EMAIL PAGE THREE
COLUMN EIGHTY-FIVE, FEBRUARY 15, 2003
(Copyright © 2003 The Blacklisted Journalist)
BY PAUL KRUGMAN
1. THE SONS ALSO RISE
Subject: NYTimes.com Article: The Sons Also Rise
Date: Fri, 22 Nov 2002 23:19:47 -0500 (EST)
November 22, 2002
The Sons Also Rise
By PAUL KRUGMAN
America, we all know, is the land of opportunity. Your
success in life depends on your ability and drive, not on who your father was.
Just ask the Bush brothers. Talk to Elizabeth Cheney, who
holds a specially created State Department job, or her husband, chief counsel of
the Office of Management and Budget. Interview Eugene Scalia, the top lawyer at
the Labor Department, and Janet Rehnquist, inspector general at the Department
of Health and Human Services. And don't forget to check in with William Kristol,
editor of The Weekly Standard, and the conservative commentator John Podhoretz.
What's interesting is how little comment, let alone
criticism, this roll call has occasioned. It might be just another case of
kid-gloves treatment by the media, but I think it's a symptom of a broader
phenomenon: inherited status is making a comeback.
It has always been good to have a rich or powerful father.
Last week my Princeton
colleague Alan Krueger wrote a column for The Times surveying statistical
studies that debunk the mythology of American social mobility. "If the
United States stands out in comparison with other countries," he wrote,
"it is in having a more static distribution of income across generations
with fewer opportunities for advancement." And Kevin Phillips, in his book
"Wealth and Democracy," shows that robber-baron fortunes have been far
more persistent than legend would have it.
But the past is only prologue. According to one study cited
by Mr. Krueger, the heritability of status has been increasing in recent
decades. And that's just the beginning. Underlying economic, social and
political trends will give the children of today's wealthy a huge advantage over
those who chose the wrong parents.
For one thing, there's more privilege to pass on. Thirty
years ago the C.E.O. of a major company was a bureaucrat " well paid, but not
truly wealthy. He couldn't give either his position or a large fortune to his
heirs. Today's imperial C.E.O.'s, by contrast, will leave vast estates behind
" and they are often able to give their children lucrative jobs, too. More
broadly, the spectacular increase in American inequality has made the gap
between the rich and the middle class wider, and hence more difficult to cross,
than it was in the past.
Meanwhile, one key doorway to upward mobility " a good
education system, available to all " has been closing. More and more,
ambitious parents feel that a public school education is a dead end. It's
telling that Jack Grubman, the former Salomon Smith Barney analyst, apparently
sold his soul not for personal wealth but for two places in the right nursery
school. Alas, most American souls aren't worth enough to get the kids into the
92nd Street Y.
Also, the heritability of status will be mightily
reinforced by the repeal of the estate tax " a prime example of the odd way in
which public policy and public opinion have shifted in favor of measures that
benefit the wealthy, even as our society becomes increasingly class-ridden.
It wasn't always thus. The influential dynasties of the
20th century, like the Kennedys, the Rockefellers and, yes, the Sulzbergers,
faced a public suspicious of inherited position; they overcame that suspicion by
demonstrating a strong sense of noblesse oblige, justifying their existence by
standing for high principles. Indeed, the Kennedy legend has a whiff of Bonnie
Prince Charlie about it; the rightful heirs were also perceived as defenders of
the downtrodden against the powerful.
But today's heirs feel no need to demonstrate concern for
those less fortunate. On the contrary, they are often avid defenders of the
powerful against the downtrodden. Mr. Scalia's principal personal claim to fame
is his crusade against regulations that protect workers from ergonomic hazards,
while Ms. Rehnquist has attracted controversy because of her efforts to weaken
the punishment of health-care companies found to have committed fraud.
The official ideology of America's elite remains one of
meritocracy, just as our political leadership pretends to be populist. But that
won't last. Soon enough, our society will rediscover the importance of good
breeding, and the vulgarity of talented upstarts.
