Paul Krugman won’t save us: We need a new conversation about inequality

Democrats are scared of class. But issues like inequality are why liberals exist, and talk can't be left to elites

Topics: Inequality, Paul Krugman, davos, Barack Obama, Tea Party, Economics, greed, Capitalism, Great Recession, Larry Summers, Occupy Wall Street, Editor's Picks, , ,

Paul Krugman won't save us: We need a new conversation about inequalityPaul Krugman, Paul Ryan (Credit: Reuters/Bob Strong/AP/Mary Altaffer/photo composite by Salon)

When President Obama declared in December that gross inequality is the “defining challenge of our time,” he was right, and resoundingly so. As is his habit, however, he quickly backed away from the idea at the urging of pollsters and various Democratic grandees.

I can understand the Democrats’ fears about venturing into this territory. It feels like a throwback to an incomprehensible time — to a form of liberalism that few of them understand anymore. Unfortunately, they really have no choice. Watching first the way the bankers steered us into disaster in 2008 and then the way they harvested the fruits of our labored recovery — these spectacles have forced the nation to rediscover social class, and as we dig deeper into the subject we are appalled to learn what has been going on for the last three decades.

I was born in a comfortable middle-class America of the postwar years, the “affluent society” you hear about sometimes, and the shattering of that social order has been the story of my entire adult life. “Inequality” is an inadequate word for the Big Smashup, but we need some term to describe all the things that have gone to make the lives of the rich so superlative and the lives of people who work so shitty and so precarious. It is visible in the ever-rising cost of healthcare and college, in the deindustrialization of the Midwest and the ballooning of Wall Street, in the power of lobbying, in the dot-com bubble, in the housing bubble, in the commodities bubble. It was made possible by the signal political events of our time: the collapse of the New Deal coalition; the decline of labor; the infernal populism of the New Right; the fall of antitrust and the triumph of deregulation; the rise of Ronald Reagan, and after him Newt Gingrich, and after him George W. Bush, and after him the Tea Party, all of them bringing their pet tax cuts with them to Washington.

The word is a polite one, but “inequality” is what we say when we mean to describe the ruined downtown of your city, or your constant fear that the next round of layoffs will include you, or the impeccable air conditioning of your boss’s McMansion, or the way you had to declare bankruptcy when your child got sick. It is a pleasant-sounding euphemism for the Appalachification of our world. “The defining challenge of our time”?: Oh, yes.

* * *



Actually, let me offer a correction to Obama’s formula. What really defines our time is the simultaneous soaring of inequality and the maddening inability of most progressives (there are exceptions, of course) to talk about it in a way that might actually inspire anyone to get off their ass. Start with the word itself: Like “neoliberalism,” another favorite lefty term for many of these same developments, “inequality” is confusing. It is euphemistic and aloof. It gets easily muddled with other, similar-sounding issues like marriage equality, gender equality and equal housing opportunity. Its tone is also needlessly clinical, giving the whole debate a technical and bloodless air.

Still, to read around on the subject is to get the feeling that certain liberals like it that way. “Needlessly clinical” is exactly their style. The subject, for them, must be positively cloaked in wonkery. They don’t talk much about “class,” like some troublemaker from the ’30s; they talk about “inequality,” which is a delicate and intricate signifier. Oh, it is extremely complex. It requires so many charts.

To our ancestors, though, this same issue was the most basic matter of them all. What we call “inequality” they called “the social question”; the phrase denoted nothing less than the eternal conflict of rich and poor. Let us recall how they used to address the subject. Here is a famous passage from the Omaha Platform of the Populist Party, written in 1892:

The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of those, in turn, despise the republic and endanger liberty. From the same prolific womb of governmental injustice we breed the two great classes—tramps and millionaires.

Twenty years and countless industrial battles after that, Congress asked a panel of representatives from labor and management (it also included one economist) to look into the overwhelming feeling of discontent then abroad in the land; in one of their 1916 reports members of the Commission on Industrial Relations declared that the No. 1 cause of American “unrest” was the “unjust distribution of wealth and income.” Here is how they described the attitudes then prevailing:

The conviction that the wealth of the country and the income which is produced through the toil of the workers is distributed without regard to any standard of justice is as widespread as it is deep-seated. It is found among all classes of workers and takes every form from the dumb resentment of the day laborer, who, at the end of a week’s back-breaking toil finds that he has less than enough to feed his family while others who have done nothing live in ease, to the elaborate philosophy of the “soap-box orator,” who can quote statistics unendingly to demonstrate his contentions. At bottom, though, there is the one fundamental, controlling idea that income should be received for service and for service only, whereas, in fact, it bears no such relation, and he who serves least, or not at all, may receive most.

OK, that’s from a government document. But still it sings. And here is the socialist newspaper editor Oscar Ameringer, describing the attitudes of his Oklahoma neighbors to a congressional committee in 1932:

There is a feeling among the masses generally that something is radically wrong. They are despairing of political action. They say the only thing you do in Washington is to take money from the pockets of the poor and put it into the pockets of the rich. They say that this Government is a conspiracy against the common people to enrich the already rich. I hear such remarks every day.

