Krugman on the march:

Paul Krugman has an excellent article in Sunday's New York Times magazine about changing income distribution and the politics of wealth. Most of the ideas seem like they came straight out of Kevin Phillip's book (whom he mentions only once - at the end), but they are still potent. We read:

... the growing concentration of wealth has reshaped our political system: it is at the root both of a general shift to the right and of an extreme polarization of our politics.

For at least the past 15 years it has been hard to deny the evidence for growing inequality in the United States. ... Nonetheless, denial of that evidence is a sizable, well-financed industry. Conservative think tanks have produced scores of studies that try to discredit the data, the methodology and, not least, the motives of those who report the obvious. Studies that appear to refute claims of increasing inequality receive prominent endorsements on editorial pages and are eagerly cited by right-leaning government officials. Four years ago Alan Greenspan (why did anyone ever think that he was nonpartisan?) gave a keynote speech at the Federal Reserve's annual Jackson Hole conference that amounted to an attempt to deny that there has been any real increase in inequality in America.

This is the 1998 Greenspan speech Krugman is referring to. Excerpts:

One story that has emerged from that body of research is now familiar: Rising demand for those workers who have the skills to effectively harness new technologies has been outpacing supply, and, thus, the compensation of those workers has been increasing more rapidly than for the lesser skilled segment of the workforce.

Using data from the Consumer Expenditure Survey that the U.S. Bureau of Labor Statistics conducts, researchers have found that inequality in consumption, when measured by current outlays, is less than inequality in income. [Greenspan's emphasis]

As we consider the causes and consequences of inequality, we should also be mindful that, over time, the relationship of economic growth, increases in standards of living, and the distribution of wealth has evolved differently in various political and institutional settings. Thus, generalizations about the past and the future may be hard to make, particularly in the current dynamic and uncertain environment of economic change. We need to ask, for example, whether we should be concerned with the degree of income inequality if all groups are experiencing relatively rapid gains in their real incomes, though those rates of gain may differ.

WE NOTE THE FOLLOWING: When people start talking about consumption as a guage of inequality, it's a redirection from the issue at hand. The wealthy, having certain limits on time and energy, are unlikely to spend/consume all their money. So much of it is saved or invested, which gives them immense security and at times, influence (if they choose to use it). Consumption is a subset of economic activity. One could narrow it further and, for instance, speak of consumption for hygiene (CfH). The total number of bars of soap people use falls within a fairly narrow range - so, using CfH as a metric, there is equality throughout the land, and therefore no cause for concern. Busybodies like Krugman should stop their complaining.     (See how easy that was?)

The three things that Krugman refers to, "globalization'', ''skill-biased technological change", and ''superstar'' - which some claim are explanations for the inequality are precisely what Mickey Kaus wrote a decade ago (a New Republic article, and later a book - Amazon, B&N, review). Kaus will no doubt have something to say in response to Krugman's article.

More Krugman:

According to this story, highly paid C.E.O.'s really are worth it, because having the right man in that job makes a huge difference. The more pessimistic view -- which I find more plausible -- is that competition for talent is a minor factor. Yes, a great executive can make a big difference -- but those huge pay packages have been going as often as not to executives whose performance is mediocre at best. The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation and control many of the perks that board members count on. So it's not the invisible hand of the market that leads to those monumental executive incomes; it's the invisible handshake in the boardroom.

Much more than economists and free-market advocates like to imagine, wages -- particularly at the top -- are determined by social norms. [Give this man a Nobel Prize!]

[There have been] two huge changes in American politics. One is the growing polarization of our politics -- our politicians are less and less inclined to offer even the appearance of moderation. The other is the growing tendency of policy and policy makers to cater to the interests of the wealthy. And I mean the wealthy, not the merely well-off: only someone with a net worth of at least several million dollars is likely to find it worthwhile to become a tax exile.

As the gap between the rich and the rest of the population grows, economic policy increasingly caters to the interests of the elite, while public services for the population at large -- above all, public education -- are starved of resources. As policy increasingly favors the interests of the rich and neglects the interests of the general population, income disparities grow even wider.

Essentially what Krugman is saying is that the wealthy don't deserve the money they get. That those at the top have been rewarded, not through classic market systems (e.g. CEO supply and shareholder demand), but by alternate methods (connections¹, inheritance², deception³, and luck⁴). Also, the substantial wealth generated in the last decade or two was not "fairly" distributed within society.

The unanswered question is, what to do about it?

¹ The Bush brothers
² Richard Mellon Scaife
³ Wall Street analysts and assorted book-cooking
⁴ For example, if you got options in '99 and '00

posted by Quiddity at 10/19/2002 01:42:00 PM

Cheap shot:

Index Finger Length Can Predict Penis Size: Study

According to Greek scientists, the length of a man's index finger can accurately predict the length of his penis. The findings are published in the September issue of the journal Urology.

posted by Quiddity at 10/18/2002 08:28:00 PM

Sullivan reacts to the North Korea / nukes news:

Andrew Sulllivan churns out 307 words of his own in the wake of the news that North Korea has a nuclear program (and probably bombs). He mentions Clinton twice, The New York Times twice, McCain once, and ends up cheering Krauthammer. What's notable is that Sullivan has nothing to say about the Bush administration. Nothing about holding back the information prior to the big vote on use of force. Nothing about why one of the countries in the "axis of evil" wasn't examined more closely by the spy network. Nothing about Bush's easy-going approach to Pakistan (who provided key technology).

Nothing.

posted by Quiddity at 10/17/2002 11:19:00 PM

Is this true?

