Letters We Wish We'd Written - Reaganomics And Income Inequality Edition

The once great Washington Post's Bezos Bugle's non-economist economics writer Robert "Not Paul" J. Samuelson provides a reliably wrong-headed right-wing point of view on op/ed pages once graced by the likes of Walter Lippmann.  Today, two perceptive readers take issue with one of "Not Paul" Samuelson's recent forays into dunderhead economics:

Robert J. Samuelson’s May 11 op-ed column, “Poof goes the big tradeoff,” cited Arthur Okun’s “Equality and Efficiency, The Big Tradeoff,” which theorized that higher growth would come with increased inequality and increased equality would lead to stagnation. But that hasn’t worked out in the real world, and this puzzled Mr. Samuelson.

Mr. Samuelson claimed to have no clue as to why the U.S. economy is stagnating while the richest (after-tax, inflation-adjusted) 1 percent of Americans command nearly half of the nation’s income (almost equal to the lower 80 percent’s total) and how this inequality has occurred.

Hasn’t Mr. Samuelson noticed that the “Reagan revolution” is still going on? Congress’s budgets have given massive tax breaks to the richest while cutting funds for education and making no provision for budget-balancing states and municipalities that have been forced to cut funding for schools, police and other essential services.

President Obama tried to stimulate the economy by proposing measures for necessary repairs and improvements to roads, bridges and other infrastructure, but the Republican Congress turned him down flat.

Mr. Samuelson surely knows that consumer spending drives 70 percent of the U.S. economy’s activity. But skinflint policies have targeted the very people who do most of the consuming. In short, Mr. Okun’s 1975 theories don’t apply today. The billionaires have bought Congress, and the resulting increase in inequality has led to economic stagnation.

Russ Prickett, Austin

Robert J. Samuelson contended that relatively weak U.S. economic growth and widening inequality demonstrate factually that “the big tradeoff has proved unworkable” because “we do not know enough to manipulate economic growth, productivity and income distribution.” Right facts, wrong conclusion. A few years after Arthur Okun’s article, the United States implemented Reaganomics, shifting massive wealth from the public to the private sector. But the “job creators” have not behaved as expected, using a greater portion of these funds to increase their wealth through financial investments (hedge funds, collateralized debt obligations, outsourcing to increase profit margins, executive stock options, etc.) rather than investments in productive equipment and output. With the reduced funds available to the public sector (exacerbated by long wars in Iraq and Afghanistan), we get crumbling infrastructure and limited ability to support bootstrapping efforts. We do know enough now: This 35-year experiment has demonstrably failed to achieve the right set of tradeoffs. The United States needs to recalibrate the public-private balance, not just give up hope.

Len Levitt, McLean

Unfortunately for America, the "Reagan revolution" is still going on, as Mr. Prickett notes.  Thanks to the usual suspects -- an infantile media, plutocrats emboldened by Citizens United,  and an array of spineless "centrist Democrats" -- the rather obvious connection of income inequality to policies that have long-favored the wealthiest 1 per cent ("makers!") is obscured  by people like Samuelson to the detriment of us all.

Letters We Wish We'd Written Dept., War On The Middle Class Edition

The letter below was in response to a recent op/ed by the once great Washington Post Bezos Bugle's conservative plutocrat shill and non-economist Robert J. "Not Paul" Samuelson on why "the system" is rigged toward the middle class, not the wealthy (you need only read the first few paragraphs to get the gist of Samuelson's argument).  That's right: those greedy middle class "takers" are grabbing all the goodies from the one percent "makers!" (Let's pause here for a serious question to our reader demographic:  Do you feel the system has been rigged in your favor?  We didn't think so.)  But, as we know, reality has a liberal bias:

Robert J. Samuelson’s op-ed column had a fundamental flaw. He claimed the federal government has a bias for the poor and middle class as opposed to the rich, citing funds spent on Social Security and the fact the rich pay the majority of taxes in the United States. 

He failed to note that U.S. workers paid through their working lives for Social Security. He completely ignored that, for the past three decades-plus, incomes of the rich have risen several hundred percent while middle-income workers’ wages have been stagnant. Since the economic recovery, the top 1 percent have gained 95 percent of all new income with the remaining amount going to the next 9 percent. Nine out of 10 Americans received a great big nothing in new income. 

Public policy has been deliberately framed to favor the rich and well-connected. Mr. Samuelson might examine the recent omnibus spending bill that gave banks the power to use federally insured deposits in derivative speculation. If the deal goes well, bankers keep the bucks. If not, taxpayers foot the bill. Thanks to the same bill, retirees might lose part of the pensions they already receive and the government won’t help. 

Bias for the middle class, indeed! 

Fred Rotondaro, Washington  

The writer is a senior fellow at the Center for American Progress.

Another letter writer named Gregory Diercks had a more detailed rebuttal to Samuelson that we're not reprinting here, but is worth your time to check out.

Basically, Samuelson is Oxycontin Rush Limbaugh with some intellectual patina.  They share the same view that the 2008 crash was the result of gummint policies allowing expanded middle class homeownership, rather than the greed and sociopathy of Wall Street and its network of shady lenders and speculators.  What a joy that the once great Washington Post Bezos Bugle is affording this reactionary valuable space on its op/ed pages.

Wanker of the Week

Robert J. (for Jackass) Samuelson, yet another of the WaPo's poor excuses for "balanced" punditry, has an op/ed today with a startling, fresh, right-wing meme: the "media" is ga-ga for Obama!! Blimey, that Samuelson has found a darn good, original line of work-the-refs attack!!

Rather than linking directly to this sack o' steamin' shit, check out the "Pundit Round-up" in Daily Kos, which has a wonderful, lol summation that captures all of Samuelson's incoherent rage.

(Photo: Robert J. (for Jackass) Samuelson: photoshop a cigar and you've got Groucho!)