In our own time, we haven’t heard a lot of that kind of language since the days when protesters were still occupying Zuccotti Park. Since then, the “conversation” that Occupy Wall Street so famously “changed” has pretty much been monopolized by the usual parties, by which I do not mean day laborers or angry farmers or Oklahoma ranchers.

Who is called upon to speak on the subject today? Why, academics, of course. “Inequality” is a matter for experts, a field for the playful jousting of rival economists, backed up by helpful professors of political science, and with maybe an occasional sociologist permitted into the games now and then.

In other words, the same bien pensant crew who spoke on the last hot money-related subject of the day, whether it was trade barriers or exchange rates or whatever.

For example, consider the New York Times’ series on the subject, “The Great Divide,” which has run now for a little over a year, and where about 80 percent of the articles have been written by academics, more than half of these economists — probably because the “moderator” for the series is Nobel Prized economist Joseph Stiglitz. Or the comprehensive documentary about the subject, “Inequality for All,” which features former Labor Secretary Robert Reich lecturing in an auditorium filled with college students. Larry Summers, the celebrated deregulator, has stepped into the battle as well, sharing “his passion for reducing inequality” with his new colleagues at the Center for American Progress. The discovery of inequality has also compelled our leadership class to establish things like the Washington Center for Equitable Growth, which boasts a steering committee made up of six economists plus one Democratic foundation/policy type. It describes itself as:

a new research and grantmaking organization founded to accelerate cutting-edge analysis into whether and how structural changes in the U.S. economy, particularly related to economic inequality, affect growth. Core to our mission is helping to build a stronger bridge between academics and policymakers so that new research is relevant, accessible, and informative to the policymaking process.

But to look at its website, it’s just another platform for the trademark blog styling of the well-known economist Brad DeLong.

The one thing that just about everyone knows about inequality is that it’s a complex, highly technical problem, with many confusing causes and expressions. “Inequality is a complicated, complicated thing,” as a puzzled writer declared in the Atlantic a few weeks ago. “What exactly is income inequality?” wondered NPR’s Audie Cornish in January. “Ask six economists and you’re likely to get six different answers.” (That it’s economists you’re supposed to ask was simply taken for granted.)

I admit that the issue is complicated in its details, but it’s also — in its basic, brutal thrust — something  dead simple: Inequality happened because our leaders set out to make it happen. On the first page of Kevin Phillips’ 1990 (!) bestseller on the subject, “The Politics of Rich and Poor,” he stated this obvious truth. “The 1980s were the triumph of upper America,” he wrote.

But while money, greed and luxury had become the stuff of popular culture, hardly anyone asked why such great wealth had concentrated at the top, and whether this was a result of public policy. Despite the armies of homeless sleeping on grates, political leaders—even those who professed to care about the homeless—had little to say about the Republican party’s historical role, which has been not simply to revitalize U.S. capitalism but to tilt power, policy, wealth and income toward the richest portions of the population. (emphasis added)

The rich got so goddamn rich, in other words, because the signature policies of the Great Right Turn were designed to make them rich. And, as the world knows, these policies weren’t limited to Republicans; Jimmy Carter, Bill Clinton, and Barack Obama—plus, of course, their resident economists and cabinet members—all more or less endorsed the basic tenets of the free-market faith. They are all implicated.

So inequality, now that we’re having a “conversation” about it, must of course turn out to be massively complicated, something no one could possibly have seen coming — sort of like the 2008 financial crisis, come to think of it. Furthermore, it must be seen as another technical problem, a matter for the experts to solve, like the budget deficit or entitlement spending.

* * *

Then again, why do I quibble? Most of the experts I refer to here aren’t actually wrong. I have quoted them myself on occasion; I have shown PowerPoint slides of Piketty-Saez graphs to audiences of unbelieving college students. Many of the essays in the Times’ “Great Divide” series have been admirable, as will surely be much of the “cutting-edge analysis” scheduled to be produced by the Washington Center for Equitable Growth. What difference does it make if it’s a Nobel laureate who tells us what’s happened to the middle class or the leader of a local union somewhere?

My suspicion is that it makes an enormous difference. “Inequality” is not some minor technical glitch for the experts to solve; this is the Big One. This is the very substance of American populism; this is what has brought together movements of average people throughout our history. Offering instruction on the subject in a classroom at Berkeley may be enlightening for the kids in attendance but it is fundamentally the wrong way to take on the problem, almost as misguided as it would be if we turned the matter over to the 1 percent themselves and got a bunch of billionaires together at Davos to offer pointers on how to stop them from beating us over and over again in the game of life. (Oops — that actually happened.)

“Inequality” is the most basic issue of them all, the very reason for liberalism’s existence. It is about who we are and how we live. Virtually every other liberal cause pales by comparison. This is the World War II of political subjects, and if we are going to win it must be a people’s war, not a Combat of the Thirty between the plumèd knights of the Beltway. We owe the economists thanks for making the situation plain, but now matters must of necessity pass into other hands. If the destruction of the middle class is ever to be addressed and solved, the impetus must come from below, not from above. This is a job we have to do ourselves.

Thomas Frank is a Salon politics and culture columnist. His many books include "What's The Matter With Kansas," "Pity the Billionaire" and "One Market Under God." He is the founding editor of The Baffler magazine.

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