Tuesday, February 19, 2013

What Is the Biggest Problem Facing the Country Today? By Bill O’Reilly.

What Is the Biggest Problem Facing the Country Today? By Bill O’Reilly. Video. Talking Points Memo. The O’Reilly Factor. Fox News, February 19, 2013. Transcript.

Bill O’Reilly Reveals America’s Biggest Problem. Video. Fox News Insider, February 20, 2013. Transcript.

Should American Law Protect Unborn Children from Harm. Video. The O’Reilly Factor. Fox News, February 20, 2013.

Hagel Said Israel Headed Toward Apartheid. By Alana Goodman.

Report: Hagel Said Israel Headed Toward Apartheid, Netanyahu a “Radical.” By Alana Goodman. Washington Free Beacon, February 19, 2013.

Against Despair. By Michael Tomasky.

Against Despair: How Our Misreading of History Harms Progressivism Today. By Michael Tomasky. Democracy: A Journal of Ideas, Summer 2010. Also find it here.

The Long Exception: Rethinking the Place of the New Deal in American History. By Jefferson Cowie and Nick Salvatore. International Labor and Working-Class History, Fall 2008.

For Richer: How the Permissive Capitalism of the Boom Destroyed American Equality. By Paul Krugman. New York Times, October 20, 2012. Also find it here.

Also see: The Rise of the New Global Plutocratic Elite and the Crisis of the Middle Class.


I was born three weeks before Kennedy was elected. To pick two other progressives in positions of somewhat greater prominence, Rahm Emanuel was born a few months before me, and Barack Obama, a few months after. People my age now run things; whatever liberalism exists today is in no small part a creation of my generation’s experience and imagination.

We grew up with a set of assumptions. If you were born in the United States between, say, 1945 and 1965, you were raised in a basically liberal political culture when liberalism was the default position. You studied the New Deal, or were instructed in it by your parents and grandparents, as I was (neither of my grandmothers could even say “Hoover” without spitting the name out like a mouthful of turpentine), and you thought: This is how it is. This is America. We were once a conservative country. But that was then. We’ve put it away. Progress–progressive progress, if you don’t mind the redundancy–was inevitable.

When Reagan came, you thought: aberration. Maybe we did go a bit overboard here and there, and, let’s face it, Jimmy Carter was not an effective president. So this is a corrective. Temporary. Things will sort themselves out. That was how it looked in August 1988, when Michael Dukakis was 17 points ahead of George H.W. Bush, and when many hoped that President Dukakis’s tenure would be followed by President Cuomo’s. In the America in which we were raised, that was how things would have gone and were fated to go.

Thirty years later–actually, about 27 years later, or three or so years ago–I started to ask myself: What if all these presumptions I grew up with were wrong? What if Reagan wasn’t an aberration? What if Roosevelt and Johnson were the aberrations? True, we had Bill Clinton in the meantime. Poor Clinton never plays a central role in these narratives, and I think today we’re gaining enough historical distance that he is starting to deserve better: His presidency may not have constituted a golden age of progressivism in the way selected Roosevelt and Johnson years did, which remains the reason we focus more on those two, but it was certainly a comparative golden age for the country. Still, as we know, the right marched onward during the Clinton years. And then of course came Bush. The idea we young people of the 1980s once entertained–the idea that the Age of Reagan was somehow false, anomalous, a torn page in an otherwise seamless development of plot–had now to be reexamined, in light of the speed with which Bush and Dick Cheney and Karl Rove undid so many (thankfully not all) of the ideas and policies we had been raised to believe were inviolate.

The historians Nick Salvatore and Jefferson Cowie of Cornell University published a brilliant paper in 2008 in the journal International Labor and Working-Class History called “The Long Exception: Rethinking the Place of the New Deal in American History.” In their Abstract, they write:
The New Deal was more of an historical aberration–a byproduct of the massive crisis of the Great Depression–than the linear triumph of the welfare state. The depth of the Depression undoubtedly forced the realignment of American politics and class relations for decades, but, it is argued, there is more continuity in American politics between the periods before the New Deal order and those after its decline than there is between the postwar era and the rest of American history. Indeed, by the early seventies the arc of American history had fallen back upon itself. While liberals of the seventies and eighties waited for a return to what they regarded as the normality of the New Deal order, they were actually living in the final days of what Paul Krugman later called the “interregnum between Gilded Ages.”
Salvatore and Cowie argue that on three crucial fronts–labor, race, and religion–the New Deal and the Great Society both represented abnormal (and extremely fleeting) moments of commonality in an arc of American history that otherwise bent strongly away from any notion of a common good and toward the primacy of the individual. Of the Reagan era, they wrote that “it might be more accurate to think of the ‘Reagan revolution’ as the ‘Reagan restoration,’ a return to a more sharply conservative, individualistic reading of constitutional rights and liberties prevalent before the New Deal.”

