Reader Critical Thinking Test! How Many Things Can You Find Wrong with Adam Davidson’s Latest Article?

As much as I thoroughly enjoy shredding Adam Davidson’s Sunday columns in the New York Times, why should I have all the fun? NC has lots of articulate and clever readers, so I thought it might be an entertaining change of pace to let the commentariat have first shot at it.

The piece is “The Smartphone Have-Nots.” I am already having to hold my tongue. If you bump into the New York Times paywall, try this link or Google the title. I’m looking forward to seeing what you do with it.

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  1. LucyLulu

    I intended to leave the test to those more articulate, but this one was too glaring to pass up (and besides, it pissed me off)…..

    “What do we value more: growth or fairness? That’s a value judgment. And for better or worse, it’s up to us.”

    And higher levels of wealth inequality being considered “fairness” isn’t a value judgment itself?

    If “it’s up to us me”, less wealth inequality would be more fair.

    1. Yves Smith Post author

      The problem is you are smarter than AD’s target audience. He implies that pro growth solutions of course favor giving the technocratic elite free rein and ample rewards, or “high growth = more inequality”. But you recognize that high inequality is associated with lower growth.

        1. kris

          A conservative person is telling you that Ayn Rand is the Utopia of Capitalism.
          I’ve never read anything from her and I will never read. But I’ve read so many commentaries that my conclusion is made clear to everybody pushing that ayn rand crap to me.

          1. oliverks

            I am not sure who said this, but it is a good description of Ms. Rand.

            There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.

          2. JTFaraday

            I think originally it came from jsmith, our reader of Marx.

            I liked it also. What I especially liked about it is that it makes the point that what goes by the term “neoliberalism” is a positive program of governance (and an authoritarian one at that) and no mere libertarianism or “market fundamentalism,” however much it may adopt that rhetoric. (At times. When convenient).

          3. JTFaraday

            The flip side of that being that at other times, its proponents have no qualms whatsoever dictating exactly what you, citizen and human being, should be doing, (and there is only one right way to live).

          4. bobw

            John Rogers, but I haven’t been able to find when or where: “Paul Krugman alluded to an oft-quoted quip by John Rogers in his blog: ‘There are two novels…’ Wikipedia FWIW.

          5. bobw

            Wikipedia FWIW: “Paul Krugman alluded to an oft-quoted quip by John Rogers in his blog: ‘There are two novels…'” Apologies if double post (cat on keyboard).

          6. Ol' Bill

            Allow me to provide the identity of the quoter: John Rogers, who when not producing/writing/directing the (sadly just cancelled) cable series LEVERAGE, writes some of the smartest, most incisive, kick-assiest political commentary around. Website:

    2. Klassy!

      I can see how he arrived at this choice. After all, read the previous paragraph:
      The Organization for Economic Cooperation and Development, a sort of global club for the world’s richest nations, has carefully studied the relationship between inequality and growth. The fastest-growing industrialized economies (South Korea, Estonia and Poland) have remarkably low inequality. A few low-growth countries (notably Mexico and Turkey) have high inequality. The rest of the world is all over the place, with no obvious connection between a country’s level of inequality and its economic growth.
      So yes, the obvious conclusion is that you must choose growth or fairness.

      1. Matt D

        It is a hilariously inconsistent set of statements. The ability to put them that close together in an article – now that’s journalism.

        Kind of like saying that people who get enough sleep are the most productive, and then asking which you value more, your sleep or your productivity.

    3. Dan Kervick

      I thought the article was a pretty fair summary of the current debate until that last false dichotomy. He leaves the Stiglitz argument out of the discussion entirely: Stiglitz’s claim is that high inequality damages growth.

      Equality is not just about fairness, which is a feature of social life whose appraisal flows form our sense of justice. Equality is also essential for restoring and sustaining political democracy. Democracy is simply impossible in circumstances of high inequality. Progressive defenders of democracy have put all the focus lately on campaign finance reform. That’s an important component, but in the end it is not sufficient. It is simply impossible to build an electoral firewall between money and power. People with a high concentration of wealth will always find some way of converting that wealth into high concentrations of political power.

      Also, while educating our people is important for many reasons, including the fact that an educated is in itself an element of a food life, it will not itself reduce income inequality. There can no income equalizing “race to the top”. Getting a better education certainly gives an individual an advantage if others stay the same. But improving everyone’s education simultaneously doesn’t alter the fundamental economic power structure that generates inequality.

      We need to go to the roots and attack inequality and the fundamental economic structures that produce it. This scares a lot of people who would like politics to be easy and want to avoid these kinds of harsh class battles. And it repels other people – not just the rich themselves, but knowledge class intellectuals who detest the lowly and uneducated, and wish to preserve an order that preserves their own privileges.

      1. Klassy!

        That is an excellent point about fairness not being the same as equality.
        I agree that campaign finance reform offers false hope when there are so many other avenues to control the message and to limit the debate.

      2. from Mexico

        Dan Kervick says:

        I thought the article was a pretty fair summary of the current debate until that last false dichotomy.

        You really think the way Davidson structured his article, which was to sumarize Mishel’s position and then marshall “one of the country’s most celebrated labor economists” and a “M.I.T. labor economist who hasn’t fully committed to any one particular view” to shoot it down, to be a fair fight? When donkeys fly!

        But let’s distill what the “current debate” is all about. It boils down to this:

        Inequality is good vs. Inequality is bad

        Good is deemed to be maximization of aggegate utility. There is a built in assumption in every utterance of Davidson’s that inequality maximizes aggregate utility. This is received wisdom, a notion blindly accepted on faith, which has about as much basis in reality as the Tooth Fairy or the Garden of Eden.

        Below this debate is another sub-debate, which can be distilled as follows:

        Inequality is a result of government intervention vs. Inequality is a result of free markets

        S.B.T.C. theory fits within the latter, the rubric of free market theorizing. Growing inequality, according to this theory, has nothing to do with anything the US government did. It occurs due to an immutable law of nature. Levy takes this spin to the next level, as if the neoliberal ideologues have not engaged in a vast military exercise to spread the free market gospel accross the globe, deploying practically every instrument of violence ever known to mankind in their crusade for world hegemony.

      3. Min

        Dan Kervick: “Equality is not just about fairness, which is a feature of social life whose appraisal flows form our sense of justice. Equality is also essential for restoring and sustaining political democracy.”

