Krugman, a must read, on the cause of current polarization

[Hamlette]

So what's our bitter partisan divide really about? In two words: class warfare. That's the lesson of an important new book, "Polarized America: The Dance of Ideology and Unequal Riches," by Nolan McCarty of Princeton University, Keith Poole of the University of California, San Diego, and Howard Rosenthal of New York University.

snip

What the book shows, using a sophisticated analysis of Congressional votes and other data, is that for the past century, political polarization and economic inequality have moved hand in hand. Politics during the Gilded Age, an era of huge income gaps, was a nasty business — as nasty as it is today. The era of bipartisanship, which lasted for roughly a generation after World War II, corresponded to the high tide of America's middle class. That high tide began receding in the late 1970's, as middle-class incomes grew slowly at best while incomes at the top soared; and as income gaps widened, a deep partisan divide re-emerged. Both the decline of partisanship after World War II and its return in recent decades mainly reflected the changing position of the Republican Party on economic issues.

Before the 1940's, the Republican Party relied financially on the support of a wealthy elite, and most Republican politicians firmly defended that elite's privileges. But the rich became a lot poorer during and after World War II, while the middle class prospered. And many Republicans accommodated themselves to the new situation, accepting the legitimacy and desirability of institutions that helped limit economic inequality, such as a strongly progressive tax system. (The top rate during the Eisenhower years was 91 percent.) When the elite once again pulled away from the middle class, however, Republicans turned their back on the legacy of Dwight Eisenhower and returned to a focus on the interests of the wealthy. Tax cuts at the top — including repeal of the estate tax — became the party's highest priority.

But if the real source of today's bitter partisanship is a Republican move to the right on economic issues, why have the last three elections been dominated by talk of terrorism, with a bit of religion on the side? Because a party whose economic policies favor a narrow elite needs to focus the public's attention elsewhere. And there's no better way to do that than accusing the other party of being unpatriotic and godless.

http://select.nytimes.com/2006/06/19/opinion/19krugman.html?hp (behind the wall so I don't think the link works...)

[babylonsister]

1. If you can, check out Democracy Today today; they're

airing his most current speech on class warfare.

[glitch]

34. Democracy Now

http://www.democracynow.org/

[babylonsister]

37. Oops, that WAS a glitch!

:hi:

[glitch]

40. Forgot to thank you for the post - Krugman on Democracy Now is choice

listening!

[ulysses]

2. excellent points.

K&R.

[ProfessorGAC]

3. There's A Huge Mistake In This Article

To whit, this quote: "Before the 1940's, the Republican Party relied financially on the support of a wealthy elite, and most Republican politicians firmly defended that elite's privileges. But the rich became a lot poorer during and after World War II, while the middle class prospered."

In fact, over this period, the number of millionaires increased as a percent of population like no other period in world history! And, the very rich became billionaires in this period, when prior to WWII, there were none! (OK, Rockefeller and Carnegie would have been had they still be alive.)

It's simply untrue that the rich became less rich, because the explosion of scale and spending power of the middl class meant that hundreds and thousands of big companies were flush with cash due to middle class consumption. That means high profits and huge returns for the investor class.

So, the middle class getting huge and powerful did NOT make rich people less so. Just not true. I'm usually pretty in line with Krugman, but he and his source are wrong about this.
The Professor

[Armstead]

8. I think that's a point that gets lost

Duiring the period that the middle class was expanding and when liberal protections and safety nets were in place, businesses and the wealthy also gained.

That era puts the lie to the GOP claims that helping the population as a whole get ahead is contrary to the interests of business and the overall economy. What's more accurate than that is the phrase "Everyone does better when EVERYONE does better."

The problem, IMO, is that the wealthy and corporate business sector are never satisfied. They didn't like seeing the overall pie grow in proportion. They wanted more of the pie. So in the 1970's they began a concerted attack on the very policies and values that had broadened the base of prosperity. They began attacking the minimum wage -- and the whole notion of fair wages overall -- as well as undermining things like anti-monopoly regulation in their campaign to roll back the clock to the Gilded Age.

They managed to turn the population against its' own interests, through such double-talking mantras like "Allow us to reduce competition to maintain competition" and "Let us cut your wages so you will have a higher standard of living."

This turned a moderate concensus into class warfare.

[leftofthedial]

9. not to quibble, but

the increase in millionaires was fueled mainly by a rise (for pretty much the only brief time in American history) of large numbers of people changing class, that is, the poor and middle classes exploiting the opportunities in America to become wealthy. The rise in billionaires rewarded this entrepreneurial class--the Waltons, Bill Gates . . . There was a window around and just after WWII for entrepreneurs to prosper. That "opportunity," "pull-yourself-up-by-your-bootstraps" paradigm has become a pervasive and paralyzing myth, but is no longer true in this country. Due to inflation, nowadays, a "millionaire" is not part of the wealthy elite.

