Gentlemen: You forgot the fourth "I". Inequality. The wealth gap has been relentlessly expanding since the Reagan era and now rivals that of the Gilded Age (1870-1900) with 40% of the nation's wealth now concentrated in the top 1% of households. It takes somewhere around $13 million in net assets to qualify for this category. And the near instantaneous and ubiquitous reminder that is the Internet has exacerbated people's frustration. The middle class is having their face rubbed into the gap every minute of every hour. So to the PPV (Personal Price Vector), I would add PWV, the Personal Wealth Factor, as an important cause for the pervasive disgruntlement and the rise of reactionary populism.
I agree completely. Unfortunately this rot has been going on so long now that people just accept that here it is -- and didn't notice how much actually started to move in the right direction once Biden turned supply-side upside down and funded real projects like infrastructure.
Yes. Democrats need to stand FOR something and not just against MAGA. Back to the steeply progressive tax structure pre-Reagan when 70% was the top bracket. Tax unrealized capital gains (ex-primary residence.). Lower the threshold for inheritance taxes. Finally a guaranteed national income funded by the above. And oh Medicare for all from birth.
Absurd. All nonpartisan studies have shown that the Biden/Harris administration has a pretty stellar record. Study it and you'll know immediately what Democrats stand FOR.
A couple of unwarranted assumptions: 1 That what the Biden/Harris administration did represent what “Democrats” stand for, and 2 that enough voters to make a difference will study the administration’s record and come to any conclusion, let alone the conclusion I imagine you think the will come to. In that regard, it would be helpful if you could provide us with succinct account of what your study of the record leads you to conclude that Democrats stand for. Also please a statement of who you mean to include within the term “Democrats.”
The Biden/Harris administration perfectly represents what Democrats stand for. That means: the political philosophy behind leftist policies were clearly guiding them constantly, and they fully used the democratic process in Congress to make remarkable progress on these policies. If you'd disagree, what would your arguments be?
As to studying an administration's record: that's the job of all citizens, in a democracy. Without it, any given democracy will always remain weak and the risk of a fascist power grab real.
A repeat of the message: the American voter is who counts, not you or I or anyone else individually or even severally. Democrats do not stand for Trump, but Democrats got him elected, twice. Why? Hint: it's not political competence. Has nothing to do with Left vs Right.
If many voters didn't prefer mindless blustering over intelligent well reasoned & fair policies, Trump would never have been elected his first time in 2016, never mind in 2024.
A big problem is many voters don't use a healthy dose of critical thinking when they vote.
Lack of critical thinking reflects the educational level of states that went for Trump. On the other hand, the luminous insanity behind running arguably the most hated woman in America for President in 2016 moots all other considerations why Trump was elected.
Sorry, my comment was not meant as a slap at the Biden administration, but the Harris campaign did default to an anti-Trump/Save Democracy meme in its final weeks, which proved insufficient. Time to move on and not engage in rearview-mirror sarcasm. And that means you, Mr. EUWDTB who presumes to attack my erudition and reading habits. I spent 40 years in the book publishing industry, multiple advanced degrees, several published books. That's not meant as bragging but self-defense to your ugly personal attack which only compounds our Democratic predicament. You tell me to "read." I tell you to grow up.
They should have directly challenged Trump & Republicans on the border issue. Democrats supported a bi-partisan solution which Trump & company blocked for political reasons.
Krugman's dialog with Bernstein was interesting, but as with your analysis, way too complicated. Any of the issues raised could be answered compellingly by either the "Left" or "Right".
Anti-Trump/save democracy is the same approach McGovern used against Nixon in '72, and it fell flat just like it did last year.
America will elect a strong bad person over a weak good person virtually every time.
Trump's promo pictured a strong, defiant, resolute, resilient leader while Harris' promo was all smiley-face. Sad to say, this was likely the key. Harris was a bad, bad choice but with Biden's obviously increasing physical debilities of age and the unwillingness or obstinacy of the DNC, who should have been looking for the Biden replacement from the start, Trump was a shoo-in, turned out.
Stellar record? What Democrats stand "FOR"? The only incontrovertibly stellar result of recent (my reference frame) Democratic administrations has been the Elections of Trump (twice), Bush II, Reagan, and Nixon. Saying Biden/Harris was in any way stellar is like saying Mussolini made the trains run on time and what's-his-name built the autobahns.
I like Biden. I like most of what he did. But what he and the DNC did was elect Donald Trump because they could not frame the message competently. Then there is Gaza.
I just spent three years working with utilities on IIJA/IRA projects. Go read anything reasonable about those Acts and their work, which are just part of what the Biden admin were for. Massively ambitious and, while running, effective pieces of legislation. I appreciate you want it spoon-fed, but you big, go read.
Why not an inheritance tax on how much a person receives. This would encourage the rich to give money to friends, distant relatives, and their workers.
Why tax the giver? That is an arbitrary decision. Tax the receiver, it is a sort of income. Taxing the giver creates all sorts of tax evasions. Were the receiver to be taxed, the very rich would need to establish an account for those millionaire 5-year-olds. A few $million deductibles would be appropriate.
I don't think people just accepted it so much as they didn't know what to do about it - and still don't. Part of that is the influence of reichwing propaganda that began in earnest with St. Reagan and Rush Limbaugh, then morphing into Faux Newspeak.
People just didn't understand, if you want to end the iniquity, don't vote Republican!
That's it. I work with people who have BA's, work 40 hrs a week, and have second jobs on the weekends. They never have a day off. They are paying $3000+ for rent. They will never be able to buy a house. They are paying $700+ a month for student loans. Moving these indicators a couple of percentage points isn't helping.
