October 20, 2002

1:28 PM

For Richer: the first in a New York Times series on class in the United States. Princeton economics professor Paul Krugman declares the death of the middle class, pointing out disparities between the rich and the poor, examining efforts to cover up class makeup with quantile data, and probing the transformation of corporate executive ethics and influence. Even Glenn Reynolds is taken to task for his Sweden-Mississippi per capita GDP comparison. Krugman's sources are on the slim side, but the question must be asked: Are we living in a new Gilded Age? And, if so, how can citizens and government work to change things?
posted by ed (53 comments total)

1) Yes.

2) Armed revolution. Viva la Raza!
posted by raaka at 2:14 PM on October 20, 2002

Agreed. Look at it like this:

"The first generation creates wealth, the second manages wealth, the third studies art history, and the fourth degenerates." --Germany's Iron Chancellor, Otto von Bismarck

From the Washington Post Article:

by most measures we are, in fact, back to the days of ''The Great Gatsby.''

I believe the 90s were akin to the 20s and we are coming full circle entering a period where the next generation is about take over we are entering the age of the Degenerate.
posted by stbalbach at 3:06 PM on October 20, 2002

And here's a radical thought: if the rich get more, that leaves less for everyone else.

Money is not a finite resource. For every dollar that Bill Gates earns, I do not lose a dollar.
posted by Frank Grimes at 3:12 PM on October 20, 2002

Money is not a finite resource. For every dollar that Bill Gates earns, I do not lose a dollar.

Um, yes...but someone does. Now if by this you mean that we can always "make" more money than that's true but the more money we "make" the less it is worth.

I have the most elementary understanding of economics, I'll admit, but that's how it was explained to me.

As for the middle class, we're still here, bent but unbroken, and God bless us.
posted by jonmc at 3:24 PM on October 20, 2002

Krugman is still allowed to write for the Times after all of his latest op-eds have been picked apart to the level of outright ridicule online? Oh well... at least he serves a kind of court jester-function.
posted by dagny at 3:25 PM on October 20, 2002

Anyone who has read Krugman for some time knows the man is a naught. He cannot reconcile the fact that he is passed over time and time again for the Nobel in economics because he cannot conjure up an original thought. So he writes for the Times in an Op-Ed capacity and embarrasses them on a scale equal to Dowd.
posted by philip_buster at 3:26 PM on October 20, 2002

...after all of his latest op-eds have been picked apart to the level of outright ridicule online...

Would you mind sharing the citations?
posted by apollo3000 at 3:28 PM on October 20, 2002

I enjoyed the article, just wish he presented some possible solutions. I emailed him, got a response back... he didn't sound too encouraging:

"I don't really know the political answer. The only model we have is the New Deal, which created a new power base in unions, supplemented by old-fashioned urban machine politics. I have hopes that a wave of moderate to liberal governors can rebuild the center - you can see the plutocracy giving a bit of ground in places like New Jersey and California. But so far the prospects look dim, and I fear the worst."
posted by gramcracker at 3:34 PM on October 20, 2002

Would you mind sharing the citations?

And refute this while you're at it, ad hominem boys:

A few months ago the conservative cyberpundit Glenn Reynolds made a splash when he pointed out that Sweden's G.D.P. per capita is roughly comparable with that of Mississippi -- see, those foolish believers in the welfare state have impoverished themselves! Presumably he assumed that this means that the typical Swede is as poor as the typical resident of Mississippi, and therefore much worse off than the typical American.

But life expectancy in Sweden is about three years higher than that of the U.S. Infant mortality is half the U.S. level, and less than a third the rate in Mississippi. Functional illiteracy is much less common than in the U.S.

How is this possible? One answer is that G.D.P. per capita is in some ways a misleading measure. Swedes take longer vacations than Americans, so they work fewer hours per year. That's a choice, not a failure of economic performance. Real G.D.P. per hour worked is 16 percent lower than in the United States, which makes Swedish productivity about the same as Canada's.

But the main point is that though Sweden may have lower average income than the United States, that's mainly because our rich are so much richer. The median Swedish family has a standard of living roughly comparable with that of the median U.S. family: wages are if anything higher in Sweden, and a higher tax burden is offset by public provision of health care and generally better public services. And as you move further down the income distribution, Swedish living standards are way ahead of those in the U.S. Swedish families with children that are at the 10th percentile -- poorer than 90 percent of the population -- have incomes 60 percent higher than their U.S. counterparts. And very few people in Sweden experience the deep poverty that is all too common in the United States. One measure: in 1994 only 6 percent of Swedes lived on less than $11 per day, compared with 14 percent in the U.S.

