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January 29, 2014

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Posted: 29 Jan 2014 12:03 AM PST

'Money and Class'

Posted: 28 Jan 2014 09:56 AM PST

Paul Krugman:

Money and Class: My post on Americans starting to recognize class realities has brought some predictable reactions, which I'd place under two headings: (1) "But they have cell phones!" and (2) it's about how you behave, not how much money you have.

My answer to both of these would be to say that when we talk about being middle class, I'd argue that we have two crucial attributes of that status in mind: security and opportunity.

By security, I mean that you have enough resources and backup that the ordinary emergencies of life won't plunge you into the abyss. This means having decent health insurance, reasonably stable employment, and enough financial assets that having to replace your car or your boiler isn't a crisis.

By opportunity I mainly mean being able to get your children a good education and access to job prospects, not feeling that doors are shut because you just can't afford to do the right thing.

If you don't have these things, I would say that you don't lead a middle-class life, even if you have a car and a few electronic gadgets that weren't around during the era when most Americans really were middle class, and no matter how clean, sober, and prudent your behavior may be. ...

A lot of Americans — quite arguably a majority — just don't have the prerequisites for middle-class life as we've always understood it. ...

The sad thing is that our fetishization of the middle class, our pretense that we're almost all members of that class, is a major reason so many of us actually aren't. That's why the growing appreciation of class realities on the part of the public is a good thing; it raises the chances that we'll actually start creating the kind of society we only pretend to have.

I've written about this in the past, e.g. in 2010:

...people who, because of their incomes, cannot participate fully in society are poor. A child getting enough to eat, and with clothes to wear, who cannot afford the toys needed to be part of the group of kids in the neighborhood is socially isolated and socially disadvantaged (we don't want to play at your house because you don't have a TV, you can't come with us because you don't have a bike, you didn't get my text message about baseball practice being moved?, etc., etc., etc.). Giving people, children in particular, what they need to participate in the society around them is an important element of how successful they will be in the future. It helps to determine their ability to give back to society as fully participating adults. ...

Or, from 2008:

To me, being poor isn't just about stuff, it's about being able to participate fully in society. The things on the list that almost all households now have, refrigerators, stoves, TVs, and telephones, are things you have to have to function in this society... How do you make a doctor's appointment without a phone? Drop by in you spare time? A refrigerator and a stove are items a household has to have given how we bring food to the table in this society. I just don't see these things as doing anything more than providing the minimum necessary to function. Even something like a TV is necessary if you want to, say, keep up with the political debates (there's a presumption in our political discourse that you can watch campaigns on television and they are largely devoted to delivery over that medium - without a TV you cannot participate fully) or even talk to people around the water-cooler at work about the latest popular TV show. Yes, the poor might have been well-off in, say, 1821 given the societal standards of the time, or some other historical period one might choose to compare, but this isn't 1821 - things have changed and so have the minimum standards necessary to be part of the society. I'm sorry if there are people who don't want to share... Giving people the things they need to be a full part of the society they live in is the decent and right thing to do. As our society elevates itself and the requirements for full participation increase, when things like computers are as necessary as a stove, our standards of decency - what we are willing to accept as a minimum standard of living - must also rise. Just meeting physical needs - food and clothing - is not enough to be a full part of the society we live in today. We can and should do better than that.

Sharing the Gains from Economic Growth

Posted: 28 Jan 2014 08:02 AM PST

I have a new column on inequality:

Sharing the Gains from Economic Growth, by Mark Thoma: President Obama will make reducing inequality a major part of his State of the Union Address according to several reports. But to avoid being accused of waging class warfare, he will talk about creating "ladders of opportunity" instead of focusing directly on the inequality problem.
This shift in emphasis is a mistake because it misses a key part of the inequality problem. ...

The mechanism that distributes goods and services is broken.

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