Monday, January 20, 2014

A determined campaign of optical obfuscation, of distortion by dilution...

Please read Paul Krugman's article before continuing.

Convincing stuff? Well, read on:

The reality of rising income in America is encouraging. Since the late 1970s the lives of the bottom half of the workforce have improved measurably right along with the incomes of the top 1 percent, while "progressives"---amid a nation (top to bottom) full of cell phones and satellite TVs, Blue Rays and X-Boxes, microwaves and cordless mouses, and myriad etceteras and etceteras---dispute reality with statistics that merely measure the growth, lack thereof actually, in wages over the past few decades. That's right, even some economists, make that "progressive" economists, go there and insult the intelligence of every American with functioning eyeballs. They talk of "numbers", but never of notebooks.

The numbers are their open invitation to bring out that age-old political weapon that, when deployed at the right moment---like when the economy is contracting, or growing slowly---works oh so well: that would be the inciting of class warfare. It's a determined campaign of optical obfuscation. At its cruder end this campaign comes close to outright falsification; at its more sophisticated end it involves using fancy footwork to propagate what I think of as the myth of middle-class stagnation.

For examples of de facto falsification, one need look no further than the recent columns by Paul Krugman of the New York Times. Krugman revels in insulting every economist, and any(sighted)one else who would dare point his fellow citizens past the ends of their noses. The story goes like this: America's affluent are affluent at the expense of everyone else. "At this point", in his own words, "the rise of the 1 percent at the expense of everyone else is so obvious that it's no longer possible to shut down any discussion of rising inequality with cries of "class warfare"." He wields his bravado in such a way that you almost believe you've been, to this point, oblivious to the "obvious". Then you come to your commonsenses and realize that it is Krugman, never your eyes, that would deceive you---that what's truly "so obvious" is that folks on every rung of the income ladder are visibly better off today than they've ever been. 

O.K., that's what crude obfuscation looks like. What about the fancier version?

Krugman loves to cite the works of "progressive" think tanks, like the Economic Policy Institute. In his latest he links to a column written by Lawrence Mishel and Colin Gordon showing a 1973-2012 real wages chart for all workers. It supports Krugman's assertion, proves it actually, that real wages for the bottom half of the workforce have stagnated or fallen. Here's a snippet from their article: 
Low– and middle-wage men and women lose ground across this era—a pattern interrupted only by the sustained growth, low unemployment, and minimum wage increases of the late 1990s. The growing wage inequality fed greater household income inequality (wages and salaries make up more than three-quarters of median family income) as those at the top received disproportionate wage gains. And the lessons are clear as well: Shared prosperity rests on policies and institutions (collective bargaining, a decent minimum wage, strong labor standards, etc.) that sustain the bargaining power of workers. In the absence of those institutions, only exceptional stretches of full employment have interrupted the failure of the wages, incomes, and living standards of ordinary Americans to benefit from the fruits of economic growth.

I guess the "fruits" group doesn't include cell phones and satellite TVs.

Not only is that fancy obfuscation, it's pure political genius (it makes voting victims out of non-victims). Although it should be viewed---in the face of present-day's ubiquitous amenities---as the most disgusting political manipulation.

Oh, and A HUGE by the way, the Economic Policy Institute calls itself  "a non-partisan think tank". Now note above the assertion that "Shared prosperity rests on policies and institutions (collective bargaining, a decent minimum wage, strong labor standards, etc.) that sustain the bargaining power of workers." Hmm... "collective bargaining", "labor standards", "bargaining power of workers"...Hmm... smells a little fishy. I wonder who chairs the board of the EPI? Let's click on the Board of Directors tab and see. Ooookay, now it's making sense: The chairman of the (cough cough) non-partisan Economic Policy Institute is---you ready?---none other than good old Richard Trumka, President of the AFL-CIO!! And this would be Krugman's idea of a credible source. Oh my!! 

So then, how can the myth of middle class stagnation be sustained? Mainly through a strategy of distortion by dilution. You almost never hear class warmongers talk about the glaring contrast between life in the 70s and life today. Instead they talk about "real wages". This may sound like an innocent choice, but it's not, because it misses the miracles of virtually all manner of technology stemming from a system that rewards the inventors, innovators and distributors of those miracles.

Think of it this way, the fortunes (okay, the wages) of those who deliver the goods and services that allow the rest of us to enjoy so much more wealth per dollar earned (that would be "shared prosperity") will of course grow faster than the wages of the rest of us---as they should.

In closing, I can't help but sympathize with Krugman on one point. He states:
And who are these lucky few? Mainly they're executives of some kind, especially, although not only, in finance. You can argue about whether these people deserve to be paid so well, but one thing is clear: They didn't get where they are simply by being prudent, clean and sober.

While the finance industry has no doubt played an essential role in the development of the material miracles highlighted above, I do deeply share the frustration that many (not all) of those who were so instrumental in the inflating of the real estate/mortgage backed securities bubble walked away, wealth intact. What is utterly amazing, and unconscionable, is that the likes of Krugman would have us place yet more power in the institution (the Federal Government) that fed those fat cats the fruits of other people's labor. Oh my!!


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