Inequality: Government Is a Perp, Not a Bystander

[unhappycamper]

http://smirkingchimp.com/thread/dean-baker/53336/inequality-government-is-a-perp-not-a-bystander

Inequality: Government Is a Perp, Not a Bystander
by Dean Baker | December 24, 2013 - 11:50am

In his speech on inequality earlier this month, President Obama proclaimed that the government could not be a bystander in the effort to reduce inequality, which he described as the defining moral issue of our time. This left millions convinced that Obama would do nothing to lessen inequality.

The problem is that President Obama wants the public to believe that inequality is something that just happened. It turns out that the forces of technology, globalization, and whatever else simply made some people very rich and left others working for low wages or out of work altogether. The president and other like-minded people feel a moral compulsion to reverse the resulting inequality. This story is 180 degrees at odds with the reality. Inequality did not just happen, it was deliberately engineered through a whole range of policies intended to redistribute income upward.

Trade is probably the best place to start just because it is so obvious. Trade deals like NAFTA were quite explicitly designed to place our manufacturing workers in direct competition with the lowest paid workers in the world. The text was written after consulting with top executives at major companies like General Electric. Our negotiators asked these executives what changes in Mexico's law would make it easier for them to set up factories in Mexico. The text was written accordingly.

When we saw factory workers losing their jobs to imports from Mexico and other developing countries, this was not an accident. In economic theory, the gains from these trade deals are the result of getting lower priced products due to lower cost labor. The loss of jobs in the United States and the downward pressure on the jobs that remain is a predicted outcome of the deal.

[cantbeserious]

1. Who Stole The American Dream - Video - Book - Powell Memo

"The promise of a prosperous middle-class life with decent work, rising living standards, and the potential for a better future has long been the foundation of the American dream. But as America continues to struggle to recover from the Great Recession, it has become clear that the middle class is in jeopardy -- and many of the policies of the last 40 years are to blame.

Examining the political, legislative, and corporate choices that have pushed the middle class to the brink, Pulitzer Prize- and Emmy Award-winning journalist, producer, and bestselling author Hedrick Smith details the story of this demise. In his new book, Who Stole the American Dream?, Mr. Smith analyzes how "pro-business" policies dismantled the previous American social contract and tells the stories of the people who have been left behind. ..."

The Book - Who Stole The American Dream

http://www.amazon.com/Stole-American-Dream-Hedrick-Smith/dp/1400069661

See the Powell Manifesto Here.

http://www.thwink.org/sustain/articles/017_PowellMemo/PowellMemoReproduction.pdf

Commentary Here.

http://www.thwink.org/sustain/articles/017_PowellMemo/

[Doctor_J]

2. The president talks one way and acts another

I guess the fan club will swoon over the speech, but between heritage care, cheering the wholesale firing of the Rhode island teachers, TPP, and his half hearted support for a pretty tepid minimum wage hike, it seems mostly like bullshit.

[Warpy]

3. Trade, living minimum wages indexed to inflation, and a progressive tax structure

are all necessary to the growth and maintenance of another large and stable middle class. Otherwise, as we have seen in the last 30 years, the economy polarizes into a few grabby men with more money than they could squander in 1000 lifetimes and the vast majority of people who are just now becoming food and shelter insecure as we race towards debt peonage and a feudalistic system.

Capitalism can only succeed when it's regulated into being something quite different, a mixed system wherein naked greed is punished with confiscatory taxes, work is rewarded with a comfortable lifestyle, and the whole business is made less harsh by a strong social safety net for those who can't participate in the workforce for one reason or another.

Offshoring didn't really give us cheaper items, only a bloated aristocracy of wealth. We didn't need either.