Archive for the ‘Bias’ Category

Joe The Plumber 2016

Thursday, March 17th, 2016


“You bet I liked it,” he told “Inside Edition” when asked about the rally. “Clocking the hell out of that big mouth.” Of the victim, he said: “We don’t know if he’s ISIS. We don’t know who he is, but we know he’s not acting like an American and cussing me … and sticking his face in my head. If he wants it laid out, I laid it out.” He added: “He deserved it. The next time we see him, we might have to kill him. We don’t know who he is. He might be with a terrorist organization.”

That was 78 year old John McGraw justifying his assault on Rakeem Jones during a Trump rally at the Crown Coliseum in Fayeville, NC on March 9.

There is so much wrong with this that it is difficult to know where to start.

But let’s start with the dangerous confluence of Authoritarianism and Populism that has become the Trump campaign.

Trump didn’t invent this particular type of appeal, nor is he even the first.  This particular philosophy has been growing over the past 25 years in western Democracies.

Le Pen in France dismissed the Holocaust as a “detail of history”.  Fortuyn was assassinated in the Netherlands in 2002, but his anti-immigrant anti-Muslim party has grown to become the second largest in the Dutch parliament.  The Swiss People’s Party, the Austrian Freedom Party, the Swedish Democrats, and the Danish People’s Party have all been gaining support.  Hungary is now building a wall to keep out immigrants because of the success of the Jobbik neo-fascist party in that country.

These parties are attracting radical right wingers because of their Authoritarian stands.  But they are also drawing center-left less educated men and the economically marginalized because of their populism.

What’s happening?

Long-term dramatic demographic, economic, and social change going on in western democracies.  The Great Recession is still being felt in much of the industrialized world.  Gender and sexual roles are also changing as the LGBT community gains rights and legal protection.  Globalization, immigration, and the aging baby boom left less educated elderly citizens fearful of being marginalized and left behind in countries that they felt they helped build.

In the 2011 World Values Survey, almost half of those in the US who didn’t graduate from college approved of having a strong leader unchecked by elections and Congress.  Normally we would only expect to see these sorts of results in countries like Russia who don’t have our strong democratic tradition.

The Republican Party didn’t create this gap between the emotionally disenfranchised and the “elites”, but they did give voice to those who objected to social and political change.  They become the “party of no” the day after Barack Obama was elected.  That immediately legitimized a whole set of conspiracy theorists who previously were forced to live on the looney fringe.  Fox News jumped at the opportunity to pander to this audience with a daily concoction of tabloid fiction that they claimed the liberal media refused to air.  Finally the Tea Party gave structure to what has become a political movement.  Now this same revolution has turned upon those who used anger and fear for political gain.  The new authoritarian populists are blaming their Republican Party leaders that they helped elect for the failure to stem the tide of social, demographic, and financial change.

The result is clear in the words of John McGraw.

Those who disagree deserve the beating that they receive.

Tolerance for gay marriage, sexual equality, and social diversity is condemned as “political correctness”.

Anyone of color may be a terrorist.  Those who are terrorists deserve to be killed.

Whether or not Trump is elected, he and his followers have articulated a new brutalism and intolerance, altering what’s speakable in American politics.

The chilling difference is that parliamentary democracies have many methods to limit the power of populist authoritarian parties.  In our representative two party democracy, the authoritarian populists may be able to take over the Republican Party.  Then that party will have to decide whether they are willing to trade all of their past principles for the opportunity to remain in power.  Those principles of sound government and fiscal responsibility have already been severely damaged by the actions of the last eight years.

More concerning, however, is how this angry violent bigoted xenophobic subset of the voting public is going to handle defeat.  I don’t believe that they are going to accept it graciously.

It is fascinating to consider that those who most fear the “enemy within” may in fact become the very instrument of destruction of the democracy that they claim they are protecting.

More Thoughts on Income Inequality

Saturday, January 16th, 2016

Paul Krugman recently published a good summary of the historical discussions regarding income inequality.

Before diving into climate change, I thought it would represent a reasonable addendum to what has already been posted.

It does venture in a little bit into the territory of why we should reduce income inequality and how we should go about doing that.

First let’s explore the three generally accepted reasons for the current huge income inequality.

People get paid based on the value of their work. The reason some people get paid hundreds or thousands of time more than other people is because they are uniquely capable, skilled, and experienced. It is the old plumber joke. A man calls a plumber because he is having a problem. The plumber walks in, looks around for a minute, and hits a pipe with his hammer. The problem is fixed. The plumber hands the homeowner a bill for $100. The homeowner objects complaining that the plumber was only in the house for 10 minutes. The plumber takes the invoice back, adds these itemizations, and hands it back to the homeowner. Labor – $20. Knowing which pipe to hit and where to hit it – $80.

For the record, I have no problem with those with unique skills getting paid what the market will bear for those skills. Those include athletes, entertainers, and actors as well as brilliant developers and visionary entrepreneurs.

People get rich because they are in the right place at the right time. No better example of that than the recent Powerball lottery. That event produced roughly 5 people each worth $200M or so after taxes. Their chances of winning were ridiculously thin, but they won none the less because there are always winners. Not many who participated in one of our gold rushes struck it rich either, but the number of people who did participate spoke to the belief in this country that we all have an opportunity to strike it rich. But this sort of windfall has nothing to do with character, talent, or persistence. Just luck. That same luck is evidenced in the fact that parentage directly or indirectly accounts for a significant percentage of those who are wealthy today. This whole concept of “wealthy” luck was explored deeply in Malcom Gladwell’s Outliers book.

I have no problem with those who end up being wealthy because they were lucky. I don’t think that they have any standing to suggest that a higher tax rate will somehow reduce the small percentage of people who figuratively or literally win the lottery. But I agree that we have always been a “gold rush” country where we celebrate the good fortune of those who overcame enormous odds through blind dumb luck.

Executives at large corporations who get to set their own compensation programs. Financial speculators who benefit from information that the rest of the market doesn’t have. Fraudsters who get rich off schemes that fleece the naïve or greedy. Power brokers who are able to exchange political power for financial gain.

These are the segment of wealthy that I think are the most troublesome. That’s because they use their wealth to acquire political influence. They use that political influence to gain an unfair advantage. That process is corrosive in a democratic society.

So What
There is the claim that “it has ever been thus”. We’ve always had income inequality, the claim goes. What is so different now?

The difference is that the income inequality is now larger than it has been since the robber baron gilded age. The public’s disgust about the influence of wealth at that time elected reformers like Teddy Roosevelt and William Howard Taft. These wealthy civic-minded leaders realized that our democracy couldn’t survive if so much wealth was concentrated in the hands of so few people. That’s because our political system then, and our political system now, allows money to purchase political influence. Those that are driven to dominate industries through economic power see political power as just another opportunity to acquire an unfair advantage over their competitors. Reformers passed legislation to break up the trusts and monopolies built by folks like Morgan, Carnegie, Rockefeller, and Schwab.

I’ve documented how the same thing is going on in markets today. It is clearly more sophisticated, but it is no less insidious.