The moral of this comparison is that even if you think that America's high levels of inequality are the price of our high level of national income, it's not at all clear that this price is worth paying. The reason conservatives engage in bouts of Sweden-bashing is that they want to convince us that there is no tradeoff between economic efficiency and equity -- that if you try to take from the rich and give to the poor, you actually make everyone worse off. But the comparison between the U.S. and other advanced countries doesn't support this conclusion at all. Yes, we are the richest major nation. But because so much of our national income is concentrated in relatively few hands, large numbers of Americans are worse off economically than their counterparts in other advanced countries.
posted by y2karl at 4:07 PM on October 20, 2002

And, too, the illegal immigrant trade involving Swedes is a bit low,
let it be noted.
posted by y2karl at 4:13 PM on October 20, 2002

Frank Grimes: Money is not a finite resource. For every dollar that Bill Gates earns, I do not lose a dollar.

jonmc gave you a good answer. Here is the scientific version: your income and Bill's income, as random variables, are not independent. There might not be a simple linear relationship between them (i.e. correlation = 0), but that does not imply independence. Example: part of the tax money from your last shopping trip goes to public schools that bought (discounted) versions of MS Windoze.

If you are talking about the stock market, it can be modeled as a growing trend and a zero sum game. While nobody denies that we are doing better (on average) from generation to generation, it is the zero sum game that creates problems. Think of it as a Ponzi scheme or, why not, the recent Internet bobble.

dagny and philip_buster: Yes, Krugman is a pig-headed selfish, egomaniac bastard. Should I add pedophile? ... If you want to attack this article, please do it using pertinent arguments.
posted by MzB at 4:15 PM on October 20, 2002

from the article:
The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation and control many of the perks that board members count on. So it's not the invisible hand of the market that leads to those monumental executive incomes; it's the invisible handshake in the boardroom.

A recent paper, "Decision making dynamics in corporate boards", describes exactly the above process (easy to read summary thanks to Nature News).
posted by MzB at 4:28 PM on October 20, 2002

Um, yes...but someone does. Now if by this you mean that we can always "make" more money than that's true but the more money we "make" the less it is worth.

Not really. Money grows in the banking system. Someone puts in a million dollars and its gets lent out. The same money goes into the banking system again and again. I think its called the multiplying effect. The supply of money grows without actually making new money and in an expansionary economy it should grow faster than the rate of inflation.
posted by Recockulous at 4:32 PM on October 20, 2002

MzB:

You can call Krugman a pedophile if you'd like , but
please do it using pertinent arguments.
posted by philip_buster at 4:36 PM on October 20, 2002

Even Glenn Reynolds is taken to task for his Sweden-Mississippi per capita GDP comparison.

Lordy. It's a sad day when mediocre academics now have enough viral stature via their lowest common denominator weblogs that they must be taken to task by their Princeton peers rather than simply ignored.
posted by donkeyschlong at 5:03 PM on October 20, 2002

Also, regarding the Bill Gates criticism, Krugman was referring to percentage shares, not absolute dollars. For every percentage of national income the 10,000 richest americans gain, everyone else, by definition, loses a percent. Some parts of the essay are subjective (particularly the argument against the estate tax), but his observation that income disparities have become greatly magnified since 1970, and especially in the 1990s, seems unquestionable.
posted by gsteff at 5:05 PM on October 20, 2002

The polarization-of-politics stuff doesn't really bear out, as it happens. I'm still tickled and amused to see Poole-Rosenthal NOMINATE scores used in the popular press though.

First, yeah, Poole and Rosenthal say that "voting in Congress is highly ideological -- one-dimensional left/right, liberal versus conservative." But it turns out that the way they're doing this can easily overestimate the importance of the first dimension it finds, which at any rate looks like left-right, so it's hard to tell whether or not that's really true. (see Ken Koford's piece in the APSR 1989, for thems with jstor)

More importantly, the rise of partisanship in Congress has a lot more to do with the breakup of the Solid South and the enfranchisement of blacks than it does with income inequality. Conservative southern whites stopped voting for Democrats and started voting for Republicans, and southern blacks started voting Democratic and generally liberally, and that sorted out the parties ideologically.

The conservative Democrats who used to ruin predicting votes by party most-all either lost to Republicans, became Republicans, or lost to more liberal Democrats (in the cities or black rural belts)
posted by ROU_Xenophobe at 5:09 PM on October 20, 2002

For every percentage of national income the 10,000 richest americans gain, everyone else, by definition, loses a percent

Not necessarily. If we all have $10K, it's equal, but if all-1 have $11K and 1 has $15, that one has gained in share without costing anyone else anything.