The repukes, during and after WWII, definitely did shift their "base" from the super wealthy and big business to the UMC, country-club set. With the rise of the neocons after the coup that brought down Nixon, the base has dramatically shifted back to the upper 1% or 2% (about 1200 families) of entrenched super-rich "old-money aristocrats."

[ProfessorGAC]

11. You're Agreeing With Me

But, the entrepeneur class (or whatever you'd like to call it) only became superrich because the middle class was so large and had sufficient discretionary dollars, that it made good ideas viable at market.

The middle class getting larger did not make it harder for the rich to get richer. It made it easier.

I agree with what you're saying. It seems you're reinforcing my point, not refuting it.
The Professor

[leftofthedial]

16. we violently agree

I didn't intend a refutation, just some added coloration

[ProfessorGAC]

19. Cool!

Wasn't sure! BUt, was hoping that was the case!
The Professor

[leftofthedial]

21. hasn't the concentration of wealth

been pretty steadily increasing since WWII? I'm pretty sure it did from the 70's on, but didn't it start during Eisenhower's administration?

wouldn't that be the main issue?

[ProfessorGAC]

22. In Looking At The Data, I'd Say No

It looks like it's pretty much a flat line from after WWII until the 80's. There's a bump in the 70's, but i think that's assignable to the fact that high inflation resulted in job loss, which pushed median and mean income down. That, of course, doesn't affect the return on investment when guaranteed interest rates are very high, so the wealth would concentrate upward a pinch.

I've got a whole hard drive full of econometric data from pre-Civil War to the present for 18 countries. So, i just fool around with different sets of dimensions looking for causation and trends. I'm a geek!
The Professor

[leftofthedial]

24. In any case, I am convinced that a class war

is the root of most of the division and conflict in this country

democracy is a threat to the oligarchy.

[ProfessorGAC]

26. Again With The Agreement!

Stop it. It's making me uncomfortable to keep agreeing like this.
The Professor

[TahitiNut]

30. Well, allow me to add to that discomfort.

:silly: Greed is insatiable. "Enough" is NEVER enough. What we have is organized and institutionalized greed - in our political, religious, and business sectors - all given a 'mandate' in the "Greed Is Good" Era. The corruption runs deep and wide in our body politic and I'm not at all sanguine that a positive prognosis is rational.

[catzies]

44. And speaking of "organized and institutionalized greed," Rep. Waxman

has just issued areport on how well government contractors *cough*HALLIBURTON*cough* have done in the last six years.

"The fastest growing contractor under the Bush Administration has been Halliburton. Federal spending on Halliburton contracts increased over 600% between 2000 and 2005."

http://www.democrats.reform.house.gov/story.asp?ID=1071

[endarkenment]

41. Not to quibble (he said quibbling)

but Gates' fortune is wealth derived from wealth. He is upper class born and bred, not some self made poor boy. Sure his dad didn't have the planets premere fortune, but Bill jr. got the usual silver spoon treatment.

[emcguffie]

10. But they did pay huge taxes then.

They were taxed more heavily than at any other time.

[ProfessorGAC]

13. Not Really

While the marginal tax rates were high, the ability to shelter income was much broader, so much of that money was untaxed.

Some people did pay exorbitant tax rates, to be sure, but despite that, millionaires were created in huge numbers, and billionaires like never before.

So, those tax rates did not stop the rich from doing pretty darned well.

The point is that a strong and sizeable middle class BENEFITS the wealthiest among us. Diluting the strength of the middle class only can HURT the wealthiest.
The Professor

[patcox2]

28. I'd characterize it differently, it doesn't hurt those already wealthy.

Though it may make it harder to become wealthy. The decline in the middle class, I mean. The policies that are sticking the middle class are definitely enriching those who are now wealthy. But, as you say, they are inhibiting the ability of the middle class to become wealthy and thus increase the number of wealthy.

An oligarchy is great for the oligarchs.

[Hamlette]

14. while its true, wars are created by and for millionaires

you also need money to make money and at the post war tax rate on the rich 88-91% for over a decade, at least far fewer millionaires were "made" during that period.

Got a link for your argument?

[ProfessorGAC]

20. Look It Up

I would suggest the Statistical Abstract of the United States or the website. (The latter is subscrption only, so you might have to go to the nearest college library for that.)

The rate of millionaires per million people in the population went up from 1950 - 1970 at a faster rate than at any time other than the tech boom of the 90's.

The source is as i described. Do you have a link to support that the 88-91% tax rate was actually paid by anybody in the investor class? Didn't think so.
The Professor

[Hamlette]

33. my my

down boy

I asked for a link (after I googled it, of course, and couldn't find anything)

Where is it, oh mighty professor, that I said the "investor class" actually paid those rates?

I said it was the tax rate.

[Norquist Nemesis]

18. Agreed.

They were not "less rich" unless the definition of that is the gap between the "rich" and the middle class.

