Kevin Bacon is so yesterday. If you’re an aspiring political pundit, Hitler is the game. Former governor and three-term senator from New Hampshire, Judd Gregg, is the latest to step into the ring.
Writing in The Hill this morning, Gregg draws a wobbly late-night drunkard’s path from “Progressives” to “Wealth Redistribution”, makes a beeline to “Socialism”, a word that appears in the “National Socialism Movement” in Germany that was later shortened to “Nazism”, and by golly, there’s your “Hitler”. A perfect six hops, proving conclusively that Progressives are as bad as Hitler.
What more is there to say? I mean, you can’t argue with that sort of air-tight deductive power, can you? Surely, Sherlock Holmes himself (assuming he was smoking some seriously good shit in that bad-ass pipe of his) would concur.
I’m arguably a bit manic about this at the moment because it’s the second “slippery slope” argument I’ve seen in the last 48 hours. The other was John Goodman’s essay defending inequality. In Goodman’s case, he had the good sense to avoid Hitler, but he did manage to wend his way from a rise in the capital gains tax rate to 28% all the way to full on communism.
Fer cryin’ in yer beer, do these guys apply this sort of convoluted logic to their everyday lives? Do they really think if they don’t get rid of cable their house will explode?
The crime is that there should be a serious debate here. There are solid arguments for and against various plans to modify the tax code. There are pros and cons to changing the minimum wage. And there are pluses and minuses to socializing various functions and services in society. Further, these are complex interwoven policies. You can’t address them in a vacuum. Rather they need to be considered holistically with other policies to further specific goals.
But silly arguments like these do not advance the discourse. Life is lived in the grey, not at the extremes. If you want to model your world using ideological purity rather than data and reason; if you want your emotions to swell at the sound of soaring rhetoric and nationalist pride; if you want to rationalize the “other” as the root of your plight; then maybe you should be following… HITLER. {FTW}
Perhaps we need to start teaching Godwin’s law in school rather than just leaving people to discover it on the internet.
So, let me get this straight. The President talks about how inequality is the defining issue of our times. He makes statements that lead you to believe that inequality itself, and not the issues that it causes are bad. Somebody writes an article that shows how absurd that is, and he’s not helping the discussion? I think you are reading far too much into his article. Is he writing in code that I don’t understand? Why is “inequality is good” more extreme than “inequality is bad”? At least he tried to explain his side of it.
To my knowledge, no credible politician, lobbyist, pundit, or policy wonk is advocating for the absence of inequality. This is the assertion Goodman makes in paragraph 3, and he sticks with it. There is an enormous difference between advocating for less inequality and advocating for equality. Further, no one is advocating silly things like removing wealth by expatriating the 1%. These are hyperbolic slippery-slope arguments, and no, that’s not helping the discussion.
As I know you are aware, economics is an intricate web of activities and policies. No sane person is going to advocate for a single economic metric to be achieved at all costs. But that’s the essential argument Goodman is trying to make. Liberals are advocating for equality, and if you just jump up and down on that lever, bad things happen.
You could make equally silly arguments in the other direction. If taxes depress the economy and government is evil, the logical goal is anarchy. That would be bad. Therefore, we can’t lower taxes or shrink the size of government.
As I indicated in the post, there are reasonable and useful discussions and debate to have about relative inequality as a part of overall economic policy. Neither of the essays referenced usefully advance that dialog.
I wrote the previous post and went and worked out. While working out, it hit me that I was a sucker and your post was pure genus. You write about how somebody uses convoluted logic to go from one extreme to Hitler and how insane that is. Then you use the same convoluted logic ending up at the same Hitler. This isn’t an argument against their argument, its an example of how insane the process is. Good one.
But if I’m wrong, then maybe we are reading two different articles. The one I’m reading starts out:
During the 2008 presidential election, Barack Obama was asked if he would favor of a higher capital gains tax rate, even if the government received less revenue as a result. His answer: Yes.
When you stop to think about it, that’s a remarkable answer. By hypothesis, everyone is worse off. The owners of capital are worse off. The government is worse off. Poor people who depend on government are worse off.
