Krugman Explains It All

The federal government is basically an insurance company with an army.” Nice.

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In any case, however, whatever is causing the growing concentration of income at the top, the effect of that concentration is to undermine all the values that define America. Year by year, we’re diverging from our ideals. Inherited privilege is crowding out equality of opportunity; the power of money is crowding out effective democracy.

So what can be done? For the moment, the kind of transformation that took place under the New Deal — a transformation that created a middle-class society, not just through government programs, but by greatly increasing workers’ bargaining power — seems politically out of reach. But that doesn’t mean we should give up on smaller steps, initiatives that do at least a bit to level the playing field.

Take, for example, the proposal by Bill de Blasio, who finished in first place in Tuesday’s Democratic primary and is the probable next mayor of New York, to provide universal prekindergarten education, paid for with a small tax surcharge on those with incomes over $500,000. The usual suspects are, of course, screaming and talking about their hurt feelings; they’ve been doing a lot of that these past few years, even while making out like bandits. But surely this is exactly the sort of thing we should be doing: Taxing the ever-richer rich, at least a bit, to expand opportunity for the children of the less fortunate.

9 thoughts on “Krugman Explains It All

  1. Conservative Plutocrats POV:
    It’s not the 1/2% tax increase.
    I mean, in a month, that’s not even a day’s worth of tipping money – and that’s if we’re cheap tippers. Which, of course, most of us are.

    It’s the principal of the damn thing!!!

    We worked hard to be born into the right families.
    And our families worked hard getting us into the best private schools and colleges – so that we’d have good connections.
    And then, if we weren’t able to use our school contacts to find great jobs, our families had to call in favors from other entitle… hard working familes!
    And our families worked hard, setting up trust funds for us – so that, no matter how dim we are, or how drunk and/or high we are, we can’t blow through all of our money in one lifetime.
    Goddammit!
    THAT’S a lot of hard work, for us, and by our families!
    And then, we’ve got to show up at our jobs once in awhile – even if only to keep up the charade!

    Tax the riff-raff to help out the riffier-farrier, and leave us alone.
    We didn’t tell them to be poor, or middle class!
    They CHOSE to be that!
    Now, let them pay for the consequences of their actions!!!

  2. “Taxing the rich” has an interesting (to me) side effect, as long as the tax laws are structured accordingly by providing an opportunity to offset those taxes by starting businesses, among other opportunities. Starting a business may mean providing job opportunities and, ultimately, dispersing cash to a community in a more acceptable form than going through government.

    Just sayin’

  3. I don’t think taxation has nearly as much about starting a business as some would have youthink. Starting a business is more about timing and location, and of course, the potential for growth and profit. At the bottom wrung, starting a business is just having gainful employment.
    This stinking “mini-pad” is testing me patience!

  4. Ughhh. Jeez. I can hear the whine of “But that’s socialism” already. I keep wondering whether there’s not a better way to explain the part about

    But surely this is exactly the sort of thing we should be doing: Taxing the ever-richer rich, at least a bit, to expand opportunity for the children of the less fortunate.

    That works for me as does the reason I’ve heard with regard to founding fathers which is that “We’ll have no kings in America.” I’m not averse to some better marketing en route to a tipping point.

    Every problem is due to some other problem and most people tend to focus on symptoms rather than causes. Isn’t this partly a symptom of unabated consolidation as are the engineered financial calamities from which the very few profit as the misery of others fuels their profits? I wonder about addressing the system itself rather than the people who profit from it. That’s been done before with regulation that has since been demolished — FCC media ownership and antitrust etc.

  5. Yeah, like Wall Street is going to pick up and move to Detroit if they’re forced to give something back.

    I wonder, is de Blasio going to tie Lhota to the irresponsibility of the Republicans in Washington? I mean, what’s worse for rich New Yorkers, having to pay slightly higher taxes or a default on the national debt?

  6. Here’s how one famous New York Republican put it:

    The man of great wealth owes a peculiar obligation to the state because he derives special advantages from the mere existence of government.

  7. erinyes – The key metric in a serious business startup is the anticipated need. Will customers buy the product or service. Krugman has worn himself out on this point. All the austerity economics ignore that CONSUMPTION drives economic growth.

    The stagnation in wages and the stagnation in the economy are married metrics. People with needs and no money can’t buy anything more than essentials. It doesn’t matter HOW you do it but to get the economy rolling, you have to get money to the BOTTOM of the economic strata. Those people have to buy. The economic falicy of feeding the top 1% is that – they won’t spend any break you give them. They will stash it or reinvest globally in an emerging economy. But they don’t spend more because they earn more – thus they don’t feed the essential component of CONSUMPTION.

    To clarify, I am not advocating a permanent welfare state as a solution. Getting money to the BOTTOM is a way of priming the pump, so to speak – spurring spending which translates into a need to produce. This works even better if we stop giving the international corporations a blank check to take manufacturing to third world countries. The promise of no import taxes is an invitation to outsource what COULD made HERE.

  8. I think we should make a deal with the Wall Street kings: “we’ll let you enjoy tax-free status for the next 50 years, in exchange for which you pay back the $16 trillion in bailouts you’ve received since late 2008.”

    I bet they’ll change the topic faster than you can say “socialism” if you put it that way.

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