Cowie and Salvatore:

Given the intense brevity of the “fragile juggernaut,” it might be more accurate to think of the “Reagan revolution” as the “Reagan restoration,” a return to a more sharply conservative, individualistic reading of constitutional rights and liberties prevalent before the New Deal. That this restoration included a society more sharply stratified by economic distinctions and racial divides, a significantly less liberal interpretation of a host of social and cultural issues, an enhanced fragmentation of working people’s political voice, and a reuniting of religious and conservative activists in civic life is due to many factors. But prominent among them in driving this return to a new Gilded Age was the profound fragility of New Deal liberalism itself. Even so, this was not a restoration in the sense of a return to small government as Reagan so forcefully advertised. As David Stockman’s lament about the Reagan administration’s inability to truly roll back government suggests, a Hamiltonian structure—contra Louis Hartz—was the true vital center of twentieth century American politics. Akin to post-CivilWar America, the political discourse of the Reagan Era celebrated the self-made man while denigrating the encroaching powers of government—all the while enlarging those federal powers to new heights. The issue was never really whether that government was large or small as political rhetoric might have us believe, but toward what ends and whose interest those massive institutions would be driven.


As the story about Despont suggests, it’s not fair to say that the fact of widening inequality in America has gone unreported. Yet glimpses of the lifestyles of the rich and tasteless don’t necessarily add up in people’s minds to a clear picture of the tectonic shifts that have taken place in the distribution of income and wealth in this country. My sense is that few people are aware of just how much the gap between the very rich and the rest has widened over a relatively short period of time. In fact, even bringing up the subject exposes you to charges of “class warfare,” the “'politics of envy” and so on. And very few people indeed are willing to talk about the profound effects – economic, social and political -- of that widening gap.

Yet you can't understand what’s happening in America today without understanding the extent, causes and consequences of the vast increase in inequality that has taken place over the last three decades, and in particular the astonishing concentration of income and wealth in just a few hands. To make sense of the current wave of corporate scandal, you need to understand how the man in the gray flannel suit has been replaced by the imperial C.E.O. The concentration of income at the top is a key reason that the United States, for all its economic achievements, has more poverty and lower life expectancy than any other major advanced nation. Above all, the growing concentration of wealth has reshaped our political system: it is at the root both of a general shift to the right and of an extreme polarization of our politics.

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The concerted effort to deny that inequality is increasing is itself a symptom of the growing influence of our emerging plutocracy (more on this later). So is the fierce defense of the backup position, that inequality doesn’t matter – or maybe even that, to use Martha Stewart’s signature phrase, it’s a good thing. Meanwhile, politically motivated smoke screens aside, the reality of increasing inequality is not in doubt. In fact, the census data understate the case, because for technical reasons those data tend to undercount very high incomes – for example, it’s unlikely that they reflect the explosion in C.E.O. compensation. And other evidence makes it clear not only that inequality is increasing but that the action gets bigger the closer you get to the top. That is, it’s not simply that the top 20 percent of families have had bigger percentage gains than families near the middle: the top 5 percent have done better than the next 15, the top 1 percent better than the next 4, and so on up to Bill Gates.

Studies that try to do a better job of tracking high incomes have found startling results. For example, a recent study by the nonpartisan Congressional Budget Office used income tax data and other sources to improve on the census estimates. The C.B.O. study found that between 1979 and 1997, the after-tax incomes of the top 1 percent of families rose 157 percent, compared with only a 10 percent gain for families near the middle of the income distribution. Even more startling results come from a new study by Thomas Piketty, at the French research institute Cepremap, and Emmanuel Saez, who is now at the University of California at Berkeley. Using income tax data, Piketty and Saez have produced estimates of the incomes of the well-to-do, the rich and the very rich back to 1913.

