As mentions of “Occupy Wall Street” or “Occupy movement” waned in early 2012, so too have mentions of “income inequality” and, to an even greater extent, “corporate greed.” The trend is true for four leading papers (New York Times, Washington Post, USA Today, Los Angeles Times), news programs on the major networks (ABC, CBS, NBC), cable (MSNBC, CNN, Fox News) and NPR, according to searches of the Nexis news media database. Google Trends data also indicates that from January to March, the phrases “income inequality” and “corporate greed” declined in volume of both news stories and searches.

Knefel notes that tokens of Occupy rhetoric — most notably the idea of a “99 percent” against a “1 percent” — has seeped into everyday cultural parlance. Since Occupy’s inception last fall, references to “the 1 percent” don’t elicit the response, “of what?”; these numbers are now understood far and wide to connote class disparity  – even though many Occupy participants have at times felt the slogan too reductive to signify complicated socio-politico-economic issues. Knefel points out too “the danger, of course, is that ‘the 1 Percent’ simply becomes a buzzword and ceases to have any connection to the way American capitalism produces and reproduces economic and social inequality.”

FAIR’s findings prompt a number of critiques, both of the media’s attention span and of Occupy’s lasting power. It is a troubling state of affairs that in order to push conversations about rampant inequality in the press, it seems there needs to be continuous, headline-grabbing protests, occupations and public manifestations of anger (with newsworthy slogans, of course). But this should perhaps come as no surprise — after all, it was in recognition of our very troubling state of national and international affairs that Occupy participants took to the streets, parks and encampments in the first place.

Occupy supporters may well be saddened by FAIR’s news: that their important messages about corporate greed and class disparity have not permanently shifted the mainstream media’s coverage of these issues. Knefel’s report is at once a reminder of the long slog it takes to really shift a discourse. It’s a reminder too that mainstream media outlets are fickle creatures, ready to move on to the next shiny object with little focus on the issues underpinning stories.

It’s reasonable (although perhaps less so after the mass mobilizations in streets across the country on May 1) to debate Occupy’s current relevance. For me, the problem highlighted here might not be a radical movement’s failure to stay in the headlines, however; the fault is rather with a mainstream political and media machine that ignores economic and social inequality; hence the importance of radical movements. The question then becomes whether assemblages like Occupy should continue to work to hold the attention of such a machine, or work toward challenging its ability to determine political discourse.

There can be no reasoning with people this irrational. Any attempt to do so will fail, as Barack Obama, whose main goal is to maintain, not upend, the system that made these people so disgustingly wealthy, is learning. It’s growing harder and harder to pretend that the fantastically wealthy have a sophisticated understanding of politics — or math, or economics, or cause-and-effect.

The Times Magazine has the story of the Obama campaign’s difficulty in matching its record 2008 contributions from the finance sector. It contains this now surely infamous passage, a true marvel of that classic rich guy cocktail of self-pity mixed with self-regard:

One of the guests raised his hand; he knew how to solve the problem. The president had won plaudits for his speech on race during the last campaign, the guest noted. It was a soaring address that acknowledged white resentment and urged national unity. What if Obama gave a similarly healing speech about class and inequality? What if he urged an end to attacks on the rich? Around the table, some people shook their heads in disbelief.

The problem with inequality in America, you see, is apparently that it has led to rhetorical attacks on the winners of the class war. Greg Sargent wrote, in response to this story: “One wonders if there is anything Obama could say to make these people happy, short of declaring that rampant inequality is a good thing, in that it affirms the talent and industriousness of the deserving super rich.”

I’m not sure even that would help, because there is already another presidential candidate who likely believes that. In the same issue of the Times Magazine, we have the story of Edward Conard, a retired Bain Capital executive who is about to release a book (presumably against the wishes of his friend and former colleague Mitt Romney) arguing “aggressively” that massive wealth disparity is an unalloyed Good Thing. In fact, Conard thinks “the wealth concentrated at the top should be twice as large.” (Paul Krugman does not think much of his argument.)

Conard also detests charitable giving and has developed a statistical method for finding a spouse, because he is a sociopath. Because he is very wealthy, he is very used to his ideas being taken seriously — even economists offer him (qualified) praise. He is utterly convinced that his book will convince every serious person that wealthy finance industry titans not only deserve their wealth, but make society a better place for all. He has basically taken what is a gut feeling among his class and turned it into a philosophy and an argument.

Perhaps the most persuasive argument — for Republicans — for nominating Mitt Romney was that he is of this class. The fact that he is more comfortable in a boardroom than a Pizza Ranch is actually a major asset, because the Democrats had, since the Clinton years, gradually won over much of Wall Street, helping them to erode the GOP’s massive Reagan-era fundraising advantages. Romney can win that money back. Our friend Ed Conard even created a shell corporation for the sole purpose of secretly donating $1 million to Romney’s super PAC. The Sunlight Foundation shows in Figure 5 here that the share of finance money going to Democrats skyrocketed during Clinton’s first term, and rose again in 2008. Clinton rewarded his super-rich donors with extensive deregulation — and they rewarded him by shifting the majority of their donations back to the GOP. (Finance, naturally, likes to chase winners: They give more to whichever party seems to be on the upswing, as Obama learned in 2010 and will learn again this year.)

