This particular effort is especially notable for its slapstick conclusion, but we have to wait for that. The rest is too good to pass up. Selected quotes:
In the mid-19th century, socialists of various stripes asserted that capitalists grow richer while exploiting workers, who grow poorer. Today we hear that the gains from economic growth accrue to the highest-income earners while the standard of living of the poor and middle America stagnates and the gap between the richest and the poorest grows ever wider. That portrait of the country is wrong.I'm going to just leave it to your imagination why an out-of-the-blue reference to mid-1800s socialism found its way into a column about how workers these days have it just fine, thank you very much. If you hear the faint sound of ringing in your ears, you're on the right track. Anyway, after acknowledging that yes, all those studies on income inequality do exist and do show rising income inequality, those can be dismissed because:
(Continued after the fold.)
In the first place, studies that measure income inequality largely focus on pretax incomes while ignoring the transfer payments and spending from unemployment insurance, food stamps, Medicaid and other safety-net programs. Politicians who rest their demands for more redistribution on studies of income inequality but leave out the existing safety net are putting their thumb on the scale.So poor people are not in fact getting worse off because when they get worse off, we give them food stamps. That's exactly the sort of deep thinking I would expect from one of the guys who was convinced that we had to quickly spend the Clinton surplus on hemorrhaging tax cuts before we did anything crazy with it like repaving some roads or something.
Second and more important, it is well known that people's earnings in general rise over their working lifetime. And so, for example, a person who decides to invest more in education may experience a lengthy period of low income while studying, followed by significantly higher income later on. Snapshot measures of income inequality can be misleading.Yes. It's entirely possible that the reason wages have been stagnant for these past few decades is that all the workers took time off to get their bachelor degrees and simply haven't come back yet. Of course.
According to data from the Bureau of Labor Statistics' Consumer Expenditure Survey, if you sort households according to their pretax income, in 2010 the bottom fifth accounted for 8.7% of overall consumption, the middle fifth for 17.1%, and the top fifth for about 38.6%. Go back 10 years to 2000—before two recessions, the Bush tax cuts, and continuing expansions of globalization and computerization—and the numbers are similar. The bottom fifth accounted for 8.9% of consumption, the middle fifth for 17.3%, and the top fifth for 37.3%.Despite a crippling recession, poor workers still seem to be buying food and other necessities. The wealthy are also consuming much the same amount, percentage-wise, as they once were, perhaps indicating that no matter how many tax cuts you give a rich person, there is only so much crap that they can possibly manage to buy. This would seem to suggest that tax cuts on the wealthy are not, in fact, stimulative, because wealthy Americans only need one zircon-encrusted microwave oven per summer home no matter how many tax cuts you give them—but I digress.
While this stability is something to applaud, surely more important are the real gains in consumption by income groups over the past decade. From 2000 to 2010, consumption has climbed 14% for individuals in the bottom fifth of households, 6% for individuals in the middle fifth, and 14.3% for individuals in the top fifth when we account for changes in U.S. population and the size of households. This despite the dire economy at the end of the decade.Despite food and other necessities rising in price much faster than the official rate of inflation, poor people continue to insist on eating. They are goddamn slackers.
The percentage of low-income households with microwave ovens grew to 92.4% from 74.9% between 2001 and 2009. Fully 75.5% of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet through their phones.Prices of many appliances and electronic devices continue to drop, thus allowing their purchase by more people. Also too, the internet, am I right? This means low-income workers have it just fine, if not too damn good.
We would hazard a guess that if you were to ask a typical low-income American in 2009 if he would like to trade his house for its 2001 version, he would tell you to take a hike. How then is he worse off in 2009?Oh, sweet merciful crap. For one thing, he is more likely to be unemployed. For another, he is more likely to have had that house foreclosed out from under him and be living in his goddamn car, dipshit. Yes, yes, but houses have more rooms these days, so it all balances out.
All right, so let's get to the capper, the closing hand-waving that gives away the game and then some. The painful penultimate paragraph:
The data suggest the following picture. Over time, Americans have constructed a vast safety net that has adequately served the poor and helped them—as well as the middle class—to maintain significant consumption growth despite the apparent stagnation of cash incomes. The notion that a society that has accomplished such a feat is rigged or fundamentally unjust is ludicrous.So we're all agreed, then, that there has been an "apparent" stagnation of cash incomes. We're also agreed that we have an American safety net that helps hold the poorest of the poor barely above water, or at least attempts (not always successfully: see child hunger rates, homeless rates, etc.) to allow their families to continue to eat. And glory effing be, we agree that consumption is rising despite wages staying flat, which for some reason is apparently an indisputably good thing. All of this then is cited as justification that those stagnant wages must clearly be fine, the income inequality that we all have recognized is by definition "just," and clearly American workers just need to not feel so bitter about all that crap they have just gone through and keep going through. All right; so be it. But then we get to this, the final tell. The whole maudlin, hackish reason the column was presumably written, and the reason why calling Hassett one of the world's worst economists seems a damn plausible theory.
It is true that the growth of the safety net has contributed to massive government deficits—and a larger government that likely undermines economic growth and job creation. It is an open question whether the nation will be able to reshape the net in order to sustain it, but reshape it we must. We might make significant progress in that regard if those on the left would stop seeking political gain by inflaming class hatreds with misleading statistics.Let me translate. Ahem. You cannot call poor Americans worse off now or claim that inequality is getting more pronounced between rich and poor because we are giving the poor unemployment insurance and food stamps. We must now cut that unemployment insurance and those food stamps because of deficits, while leaving tax benefits for wealthier Americans untouched because jahb creatun. Therefore, everyone should stop inflaming class hatreds by pointing out that exact fucking thing I just said about further cutting aid to the poor in order to heap yet more benefits onto the rich, which I said was not happening right up until the moment I argued for exactly fucking that, once again, in the closing paragraph of my column telling you how that was not happening.
I am not sure if Mr. Hassett is truly as dumb as he appears to be, or if he is just convinced everyone else is. It is, however, pretty much exactly what you would expect from the very, very ridiculous adviser to the man who wants to cut taxes on the rich, shift that tax burden to the middle class, and then feign a deep outrage when anyone points it out.
In the wake of the massive hucksterism of the last decade, a hucksterism that the public only started to get deeply pissed off about after the Great Recession, when it became plainly obvious that no matter how deeply the recession was hurting the nation, the elite class was still doing just fine and then some, the only way the hucksters can continue selling their plans is if they convince workers that no, they have it just fine, regardless of what those workers have actually experienced. All the pension scandals, pay cuts, factory closings, increased job insecurity, worsening health benefits, worsening other benefits, and all of the rest of it are perfectly fine things, even compared to the massive cash transfers to the wealthy that have continued even as we have bailed out their companies and gotten told how we should expect jack-shit in return, because quite a few poor people these days have microwave ovens.
And isn't that good enough?