It makes sense to bring out some ideas from Dean Baker now that Paul Ryan has teamed up with Mitt Romney to redistribute money from the bottom 99% to the top 1%. Romney and Ryan have put their stake in the ground. We need to cut taxes for the rich, and deregulate our deregulated economy, in order to restore business confidence. Its hard to imagine that corporations have lost their confidence during a period of record corporate profits; its much easier to imagine that slack consumer demand is the major reason why they are not increasing capacity. But that is another matter. Some people like to believe in the confidence fairy.
In order to pay for the tax cuts for the super rich, government spending must be cut. Paul Ryan's plan takes the hatchet to Social Security, Medicaid and Medicare in order to pay for the tax cuts. Its easy to frame the debate as a battle between liberals, who want to take care of the losers in society, and conservatives who want to encourage the winners to grow the economy. Its easy for liberals to lose this battle when many American's have been convinced that government redistribution of income, from the winners to the losers, will sink the economy by increasing the national debt. Dean Baker suggests that liberals focus on the system that distributes income to the rich by setting the rules of the game. The super rich have hired the best Congress that money can buy to rig the rules in their favor. They extract economic rent from the system, and they don't want to pay taxes on the rents that they have received. Its time for liberals to focus attention on the rent extracting rules of the game that lead to the maldistribution of income. Part of the debate should be about leveling the playing field by altering the rules that enable rent extraction.