Yet Obama’s answer wasn’t remarked upon. It was generally ignored. The reason: I think most people in the mainstream media took it as aberration. Maybe even a misstatement. And that is because the mainstream media doesn’t take the president seriously when he says he is against inequality — an understandable attitude, given that the first family just finished a 17 day, $4 million vacation in Hawaii. – See more at: http://healthblog.ncpa.org/in-defense-of-inequality/comment-page-1/#comment-240478
I don’t see where he is accusing anybody of advocating for the absence of inequality in paragraph 3. The point isn’t that anybody is fighting for pure equality. The point is that before you start advocating for less equality, you need to prove inequality is bad. Obama indicates that it is bad in and of itself. Do you agree? I don’t. I think before we take on any problem in this country, we need to discuss what our assumptions are. That’s what this article is all about.
Thanks, that really was the point of the post.
As to Goodman, he says, “And that is because the mainstream media doesn’t take the president seriously when he says he is against inequality…” He then seems to proceed assuming he’s trying to show only that inequality is useful.
No one is arguing it’s not. It’s a question of degree. Further, he argues from the premise that the goal is to dramatically reduce or eliminate inequality. While that one specific quote from a 2008 Democratic debate, does seem to indicate that (especially out of context), it ignores his policy initiatives and what the left is largely arguing for. That is, inequality is a symptom, not a cause.
What I think is unarguable is that in recent history inequality has been significantly less, and the economy still thrived. That doesn’t prove causation, but it does show that less inequality isn’t an economic catastrophe.
These overly simplistic hyperbolic slippery-slope arguments are intellectually dishonest. There’s no value in taking a single 5-year old quote out of context and then railing against the horror of its nth degree outcome. Economics in particular, and politics in general, are way too complicated to be reduced to sound-bite analytics.
Inequality is a symptom of what exactly? What policy initiatives? I think most policy initiatives of the left, increase income inequality. Which isn’t a bad thing necessarily. Obamacare increases income inequality. Food stamps increase income inequality. I would argue that minimum wage increases income inequality, because it puts downward pressure on employment. I have no idea what inequality does to the economy. Is there an optimal level? Nobody knows. That’s why Goodman’s article is relevant, it shows the inanity of the whole discussion.
Degree of inequality, or perhaps it’s better to look at the rate and slope of inequality over time, indicate growth trends and winners/losers in the economy. At present, inequality is growing at a pretty good clip.
But it’s more complicated than the number. If the low range was growing apace, and the high range was growing even faster, then it’s probably not an issue. But our present situation seems to be that the top is growing rapidly and the bottom is not moving or even sliding down. The rising tide is not lifting all boats.
Left unchecked, the result is an aristocratic class living in walled estates and peasants outside starving in the street. That’s neither economically desirable nor politically stable. Not that I’m concerned we’ll get to that extreme, but it begs the question of what turns that around. What changes the trend?
While there is a “social justice” crowd on the left, the mainstream policy wonks are not really concerned about making sure the rich have less. It’s about how the bottom 80% share in the success. The conservative position seems to be, it will trickle down. So far it hasn’t. So how much wealth needs to be aggregated at the top before it spills over the levies?
As to leftward policies actually increasing inequality, 2 things. First, if inequality is good (or at least not bad), then why aren’t conservative advocating liberal policies?
Second, while there are lots of point studies both for and against here, history tends to disagree. 1950-1980 were generally considered pretty prosperous times. They were also a time of pretty progressive policy. After Reagan, the policies shifted considerably rightward, and inequality has widened ever since. Again, correlation is not causality, but it does show that liberal policies don’t correlate with higher inequality.
I don’t think that anybody is arguing that more inequality is better. Inequality is inevitable. Income inequality does not reflect the safety net. Transfer payments don’t count as income. If you ask many liberals what the would do to combat inequality, many of the would say increase food stamps. But this has no (first order) effect on income inequality.
http://www.krusekronicle.com/kruse_kronicle/2012/10/consumption-inequality-versus-income-inequality.html#.UvOYXbmYYdU
Let’s quit talking about inequality and talk about the what the real problems are.
My gut instinct is that the growth of inequality has more to do with globalization and automation than either right or left wing policies. Low skilled workers are worth relatively less than they used to be. There is no going back to the sixties. All this talk about inequality on both sides is a ruse that the politicians use to get reelected.
