The Glade 4.0

Numerologists may have to be called in to explain the historic magnitude of the year 2010. After 60 years of doubling down on their spending, 2010 became the year governments from Greece to California hit the wall. (That Athens became the symbol of the democracies' compulsion to spend themselves into oblivion is an eeriness we'd rather not ponder.)

In the distant future, some U.S. historian in kindergarten today will write about Congressman David Obey's contribution to the splitting apart of American liberalism's assumptions about the purpose of government. Mr. Obey of Wisconsin is chairman of the House Appropriations Committee, the spenders. People have said for years that government robs Peter to pay Paul. Now brother is ripping off brother. Mr. Obey plans to send $10 billion to school districts to avoid teacher layoffs and will pay for it in part by taking money from several school reform programs, such as Race to the Top.

President Obama has threatened a veto. Keep an eye on it. If this Democratic president stops that Democratic congressman from knee-capping school reform to protect unionized teachers from the world the rest of us live in, you can mark down August 2010 as a first step back from the crack-up. That would be the kind of change Mr. Obama's admirers thought they were getting.

To explain Mr. Obey's teacher bailout, it is necessary to descend into the lower depths of cynicism. Put it this way: Race to the Top doesn't make campaign contributions.

According to tabulations by the Center for Responsive Politics, from 1989 to 2010 the two big teachers unions made some $58 million in campaign contributions. The National Education Association gave 92% of theirs to Democrats, and for the American Federation of Teachers it was 98%.

From the wages sent to the teachers by the House Appropriations Committee, the two unions will take a cut to pay for their political operations. Mr. Obey isn't appropriating this money out of love for teachers. It's primarily for his party colleagues, to help party professionals survive the 10% unemployment rate.

If this sump pump wasn't running from the paychecks of unionized teachers to Democratic campaign coffers, it is at least arguable that appropriations for reforms aimed at children in failed inner-city schools would have a fighting chance.

But this is only a piece of it. The financial meltdown of so many states and cities is forcing American liberalism to come to grips with a tough truth: The demands of public-sector unions and the legal obligations to pay their pensions are collapsing the ability to perform what's left of the traditional liberal agenda.

Nowhere is this more evident than in California.

On July 8, Gov. Arnold Schwarzenegger, an admirer of New Jersey's blunt new Gov. Chris Christie, held a roundtable in Sacramento on the public pension crisis. Listen to Jeff Adachi, a San Francisco Democrat and the city's elected Public Defender:

"San Francisco is the most progressive, pro-union, you know, lefty, and I'm probably the poster boy for that in many ways. But the reality is, if we don't do something, all of the important programs, not only public defense but we're talking about children's programs, after-school programs, education, senior programs, everything that we care about as progressives is going to be lost because it's being sucked up by the cost of pensions."

Last month, David Crane, a Democratic adviser to Mr. Schwarzenegger, testified before the California Assembly's Committee on Public Employees, Retirement and Social Security (which sounds as if it dates to the French Revolution): "Those who should be most concerned about pension costs are families and businesses concerned about California's colleges and universities, recipients of the state's health and human services, users of state parks, citizens interested in environmental protection."

California probably gave David Obey the idea for his funding feint. Mr. Crane says California this year shifted $5.5 billion out of budgets for the state's public universities, transit, parks and such to pay for obligated pensions and health care.

Nor is this tension merely the result of recession. In a more systematic, 2008 study of spending in Massachusetts for the Institute for a New Commonwealth, Cameron Huff notes that from 1986 to 2006, spending on social services and public safety (the collectively bargained functions) rose more than 130%. Spending on the environment, higher education and housing all fell.

This downward spiral won't stop when the economy returns. The unions will get theirs; the vulnerable categories will get the shaft. For this to change, the modern Democratic Party would have to change. It's got to decide if it wants to do more for real people and less for gerrymandered politicians and union protectorates. Lifetime pol Joe Biden says the stimulus "is working." It is, for the boys in the clubhouse. Honest liberals and progressives distraught over the harsh math of 2010 have more in common with the tea partiers than they imagine.

Our problem is our unwillingness to update our tax rates appropriately. We could stand to tax the top income bracket more, and we could stand to create a couple of new brackets that were taxed significantly.

Yeah, yeah, grab your pitchforks and torches.

Facism is not a school of thought, it is a racial slur.

Our problem is our unwillingness to update our tax rates appropriately. We could stand to tax the top income bracket more, and we could stand to create a couple of new brackets that were taxed significantly.

Hauser's Law continues to own Montegue.

Sorry, I'm not going to be sympathetic when the Gini Index (rich/poor wealth gap) in the US keeps rising and you hear rich companies running out ruthless policy after ruthless policy that guarantees high unemployment will continue. First every company starts with, "If you're not currently employed, we won't even look at you." Now I just read an article saying that 60% of all US employers will now not hire anyone that has an account in collections on their credit report. So now if you lose your job and fall behind on bills because you lost your job you can't ever get another one because of this crap. Well if corporate America isn't going to support these people then the government has to do it, and that means more taxes.