        Hear, hear. Well said. :)

        IIUC, a lot of the U. S. super-rich are nouveau riche. The social mobility behind that is not so troubling. But without stringent taxation, their descendants will also be super-rich. We are in danger of producing a kind of aristocracy.

        Dan Kervick: “Also, while educating our people is important for many reasons, including the fact that an educated is in itself an element of a food life, it will not itself reduce income inequality. There can no income equalizing “race to the top”.”

        First, I suppose you mean a “full life”. :)

        Your second statement is certainly true. If everybody has a college degree, then people with college degrees will have minimum wage jobs. However, I am not so sure that education itself will not go towards reducing inequality. I remember my sociology prof saying that the most dissatisfied people in the world are college graduates. It isn’t just a question of socio-economic expectations, it is the cognitive ability to find and define problems and to visualize and work through solutions. College for all is a force for social change. Remember, Fidel was a lawyer and Che was a doctor. ;)

        1. Min

          “We are in danger of producing an educated proletariat. That’s dynamite! We have to be selective on who we allow to go through higher education.”

          — Roger Freeman, education advisor to Nixon

          1. Hamfast Ruddyneck

            Massa Freeman knew better than to educate us field hands, lest we get uppity.

            Disclosure: I’m almost white enough to be Casper, but then in the New Slavery, field hands come in every color of the rainbow.

    4. diptherio

      Damn, beat me to it. You gotta love an author who contradicts himself in the space of two paragraphs and expects no one will notice.

      The rest of the world is all over the place, with no obvious connection between a country’s level of inequality and its economic growth.

      So, there’s no connection, I see. But wait:

      What do we value more: growth or fairness? That’s a value judgment.

      Wait, so there is a trade-off and we have to choose one or the other? But, I thought there was no obvious connection between inequality and growth!

      Davidson is an ass, pure and simple. If he was half as smart as he thinks he is, he’d be twice as smart as he actually is.

  2. jake chase

    Thanks for the link. I thought the piece remarkably even handed almost progressive for the Times. All this on the one hand but then on the other hand vapidity, and a conventionally slanted history lesson, is pretty much all one gets from the best of newpapers on their best days.

    My major quarrel with the piece is that the issues it raises are irrelevant. Democratic government exists to serve the 99%. Whatever the impetus to elitist rent extraction that is supplied by technology, it could easily be diverted to satisfy the needs of actual people if our politics made this possible. They don’t.

  3. esb

    Financialization of everything is the principal cause of the noxious state of affairs in which we find ourselves.

    Regarding smartphones (or smarty-pants phones, as my significant other calls them), even they have been financialized, where the “price” paid by the postpaid user is simply a downpayment and the bulk of the total cost is financed with wildly excessive airtime charges.

    The poor suckers are often paying close to a thousand dollars or even more for a phone when the ultimate cost burden is fairly calculated.

    But we Americans love to be in debt, in every form possible, don’t we?

  4. jake chase

    I don’t own a smart phone. All you have to do is hold one in your hand to know the damn things are toxic. How many people have been run over and blind sided while playing with these toys when they should have been paying attention?

    The principal effect of these moronic devices is that ordinary cell phones are no longer available. If Steve Jobs were still alive I would enjoy planting one of these on him where the Sun don’t shine.

    1. craazyman

      No Jake you’re wrong!

      I suckered myself into a Smart Phone purchase a couple years ago and it wasted my time continuously for $80 a month until it did the smartest thing I can imaine — it lost itself at the beach while I was eating lunch.

      I don’t know how it did it. I’m not sure if this was an app kicking in or what. But it was impressive.

      Anybody can do what I did next. I went to Radio Shack and got a prepaid AT&T basic phone with $100 of minutes at 10 cents/minute good for 1 year, for $130 dollars including tax.

      No monthly bill. No extra charges. Nothing but the phone.

      No I’m on the bus staring out the window contemplating the universe, not waiting 45 seconds for a web page to load on the little screen, getting pissed off.

      Regarding the NY Times article, I don’t know what to make of it. Is it something about economics? It doesn’t have any interviews with poor people. That’s what usually derails these things.

      1. Hypothetical_Taxpayer

        “I don’t know how it did it. I’m not sure if this was an app kicking in or what.”

        The old “clamshell” type phones would dig themselves into the beach natively, but a smartphone needs a special software app to do it. Usually the phone mfg provides it as a freeware app.

        “I don’t know what to make of it. Is it something about economics? It doesn’t have any interviews with poor people.”

        One of the great successes of economics is that we no longer have poor people. They attribute this phenom to the invention of fiat currency. Worked everywhere in the world!

        1. craazyman

          Questions for Master Po

          Is equality good if everybody is rich at the same time but not if everybody is poor at the same time?

          can everybody be rich at the same time?

          almost everybody can be poor all at the same time, even in a big country.

          It seems like it’s easier for a nation to be poor than rich. I wonder why that is. You’d think it would be 50/50 assuming a normal probability distribution.

          1. LifelongLib

            One aspect of “rich” is being able to live without working, so it’s hard to see how everyone (or even a large percentage) of people in any one place could be “rich”.

            On the other hand, plenty of poor people work very hard, they just don’t get to enjoy the benefits. So you can easily have a place where most people are poor.

          2. Hypothetical_Taxpayer

            Master Po say “We are all rich in Sovereign Spirit – even tho we may be barefoot and smell like cow dung – and have silly nicknames like ‘Grass-shopper’.”

    2. Can't Help It

      That’s maybe true in Western countries. In Asia, non smartphone can still be found easily. In fact in the last 10 years, my cell phone has gotten cheaper and dumber. 7 years ago I purchased a Motorola Razor. Now I have a super basic Nokia model. My bosses tried to give me a BlackBerry. I think I “lost” it in a local canal the week after….

      Definitely not the point of this thread. Just replying to the post above that’s all.

  5. brian t

    Are the objections to SBTC in general, or to Adam’s reading of it? He is a *reporter*, after all, not one of the economists he’s quoting. My first reaction to the piece was “here we go, more American Exceptionalism”, so I give MIT’s Frank Levy for looking at other countries for comparison.