You said:
If Inequality in the US is a function of globalization, then you should see inequality trending in the opposite direction in places like China and India. That’s not happening. Inequality is trending up globally and is especially high in countries who are the economic benefactors of US business globalizing.
Your point about low-skilled workers is dead on the money. They are less valued, as reflected in the increased inequality numbers, and in the size of the safety net required to catch them. There is no going back. $30/hr assembly line jobs will not re-materialize, no matter what. Many of these workers lack the capacity to be trained as nurses, electronics techs or other highly skilled labor jobs, no matter how many training programs are provided. So as a society, I think the question starts with, what do we do with these folks?
I don’t think we can just let them starve. But I’m not a big fan of corporate welfare where effectively the safety net programs subsidize the Wal-Marts of the world by making their low wages liveable.
I’m beginning to entertain whether or not a minimum income program for everyone makes sense. It seems insane, but there are examples of it having worked successfully. It’s easier to administer than the current web of programs, doesn’t adversely favor the poor, and makes unemployment and inequality much less relevant.
I don’t know what the solution is.But I do think we are not on a path to make this better today, and are reluctant to try anything because it costs money the gov’t doesn’t have and the rich are desperately trying not to part with. Hardly a recipe for success.
Why would we see inequality trending in the opposite direction in China and India? I don’t believe there is any reason to assume this. Look at the Middle East oil producing countries. Trade increased inequality. I would say on average, the citizens of these countries India and China) should be doing better because of trade, and I think they are.
Less inequality in counties where American jobs are being outsourced just seemed to make sense if losing the job resulted in more here. Even you are saying that people should be doing better there because of the trade. Although given where they started, doing better and less inequality don’t necessarily have to correlate.
I find it a disconnect that you don’t know what to do with the low wage workers, yet you want to punish the companies that employ them. Are you willing to hurt millions of the most disadvantaged Americans to make sure Wal Mart and McDonalds live up to some fictitious social contract? I think 50 years ago people were worried about the same issues. Nobody foresaw the growth of the service industry to the extent that it is today. I think there will always be jobs for people to do as long as the government doesn’t make it illegal to do them at the wage that they are worth doing.
The idea of a guaranteed income intrigues me. The problem that I have is that I would want it to replace the safety net for the majority of people, and I can’t fathom that we could set the income level that high.
Well, your points are a big part of why I don’t know what to do with low skill laborers. In principle, I think using tax dollars to help Wal-Mart keep their everyday low prices is antithetical to free markets. But having people starve or wind up unemployed is a step in the wrong direction too.
I agree guaranteed income should replace all the safety nets. This should even include a big chunk of SSI. It would also have to affect wages so everyone employed didn’t suddenly get a big raise. So it seems a lot of the funds needed already exist, just not in the right place.
However, politically, this is unfathomable in the US. Others will have to do it first (maybe Switzerland). If it works, it will catch on with other developed nations. We’ll scream about it being unAmerican for a generation or so, and then reluctantly concede. You and I will be long dead by then…
This is dated, but relevant.
http://www.mackinac.org/archives/2006/walmart.pdf
One key quote out of many….
Neither paper estimated the impact of Wal-Mart on real wages. Presumably the workers
in the retail sector and more broadly also benefit from the lower prices that follow the entry of a
Wal-Mart. The nominal wage effects in both papers have to be compared to the 7 to 13 percent
retail price effect in the long run found by Basker or the reduction in the broader CPI found by
Global Insight. Taken together, the evidence appears to suggest that, even for retail workers, the
benefits of lower prices could outweigh any potential cost of lower wages – potentially leading
to higher real wages even in the retail sector.
Your quote could be used to make the argument that reducing wages even further would be a societal benefit as it would further drive down prices. Clearly that’s not true all the way to zero any more than it makes sense to raise the minimum wage to $20. There’s a balance point somewhere, and it would be nice to see a model that called it out.
On healthcare, yes, low wage workers want cash rather than insurance. But that’s just a short term vs. long term horizon focus. Interestingly, the article comes close to arguing for a simple single payer plan that would separate health insurance from employment. Seems that would address all of WalMart’s woes.
Finally, there’s not an accounting of the negative effect WalMart has on manufacturers. They are brutal negotiators, often dictating terms to their suppliers. And they control so much of the retail shelf space that most companies are pretty much forced to comply. This is deleterious to other companies and inconsistent with open markets and capitalism. The effects of the WalMart monopoly are felt up and down the whole consumer goods supply chain.
