is the title of this Monday op ed in the New York Times. It is a well-reasoned and thorough piece, full of relevant links.
Krugman reminds us that inequality is not a new issue, starting with a reference to Oliver Stone's 1987 movie Wall Street with the famous Gordon Gekko quote "Greed is Good." While politicians may have shied away from addressing inequality, Krugman believes the election of Bill de Blasio in New York, Elizabeth Warren's endorsement of expanding Social Security, and President Obama's speech all serve to provide the possibility of a different political environment, one in which it becomes possible to take on the issue of inequality. And yet,
Still, the discussion has shifted enough to produce a backlash from pundits arguing that inequality isn’t that big a deal.
This is different.
The criciticism Krugman makes is not of the mindset that says austerity is the real issue, the need to balance our accounts. Instead he takes on those who argue that restoring economic growth is more important than worrying how the gains from that growth are distributed.
First of all, even if you look only at the direct impact of rising inequality on middle-class Americans, it is indeed a very big deal. Beyond that, inequality probably played an important role in creating our economic mess, and has played a crucial role in our failure to clean it up.Krugman views the real crisis of economic inequality to be political, pointing at the bipartisan consensus for financial deregulation (Glass Steagall was finally abolished under Bill Clinton although it had been whittled back for years) that underlay the financial crisis that so hurt ordinary Americans, most of whom have not yet recovered. Besides that, after the crash, our government rushed to bail out the banks.
Start with the numbers. On average, Americans remain a lot poorer today than they were before the economic crisis. For the bottom 90 percent of families, this impoverishment reflects both a shrinking economic pie and a declining share of that pie. Which mattered more? The answer, amazingly, is that they’re more or less comparable — that is, inequality is rising so fast that over the past six years it has been as big a drag on ordinary American incomes as poor economic performance, even though those years include the worst economic slump since the 1930s.
What do the pre- and postcrisis consensuses have in common? Both were economically destructive: Deregulation helped make the crisis possible, and the premature turn to fiscal austerity has done more than anything else to hobble recovery. Both consensuses, however, corresponded to the interests and prejudices of an economic elite whose political influence had surged along with its wealth.That is pretty direct.
It is also accurate as to both the politics and the financial impact.
Krugman points out that it is the wealthy who argue for cutting back the social safety net and they are the ones driving our policy debate. Here I think especially of the likes of Pete Peterson, but as an educator of the many billionaires who are seeking to destroy truly public education and to shift the resources to their profit-making entities.
In education, we regularly get folks bloviating about things they do not understand.
Krugman also has his criticisms of the chattering class:
Underlying some of the backlash against inequality talk, I believe, is the desire of some pundits to depoliticize our economic discourse, to make it technocratic and nonpartisan. But that’s a pipe dream. Even on what may look like purely technocratic issues, class and inequality end up shaping — and distorting — the debate.In education policy discussions, we have found the voices of professional educators excluded, along with those of parents and - yes - students.
When it comes to economics, those who are bearing the brunt of the economic burden are similarly excluded from the discussion.
Here I think it worthwhile to look at the Boston Globe piece by my friend Anat Shenker-Osorio, And then inequality happened which is subtitled "How Obama’s language left no one to blame." Her point is that by clever use of the passive voice Obama avoids placing blame where it belongs, on the banksters who created the mess, who have been bailed out at our expense, who fight like hell to avoid paying appropriate taxes, who negotiate to avoid criminal penalties for clearly illegal actions, and who now advocate cutting the programs that can enable the rest of us to survive.
I thought that caveat was necessary before looking at the final words from Krugman, which are:
So the president was right. Inequality is, indeed, the defining challenge of our time. Will we do anything to meet that challenge?If we are unwilling to name the disease, which is the greed of the financial sector;
If we are unwilling to require those who continue to make obscene amounts of money to pay fairly for the benefits they have clearly received from the tax dollars of all of us, then the answer to Krugman's question is clearly negative.
Inequality is one of many defining challenges of our time.
So is anthropogenic climate change.
So is the privatization of the commons.
We used to recognize that we needed to address inequality - of race, gender, and - yes - economics.
We had a New Deal, which probably kept the Communist party from flourishing the way it did in many Western European nations, and also may have prevented serious violence.
We had a Great Society, in part because we were shamed, starting before LBJ, with things like "Harvest of Shame" and the realization that a large portion of our country was still, decades after the words from FDR, ill-housed, ill-clad, and ill-nourished.
that our GINI index continues to rise demonstrating that inequality continues to grow at a time when corporate profits are at an all-time, when the concentration of wealth exceeds that of the Gilded Age, we are losing the American Dream.
Franklin Roosevelt worried about 1/3 of a nation.
We are approaching 1/2 of our public school children living in poverty.
Will we do anything about this?
Yet again I repeat the words of Hubert Humphrey,
It was once said that the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped.I look at the just negotiated budget deal, coming as it has after years of attacks on the social safety net in particular and the notion of government services in general, and say that we are failing that moral test.
Krugman has told us Why Inequality Matters from an economic standpoint.
Perhaps we need some politicians to recognize that it matters morally, and that if allowed to continue to expand it will inevitably mean the demise of the democratic republic in which we claim to live.