Sherry Chandler

It’s the economy…

It Didn’t End Well the Last Time from the NYTimes:

Not since the Roaring Twenties have the rich been so much richer than everyone else. In 2005, the latest year for which figures are available, the top 1 percent of Americans — whose average income was $1.1 million a year — received 21.8 percent of the nation’s income, their largest share since 1929.

Over all, the top 10 percent of Americans — those making more than about $100,000 a year — collected 48.5 percent, also a share last seen before the Great Depression.

Those findings are no fluke.

Money Changes Everything, A Review by Jackson Lears from The New Republic and reprinted at Powells.com:

…Though rumor has it that Marx himself insisted “Je ne suis pas un marxiste,” it has become nearly impossible to separate the man’s thought from the crimes committed in his name. In common parlance, Marxism is immediately — and correctly — associated with slave-labor camps, mass murder, and hopelessly inefficient command economies. The collapse of the Soviet empire, in this view, marked the death of Marxism as an intellectual tradition.

The problem with such a perspective is that it allows the millenarian vision of Marxist ideology, and its catastrophic consequences, to obscure the glimmers of analytical insight in the work of Marx himself. Consider just his awareness of the relation between unregulated capital and unprotected labor. The chapter on “Machinery and Modern Industry” in Capital was the classic account of “scientific management” before the term even existed. The reader is present on the shop floor, feeling the pace of toil quicken with the managerial imperative to raise productivity by “filling up the pores of the working day” and merging the factory operatives with the rest of the machinery for making money.

Marx’s account of actually existing capitalism was a powerful counterpoint to the cant of Samuel Smiles, whose Self-Help was published at about the same time as Capital, and who insisted (against all the evidence) on the transformative powers of plodding diligence. Marx knew better. He recognized that capital, not labor, was the key to success. This was an insight that he shared with the leading capitalists of his day. Then, as now, moralists penned paeans to work, while the rich went about their business largely oblivious to conventional pieties.

Goosing the Economy by Kevin Drum at Political Animal:

Consider the evidence. The average income of families in the bottom fifth of the population has been flat for more than 30 years, through good times and bad. In the most recent five years of economic expansion, using the BLS data…, it’s been even worse: wages for the bottom 10% (after correcting for inflation) are flat. Wages for the bottom 25% are flat. Wages for the median worker are flat. And that was during a period of sustained economic growth. How long is it supposed to take for an economic expansion to turn into a tight labor market? Over the past three decades, the only time the median wage has increased significantly was during the late 90s, and that was thanks to the most intense, highest-flying bubble in a generation. We can’t count on that happening again any time soon.

I’m as big a fan of a hot economy as the next person, but the stubborn fact is that economic growth over the past three decades has produced next to no gains for the average worker. And even if it did, what’s the magic key to manufacturing an endless expansion? None that I know of. There’s a Nobel Prize waiting for the guy who can figure out how to do away with the business cycle.

Related posts:

The myth and the reality

The Conscience of a Liberal

Mr. Rich White & Mr. Poor White

The booming Bush economy…

Remembering the reason for the day

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