Krugman’s Blog, 1/26/13

He heads up his first post, “What We Have Less Of,” with a video, so here’s the link:

Pretenders — Time The Avenger

Now on to the post itself:

Matthew Yglesias asks a very good question — but I have a pretty good answer.

Yglesias asks, if the middle class is under pressure, what exactly is it that ordinary American families have less of (or rather, had less of before the Great Recession struck). After all, people do seem to have more stuff.

But one important answer is, they have less time — specifically less family time.

Here’s one estimate (pdf):

Now, you might be tempted to say that something like this was bound to happen along with social changes that led to more women in the paid working force. But the sharp increase in total hours worked per family didn’t have to happen; more female labor force participation could have been offset by shorter working hours. In fact, that’s exactly what did happen in Europe; at this point major European nations, France in particular, have fully matched the US in employment rates for both male and female prime-age adults:

But the Europeans have steadily reduced working hours as labor force participation rises, so that they have not seen an equivalent loss of family time. From the Total Economy Database:

So what we have is a situation in which American families have more stuff, but they have managed to afford that stuff only by being two-income families, with ever less family time — unlike their European counterparts, who have gained in shorter hours and vacations what they lost in stay-at-home wives.

It’s not hard to think of reasons for this divergence; many of them come down to sharply rising inequality and the raterat race this inequality creates. More on that in later posts.

The second post of the day is “Populism, Republican Style:”

The recent speech by Bobby Jindal, Louisiana’s governor, has drawn a fair bit of attention. Conservatives would have you believe that it marks the start of real GOP reform; but the reality, as Andy Rosenthal says, is that Jindal wants to change the jingle in the commercial without changing the product.

And if you want a clear demonstration of that point, compare Jindal’s words and deeds. Here’s what he just said:

We must not be the party that simply protects the well off so they can keep their toys. We have to be the party that shows all Americans how they can thrive. We are the party whose ideas will help the middle class, and help more folks join the middle class. We are a populist party and need to make that clear.

And here’s what he recently did:

Louisiana Governor Bobby Jindal (R) recently rolled out a plan to replace his state’s personal income and corporate taxes with an increased sales tax. Such a move would shift taxes from the rich to the poor, who are disproportionately hit by the sales tax.

According to an analysis by the Institute on Taxation and Economic Policy, Jindal’s plan will raise taxes on the bottom 80 percent of Louisianians, while cutting them for the richest 1 percent:

– The bottom 80 percent of Louisianans in the income distribution would see a tax increase from repealing the personal and corporate income taxes and replacing them with a higher sales tax.

– The poorest 20 percent of taxpayers, those with an average income of $12,000, would see an average tax increase of $395, or 3.4 percent of their income, if no low income tax relief mechanism is offered.

– The middle 20 percent, those with an average income of $43,000, would see an average tax increase of $534, or 1.2 percent of their income.

– The largest beneficiaries of the tax proposal would be the top 1 percent—a group with an average income
of well over $1 million. Louisianans in the top 1 percent would see an average tax cut of $25,423, or 2.3 percent of their income under the plan described above.

I guess there is some innovation here: finally, Republicans have stopped being the party that only want tax cuts, and have started becoming the party that wants to cut taxes for the rich while raising them on ordinary families. Populism!

Next, and the last post of the day, is “WWS 594E, Economics of the Welfare State: Preliminary Readings:”

Still updating here, in particular looking for more reasonable critiques of social insurance programs. But here’s the preliminary syllabus (pdf).



One Response to “Krugman’s Blog, 1/26/13”

  1. Says:

    Krugman’s Blog, 1/26/13 « Marion in Savannah…

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