The NY Times isn't exactly a revolutionary left-wing publication -- and while columnist Paul Krugman routinely talks about the income and wealth divide, it's not typically a staple of how the Times cover the news. But David Leonhardt is starting a blog on the decline in the middle class and is going to turn it into an article during the later parts of the presidential campaign -- and amazingly enough, he's got it pretty much right:
In addition to the slow growth in overall size of the pie, the share that has been going to anyone but the richest Americans has been declining. The top-earning 1 percent of households now bring home about 20 percent of total income, up from less than 10 percent 40 years ago. The top-earning 1/10,000th of households — each earning at least $7.8 million a year, many of them working in finance — bring home almost 5 percent of income, up from 1 percent 40 years ago. In the simplest terms, the relatively meager gains the American economy has produced in recent years have largely flowed to a small segment of the most affluent households, leaving middle-class and poor households with slow-growing living standards.
It's simple, and it's pretty clear -- as is the fact that it's not random but the result of specific policies. From one of the (many intelligent) comments (my trolls, please take note):
The middle class is an artificial construct, something deliberately created through the enactment of policy. It emerged in the U.S. largely because of political, economic and social changes that were imposed: the New Deal, the Great Society, the creation of the suburbs and highway systems, strong unions that demanded fair wages and protections, etc. All of these developments happened only because people willed them and fought to ensure economic expansion benefited regular people. It could have just as easily gone the other way; indeed, it IS going the other way now (and has been for the last 30 years or so). The choices today are different: to let the markets decide, to deregulate and bolster corporations, to exacerbate the wealth divide, to enforce an unfair tax system, to shift essential costs (healthcare, environmental remediation, etc.) to the taxpayer, and so on. And so the middle class erodes. It should come as no surprise.
What's talked about less in this NYT piece is the role of government in redistributing income. The idea that the US tax system should take more than half of the income people earn beyond a certain point is hardly radical; as early as the 1920s, the highest earners turned over as much as 70 percent to the government -- and unlike today's billionaires, they actually paid it. The JP Morgans of the world got really really rich AND paid high taxes AND gave a lot of money to public enterprises (public libraries, public museums etc.).
That as much as unionization and post-War industrialization created the middle class.
Another interesting comment:
Our "free-market" policies of the last 30 years have favored efficiency and productivity above all else. The result has been sending American jobs overseas on a massive scale. Now we have inexpensive tee-shirts and computers, but vast unemployment and underemployment. Instead, I believe our culture should favor creating as many high paying middle-class jobs as possible without regard to "productivity". This requires protective trade barriers. Yes, prices will go up, but for a more affluent society, it's a cheap price to pay.
Obama talks a good line about the middle class, but he's not offering any specific ideas that would fundamentally change the direction of US economic policy. In fact, the biggest issue in the campaign isn't even an issue.
Oh, and by the way: I have to note that Randy Shaw at BeyondChron is now talking about the important of "class diversity." He's right -- there need to be more tenants (and working-class tenants) on the Planning Commission and Board of Appeals. There also needs to be a consciousness of class issues in general at City Hall -- and a discussion of how policies that favor high-tech companies, like those of his beloved Mayor Lee, are pretty clearly NOT in the interests of protecting class diversity in the city.