There are certainly those, like Mark Zuckerberg, who built his fortune on the strength of a great idea that created a whole new category of software. We can talk about his luck of being in the right place at the right time, combined with being born into a wealthy family that could afford to send him to the best schools, to getting accepted at Harvard at a time when the college-based social networks were just taking off. But for every Mark Zuckerberg, there are roughly 30 corporate execs just making a salary.

70% of the top .1% of fabulously wealthy wage earners are corporate execs, financial professionals, real estate speculators, and lawyers. It is this dramatic growth in executive salaries that has been the dominant force in creating a new gilded age.

What Should Government’s Role Be?
That leaves the fundamental question of the purpose of progressive taxation, government oversight in market rules making, and money in politics.

The extraordinary gap between the rich and poor, driven by power rather than luck or skill, demonstrates that money is already providing the “Power” wealthy inordinate influence in politics. The powerful have already reduced the impact of taxation on their annual income as well as increased their ability to preserve their wealth for their heirs. They have manipulated the rules of the marketplace to provide their companies an unfair advantage against both competitors and the public. Finally they have achieved this by becoming the primary funders for political campaigns of those politicians who are willing to do their bidding. Four hundred families have provided half the funding for the current presidential campaign. That is unprecedented.

Progressive taxation is not punishment for success. Instead it is a tool that a democratic society can use to balance the political power that naturally accrues to the wealthy. The purpose of that balance is not to discourage success, but rather to lower the barriers that the “Power” wealthy can put in place to make it more difficult for others to succeed.

Revenues generated from higher taxes on those that I characterize as “powerful”, can be used to build a stronger social safety net and provide access for all citizens to the tools (education, investment, and government subsidies) needed to participate in the start-up economy. The 50’s and 60’s were the period of our most rapid growth and technological progress. We also had much higher top tax rates and much lower income inequality. Sweden is a good example of a high-tax, low-inequality state today. They have high marginal tax rates on their top earners and a very healthy start-up economy. They use the revenue generated from these high taxes on top earners to build a strong social safety net. They claim that this strong safety net encourages more risk taking because it reduces the personal costs of failure.

Creating markets that operate more fairly than today’s markets protect investors and reward innovation in ways that our current markets don’t. Most start-ups get acquired today because big companies continue to have significant market advantages over small ones. Freeing up small companies from issues of tortuous patent infringement, contractual barriers to competition, and de-facto monopolies will benefit consumers and the economy in general.

Breaking the connection between money and political influence will deliver on the promise of our democracy. One person. One vote.

The issue is not wealth.

The issue is not talent.

The issue is not luck.

The issue is how we want our economy to function.

We currently have a wealth-based economy. Wealth-based economies are inherently less stable than consumer-based economies. Our wealth-based economy was not the natural outgrowth of the disruptive events of automation. It was the unnatural influence of money on government policies. Those government policies encouraged a dramatic increase in corporate executive compensation that was not justified by company performance, allowed insider trading and stock manipulation, and increased corporate power and protection which weakening the bargaining power of workers.

I submit that a wealth-based economy is also not sustainable in a democracy. That’s because the natural tendency of those who have wealth is to protect it. That “protection” inevitably becomes influence on government policies from taxation, to market rules, to executive compensation.

At some point, those who are not part of the wealthy class will begin to realize that they are playing a game that is rigged against them. Rewards don’t go to those who are willing to work hard and play by the rules. Rewards go those who make the rules.

In a democracy the rules should be made by and for the largest number of voters. Right now many of our rules benefit only a small minority – an oligarchy.

One of those rules will be a rejection of the myth that high taxes discourage investment innovation. There is no data to support that claim. Innovation suffers when markets are dominated by large companies and rules/monopolies prevent the emergence of disruptive technologies.

If we want to encourage innovation, subsidize education, promote new business formation, expand the social safety net, and invest in emerging technologies. That would increase the number of “Productivity” billionaires even with high marginal tax rates. We would return to the meritocracy of the 60’s where talent and determination opened the doors to opportunity. Today, parentage is the primary determination of success.

We would not reduce the number of “lucky” wealthy because taxes have no impact on luck. Those who are lucky will continue to be lucky and should in some ways be willing to give back to a society that afforded them an opportunity that they didn’t themselves deserve.

We WILL reduce the number of those who achieve their wealth through warping the marketplace to their own benefit. The savings will diversify our economy, reduce those companies that became “too big to fail”, and close all of the loopholes and shortcuts to prosperity that only the “smart” money could take advantage of. In other words, those who in the past depended on Power to secure their wealth will now have to work for it just like everyone else.

That may result in some of the fabulously wealthy becoming just wealthy. It may also reduce inequality, but inequality will always be with us. It will expand opportunity which has always been the basic promise of this country.

Conservative Myth – Income Inequality is Fine

Thursday, December 10th, 2015

We’ve already gone through the question of whether or not an unregulated free market really exists in this country (it doesn’t) and whether that market is a fair distributor of wealth (it isn’t).

Just as a reminder. I’m not attempting to suggest any solution to the problem, but just addressing the conservative myths. I want to separate those two discussions, because so often the defense of a myth is the suggestion that there is nothing reasonable you can do to prevent it. We can get into solutions in future posts. Let’s focus these discussions on existence rather than remediation.

So now let’s dig a little deeper into the related conservative myth regarding their tolerance of income inequality. That myth has three parts.

The first, like many conservative myths, ignores the facts and suggests that income inequality isn’t really that bad for the individual. Everyone has a higher standard of living after all and so those who are concerned about income inequality are really just engaged in class warfare.

The second, is that a concentration of wealth in the hands of a few is good for the economy. It is the ultimate expression of a free market at work and it is the wealthy who create jobs, so any attempt to limit their ability to maximize their income is going to hurt the economy.

The third, is related to the second, but more philosophical. Wealth is the natural outcome of a free market. So progressive taxes and other methods which require the wealthy to pay more than everyone else is unfair. These methods punish success and by implication discourage others from making the same sacrifices that these special individual are willing to make.

Let’s take these in order.

Income Inequality is Harmless

Hopefully we all can agree that income inequality is great if you are part of the small group whose share of the income pie has been growing. We’ll talk about that group in more detail in the next two parts of this myth.

For the purposes of this portion of the discussion let’s focus on the rest of those who are primarily wage earners and whose incomes have been basically flat since roughly 1970.