You could argue that, contrary to the Gilded Age, public services are much better today, so the economic consequences of the income gap aren't as severe as back then (there IS a social safety net, and education and health levels are much higher, because of it).
And then of course, to the extent that the income gap is obviously a problem, in and of itself, this fact is a reason to massively vote for Democrats, since only they propose bills to reduce it, while the GOP systematically does the opposite and Trump even more so...
Comparing 2021-3 inflation to the lengthy, persistent inflation of the mid-‘70s to early ‘80s, which I lived through:
- Wage inflation kept up with and sometimes led price inflation in the mid-late ‘70s / early ‘80s. I was a middle manager getting 10% wage increases, which more than offset 8% cost of living increases. There was NEVER a year when the cost of living increase outpaced my salary increase by 6%. When that hits your “average household”, it’s a body blow that makes you really, really angry and you want to take it out on those you perceive to be in power. I respect and admire Paul Krugman, but he doesn’t seem to get this. An analogy would be you are kneecaped one year. your knees still ache every time you walk through the grocery store and your attacker greets you there and says “Hey, I didn’t kneecap you anymore, why don’t you like me now?”
- Productivity is up means workers are not equitably being cut in on our economy’s success. This adds to the sour mood.
- Yes, Faux News told people the Biden economy is terrible, and they repeated it like a mantra. However the two prior points caused that to resonate with viewers!
I agree. And is the reason that the opposite party wins in every election. Come 2028 the voters will be even more frustrated and angry that government does not work for them.
I don't have time to respond to these, but the quality and thoughtfulness of these comments is very high (which maybe is the norm up in this site but is, of course, unusual) and worthy of response and further discussion.
I will soon be part of a venue to field questions/thoughts like this in real time and will make sure folks here know about it. I'm also going to make Paul do it with me if/when he can!
Look forward to that, esp. would like to hear you two delve into the "soft fraud" aspect mentioned above, and the extreme wealth distortions these past many decades. This is the true five alarm fire.
It would be good to hear your take on the work by Clyde Prestowitz - “ The World Turned Upside Down “ ?
Obviously very critical of allowing China into
the trade world. My own view is that CEO’s in the US didn’t have to totally move all of the manufacturing to foreign lands. We did have a border industrialization program with Mexico
to have some of the labor intensive pieces handled there - but we kept plants open here .
Later on - the whole plant was closed - common sense went out the window and unmitigated greed flew in .
American workers were unable to adapt quickly enough to meet the changes - they reacted by
embracing MAGA - we can’t explain that with
a Phillips Curve - but maybe the phrase
“ brother , can you spare a dime - adjusted for inflation “ might?
"My own view is that CEO’s in the US didn’t have to totally move all of the manufacturing to foreign lands."
Except that China permits near slave labor. Mexico does too to some extent, but it would be easier for the Feds to check up on and regulate that. And you know how CEO's feel about regulations.
The Norwegian owners could relocate to markets with slave labor - or merely lower wage labor - but choose not to declare war on their
domestic labor force .
We had an implicit agreement in the past to pay a decent wage to labor - they would then purchase the products they helped build. The owners managed to make out quite well. Then ,
slowly- and later all of a sudden- a frontal assault on unions and the middle class broke out
"The cause of the inflation was strong demand colliding with constrained supply. It was that intersection." In the midst of that price rising, how much of it was attributable to suppliers taking advantage—not needing to raise prices but because inflation gave them cover, they raised them anyway? How much of a role does this kind of "soft fraud" play?
Though in a different part of the world, I have an anecdote on the the rise of (privately managed) parking fees at urban centers "as a result of supply chain disruptions"
You Paul, and everyone, are missing the biggest thing; the right’s propaganda machine.
You two seem to scratch your heads over the truly good economy juxtaposed with the negative “vibe”.
Understand this: there are provable facts and there are believed facts. Those who don’t understand what decades of poisonous FOX propaganda has done think provable facts and believed facts should line up.
No question reichwing propaganda, in particular from Faux Newspeak, has a profound influence. Before that it was Rush Limbaugh - kinda like Carlson Tucker in a fat suit.
MAGA is about three things: racism, masculinism, and ressentiment. The Trumpian emphasis on manufacturing fits into the masculinism bucket. They want more good jobs coded male. This isn't a completely invalid argument, from a social justice viewpoint--men in the lower half of the workforce have been getting screwed; the upper half of the workforce is increasingly feminized. (Women also have problems, of a different sort.) But it is crazy economics, as Paul and Jared have pointed out. If the Trumpazoids were economically rational, they would be pushing construction, rather than manufacturing.
These points would make sense if magats could keep up with a reasoned argument. They have no interest in doing that, but they have an overwhelming interest in hearing about stepped-up persecution of groups they don’t like. That’s why trashing DEI is such a huge plus for Republicans. They’ve been using that playbook since 1968, and it has brought them an ROI that’s off the scale.
rational is they would be pushing health care jobs...a smart guy who does not want a Ph.D but wants lots of money and lots of work if he is rational...will turn to nursing.
Twue dat. But nursing is not coded male. The rule of thumb: if you are one of the characters in the Village People, your job is coded male. Otherwise, not so much.
That works for some folks. But not everyone is suited to healthcare - in any position, be it nurse, doctor, technician, whatever. It's not for everybody.
WTF??? And where did I say any such thing? I said nothing of the sort. Nor did I even so much as insinuate anything of the sort. I meant exactly what I said, no more and no less.
Do you really expect absolutely everybody to be in healthcare? Do you think that's workable?
