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

See also —

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.

http://www.youtube.com/watch?feature=player_embedded&v=ONEcoq9pjac#action=share

Charles Pierce:

My god, this is a kicking of the ass. Sooner or later, they’re going to realize that you really do have to bring the A-game on this stuff to the Senior Senator, or she is going to smile her Okie smile and the hook is going to come off the jab and, as the great Jimmy Breslin once put it, you will leave the ring in a blanket. She does mean business. Someone should start to believe that

Ben White and Tarini Parti write in Politico that some Dems are finally pushing back against the “debt crisis” myth.

These Democrats and their intellectual allies once occupied the political fringes, pushed aside by more moderate members who supported both immediate spending cuts and long-term entitlement reforms along with higher taxes.

But aided by a pile of recent data suggesting the deficit is already shrinking significantly and current spending cuts are slowing the economy, more Democrats such as Virginia Sen. Tim Kaine and Maryland Rep. Chris Van Hollen are coming around to the point of view that fiscal austerity, in all its forms, is more the problem than the solution.

I’ve always thought of Kaine as something of a milquetoast, so good for him.

Joe Weisenthal of that socialist rag Business Insider writes,

You might wonder what, exactly, is the big deal here. After all, Democrats haven’t been the ones pushing for spending cuts. Republicans have. But most of the time, Democrats have ceded the general point to Republicans that debt is a major problem, and that in some form or another, fiscal policy should focus on reducing that debt. The realization that growth is how you close the deficit and that austerity (because it saps growth) is counterproductive allows Democrats to form a counter-argument that doesn’t cede to the GOP’s premise. And that in itself is an important change in the debate.

Make no mistake that the data supports this concept.

He has line graphs. Do look.

Jared Bernstein writes,

Now, it’s surely the case that the spell isn’t as broken as all that–the force has been disturbed, the U-Mass team sprayed a heavy hose on the hair-on-fire austerions. But neither is Keynesianism about to break out all over.

Still, you gotta love the incredibly juicy irony of what’s going on. Nobel laureates, former Treasury officials, think tankers, yours truly and zillions of others have been trying to break through on this for years. Some bespectacled twenty-something comes along, and for a term paper–a term paper!–tries to replicate Rogoff and Reinhart’s study, he perseveres, gets some solid guidance from his profs, who happen not to genuflect at either the alter of austerity or the academic hierarchy (I’m afraid other profs might have shut the young man down)–and BOOM!

Somebody really needs to make a movie out of all of this someday.

I don’t think the debunking of Reinhart/Rogoff all by itself caused the partial collapse of the austerity myth. There were signs of disillusionment elsewhere, especially in Europe. The debunking may have been a tipping point, though. The myth isn’t dead, of course; it will be with us for a long time. But it’s nice to see the myth being challenged.

I disagree with White and Parti that this is going to hurt President Obama. The more Dems tell Republicans they can take their austerity and shove it, the weaker the Republican position. My sense of things is that the President is less pro-austerity than pro-get something passed, even if it isn’t what he wants.

See also “What if Simpson and Bowles threw a debt-reduction party and nobody came?”

Update: Krugman

Michael Lind, “Southern Poverty Pimps.”

Also: Greg Sargent, “GOP “makeover” hits a snag: Unwillingness to change”

This is an astonishing story I’ve been struggling to wrap my head around this morning as I wait for the coffee to drip.

“TED (Technology, Entertainment and Design) is a global set of conferences owned by the private non-profit Sapling Foundation, formed to disseminate ‘ideas worth spreading,’ says Wikipedia. In March, a venture capitalist from Seattle named Nick Hanauer gave a talk at TED on income inequality that clearly and succinctly destroyed all the BS talking points about the rich being “job creators.” Middle-class consumers are the real job creators, he said.

Most TED conference talks are published on the TED website for public viewing. But this one was embargoed for being too politically partisan. Over the past few hours several leftie bloggers and columnists such as Ezra Klein learned of this and gave TED a good smacking for being weenies. TED shot back that the charges against them are unfair; but they also admitted they embargoed the talk for being too politically partisan. So, yeah, they are weenies.

However, being weenies, they caved to pressure and released the talk. You must watch this:

The transcript is at National Journal.

And as you read or watch, remind yourself that this talk was considered too radical / controversial / partisan to be released to the public. And then email it to your wingnut uncle.

I knew I shouldn’t read Brooks’s most recent column, because he’s talking about the economy, and Brooks is always in over his head when talking about the economy. But then he’s in over his head about just about anything else, too. I suspect he could be quite the authority on many simpler things, such as cheese graters or crew socks, but anything that involves more than a couple of moving parts tends to confuse him.

Nevertheless I waded in, to find Brooks explaining that neither conservatives nor liberals really understand what’s wrong with the economy. But he has perceived that its problems are structural, not cyclical. “Fixing these structural problems should be the order of the day, not papering over them with more debt,” he says.