Krugman could have made most of his points talking about absolute income levels, and it bugs me that he resorted to talking about inequality so quickly.
posted by ROU_Xenophobe at 5:12 PM on October 20, 2002

The story cites the average American income and gives percentages, but I'm looking for a range that defines middle class. I did some looking around a couple months ago, but all I could find was pretty much the same - Do any of you know the middle class range in $$?

And yes, I realize that answers will probably vary.

Thank you.
posted by dakotadusk at 5:27 PM on October 20, 2002

Um, yes...but someone does. Now if by this you mean that we can always "make" more money than that's true but the more money we "make" the less it is worth.

Sort of. Money is only valuable because people *believe* it's valuable. It all depends on what people will give in exchange for your dollars, and what you'll accept dollars for. Money can become quite worthless without any change in supply if confidence in the currency drops. (e.g., people think they've found a better means of exchange.)

I have the most elementary understanding of economics, I'll admit, but that's how it was explained to me.

Did you get the part of the lecture where that US Govt will increase the money supply as the economy grows? If there are too few dollars chasing too many goods, prices drop too much. (Don't ask me to explain why that could be a problem; it's called deflation, and leads to assorted issues, and I really can't say much more. I'm already pulling stuff out of the far back of my brain.)

If the increase in money is even with the expansion of the economy, then prices stay relatively the same. So, as more stuff gets produced more efficiently, more money appears in circulation, but (ideally) you don't notice the effects of this inflation.

(It gets weird, though, when you introduce credit into the mix, and the idea of the velocity of money. Credit is like virtual cash, so a lower interest rate leads people to buy more on credit which increases the money supply.)

Now, the troubling part is that, since the value of money is relative to the total supply and what's available to buy, if the rich get richer, but you stay the same, then you may have lost because you have a smaller chunk of the money supply, assuming the money supply is increasing.

Even you gain, if the gain doesn't offset the supply increase, then you've lost.
posted by Ayn Marx at 5:36 PM on October 20, 2002

Like apollo and everyone else, I'm still waiting for those citations.

dakotadusk: The CBO study that Krugman used for the typical Greenspan guide (still quintile data, as opposed to decile data) lists $45,100 (1997 dollars) in the middle quintile. So I would assume that's the middle class figure being referred to here, unless he also wants to throw in the average $35,864 salary in 1999.

donkeyschlong: Not at all. Krugman recognizes that Reynolds is a voice on the Web and has responded accordingly. Or are only weblogs permitted to respond to newspapers and not the other way around?
posted by ed at 5:51 PM on October 20, 2002

I'm no friend of Bill Gates, but I think the above is wrong. It's wrong because, presumedly, and arguendo, Gates' "genius" created new wealth that wasn't there before; and denying him the incentive to create such does not mean that someone else will create it instead. Taxing Edison to the point where he has no desire to invent does not mean that someone else will invent the same things, or that two people will each invent half as much as Edison.

Also, the stock market is a Ponzi scheme, but one with, essentially, an unlimited number of greater fools--so it works.



Wealth is not a zero sum game. If it was, per-capital income would never increase, which, clearly it does.



What doesn't mean that I would love to see certain aspects of Swedish society embraced here...
posted by ParisParamus at 6:04 PM on October 20, 2002

I REALLY want an edit feature on Mefi. I am a lost cause in that department. Sorry for the psycho-typos.
posted by ParisParamus at 6:37 PM on October 20, 2002

I think it's funny that "the fact that he [Krugman] is passed over time and time again for the Nobel in economics" is a reason why no one should pay attention to him. (As opposed to the economists and other assorted anti-Krugmanites at the Heritage Foundation, who presumably all have Nobel Prizes.) The problem that conservatives have with him, and the reason he is "picked apart online" so often, is that they don't have a comparable figure - an incredibly accomplished, respected economist who can translate economics into concise columns, has a fire in his belly and uses his position to criticize the powers that be. He's a lightning rod, sure, and he catches flak for what he writes, but people read him in magnitudes more than they read anyone of a similar stature on the right.
posted by risenc at 8:25 PM on October 20, 2002

Krugman's boring, familiar, and utterly-one-sided marshaling of anecdote evidence is unworthy of comment.

What is worthy of comment is the agenda. He as much as admits that's there's no hope in in the class war of the bottom-90%-versus-top-10%, to say the least of the class war of the actual poor.

Instead, all of his energy is devoted to fomenting class war between 90%-99% and the top 1%. In other words, he acknowledges that while the South Bronx will never rouse themselves against Scarsdale, nor even Islip roll out against Great Neck, perhaps you can get Westwood to step up to Beverly Hills.