    I don’t find Davidson’s reporting particularly offensive here, but then I have been listening to “Planet Money” for years now …

    1. from Mexico

      You evidently missed this zinger by Davidson: “As the financial crisis wanes…”

      That’s not “reporting.” That’s fiction, concocted and proseltyzed by the lords of capital and their paid liars and bumsuckers.

      1. Brindle

        That jumped out at me too, “As the financial crisis wanes”—-could only be written by one on the side of the victors. Or whose only conversation are those who well off.

        Davidson comes off as someone whose only interaction with those who might be struggling are his maid/housecleaner and maybe those who he tips at restaurants.

    2. diptherio

      And what does Levy (or Davidson, it’s hard to tell which) have to say about those other countries? Among other things:

      Greece, Spain and Portugal have so thoroughly protected their workers that they are increasingly unable to compete in the global economy.

      Really! See, I thought those country’s economic woes had to do with the fallout from the GFC and asinine austerity policies. But it’s really just that their workers are “too protected.” I wonder if they know that.

      For the record, when anyone talks about making workers “compete in the global economy,” what they mean is reducing worldwide labor conditions to those found in “Third World” countries. China and the Philippines are the standard for “competitive” workers.

      Davidson is a subtle propagandist, but not that subtle.

    3. rob

      adam davidson might just be a reporter,but his wide exposure is what makes his arrogant viewpoint backed by false assumptions,tough to take quietly.His reporting on NPR for years has been one of many reasons NPR is such a poor news source.After all, adam davidson was reporting on the end of the recession in mid-2009.
      Shills like him are the reason so many people in the general population are so poorly informed, and so thoroughly mis-informed.

  6. from Mexico

    Adam Davidson regales us with a manifesto of trickle down theology. It’s one of the cornerstones of neoliberalism. And as Carlos Fuentes explained in A New Time for Mexico:

    It is worth recalling that the prefix neo is particularly well suited to this doctrine, which already had its chance in Latin Amrica during the last century. Throughout the nineteenth century, Latin America followed the precepts of laissez-faire and the magic of the market… Powerful economic elites emerged from Mexico to Argentina. The hope was that the wealth accumulated at the top would sooner or later find its way down to the bottom. This did not happen. It has never happened. Instead, the wealth generated at the working base found its way to the top and stayed there.

    What is always conspicuously missing from these trickle down fairytales, such as this fine example spun by Davidson, is the elephant in the room: state violence. This is due to another of the fundamental tenets of neoliberalism, and also the liberalism that preceded it. What we have is the pious devotion to the fiction that state violence plays no role — no, doesn’t even exist — in “free” market economies. Here’s how Jonathan Schell puts it in The Unconquerable World:

    The early champions of the free market, most of them British, had in fact looked to industry mainly to create the wealth of nations, as the title of Adam Smith’s classic book had it, not the power of nations, which had been the preoccupaton of their mercantilist predecessors. The advocates of laissez-faire declared the independence of economics from state power. (The eventual coining of the word “economics,” identifying a distinct realm of human activity subject to its own laws, was one sign of their faith in that independence.) The market worked best, the worldly philosophers of the late eighteenth century believed, when the government kept its hands off.

    However, the market Utopia, just like Erewhon, is nowhere. The government didn’t keep its hands off. It never has.

    But in neoliberal fairy tales, theology trumps reality. And so the rise of the US police state that went hand-in-glove with the rise of the “free” market simply doesn’s exist in neoliberal fairyland. Its existence, however, is amply illustrated in this graph:

    “What happened in 1980? — Incarcerated Americans 1920-2006”

    That graph, however, tells only half the story of the rise of the US security state. The other half of the story comes about due to the growing devotion to the theology of full spectrum dominance — “imposing the rule of law, property rights and other guarantees, at gunpoint if need be,” as Max Boot so candidly put it. Andrew J. Bacevich explains further in The Limits of Power:

    A new national security consensus emerged based on the conviction that the United States military could dominate the planet as Reagan had proposed to dominate outer space. In Washington, confidence that a high-quality military establishment, dexterously employed, could enable the United States, always with high-minded intentions, to organize the world to its liking had essentially become a self-evident truth. In this malignant expectation — not in any of the conservative ideals for which he is retrospectively venerated — lies the essence of the Reagan legacy.

    1. knowbuddhau

      from Mexico:

      What is always conspicuously missing from these trickle down fairytales, such as this fine example spun by Davidson, is the elephant in the room: state violence.

      O brother! my Brother painter, yes, indeed, the distinction, between neoliberal economics and state violence, is an illusion. Thanks for succinctly stating my biggest beef with discussions of economics.

      So much of it buys into the false dichotomy between “Mr. Market” and his brother-in-arms, “Uncle Sam.” Mr. Market could not have raped Chile without the state violence provided by Uncle Sam. That shock-doctrinaire model has since been exported around the world, including right here at home.

      According to Naomi Klein, Nixon brought in Friedman, who brought in his notorious Chicago Boys, but even Nixon knew that Friedman’s policies would cost him the election.

      So the importance of the University of Chicago Economics Department is that it really was a tool for Wall Street, who funded the University of Chicago very, very heavily. Walter Wriston, the head of Citibank, was very close friends with Milton Friedman, and the University of Chicago became kind of ground zero for this counterrevolution against Keynesianism and the New Deal to dismantle the New Deal. So in the ’50s and ’60s, it was seen as very, very marginal in the United States, because big government and the welfare state and all of these things that have become sort of dirty words in our lexicon thanks to the Chicago School — they didn’t have access to the halls of power.

      But that began to change. It began to change when Nixon was elected, because Nixon was very close with Milton Friedman, although Nixon decided not to embrace these policies domestically, because he realized he would lose the next election. And this is where I think you first see the incompatibility of these free-market policies with a democracy, with peace, because when Nixon was elected, Friedman was brought in as an adviser — he hired a whole bunch of Chicago School economists. And Milton Friedman writes in his memoirs that he thought, you know, finally their time had come. They were being brought in from the margins, and this sort of revolutionary group of these counterrevolutionaries were finally going to dismantle the welfare state in the USA. And what actually happened is that Nixon, you know, looked around, looked at the polls and realized that if he did what Milton Friedman was advising, he would absolutely lose the next election. And so, he did the worst thing possible, according to the Chicago School, which is impose wage and price controls.