Here’s how life has changed for this group.
1. Mom’s went to work. They did this to allow their families to remain in the middle class, or as an effort to get into the middle class. One wage earner used to be sufficient for a comfortable middle class life, but it isn’t anymore. The nature of middle class jobs changed for a number of reasons. One of those reasons is that executives began taking a bigger piece of the compensation pie. Up until the 1970’s, workers’ wages kept pace with productivity. After the 1970’s only executives benefited from increased corporate productivity.
2. Families got smaller. Middle class families could no longer afford four kids. The costs to raise kids went up in part because mom’s were no longer at home to help. Smaller families mean smaller schools, slower growth in the consumer economy, and long term fewer workers paying taxes and supporting Social Security and Medicare.
3. Commutes got longer. Middle class work weeks got longer. Middle class workers took less vacation. The United States in some ways turned into Japan in terms of the 24-7 nature of middle class jobs. As a result, the health of middle class workers declined as their stress levels went up.
4. The bargaining power of middle class workers decreased. Several factors at work here. One was an aggressive union-busting strategy championed by Ronald Reagan. Another was an aggressive outsourcing of manufacturing to right-to-work southern states and offshore low cost of labor centers. The third was decimation of the white collar workforce as a result of automation. Many middle management jobs simply disappeared as factory work contracted, clerical work disappeared, and software replaced paper and the workforce that managed that paper.
5. The cost of college skyrocketed as Republicans purposefully cut funding to higher education as part of the larger supply side economic fantasy. The middle class did get a tax break, but that modest increase in income fell far short of the cost to send their kids to college. So those families pulled money out of the only other asset they had, their homes. That asset was dramatically devalued in the financial crisis of 2008. The result is that those families are no longer able to pay for a college education. That burden has now shifted to students who leave college with huge debt burdens that previous generations did not have to deal with. The result of those burdens are being felt across the economy as college graduates spent a decade or more paying off debts rather than buying houses, starting families, or starting new businesses.
6. College education used to be the huge social melting pot where smart kids from modest means could make the jump to high paying jobs based on their willingness to work hard. Now college, particularly the elite colleges that are the gateway to the executive level jobs in this country, are only available to the children of those executives. The meritocracy of the 1950’s has been replaced by an oligarchy.

The Concentration of Wealth is Good for the Economy

I’ve dealt with this in previous posts. But here is a quick summary.
1. There is no trickle down economy. Wealthy people only buy from other wealthy people.
2. The wealthy get a substantial amount of their income from the stock market. As a result, their spending habits fluctuate based on the market. This makes for a far more volatile economy than one based on a large set of middle class consumers.
3. The wealthy are NOT job creators. Most jobs in this country are generated by medium size high growth companies. Most of these companies are privately owned. Those owners are not taking big salaries. They may have high net worth because of the value of their business, but all of their assets are tied up in their business. So they aren’t generally reporting high incomes. Too many small businesses fail or get acquired, so the gains of small business are pretty much offset by the loses. Big companies that can afford high priced CEO’s are the ones doing the acquiring. As a result, they lay off more people than they hire. So they also are not a long term significant contributor to job growth.

Wealth is the Natural Outcome of a Free Market

While it is true that in a free market income distribution is going to produce some wealthy people, we have already proven that in this country, markets aren’t free. Worse yet, markets have become warped by the political influence of wealth. Because we’ve allowed markets to become biased to benefit the wealthy at the expense of everyone else, we shouldn’t be concerned that an effort to remove some of this bias is “unnatural”.

While it is true that wealth is an incentive, there is no evidence that progressive taxes are a disincentive, or that a multi-millionaire is any less driven than a billionaire. If higher marginal tax rates were a disincentive to wealth, we would see it reflected in slower economic growth during times of high marginal tax rates and higher growth during times of low marginal tax rates.

During the period 1951-63, when marginal rates were at their peak—91 percent or 92 percent—the American economy boomed, growing at an average annual rate of 3.71 percent. The fact that the marginal rates were what would today be viewed as essentially confiscatory did not cause economic cataclysm—just the opposite. And during the past seven years, during which we reduced the top marginal rate to 35 percent, average growth was a more meager 1.71 percent.

Finally there is the myth that a progressive tax system removes the incentive for those who aspire to wealth to make the same sacrifices that those who achieved it where willing to make. The reality as we covered in the previous post is that great wealth in this country is much more an accident of birth than the product of hard work. Less than 20% of the billionaires in this country earned all of that income themselves. The other 80% inherited a substantial amount of money, in some cases more than a billion dollars.

That is not to say that those who achieve great wealth weren’t willing to work hard and make sacrifices. They were. But it wasn’t their hard work and willingness to sacrifice that distinguished them from those who didn’t achieve great wealth. The difference is that they were lucky. They stood at the table of life and rolled a 7. They were born into the right family at the right time with the right skill set to take advantage of a disruptive moment in our economy. There is nothing wrong with being lucky, but there is something wrong when we suggest that taxing the lucky will somehow diminish their ability or desire to take advantage of their good fortune.

But that still leaves one question unanswered. What sort of incentive does wealth provide for those who are already wealthy? Turns out that the major incentive is preservation of their family’s wealth through investments to minimize their taxes and secure the future for their children. Over the past 50 years or so, those investments have include political contributions to influence favorable rule making.

Again I’m not trying to make value judgments here, though obviously I do have an opinion. I’m just stating facts. For example, it is entirely natural for parents to try to make a better life for their children. By not paying closer attention to the influence that wealth has in this country, however, we are witness to the meritocracy of the 60’s becoming an aristocracy. That’s because those who benefited from the ability to make the jump from the middle class to wealth have had the means to change the system so that it benefits the children of the wealthy rather than all talented, gifted, and hard working children. There are still the same number of opportunities for Ivy League grads now that existed in the 60’s, but a much higher percentage of those grads are coming from wealthy families.

So it raises the inevitable question of which is more beneficial to our society, one billionaire or 20,000 middle class wage earners. In other words, what kind of a society to we want ?

Here are our choices. The society we have today concentrates wealth in the hands of a few who control the rules of the game for their own benefit. Those rule changes have greatly impacted the middle class which is in steep decline. The society we had during the most prosperous years in our history concentrated economic and political power is in the hands of a middle class. They received a fair share of the productivity gains that they delivered because of strong unions. That fair share was sufficient to allow them to provide their children all of the advantages and support required to also be part of the middle class. The result was a growing middle class that sustained economic growth through the 1970’s when the rules began to change.

Economic prosperity doesn’t trickle down, and neither does civic prosperity. Both are middle-out phenomena. When workers earn enough from one job to live on, they are far more likely to be contributors to civic prosperity — in your community. Parents who need only one job, not two or three to get by, can be available to help their kids with homework and keep them out of trouble — in your school. They can look out for you and your neighbors, volunteer, and contribute — in your school and church. Our prosperity does not all come home in our paycheck. Living in a community of people who are paid enough to contribute to your community, rather than require its help, may be more important than your salary. Prosperity and poverty are like viruses. They infect us all — for good or ill.

Inclusive economies always outperform and outlast plutocracies. That’s why investments in the middle class work, and tax breaks for the rich don’t.

The Empire Strikes Back

Tuesday, September 15th, 2015

There are plenty of frightening things about Trump’s campaign.

What is most frightening is his xenophobic appeal to nativism. It has given voice to an ugly white bigoted segment of society that has always been there, but was not discussed in polite company. These are the neo-nazi white supremacist racists who have enjoyed resurgence over the past eight years because a black man was in the White House. They were able to scream their bigotry in the public square because conservative Republicans claimed it was all politics. The worst stuff imaginable was suddenly fashionable among those who opposed the President because of his politics AND his race.