It is kind of sad that the last hope of soft socialists boils down to, in essence, a revolt led by dentists jealous of their frat buddies who grew up to cardiologists.
posted by MattD at 8:53 PM on October 20, 2002

So, MattD, are you saying that the top 10% didn't get comparitively richer in the last generation? And that the top wealthy families haven't gained more than the rest of us, while what was the middle class didn't grow apace? I'll make sure to check the retractions in tomorrow's Times.

That was a declaration of class war? Sounded pretty tepid to me. Was he fomenting me to do something?

God, that sounds dirty. Hee hee: I'll foment you all night long!
posted by RJ Reynolds at 9:20 PM on October 20, 2002

Krugman is barely woth the response...among complaints:

"Despite obfuscations, it remains true that more than half the Bush tax cut will eventually go to the top 1 percent of families" - sorry, how is this? I've never seen data that supports this, even from the far left. Facts: A huge portion of America pay no income taxes. The rich pay far more, percentage-wise and in real dollars, in total taxes than any other class, even after you take into account the offshore hocus pocus.

The fundamental problem is forgetting the income mobility we have here compared to other nations. I don't have the data, but I"m all but certain the US has the greatest quintile mobility of any nation. 40% of the bottom quintile moves over 10 years - that is, 40 percent of the very poorest are no longer there 10 years later. The concepts of 'class' don't really exist. I was born in Dorchester, on food stamps, to my then-poor mom and dad. My grandfather was in the middle class until he was in his fifties, when promotions led him to the upper quintile. I'm in school studying administration, and will no doubt be in an entirely different quintile from my parents. That's critical if you want to investigate anything class related in the US.

He does make some decent points - for instance, some form of estate tax makes sense. But most of his lecture is lost in anecdotal magic with no real data. How he teaches at Princeton is beyond me.

Further, as has been noted, the correlation between "rich get richer in real dollars" and "poor get poorer in real dollars" is absolutely nil. The mercantilists, before 1776 and Adam Smith, believed that there was a finite amount of wealth. As production is made more efficient through new processes and technologies, there is *more* wealth, thus everyone can get richer in real dollars.
posted by Kevs at 9:35 PM on October 20, 2002

Why's this supposed to be a data-heavy, citations-rich piece? He's writing for the New York Times, not the Quarterly Journal of Economics. Put in other terms: The New York Times is a newspaper, not an academic journal. The audience may be better educated than the norm, but that doesn't mean they want footnotes out the wazoo.
posted by raysmj at 9:41 PM on October 20, 2002

Believing that a society benefits by having a substantial middle class, by the way, and as much wealth as possible within that middle class, does not make one a "socialist." Was Aristotle a socialist?
posted by raysmj at 9:45 PM on October 20, 2002

My point was that he wasn't really fomenting the real middle class to do anything.

The "middle" class which consists of a $50K salaried mom and $90K profits draw entreprenuer dad with three kids, three cars, and a big house (actually, well into the top 10% by income) on the other hand, he spends much time proving that they're falling behind, and goring their most salient oxes (continued upward mobility for their children, perscriptions for their aged parents, integrity of their 401ks), with a narrowly tailored goal of attacking their support for Republican tax and health care policy.

As for his facts, it is a combination of the obvious and the miselading.

I think that the criticism of the super-wealthy CEO class is well-made, but also non-controversial. Of course Boards of Directors gave away the store, and that was an abuse.

Anecodotes about Europe are badly misleading. He ignores the most obvious stastic of voting with one's feet, by which America is vastly favored to Europe, ignores the plentiful evidence of social and economic malaise throughout Europe, the profound deficit in technological innovation, the crushing burden of taxation and regulation upon innovation and job creation, etc.

To me, the greatest sin was the suggestion that somehow Europe is more egalitarian. Nothing can be further from the truth! America is the land of social mobility and opportunity; Europe is the land of doing the same job and occupying the same social class as grandfather. Britain has broken free of that (to the self-parodying extent that public school lads now pretend Cockney intonations when working trading desks in the City) but Krugman's greatest example (Sweden) is probably the greatest offender, with a sclerotic (if still rich) business aristrocracy essentially closed to people not to the manor born, supporting and being supported by a vast bureaucracy indifferent to change.

The way I see it (and, on preview, now concur with Kevs), the measure of social justice in an economy is not its static scatter charts and bell curves, but the extent to which it supports actual social mobility ... in other words, not how rich the top 10% is, but how much access a smart, honest, and hard-working person born into the bottom 50% has to reach the top 10%. America is second to nowhere else on Earth, in the history of Earth, by that measure, and that's what counts.
posted by MattD at 9:45 PM on October 20, 2002

"Despite obfuscations, it remains true that more than half the Bush tax cut will eventually go to the top 1 percent of families" - sorry, how is this?