The quote does not say anything about lower wages being better for society. It says lower prices are better for society, especially for lower income people. Lowering wages down to zero of course would be bad for society, but lowering the minimum wage down to zero would be a positive. Remember it is a price floor, not a price ceiling. I think the vast majority of people who earn minimum wage would still get paid the same. In the long run, the wage distribution would approach a normal distribution. Employment would increase. There would be competition among companies to attract better entry level workers. Companies would actually have to put thought into the value of those positions, instead of assuming the minimum wage. At some places it would go up, some places it would go down.
The model you’re looking for that estimates the correct amount to pay for a position is called the free market system.
I don’t understand your fixation on Wal Mart being evil. They employee millions of low skill workers. They pay as well as others in their industry. They give a boost for many people from low income to middle class. They make life better for many more millions of people through low prices. It sounds to me you are more worried about putting down their business model than you are about helping the poor. It used to be we were worried about monopolies soaking the poor to get rich. Wal Mart soaks the rich to help the poor.
I believe the article you referenced says:
– Lower prices are better for society
– Lower wages are a primary driver of WalMart’s ability to deliver low prices
– The benefit of low prices outweighs the benefit of higher wages
So it pretty much does say lower wages are good for society, it just leaves the reader to do the math.
I don’t think WalMart is evil. Like any business, they are operating in their own self interest to maximize profits. That’s what businesses do, and there’s nothing wrong with that.
The issue I have with WalMart is they have become so large that they really aren’t subject to free-market rules. I’ve dealt with them on the supplier side. If you’re a commodity brand, you can’t afford to not be on WalMart’s shelves. They are too big a portion of the retail space. They know this, and they use it to dictate prices, packaging requirements, special shipping, payment terms and other demands that make them a major PITA for suppliers to deal with. Most companies have their own groups dedicated just to meeting WalMart terms and conditions. In a true free market, suppliers would just not ship to WalMart and focus on other retailers. That would force WalMart to change their game. But that’s not a practical choice given WalMart’s outsized retail footprint.
The same sort of thing happens in other areas. WalMart coming to town is usually the death of smaller and more local stores. And not just because they pay their staff too much. They can’t demand the supplier prices WalMart can, and can’t compete on price. Price is the major driver in the commodity consumer goods market.
Especially once the smaller stores are gone, Most towns have a glut of unskilled labor. This is where most of the unemployment is today. WalMart doesn’t compete for workers when there’s an excess labor pool. Absent minimum wage laws, what would govern the low-end of the wage scale would not be inter-company competition for workers, but the comparative value of the government safety net.
I’m a big fan of the free-market, but it must be recognized that the incentive is for each actor in the free market to be selfish and greedy. That’s the game. And the market will periodically yield big winners. However, left unchecked, a very big winner (or a small group of cooperating big winners) will dominate a market, and then it is no longer free. Absent a government regulation there’s no inherent mechanism for the free-market model to self-correct for these big winners who reach a point where they no longer have to play by free-market rules.
WalMart has reached this point in the retail space. It doesn’t make them evil any more than it makes them Robin Hood-esque. Most companies strive for this freedom from the free market. The free market is a bitch. Getting to a point where you can dominate the customer base and control your supply chain is business nirvana, precisely because it means you no longer operate at the whim of the free market. So if the free market is good for society, then companies that reach the point where they are no longer subject to it are not good for society.
It says in this case the net benefit for the worker is positive because the retail price effect outweighs the nominal wage effect. That is a much different statement than you are making. Even using the word outweighs suggest the two factors work in opposite direction. It definitely does not say that low wages are the main factor in their low prices. They pay comparable wages to others in there industry, and still have lower prices. It suggests they are really good at other things.
I agree with a lot of what you have to say about Wal Mart. The argument is whether they are good or bad for the low wage workers and this evidence shows they are good.
Could you imagine 30 years ago talking about the next great companies and even imagining that one of them could do retail so well that it would dominate this way? Retail has been around forever. Sears, Kmart JC penney; surely there was too much competition for a new store to come in and revolutionize the way things are done. Yet they did. And they didn’t always have the “monopoly power” they have now. They must have done something right.