For years, opinion leaders have told us that it's all about family values. And it is " but it will take a while before most people realize that they meant the value of coming from the right family.
Copyright The New York Times Company
Subject: NYTimes.com Article: Hey, Lucky Duckies!
Date: Tue, 3 Dec 2002 23:19:47 -0500 (EST)
December 3, 2002
Hey, Lucky Duckies!
By PAUL KRUGMAN
Harping critics of the conservative movement have been
known to say that its economic program consists of little more than tax cuts,
tax cuts and more tax cuts. I may even have said that myself. If so, I
apologize. Emboldened by the midterm election, key conservative ideologues have
now declared their support for tax increases " but only for people with low
The public debut of this idea came, as such things often
do, on the editorial page of The Wall Street Journal. The page's editors, it
seems, are upset that some low-income people pay little or nothing in income
taxes. Not, mind you, because of the lost revenue, but because these "lucky
duckies" " The Journal's term, not mine " might not be feeling a proper
hatred for the government.
The Journal considers a hypothetical ducky who earns only
$12,000 a year " some guys have all the luck! " and therefore, according to
the editorial, "pays a little less than 4% of income in taxes." Not
surprisingly, that statement is a deliberate misrepresentation; the calculation
refers only to income taxes. If you include payroll and sales taxes, a worker
earning $12,000 probably pays well over 20 percent of income in taxes. But who's
What's interesting, however, is what The Journal finds
wrong with this picture: The worker's taxes aren't "enough to get his or
her blood boiling with rage."
In case you're wondering what this is about, it's an
internal squabble of the right. The Journal is terrified that future tax cuts
might include token concessions to ordinary families; it wants to ensure that
everything goes to corporations and the wealthy. But the political theory
revealed by the editorial " policy should be nasty to people with low incomes,
lest they have any good feelings about government " may explain a lot of what
has been happening lately.
For example, House Republicans recently refused to extend
unemployment insurance. Their inaction means that later this month more than
800,000 workers will receive Merry Christmas letters from the government,
telling them that their benefits have been cut off. This would have been a harsh
decision under any circumstances. At a time when the administration says we need
further tax cuts to stimulate demand, slashing the incomes of the very
households most likely to cut their spending sounds like a lose-lose
proposition. But once you realize that pain is good because it makes citizens
hate their government, it all makes sense.
An even better example is the failure of Congress to
provide adequate funds for the State Children's Health Insurance Program. The
details of the legislative maneuvering are complex, but what it comes down to is
that conservatives showed no interest in maintaining adequate funding for this
highly successful program. The sums involved are not large, by Washington
standards. But the results will be dramatic: according to Office of Management
and Budget estimates, 900,000 children will lose health insurance over the next
We are, of course, now living in what George W. Bush has
called the "era of personal responsibility": if a child chooses to
have parents who can't afford health care, that child will have to accept the
consequences. But there may also be political calculation involved. Again, the
government mustn't do anything good, because then people might not realize that
government is bad. Understand?
What do we learn from this catalog of cruelties? We learn
that "compassionate conservatism" and "leave no child
behind" were empty slogans " but while this may have come as a surprise
to the faith-based John J. DiIulio, some of us thought it was obvious all along.
More important, we learn how relentless and extremist today's conservative
movement really is.
Some people " moderate Republicans who aren't ready to
admit what has happened to their party, and Democrats who think their party can
appease the right by making its own promises of smaller government " still
don't get it. They imagine that at some point the right will decide that it has
gotten what it wants.
But the right's ambitions have no limits, and nothing
moderates can offer will appease it. Eventually the public, which actually
benefits from most of the programs the right is determined to abolish, will
figure that out. But how fast voters figure it out depends a lot on whether
moderate politicians clearly articulate the issues, or try to escape detection
by sounding like conservatives.