While they weren’t looking, however, conservatives have discovered that Trump is not just a racist, which they understand. He is also a populist. Worse yet, he is a rich populist, which seems an oxymoron, but doesn’t seem to disturb his followers. Even more terrifying to the conservative Republican establishment, his populism hasn’t just targeting illegal immigrants. It has also targeted bloated corporations who have had their way for too long and CEO’s who have been packing it in at the expense of their workers.

This is a very interesting turn of events. Ever since Reagan coopted the evangelical political movement awakened by Carter, Republican candidates have run on a whole platform of social issues. Once elected, however, they only delivered on the fiscal issues that were most important to their big money backers. Over the years everyone assumed that social conservatives actually cared about all of these fiscal issues too. Turns out that those supporting Trump don’t really care about the reducing taxes, expanding federal programs, and state’s rights. They understand the impact that big money has had on politics and are just as unhappy about large corporations and high income CEO’s as they are about illegal immigrants. Trump, running as a conservative Republican, hates free trade deals, loves Medicare and Social Security, wants to punish big companies that ship their jobs overseas, wants to tax CEO’s with cushy comp packages, and pledges to hold boards more accountable for their crony capitalism. In that regard Trump is MUCH closer to Bernie Sanders than he is any other candidate on the Republican ticket.

As Paul Krugman points out

The influence of big-money donors meant that nobody could make a serious play for the G.O.P. nomination without pledging allegiance to supply-side doctrine, and this allowed the establishment to imagine that ordinary voters shared its antipopulist creed.

But Mr. Trump, who is self-financing, didn’t need to genuflect to the big money, and it turns out that the base doesn’t mind his heresies. This is a real revelation, which may have a lasting impact on our politics.

The empire has inevitably begun to strike back.

The Club for Growth, that mainline supply side shill for political big money, is raising money to start running ads against Trump because of his tax policy.

Their hope is that they are going to be able to convince enough conservative Republicans that Trump is not their friend. This is going to be really interesting because the moment those ads begin to run I predict his poll numbers will improve. Rather than vilify Trump, these attacks from the conservative Republican establishment will validate what Trump has been saying all along. Those that have been sitting on the sidelines not sure that Trump is the real deal will realize that the Republican establishment, whom they also don’t trust, DOES take him seriously. They believe that he is dangerous. They recognize that he isn’t going to succumb to their influence. And finally, the establishment is terrified of what will happen to them if Trump is elected. This attack will be the sort of endorsement some of those on the sidelines have been waiting for. Trump will use these attacks to double down on his message of change. He will say, “If you really want to see changes, rather than the same old three card Monty that the Republican Party has been running, vote for me”.

If Trump is able to prove that these sorts of attacks will backfire and that organizations like the Club for Growth no longer have the weapon they claimed, the Republican Party will enter a brave new world. They will be required to really debate fiscal policy on the basis of what is best for the voters rather than what is best for their big money interests. If that occurs, we could really see a Presidential election where Bernie Sanders and Donald Trump both agree that the wealthy should pay more taxes, corporations should be penalized when they ship jobs offshore, trade pacts should benefit US workers, the social safety net should be strengthened because it benefits those that depend on it, and healthcare should be available to all at a cost that all can afford.

Compare this to the tax plans of the rest of the clowns on the Republican candidate bus.

Cruz, Paul, and Carson all favor a flat tax. Easy math says that the flat tax has to be somewhere around 25% in order to fund the government at current spending levels. Paul is at 14.5%. Carson at is 10%. Cruz hasn’t said. Beyond that, the flat tax is a huge give away to the wealthy who are paying significantly more in taxes today.

Huckabee is proposing a consumption tax. This federal sales tax would add $.23 to ever $1 spent on anything or an effective rate of 30%. The problem is that economic think tanks across the political spectrum say that it wouldn’t even come close to funding the government at its current level of spending.

Bush’s tax plan is the most interesting just because it is so weird. He has already promised that supply side economics will produce 4% growth for as far as the eye can see. But the details of the plan make that naïve prediction seem rational. Here are some quotes from a good article on the subject from

Bush’s plan offers an unlikely combination of solutions to the problem of slow growth.

He wants to cut the income tax rate and eliminate the estate tax and the alternative minimum tax — all policies that would benefit mostly the wealthiest Americans. At other times, he sounds like a populist, calling for the closing of loopholes that benefit corporations and hedge fund managers. And at others, he sounds like a policy wonk, arguing to shift tax policy in a way that encourages companies to build rather than borrow.

There’s no way to calculate yet what impact Bush’s proposals would have on the federal deficit, for example, or exactly how much more or less specific groups would pay in taxes. He hasn’t identified the corporate loopholes he would close or said whether closing them would fully offset his proposed cut to the headline corporate income tax rate.

The summary is that this is a politically motivated plan that borrows something from every other candidate including Clinton and Sanders, bundles it all up in a big confusing bag, and then wraps it in a bow of promised 4% growth. The reality once you strip everything away is that it is the same old voodoo economics that Reagan was forced to abandon, Bush I rescinded, and Bush II used to turn a surplus into a deficit.

The reality, at least for the moment, is that there are a lot of angry white voters out there who are unhappy with the Republican establishment. There are also a lot of frustrated progressive voters out there who are eager for a candidate willing to mount a full throated defense of progressive principles. Trump and Sanders are riding these respective waves. It is unclear whether those waves will propel both candidates to their party’s nomination, but the political establishment is becoming very uneasy with this populist uprising.

Trump and the Crazy Train

Friday, August 14th, 2015

There is certainly one thing that you can say about Trump – he is entertaining.

What people aren’t talking about is the fact that ALL of the Republican presidential candidates are in one way or another just as crazy as Trump.

Trump represents an interesting populist anti-establishment uprising that has surprised the party establishment, the media, and Trump. He is also the natural evolution of the “money votes” economy. Rand Paul was on the right track when he said that Trump is “used to buying politicians”. He has simply taken the next step of by passing the middle man and representing his own interests. Whether he is able to translate this into a nomination is yet to be seen.

He gained momentum by demonizing undocumented workers. He fanned the flames of xenophobia by claiming that Mexico was deliberately sending their most dangerous citizens to us to deal with.

All of the rest of the candidates were dragged along to support Trump’s claim that there is a crisis at the border. Rubio tried to distance himself from his previous support of a path to citizenship. Walker also changed his tune. Christie called his previous support a “garbage idea”. Even Trump had flipped from his earlier support of path to citizenship. Only Kasich, Hackabee, Carson, and Paul have resisted the urge to jump on the “we’re being overwhelmed with criminals” bandwagon.

The problem is that fact checkers call this claim false. Illegal immigration peaked in 2007 and has actually declined since. Deportations hit an all time high in 2013 of 400K. Most of those were convicted of crimes in this country. More robust border enforcement has not only dramatically reduced illegal immigration, but it has also discouraged undocumented workers from leaving this country for fear that they won’t be able to get back in. The result is a fairly stable population of undocumented workers in this country of 11M. Their children, at least those born here, will automatically be citizens. If these trends continue, within thirty years the number of undocumented workers will drop by 50% without any other actions on our part.

