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Old 02-18-2013, 04:56 PM  
Direckshun Direckshun is online now
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The problem with conservativism in 2013.

The key problem that I believe conservativism has to face in 2013 and the near future is that it doesn't have an answer to what has become the most critical problem for the 21st century economy: inequality.

There has been a historical tendency over the past 15 years and three Presidents to concentrate more and more wealth with the wealthy, and less and less wealth with everybody else. Inequality is at all time highs on that front, and it gives the middle and lower classes less spending money, slogs down the economy, and ultimately splits the economic pie even greater into the hands of the few.

Liberalism has a whole host of solutions, bordering from the more free market tendencies of the Democratic Party and the mainstream liberal movement, to the more socialist suggestions frequently made by the party's left wing. Some of them can be argued as legitimately good ideas (raising the minimum wage, capping the multi-billion dollar tax breaks for huge corporations, any number of investments in college education), some of them are obviously more on the fringe.

Conservativism's answer seems to be singular and ineffective: get "government out of the way," undo the massive structure of government regulation, and the economy will grow. And like a rising tide that lifts all boats (think "trickle down" economics), as the economy grows, so too will the fortunes of the lower and middle classes. Honestly, if conservativism has more of a message than this right now with regards to inequality, I've missed it.

The problem with this message, and conservativism in general right now, is that it seems outdated for 2013. As the economy has grown at times throughout the past fifteen years, the middle class and working poor have seen less and a less of a return on that progress, and the upper class has soared. In other words, the absolute core conservative response to the biggest issue affecting working Americans in 2013 is no longer applicable. It had some bearing, perhaps, in previous decades, but we now reside in an era where this dynamic no longer holds water.

Economists are reportedly attempting to figure out why that is the case. A decrease in education quality seems, to me, to be the most convincing cause, although obviously this is something that deserves a holistic analysis.

But either way, I don't really see convincing analysis that growth is enough anymore. It seems that a reduction in inequality seems now to be just as important.

http://www.washingtonpost.com/busine...06b_print.html

Growth isn’t enough to help the middle class
By Jim Tankersley
Published: February 13

Two kinds of middle-class Americans are struggling today — people who can’t find any work or enough work, and full-timers who can’t seem to get ahead.

Democrats and Republicans prescribe economic growth to help both groups. There was a time that would have been enough. But not today.

In the past three recoveries from recession, U.S. growth has not produced anywhere close to the job and income gains that previous generations of workers enjoyed. The wealthy have continued to do well. But a percentage point of increased growth today simply delivers fewer jobs across the economy and less money in the pockets of middle-class families than an identical point of growth produced in the 40 years after World War II.

That has been painfully apparent in the current recovery. Even as the Obama administration touts the return of economic growth, millions of Americans are not seeing an accompanying revival of better, higher-paying jobs.

The consequences of this breakdown are only now dawning on many economists and have not gained widespread attention among policymakers in Washington. Many lawmakers have yet to even acknowledge the problem. But repairing this link is arguably the most critical policy challenge for anyone who wants to lift the middle class.

Economists are not clear how the economy got to the point where growth drives far less job creation and broadly shared prosperity than it used to. Some theorize that a major factor was globalization, which enabled companies to lay off highly paid workers in the United States during recessions and replace them with lower-paid ones overseas during recoveries.

There is even less agreement on policy prescriptions. Some liberal economists argue that the government should take more-aggressive steps to redistribute wealth. Many economists believe more education will improve the skills of American workers, helping them obtain higher-paying jobs. And still others say the government should seek to reduce the cost of businesses to create new jobs.

The problem is relatively new. From 1948 through 1982, recessions and recoveries followed a tight pattern. Growth plunged in the downturn, then spiked quickly, often thanks to aggressive interest rate cuts by the Federal Reserve. When growth returned, so did job creation, and workers generally shared in the spoils of new economic output.

You can see those patterns in comparisons of job creation and growth rates across post-World War II recoveries. Starting in 1949 and continuing for more than 30 years, once the economy started to grow after a recession, major job creation usually followed within about a year.

At the height of those recoveries, every percentage point of economic growth typically spurred about six-tenths of a percentage point of job growth, when compared with the start of the recovery. You could call that number the “job intensity” of growth.

The pattern began to break down in the 1992 recovery, which began under President George H.W. Bush. It took about three years — instead of one — for job creation to ramp up, even when the economy was growing. Even then, the “job intensity” of that recovery barely topped 0.4 percent, or about two-thirds the normal rate.

The next two recoveries were even worse. Three and a half years into the recovery that began in 2001 under President George W. Bush, job intensity was stuck at less than 0.2 percent. The recovery under President Obama is now up to an intensity of 0.3 percent, or about half the historical average.

Middle-class income growth looks even worse for those recoveries. From 1992 to 1994, and again from 2002 to 2004, real median household incomes fell — even though the economy grew more than 6 percent, after adjustments for inflation, in both cases. From 2009 to 2011 the economy grew more than 4 percent, but real median incomes grew by 0.5 percent.

