Then the Rich Got Richer.

“Through midcentury, when times were good economically, most of the benefits trickled down to the bottom 90 percent of households. Then came the Reagan era and actual trickle-down economics. Suddenly, the benefits started sticking with the rich. Since 2001, the top 10 percent have enjoyed virtually all of the gains.”

As making the rounds of late, a devastating graph of rising income inequality in America, “post-trickle-down”. “This isn’t a totally new story. But it is a vivid and visceral illustration of what we’ve basically known to be true for a while.”

Along the same lines, Mother Jones is posting a new chart on income inequality every day this week. “In the past few years, we’ve heard a lot about overtaxed ‘job creators’ and freeloading ‘takers.’ But consider this: As the income rates for the wealthiest have plunged, their incomes have shot up.”

If it’s any consolation, presumptive 45th president Hillary Clinton has recently “talked to friends and donors in business about how to tackle income inequality without alienating businesses or castigating the wealthy.” Er…sorry, that’s not going to get it done.

The New Gilded Age.

“[This] is, as I hope I’ve made clear, an awesome work. At a time when the concentration of wealth and income in the hands of a few has resurfaced as a central political issue, Piketty doesn’t just offer invaluable documentation of what is happening, with unmatched historical depth. He also offers what amounts to a unified field theory of inequality, one that integrates economic growth, the distribution of income between capital and labor, and the distribution of wealth and income among individuals into a single frame.”

In the NYRB, and in very related news, Paul Krugman sings the praises of Thomas Piketty’s new magnum opus, Capital in the 21st Century. “This is a book that will change both the way we think about society and the way we do economics…Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.”

As a counterpoint of sorts, CEPR’s Dean Baker — neither a Pollyanna nor a conservative — argues Piketty has picked up some of Marx’s bad habits, and finds the book too deterministic and despairing by far:

“[T]here are serious grounds for challenging Piketty’s vision of the future…the book [suffers from a] lack of attentiveness to institutional detail…In the past, progressive change advanced by getting some segment of capitalists to side with progressives against retrograde sectors. In the current context this likely means getting large segments of the business community to beat up on financial capital…[T]he point is that capitalism is far more dynamic and flexible than the way Piketty presents it in this book. Given that we will likely be stuck with it long into the future, that is good news.”

Update: Galbraith weighs in. “[This] is a weighty book, replete with good information on the flows of income, transfers of wealth, and the distribution of financial resources in some of the world’s wealthiest countries…Yet he does not provide a very sound guide to policy. And despite its great ambitions, his book is not the accomplished work of high theory that its title, length, and reception (so far) suggest.”

“Too Fast to Fail.”

“The issue here is that people are earning large amounts of money by using sophisticated computers to beat the market. This is effectively a form of insider trading…[T]he front-running high speed trader, like the inside trader, is providing no information to the market. They are causing the price of stocks to adjust milliseconds more quickly than would otherwise be the case. It is implausible that this can provide any benefit to the economy. This is simply siphoning off money at the expense of other actors in the market.”

In the wake of Michael Lewis’ publicity blitz for Flash Boys, and per his “let’s focus on solutions” argument to Piketty above, CEPR’s Dean Baker explains how to easily fix the problem of high-frequency trading. “[O]ne simple method…would virtually destroy the practice. A modest tax on financial transactions would make this sort of rapid trading unprofitable since it depends on extremely small margins.”

Yes, the Game is Rigged.

“Well, the plutocrat class — that’s the top 16,000 households in this country — are where all the gains have been going since the end of the recession. Thirty-seven cents out of every dollar of increased income between 2009 and 2012 went to these 16,000 households — in a country of 314 million people…[Meanwhile] The average income of the bottom 90 percent of us has fallen 20 percent below where it was in the year 2000 — it fell from about $36,000 to $30,000. It has fallen back to the level of 1966, when Mustangs were new, Lyndon Johnson was president and we were prosecuting a war in Vietnam. 1966.”