Copyright The New York Times Company
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3. BUSH'S STYLE OF FISCAL RESPONSIBILITY
Subject: NYTimes.com Article: Off the Wagon
Date: Fri, 17 Jan 2003 14:23:22 -0500 (EST)
January 17, 2003
Off the Wagon
By PAUL KRUGMAN
Picture a recovering alcoholic falling off the wagon. First
he says he can handle a few drinks. Then, when his inebriation can't be denied,
he insists it's only a temporary lapse. But eventually he turns mean.
"What's so great about being sober?" he growls, reaching for another
As a drunk is to alcohol, the Bush administration is to
During the 2000 campaign George W. Bush often pledged to
maintain fiscal responsibility. Right up to the passage of the 2001 tax cut his
people said they could cut taxes, pay for new programs like prescription drug
coverage, and still pay off most of the federal government's debt.
As soon as the bill passed, those rosy budget projections
fell apart. Then came Sept. 11. "Lucky me, I hit the trifecta,"
declared Mr. Bush, claiming " falsely " to have said during the campaign
that his budget promises didn't apply in the event of recession, war or national
emergency. But until this week officials insisted the deficit was temporary.
Now the budget director, Mitch Daniels, has admitted the
obvious: The federal government faces the prospect of large deficits as far as
the eye can see. And sure enough, the drunk has turned mean. As the
administration reaches for another bottle " another long-term tax cut for the
affluent " its officials sullenly denounce the "fixation" on budget
deficits, dismissing it as nonsensical "Rubinomics." (So much, by the
way, for the war on terror as an excuse for deficits. "What did you do in
the war, daddy?" asks Ronald Brownstein in The Los Angeles Times. "I
got a big tax cut, and passed the bill on to you.")
Economics aside, the administration's ever-changing
rationale for tax cuts says a lot about its character. If the Bush team never
cared about deficits, Mr. Bush's promises of fiscal responsibility were
dishonest. On the other hand, if administration officials didn't decide that
deficits are O.K. until that belief became convenient, that suggests that
they're tough talkers who make excuses when confronted with real problems.
That's a scary thought; is this the kind of administration that would, say, call
North Korea names and talk about pre-emptive war, but back down and offer aid
when the country actually threatens to restart its nuclear program? Nah,
The administration's top economist certainly changed his
mind about deficits very late in the game. Glenn Hubbard, chairman of the
Council of Economic Advisers, recently denied that deficits raise interest rates
and depress private investments. Yet Mr. Hubbard is also the author of an
economics textbook; as Berkeley's J. Bradford DeLong points out on his
influential Web site, the 2002 edition of that textbook explains how, yes,
deficits raise interest rates and depress private investment.
There's a reason Mr. Hubbard said what he did in his
textbook. When the government sells bonds it competes with private borrowers. By
the usual rules of economics, this competition should, other things equal, drive
interest rates higher and investment lower. There are exceptions to economic
rules, but someone who suddenly discovers such an exception at the precise
moment his political masters need a cover story isn't credible.
Will this alcoholic eventually go back on the wagon? Not
for a while; he has too many enablers. The Congressional Budget Office will soon
start using "dynamic scoring" to assess proposed tax cuts " that is,
it will build in the supply-side assumption that tax cuts raise the economy's
growth rate, and therefore generate indirect revenue gains that offset the
direct revenue losses. In the past, budget officials have opposed this practice,
because it's so easy to slide from objective analysis into wishful thinking.
With Republicans controlling both the White House and Congress, does anyone
doubt that future C.B.O. analyses will take a very favorable view of big tax
cuts for rich people?
It's O.K. to run a deficit during a recession, as long as
the deficit is clearly temporary. But both the numbers and the administration's
search for excuses tell us that there's nothing temporary about the red ink. On
the contrary, we'll probably be on a deficit bender until the baby boomers
retire " and then it will get much worse.
Trust me: we're going to miss Rubinomics. Maybe not today, and maybe not tomorrow, but soon, and for the rest of our lives.
Copyright 2003 The New York Times Company ##
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