It almost has to happen by definition. The rich pay a high percentage of collected income taxes, and poor and poorer-middle don't pay much income tax at all, net, so when you cut income taxes you have to favor the better off.

Where it gets duplicitous is in all of the subsidies that we include in the tax code. The government will pay for ~40% of a rich person's mortgage interest, but none of my rent, and even if we bought the same house, the government would pay less of my mortgage interest than of Mr. Rich Bastard's.
posted by ROU_Xenophobe at 9:48 PM on October 20, 2002

No one disputes the value of a large middle class ... but, of course, the statistics don't suggest anything like the loss of the key metrics of middle class life. Indeed, if consumption is your measure, things have never been better.

There was something blissful about the 1947 to 1972 period in the American economy, but it was not a sustainable model. It was a quarter century characterized by an almost exclusive American dominance of the global economy, due to our victories in World War II, the destruction of the Asian and European industrial bases, the closing of the Chinese markets, the necessity of American strategic extension to contain communism, and (economically) insane experiments with varieties of socialism in Italy, France, Argentina, and other powerhouses of the pre- war world.

The loss of that highly privileged position, to the European and Japanese renaissance, the more expensive oil as the Arabs organized, the opening of China, etc., was going to cost America something. But, also, materialism hit somewhere too. Ask your parents about how they lived in 1970, and like as not it involved one car, several years old, one television, a 1600 square foot house, and one vacation a year when they loaded up the car and drove to the state park to go camping, and meals out once or twice a month, if that.
posted by MattD at 9:57 PM on October 20, 2002

Krugman spends a good deal of time discussing how not every country has as great a disparity in income as we do. Why don't you actually address that, instead of going on about how the post-World War II model wasn't sustainable or about consumption patterns? (What about debt there, by the way?)

By the way, there was no cable television for most people in 1970 - the technology didn't exist for it to be halfway decent. What's the point there? I remember much nicer department stores in the early 1970s, just being awed by them as a kid. I have records from the '60s with which you could kill a man. You should see the lunch boxes my sisters are holding in pics from the '60s. Sheesh, murder weapons, I tell you. Phones back then were of much more substantial quality, etc. Crap got cheaper, and we can buy more crap. Wow. The travel and restaurant industries grew over time. Why is that a surprise? They're both still relatively young, and TV, mass media and education have probably increased the demand for travel. You're confusing technological, service industry and marketing advancement with a growth in middle class wealth.
posted by raysmj at 10:09 PM on October 20, 2002

I've seen some interesting and scary work lately suggesting that:
- income distributions in a society are actually almost completely independent of that society's nominal political-economic system;

- that according to this thesis income distributions theoretically enjoy but one metastable configuration, with a spread of attraction basins each corresponding to one of the observed distributions;

- that one of these is a power-law distribution: the aggregation of almost all meaningful wealth in literally a single-digit number of individuals;

- and most scary, that we may be near a tipping point into this attraction basin. That is, that we may be about to transition from a Pareto (80:20) distribution to a 99.99999:.00001 distribution. Whoo, that's creepy!

Worth thinking about, anyway. (Before you say it: I'm currently looking for an online citation.)
posted by adamgreenfield at 11:40 PM on October 20, 2002

It is kind of sad that the last hope of soft socialists boils down to, in essence, a revolt led by dentists jealous of their frat buddies who grew up to cardiologists.

Even sadder is that because dental work has, is, and will probably never be covered to the same extent as other health care by insurance, most dentists are making more money than MDs these days.
posted by BentPenguin at 5:59 AM on October 21, 2002

I'm always late on these threads, but:

