Should we be mad at the 1%?

http://finance.fortune.cnn.com/2012/04/24/pay-gap-rich-poor/

 I think her argument is part straw man, part wrong, and part ok.

The straw man part is that the anger of the 99% is directed at the 1%.  I don't think this is generally the case.  The anger is directed at a self-reproducing class system that is supported by political decisions that have lowered tax rates and deregulated banking.  Americans still emulate rich people and want the lifestyle sold as the American Dream, which is increasingly becoming off-limits to the majority of Americans because our economic policies have been directed at increasing the gains at the top while eroding the social safety net at the middle and bottom.  

Furthermore, the values she attributes to the 1% aren't exclusive to the 1%.  Part of the reason the anger is bubbling up now is that you can do everything right--go to college, get a job, get married, and because of complex economic problems coupled with a political trend that has eroded the middle class, all that can be swept out from under you in a heartbeat.  There's much less security now unless you are a member of the 1%.  The implication that the 1% deserve to enjoy these benefits is accompanied by the implication that the rest of us don't, whether she intends it or not.  

The wrong part is the idea that getting everyone a bachelor's degree is going to fix this problem.  First of all, the skill set needed in the economy now are associate's degrees, for jobs whose wages are not going to do much about inequality.  Second of all, the value of a bachelor's is diluted as more people attain them--this is a pretty basic economic concept of generalized equilibrium.  Third of all, the inequality itself is a contributing factor to why it's harder and harder for people to attain BAs.  

The other wrong part is ignoring the fact that you're going to need redistributive tax policies in order to fund the policies that will increase education.

The true part goes back to the straw man part. We shouldn't villify individual 1-percenters; it is the system we are all a part of that produces such unequal benefits for 1-percenters that we should be railing at, and channeling our anger politically. 

Heading back out into the world

I was inspired today to return to this blog, maybe because my subconscious is sensing I don't have much longer to express my policy and political ideas over lunch with my classmates, and will need a different outlet to process the things I have learned at HKS over the last two years.

I received an email about this talk :http://www.cato.org/event.php?eventid=8940&utm_source=Cato+Institute+Emails&utm_campaign=1bc6c1b8a3-CBF_American_Nightmare&utm_medium=email&mc_cid=1bc6c1b8a3&mc_eid=38bd0df18e

...with the following commentary: Typical Cato crap…


Typically a sentiment I'd agree with.  But at second glance (without having read the book), one of the central arguments of this book appears to be a relatively mainstream, neither-liberal-nor-conservative policy prescription (other arguments contained therein, probably not so).  


That is, if the author is in fact arguing that local land use policies constrain the housing supply and lead to the inflation of housing prices, I tend to agree.  Not that this would have prevented the bubble; some of the states that were hardest hit (FL, NV, TX) have the least restrictive land use policies, and that may have made a negative contribution to the overexpansion of homeownership. The land use policies weren't the problem there, the expansion of sub-prime credit was, but the expansion of the housing stock complemented the expansion of bad credit.  

What Iactually find interesting and depressing about this Cato talk, though, is not its policy content per se, but what it represents about the quality of political discourse in this country, where a relatively mainstream argument (see Ed Glaeser, a Harvard prof who advocates for expanding the housing supply) becomes polemicized with outrageous language pandering to a certain set of values and becomes essentially code for a whole other set of values, in this case conservative anti-statism.  Dems and Progs need to take back these kinds of policies and figure out how to talk about them in language that resonates as well as the language that conservatives have found to rile up the Republican base.  Reframe the debate, so housing policy isn't about heavy-handed government distorting the market, but rather about good governance laying out rules that lead to fairness and prosperity.