Wednesday 2011-09-14

The End of Loser Liberalism by Dean Baker

Baker wants people to use government to redistribute earnings from the wealthy to the impoverished. Since the US has had ~30 years of stagnant real wages for middle/lower class jobs, Baker wants to expand the scope of redistribution.

Progressives have been similarly shortsighted by misdirecting their attention to the narrow realm of tax and transfer policy while largely ignoring far more important policies that determine the distribution of before-tax income. As a result, conservatives have gained control of the mechanisms that distribute income and used tax and transfer policy as a sideshow to divert public attention.

The arithmetic on this story is straightforward. Federal government spending averages roughly 20 percent of GDP. Adding in state and local government spending gets us a bit over 30 percent. This means that all levels of government spending account for less than one-third of the economy. If this is the exclusive realm for political debate, and we ignore the way in which the government structures the larger economy, then we have given up two-thirds of the game.

Even worse, this approach leaves progressives much less well-situated to contest the portion of income that is controlled by the government for both political and economic reasons.
-- Chapter 11

Baker does not show why he prefers redistribution by government to redistribution by charities; that differential in performance must be worth the additional cost of coercion. He also does not show why addressing the symptom of stagnant real wages by increasing transfers to middle / lower class job-holders will make the US more competitive in the markets where those jobs exist.

With regards to job change, Phil Bowermaster speculated:

Maybe what's becoming obsolete is not jobs per se, but the idea that they are something that you simply find.

Increasingly, perhaps, a job is something that we each have to create. We can't count on someone else to create one for us. That model is disappearing. We have to carve something out for ourselves, something that the machines won't immediately grab.
-- Jobsolescence