wings and force him to begin drawing down the number of troops in Iraq.

Mark Kleiman:

The Democrats should offer the Webb Amendment when the Defense Appropriation comes up. If the Republicans want to filibuster, fine. Don’t pull the amendment. Just let them keep filibustering. As long as the amendment is on the floor, there can be no vote on the bill itself. Keep calling cloture votes, one per day. After a few days, start asking how long the Republicans intend to withhold money to fund troops in the field in order to pursue their petty partisan agenda.

If the Republicans in the Senate hold firm, it’s their stubbornness that’s holding up the bill. If they fold, and the bill gets to the President’s desk and he vetoes it, then pass the same damned bill again. And start asking how long the President intends to block funding for troops in the field in order to pursue his petty partisan agenda.

As of October 1, there’s no money to fund the war. So the usual move is to pass a continuing resolution, which keeps the money flowing until the appropriation passes. Fine. Pass a continuing resolution with the Webb Amendment attached. If the CR runs into a filibuster or a veto, ask how long …

Really, this isn’t very hard. With the voters overwhelmingly interested in getting us the hell out of Iraq, the Democrats can make full use of the power of the purse without worrying about a backlash, especially with Webb as the public face of the campaign.

Me: There’s also a “write your senators” form on this page. Do it. Do it this morning.

Please call and ask these senators to support Jim Webb’s pro-troop amendment:

Lisa Murkowski (R-Alaska)
DC: 202-224-6665
Anchorage: 907-271-3735

George Voinovich (R-Ohio)
DC: (202) 224-3353
Cleveland: (216) 522-7095

Elizabeth Dole (R-North Carolina)
DC: 202-224-6342
Raleigh: 866-420-6083

John Warner (R-Virginia) *
DC: (202) 224-2023
Roanoke: (540) 857-2676

Mitch McConnell (R-Kentucky)
DC: 202-224-2541
Louisville: 502-82-6304

Arlen Specter (R-Pennsylvania)
DC: 202-224-4254
Harrisburg: (717) 782-3951

Bonus – Ask Harry Reid to “don’t let Republicans obstruct – make them stand and filibuster”:

Harry Reid
DC: 202-224-3542
Las Vegas: 702-388-5020

* Warner originally supported the bill, but yesterday word got out that he is reconsidering. The President has made noises about bringing a few thousand troops home by Christmas, and “There is a lot of importance in that,” Warner says. However, the troops designated to come home before Christmas were scheduled to come home before Christmas, anyway. Bush isn’t giving away a damn thing. And the fact that some troops are coming home doesn’t relieve the exhaustion of those who remain. Warner needs to hear that some of us know a scam when we see it.

See also: Taylor Marsh.

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