They are one of those industries that is used to getting exactly what it always wants from Washington, because they essentially own both parties. (As opposed to say, oil and gas, ally of Republicans, or the entertainment industry, ally of Democrats.) So Dodd-Frank made them very, very mad. But not just mad: Confused, hurt, betrayed. There is a psychosocial element to the response, clearly on display in the story of the rich people who wish for a speech about how they are not evil. They are essentially spoiled children who have just been lightly reprimanded for the first time that they can remember.

Obama has not been remotely unkind to Wall Street, even as he’s grudgingly adopted a slightly more leftist tone. The grotesque nature of our campaign finance system has effectively made economic populism impossible. Even populist rhetoric not backed up by any sort of action is apparently hurtful to these masters of the universe.

But Conard is wrong. The rich are not intrinsically more virtuous or hardworking than the masses. They are also, decidedly, not any smarter. And they receive their news, and their political opinions, from the exact same organs as everyone else. They may be more likely to read the Wall Street Journal than the New York Post, but both of those Murdoch-owned newspapers carry similar lies on their editorial pages. In other words, they actually believe their bullshit. They honestly believe that mean Democrats invented “Occupy Wall Street” in order to make them scapegoats for a crisis that they feel no responsibility for. People who are in the business of extracting fees and interest from consumers, or moving rich people’s money around, unironically think of themselves as “job creators.”

The result of their last few decades of job creation has been the decoupling of productivity grown from wage growth and skyrocketing compensation for CEOs and finance industry workers.

But appeals to logic, history and common sense will not get you far with a roomful of very rich guys who feel paranoid and victimized. The Wall Street types asked to become Obama donors wanted assurances that the president would not criticize his opponent’s finance industry record. It’s not enough that they’re ridiculously wealthy: They wish to be utterly above criticism. That’s the most important thing to remember: These people, the .01 percent, are mostly childish idiots. Idiot children have now accumulated all of the nation’s wealth and they are terrified that someone might try to take some of it away.

After preliminaries dealing with mobility, Noah, a staff writer at the New Republic, offers a short discussion of race, gender and family structure. He takes it as a given that civil rights, female liberation and changing marriage norms did not actively bring about income changes for the groups involved in those movements.  Instead, Noah accepts the prevalent view of economists that larger forces were at work and that minorities, women and families were affected by, but not principal actors in, the drama of rising inequality.

What were those forces? For Noah’s sources, the labor market is the primary scene of the action. Here wages are buffeted by the forces of demand and supply. On the demand side, the big forces include technology and trade; on the supply side, they are mainly education and immigration.

As Noah relates, the Harvard power couple Claudia Goldin and Lawrence Katz have argued that increasing wage inequalities are due mainly to “a race between technology and education.” In their view, technology raises inequality by increasing the demand for skill; education lowers it by increasing the supply.  Thus, rising inequality in the first and last decades of the last century was due to rapid technological change and lagging education, while the “Great Compression” in the middle of the century happened largely because education caught up.

This story is far more controversial than Noah lets on.  Quite apart from the fact that we do not have a good measure of technological change – so we cannot really say when it was fast and when it was slow –  the idea that technology favors the skilled worker is not obviously correct. Noah does not mention the dissenting views of (for instance) David Card of UC-Berkeley,  John DiNardo of the University of Michigan, or Robert Z. Lawrence of Harvard.  As for the effects of education, in a 1999 article in Research in Economic History, Thomas Ferguson and I examined American wages in fine detail from 1920 to 1948. We found that the fluctuation during those years could be explained entirely without reference to schooling.  Moreover, to state the obvious:

During World War II, the enormous rise in wages of the truly unskilled workers who toiled in agriculture and on the public roads owed nothing to any Roads Scholarships program. [It] was the effect, surely, of demand, spurred by record public deficits, and the absorption of some ten million men into uniformed government employment. And the result was an almost perfect inversion of Protestant ideology and conventional thinking about education and labor markets, for the prime beneficiaries certainly included many millions of workers who were functionally illiterate and possessed of the very  lowest educational credentials of all.

Economists sometimes strain at gnats while swallowing camels. Noah does credit the effect of the WWII wage controls in fashioning the postwar world, but he overlooks the fact that since those vast changes more than explain the great equalization of American wages that occurred, there is no need to appeal to high school graduation rates for a second cause.

In the 1990s, “skill-biased technological change” was a preferred mainstream explanation for rising wage inequality, while liberals tended to blame rising trade. Yet those making the case that trade was the culprit also had a hard time finding proof. The difficulty, according to Noah, was that America’s main trading partners were also high-wage countries. NAFTA helped make Mexico into a significant exception, and then along came China and India. The result was that in the 2000s, several prominent economists – including Paul Krugman and Alan Blinder – began to argue that off-shoring (including of services) had become a major threat to jobs and wages. How big a threat? Noah assigns just 12 to 13 percent of the Great Divergence to trade, but he does not say where this number comes from or what, exactly, it applies to.