In contrast, from 1982 to 1984, the economy grew by nearly 11 percent and real median incomes grew by 5 percent.

Today, nearly four years after the Great Recession, 12 million Americans are actively looking for work but can’t find a job; 11 million others are stuck working part time when they would like to be full time, or they would like to work but are too discouraged to job-hunt. Meanwhile, workers’ median wages were lower at the end of 2012, after adjustments for inflation, than they were at the end of 2003. Real household income was lower in 2011 than it was in 1989.

Obama alluded to the breakdown between growth and middle-class wages and jobs in his State of the Union address. “Every day,” he said, “we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills needed to do those jobs? And how do we make sure that hard work leads to a decent living?”

But outside of some targeted help for manufacturing jobs and some new investments in skills training, the proposals Obama offered focused comparatively little on repairing the relationship between growth and jobs, or growth and income. Obama’s boldest plans included increasing the minimum wage and guaranteeing every child a preschool education. Both aim largely at boosting poorer Americans and helping their children gain a better shot at landing the higher-paying jobs.

The Republican response to Obama’s speech did not appear to nod to the new reality at all. Sen. Marco Rubio (Fla.) said that “economic growth is the best way to help the middle class” and offered few job-creation proposals that appeared materially different from what Republican politicians have pushed since the 1980s.

Economists are still trying to sort out what broke the historical links between growth and jobs/incomes.

Economists are still trying to sort out what broke the historical links between growth and jobs/incomes.

Federal Reserve Bank of New York economists Erica Groshen and Simon Potter concluded in a 2003 paper that the recoveries from the 1990 and 2001 recessions were largely “jobless” because employers had fundamentally changed how they responded to recessions. In the past, firms laid off workers during downturns but called them back when the economy picked up again. Now, they are using recessions as a trigger to lay off less-productive workers, never to hire them back.

Economists at the liberal Economic Policy Institute trace the problem to a series of policy choices that, they say, have eroded workers’ ability to secure rising incomes. Those choices include industry deregulation and the opening of global markets on unfavorable terms for U.S. workers.

In the latest edition of their book “The State of Working America,” EPI economists argue that an “increasingly well-paid financial sector and policies regarding executive compensation fueled wage growth at the top and the rise of the top 1 percent’s incomes” at the expense of average workers.

Robert Shapiro, an economist who advised Bill Clinton on the campaign trail and in the White House, traces the change to increased global competition.

“It makes it hard for firms to pass along their cost increases — for health care, energy and so on — in higher prices,” he said. “So instead they cut other costs, starting with jobs and wages.”

Shapiro said the best way to restart job creation is to help businesses cut the costs of hiring, including by reducing the employer side of the payroll tax and pushing more aggressive efforts to hold down health-care cost increases.

Obama seems to have embraced an approach pushed by Harvard University economists Claudia Goldin and Lawrence Katz: helping more Americans graduate from college and go on to high-skilled, higher-paying jobs. It’s a longer-term bet. But as senior administration officials like to say, the problem didn’t start overnight, and it’s not likely to be solved overnight, either.

Last edited by Direckshun; 02-18-2013 at 05:09 PM..
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Old 02-22-2013, 04:17 PM   #181
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Originally Posted by patteeu View Post
Embarrassing. You should quit now.
Here is another:

http:// mjperry.blogspot. com/2010/09/us-poverty-rate-1959-to-2009.html

2. The poverty rate in 2009 was below the rate in 1982 (15%), 1983 (15.2%) and 1984 (14.4%) following the 1980 and 1981-1982 recessions.

3. The increase in the poverty rate (Table 5 in the report) associated with the recessions of the early 1980s was 3.8 percentage points (11.4% in 1978 to 15.2% in 1983), which is more than twice the 1.8 percentage point increase from 2007 (12.5%) to 2009 (14.3%).

The tax cut was in 1981. Poverty increased in 1981, 1982, 1983. The is absolutely not connection between cutting that top tax rate and a decrease in poverty in 1984.
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Old 02-22-2013, 04:19 PM   #182
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Originally Posted by patteeu View Post
I told you, I'm in agreement with the article you provided. It doesn't mean what you apparently think it means though. Big surprise.
You agree with this?

"The official poverty rate, which counts the number of people whose income falls short of some minimum level, did not come down as the economy rose. While poverty shrank by a quarter in those golden Kennedy-Johnson years, it was actually higher at the end of the Reagan boom than in 1979."

I thought you said poverty decreased.
Or are you failing at reading comprehension again?
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Old 02-22-2013, 04:22 PM   #183
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I take a road to work. I make twenty thousand year, that road helped me make twenty thousand. The owner, who needs that road to get to work, receive shipments, and bring in clients, makes over a hundred thousand. Who benefited more for the roads?