So the only value in building a bigger wall is that it will likely provide some jobs for those that the wall is intended to keep out.

How about abortion?

Trump flipped from his previous support of abortion.

Rubio lied about never supporting exceptions to abortion.

Bush questioned whether, “we need half a billion dollars for women’s health issues.”

Huckabee said he would ignore the Supreme Court and declare that a “baby inside the mother’s womb is a person at the moment of conception.”

Santorum, who has built his political career on his opposition to abortion, took the opportunity to question Carson’s character because Carson used fetal tissue in his medical research. “When you start to see some of these cracks, I think it may show whether the person is really someone who’s going to take on an issue and be strong on it when they get into the very difficult position of being President of the United States.” An interesting attack from the guy who recently failed a significant test of character when he had to choose between politics and his religious faith on the topic of climate change.

How about healthcare?

Trump flip flopped in his previous support for single payor.

All promise to repeal Obamacare and replace it with something better. NONE have said what that something better would be other than some discussion that health savings accounts would be nice.

How about the use of our military in the Middle East?

Rand Paul is the only one who would not put “boots on the ground”.

Fiorina lied when she claimed that the US wasn’t arming the Kurds. We are doing it through the Iraqi government.

How about the economy?

Jeb promises that he can deliver 4% growth off into the future based on his experience in Florida and his belief in supply side economics. The reality is that he presided over a huge real estate bubble in Florida. When it burst, shortly after he left office, 900K of the 1.3M jobs he claimed to create vanished. Funny the same thing happened to his brother’s supply-side experiment.

Many economists think that 4% is just out of our reach because of the demographic headwinds of the baby boomer retirement. You really have to believe in the fairy dust of supply side economics to project that we would touch 3% as a result of government policies.

Christie claimed some big job numbers, but his state ranked 44 out of 50 in job growth.

Walker did not elaborate on his failure to deliver the 215K jobs he promised would appear as a result of the massive tax cuts he gave business. Instead he talked about job growth and job participation numbers. What he didn’t say is that these were the same numbers that existed prior to his election.

Huckabee solves everything with a consumption tax. One of the advantages of that tax is that even “illegals, prostitutes, pimps, and drug dealers” would be paying this tax. He claims that tax will generate 6% growth. I have to admit that 6 is better than 4 which is certainly better than 2, but just changing the tax policy won’t do it. You have to get more workers which just isn’t going to happen unless there is also a radical change in immigration policy which is not part of Huckabee’s plan. Even if you got more workers, you would also have to have a significant change in productivity because wages would have to track this growth in order to get more money into the economy. Huckabee hasn’t even thought of this because his consumption tax shifts most of the tax burden to the poor. All he has thought about is that 6 is better than 4.

Then there is Doc Carson, who suggest that we should all tithe 10% of income instead of pay taxes. When asked whether or not it would work, he said that if it worked for God, it will work for us.


In this context it isn’t surprising that Trump is having the success that he has been having. The reality is that the only half-way serious candidate in this train full of clowns is Kasich. Not surprisingly he is the most moderate of the bunch and as a result, the least likely to get the nomination.

This speaks volumes about what the Republican Party has become. This is no longer the party of George HW Bush or even Ronald Reagan. It has become the party of paranoia and extremism as the old white angry men, who have been the party’s backbone, struggle with the reality that they are no longer in control. They failed to defend marriage from the onslaught of gay rights. They failed to prevent the rollout of what they see as another big entitlement program in Obamacare. Black people are demanding justice. Hispanics have discovered the power of the ballot box. Even the Pope disagrees with their abortion obsession. And women are no longer content with staying home and raising children. They not only demand a career, but also equal pay for equal work.

These guys are growing tired of the effort required to hold back the flood of scientific evidence supporting human-caused climate change. Their dam has sprung so many leaks that they are running out of fingers to plug them. Coal-based electrical generation is not only polluting, it is expensive. The most economical and highest performance car is all electric, made in this country, and sold direct over the internet. The world is changing under their feet and there appears to be little they can do to prevent it except perhaps support someone who is willing to give voice to their fears and frustrations – Donald Trump.

Courts Decide

Friday, July 3rd, 2015

The Supreme Court recently did what they are empowered to do – make decisions based on their best interpretation of the constitution.

The Constitution provides for an independent judiciary for a reason. We are a nation of laws where the power of the majority does not trump the rights of the minority. Our federal judges are appointed to reduce political influence.

The court also decides issues that we can’t resolve at the ballot box.

During this time of deep political polarization, every decision produces a backlash of second guessers. The same court they agreed with yesterday somehow betrayed them today. You’ll likely see some of that across the Internet with appropriate doomsday predictions.

Americans deserve leadership that can actually fix our broken health care system, and they are certainly not getting now from Washington, DC. Jeb Bush

From the beginning, it was clear that ObamaCare would fail the American people and this has proven to be true across the country and in Wisconsin. Scott Walker

The reality is that while not perfect, Obamacare is meeting its goals. Over 10M insured and the healthcare growth rate has slowed to its lowest rate in decades. This despite the fact that 25 Republican states have refused to expand Medicare. Also NOT ONE Republican candidate has produced a detailed replacement plan that can be scored against Obamacare.

I will not acquiesce to an imperial court any more than our Founders acquiesced to an imperial British monarch. We must resist and reject judicial tyranny, not retreat. Mike Huckabee

This decision will pave the way for an all out assault against the religious freedom rights of Christians who disagree with this decision. This ruling must not be used as pretext by Washington to erode our right to religious liberty. Bobby Jindal

The states are the proper place for these decisions to be made, and as we have seen repeatedly over the last few days, we will need a conservative president who will appoint men and women to the Court who will faithfully interpret the Constitution and laws of our land without injecting their own political agendas. As a result of this decision, the only alternative left for the American people is to support an amendment to the U.S. Constitution to reaffirm the ability of the states to continue to define marriage. Scott Walker

What is funny is that the founding fathers created the judicial branch to protect the people from an imperial exec and legislative branch. Also at the time of the decision, 39 states had already approved gay marriage.

Those that complain about the court being politicized, recommend packing the court with conservative justices as the remedy. Yet, it was supposedly conservative justices who participated in the majority in both cases.

Then there were the appropriate predictions of the apocalypse.

Santorum said stopping gay people from marrying was about “the survival of our country.”

Sen. Ted Cruz said it was “the darkest 24 hours in our nation’s history.”

Santorum might be correct if the country were exclusively populated by gay men, but it’s not. We are, in fact, in the midst of a baby boom. So clearly there are plenty of people still willing to contribute to the next generation even if that generation includes some married gay people.

As far as dark hours, at least from an existential perspective, this one isn’t very high on the list. Pearl Harbor, 9/11, the murders of the Kennedy’s, MLK, and Licoln; the Great Depression, the Great Recession, the Civil War, and Valley Forge all come to mind well before we get to this most recent SCOTUS decision.

Here’s what was actually decided.