The first point you learn from these new estimates is that the middle-class America of my youth is best thought of not as the normal state of our society, but as an interregnum between Gilded Ages. America before 1930 was a society in which a small number of very rich people controlled a large share of the nation's wealth. We became a middle-class society only after the concentration of income at the top dropped sharply during the New Deal, and especially during World War II. The economic historians Claudia Goldin and Robert Margo have dubbed the narrowing of income gaps during those years the Great Compression. Incomes then stayed fairly equally distributed until the 1970’s: the rapid rise in incomes during the first postwar generation was very evenly spread across the population.

Since the 1970’s, however, income gaps have been rapidly widening. Piketty and Saez confirm what I suspected: by most measures we are, in fact, back to the days of “The Great Gatsby.” After 30 years in which the income shares of the top 10 percent of taxpayers, the top 1 percent and so on were far below their levels in the 1920's, all are very nearly back where they were.

And the big winners are the very, very rich. One ploy often used to play down growing inequality is to rely on rather coarse statistical breakdowns – dividing the population into five “quintiles,” each containing 20 percent of families, or at most 10 “deciles.” Indeed, Greenspan’s speech at Jackson Hole relied mainly on decile data. From there it’s a short step to denying that we’re really talking about the rich at all. For example, a conservative commentator might concede, grudgingly, that there has been some increase in the share of national income going to the top 10 percent of taxpayers, but then point out that anyone with an income over $81,000 is in that top 10 percent. So we’re just talking about shifts within the middle class, right?

Wrong: the top 10 percent contains a lot of people whom we would still consider middle class, but they weren’t the big winners. Most of the gains in the share of the top 10 percent of taxpayers over the past 30 years were actually gains to the top 1 percent, rather than the next 9 percent. In 1998 the top 1 percent started at $230,000. In turn, 60 percent of the gains of that top 1 percent went to the top 0.1 percent, those with incomes of more than $790,000. And almost half of those gains went to a mere 13,000 taxpayers, the top 0.01 percent, who had an income of at least $3.6 million and an average income of $17 million.

A stickler for detail might point out that the Piketty-Saez estimates end in 1998 and that the C.B.O. numbers end a year earlier. Have the trends shown in the data reversed? Almost surely not. In fact, all indications are that the explosion of incomes at the top continued through 2000. Since then the plunge in stock prices must have put some crimp in high incomes – but census data show inequality continuing to increase in 2001, mainly because of the severe effects of the recession on the working poor and near poor. When the recession ends, we can be sure that we will find ourselves a society in which income inequality is even higher than it was in the late 90’s.

So claims that we've entered a second Gilded Age aren’t exaggerated. In America’s middle-class era, the mansion-building, yacht-owning classes had pretty much disappeared. According to Piketty and Saez, in 1970 the top 0.01 percent of taxpayers had 0.7 percent of total income – that is, they earned “only” 70 times as much as the average, not enough to buy or maintain a mega-residence. But in 1998 the top 0.01 percent received more than 3 percent of all income. That meant that the 13,000 richest families in America had almost as much income as the 20 million poorest households; those 13,000 families had incomes 300 times that of average families.

And let me repeat: this transformation has happened very quickly, and it is still going on. You might think that 1987, the year Tom Wolfe published his novel “The Bonfire of the Vanities” and Oliver Stone released his movie ''Wall Street,'' marked the high tide of America's new money culture. But in 1987 the top 0.01 percent earned only about 40 percent of what they do today, and top executives less than a fifth as much. The America of “Wall Street” and “The Bonfire of the Vanities” was positively egalitarian compared with the country we live in today.

A Disgusting Little Email Making the Rounds on Wall Street. By Joshua M. Brown.

A Disgusting Little Email Making the Rounds on Wall Street. By Joshua M. Brown. The Reformed Broker, April 30, 2010.

Angry Class Warfare Email Being Passed Around Wall Street. By Joe Weisenthal. Business Insider, April 30, 2010.

Saving the American Idea. By Paul Ryan.

Saving the American Idea: Rejecting Fear, Envy and the Politics of Division. By Paul Ryan. Heritage Foundation, October 26, 2011. Also at YouTube.


Rather than raising taxes and making it more difficult for Americans to become wealthy, let’s lower the amount of government spending the wealthy now receive.