Not everybody. Sorry if I misunderstood you. My point is what is simple and obvious. We are not going back to coal mines and being a manufacturing country. We are not going back to 1960. People have to work the jobs that are here in the economy today. Trump won't transform American employment... unless he becomes a dictator.
Yes, that much I can agree with. But it doesn't go far enough. We need to seriously increase the minimum wage to a living level, because we can't count on employers to do it.
Personally, I believe we should have a basic minimum income. The oligarchs don't like that idea because then they'd have to compete with that to attract low wage employees.
We can accomplish this by, yes, raising taxes on the oligarchs. It's way overdue. We can start by taxing capital gains at the same rate as hard earned income. It's obscene that we don't already. It's way past time to eliminate the carried interest exemption too. Then we can increase the AMT threshold, I'd say to somewhere between 750,000 - a million, roughly.
Bad vibes are surely a product in good part of what the media are repeating 24/7. It's naive to pretend folks come by all their concerns independently.
Now why would media - pretty much all owned by billionaires - want to tell people that things are terrible? Because billionaires hate it when the labor market runs hot, as Bidenomics achieved for the first time in many decades. Workers in a hot labor market have job choices and don't have to stand for poor pay and conditions. The profit share of the economy might finally stop going up and wage share might stop going down. Couple the strong labor market with Biden moves to support unions and against monopolistic abuses. Billionaires across the media made sure Biden got no credit for the economy. Seeing them line up with Trump in 2025 tends to confirm this.
Yeah. I think you're on to something. It was the first time in my 67 years that I've seen the share of workers wages go up.
Ever notice that the tech people talk about their goal is capturing the market? They are openly talking about gaining monopoly power. If you have monopoly power, you've got control over prices and labor.
I think the "price of eggs" was a distraction from the price of housing, health care, and education. One reason _why_ the price of eggs was so painful to so many, IMHO, is because there wasn't much money left over after paying your rent/mortgage, your insanely inflated car insurance, your college loans, and your medical bills. What troubles me is why populist outrage could not identify these things as the real source of their economic worries. Inflation of grocery prices could be managed if we weren't being screwed over so badly in these other sectors .
and Kamala Harris did promise to fight price gouging, notably businesses taking advantage of other inflation to raise prices and to keep them high even when the underlying causes of the inflation, notably supply chain issues, had disappeared. She got little credit for that - something that government might actually be able to do - because people apparently believed Trump saying he would lower the prices on day one - which he clearly had no power to do (as he has admitted and demonstrated over and over since the election.)
The price of eggs (driven by shortages because of bird flu) was very obvious. Most people buy eggs. You see the change in the grocery store weekly. It's in your face. Like gas prices, it hits most people.
Home prices, medical bills, college loans aren't weekly expenditures. You can go for years without being confronted by the cost increase in those.
I don't buy that college is for everyone, nor that it should be free for everyone. (community college and apprenticeship programs should be publicly financed) Two thirds of America shouldn't be paying for one third to have "the college experience".
I agree with everything you say except for the part about community college and apprenticeship programs. By that reasoning, we should eliminate all public education, which, come to think of it, is exactly what Trumpkopf is threatening.
"The price of eggs" was largely propaganda, which you'll know because most of the people shouting about it early on were people who never in their lives have shopped for eggs.
The price of eggs was an excuse. White people voted R because Republicans promise to step up the persecution of people a significant majority of white voters don’t like.
This is exactly right. Nesbitt and Wilson showed that people often confabulate reasons for why they make the choices they make. They showed that people tend to choose items on the right side of a display even when the items are randomized in their location. In other word, they tended strongly to choose items based on where they located in the display and not other qualities like color or shape. But when asked why they choose that item they would claim the reason was any other quality than the location, which actually was the basis of their choice.
People said they voted for a rapist and convicted felon because of the price of eggs. On the face of it, this is just silly confabulation. The fact that none of his supporters now gives a damn about the price of eggs merely underscores the absurdity of "inflation" as a core issue for Trump voters. "Inflation" is a stalking horse (a fake reason the real reason hides behind) for "punching down."
Trump voters voted for him because they believed he would "punch" the people beneath them is status. One way to feel your status go up is watch the status of others go down. That's what Trump voters were voting for.
But this is not a pleasant motive admit to, even to oneself. Thus the need for a less ego-threatening, but false (stalking horse) motive: The price of eggs!!!
Carton of Goldfish 7.99 pre-pandemic, went up to 10.99 post-pandemic, a 37.5% increase.
A "party size" bag of Reese's peanut butter cups 9.99 pre-pandemic, went up to first 14.99, then 16.49 post-pandemic, a 50% initial increase followed by and additional 10% for a total increase of 65%.
Thank you for a great discussion. I think it was Jared who said, only in passing, when discussing the Trump economic plans, "assuming" that they were intended to bring manufacturing back to the US . . . . I know it's not an economic point, but there is a whole discussion to be had regarding whether that is really the intent, or just the "cover story," with the intent being a massive redistribution of wealth, and a permanent reconstruction of America into the haves/rulers, and the have nots/powerless subjects.
I think Trump actually believes his policies will bring back those "good" manufacturing jobs with high wages and good benefits. He isn't a deep thinker. This is the man who thought he could provide water to LA by letting water out of Central Valley dams. He's arrogant and profoundly, willfully ignorant.
He isn't a deep thinker for sure, but I'm not prepared to give him a pass on believing his policies aren't intentionally maleficent. He's always been that way. Even his cold blooded mentor, the infamous Roy Cohn, said of him "this guy pisses ice water".
Not just in shock , but grieving. I am sure everyone knows relatives and friends who died from Covid. It is so recent and we already do not talk about it in public?!