Immigration also seems to have been small beer. The fact that a new labor supply doesn’t change wage rates was nicely demonstrated by David Card at the time of the 1980 Mariel boatlift, which deposited 125,000 low-skilled Cubans on Miami. As Noah writes: “Card observed no impact on wages at all … even  among low-skilled native-born workers” (emphasis in original).  Needless to say, some economists were still unpersuaded; the grip of theory is powerful on the mind.

Noah’s accounts of these studies is fair and lucid. The difficulty comes in making an assessment. The conclusion I’d draw (and in fact drew, many years ago) is that supply-and-demand is a poor model for explaining inequalities in pay. Wages are rigid! Some recognition of this does exist, and so political explanations – for example, the great shift in “norms and institutions” under Reagan – have attracted attention.  Noah devotes two chapters to them, one of which is on taxes and the other of which is on unions.

The Reagan-era cuts in income tax rates – up to and including the Tax Reform Act of 1986 – seemed like a big favor to the rich at the time. But Noah (following, as always, his economists) argues that they could not have caused the rise in income inequality, for they do not account for the rise in the pretax income shares of the very rich. In my view, this is too quick of an assessment: It overlooks the fact that lower tax rates induced corporate executives to take their compensation in private income as against perks. We should thus expect that it was a powerful force behind the CEO pay explosion that occurred at the same time.

The other problem is that the Tax Reform Act redefined adjusted gross income for top earners so as to increase what they reported. Thus, a significant part of the rise in pretax income inequality – the part the data show to have occurred in 1986-87 – are accounting changes. The twist here, is that removing this “data break” from the series somewhat lowers the measured increase in inequality that forms the core narrative of a “Great Divergence.”

The collapse of unions was no doubt important from any viewpoint,  but here one has a skein of contending causal forces.  How much should one credit the overtly political attack? And how much, perchance, was due to Paul Volcker’s war on inflation – a topic to which Noah devotes only a few words? It’s possible the principal force was not the destruction of unions as such but rather the destruction by monetary policy of jobs through the rise of interest rates and the dollar, which brought on the recession and the fall of the unions. And if that’s true, then outsourcing is also not an independent factor, but rather just another consequence.

In support of this view,  there is the fact that pay inequality in American manufacturing actually peaked in 1983 and fell back once interest rates dropped and the recession ended. This is easy to miss, partly because income-tax data reflect the changing structure of households, which continued through the 1980s.  Pay inequality did not rise again until the recession in 1989, and after 1994 it once again declined quite sharply. By 2000, inequalities in the structure of pay had fallen a lot, which helps account for the very low poverty rates, including for minorities, in those years.

What happened?  The answer jumps from a chart: Inequality in the structure of pay, measured as weekly earnings of the manufacturing workers, tracks the unemployment rate. It is a macroeconomic phenomenon, driven largely by the extra hours that low-paid workers are able to work in booms as well as by the short-time they suffer in slumps. It follows that the focus on supply-and-demand forces that are supposed to affect hourly wage rates – such as technology and education – is largely a waste of effort.  What matters is the state of the economy and the rules governing wages.

Meanwhile, if you do want to compress wages and earnings, it’s quite possible.  There is a proven method – a simple, direct, effective measure. Actually, there are two of them.  One is to pursue full employment. The other is to raise the minimum wage.  In his summary chapter on policies, Noah does talk about unions, but he doesn’t mention the minimum wage.

Inequality in incomes rose sharply in the late 1990s, a phenomenon Noah describes as the rise of the “really stinking rich.” And he rightly calls attention to the bankers and fund managers and other denizens of Wall Street. But in thinking about how these incomes rose as they did, a chart can again clarify matters. Clearly it’s another macroeconomic phenomenon, related in this case to the stock market. Pay follows unemployment; incomes followed the NASDAQ right up to the peak in 2000, and  beyond.

And as the data will show eventually, the Great Divergence in incomes ended (for now) with the tech bust. Since then the pattern has been down, up, down and up again –  both in the run-up to and in the wake of the Great Crisis. Which, interestingly, also gets no mention here.

In short, this is a valuable book. The beef I have with it is that, in surveying academic opinions, Noah reflects the views of the people he read and spoke with. And since they aren’t interested in macroeconomics, he isn’t either. That’s a loss.

Obama warned of the unraveling of the American dream, and called for giving hurting middle-class workers a fair shake and restoring financial security — themes he’s certain to return to throughout the 2012 campaign.

“This isn’t just another political debate. This is the defining issue of our time. This is a make-or-break moment for the middle class, and all those who are fighting to get into the middle class,” Obama told a crowd in the Osawatomie High School gym, where red, white and blue bunting lined the bleachers.

“Because at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, and secure their retirement,” he said.

Taking aim at Republicans, Obama said: “Their philosophy is simple: we are better off when everyone is left to fend for themselves and play by their own rules. Well, I’m here to say they are wrong.”

Obama’s speech sounded the theme of inequality of income and opportunity, which the White House sees as a major force in current politics, but it was short on new ideas or specifics for pulling the country out of its economic doldrums.