Affordable Care Act The dispute was over six of the 363,086 words in the law. The part of the law said that insurance purchased through “an exchange established by the state” qualified for subsidies. Narrowly interpreting the law in this fashion, according to the court, led to many more serious contradictions throughout the rest of the law. The court decided (6-3) that Congress intended ACA subsidies to apply regardless of how insurance was purchased. The court encouraged Congress to be more careful in the future and left open the option for future legislation on the subject.

Same Sex Marriage The court decided (5-4) that adults have the constitutional right to marry. States can’t limit that right based on sexual preference. This decision doesn’t affect state laws regarding children, monogamy, or bestiality. It doesn’t affect who churches decide to marry. It doesn’t compel any business to change their practices. It only requires states to provide marriage licenses to all adults who apply for them and meet the requirements of that state (not already married, no sexually transmitted diseases, etc.).

There are certainly those who feel that this decision violates their religious beliefs. I would only remind them that similar religious arguments were used to support slavery, oppose female suffrage, support segregation, and oppose interracial marriage. Very few legitimate churches support those views today.

The courts aren’t perfect, but they do serve a vital role in our democracy. While I welcomed these decisions, I too was deeply disappointed by others (e.g. Citizens United). We all have the right to disagree, but we also have the responsibility as citizens to respect this constitutional process. If you want change, vote.

Climate Change Infallibility

Tuesday, June 16th, 2015

Here’s how twisted the climate change debate has become.

The Pope feels that he has to weigh in.

His opinion?

Climate change is real.

Climate change is a moral issue because of the damage being done to the poor.

His formal remarks on the subject will be published in an encyclical due later this month. Encyclicals are letters that Popes send to Bishops. The purpose is to instruct the Bishops on the Catholic Church’s position on particular issues. This is serious stuff. It is not an invitation for dialog. It is a statement of how this particular issue is going to be taught by the Bishops going forward. The Pope expects all good Catholics to follow the church’s teachings.

The reaction on this side of the ocean is incredible.

Catholic republican conservative Rick Santorum has built his political career on his religious beliefs. He opposes abortion and same sex marriage. On ISIS, he believes that the US should “bomb them back to the seventh century.” He believes that immigration is contributing to economic problems because immigrants are taking jobs from citizens. As a result, he wants to reduce LEGAL immigration by 25%. He opposes any path to citizenship for illegal immigrants. Finally, he rejects scientific evidence that human behavior is causing climate change. He walks pretty much straight down the right wing conservative Republican political platform while wrapping it all in a mantle of Catholicism.

The problem is that conservative Catholics also believe in papal infallibility. That means that when the Pope speaks on matters concerning faith or morals, it is not only binding for all Catholics, but it is divinely inspired and cannot be wrong.

So this puts Rick Santorum in a difficult spot. Which is more important to him – his religion or his politics? Here’s his response.

I would just say this: The church has gotten it wrong a few times on science, and I think that we probably are better off leaving science to the scientists and focusing on what we’re really good at, which is theology and morality.

Not only does he reject the whole concept of papal infallibility out of hand, but he also questions the Pope’s right to view climate change as a moral issue. Finally he uses the church’s past denial of the scientific evidence supporting a sun-centric planetary system, as evidence that the church isn’t trustworthy when it comes to science. He advises the Catholic Church to leave science to the scientists.

This is the height of hypocrisy. That’s because Santorum’s political position of climate change denial fails to follow his own advice to the Catholic Church. Instead of leaving science to the scientists, Santorum rejects the current scientific consensus regarding the causes of climate change because it conflicts with his RELIGIOUS views.

Here is how Santorum defends calling climate change “a hoax”.

If you leave it to Nature, then Nature will do what Nature does, which is boom and bust


We were put on this Earth as creatures of God to have dominion over the Earth, to use it wisely and steward it wisely, but for our benefit not for the Earth’s benefit.

Rick Santorum has no standing in the scientific community. His undergrad degree is in Political Science from Penn State. He got an MBA from Pitt and a JD from Dickenson. Pope Francis, on the other hand, IS a scientist. He has a degree in chemistry and worked as a chemical technician before entering the priesthood. He CAN speak with authority on the science.

He can also speak with authority on the morality of climate change because he is the head of one of the world’s largest religions. He isn’t the first to speak out either. He is one of a long line of Pope’s who have treated climate change as a moral issue.

Environmental protection and the connection between fighting poverty and fighting climate change are important areas for the promotion of integral human development – Pope Benedict XVI

In our day, there is a growing awareness that world peace is threatened … by a lack of due respect for nature – Pope John Paul II

So we have a conservative Republican politician who has so blurred the lines between his political views and his religious views that he can no longer see the difference. He rejects the leader of his church claiming the Pope isn’t qualified to make a scientific judgment because of the church’s opposition to Gallileo – even though the church’s position is motivated by morality. Despite the fact that the Pope himself is a scientist, Santorum dismisses the church’s position as out of step with the scientific community. Then he uses exactly the same Biblical passage that the Catholic Church used to defend itself against the scientific claims of Gallileo, to support his own rejection of the scientific community’s conclusion that human actions are causing climate change.

In other words he tells the church to quit politicizing science and then turns right around to use his own religious beliefs to politicize science.

This raises an obvious question of whether Rick recognizes the Pope as his leader. Here’s what he told a radio interviewer in January.

I mean, it’s sometimes very difficult to listen to the Pope and some of the things he says off the cuff…. I keep coming back to the Pope is the leader of the Catholic Church, and when he speaks as the leader of the Catholic Church, I’ll certainly pay attention. But when he speaks in interviews, he’s giving his own opinions.

Santorum’s rejection of the Pope’s encyclical on climate change is just another example of the hubris of the man. This is a perfect example of the solipsism that appears to infect the right wing conservative movement. There isn’t even the hint of self consciousness in Santorum’s statements even though they are obviously contradictory. That’s because there is only one ideology that he follows – right wing conservatism.

That is his god.

That is his religion.

The fact that he can campaign as a serious candidate only highlights the deep cynicism that pervades the conservative wing of the Republican party.

Fortunately the Bible warned us against these people.

A double minded man is unstable in all his ways James 1:8

Poverty and the Social Safety Net

Sunday, June 7th, 2015

Here’s a quick recap of what we have learned so far.

Conservatives have developed a set of narratives to explain why our best efforts to eradicate poverty have failed. These narratives all revolve around a central core claim that programs which attempt to assist people in need actually perpetuate that need. That’s because, according to this “logic”, aid of any sort reduces the incentive to work. The foundation of this view is that if the poor were willing to work as hard as the middle class they would quickly join the middle class. Lately there has been another twist to this point of view. If the middle class were willing to work as hard as the wealthy, they would be wealthy too. These views are consistent with the conservative moral foundation that hates that possibility that anyone might be able to “cheat” the system.

A recent study by the Pew Research Center for example found that three-quarters of conservatives believe that the poor “have it easy” because of government benefits. Only 1 in 7 believe the poor lead “hard” lives.

We have gone through a very interesting eight years where a lot of these assumptions were tested.

During those eight years the ranks of the poor swelled as many previously middle class people lost their jobs, their homes, and their savings. They were forced to file for unemployment, food stamps, temporary need to dependent families, and many of the other assistance programs that are the target of conservative scorn.