Two things come to mind for me about why the public is so upset all the time (other than trumpism in general and the failure of mainstream media to speak truth, etc). One is that Reaganomics not only does not work, but it destroys the resilience of the economy and favors the kind of corruption we see in government. The other is that we are all still in a state of profound shock from the pandemic. To have that hideous virus emerge and just take over the world all of a sudden was such an outrage! We are all still in shock. Of course we're all mad as hell about everything!
A while ago, some people discovered -- rediscovered -- that there had been an immense influenza pandemic in 1917-19, and wondered why it was almost never mentioned in books and articles about past years. I can understand that now. It was just too much.
Ah yes, the "trickle down effect" in action. Fat cats got fat tax cuts, and the rest of us got trickled on. Execs in the C-Suite got golden parachutes, we got the golden showers.
And how did America react? By voting for an Orange Mutant St. Reagan clone on steroids. Way to go voters.
Earlier in the discussion when the PPV (Personal Price Vector) came up, you talked about the need for folks to recalibrate their understanding of increasing costs and expectations. And in general getting the voting population to understand all the various economic forces at play in their lives. I think we also need to get people to realize that beyond their PVP there is the Common Good. Our expectations for ever increasing personal growth and consumption can not continue at the expense of the Common Good. For the country and the world to survive we need to learn to share and support the larger human community.
Early in the conversation the "term" Vibes appears. As usual with many such discussions there seems to be a confusion about how these bad vibes could proliferate when so many good effects are pressing inflation down and productivity up.
At worst it reminds me of the consternation that for instance, women want more when we give them everything they need.
Why are people so fixated on the prices of old when conditions are looking so good?
As one of those anxious people I can explain that the fat cats tripled their incomes but I did not see such personal gains. If productivity went up it must mean that I was producing more profits for them but not seeing an equitable rise in my pay.
I am earning more but paying more ....call me a sour grape.
The rich bastards have so many ways to make and keep money. Perks, tax dodges don't trickle down. Instead my taxes are shoveled into the potholes the rich leave behind.
The GOP teaches us "ordinary people" the problem is "inflation" and scoffs at our insinuation that the high prices are GREED plain and simple.
I wish "Vibe" and its magical aura of working class ignorance would be banned from such discussions or given the credence "everyday people" deserve. We depend on you to explain and to expand our view and help us articulate our dread.
If dread seems hyperbolic, please imagine how chainsaw economics looks to us.
"As one of those anxious people I can explain that the fat cats tripled their incomes but I did not see such personal gains. If productivity went up it must mean that I was producing more profits for them but not seeing an equitable rise in my pay."
Interesting! I think another part of that is that maybe we are earning more - we still do not earn enough to 'save' more so we can have a better future (like buying a home, going on a nice vacation, having a feeling of safety).
And yes, we can see every day how some people can spend exorbitant amount of monies on some really fancy stuff (multi-million dollar homes, $100,000 cars, ...).
Thanks for your work. Please go over this again focused on the production of services and inflation while addressing this quote from House in your dialogue:
“I would say the two areas where we were just not able to get our agenda across the legislative goal line in ways that were really important to the two biggest pieces of unfinished business were affordable housing and affordable child care”
The service sector, with attention to housing construction, child care and I would add public health, health monitoring and medical care, as they too are in the service sector. The White House is busily demolishing federal programs aimed to strengthen the service sector (education, health, FEMA , Social Security, etc) I would like to learn more from your economic discussions (which are absolutely enlightening) about this. How should this fit into future economic policy?
One additional question relates to learning how people illegally crossing the border were often being hired to cover these planning gaps in our service sector. How do we further develop legal ways to strengthen and work in the service sector?
It is also a time when the work of women was unpaid and largely in the area of services via the informal sector. Many women who later on entered into the labor force and were defined as economically active continued to produce similar services as before while getting paid wages as child care workers, restaurant workers, school teachers, etc. These service areas are often poorly paid and not well supported by governmental policy , planning and funding. This is likely to worsen given the massive reduction in support for health education and welfare by the current GOP.
What’s interesting is male labor force participation began declining in the early 1950s (BLS data), although women were discouraged from working outside the home.
Gentlemen: You forgot the fourth "I". Inequality. The wealth gap has been relentlessly expanding since the Reagan era and now rivals that of the Gilded Age (1870-1900) with 40% of the nation's wealth now concentrated in the top 1% of households. It takes somewhere around $13 million in net assets to qualify for this category. And the near instantaneous and ubiquitous reminder that is the Internet has exacerbated people's frustration. The middle class is having their face rubbed into the gap every minute of every hour. So to the PPV (Personal Price Vector), I would add PWV, the Personal Wealth Factor, as an important cause for the pervasive disgruntlement and the rise of reactionary populism.
I agree completely. Unfortunately this rot has been going on so long now that people just accept that here it is -- and didn't notice how much actually started to move in the right direction once Biden turned supply-side upside down and funded real projects like infrastructure.
Yes. Democrats need to stand FOR something and not just against MAGA. Back to the steeply progressive tax structure pre-Reagan when 70% was the top bracket. Tax unrealized capital gains (ex-primary residence.). Lower the threshold for inheritance taxes. Finally a guaranteed national income funded by the above. And oh Medicare for all from birth.
Absurd. All nonpartisan studies have shown that the Biden/Harris administration has a pretty stellar record. Study it and you'll know immediately what Democrats stand FOR.