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Telling Americans they are stuck in their current station in life, that they are victims of circumstances beyond their control, and that government’s role is to help them cope with it – well, that’s not who we are. That’s not what we do.

Our Founding Fathers rejected this mentality. In societies marked by class structure, an elite class made up of rich and powerful patrons supplies the needs of a large client underclass that toils, but cannot own. The unfairness of closed societies is the kindling for class warfare, where the interests of “capital” and “labor” are perpetually in conflict. What one class wins, the other loses.

The legacy of this tradition can still be seen in Europe today: Top-heavy welfare states have replaced the traditional aristocracies, and masses of the long-term unemployed are locked into the new lower class.

The United States was destined to break out of this bleak history. Our future would not be staked on traditional class structures, but on civic solidarity. Gone would be the struggle of class against class.

Instead, Americans would work, compete, and co-operate in an open market, climb the ladder of opportunity, and keep the fruits of their efforts.

Self-government and the rule of law would secure our equal, God-given rights. Our political and economic systems – rooted in freedom and responsibility – would reward, and thus cultivate, traditional virtues.

Given that the President’s policies have moved us closer to the European model, I suppose we shouldn’t be surprised that his class-based rhetoric has followed suit.

We shouldn’t be surprised . . . but we have every right to be disappointed. Instead of appealing to the hope and optimism that were hallmarks of his first campaign, he has launched his second campaign by preying on the emotions of fear, envy, and resentment.

This has the potential to be just as damaging as his misguided policies. Sowing social unrest and class resentment makes America weaker, not stronger. Pitting one group against another only distracts us from the true sources of inequity in this country – corporate welfare that enriches the powerful, and empty promises that betray the powerless.

Ironically, equality of outcome is a form of inequality – one that is based on political influence and bureaucratic favoritism.

That’s the real class warfare that threatens us: A class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society. And their gains will come at the expense of working Americans, entrepreneurs, and that small businesswoman who has the gall to take on the corporate chieftain.

Jeremy Lin, Superstar Economics, and the Culture of Aspiration.

Media Hype for Lin Stumbles on Race. By David Carr. New York Times, February 19, 2012.

The Economics of Superstars. By Sherwin Rosen. American Economic Review, December 1981.

The Matthew Effect in Science. By Robert K. Merton. Science, January 5, 1968.

The Separation of Ownership and Control in American Industry. By Gardiner C. Means. The Quarterly Journal of Economics, December 1931.

Top Executives Are Worth Every Nickel They Get. By Kevin J. Murphy. Harvard Business Review, March/April 1986.

The Age of Social Transformation. By Peter F. Drucker. The Atlantic, November 1994. Also find it here and here.

Capital Versus Talent: The Battle That’s Reshaping Business. By Roger L. Martin and Mihnea C. Molodoveanu. Harvard Business Review, July 2003. Slightly different version here.

Capital vs. Talent: The Battle Rages On. By Roger Martin. Rotman Magazine, Fall 2008. Also find it here.

The Winner-Steal-All Society. By Jerry Useem. The American Prospect, October 3, 2002. Also find it here.

Net Worth. By James Surowiecki. The New Yorker, March 15, 2005.

America Hates Crony Capitalism. By Joshua M. Brown. The Reformed Broker, December 20, 2011.

Life After Blue: The Middle Class Will Beat The Seven Trolls. By Walter Russell Mead. Via Meadia, January 30, 2013.

The Irony of Superstar Economics In a Democratic Age. By Chrystia Freeland. Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. New York: The Penguin Press, 2012, p. 140.


Even in an age of tension between the 99 percent and the 1 percent, we love our superstars. That’s ecause, as the New York Times’s David Carr put it in a deft analysis of the popularity of basketball player Jeremy Lin, in aspirational America, we all like to think that we are superstars-in-waiting, on the verge of our big break: “The Lin story has broken out into the general culture because it is aspirational in the extreme, fulfilling notions that have nothing to do with basketball or race. Most of us are not superstars, but we believe we could be if only given the opportunity. We are, as a matter of practicality, a nation of supporting players, but who among us has not secretly thought we could be at the top of our business, company or team if the skies parted and we had our shot?” That’s the irony of superstar economics in a democratic age. We all think we can be superstars, but in a winner-take-all economy, there isn’t room for most of us at the top.