Now we are finally emerging from this long period of economic decline.

If the conservative theories are correct, those who were out of work for a long period of time and receiving benefits, should be demonstrating some dependence because of the corrupting influence of those benefits. We should be able to see evidence of that dependence in a reluctance to return to work.

One example would be the number of people on food stamps. That should remain high even as the unemployment rate goes down.

Guess what?

The number of people filing for food stamps has gone down at pretty much the same rate as unemployment.

The same thing is true regarding the claim that poor women have children in order to support themselves with the meager benefits provided for mothers with dependents. If that actually was a strategy, we would see the birth rate among the poor go up during times of high unemployment. Instead the birth rate among the poor went down, just like it did in the overall economy.

We’ve also seen that the behavioral effects of poverty cross racial lines. As more poor people fell into poverty over the past 8 years, their families disintegrated too. They saw increases in drug use, violence, and crime. They also experienced declining health. While life expectancy among the wealthy has gone up, life expectancy among the poor has gone down.

The real answer is much simpler.

If you want people to demonstrate middle class values, you have to provide them middle class jobs.

If you want to reduce the ranks of the generationally poor, you have to break down the barriers that institutional racism use to literally wall off poor minority communities from prosperity.

Finally, we have to have an honest conversation about the value of a social safety net in preventing people from falling into poverty. The psychological and physical damage they suffer in that condition can make it difficult for them to recover.

Here are just a few examples from a study by the Federal Reserve.

Poverty is an issue for our elderly. 25% of the elderly depend entirely on Social Security benefits. 50% get more than half their income from Social Security. That’s because 30% of the rest of the population have no retirement savings or plan at all. That same percentage of people report that they went without some medical care over the past year because they couldn’t afford it. 25% reported that they or someone else in their immediate family had experienced some degree of financial hardship over the past year. 47% said that they would not be able to handle an unexpected expense of $400 or more.

That’s why those Republican states who have refused to expand Medicaid continue to put their populations of working poor at a terrible risk. They remain literally one medical emergency away from bankruptcy.

Hopefully all of this will be included in the discussions of income inequality that I hope will be part of this election year cycle.

The poor are not to blame for their condition. We are.

We have created a system that makes it very difficult for those who fall into poverty to ever get out.

We keep the working poor on the knife edge of financial collapse.

We keep the black community imprisoned in economic and physical ghettos with an asymmetrical police and legal system that punishes them for not demonstrated middle class values. Then we are shocked when every ten years or so the ghettos explode in violence and frustration.

The data is there.

The changes are obvious.

All that is lacking is the will for conservatives to overcome their bias and have an honest an open discussion about how to address the root causes of poverty rather than simply blame the poor for their condition.

Institutional Racism

Friday, May 15th, 2015

In the previous post, I made the claim that institutional racism in the form of asymmetrical law enforcement and judicial bias were two of the three motivating factors driving the current demonstrations and violence in black communities across the country.

I suspect that some might dispute the claims of asymmetrical law enforcement or judicial bias, but the numbers here are undeniable. Blacks have many more encounters with police than whites on a per capita basis. They get arrested way more than whites. They are incarcerated at a much higher rate for the same crimes. They receive longer sentences for the same convictions. Ferguson was just one example of collusion between city government, law enforcement, and the judiciary to extort money from the black community for petty infractions. That’s institutional racism.

Another aspect of institutional racism created the ghettos where the vast majority of the black population live. These communities not only have substandard housing, but also no jobs and a very low percentage of home ownership.

Home ownership is the middle class wealth engine. Blacks don’t have access to that engine because they don’t have access to the middle class jobs that can support home ownership. They also don’t have access to that engine because, until the 70’s, they were not able to get mortgages for houses in middle class neighborhoods. Federal Housing policies prohibited it. That’s institutional racism.

Ned Resnikoff dug into the history in an MSNBC piece.

Disparities in homeownership are a major driver of the racial wealth gap, according to a recent study from Brandeis University. According to the authors of the report, “redlining [a form of discrimination in banking or insurance practices], discriminatory mortgage-lending practices, lack of access to credit, and lower incomes have blocked the homeownership path for African-Americans while creating and reinforcing communities segregated by race.”

For those of you unfamiliar with redlining, banks had different policies for different parts of the city. Those policies effectively priced black consumers out of white neighborhoods by charging blacks more to purchase a home in those neighborhoods than they would charge a comparable white customer.

This practice began in 1934 with the National Housing Act which established the FHA and the Federal Home Loan Bank Board. This later agency created “residential security maps” which assessed the risk of real estate investments in different parts of major cities. Black neighborhoods were designated high risk and denied funding. This dramatically reduced both home ownership in black neighborhoods as well as commercial investment.

Speculators stepped into the void left by banks, often with the support of local government.

When selling on contract, the speculator offered the home to a black purchaser for a relatively low down payment – often several hundred dollars would suffice. For bringing the home within the reach of a black purchaser, however, the speculator extracted a considerable price. In the Commission on Human Relations study, the percentage increase in the cost of the home from the speculator’s purchase price to that of the black consumer ranged from a minimum of 35% to 115%; the average increase was 73%.

The next step toward the ghettos that we know today was block busting.

After the riots of the 60’s, whites began to leave inner city neighborhoods for the “safety” of the white suburbs. They took their businesses, jobs, and purchasing power with them. Speculators accelerated that white flight through various tactics intended to convince white home owners that black families were moving into their neighborhood. Realtors and speculators were able to purchase the houses at deep discounts and then convert them to multi-family dwellings that generated significantly more income for their owners.

As neighborhoods transformed from predominantly owner occupied low density to predominantly renter-occupied high density, property values declined. Property tax revenues which are based on property values and which fund local schools also declined. As jobs and purchasing power left neighborhoods, the small business services associated with that purchasing power also left. Neighborhoods that once were vital and sustainable, deteriorated. Whites associated this decline with black pathology. It was in fact a logical result of intuitional racism.

During the 60’s public housing projects were also placed in these same segregated economically depressed neighborhoods as a compromise with conservatives who opposed them completely. These projects were doomed from the start because they also failed to address the fundamental issue of jobs. Instead they simply concentrated all of the pathologies associates with poverty in a smaller geographic area. Gangs, violence, and drug use all became associated with the black family experience rather than the underlying economic conditions that were in fact the root of that behavior.

When you wall-off a whole community from access to the wealth building tools of employment, access to capital, and home ownership – they are unable leave their impoverished areas. Their poverty has a whole set of pathologies that accompany it. This cultural dysfunction and deep generational poverty defines life in the prison that our policies built. Conservative Republican leaders starting with Nixon turned this into a political strategy. Nixon was content to simply play on the same fears of whites that made the block busters wealthy. Reagan was the one who expanded the meme that blacks were dangerous. He convinced angry white voters that the blacks imprisoned in the ghettos that institutional racism created are themselves responsible for the conditions under which our government’s policies have forced them to live.

O brother, where art thou?