So what are these structural problems?

“First, there are those surrounding globalization and technological change. Hyperefficient globalized companies need fewer workers. As a result, unemployment rises, superstar salaries surge while lower-skilled wages stagnate, the middle gets hollowed out and inequality grows.”

I hadn’t noticed a need for fewer workers in those globalized companies, just cheaper ones, such as in Mexico or China.

There’s actually a free-market solution for that, though. Once there’s no middle class to play the role of “consumer,” the globalized companies won’t have any “consumers” around to buy their products, and the whole house of cards will collapse. A correction! Or, a depression!, depending on your point of view. But let’s go on.

“The United States, once the world’s educational leader, is falling back in the pack. Unemployment is high, but companies still have trouble finding skilled workers.”

I though they didn’t need workers? But is it true companies are having trouble finding skilled workers? I have heard of some isolated incidents, but I have a hard time believing this is a major trend.

“Over the decades, companies and other entities have implanted a growing number of special-interest deals into the tax and regulatory codes, making it harder for politically unconnected, new competitors, making the economy less dynamic.”

There may be something to this, but essentially it comes down to the big companies rigging the system to eliminate competition from smaller companies. Theodore Roosevelt had a similar problem to deal with, as I recall. In his case, government was the solution.

“These and other structural problems have retarded growth and wages for decades.”

Beside shipping jobs to Asia, what’s suppressing wages are a whole mess of other things, including the decline of unions, which Brooks doesn’t mention.

“Consumers tried to compensate by borrowing more. Politicians tried to compensate by reducing the tax bill, increasing deficit spending, ensuring easy credit for homebuyers”

Yes, blame the poor homebuyers, not predatory lenders, for the financial crash.

“… and by helping workers shift out of the hypercompetitive, globalized part of the economy…”

… since their jobs were lost forever to Bangladesh …

“…and into the less productive and more sheltered parts of the economy — mostly into health care, government and education.”

I hadn’t noticed that government was doing all that much to train people to take jobs in health care, government, and education, and in any case government jobs have been chopped all over the place lately. And I’m not sure what he means by “sheltered.” Is Brooks hallucinating?

“But you can only mask structural problems for so long. The whole thing has gone kablooey. The current model, in which we try to compensate for structural economic weakness with tax cuts and an unsustainable welfare state, simply cannot last. The old model is broken. The jig is up.”

Granted, the tax cuts aren’t doing a hoo-haw to get the economy moving, but the “unsustainable welfare state” is mostly a figment of the Right’s imagination. America is pretty chintzy on “entitlements” compared to a lot of other countries, but if Brooks can’t appreciate the structural role played by Medicare and Social Security and other props to keep the middle class from sinking into a third-world bog, then he truly is an idiot.

“Unlike the cyclicalists, we structuralists … “

“We structuralists.” That’s so … affected.

“… do not believe that the level of government spending is the main factor in determining how fast an economy grows. If that were true, then Greece, Britain and France would have the best economies on earth. (The so-called European austerity is partly mythical.)”

Translation: Brooks can’t believe genuine austerity is failing as badly as it is obviously failing in Yurp, so he assumes the Yurpeans must be doing it wrong. But the only partly mythical thing here is Brooks’s brain.

But let’s go back to “we structuralists do not believe that the level of government spending is the main factor in determining how fast an economy grows.” I don’t think anyone believes just spending a lot of money makes the economy grow. This is a fantasy the Right has pushed for ages; that the Left believes spending lots of money in and of itself is a good thing. If that were true, then let’s role the dice and use the entire federal budget to give ourselves vacations in France. That would certainly be great for the economy … of France.

What some of us believe is that if taxpayer money is invested in things like, oh, I don’t know — education, maybe. Brooks says we need a better educated workforce. Does he think the “free market” will take care of that? On what planet?

Make college more affordable, for example. Make student loans cheaper. Throw some money into failing public schools so that the buildings aren’t falling apart, class sizes are smaller, and at least some of the books in the library were published after 1989.

Throw some money at infrastructure issues such as the energy grid, roads, and bridges; plus information technology. Business needs this stuff to thrive, you know. Plus, it makes jobs.

Let’s go with a single-payer health care system, to get health care costs off the backs of business and prevent medical bankruptcy from ruining so many lives. Plus, a healthy workforce is a more productive workforce.

Invest in scientific research. All that pure science stuff is what provides the know-how for new products of the future.

Etc. etc. There are a few more paragraphs in Brooks’s column, but I lacked the strength to go further. Brooks is a freaking idiot.

I actually do agree with him that the ultimate problems are structural and not cyclical, but as I see it, the whole consumerist-capitalist economic system is unsustainable. We’re going to have to evolve into new economic models. But that’s hard to do when people conflate economic theory with religion. So I’m not hopeful.