blah blah blah armchair economics blah blah Krugman sux blah blah

1. Being "passed over" for the Nobel Prize hardly indicates the "man is a naught." For one, the prize is usually awarded near the end of a long, distinguished career. Krugman is still relatively young and active. Also, there are lots of very good economists who have not yet received the prize—that is, in part, why the prize is so "prized." Very few economists have the Nobel on their CV; that hardly means that all the rest are know-nothing blowhards.
2. "Money" in circulation can increase or decrease for all sorts of reasons, but it's not the relevant measure. When economists talk about money "adjusted for inflation," what they're trying to get at is some measure of command over goods and services. While incomes for generic quantiles are nominally higher now than 20-30 years ago, the amount of stuff people can buy with their incomes actually declined for people at the bottom end of the distribution during many of the past thirty years. Ed Wolff (NYU) has a good study that largely reflects/corroborates/inspired what Krugman has written. And yes, Kevs, while "everyone can get richer in real dollars," it would be ludicrous to assume that everyone does get richer. You gotta have a claim to the spoils, and not everybody does.
3. I agree with your criticism of the comparisons with Europe, MattD, in that there are social factors not measured in GDP per capita or income distributions that are nevertheless important for evaluating where one might like to live. However, Krugman's beef with inequality isn't that the poor are stuck being poor, or that it's not nice for rich people to have so much more stuff than poor people. It's that the alarming concentration of wealth in the hands of the very few has dire political consequences. It makes a mockery of democracy; in a world where our political modus operandi is something like "one dollar, one vote," the kind of polarization we're seeing today means the effective disenfranchisement of much of the populace (Krugman also asserts the opinion that large CEO compensation packages are counterproductive and economically wasteful, though it would be rather difficult to demonstrate definitively).
4. Krugman is writing here for a largely non-economist audience, but much of what he says is backed by careful academic studies in reviewed journals. Ask any college economics professor for guidance if you want an introduction to the literature (there's a lot of it, journals dedicated to it, all that). And even if you hate his political views, Krugman is at Princeton for his academic acumen. He's a very solid researcher.
posted by dilettanti at 8:32 AM on October 21, 2002

"Despite obfuscations, it remains true that more than half the Bush tax cut will eventually go to the top 1 percent of families" - sorry, how is this? I've never seen data that supports this, even from the far left
Krugman wrote a whole freakin' book about it and has covered it in numerous articles, as have countless other writers. It's been very, very, very, very, very well substantiated- and never actually disputed by the administration with different figures. Fact is, as one of these pseudo-elite "Corolla Conservatives", you just don't want to know about it. Funny, Krugman addresses many of the points/straw men brought up by his critics in this very thread, from the quintile/decile argument (which he notes is a convenient but not meaningful breakdwon when discussing the top 1 or .1% of wealth) to the super- rich-people- mean- we're- all- doing- better argument (and if I piss on your head and tell you it's raining, does it make it true if I'm a billionaire?). Saddam Hussein's super rich in Iraq- they must be a paradise of wealth creation over there!

It is kind of sad that the last hope of soft socialists boils down to, in essence, a revolt led by dentists jealous of their frat buddies who grew up to cardiologists

Interesting you see it that way- not even remotely what Krugman was saying, but apparently in your paranoid worldview it always boils down to barbarians at the gate, eh? Krugman's point, if you'd bothered to read this article, was that the dentist/cardiologist conflict, using quintiles or deciles to point out that the "rich" are just like you and me, was a distraction of the middle and the affluent end of middle-class from the TRULY wealthy that were sucking up a greater and greater portion of the GDP to the detriment of the other 99%.

For that matter, if you morons could stop saying "top 10%", I'd think you might have actually read the linked article. Geezus fawkin' christ already. He's. Not. Talking. About. The. Top. 10. Percent. You dunderheaded schmucks.
posted by hincandenza at 8:55 AM on October 21, 2002

Now, easy there, fella... .
posted by y2karl at 9:00 AM on October 21, 2002

Krugman is writing here for a largely non-economist audience, but much of what he says is backed by careful academic studies in reviewed journals

But he misses the boat in his links to partisan polarization. We (people who do this, me included in a bit role) actually have a pretty good handle on why parties in Congress polarized starting in the '70's, and it doesn't have to do with income inequality. It has to do with the Democrats getting rid of most of their conservative southern wing, which sorted out the parties ideologically.

He's also citing Poole and Rosenthal's work as gospel, when it's actually hotly contested whether Congress is as one-dimensional as they make it out to be -- given their methods, it's easy to take a true 2-dimensional array of ideal point and underestimate the second dimension.
posted by ROU_Xenophobe at 9:45 AM on October 21, 2002

I didn't think he was blaming income inequality on political polarization so much as saying that it contributed to the problem. The conservative agenda has most certainly been as much economic as social. In fact, the whole "New right" bit of the '60s was fueled in large part by "fusionism," a tying of neo-classical economics to conservative stances on moral issues. It all comes together with Reagan, who wants to slash government, cut taxes and regulations, and meets with Jerry Falwell and Co. on his first day in office, has an attorney general who goes on an anti-porn crusade, etc. The Democratic purge of the early '70s had indeed been driven by disgust of southern conservatives' blocking of civil rights legislation and whatnot, but the party is not as ideologically cohesive today as the GOP is. Its only raison d'etre, it seems, is to block the more extreme economic measures of the GOP right.
posted by raysmj at 11:19 AM on October 21, 2002

Nicholas Lemann wrote an outstanding profile of FCC chief Michael Powell in the New Yorker recently, one that makes plain that our current politics don't differ much from those of the Gilded Age - even if things might seem different on the surface.
posted by raysmj at 11:23 AM on October 21, 2002

I didn't think he was blaming income inequality on political polarization so much as saying that it contributed to the problem

He didn't. He was saying, wrongly, that polarization is happening because of increasing income inequality.