Living Alone In the Age of Post-Familialism.

Living alone in the age of post-familialism. Panel with Eric Klinenberg and Joel Kotkin. Minnesota Public Radio, February 5, 2013.

Eric Klinenberg on Going Solo. By Joseph Stromberg. Smithsonian, February 2012.

Solo nation: American consumers staying single. By Eric Klinenberg. Fortune, January 25, 2012.

One’s a Crowd. By Eric Klinenberg. New York Times, February 4, 2012.

The Rise of Post-Familialism: Humanity’s Future? By Joel Kotkin. JoelKotkin.com, October 12, 2012.

The Talent Society. By David Brooks, New York Times, February 20, 2012.

“Going Solo”: What’s the Appeal of Living Alone? Eric Klinenberg interviewed by Ray Suarez. PBS News Hour, March 27, 2012. Also on YouTube here and here.

New York Times Fighting the Future of Higher Education. By Walter Russell Mead.

NYT Fighting the Future of Higher Ed. By Walter Russell Mead. Via Meadia, February 19, 2013.

The Trouble With Online College. Editorial. New York Times, February 18, 2013.

Revolution Hits the Universities. By Thomas L. Friedman. New York Times, January 27, 2013.

The End of the University as We Know It. by Nathan Harden. The American Interest, January/February 2013.


Every new idea has problems and online ed is no exception. But the New York Times seems inordinately eager to call the whole thing a waste of time. Yesterday’s editorial, “The Trouble With Online College,” is oddly dismissive of what is likely to be the biggest threat to traditional college patterns of instruction: the “hybrid” course in which the equivalent of a TA or a tutor works with small groups of students around a lecture course.

Training people to teach these classes may work, warns the Times, but is expensive: “Hybrid courses are rare, and teaching professors how to manage them is costly and time-consuming.”

Perhaps—but it’s much, much less expensive than the current method of having virtually all classes everywhere taught by full PhDs. A college or institute that trains tutors and assistants to teach one particular course could really save a ton of money by replacing PhDs (many of whom are not particularly good teachers, and most of whom are anything but intellectual leaders in their fields) with highly trained and focused tutors. These tutors, while not knowing a field in as great a depth as a PhD, would be able to provide students with a better experience in one particular course than most PhD faculty at most colleges can now provide.

Does the Times really think it’s more expensive to train people with BAs to be TAs in a physics course than it is to train and hire PhDs?

The NYT editorial board seems deeply invested in the existing model, viewing new forms of higher ed with sentiments similar to those with which the American Blacksmiths’ Association viewed the early cars. Those early cars did have a lot of breakdowns, and there were a lot of problems with them. But it was pretty obvious to everyone but the Livery Stable League that change was coming.

There are serious questions to be asked about the future of American higher ed. We need to make training and job qualifications much cheaper, and at the same time we need to revive and strengthen the concept of liberal education. But until places like the NYT accustom themselves to thinking outside the blue box, that debate is going to be less rich and thoughtful than it needs to be.

The Unlikely History of American Exceptionalism. By Walter A. McDougall.

The Unlikely History of American Exceptionalism. By Walter A. McDougall. The American Interest, March/April 2013. Also find it here.

Walter McDougall on American Exceptionalism. By Darryl Hart. Front Porch Republic, September 20, 2012.

Nightmares of an I.R. Professor. By Walter A. McDougall. Foreign Policy Research Institute, September 2012.

American Exceptionalism or a Modest Republic. By Mark T. Mitchell. Front Porch Republic, October 17, 2011.

Patriotism vs. American Exceptionalism. By Mark T. Mitchell. Front Porch Republic, March 20, 2012.

Everyone Is Special. By Nils Gilman, Michael Grosack, and Aaron Harms. The American Interest, March/April 2013.

Separated at Birth? Europe and America in the 21st Century. By Peter Baldwin. The American Interest, March/April 2013.

On Misunderstanding Mohamed Mursi for His Mask. By Raymond Stock.

On Misunderstanding Mohamed Mursi for His Mask. By Raymond Stock. Foreign Policy Research Institute, February 2013.

More on Egypt and Morsi here.

The Diversity Myth: America’s Leading Export. By Benjamin Schwarz.

The Diversity Myth: America’s Leading Export. By Benjamin Schwarz. The Atlantic, May 1995. Also find it here.