A couple of unwarranted assumptions: 1 That what the Biden/Harris administration did represent what “Democrats” stand for, and 2 that enough voters to make a difference will study the administration’s record and come to any conclusion, let alone the conclusion I imagine you think the will come to. In that regard, it would be helpful if you could provide us with succinct account of what your study of the record leads you to conclude that Democrats stand for. Also please a statement of who you mean to include within the term “Democrats.”
The Biden/Harris administration perfectly represents what Democrats stand for. That means: the political philosophy behind leftist policies were clearly guiding them constantly, and they fully used the democratic process in Congress to make remarkable progress on these policies. If you'd disagree, what would your arguments be?
As to studying an administration's record: that's the job of all citizens, in a democracy. Without it, any given democracy will always remain weak and the risk of a fascist power grab real.
A repeat of the message: the American voter is who counts, not you or I or anyone else individually or even severally. Democrats do not stand for Trump, but Democrats got him elected, twice. Why? Hint: it's not political competence. Has nothing to do with Left vs Right.
Which policies are you referring to as leftist?
If many voters didn't prefer mindless blustering over intelligent well reasoned & fair policies, Trump would never have been elected his first time in 2016, never mind in 2024.
A big problem is many voters don't use a healthy dose of critical thinking when they vote.
Lack of critical thinking reflects the educational level of states that went for Trump. On the other hand, the luminous insanity behind running arguably the most hated woman in America for President in 2016 moots all other considerations why Trump was elected.
Sorry, my comment was not meant as a slap at the Biden administration, but the Harris campaign did default to an anti-Trump/Save Democracy meme in its final weeks, which proved insufficient. Time to move on and not engage in rearview-mirror sarcasm. And that means you, Mr. EUWDTB who presumes to attack my erudition and reading habits. I spent 40 years in the book publishing industry, multiple advanced degrees, several published books. That's not meant as bragging but self-defense to your ugly personal attack which only compounds our Democratic predicament. You tell me to "read." I tell you to grow up.
They should have directly challenged Trump & Republicans on the border issue. Democrats supported a bi-partisan solution which Trump & company blocked for political reasons.
Krugman's dialog with Bernstein was interesting, but as with your analysis, way too complicated. Any of the issues raised could be answered compellingly by either the "Left" or "Right".
Anti-Trump/save democracy is the same approach McGovern used against Nixon in '72, and it fell flat just like it did last year.
America will elect a strong bad person over a weak good person virtually every time.
Trump's promo pictured a strong, defiant, resolute, resilient leader while Harris' promo was all smiley-face. Sad to say, this was likely the key. Harris was a bad, bad choice but with Biden's obviously increasing physical debilities of age and the unwillingness or obstinacy of the DNC, who should have been looking for the Biden replacement from the start, Trump was a shoo-in, turned out.
Stellar record? What Democrats stand "FOR"? The only incontrovertibly stellar result of recent (my reference frame) Democratic administrations has been the Elections of Trump (twice), Bush II, Reagan, and Nixon. Saying Biden/Harris was in any way stellar is like saying Mussolini made the trains run on time and what's-his-name built the autobahns.
Nope, the president "we the people" elect is OUR responsibility, not that of the previous president ;-).
As to the Biden/Harris record: just google it. It has been publicly available all the time.
I like Biden. I like most of what he did. But what he and the DNC did was elect Donald Trump because they could not frame the message competently. Then there is Gaza.
Bravo.
What are you even talking about?
I just spent three years working with utilities on IIJA/IRA projects. Go read anything reasonable about those Acts and their work, which are just part of what the Biden admin were for. Massively ambitious and, while running, effective pieces of legislation. I appreciate you want it spoon-fed, but you big, go read.
Why not an inheritance tax on how much a person receives. This would encourage the rich to give money to friends, distant relatives, and their workers.
Ah, but everyone fell for the "trickle down" lie.
Why tax the giver? That is an arbitrary decision. Tax the receiver, it is a sort of income. Taxing the giver creates all sorts of tax evasions. Were the receiver to be taxed, the very rich would need to establish an account for those millionaire 5-year-olds. A few $million deductibles would be appropriate.
I don't think people just accepted it so much as they didn't know what to do about it - and still don't. Part of that is the influence of reichwing propaganda that began in earnest with St. Reagan and Rush Limbaugh, then morphing into Faux Newspeak.
People just didn't understand, if you want to end the iniquity, don't vote Republican!
That's it. I work with people who have BA's, work 40 hrs a week, and have second jobs on the weekends. They never have a day off. They are paying $3000+ for rent. They will never be able to buy a house. They are paying $700+ a month for student loans. Moving these indicators a couple of percentage points isn't helping.
They're lucky if their bosses allow them to work only 40 hours a week. Nowadays at least 60 is more typical.
You could argue that, contrary to the Gilded Age, public services are much better today, so the economic consequences of the income gap aren't as severe as back then (there IS a social safety net, and education and health levels are much higher, because of it).
And then of course, to the extent that the income gap is obviously a problem, in and of itself, this fact is a reason to massively vote for Democrats, since only they propose bills to reduce it, while the GOP systematically does the opposite and Trump even more so...
Comparing 2021-3 inflation to the lengthy, persistent inflation of the mid-‘70s to early ‘80s, which I lived through:
- Wage inflation kept up with and sometimes led price inflation in the mid-late ‘70s / early ‘80s. I was a middle manager getting 10% wage increases, which more than offset 8% cost of living increases. There was NEVER a year when the cost of living increase outpaced my salary increase by 6%. When that hits your “average household”, it’s a body blow that makes you really, really angry and you want to take it out on those you perceive to be in power. I respect and admire Paul Krugman, but he doesn’t seem to get this. An analogy would be you are kneecaped one year. your knees still ache every time you walk through the grocery store and your attacker greets you there and says “Hey, I didn’t kneecap you anymore, why don’t you like me now?”