In an interview with Joshua Holland, journalist and tax expert David Cay Johnston discusses how our current tax code, among other things, is fueling inequality. For example:

1) “Very, very wealthy people…are not required to report most of their economic gains and legally they can literally live tax-free or nearly tax-free by borrowing against their assets. You can borrow these days, if you’re very wealthy, against your assets for less than 2 percent interest and the lowest tax rate you could pay is 15 percent…[I]f you’re a billionaire and you borrow, let’s say, $10 million dollars a year to live on, you pay $200,000 interest, but your fortune through investing grows by $50 million. At the end of the year you pay no taxes, your wealth is up almost $40 million dollars and your cost was just the interest of $200,000.”

2) “Well, one of the reasons some Americans feel they’re being taxed to death is that if you add up our taxes, which are low compared to other modern countries, and then you add in private expenditures for things the tax system pays for in other countries — a lot of our health care costs, higher education costs, admissions and fees and tickets and licenses for a lot of things — lo and behold, we end up being a relatively high-tax country.”

This is Why We Can’t Have Nice Things.

“There is a dignity in the Hoover Dam, a massiveness that speaks to a grand national purpose. A country — our country — decided to build it…Great works of infrastructure provided jobs and returned an incredible social investment. It is inconceivable to imagine the modern economy without the vast investments in infrastructure made by preceding generations — everything from rural electrification to developing the Internet.“

Ex-Grayson staffer (and friend) Matt Stoller dissects the lack of political will for infrastructure reinvestment in today’s political climate. “Ultimately, of course, we will have no choice but to rebuild our infrastructure or risk social collapse…Meanwhile, the ideological fight is not over whether to spend more on infrastructure. It’s whether we should privatize what’s left.“

Proving Matt’s point is this thoroughly sad column by ex-Biden Chief of Staff Ron Klain, a man who until very recently was a senior advisor to the president. (Now, he works for a “private investment firm,” natch.). Says Klain: “Hoover Dam nostalgia is misguided…[I]t’s time to let go of the idea that a handful of marquee construction projects, even majestic and lasting ones, can solve our employment problem. Such endeavors alone didn’t bring us out of the Depression in the 1930s, and they won’t end our current predicament.“

Uh, is anyone actually saying that we should only do “a handful of marquee construction projects“? No, no, they’re not. They’re saying we should build big things, build small things, rebuild and repair things big and small, and otherwise put people back to work in any way possible. Where’s the vision? It’s going to take something a mite bigger and more audacious to get the economy moving again than an employer-side payroll tax cut.

Enabling the Hucksters.

“‘Trump’s presidential run is no longer being treated as serious by the easily distracted and resolutely frivolous political press that covered it so thoroughly just a few short weeks ago. While it was always an unamusing joke…we had what felt like a lifetime of New Hampshire trip coverage and Piers Morgan interviews and ‘President Trump? It might be more likely than you think!’“

With last month’s embarrassing Trump boomlet seemingly run its course in the Village, Salon‘s Alex Pareene comes to bury, not praise, the Donald. “[T]ransparent idiocy didn’t cause the press to take Trump less seriously, but it did lead people to gradually grow to hate Trump, which made his ratings suffer, and the exposure of the artifice of the Trump persona was decidedly damaging to his ‘brand.’ Once your ‘brand’ has been damaged, say goodbye to credulous political press coverage!“

To be honest, I couldn’t care less about Trump, and mostly avoided all of his Birther shenanigans as they were unfolding two weeks ago for the same reason I try to avoid any political coverage — from right or left — of the “You won’t believe what Sarah Palin just posted on Facebook!” variety. It’s lazy, it’s boring, and it’s actively pernicious given all the real problems we face right now. (But at the very least, both Trump and Palin are noteworthy indicators of how far the GOP done fell.)