      And the irony is that two key Chicago School figures, Donald Rumsfeld, who had studied with Friedman as a sort of — I guess he kind of audited his courses; he wasn’t enrolled as a student, but he describes this time as studying at the feet of geniuses, and he describes himself as the “young pup” at the University of Chicago — and George Shultz were the two people who imposed wage and price controls under Nixon and when Nixon declared, “We’re all Keynesians now.” So for Friedman this was a terrible betrayal, and it also made him think that maybe you couldn’t impose these policies in a democracy. And, you know, Nixon famously said, “We’re all Keynesians now,” but the catch was he wouldn’t impose these policies at home, because it would have cost him the next election, and Nixon was reelected with a 60% margin after he imposed wage and price controls. But he unleashed the school on Latin America and turned Chile, under Augusto Pinochet, into a laboratory for these radical ideas, which were not compatible with democracy in the United States but were infinitely possible under a dictatorship in Latin America. [The Shock Doctrine: Naomi Klein on the Rise of Disaster Capitalism.]

      What Nixon was afraid to do, George W. Bush and his crew of re-treaded Shock Doctrinaires of the Chile era, did, first to Iraq, then to us. We’ve had one manufactured crisis after another; seen the advent of blanket, warrantless spying on all of us; and even the use of assassinations and torture against US citizens. Anwar Al-Awlaki was killed to set a precedent; Bradley manning, and a host of other political prisoners, like Mumia Abu jamal and Leonard Peltier, are being slow-roasted alive to keep the rest of us in line.

      Klein’s words, from 2007, are prescient. Pardon me for quoting her at length.

      NAOMI KLEIN: Yeah, and, I mean, this is — we see these layers of continuity. I mean, Paul Bremer was the assistant to Kissinger during the Nixon administration when the support for Pinochet was so strong. So you have all of these layers of historical continuity. And, you know, that’s why, I guess, my motivation for writing the book was — there has been no accountability for these crimes. And in Latin America, there have been truth commissions, there have been trials. The people who were at the heart of this very violent transformation, many of them have actually been held accountable. Not all of them, but many of them have actually been held accountable, if not in the courts, then certainly in a deep and important public discussion of truth and reconciliation. But this country, that has never happened, despite the fact that there has been a great deal of wonderful investigative reporting. And because there has never been any accountability, the same players are really at it again.

      AMY GOODMAN: Talk about, Naomi Klein, the destruction of Iraq. Talk about “Shock and Awe,” the shock economic therapy of Paul Bremer, the shock of torture, as well, putting them all together in Iraq.

      NAOMI KLEIN: Yeah, well, as I said, you know, in Chile we see this triple-shock formula and torture as an enforcement of these policies. And I think we see the same triple-shock formula in Iraq. The first was the invasion, the shock-and-awe military invasion of Iraq. And if you read the manual, the military manual that explained the theory of shock and awe — a lot of people think of it as just like a lot of bombs, a lot of missiles, but it’s really a psychological doctrine, which in itself is a war crime, because it says very bluntly that during the first Gulf War the goal was to attack Saddam’s military infrastructure, but under a shock-and-awe campaign, the target is the society writ large. That’s a quote from the shock-and-awe doctrine.

      Now, targeting societies writ large is collective punishment, which is a war crime. Militaries are not allowed to target societies writ large; they’re only allowed to target military. So this was — the doctrine is actually quite amazing, because it talks about — it talks about sensory deprivation on a mass scale. It talks about a blinding, cutting off the senses, of a whole population. And we saw that during the invasion, the lights going out, cutting off of all communication, and the phones going out, and then the looting, which I don’t actually believe was part of the strategy, but I think doing nothing in some ways was part of the strategy, because, of course, we know that there were all kinds of warnings that the museums and libraries needed to be protected and no action was taken. And then you had the famous statement from Donald Rumsfeld when he was confronted with this: “Stuff happens.”

      So, it was, I think — it was this idea that because the goal was, in New York Times columnist Thomas Friedman’s famous phrase, not nation-building, but “nation-creating,” you know, which is an extraordinarily violent idea, if you stop and think about what it means to create a nation in a nation that already exists, something has to happen to the nation that was already there, and we’re talking about a culture as old as civilization. So I think that because there was this idea that we were starting from scratch and this idea that is often portrayed, you know, in the US media as idealistic, of wanting to build a model nation in the heart of the Arab world that would spread to neighboring countries and lead to an opening up, this idea of building a model nation is — you know, it has all kinds of colonial echoes. It really can’t be done without some kind of a cleansing. And so, I think that the ease, the comfort level with the looting, with the erasing of Iraq’s history, has to be seen within that vision of, OK, well, we’re starting over from scratch. So anything that’s already there is really just getting in the way. So if it’s loaded onto trucks and it’s sold in Syria and Jordan, that sort of just makes the job easier. And so, I think we saw that on many, many levels.

      AMY GOODMAN: Naomi Klein, how does Abu Ghraib fit into this picture?

      NAOMI KLEIN: Well, I quote Richard Armitage in the book, saying that the theory — that the working theory in Iraq was that Iraqis would be so disoriented by the war and by the fall of Saddam that they would be easily marshaled from point A to point B. Now, as we know, that was not the case. And as Paul Bremer — when Paul Bremer rode in and did his radical country makeover, fired the entire Iraqi — much of the Iraqi civil service, as well as the army, declared Iraq open for business, cheap imports flooded the country. Iraqi businesses couldn’t compete. That first summer, there was a huge amount of peaceful protest outside the Green Zone, and it became clear that it was just simply not going to be possible to marshal Iraqis from point A to point B.

      And it was after that, when the first armed resistance emerged in Iraq, that the war was brought to the prisons. And this also comes back to Donald Rumsfeld’s vision of being this sort of CEO Defense Secretary, because, of course, like any CEO, he understaffed the war. And he was not in a position, or the US occupying force was not in a position, to deal with this drastic miscalculation and this sort of fantasy that Iraqis would just behave and accept this economic shock therapy and this — really this looting of their country. So when Iraqis began to resist, the suppression of that resistance couldn’t take place in the streets, because there simply wasn’t the person power.

      So people were rounded up and brought to the jails, and torture was used, as it was in Latin America, to send a message to the entire country. And torture is always — it’s both private and public at the same time. And this is true no matter who is using it, that for torture to work as a tool of state terror, it’s not just about what happens between an interrogator and a prisoner; it’s also about sending a message to the broader society: this is what happens if you step out of line. And I believe torture was used by the US occupation in that way, not just to get information, but also as a warning to the country. [The Shock Doctrine: Naomi Klein on the Rise of Disaster Capitalism.]