- Productivity is up means workers are not equitably being cut in on our economy’s success. This adds to the sour mood.
- Yes, Faux News told people the Biden economy is terrible, and they repeated it like a mantra. However the two prior points caused that to resonate with viewers!
I agree. And is the reason that the opposite party wins in every election. Come 2028 the voters will be even more frustrated and angry that government does not work for them.
Totally agree, this factor is very, very important. See my comment.
I don't have time to respond to these, but the quality and thoughtfulness of these comments is very high (which maybe is the norm up in this site but is, of course, unusual) and worthy of response and further discussion.
I will soon be part of a venue to field questions/thoughts like this in real time and will make sure folks here know about it. I'm also going to make Paul do it with me if/when he can!
I look forward to this, and also hoping for a Part 2 continuing your discussions of trade imbalance, capital markets.
Look forward to that, esp. would like to hear you two delve into the "soft fraud" aspect mentioned above, and the extreme wealth distortions these past many decades. This is the true five alarm fire.
It would be good to hear your take on the work by Clyde Prestowitz - “ The World Turned Upside Down “ ?
Obviously very critical of allowing China into
the trade world. My own view is that CEO’s in the US didn’t have to totally move all of the manufacturing to foreign lands. We did have a border industrialization program with Mexico
to have some of the labor intensive pieces handled there - but we kept plants open here .
Later on - the whole plant was closed - common sense went out the window and unmitigated greed flew in .
American workers were unable to adapt quickly enough to meet the changes - they reacted by
embracing MAGA - we can’t explain that with
a Phillips Curve - but maybe the phrase
“ brother , can you spare a dime - adjusted for inflation “ might?
"My own view is that CEO’s in the US didn’t have to totally move all of the manufacturing to foreign lands."
Except that China permits near slave labor. Mexico does too to some extent, but it would be easier for the Feds to check up on and regulate that. And you know how CEO's feel about regulations.
The Norwegian owners could relocate to markets with slave labor - or merely lower wage labor - but choose not to declare war on their
domestic labor force .
We had an implicit agreement in the past to pay a decent wage to labor - they would then purchase the products they helped build. The owners managed to make out quite well. Then ,
slowly- and later all of a sudden- a frontal assault on unions and the middle class broke out
in the USA - and now we are back to Gilded
Age 2.0 .
Yes! Exactly!
Wow, thank you. That would be awesome.
I
“And I think that they're mistaken in profound ways about what they think they can do to make America better off if that's really the goal.”
“…if that’s really the goal.”
It isn’t. The goal of their fascist autocracy is to make American billionaires better off. And so what if the collateral damage is…well,…everything.
🎯
"The cause of the inflation was strong demand colliding with constrained supply. It was that intersection." In the midst of that price rising, how much of it was attributable to suppliers taking advantage—not needing to raise prices but because inflation gave them cover, they raised them anyway? How much of a role does this kind of "soft fraud" play?
Though in a different part of the world, I have an anecdote on the the rise of (privately managed) parking fees at urban centers "as a result of supply chain disruptions"
Hell, they're doing that right here in NYC. Ditto subway fares.
AKA, profiteering. Gouging as it were.
I think it was a *lot*.
And don't forget the Fed buying 4.5Trillion non-bank stuff, which is where inflation comes from. (See The War for Bankocracy at https://beta.solari.com/the-war-for-bankocracy/ )
You Paul, and everyone, are missing the biggest thing; the right’s propaganda machine.
You two seem to scratch your heads over the truly good economy juxtaposed with the negative “vibe”.
Understand this: there are provable facts and there are believed facts. Those who don’t understand what decades of poisonous FOX propaganda has done think provable facts and believed facts should line up.
It’s killing us.
Most Americans are not uninformed they are misinformed - and, may I add, bamboozled!
No question reichwing propaganda, in particular from Faux Newspeak, has a profound influence. Before that it was Rush Limbaugh - kinda like Carlson Tucker in a fat suit.
MAGA is about three things: racism, masculinism, and ressentiment. The Trumpian emphasis on manufacturing fits into the masculinism bucket. They want more good jobs coded male. This isn't a completely invalid argument, from a social justice viewpoint--men in the lower half of the workforce have been getting screwed; the upper half of the workforce is increasingly feminized. (Women also have problems, of a different sort.) But it is crazy economics, as Paul and Jared have pointed out. If the Trumpazoids were economically rational, they would be pushing construction, rather than manufacturing.
These points would make sense if magats could keep up with a reasoned argument. They have no interest in doing that, but they have an overwhelming interest in hearing about stepped-up persecution of groups they don’t like. That’s why trashing DEI is such a huge plus for Republicans. They’ve been using that playbook since 1968, and it has brought them an ROI that’s off the scale.
rational is they would be pushing health care jobs...a smart guy who does not want a Ph.D but wants lots of money and lots of work if he is rational...will turn to nursing.
Twue dat. But nursing is not coded male. The rule of thumb: if you are one of the characters in the Village People, your job is coded male. Otherwise, not so much.
I think this changing. Several of my very masculine (and quite MAGA) nephews are nurses. Don't seem to be bothered that in particular...
It's not just about being coded male. There are actually quite a few perfectly masculine male nurses.
It's that not every kind of job is suitable for just anybody. There should be a wide enough variety of job types available to suit everybody.
That works for some folks. But not everyone is suited to healthcare - in any position, be it nurse, doctor, technician, whatever. It's not for everybody.
fine, but don’t expect Trump to fix the economy for a certain job just for you?