Pathology Versus Economics

Friday, May 8th, 2015

Responses to racial unrest, most recently in Baltimore, aren’t surprising given what we know about conservatives and liberals. Conservatives focus on rioters calling them thugs and feign surprise at the violence. Liberals on the other hand point to asymmetrical law enforcement in white and black neighborhoods and question why cops are killing so many unarmed poor kids.

Here’s a little history to try to figure out what is going on.

This country was founded on slavery. The slave trade in North America grew right along with European colonization. It was written into our founding documents right along with inalienable rights. The United States fought a civil war to force an end to slavery in southern states. That ended two hundred years of institutionalized and constitutional slavery.

A war weary country, however, failed to eradicate institutional racism. Whites successfully regained the political and economic power that they lost briefly during reconstruction. They exercised that power with impunity for another 100 years until the civil rights movement began to win a series of Supreme Court victories. The pinnacle of that movement was the voting rights legislation passed during the Johnson administration.

Coincident with that legislation was widespread racial unrest. During that period of time there were two seminal studies on poverty and racism.

The Moynihan Report in 1965 blamed the violence on poverty. They blamed poverty on pathological and cultural deficiencies in black families. This report shifted the onus from institutions and policies to families. It coined the term “benign neglect” in recommending that government had done pretty much all that it could to. Rights had risen as far as the study’s authors felt they could. Fixing families required an attitude adjustment by government and blacks. Government had to stop trying to supplement poor incomes. Instead government should encourage poor black families to fix themselves.

The Kerner Commission Report in 1968 took a much more scientific approach. It was based on extensive interviews of all those involved in rioting – young black men, shop owners, police, citizens, leaders, and elected officials. That report said the root cause of rioting was institutional racism. The solution to racial unrest was simple and obvious – social justice and economic redistribution. People rioted because they felt oppressed by the police, persecuted by the courts, and taken advantage of by the business community. Provide those same people good jobs, fair law enforcement, and color-blind courts; and everyone will happily live a peaceful law abiding life.

The riots of the 60’s also terrified white people. They fled the cities for the suburbs and took their jobs with them. Nixon and Lee Atwater invented the Southern Strategy in 1968. It played on white fears. Republicans successfully mined white backlash and rage right up until Obama’s election in 2008.

Reagan famously put another twist on the Moynihan report when he claimed that poverty itself was the result of dependence. He invented the specter of the welfare queen living large on the state. He based that characterization in a bi-racial con artist who was hardly a black stereotype. But the narrative was more powerful than the reality, and a whole series of reforms all the way through Clinton dismantled the social safety net for the poor that was part of the Great Society’s War on Poverty.

So what is the reality? Pathology or Economics.

As always the numbers give us some insight.

Let’s start at the same place that Reagan started, with the welfare queen. Everyone is familiar with this claim. Poor minority women bear lots of children so that they can live off government assistance rather than work. Let’s put aside for a moment the fact Clinton eliminated this sort of permanent assistance. There is a much simpler way to blow up this myth. If it were true, we should be able to see increases in the birth rates of poor black families during difficult economic times. We have just gone through the most difficult 8 years since the Great Depression. The birth rate in poor black families plummeted just like it did across the rest of the socio-economic spectrum. In other words, while there may be individuals who successfully defraud the government, aid to the poor does not create a pathological dependence which encourages women to, in effect, “live” off their children.

The great sociologist William Julius Wilson argued long ago that widely-decried social changes among blacks, like the decline of traditional families, were actually caused by the disappearance of well-paying jobs in inner cities. His argument contained an implicit prediction: if other racial groups were to face a similar loss of job opportunity, their behavior would change in similar ways.

If that’s true, we should be able to see the same social disruptions in white families over the past eight years. If you go look at the numbers, it’s there. Lagging wages — actually declining in real terms for half of working men — and work instability have been followed by sharp declines in marriage, rising births out of wedlock, and more across the racial spectrum.

As Isabel Sawhill of the Brookings Institution writes: “Blacks have faced, and will continue to face, unique challenges. But when we look for the reasons why less skilled blacks are failing to marry and join the middle class, it is largely for the same reasons that marriage and a middle-class lifestyle is eluding a growing number of whites as well.”

The pathology of “bad choices” that conservatives have used to blame the poor for their condition is now being replicated in large segments of the poor white population. They have suffered the same economic displacement over the last eight years that blacks have experienced for generations. That includes shorter life spans, increased violence, broken families, increased drug abuse, less education, decreased home ownership, increased financial instability, and increased chronic illness.

Conservatives cluck about the failure of minority communities to adopt middle class values, but those values depend in large part on access to middle-class jobs. Those jobs are simply not available in poor communities and the poor can’t afford to move to where the good jobs are. Instead you have the spectacle of a Detroit man who spends all his non-working hours getting to and from his minimum wage suburban job.

Finally, you have Republican leaders like John Boehner suggesting that the riots in Baltimore are evidence of the “50 years of failed Democrat policies”. While it is clear that he is reaching back to the Great Society, half of those 50 years Republicans were in the White House. So if policies are to blame, that blame should be shared equally by Republicans and Democrats.

The numbers again come to our rescue here. In this case, Paul Krugman.

Federal spending on means-tested programs other than Medicaid has fluctuated between 1 and 2 percent of G.D.P. for decades, going up in recessions and down in recoveries. That’s not a lot of money — it’s far less than other advanced countries spend — and not all of it goes to families below the poverty line.

Despite this, measures that correct well-known flaws in the statistics show that we have made some real progress against poverty. And we would make a lot more progress if we were even a fraction as generous toward the needy as we imagine ourselves to be.

In other words, the problem was not too much money. They problem was not enough money, and perhaps money spend on the wrong things.

So where does this leave us?

The “pathology” that has been the mainstay of Republican pronouncements about race and poverty from Ronald Reagan through John Boehner are not supported by the facts. Instead of dependency, we have predictable effects from job loss, mass incarceration, and economic disruption.

Instead of a post racial society, we have the daily experience of young black men who are targeted by the police and persecuted by the justice system.

Instead of confronting the realities of the living conditions that we have forced the poor to endure, conservatives use the myth of pathology to absolve society from taking meaningful action. The myths of the welfare queen, Willie Horton, middle class values, and personal responsibility allow us to ignore the fact that we have effectively walled off poor communities from prosperity.

Baltimore is a good example. It spent $130M over the last 20 years in an attempt to transform one of its poorest neighborhoods. While well intentioned, 1000 new affordable houses, new schools, and new clinics did not attract the employers necessary to support the families in those new houses. Without jobs, the neighborhood eventually reverted back to the same despair, crime, and drug abuse that every other job-poor neighborhood displays. Just fixing housing, schools, and healthcare, regardless of how much money is spent, isn’t enough.

“Having a well-maintained home doesn’t get at the larger issues that prevent self-sufficiency,” said DeLuca, the Hopkins sociologist. “The labor market and drug markets really destabilized Sandtown.”

The problem is institutional racism reflected in over-zealous law enforcement and lack of opportunity in the only neighborhoods that poor black people can afford to live.

The solution is jobs.

The rest is just myth and the conservative pathology of confirmation bias born of moral fundamentalism.