      As abroad, so at home.

      In Klein’s other magnificent appearance on Democracy Now!, she delivers a speech at the University of Chicago called, Wall St. Crisis Should Be for Neoliberalism What the Fall of the Berlin Wall was for Capitalism.

      Yes, it should have been, but it hasn’t, and it won’t. Why?

      Because, just as with Nixon’s betrayal of Friendman, and GWB’s more recent betrayal of market fundamentalism (by bailing out the so-called “free market”), neoliberalism is the plastic dogma, that will be shoveled by paid shills and useful fools, to serve the purposes of full-spectrum dominance. It’s not about constructing a theory that has robust external validity; or applying best-known standards and practices to promote the general welfare; it’s about the dominance.

      Full-spectrum dominance means the ability of U.S. forces, operating alone or with allies, to defeat any adversary and control any situation across the range of military operations. [Joint Vision 2020 Emphasizes Full-spectrum Dominance.]

      To the wannabe war gods and high priests of economics that infest the upper echelons of our government and corporations (as if there were a bright line between them), everything under the sun falls in the category of “range of military operations.” War, in the form of kinetic actions or shock-doctrinaire manufactured economic crises (can we say, “fiscal cliff”?) is their sick and twisted way of being human in the world.

      It would behoove us to stop talking about neoliberal economics and state violence as if they have nothing to do with each other. Even Friedman himself knew that you can’t have the former without the latter.

      1. from Mexico

        …neoliberalism is the plastic dogma, that will be shoveled by paid shills and useful fools, to serve the purposes of full-spectrum dominance. It’s not about constructing a theory that has robust external validity; or applying best-known standards and practices to promote the general welfare; it’s about the dominance.

        I, too, don’t don’t see anything to neoliberal theory other than layer upon layer of hypocrisy and irony.

  7. AbyNormal

    i value growing wealth for the few
    i value fairness in destroying wealth for all
    typical box thunking of a schmuck

    my 1st experience with a ‘smarter phone’:
    on night my teen thought she’d get cute by texting me from her friends new smart phone. it was raining an she was due home in an hour, her text read…

    Mom Im at Drunken Donuts will drive home safely.I Lu!

  8. Nell

    You can read a critique of Autor’s argument on the effects of technology on income equality here.
    Bottom line – Autor’s theory of job polarization can just about account for divergence in employment share between low-skilled, semi-skilled and highly skilled in the 1990’s. The rest is down to policy decisions that favour the powerful and the wealthy at the expense of the majority of the workforce.

  9. Jane

    Found it interesting the piece was full of quotes, assertions, and a conclusion and not one piece of evidence in support of the SBTC theory.

    If the rise in inequality is primarily due to SBTC, wouldn’t the rise be at approximately the same rates for all developed countries? Yet Europe, Canada, Australia, and even Russia, all have less income inequality than the US. Meanwhile Mexico, a large part of South America and South Africa have an even larger gap. [ ]

    If, to quote Autor ‘Inequality was merely a side effect of the digital revolution…’, who knew the US was so far ahead of the developed world and that Mexico, South America and South Africa must even further ahead, digitally speaking that is.

  10. skippy

    From 1988 to 1992 Davidson studied for a B.A. in religion and the humanities at the University of Chicago. Davidson has been criticized for accepting lucrative speaking engagements sponsored by banks while providing favorable coverage of those banks on the Planet Money podcast.

    skippy… Daniel Schorr rolls in his grave…

    1. diptherio

      I’m pretty sure the only religion courses offered at Univ. of Chicago are things like:

      Luciferianism 101: It’s All About You

      Wool-Pulling 251: Quoting Scripture for Your Own Purpose-Intro to Biblical Sophistry

      Acting for Religious Studies Majors 303: Pretending to Believe Your Own BS

      Televangelism 460: Advanced Fundraising Methodology

      1. AbyNormal

        +50 / 10 for one to grow on’)
        (im starting to feel a slight guilt for all my *much needed* laughter this morning)

      2. jake chase

        At the (Rockefeller) University of Chicago, Religion means the world according to Milton Friedman.

        The only text is A Monetary History of the United States. The trick is to finish it within four years. There is no exam. You aren’t allowed to read any other books, and if someone catches you…whipping the first time, no desert the second time….

        1. Ms G

          To be fair, memorizing the Milton Bible-Manifesto from cover to cover may well take 4 years. Though with Davidson, it seems probably that he would have had to apply for a waiver. Because Adam Davidson is an unctuous dimwit.

  11. Larry

    This right here is infuriating:

    Davidson: On the other hand, Greece, Spain and Portugal have so thoroughly protected their workers that they are increasingly unable to compete in the global economy.

    That’s such a typical conventional wisdom line that gets accepted all the time in places like the NYT. Greece, Spain, and Portugal made a pretty big mistake hitching their wagon to the Euro. One could argue they might be fairly competitive if they could devalue their own currency.

    1. YankeeFrank

      Aside from the currency-issuer question, which is a much more important issue than any stupid “worker-protecting” meme he wants to push; if only those nations had let their banks fail instead of moving their balance sheets onto the government they’d be fine as well. The lies this asshat throws around are almost too numerous. Every line is full of garbage, either in its perspective, its straw-man arguments, its flawed logic or its facile and dubious grasp of reality.

      The man was shredded by the Shame project very well. Anyone who has read that and still thinks this guy is worth listening to at all is an idiot or a neoliberal tool. I swear he’d be on my virtual against-the-wall list but he’s too small-beer. Well, maybe if the revolution can be extended a little… he could be in the third round.

    2. Ms G

      Infuriating — exactly.

      One of the core tenets of Neo Liberalism: a Humane Society is an obstacle in the path of Kleptocratic Looters and their lackeys.

  12. Alan Honick

    For Davidson to pretend that the sketchy and misleading evidence he presents in the body of his piece somehow sets up his ultimate question, “What do we value more: growth or fairness?” –– to pretend that he has actually made the case that this is the choice we face––seems the height of self-deception and intellectual dishonesty.

    It’s like a magician who attempts some impressive feat of legerdemain, but fails to notice that his pants have fallen down, and the audience is snickering.