WTF??? And where did I say any such thing? I said nothing of the sort. Nor did I even so much as insinuate anything of the sort. I meant exactly what I said, no more and no less.
Do you really expect absolutely everybody to be in healthcare? Do you think that's workable?
Not everybody. Sorry if I misunderstood you. My point is what is simple and obvious. We are not going back to coal mines and being a manufacturing country. We are not going back to 1960. People have to work the jobs that are here in the economy today. Trump won't transform American employment... unless he becomes a dictator.
Yes, that much I can agree with. But it doesn't go far enough. We need to seriously increase the minimum wage to a living level, because we can't count on employers to do it.
Personally, I believe we should have a basic minimum income. The oligarchs don't like that idea because then they'd have to compete with that to attract low wage employees.
We can accomplish this by, yes, raising taxes on the oligarchs. It's way overdue. We can start by taxing capital gains at the same rate as hard earned income. It's obscene that we don't already. It's way past time to eliminate the carried interest exemption too. Then we can increase the AMT threshold, I'd say to somewhere between 750,000 - a million, roughly.
There's more, but I'll leave it at that for now.
And pushing construction would mean pushing immigration...
"Trumpazoids" 😂😂😂
Bad vibes are surely a product in good part of what the media are repeating 24/7. It's naive to pretend folks come by all their concerns independently.
Now why would media - pretty much all owned by billionaires - want to tell people that things are terrible? Because billionaires hate it when the labor market runs hot, as Bidenomics achieved for the first time in many decades. Workers in a hot labor market have job choices and don't have to stand for poor pay and conditions. The profit share of the economy might finally stop going up and wage share might stop going down. Couple the strong labor market with Biden moves to support unions and against monopolistic abuses. Billionaires across the media made sure Biden got no credit for the economy. Seeing them line up with Trump in 2025 tends to confirm this.
Yeah. I think you're on to something. It was the first time in my 67 years that I've seen the share of workers wages go up.
Ever notice that the tech people talk about their goal is capturing the market? They are openly talking about gaining monopoly power. If you have monopoly power, you've got control over prices and labor.
and the tech bros are about the strongest anti-union voices in the land. They are keen to be rich(er) but not to enrich their workers.
Worth repeating!
“Billionaires across the media made sure Biden got no credit for the economy. Seeing them line up with Trump in 2025 tends to confirm this.”
Whoa! I don’t know how to give this lots of stars, but really good point!
I think the "price of eggs" was a distraction from the price of housing, health care, and education. One reason _why_ the price of eggs was so painful to so many, IMHO, is because there wasn't much money left over after paying your rent/mortgage, your insanely inflated car insurance, your college loans, and your medical bills. What troubles me is why populist outrage could not identify these things as the real source of their economic worries. Inflation of grocery prices could be managed if we weren't being screwed over so badly in these other sectors .
and Kamala Harris did promise to fight price gouging, notably businesses taking advantage of other inflation to raise prices and to keep them high even when the underlying causes of the inflation, notably supply chain issues, had disappeared. She got little credit for that - something that government might actually be able to do - because people apparently believed Trump saying he would lower the prices on day one - which he clearly had no power to do (as he has admitted and demonstrated over and over since the election.)
The whole price gouging schtick was a transparent joke.
The price of eggs (driven by shortages because of bird flu) was very obvious. Most people buy eggs. You see the change in the grocery store weekly. It's in your face. Like gas prices, it hits most people.
Home prices, medical bills, college loans aren't weekly expenditures. You can go for years without being confronted by the cost increase in those.
I don't buy that college is for everyone, nor that it should be free for everyone. (community college and apprenticeship programs should be publicly financed) Two thirds of America shouldn't be paying for one third to have "the college experience".
I agree with everything you say except for the part about community college and apprenticeship programs. By that reasoning, we should eliminate all public education, which, come to think of it, is exactly what Trumpkopf is threatening.
"The price of eggs" was largely propaganda, which you'll know because most of the people shouting about it early on were people who never in their lives have shopped for eggs.
The price of eggs was an excuse. White people voted R because Republicans promise to step up the persecution of people a significant majority of white voters don’t like.
This is exactly right. Nesbitt and Wilson showed that people often confabulate reasons for why they make the choices they make. They showed that people tend to choose items on the right side of a display even when the items are randomized in their location. In other word, they tended strongly to choose items based on where they located in the display and not other qualities like color or shape. But when asked why they choose that item they would claim the reason was any other quality than the location, which actually was the basis of their choice.
People said they voted for a rapist and convicted felon because of the price of eggs. On the face of it, this is just silly confabulation. The fact that none of his supporters now gives a damn about the price of eggs merely underscores the absurdity of "inflation" as a core issue for Trump voters. "Inflation" is a stalking horse (a fake reason the real reason hides behind) for "punching down."
Trump voters voted for him because they believed he would "punch" the people beneath them is status. One way to feel your status go up is watch the status of others go down. That's what Trump voters were voting for.
But this is not a pleasant motive admit to, even to oneself. Thus the need for a less ego-threatening, but false (stalking horse) motive: The price of eggs!!!
Wait... there were record profits in the billions... grocery store CEOs making $18M a year..... why didn't we speak to this more?
Carton of Goldfish 7.99 pre-pandemic, went up to 10.99 post-pandemic, a 37.5% increase.
A "party size" bag of Reese's peanut butter cups 9.99 pre-pandemic, went up to first 14.99, then 16.49 post-pandemic, a 50% initial increase followed by and additional 10% for a total increase of 65%.
Crackers and candy. How do they justify this?
