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The Washington Post Backs the GOP's Economic Voodoo

 
 
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In a major business section articleon President Obama's plans to address inequality, the Washington Post (a.k.a. Fox on 15th Street) came down squarely on the side of the Republicans. The Republican slant starts with the headline, "Obama's push to revive middle class will clash with long-term trends." This one undoubtedly had people all over the metro area saying, "duh."

Of course it will clash with long-term trends, that would be the point. No one thinks that the 1 percent just got all of our money yesterday. The process of upward redistribution has been going on for more than three decades.

After outlining the basic issues, the Post tells readers:

"Republicans, both in Congress and on the campaign trail, favor a far different approach than Obama has embraced. They generally regard government efforts to promote equality and strengthen the middle class as counterproductive. By this thinking, reducing taxes and shrinking the government’s role in the economy will free up capital that entrepreneurs can invest, creating good new jobs."

Actually, the Post has no idea how Republicans "regard" government efforts to promote equality. Nor does it know whether in their "thinking" lower taxes for the wealthy actually translates into "good new jobs."

What the Post knows is what Republican politicians and spokespeople say. A serious newspaper sticks to what is visible and knowable, it does not do mind reading for the benefit of its readers.

The piece also includes a number of assertions that are unsupported by anything. For example, it tells readers:

"But it is not clear that the measures [those proposed by President Obama]— or any others — could compensate for the factors behind the decline of the middle class, including the rise of nations with abundant cheap labor and the development of new technologies that allow companies to operate with far fewer workers."

Actually, the abundant supply of cheap labor could do much to make middle class workers wealthier if it were allowed to compete freely with the most highly educated workers in the United States. There is no shortage of smart people in China, India, and other developing countries who could train to be doctors in the United States. If we eliminated the barriers that make it difficult for foreign doctors who meet U.S. standards from practicing in the United States, it would would substantially reduce the pay of physicians.

If the salaries of doctors fell to European levels it would mean a dividend for the middle class (in the form of lower health care bills) of close to $100 billion a year, almost twice the amount at stake in extending President Bush's tax cuts to the wealthy. There would be comparable gains from opening up law and other high-paying professions to people from the developing world.

The reason that globalization has put downward pressure on the living standards of the middle class is that it has been deliberate policy under both Republican and Democratic administrations to force middle class workers to compete with their low-paid counterparts in the developing world, while protecting the most highly educated workers from the same competition. The predicted and actual result of this policy has been an enormous upward redistribution of income.

A serious piece on inequality would have made this point. It also would have discussed other ways in which conscious policy decisions (e.g. greater legal hostility to unions) have resulted in upward redistribution, instead of telling readers it was all just the natural workings of the economy. 

Center for Economic and Policy Research / By Dean Baker | Sourced from

Posted at February 3, 2012, 12:02pm

 
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