I’m only posting on this now to point out that the Trump boomlet was by no means a one-time-thing. When the President of the United States actually had to come on TV two weeks ago to prove he was an American citizen, there was much pearl-clutching by the Village press about what a travesty this had all become. “What a sad day in American political history,” lamented MSNBC’s Chuck Todd. Meanwhile, the Washington Post opined that the release “says something embarrassing — actually, make that disturbing — about the state of American politics” — soon after that newspaper of record invited Trump to the White House Correspondent’s Dinner. (An evening, by the way, that’s as good as reflection as any of how desiccated and domesticated today’s establishment press has become.)

For his part, ABC’s Jake Tapper — a fellow who, let’s remember, got his big break as a hard-hitting journalist by kissing-and-telling on Monica Lewinsky back in the day — tried to defend the press by pointing to a Pew study which found that the deficit debate was actually the most-covered news story of the week. The problem with this line of argument is that conducting lousy journalism in one arena does not absolve you of conducting lousy journalism in another. And in fact, Village criers have been just as incompetent and/or duplicitous on the deficit.

For months, as you all know, the Serious People in the media have been banging the drum of the deficit witchhunt even though, from an economic perspective, austerity at this hour makes about as much sense as Birtherism. And, in the past few weeks, they have doubled down on this idiocy by trying to elevate the most recent flavor of the month, Wisconsin Congressman Paul Ryan, as a Serious Man, come to tell us hard truths about the need for sacrifice.

In fact, Congressman Ryan is scarcely any less of a huckster than the Donald. This is a guy who laments the intrusions of the welfare state at every turn, but only made it to college thanks to Social Security benefits received upon the passing of his father. (To be fair: Ryan is only emulating his hero with this sort of hypocrisy.) This is also a guy who, when confronted with the Clinton budget surpluses of a decade ago, then lamented that the debt was too small.

And this is a guy whose budget proposal — which he was quick to deem not a budget, but a cause — is basically the same vile, stale concoction of malice and magical thinking that the right has been peddling for decades. It uses made-up numbers to argue that privatizing Medicare (and leaving seniors with the bills), slashing the social safety net, and lowering taxes on the rich will somehow end deficits and save America. (Short answer: It won’t.)

By any reasonable standard, the Ryan budget should have been laughed out of the room as soon as it dropped. But, no, the press needed A Serious Man™ on the right for its lazy he-said, she-said approach to any political story. And, so Ryan got the Trump treatment and the rest is history. Ostensibly liberal pundits fell over themselves praising Ryan’s budget. In response, the president eventually drew progressive kudos for pitching his own deficit reduction plan. (More on that in a sec.) With both sides established, the press can now continue to happily indulge in the usual medley of content-free, he-said, she-said inanities that, to them, constitutes political journalism. And everyone in Washington can continue to ignore the fact that, actually, more spending, not cutting the deficit, is what is needed to fix the economy right now. Win-win!

Regarding President Obama’s deficit proposals, he delivered an eloquent speech on the subject last month, to be sure — one of his best as president. But, even if we hadn’t already been burned far too many times by his rhetoric not matching up to his policies, it’s hard for me to take his remarks as some great moment of the left just because he finally articulated what should be pretty basic principles of American government. Particularly when you consider that the Obama plan is, of course, center-right-leaning, and yet it has nevertheless become the left pole in an exceedingly narrow economic debate.

(By the way, if you’re really worried about the long-term deficit, the answer isn’t rocket science. Try raising taxes on the rich. Or passing real health care cost controls. Or going where the money’s at. Or growing the economy and putting people back to work. Or, y’know, doing nothing — that would work too.)

In sum, the Trump boomlet of last month was not the exception. It was a clear and distilled expression of the rule, a sideshow to a sideshow. And because the Village press is so terrible, our entire politics is distorted — We are living out the consequences of this disaster yet again in the deficit debate. Only the sheer amount of money flooding the system right now is a bigger political problem than the broken state of the newsmedia.