Thank you for a great discussion. I think it was Jared who said, only in passing, when discussing the Trump economic plans, "assuming" that they were intended to bring manufacturing back to the US . . . . I know it's not an economic point, but there is a whole discussion to be had regarding whether that is really the intent, or just the "cover story," with the intent being a massive redistribution of wealth, and a permanent reconstruction of America into the haves/rulers, and the have nots/powerless subjects.
I think Trump actually believes his policies will bring back those "good" manufacturing jobs with high wages and good benefits. He isn't a deep thinker. This is the man who thought he could provide water to LA by letting water out of Central Valley dams. He's arrogant and profoundly, willfully ignorant.
He isn't a deep thinker for sure, but I'm not prepared to give him a pass on believing his policies aren't intentionally maleficent. He's always been that way. Even his cold blooded mentor, the infamous Roy Cohn, said of him "this guy pisses ice water".
Not just in shock , but grieving. I am sure everyone knows relatives and friends who died from Covid. It is so recent and we already do not talk about it in public?!
I share your dread completely. This is just the beginning of evil times.
“I dread in many ways what the next year or two will bring in. Most of them not economic, but God help us on the economics, as well.”
Two things come to mind for me about why the public is so upset all the time (other than trumpism in general and the failure of mainstream media to speak truth, etc). One is that Reaganomics not only does not work, but it destroys the resilience of the economy and favors the kind of corruption we see in government. The other is that we are all still in a state of profound shock from the pandemic. To have that hideous virus emerge and just take over the world all of a sudden was such an outrage! We are all still in shock. Of course we're all mad as hell about everything!
Yes, those of us who survived the pandemic are carrying an immense burden of unresolved, and publicly unacknowledged, trauma.
A while ago, some people discovered -- rediscovered -- that there had been an immense influenza pandemic in 1917-19, and wondered why it was almost never mentioned in books and articles about past years. I can understand that now. It was just too much.
Ah yes, the "trickle down effect" in action. Fat cats got fat tax cuts, and the rest of us got trickled on. Execs in the C-Suite got golden parachutes, we got the golden showers.
And how did America react? By voting for an Orange Mutant St. Reagan clone on steroids. Way to go voters.
Earlier in the discussion when the PPV (Personal Price Vector) came up, you talked about the need for folks to recalibrate their understanding of increasing costs and expectations. And in general getting the voting population to understand all the various economic forces at play in their lives. I think we also need to get people to realize that beyond their PVP there is the Common Good. Our expectations for ever increasing personal growth and consumption can not continue at the expense of the Common Good. For the country and the world to survive we need to learn to share and support the larger human community.
Early in the conversation the "term" Vibes appears. As usual with many such discussions there seems to be a confusion about how these bad vibes could proliferate when so many good effects are pressing inflation down and productivity up.
At worst it reminds me of the consternation that for instance, women want more when we give them everything they need.
Why are people so fixated on the prices of old when conditions are looking so good?
As one of those anxious people I can explain that the fat cats tripled their incomes but I did not see such personal gains. If productivity went up it must mean that I was producing more profits for them but not seeing an equitable rise in my pay.
I am earning more but paying more ....call me a sour grape.
The rich bastards have so many ways to make and keep money. Perks, tax dodges don't trickle down. Instead my taxes are shoveled into the potholes the rich leave behind.
The GOP teaches us "ordinary people" the problem is "inflation" and scoffs at our insinuation that the high prices are GREED plain and simple.
I wish "Vibe" and its magical aura of working class ignorance would be banned from such discussions or given the credence "everyday people" deserve. We depend on you to explain and to expand our view and help us articulate our dread.
If dread seems hyperbolic, please imagine how chainsaw economics looks to us.
"As one of those anxious people I can explain that the fat cats tripled their incomes but I did not see such personal gains. If productivity went up it must mean that I was producing more profits for them but not seeing an equitable rise in my pay."
Interesting! I think another part of that is that maybe we are earning more - we still do not earn enough to 'save' more so we can have a better future (like buying a home, going on a nice vacation, having a feeling of safety).
And yes, we can see every day how some people can spend exorbitant amount of monies on some really fancy stuff (multi-million dollar homes, $100,000 cars, ...).
That breeds contempt!
Thanks for your work. Please go over this again focused on the production of services and inflation while addressing this quote from House in your dialogue:
“I would say the two areas where we were just not able to get our agenda across the legislative goal line in ways that were really important to the two biggest pieces of unfinished business were affordable housing and affordable child care”
The service sector, with attention to housing construction, child care and I would add public health, health monitoring and medical care, as they too are in the service sector. The White House is busily demolishing federal programs aimed to strengthen the service sector (education, health, FEMA , Social Security, etc) I would like to learn more from your economic discussions (which are absolutely enlightening) about this. How should this fit into future economic policy?
One additional question relates to learning how people illegally crossing the border were often being hired to cover these planning gaps in our service sector. How do we further develop legal ways to strengthen and work in the service sector?
I think the Trump administrations focus on re-industrialization has a lot to do with the idea that industrial jobs are the "manly" jobs.
Longing for the heaven of 1953 or so.
That era when one single male wage enabled a family to actually buy a home !!!
It is also a time when the work of women was unpaid and largely in the area of services via the informal sector. Many women who later on entered into the labor force and were defined as economically active continued to produce similar services as before while getting paid wages as child care workers, restaurant workers, school teachers, etc. These service areas are often poorly paid and not well supported by governmental policy , planning and funding. This is likely to worsen given the massive reduction in support for health education and welfare by the current GOP.
What’s interesting is male labor force participation began declining in the early 1950s (BLS data), although women were discouraged from working outside the home.