Brooks and Krugman

Bobo has produced an amazing piece of word salad.  It’s called “The Great Migration,” and he gurgles that as the winners of our meritocracy hold the reins of progressive power, they may struggle to mitigate the inequality their own ascendance has helped produce.  Nope, he’s not making any sense at all.  As usual he asks a few of the right questions and then turns reason on its head and produces exactly the wrong answers.  (Well, either that or he’s confused the words “meritocracy” and “plutocracy.”)  Prof. Krugman, in “Deficit Hawks Down,” says President Obama barely mentioned the budget deficit in his Inaugural Address, and that’s a very good thing.  Here’s Bobo:

One of the features of the Obama years is that we get to witness an enormous race, which you might call the race between meritocracy and government. On the one side, there is the meritocracy, which widens inequality. On the other side, there is President Obama’s team of progressives, who are trying to mitigate inequality. The big question is: Which side is winning?

First, there is our system of higher education, which is like a giant vacuum cleaner that sucks up some of the smartest people from across the country and concentrates them in a few privileged places.

Smart high school students from rural Nebraska, small-town Ohio and urban Newark get to go to good universities. When they get there they often find a culture shock.

They’ve been raised in an atmosphere of social equality and now find themselves in a culture that emphasizes the relentless quest for distinction — to be more accomplished, more enlightened and more cutting edge. They may have been raised in a culture that emphasizes roots, but they go into a culture that emphasizes mobility — a multicultural cosmopolitanism that encourages you to go anywhere on your quest for self-fulfillment. They may have been raised among people who enter the rooms of the mighty with the nerves of a stranger, but they are now around people who enter the highest places with the confident sense they belong.

But the system works. In the dorms, classrooms, summer internships and early jobs they learn how to behave the way successful people do in the highly educated hubs. There’s no economic reason to return home, and maybe it’s not even socially possible anymore.

The highly educated cluster around a few small nodes. Decade after decade, smart and educated people flock away from Merced, Calif., Yuma, Ariz., Flint, Mich., and Vineland, N.J. In those places, less than 15 percent of the residents have college degrees. They flock to Washington, Boston, San Jose, Raleigh-Durham and San Francisco. In those places, nearly 50 percent of the residents have college degrees.

As Enrico Moretti writes in “The New Geography of Jobs,” the magnet places have positive ecologies that multiply innovation, creativity and wealth. The abandoned places have negative ecologies and fall further behind.

This sorting is self-reinforcing, and it seems to grow more unforgiving every year. One small study caught my eye. Robert Oprisko of Butler University found that half of the jobs in university political science programs went to graduates of the top 11 schools. That is to say, if you have a Ph.D. from Harvard, Stanford, Princeton and so on, your odds of getting a job are very good. If you earned your degree from one of the other 100 degree-granting universities, your odds are not. These other 100 schools don’t even want to hire the sort of graduates they themselves produce. They want the elite credential.

Barack Obama (Occidental, Columbia, Harvard) benefited from this sorting system. So did his wife (Princeton, Harvard). So did most people in his administration. So did many people who read this newspaper and many of us who write for it.

Members of the administration have worked reasonably hard to mitigate the inequality that their own rise has produced. They’ve worked reasonably hard to redistribute money from the rich people in the magnet areas to the poorer people in the flight areas. For example, the health care law increases taxes on the top 1 percent by about $20,000 per household. It increases benefits for the working class by between $400 and $800 per household. The recent tax increases will do more of the same.

The first problem with the effort is that it’s like shooting a water gun into a waterfall. The Obama measures, earned after a great deal of political pain, simply aren’t significant enough to counteract the underlying trends.

The second problem is the focus on income redistribution. Recently, there’s been far more talk about tax increases than any other subject. But the income disparities are a downstream effect of the human capital and geographic disparities. Pumping a few dollars into San Joaquin, Calif., where 2.9 percent of the residents have bachelor’s degrees and 20.6 percent have high school degrees, may ease suffering, but it won’t alter the dynamic.

The final problem is that, in an effort to reduce the economic concentration of power, the administration is concentrating political power in Washington. If the problem is that talent is fleeing blighted localities, it’s hard to see how you make that better if decision-making and resources are concentrated faraway in the nation’s capital.