Do Not Trust to Hope…

“What is at stake in the long run? Two things, mainly, in my view. First, it seems to me that we as progressives need to make an honorable defense of the great legacies of the New Deal and Great Society — programs and institutions that brought America out of the Great Depression and bought us through the Second World War, brought us to our period of greatest prosperity, and the greatest advances in social justice. Social Security, Medicare, housing finance — the front-line right now is the foreclosure crisis, the crisis, I should say, of foreclosure fraud — the progressive tax code, anti-poverty policy, public investment, public safety, and human and civil rights. We are going to lose these battles- get used to it. But we need to make an honorable fight, to state clearly what our principles are and to lay down a record which is trustworthy for the future.“

In a hard-hitting address to the Americans for Democratic Action from last November, economist Jamie Galbraith puts the current situation of progressivism in perspective. His steely resignation may sound fatalistic, but it’s hard not to feel thus these days. “Recovery begins with realism and there is nothing to be gained by kidding ourselves…We need to lose our fear, our hesitation, and our unwillingness to face the facts. If we thereby lose some of our hopes, let’s remember the dictum of William of Orange that ‘it is not necessary to hope in order to persevere.’“

We’re No. 50!

On the eve of the State of the Union — Win the Future! — the wags at Pleated Jeans compile a handy map of what each state desperately needs to work on. (By way of Blackpepper and Webgoddess.) “Whether it’s a fat population, high rate of STDs or excessive tax rate, it turns out that every state ranks dead last in at least one unsavory category. Check out the map (click image to enlarge) to see what your state is the worst at, then review additional stats and references after the jump.”

Anatomy of a Tantrum.

“This is the public option debate all over again. So I pass a signature piece of legislation where we finally get health care for all Americans, something that Democrats had been fighting for, for a hundred years – but because there was a provision in there that they didn’t get…somehow that was a sign of weakness and compromise.

“Now, if that’s the standard by which we are measuring success or core principles, then let’s face it, we will never get anything done. People will have the satisfaction of having a purist position, and no victories for the American people. And we will be able to feel good about ourselves, and sanctimonious about how pure our intensions are and how tough we are…That can’t be the measure of how we think about our public service. That can’t be the measure of what it means to be a Democrat.“

As I’m sure most of y’all know by now, the president decided to indulge in some cathartic lefty-bashing at his tax cut deal press conference earlier in the week. [Transcript.] At this point, the fact that Obama feels this way about progressives is not at all a surprise, and I feel like I’ve already responded to his appalling penchant for this sorta thing at length. So, here’re just a few numbered points about this latest sad window into Obama’s “pragmatic” mindset:

1) Alex Pareene at Salon cut right to the heart of the fallacy on display here: “[Obama] continues to imagine that his liberal critics are upset with the idea that compromises need to be made in order to accomplish progressive policy goals. Some of them are that stupid. But lots of them are actually critics of the White House’s legislative strategy, and their apparent willingness to preemptively compromise before the negotiations have already begun.” Yep.

2) See also Paul Krugman: “Leave aside the merits for a moment: what possible purpose does this kind of lashing out serve? Will activists be shamed into recovering their previous enthusiasm? Will Republicans stop their vicious attacks because Obama is lashing out to his left? It was pure self-indulgence; even if he feels aggrieved, he has to judge his words by their usefulness, not by his desire to vent…[W]hat we really don’t need right now is a president who blames everyone but himself, and seems more concerned with self-justification than with sustaining the alliances he needs.“

3) As I noted on Twitter, the president’s argument here is inherently contradictory. He began his presser by saying he had to make a bad deal because the Right, however wrongheaded, held stubbornly to their convictions. Then he verbally abuses the Left for…holding stubbornly to their convictions. Uh, it seemed to work pretty well for the GOP.