  13. Tom

    It is clear that Micheal Hudson’s view on the mechanics and history of economic development and practice are spot-on. To me, it is obvious that the economy is based on an ever crumbling foundation and superstructure. In addition, the foundation and superstructure themselves were ill conceived and deficient when built. Rapidly accelerating the process is the ever increasing corrosive activities of fraud, abuse and special privilege. Perpetuating and feeding the economic deterioration, a decreasing minority is increasingly pouring corrosive acid upon the edifice. This economically extractive cartel is increasingly consolidating and fortifying their position using any means necessary. One would think the cartel are preparing a defensive position during a battle rather than settling their conquests.
    In my view, clear reasons exist for battle between the cartel and the non-cartel groups. Each combatant clearly supports it’s position and, are hardening for the conditions that will cause one side to surrender. I do not see truce as an option. To me, a truce would be based on mythology and a deliberately influenced and compromised foundation. Overwhelmingly, the corruption and influence has been from the rent extractive minority. I think a truce would result in the same millennia long path of self destruction and deprivation we have maintained throughout human history. A common goal and understanding may be found in our constitution. I can only buttress my view through my brief study of the many examples throughout history: a record of folly endured repeatedly by the majority surrendering to tyranny. Importantly, the battleground has not matured too the ground in armed conflict, but remains, for now, in the minds of men. (Highly debatable)
    What would each combatant’s legacy be for future generations? If history be the measure then, looking back upon the legacies of history would be instructive going forward.
    My own hovel of knowledge instructs me that, mankind has never prevented the rise of the economically extractive cartels (the kings, tyrants, tyranny, dictatorships, predation etc) nor have the economically extractive cartels ever maintained dominion. No side has ever won and, each side has enjoyed short term respites. My shanty of history informs me that destructive dominion has enjoyed far greater respite.

    The economic cartel wants the following status quo if they win:
    Extract rent at a pace that will maintain domestic tyranny, cripple justice, erode the general welfare, oppress insurrection and maximize profit for the common defense with minimal effort.
    The rent extraction cartel has yet to realize the proper balance needed to maintain smooth operations. One reason they cannot achieve balance is the command and control architecture they employ. Democracy is incompatible with tyranny and those vying (free market mythologists) to achieve supremacy.
    Both the extractors and the creators continue to compete amongst themselves to check-mate the opponent’s king in a never ending stale mate game. The extractors continue to cheat, argue, insist and coerce the creators into the belief that the game can be won – if, of course, they are allowed to change the rules, that is, – the big rules of facts, reality and history. They proclaim the impossible in order to maintain dominion. They claim tyranny will water the flower of freedom.
    Any tyranny only exists with the consent of the oppressed. Permutations of this fact could be read as: Tyranny only exists with the consent of what the oppressed believe they deserve.

    The economic non-cartel wants the following if they win:
    We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    Yea, I know… cliché but, it ain’t.
    Because the parasite of tyranny is growing within our body politic, we must eliminate that tyranny. The constitution was written with a clear direction in mind and runs opposite to most of what the rent extractive cartel desires…supremacy. The rent extractive cartel have clearly demonstrated that their beliefs are clearly at odds with the constitutional intent through deeds, actions and results.

    Maybe it is time to get brave and reclaim our heritage. I believe we are at war – a war between the rent extractors and those they attack for sustenance. Some quotes from folks are informative.

    “To sin by silence when they should protest makes cowards of men.” – Abraham Lincoln

    “If a nation expects to be ignorant and free, it expects what never was and never will be … The People cannot be safe without information. When the press is free, and every man is able to read, all is safe.” – Thomas Jefferson

    “America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” – Abraham Lincoln
    “A highwayman is as much a robber when he plunders in a gang as when single; and a nation that makes an unjust war is only a great gang.” -Benjamin Franklin
    “No protracted war can fail to endanger the freedom of a democratic country.” -Alexis de Tocqueville
    . “War against a foreign country only happens when the moneyed classes think they are going to profit from it.” -George Orwell
    “A state of war only serves as an excuse for domestic tyranny.” -Aleksandr Solzhenitsyn
    “It is a universal truth that the loss of liberty at home is to be charged to the provisions against danger, real or pretended, from abroad.” -James Madison
    I would add that the current war is against an internal and external enemy – the cartel of rent extractors and compound interest employed by them.

  14. Tony Arko

    Saying a smartphone causes income inequality is like saying boxcutters caused the World Trade Centers to burst into flames.

  15. Susan the other

    Here’s an example of the logic of growth for its own sake: (I didn’t read the article, just the headline) The Japanese are building a nuclear energy plant on site to provide the energy to process Canadian tar sands.

  16. duffolonious

    Besides the “growth or fairness – pick one” BS, I fear that the tech-creates-inequality diatribe will be more and more prominent to deflect criticism from the 0.01%’s policies.

    While there is anecdotal evidence that tech does appear to be displacing people out of the middle class, I still think the numbers are quite small.

    And as for the uber-professional thing works. In programming (my area) being 10x the programmer as someone else may translate to 1.25x the income (again anecdotal); so I would conclude that most income goes to the top of those companies. So in the US it feeds both directions – less-skilled employees get the shaft, the professionals get minor gains (and only in the lucky fields); and the top wins again.

    It would be nice if he narrowed is focus and didn’t just throw out conjecture to further Agnotology in inequality.

  17. Max424

    Greece, Spain, and Portugal have dumb workers and they’re doing really crappy.

    Germany and Finland have smart workers and they’re doing super great.

    Got it.

    Note: Lily white workers of Ireland, you weren’t mentioned, probably because you’re not dark, swarthy types from the lower Mediterranean, but you must be a bunch of dumb turds too, because your economy has gone to sh-t.

    Note II: France! I didn’t forgetcha. How you doing? You are in deep recession, Froggies. Painful, isn’t it? Well, I submit, it is the result of having too many unproductive retards and morons sucking on you famously generous, governmental tit.

    Impose austerity on the stupid bastards. Make the choice, get smart or die.

    Remember, the more brilliant your thinned-out workforce, the more your economy roars!

    1. Tom

      Max424 – I would submit that your “unproductive retards and morons sucking on you famously generous, governmental tit” are the highest paid rent seekers and the captains of the financial industry. So yes, “Impose austerity on the stupid bastards” …..just make sure you are talking about the proper people.
      From your quaint little diatribe… I will make some assumptions about your integrity.

