A note in response to Krugman's 7/3/09 column: "That ’30s Show" (written 7/3/09)

A note in response to Krugman's 7/3/09 column: "That ’30s Show"

by Artie Gold on Friday, July 3, 2009 at 10:10pm

The real question at this point is "will we get to 1937?"
A lot of the problem is that 9.5% unemployment is something we've seen before; a quarter of a century is but one generation. Yes, things are bad -- but to many, it's a restoration of "the way things are supposed to be" (hideous wealth distribution, the commoditization of labor and everything else). The big difference is that our expectations have changed to such a great extent. After all, the last time we saw unemployment at these levels it preceded a pair of decades of considerable growth (the second better shared than the first, to be sure -- and even then medians barely touched the pre-oil-shock levels).
Perhaps the first thing we need to do is to un-massage the unemployment numbers; if the "real" number were promulgated (is it 13%? 14%? more, using the pre-Reagan standard?) Of course, the "other side" would immediately demagogue that issue too -- happily comparing apples to oranges...
Yes, what must happen is to drive a stake through the heart of the trickle-down worldview that got us into this mess. There's a somewhat creepy predestination-type argument that keeps being made, that the whole problem was that people got loans who didn't deserve them -- indeed who were not WORTHY of them -- and THAT'S what brought things down.
No, dammit, the fact is that a consumer-based society coupled with a consistently upward-redistributable (read: "low tax") economy is, by its very nature, unsustainable.
Here's my prescription:
Raise the minimum wage by 30% over two years.
Institute a sharply progressive income tax for incomes over, say $400000, up to, say, 60% for incomes over 1500000 and 75% over 5000000.
Establish a living wage, at likely 150% of minimum wage; wages paid below that create a corporate tax liability of 25% of the difference (against profits).
Fund the shortfalls of the states.
Create a significant fund for very low cost loans for education.
Pass a reasonable form of Universal Health Care.
Might all this be inflationary? Yes. Most likely. Truth is, inflation has been artificially low for decades now. Capital has had its party. If we are dependent upon consumption, money has to be placed in the hands of those who will use it to consume.

When the party (finally) gets started -- and goin' pretty good -- *then* you take the punchbowl away. But not until we cut unemployment by half.

Look, I'm not an economist, nor am I an MBA (many of whom are wonderful people, but as a group -- in terms of their overall effect -- not so much). I am, however an observer of the scene and have been around the block likely a few more times than I have left. Still, it seems pretty obvious.

If we make the stated policy goal to eclipse the former high in real median income by 10% we'll be all right. Otherwise it's gonna be a long slog.

Nothing to Say?

Nothing to say? Well, hardly.

I just find myself using other forums these days. Whether it be quickie tweets or slightly longer form status line musings -- or comments on those of others -- my comments have either been quick one-offs or parts of a longer conversation.

It could be the time thing. After all, I just realized that I hadn't made a blog entry since we became a family of five. A family of FIVE!! After all that's transpired, it's a particularly remarkable thing. And now, little Eliza has a new trick! Mobility!!!! Four wheel, well, erm, limb, drive and a pretty powerful little motor, and it's off to the races. No item is safe from her potential grasp.

And the big guys are doing what you'd expect. Getting bigger. Not so big that they're ready to get out of my pocket and into the world -- Paul's only maybe, perhaps, halfway there -- but bigger, nevertheless. And Alex is now a first grader. It's official.

Yup. Summer has begun, summer vacation, to be exact.
So, until late August, we'll have to be more entertaining.

I think we may be able to handle it! I hope so, anyway...

Dad.

A little less than 68 years ago my father, just nineteen years old and having completed basic training in the US Army, found himself on a ship to an unknown somewhere, looking forward to an unknown fate. Being a sharp, streetwise city kid, he found his way to a craps game on board. Within two days, the $23 he originally had in his pocket had ballooned to about $1500, enabling him to buy the best berth for sleeping, buy food from the sailors (being a British ship, the rations for the enlisted men were particularly bad) and, in general made the journey as pleasant as possible. As he told me, he would pay $5 for a roast beef sandwich, a not inconsiderable sum in 1942; it was not exactly an environment, though, that fostered long range financial planning.

Why mention this particular story? Well, it just always seemed fitting that he had gained that particular windfall shooting dice, After all, he was born on the seventh day of the seventh month (for the record, his brother was born on the eleventh day of the eleventh month). So today he would have been 87 years old (though sixty was as far as he got).

Happy Birthday, Dad..,