We took a quick look at Rush Limbaugh's website. Along with the predictable material, there was an item about Zogby. Rush doesn't like the numbers Zogby is reporting on the Florida governor's race, and now claims that he is "shucking and jiving for Democrats on every poll that he reports." Rush continues:

I hate to say this, because it was not always this way. Zogby even used to let me put some questions in his polls.

posted by Quiddity at 10/16/2002 12:06:00 PM

The Fleischer misdirect:

We read that:

President Bush does not support the push for firearms "fingerprinting" that has grown from the Washington-area sniper shootings, a spokesman said Tuesday, saying Bush is unconvinced of the technology's accuracy and is concerned about gun owners' privacy.

Besides, added White House press secretary Ari Fleischer, when it comes to new gun controls generally, "How many laws can we really have to stop crime, if people are determined in their heart to violate them no matter how many there are or what they say?"

"Stop crime?" That's a tall order, Ari. Maybe firearm fingerprinting won't stop crime. Maybe it will. Maybe it will merely reduce crime. But you can be sure of one thing, it will assist in finding the criminal. Even if the criminal manages to get a non-fingerprinted rifle, the police will be able to eliminate other suspects that have a fingerprinted weapon. But then, we're being logical.

Nice to see Bush concerned about privacy. Too bad it's only for gun owners.

posted by Quiddity at 10/15/2002 09:53:00 PM

It's official. Bush is nuts:

From Britain's Telegraph (via CalPundit):

"We will fight the war on terror on two fronts if need be," he said, repeating his insistence that there was a connection between al-Qa'eda and Saddam Hussein.

A two front war. Excellent. And this guy majored in history at college.

  Is this a scary photo, or what?

posted by Quiddity at 10/15/2002 03:11:00 AM

Fallwell apologizes for calling Mohammad a terrorist:

You've read the news. Once again Falwell apologizes for "certain statements of mine made during an interview for CBS's 60 Minutes [that] were hurtful to the feelings of many Muslims." But you see, according to Falwell, he "... answered one controversial and loaded question at the conclusion of an hour-long CBS interview which I should not have answered. That was a mistake and I apologize."

And who could forget Falwell's comment from a year ago when he said "the pagans and the abortionists and the feminists, and the gays and the lesbians who are actively trying to make that an alternative lifestyle, the ACLU, People for the American Way, all of them who have tried to secularize America, I point the finger in their face and say, 'You helped this happen'." Of course, he later said, "I would never blame any human being except the terrorists, and if I left that impression with gays or lesbians or anyone else, I apologize."

And before that, in 1999, Falwell said that, "... the Antichrist is a Jewish man who probably is alive today." Which was followed by - you guessed it: "I apologize to my Jewish friends here and around the world and I apologize to the Christians here for having created any kind of rift."

But this is nothing new. He's been at it for a long time. From Presidential Campaigns by Paul Boller (p 365):

1980 Carter / Reagan:

During the campaign, the Reverend Jerry Falwell, leader of the ultra-rightist Moral Majority, announced that he had a conference with the President in the Oval Office and the latter had told him homosexuals needed representation in the White House and he had several on his staff. But it turned out there had been no such conversation. Falwell had never even been in the Oval Office. Confronted by reporters, the Moral Majority leader admitted he had "fabricated" the tale.

We presume he apologized, but the book doesn't say.

Falwell knows what he's saying. The apologies are merely pro forma.

NOTE: We checked, and it appears that the Reverend did not apologize after his National Liberty Journal issued a parents alert that Tinky Winky had become a favorite character among gay groups.   Take that, Mr. Winky!

posted by Quiddity at 10/15/2002 01:44:00 AM

States' Rights when it pleases the Bush administration. And not when it doesn't.

We'll keep this short because it's so depressing.

California passed a law requiring a percentage of passenger vehicles to achieve zero emissions.

The federal Clean Air Act allows states to regulate auto emissions - and California has done so repeatedly in the past.

It is generally agreed that the federal law on fuel economy trumps all others; a state may not enforce a law related to fuel economy standards.

Automakers are opposed to California's zero emission law.

The Bush administration, supporting the automobile manufacturers in a 37-page filing with a federal appeals court, argued that California's zero emission mandate impinges on what is solely a federal responsibility. "The Energy Policy and Conservation Act provides that when a federal fuel economy standard is in effect, a state or a political subdivision of a state may not adopt or enforce a law or regulation related to fuel economy standards," the department argued.

Everybody got that? States may not legislate fuel economy, but are permitted to legislate emissions. Therefore California's zero emission requirement is unlawful.

How can anybody defend that reasoning? (Maybe someone from the Federalist Society can do it, but nobody with a sound mind.)

posted by Quiddity at 10/14/2002 11:24:00 AM

The Zini telegram:

We intend to begin on the first of February unrestricted airborne warfare in the Middle East. We shall endeavor in spite of this to keep Iran neutral. In the event of this not succeeding, we make Turkey a proposal or alliance on the following basis: make war together, make peace together, generous financial support and an understanding on our part that Turkey is to reconquer the lost territory in Syria, Jordan, and Saudi Arabia. The settlement in detail is left to you. You will inform the Prime Minister of the above most secretly as soon as the outbreak of war with Iran is certain and add the suggestion that he should, on his own initiative, invite Israel as a military partner. Please call the Prime Minister's attention to the fact that the ruthless employment of our air power now offers the prospect of compelling Iraq in a few weeks to make peace.

Signed, ZINI.

[FYI: Zimmerman telegram link is here]

posted by Quiddity at 10/13/2002 03:09:00 PM