  18. diptherio

    I think the major goal of Davidson’s work, both in print and on the radio, is the confusing of issues and the confusing of his audience.

    Is extreme inequality bad? Gee, economists can’t agree, so I guess we don’t really know. Here’s a bunch of competing claims that you have no way of parsing. See, it’s complex. Inequality might be bad, and it might be good, we just don’t know for sure, but rest assured that people way smarter than you are on the case.

    Meanwhile, he repeats the easy generalizations of the economics discipline in general (so maybe he can’t be held solely responsible for this). Increasing GDP (growth) is good; stagnant or falling GDP is bad. Not mentioning, of course, that all kinds of things can lead to “growth,” many of them not at all desirable. Did your insurance rates just go up? Great! That means you just increased GDP and helped our economy grow, isn’t that wonderful? Maybe your kid just got cancer…excellent, his medical and funeral expenses will add to our gross domestic product! And, of course, there’s nothing like a nice war to goose those GDP numbers. Three cheers for economic growth!!!

    The point is that “economic growth” is so broadly defined as to be absolutely useless as a metric for measuring social wellbeing. But Davidson, along with most economists, is content to ignore this uncomfortable truth and continue discussing “growth” as if it actually means something (or means something positive, at any rate).

    And, of course, the capitalist structure of our economy is never questioned. I wonder if increased technology would lead to increased inequality if businesses were co-operatively owned and managed? Might it not be that, to the extent that technological advancement has led to increased inequality, that this has been caused by the private ownership of the means of production and the sole control over revenues granted to capitalist owners, rather than by some “natural” division of benefits based on the relative usefulness of various workers to society?

    I would argue that there is no necessary link between technological advancement and increased inequality. The former only leads to the latter in already unequal systems where the benefits of collective action flow (primarily) to private individuals.

    Tech isn’t the problem, capitalism is.

    I could go on and on, but I should probably do some other things today…

    1. bob

      ” is the confusing of issues and the confusing of his audience.”

      His pimp, Ally, is of course his teacher. What is Ally? Ally is what is left of GMAC. GMAC is the neoliberal singularity.
      “We don’t even make cars anymore, the overhead is enormous. Through out reserch, we determined that it’s much more profitable to only sell loans.”

  19. Gladys (Peter Pinguid's research assistant)

    Gladys here. Peter Pinguid’s research assistant. My assignment is to follow Adam Davidson around, then file a report at the end of each day.

    So yesterday I followed him to the Wendy’s on 505 Utica Ave, Brooklyn.

    Standing behind Adam at the Wendy’s counter, I pushed the button on my iPhone voice recorder and recorded this conversation:

    Adam Davidson: “Today I’ll have a great Biggie.

    Wendy’s employee: “Sir we no longer call the 42 ounce drink a great biggie. We stopped calling it that in 2006, now it’s called “river of icy-cold refreshment.”

    Adam Davidson: “Whatever. I’ll have that. Usually I just have a small, and refill. Why pay more? But today I need a Biggie inside me. Some days, I guess, are like that. Only a great Biggie will do. You wake up and you know: today I will get a great Biggie and I will put it inside me and I will feel better. One time I saw a guy with three great Biggies at once. I wondered not about so much about him but about what it is that holds me back.”

    Adam took his great Biggie and spotted a beautiful woman sitting at one of the tables with a Biggie. Nothing else — just a Biggie. She sat alone; she seemed like she was waiting for someone.

    As Adam walked up to her, I pressed the voice recorder button.

    Adam Davidson: (speaking to the beautiful woman): “What lucky soul could make a beautiful woman with a Biggie wait? Who has that kind of power? What person would a beautiful woman with a Biggie find attractive? Only one answer makes sense to me: Planet Money co-founder and New York Times columnist Adam Davidson with a great Biggie!”

    The woman told him to piss off.

    Still overall, things went better than the last time I followed Adam Davidson to Wendys. At that time was very high on something and could not speak at the register. He kept stepping aside for other customers and staring hard at the menu. He appeared to be overwhelmed by the chicken sandwich pictured there, but had not words for it. He kept saying “that one….that one….the man dressed like a woman”.

    But the Wendy’s employee just ignored him.

    It’s hard to get served when one understands the signifier as a process.

    And then there was the time I walked into the women’s room at Wendys and found Adam there on all fours, his pants pulled down, doing things to a Frosty that I prefer not to describe on a family type blog, Frosty spilling all over the floor.

    When Adam saw me, he looked up and said: “This is the real rest of a drink’s thickness.”

    1. Gladys (Peter Pinguid's research assistant)

      I was thinking the same thing, this is nonsensical, absurd, I’m wasting my life. To me it’s a miracle that Adam Davidson’s name should last so much as a single day. I wish I had someone important to follow.

      But even if I were following someone important, there is no antidote against the opium of time. The winter sun shows how soon the light fades from the ash, how soon night enfolds us. Hour upon hour is added to the sum. Time itself grows old. Pyramids, arches and obelisks are melting pillars of snow. Not even those who have found a place amidst the heavenly constellations have perpetuated their names: Nimrod is lost in Orion, and Osiris in the Dog Star. Indeed, old families last not three oaks. To set one’s name to a work gives no one a title to be remembered, for who knows how many of the best of men have gone without a trace?

  20. matt

    If the whole point of the piece is the question “growth or fairness?” then clearly it’s meant to convince the unsuspecting reader that the two can’t coexist. In doing so, it reinforces the idea that anyone who makes it in our society does so because of their inherit superiority over everyone else. We either have economic growth–and therefore, some of us our permanently screwed–or we have fairness, and without the life high living standards of a first world society.

    Beyond that, the article was just dumb. I mean, the NYT could have paid anyone to fly out to San Diego, sum up the different points of view of Autor and Mishel, and then write a bland article that ends with “who’s to say what’s right and wrong?” Typical mainstream journalism, reporting the two sides (as they they see it) to a story withouth any real analysis.

    Interesting–or totally predictable–that the NYT didn’t mention Davidson’s links to Ally Bank. By links I mean, they pay his f**king salary.

    1. from Mexico

      Could it be that neoliberalism is in retreat, and Davidson is fighting a rear guard action?

      Earlier neoliberal apologists would never have conceded that equality = fairness. Their formulation was that inequality = fairness.