And it may not have anything to do with it (I dunno), but wasn't there a good deal of contempt from the so-called old money barons toward the new money people? :shrug:

[Vinnie From Indy]

27. You are correct Sir!

Good point! The Gilded Age never ended, it just donned a disguise.

[glitch]

32. You should write him. This is important and he needs to get it right. nt

[Junkdrawer]

35. How about as a portion of the GNP...

If the middle class rose after WWII, wouldn't the percentage of the GNP controlled by the top 1% decrease? :shrug:

[Armstead]

4. Now, if only the Democrats would take up Class Warfare for the other side.

Good article.

But unless the point is made elsewhere in it, also contributing to this economic polarization is that too often the Democrats have been AWOL too often as defenders of the middle class and disadvantaged since the 1970's. It's been a one-sided war for too long, with "partisanship" merely being a token opposition on side issues rather than a real poltical battle regarding the real issues of Money and Power.

[leftofthedial]

7. but the "other side" is no longer the Democrat's constituency

they are every bit as addicted to corporate cash (surrogates for the wealthy) as are the repukes. Both parties fundamentally represent the political interests of the oligarchical status quo. Any differences (in this context) are extremely slight matters of degree.

There is no "Labor" party in America.

[Armstead]

12. Unfortunately, I agree with you

It makes me sick that what is described today as the "far left fringe" is largely made up of people who would have been characterized as mainstream liberals 30 or 40 years ago.

The Democratic Party was far from perfect then, but even that ol warmonger LBJ was on the side of the people in terms of class issues.

[leftofthedial]

15. it has taken a generation to get to this sorry state

how do we fix it?

[Armstead]

36. My answer is both simple and complicated

The simple part -- Most Liberals and Progressives have goals and values that are shared by most Americans in terms of how the economy should work for everyone instead of the small class of elite oligarchs and the corporations they control.

All Democrats and others on the spectrum from centedr to left have to do is to unify on these core issues of Money and Power with a truly progressive populist agenda, and hammer the truth home as relentlessly as the GOP has done for the other side for the last 30 years.

If we were to do that, I am convinced that we'd win, both electorally and in terms of putting the country on a better track. It doesn;t require rocket science. Just being willing to tell the truths that everyone already knows.


The complicated part -- Herding all of the cats that make up oiur side of the spectrum into a unified political force. That would include pushing the Centrist Wussies to decide which side they are on. If they want to remain on the left half they have to either join this movement or get the hell out of the way and stop obstructing it.

Compromises on all sides would be required. But the bottom line is that we have to at least develop a common framework on the key issue of money and power.

[TahitiNut]

17. 'There is no "Labor" party in America.' Bingo!

The political process in the US has become a drunken feast at the slave market.

[patcox2]

31. This is the party of gay tree-huggers who want to take your guns!

It is the party of abortion and homosexuality and gun control and atheism and animal rights.

I say to hell with all the special interest politics, we should be the party of the working class.

[BlueEyedSon]

46. The "other side" has no money. Being a politician is COSTLY.

[leftofthedial]

5. bingo!

without the class war (in which the 1200 richest families are kicking all our asses), there'd be no "war" in Iraq, there'd be no war on "Terror," there'd be no "war" on drugs, the economy would be healthy, and most of the social issues that tear the country apart would fade back to the marginal status they warrant. The agenda of the super wealthy is profoundly un-American and anti-human.

[rman]

42. We could - almost literally - have paradise on earth,

if it weren't for these $&^*%!&*&@...

[tabasco]

6. Thanks for posting Krugman !

He's Da Man !

[kapkao]

23. sure....

alternitive theory: the minds behind the federation are just plain fucking stupid, and always have been.

Or the vocal minority(s) are now more vociferous than ever with the tremendous ease of instant communication.


Take your pick.

[The Backlash Cometh]

25. Thank you, Paul Krugman.

Class warfare launched by the whiteflight party, to be exact.

[LSK]

29. do Krugman articles still get posted on truthout???

I havnt seen any recently.

[the other one]

38. Ooh Ooh The Big Bugaboo!!!

I agree that class struggle is the problem and the issue. The right seeks to conserve power with the status quo, while the the left seeks to liberate power to be shared by all people.

Moreover, the Right was able to demonize the left by associating the American class struggle with Soviet-style communism.

The basic right-wing strategy has been to paint their opponents with their own weaknesses. The right accuses the left of communist class warfare when they themselves are engaged in fascist class warfare. Democrats today avoid associating themselves with the idea of class warfare, going so far as to side with Republicans on many issues to show off their anti-communist and anti-socialist chops.

[Flubadubya]

39. Times "Select"... crap!

Anybody got a handier link? Thanks. :shrug:

[lfairban]

43. My Google came up empty.

It hasn't been reprinted anywhere else yet that has it on a web page.

[BlueEyedSon]

45. CLASS WARFARE. Should be on the front page, not the OpEds. nt