This is not to make a partisan point. The Republicans do not have a better approach. It’s simply to say that the liberal agenda is not very good at addressing the inequality problem it seeks to solve. The meritocracy is overwhelming the liberal project.

Yep.  He’s confused meritocracy with plutocracy…  Here’s Prof. Krugman:

President Obama’s second Inaugural Address offered a lot for progressives to like. There was the spirited defense of gay rights; there was the equally spirited defense of the role of government, and, in particular, of the safety net provided by Medicare, Medicaid and Social Security. But arguably the most encouraging thing of all was what he didn’t say: He barely mentioned the budget deficit.

Mr. Obama’s clearly deliberate neglect of Washington’s favorite obsession was just the latest sign that the self-styled deficit hawks — better described as deficit scolds — are losing their hold over political discourse. And that’s a very good thing.

Why have the deficit scolds lost their grip? I’d suggest four interrelated reasons.

First, they have cried wolf too many times. They’ve spent three years warning of imminent crisis — if we don’t slash the deficit now now now, we’ll turn into Greece, Greece, I tell you. It is, for example, almost two years since Alan Simpson and Erskine Bowles declared that we should expect a fiscal crisis within, um, two years.

But that crisis keeps not happening. The still-depressed economy has kept interest rates at near-record lows despite large government borrowing, just as Keynesian economists predicted all along. So the credibility of the scolds has taken an understandable, and well-deserved, hit.

Second, both deficits and public spending as a share of G.D.P. have started to decline — again, just as those who never bought into the deficit hysteria predicted all along.

The truth is that the budget deficits of the past four years were mainly a temporary consequence of the financial crisis, which sent the economy into a tailspin — and which, therefore, led both to low tax receipts and to a rise in unemployment benefits and other government expenses. It should have been obvious that the deficit would come down as the economy recovered. But this point was hard to get across until deficit reduction started appearing in the data.

Now it has — and reasonable forecasts, like those of Jan Hatzius of Goldman Sachs, suggest that the federal deficit will be below 3 percent of G.D.P., a not very scary number, by 2015.

And it was, in fact, a good thing that the deficit was allowed to rise as the economy slumped. With private spending plunging as the housing bubble popped and cash-strapped families cut back, the willingness of the government to keep spending was one of the main reasons we didn’t experience a full replay of the Great Depression. Which brings me to the third reason the deficit scolds have lost influence: the contrary doctrine, the claim that we need to practice fiscal austerity even in a depressed economy, has failed decisively in practice.

Consider, in particular, the case of Britain. In 2010, when the new government of Prime Minister David Cameron turned to austerity policies, it received fulsome praise from many people on this side of the Atlantic. For example, the late David Broder urged President Obama to “do a Cameron”; he particularly commended Mr. Cameron for “brushing aside the warnings of economists that the sudden, severe medicine could cut short Britain’s economic recovery and throw the nation back into recession.”

Sure enough, the sudden, severe medicine cut short Britain’s economic recovery, and threw the nation back into recession.

At this point, then, it’s clear that the deficit-scold movement was based on bad economic analysis. But that’s not all: there was also clearly a lot of bad faith involved, as the scolds tried to exploit an economic (not fiscal) crisis on behalf of a political agenda that had nothing to do with deficits. And the growing transparency of that agenda is the fourth reason the deficit scolds have lost their clout.

What was it that finally pulled back the curtain here? Was it the way the election campaign revealed Representative Paul Ryan, who received a “fiscal responsibility” award from three leading deficit-scold organizations, as the con man he always was? Was it the decision of David Walker, alleged crusader for sound budgets, to endorse Mitt Romney and his budget-busting tax cuts for the rich? Or was it the brazenness of groups like Fix the Debt — basically corporate C.E.O.’s declaring that you should be forced to delay your retirement while they get to pay lower taxes?

The answer probably is, all of the above. In any case, an era has ended. Prominent deficit scolds can no longer count on being treated as if their wisdom, probity and public-spiritedness were beyond question. But what difference will that make?

Sad to say, G.O.P. control of the House means that we won’t do what we should be doing: spend more, not less, until the recovery is complete. But the fading of deficit hysteria means that the president can turn his focus to real problems. And that’s a move in the right direction.

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