Or to put it another way, if society disappeared tomorrow, who would lose more? Me and my low income lifestyle, or the rich?
He pays for the roads. You use them for free.
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Old 02-22-2013, 04:25 PM   #184
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Except that I'm not wrong. That information is all present in the chart in post 77. There was a big upsurge in poverty at the end of the Carter administration and the beginning of the Reagan administration. Then Reagan reduced top rates and poverty declined. Just like I said it did.
That chart doesn't say what it think it says. It even shows child poverty ranks increasing during the 80's. Maybe you should look at it again.
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Old 02-22-2013, 04:51 PM
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Old 02-22-2013, 06:31 PM   #185
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Originally Posted by Loneiguana View Post
You agree with this?

"The official poverty rate, which counts the number of people whose income falls short of some minimum level, did not come down as the economy rose. While poverty shrank by a quarter in those golden Kennedy-Johnson years, it was actually higher at the end of the Reagan boom than in 1979."

I thought you said poverty decreased.
Or are you failing at reading comprehension again?
Yes, I agree with that. The poverty rate declined after Reagan cut top marginal tax rates. It's pretty easy to see in the graph in post 77.
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Old 02-22-2013, 09:04 PM   #186
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Just as average citizens benefit from the roads that they use, the courts to protect themselves from injustice, the police to protect them from harm, the education to go get that job and so on. Our nation's infrastructure does not exist only to aid the rich, and it's disingenuous to imply that our society only benefits them.
I never implied that the wealthy were the only ones to benefit from society.

When we look at the magnitude of the benefits the wealthy receive versus the magnitude of what the non-wealthy receive, it's quite clear who benefits more.
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Old 02-22-2013, 09:11 PM   #187
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I never implied that the wealthy were the only ones to benefit from society.

When we look at the magnitude of the benefits the wealthy receive versus the magnitude of what the non-wealthy receive, it's quite clear who benefits more.
I have always used a certain analogy when trying to explain who benefits more in such scenarios....

It's a pretty simple one;

Imagine you had to pay $2 for the $1 menu hamburger simply because you made more money than the guy in front of you and for no other reason?

You get the same hamburger, the same service, only you are paying twice as much.
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Old 02-22-2013, 09:13 PM   #188
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Mexico is definitely a third world country. There's no consideration required. "There are parts of it that fit the description" doesn't even make sense.
The World Bank classifies Mexico as an Upper Middle Income country. They are not a 3rd world country. They have financial markets and infrastructure.

Border cities do not make an entire country a 3rd world country.

Aside from US conservatives, I'd like to see you find someone credible to support your assertion that Mexico is a 3rd world country.
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Old 02-22-2013, 09:14 PM   #189
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I have always used a certain analogy when trying to explain who benefits more in such scenarios....

It's a pretty simple one;

Imagine you had to pay $2 for the $1 menu hamburger simply because you made more money than the guy in front of you and for no other reason?

You get the same hamburger, the same service, only you are paying twice as much.
That is a terrible analogy pete.
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Old 02-22-2013, 09:15 PM   #190
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That chart doesn't say what it think it says. It even shows child poverty ranks increasing during the 80's. Maybe you should look at it again.
Patty's not very good at charts.
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Old 02-22-2013, 09:17 PM   #191
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That is a terrible analogy pete.
Why? Does the truth sting a little too much for you?

Let's apply it in real terms.....I pay more to drive on the same roads as someone who makes less than me and for no other reason than I make more than them. Do I get any special rights for it? Do I get to take up more than 1 lane? Do I get to legally speed?

NO! The person who pays less than I do gets to drive on the same road with the same rules for less $.

That's just the reality and you cannot prove otherwise.
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Old 02-22-2013, 09:24 PM   #192
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I never implied that the wealthy were the only ones to benefit from society.

When we look at the magnitude of the benefits the wealthy receive versus the magnitude of what the non-wealthy receive, it's quite clear who benefits more.
When we look at the amount of money that the wealthy contribute, it's clear who pays more for those benefits.
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Old 02-22-2013, 09:27 PM   #193
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When we look at the amount of money that the wealthy contribute, it's clear who pays more for those benefits.
....of course they pay more, that have tremendously more. That doesn't change the fact that the magnitude of benefits that the rich receive is larger than those on the other end of the scale.
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Old 02-22-2013, 09:28 PM   #194
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Why? Does the truth sting a little too much for you?

Let's apply it in real terms.....I pay more to drive on the same roads as someone who makes less than me and for no other reason than I make more than them. Do I get any special rights for it? Do I get to take up more than 1 lane? Do I get to legally speed?

NO! The person who pays less than I do gets to drive on the same road with the same rules for less $.

That's just the reality and you cannot prove otherwise.
Truth pete? Just ignore that little pesky factor income.

It was a terrible analogy. This analogy is just as bad.
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Old 02-22-2013, 09:45 PM   #195
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I never implied that the wealthy were the only ones to benefit from society.

When we look at the magnitude of the benefits the wealthy receive versus the magnitude of what the non-wealthy receive, it's quite clear who benefits more.
How much is it worth to not have to send your kids to work in a sweat shop for 12 hours a day to make enough money to feed them? It's quite clear to me who benefits more.
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