Crunch Time In America: An Interview With Economist Jared Bernstein

Jared Bernstein's Book

The topic below was originally posted on my blog, the Intrepid Liberal Journal on April 6th and x-posted today at The Wild, Wild Left, The Peace Tree,The Independent Bloggers Alliance and Worldwide Sawdust.

How many economists have you read or watched on television in recent years that claimed the economy was performing well while you struggled to make ends meat and keep up with the cost of living? Indeed, until recently a happy talk virus had infected a cabal of conservative plutocrats who preached the virtues of limited regulation, market forces and free trade as wages declined and predatory lenders had a party. It seemed we were hearing conservative politicians and their mouthpieces at the Heritage Foundation or Fox news refer to the economy as "the greatest story never told" at every opportunity.

Now that the housing and credit crisis has metastasized, conservative apparatchiks are fighting to minimize government intervention on behalf of regular folks while preserving corporate welfare. They accuse anyone who raises a fuss of waging class warfare. Instead these agents of the status quo prefer we erroneously obsess about Social Security going bust and agree to privatize it for Wall Street's benefit.

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BREAKING: Open Your Window and Yell: Raise the Minimum Wage!

Breaking: Republicans have blocked the vote on the minimum wage. This diary reflects earlier optimism about the debate.


An increase in the minimum wage is once again hovering around the Congressional docket, as Democrats try to wedge it into various bills while Republicans try to sink it.

And once again, as reliable as clockwork, defenders and opponents are snapping into action, dusting off briefs and arguments, updating the analysis for inflation and generally doing the same dance we always do (I'm a defender).

There's got to be a better way.

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Set a spell, Congress. we've got a couple things to chat about...

This past week, much to everyone's surprise, Democrats in the House of Representatives managed to slip a proposal to increase the minimum wage into a bill funding the Departments of Labor and Health and Human Services.

Faced with the specter of having to vote against increasing the wage floor from its current embarrassing level of $5.15 to $7.25 by Jan. 1, 2009, Congressional Republicans snapped into action and pulled the bill.

This is what these brave souls do in election season when they don't want to have to go back to their districts and answer questions as to why it's ok to cut hundreds of billions in rich people's taxes but deny the working poor a boost.

Well, I say: "Not so fast, guys.  Let's chat about this for a few minutes."

Not let me get this straight.  Last month, you passed $70 billion worth of new tax cuts, mostly by extending earlier Bush cuts on dividends and capital gains.  When tax cuts target investment income, the benefits flow to the wealthy, and these cuts are exhibit A: they reduce millionaire's tax payments by $43,000, and those of middle-income families by $20.  Sorry, that's not a typo.  It's what you get when you put the YOYOs in charge of fiscal policy.

Wait a second, where you going?  I'm not done.  Set a spell...

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The Economist Behind the Curtain

The recent failure in the Senate to repeal the estate tax stands as a rare victory for sane fiscal policy.  The NYT editorialized about the event under the heading "What Passes for Good News."

In fact, the Senate vote came alarming close to ending a tax on inheritances of the richest half-a-percent of households, with a majority of Senators (57--but they needed 60 for a repeal) supporting a measure which would have cost the treasury $800 billion over 10 years at a time of ballooning budget deficits and war.

Of course, the politics of the repeal were the focus of most analyses--would the White House be adhered to or get rebuffed on an issue dear to them--but the economics of the tax cut are deeply revealing of the fundamental flaw of economic policy today.

And that flaw is this: we have, over the past three decades, shifted from we're-in-this-together (WITT) economics to you're-on-your-own (YOYO) economics.

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Gay Marriage Ploy: Classic YOYO Fumble

With their focus solidly on the gay marriage amendment and estate tax repeal, the conservative movement is busy rearranging deck chairs on...well, not quite the Titanic, but on a rotting ship of state.

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