4) Speaking of Twitter, the Twitterverse response to the presidential presser is well worth perusing for gallows humor and hard truths. Take for example, “Obama: This is like the public option fight all over again where I caved and opposed the thing that reduced the deficit.“

5) As many have pointed out now, the president is also wrong on his New Deal history. In the presser, he claimed Social Security was only for widows and orphans. Wrong. He’s thinking of the civil war pension system, circa 1862. I know that law degrees are considered the be-all, end-all of our civilization these days, but an ostensibly progressive president not understanding the origins of Social Security is sort of a big effing deal. (And he didn’t just misspeak — He’s said it before.)

6) As historian Thomas Ferguson noted several weeks ago, this is not the first time the president has badly screwed up the history of the New Deal in a way that was ultimately self-serving. (As an aside: Given they they chose to structure a major policy speech around a fake Lincoln quote, his communications staff isn’t much better.)

7) As Dan Froomkin pointed out, Obama’s argument about the public option is also contradictory. He argues that Social Security and Medicare started out small, than belittles the public option because it “would have affected maybe a couple of million people,” i.e. it would’ve started out small.

8) Obama also no longer seems to understand how the public option was supposed to work. Here’s Froomkin: “What the president conspicuously disregarded was that the central point of the public option was that its existence would exert enormous competitive pressure on the private insurance system. The goal was not to serve a particularly large number of people directly — that would only happen if the private offerings were terribly inadequate. The goal was to keep the private sector honest. So no matter how many people it enrolled, ‘the provision,’ as Obama put it “would have affected” tens of millions.” In other words, the public option was designed to be a yardstick. So, even in terms of recent history, there are some serious revisions going on.

9) Politico’s catty analysis of the president’s relationship with Chuck Schumer offered more insights on Obama’s thinking today: “Obama himself warned Schumer that the millionaire strategy could sink the stock market. When a vote on the millionaire plan came up short last Saturday, the administration gloated.” The vagaries of the stock market? Is that really what we’re basing our tax policies on these days? (Also, I don’t think Chuck Schumer, of all people, needs to be informed of when and how Wall Street will balk. I think he has his finger pretty solidly on that pulse.)

10) A day after the president’s remarks, Larry Summers solemnly informed us that not passing the millionaire tax cut would lead to a double-dip recession. This is basically the economic equivalent of the terror, terror, terror, 9/11, 9/11, 9/11 argument. And, as David Dayen and Jon Walker both pointed out: If the economy is resting on that sort of knife’s edge, why’s the White House just reduce purchasing power by announcing a federal worker’s pay freeze? Something does not compute.

11) Obama at the presser again: “Look at what I promised during the campaign. There’s not a single thing that I’ve said that I would do that I have not either done or tried to do. And if I haven’t gotten it done yet, I’m still trying to do it.” Um…do we really want to go there? Because I’m sure this would be news to Maher Arar. In any case, as a friend pointed out, this isn’t kindergarten — You don’t get a gold star just for “trying.”

Anyways, so, yeah, Obama doesn’t like “the professional left” very much. And, at this point, it’s safe to say the feeling is mutual. As for myself…well, these days I just feel like a sucker.

Still Mad as Hell (with Truths to Tell.)

“It’s one thing to recognize capitalism for the powerful economic tool it is and to acknowledge that, for better or for worse, we’re stuck with it and, hey, thank God we have it. There’s not a lot else that can produce mass wealth with the dexterity that capitalism can. But to mistake it for a social framework is an incredible intellectual corruption and it’s one that the West has accepted as a given since 1980–since Reagan…People paid a much higher tax rate when Eisenhower was president, a much higher tax rate for the benefit of society, and all of us had more of a sense that we were included.”

By way of DYFL, Vice Magazine publishes an extended interview with David Simon on The Wire Treme, writing, political economy, health care reform, and other important matters. “Of course it’s socialism. These ignorant motherf**kers. What do they think group insurance is, other than socialism? Just the idea of buying group insurance! If socialism is a taint that you cannot abide by, then, goddamn it, you shouldn’t be in any group insurance policy.“