I'm ignoring the majority of this post, because I'm sure someone else will address it. However, 2 things... 1) Links please to these stories of "ruthless polices" and 2) you have missed the point of the article.

And to be fair Hauser's law deals with Federal Tax and revenue not local or state.

Oh, it doesn't have much to do with the article, it just seemed like the thread got derailed pretty fast to "the taxes on the rich are too high" so that's what I was responding to.

Nor does it account for receipts payroll taxes, which basically make up the difference. And of course, other countries manage to get tax revenues higher than 20% of their GDP, so it's quite possible to do.

Sorry, I'm not going to be sympathetic when the Gini Index (rich/poor wealth gap) in the US keeps rising and you hear rich companies running out ruthless policy after ruthless policy that guarantees high unemployment will continue.

First every company starts with, "If you're not currently employed, we won't even look at you."

Now I just read an article saying that 60% of all US employers will now not hire anyone that has an account in collections on their credit report. So now if you lose your job and fall behind on bills because you lost your job you can't ever get another one because of this crap.

Well if corporate America isn't going to support these people then the government has to do it, and that means more taxes.

Facism is not a school of thought, it is a racial slur.

It has the extra added benefit of keeping stimulative measures like unemployment insurance and food stamps working their magic in the economy.

This made me laugh at my desk.

Nor does it account for receipts payroll taxes, which basically make up the difference. And of course, other countries manage to get tax revenues higher than 20% of their GDP, so it's quite possible to do.

Facism is not a school of thought, it is a racial slur.

That said, you guys keep saying we need to increase taxes, and the data indicates that increasing taxes isn't going to solve the problem.

Education and knowledge, experience and talent will all regain market value and lead to a better economic and productive sector. Those incapable of competing will simply not work.

This works for me. If you demonstrate the level of fiscal incompetence that places you in this situation, I have no desire to hire you. You should have managed your finances better.

Except a policy of "no job = no interview" pretty much ignores education, knowledge, and talent. Entry-level graduates just out of college are not being hired simply because they don't already have jobs, which is ridiculous. It also screws over everyone who lost their last job for basically any reason other than performance issues, if their company went out of business or downsized, everyone who got canned is no longer eligible for work.



Fiscal incompetence? How do you pay your bills with no job? A huge number of people have been unemployed (and I mean unemployed in the sense that they've been searching for work) for over a year now.

Ok, that makes some sense. I thought you were responding to the OP article.

Do you have any links to either of those "policies" you mentioned? I'd like to read those articles if so.

Sorry, I'm not going to be sympathetic when the Gini Index (rich/poor wealth gap) in the US keeps rising

So what? "It's not fair!" That's all your complaints amount to. That doesn't change the fact of any of it.

Your complaint about no job = no interview is spurious on its face; people don't live or work forever. Eventually a company must hire someone with no current job.

I followed Khross' links, which lead this description of the Gini Coefficient. Based up on how this number is calculated, using it solely as a basis for equality is not valid.

Income inequality in the United States has been rising since the 1970s. What is the most effective way to succinctly convey this fact?

Here is my choice:



The chart shows average inflation-adjusted incomes of the poorest 20%, middle 60%, and top 1% of households since the 1970s. The incomes include government transfers and subtract taxes. For the bulk of American households, incomes have increased moderately or minimally. For those at the top, by contrast, they have soared.

Why This Chart?

Here are what I think should be the principal considerations. Some are obvious, others perhaps not.

...3. Show incomes, rather than a summary inequality measure. Common inequality measures include the Gini coefficient, percentile ratios (e.g., P90/P50 and P50/P10), and income shares (e.g., the income share of the top 1%). They are quite useful. Nice examples from the Economic Policy Institute’s The State of Working America are here, here, and here. But they have two drawbacks. One applies to the Gini index, which is the most commonly-used inequality statistic. It doesn’t identify where in the income distribution the rise in inequality has occurred. For example, suppose the Gini rises over time. Is that because those at the top have pulled farther away from everyone else? Because those at the bottom have fallen behind? Because of a widening spread in the middle? All three? Something else?

To address this problem analysts often turn to percentile ratio or income share measures. These, however, fail to provide information about trends in actual incomes. Suppose, for example, that the 90/50 ratio increases over time. Is that because the incomes of those at the top have risen faster than the incomes of those in the middle? Because incomes at the top have risen while those in the middle have been stagnant? Because both have decreased but those at the top have done so less rapidly? Something else?

Showing trends in actual incomes — adjusted for inflation, of course — overcomes these problems. A potential drawback of doing so is that it may not be obvious from the raw income data whether or not inequality has increased, or by how much. If the magnitude of the rise in inequality is small, it may be preferable to use an inequality measure. For the United States over the past generation, however, the increase in inequality is easy to spot from data on incomes.