Monday, February 3, 2014

Dean Baker Destroys Robert Samuelson's Defense Of The Top 1%

Robert Samuelson is opinion writer for the Washington Post.  He can be counted upon each Monday to write an article that distorts economic reality.  He is very good at that game because he writes for a general audience.  Dean Baker is an economist who regularly responds to Samuelson's fantasies.  I'm glad that Baker is around because it saves me the trouble.  We can learn at least two things from Baker's post.  Samuelson's defense of the top 1% is consistent with themes that have been used by other defense lawyers for the economic elite, but the fact that even our best newspapers provide a platform for opinion writers like Samuelson is troubling.  The media are required to provide a platform for opinion writers who can explain why the earth is really flat, and that it is at the center of the universe. It would unfair to popular opinion and common sense to do otherwise.

Samuelson uses several popular themes in this article which frequently used to defuse the issue of income inequality.  His major theme in this article is that poor are not poor because the rich are rich.  In other words, if one group's share of economic pie grows faster than another group's share, that has nothing to do with growing inequality.  The growth in income inequality over the last four decades is blamed on the culture of the poor.  Since the growth in income during this period went primarily to the top 5%, the bottom 95% must have a bad culture.  Samuelson avoids comparing the top tier with the the bottom 95% because "everyone knows" that the poor are their own worse enemy.  He can't argue that only those at the top have the right culture.  Furthermore, its hard to explain why incomes were more equal prior to the 1980's.  The culture of the poor has not worse today than it was in the 40 year period following the war than it is now.  Something else must have changed.  Samuelson does not want to discuss those changes but Baker provides a few of them.  The economy is like a game and the game changes when the rules change.  Imagine what basketball would be like if the rules were changed.  Suppose the rim was raised a foot and five points were awarded for a shot beyond the three point line.  The market for tall players would evaporate.  A lot of the rules in the economy have changed.  Clearly, some of those changes are responsible for growing income inequality. 

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