Near as we can tell, polarization mostly happened because of changes in the Democratic party -- the Democrats got rid of their members who were really basically Republicans. The Republicans also lost their leftish wing during the same time, but that was always insignificant compared to the bimodal distribution of Democrats.
posted by ROU_Xenophobe at 11:29 AM on October 21, 2002

Not according to my reading, ROU-Xenophobe. I searched in the article for the part about partisanship and read over it again, even. What the author does say is that the parties are divided over economics, which is hardly debatable. He doesn't state, outright, that economic disparities are absolutely at the root of the divisiveness - that, say, it has pitted classes against one another. It's more like, policies that have favored the wealthy have enabled them to dramatically increase conservative-targeted campaign and policy institute spending, etc., and its influence with media and elites, thus increasing their power and embittering the competition, which has hardly moved from its position of 20 to 30 years ago. It's a highly partisan argument, but he's not saying what you suggest that he is.
posted by raysmj at 11:47 AM on October 21, 2002

raysmj: from page 9...

In other words, the growing inequality of our incomes probably lies behind the growing divisiveness of our politics

Which is what I'm taking issue with.

the polarization of politics has occurred because the Republicans have moved to the right, not because the Democrats have moved to the left

Except that the Democrats *did* move to the left, on balance, by getting rid of the dixiecrats.
posted by ROU_Xenophobe at 12:20 PM on October 21, 2002

Yes, compared to the '60s, but not since '73 or so. Just to clarify here. One could argue that they've been pushed, as a whole, to the right a bit in order to compete.
posted by raysmj at 12:49 PM on October 21, 2002

You can't isolate one sentence and claim it's the entire argument, by the way. Krugman has a very nuanced, albeit convoluted (and partisan) argument behind the statement made above, but, again, it's not, "Warfare between classes is fueling divisiveness." It's more, "Warfare waged in a scorched-earth manner by one class in a somewhat covert or clever fashion by one class - with the competition largely staying in place since '73 or so - is fueling political divisiveness."
posted by raysmj at 12:57 PM on October 21, 2002

ROU_Xenophobe: OK, on balance, he doesn't go into the discussion quite enough. The Dems. have moved slightly rightward over the past couple of decades, and there are still Boll Weevil-style Dems. around. Zell Miller, anyone? The Blue Dog Coalition? What you had in the early '70s, I think, was a window for an ideological thinning of the herd. But it didn't totally work out. The GOP, however, grew more ideologically cohesive. Certainly, you can't argue that the socially conservative values types were Republicans in the '60s. They weren't. The taking on of such issues - and joining it to conservative fiscal policy stances - expanded the Republican base considerably. Krugman is right in arguing that GOP strength here led to a more conservative fiscal policy environment. You can't argue to the contrary, I don't think, without sounding as if you've lived in a cave for the past 25 years.

There's more to the story than the abvove, really. But you're getting into things here that even the best statistical analysis is not going to be able to tell you much about, much less an intentionally one-sided New York Times article.
posted by raysmj at 1:20 PM on October 21, 2002

Near as we can tell, polarization mostly happened because of changes in the Democratic party -- the Democrats got rid of their members who were really basically Republicans.

That tells us how the change took place, but not why. He says that "the growing inequality of our incomes probably lies behind the growing divisiveness of our politics," but I don't think he would argue that your process didn't occur. Krugman quotes McCarty et al. as saying that the sort of ideological polarization we see would be pointless if the inequalities were less severe. He does state that the polarization is a result of Republicans moving right, not the Democrats moving left; he may well be wrong on that point (I wouldn't know). I also didn't get the impression he took the Poole paper as gospel. He called it eye-opening, but Krugman is an economist; no economist I've ever met would take a simple model-less ANOVA study as gospel for anything other than, well, simple variance studies. The academic studies I was referring to are economics studies relating to tax policy, inequality, corruption, etc.; I have little familiarity with that PoliSci stuff.

BTW, for some interesting articles on mobility and inequality from a more theoretical perspective, one might pay a visit to the site of Krugman's Princeton colleague Roland Benabou. His papers are most likely unintelligible on first read to non-economists, but they're fun for me! Oh, and I forgot to mention last time that, while Krugman has yet to add the Nobel to his list of awards, he did win the John Bates Clark medal in 1991(?). The JBC is economics' answer to the mathematicians' Fields medal. Very nice chrome for the résumé.
posted by dilettanti at 2:03 PM on October 21, 2002

The Dems. have moved slightly rightward over the past couple of decades, and there are still Boll Weevil-style Dems. around. Zell Miller, anyone?

I don't think I'd buy that the Democrats moved rightward, at least not by anything measurable. I suspect you'd find that (technical) the common-space score of the median Democrat (/technical) shifted to the left since the 60s or 70s. Mmmmmmaybe the median for nonsouthern Democrats shifted to the right, which might give you what you're thinking of. Or you might be thinking of Presidential politics instead, where that's probably true; I don't have the scores for Carter and Clinton to check but it's hard not to be to the right of Great Society LBJ.

But, yah, the Republicans have had a much tighter distribution of ideal points than the Democrats ever dreamed of.
posted by ROU_Xenophobe at 2:31 PM on October 21, 2002

That tells us how the change took place, but not why

Voting Rights Act. Southerners elect (very) conservative Democrats to combat the civil-rights movement, but it succeeds anyway. The Democratic party shifts away from being the party your daddy and granddaddy voted for and that party that wasn't Lincoln's into being the party that them goddam niggers vote for and the one that put your precious daughter near Them in school, so the Republicans become viable (and then mostly dominant) in the South and get a lot of conservative votes.

I also didn't get the impression he took the Poole paper as gospel. He called it eye-opening

He took their finding of a unidimensional Congress as being right, when actually people still argue about that fairly nastily. It turns out that NOMINATE can look at votes that are really multidimensional (ie, not just left-right) and find only left-right "mattering". The piece for this is by Ken Koford in I think the American Political Science Review.

Which isn't a slam on Poole. He's a good guy, and utterly unflinching in helping people use his code for other projects. I don't want to think about how much of his time he gives away helping people with NOMINATE.

but Krugman is an economist; no economist I've ever met would take a simple model-less ANOVA study as gospel

The unidimensional finding isn't from a simple model-less ANOVA study. It's just looking at what the NOMINATE program is finding. NOMINATE is a fairly complex maximum-likelihood estimator that has a model of spatial voting built into it. I can wax longer on it if you want; it's pretty cool even if some parts are best left to "and then the computer does black magic..."
posted by ROU_Xenophobe at 2:44 PM on October 21, 2002

The unidimensional finding isn't from a simple model-less ANOVA study. It's just looking at what the NOMINATE program is finding.

Ah. When I glanced over Poole's page, all I saw were some ANOVA-type results and colorful graphs. I had hoped there was more to it, but your talk of the shortcomings of their methods enforced my doubt.

NOMINATE is a fairly complex maximum-likelihood estimator that has a model of spatial voting built into it.

Ooh, talk dirty to me, baby! [Sorry, I've just spent five years in grad school; seeing the words "maximum-likelihood estimator" on MeFi made my day].

It's frightening to think that today's Democrats are further to the left than those of yesteryear. If that's really the case, why did the party even bother back then? They're now practically indistinguishable from the Republicans as it is. "No, we think the Bush tax cut is FAR too large. We propose to reduce it by, oh, at least 10%." "No, Mr. President, you can't go to war until you say 'please.'" Eh. You brave souls who study this stuff are stronger than I am. I'd lose heart.
posted by dilettanti at 4:13 PM on October 21, 2002

ROU_Xenophobe: Yeah, surely non-southern Dems. have shifted rightward. The House leader's in there arguing for tax cuts and war in Iraq? How many Democrats are arguing for a balanced budget now, and could not really be described as Keynesians anymore? I'm also thinking that, in recent years, it seems like southern Democratic candidates have been more noticeably moderate or conservative (at least in image) than in the 1980s or very early '90s, with some notable exceptions - say, Louisiana Sen. Mary Landrieu (who is conservative or moderate on certain issues), Alabama senatorial candidate Susan Parker or black candidates (but even there you have Tenn. Rep. Harold Ford, among others, who aren't all that liberal). The whole Blue Dog thing is southern-bred.
posted by raysmj at 6:09 PM on October 21, 2002

ROU_Xenophobe: Oh, in writing of a window for a "purge" of Boll Weevils, I was thinking of the subcommittee rules change deal of the early '70s. That was an all-out assault on the southern conservative power that still existed, and may have pushed those a little bit out the door more.
posted by raysmj at 6:15 PM on October 21, 2002