      Has Davidson fallen back to the Maginot Line of neoliberal defense in abandoning the inequality = fairness argument and arguing that equality = low growth? It seems to me that this position is equally as indefensible as the inequality = fairness position. But that nevertheless is the argument that Davidson is making.

      1. Ben Johannson

        I think dear Adam just isn’t that good a writer. I wouldn’t recommend reading significance into anything he produces; he’s just not that important in terms of the neo-liberal framework.

      2. Ms G

        “Could it be that neoliberalism is in retreat, and Davidson is fighting a rear guard action?”

        If only.

  21. trainreq

    Beyond the obvious fatal flaw, which is stated many times above, that we can only choose growth OR fairness, I wish to pick on a single claim attributed to Autor as “Meanwhile, computers and the Internet disproportionately helped people like doctors, engineers and bankers in information-intensive jobs.”

    The medical profession is still trying to determine how to leverage IT to serve anyone but the companies selling equipment and software. Spend some time in the medical system and you will see it is not computers which are driving many doctor’s increasing wealth.

    How is it that IT benefits engineers when it displaces many engineers via force reduction, much like the previously stated skilled craftsman. The same can be said for bankers, more can be done with fewer.

    Reducing workers necessary does not serve the stated professions, it serves the ownership/rentier class.

    One is left to believe that the value in the UC education is access, not critical thinking.

  22. JEHR

    I am sure all the following points have been made in the comments already, but this is what struck me:

    “Income inequality IS part of the financial crisis!”

    Inequality is not due entirely to technological change so much as fraud, fraud, fraud and more fraud by the banks for this crisis.

    So the only real skill is how to get rich?

    The government created inequality?

    Service sector jobs should be paying a living wage as everyone deserves to eat, have a roof and wear some clothing.

    Inequality doesn’t create or encourge corruption: corruption encourages and makes inequality possible.

    Rewarding only educated people who have greater access to technology is a stupid idea: How about that cabinet maker that builds beautiful wooden furniture that a machine (technology) could not reproduce?

    No, no, no, sir. The government does not have an impact on creating inequality unless it is co-opted by the bankers who do the corruption and create the fraud then lobby the politicians for their own purposes and that leads to their getting richer and the rest getting poorer. That is a value judgement too.

  23. JGordon

    Fundamentally I find this whole debate to be distasteful. Any economy that is premised on looting the rest of the world of its labor and resources can have neither fairness nor equality no matter how evenly the loot is distributed. Although admittedly it can have growth, at least until the resources start running out. Which is now.

    From sciencedaily — stratified societies weather resource scarceness better and spread faster:

    In stratified societies such as ours the wealthy always have enough to get by while the rest of us are just sort of left to go away. It’s interesting from an intellectual standpoint to see this going on in real time, just as the science hypothesizes that it will.

    Personally I’d prefer to secure alternatives to the tiny bit of scarce resources that the elites are after and not starve, but I suppose a lot of people do look forward to living in a Mad Max world where people are doing each other in over that last bit of peanut butter at the bottom of the bottle. But admittedly I’m a bit eccentric. Regardless, I’m growing enough food and capturing enough water not only for me, but for my neighbors too. We’ll have a nice little community going that’ll be able to defend against you Mad Max types.

    1. from Mexico

      What an odd bit of science. Social Darwinism is pulling a Freddie Krueger, having been revived from the dead.

      Evolutionary biologists have all but accepted that self-interest and group-interest are at odds with each other. Enhancing group fitness comes at a cost to one’s individual fitness. Groups can be adaptive only if their members perform services for each other, yet these services are detrimental to self-interest and are often vulnerable to exploitation by more self-serving individuals within the same group. Fortunately, groups of individuals who practice mutual aid, which have high levels of cooperation between their members, can out-compete groups whose members do not. According to evolutionary biologists who do not fall into the Darwinian fundamentalist camp, group fitness is enhanced by the success of the group in limiting exploitation and free riding, in checking runaway self-interest. Even the Darwinian fundamentalists accept that individual selection works at cross-purposes to group selection, but that individual, within-group selection easily prevails over between-group selection.

      Now come forth these researchers who argue that individual selection and group selection operate in concert.

      When it comes to the advocates of Social Darwinism and neoliberalism, it doesn’t get any better than that. It’s a win-win for the champions of unchecked greed and self-interest. As Bruno Amable explains in “Morals and politics in the ideology of neo-liberalism,”

      A conflict between the logic of individual rights and the principle of utility, which could be used to justify social-reformist state interventions, is inherent in classical liberalism. To avoid those social reformist temptations, social Darwinism put forward the notions that will later be at the centre of neo-liberal thought: struggle and competition. Social Darwinism, as Foucault (2004) and Dardot and Laval (2009) show it, is instrumental in shifting the focus of liberal thought from exchange, and the related notion of the harmony of interests, to competition and struggle among individuals. An important difference is that if everybody is expected to win in exchange, some may lose in competition. Social Darwinism proposes a social theory in which the struggle for existence is a struggle against nature that makes human beings compete with each other, for scarce resources at the very least. For social Darwinists such as Spencer, competition between individuals is seen as an evolutionary principle leading to the improvement not only of society but also of the individual, an element which is alien to the classical liberal thought of the eighteenth century. In social Darwinism, competition between individuals is seen as law of nature (Sumner, 1914) sanctioning the survival of the fittest. As a consequence, any attempt to lessen inequalities would amount to fostering the ‘survival of the unfittest’, ‘carrying society downward’ and favouring its ‘worst members’. It follows that state intervention and regulation would water down inter-individual competition and should consequently be kept to a strict minimum, if not prohibited altogether.

  24. Mike

    Technology, technology, technology. I’ve been reading and hearing about the role of technology since being forced to take boring econ classes in grad school at Columbia in the mid-90s. People focus on technology so they don’t have to focus on people. If they cared about people (meaning inequality), they’d talk primarily about people, rather than technology. Upheaval in Egypt…let’s talk about Twitter. Massacre in [insert city], let’s talk about guns. We have the most advanced military technology in the world. Blah blah blah. We can’t really say we are superior to inferior people anymore (obviously we still do though), so we just say we’re technologically superior because that depersonalizes the issue.

  25. John Lounsbury

    I’m late to this discussion so I’ll just add one more thing.

    The common discussion focuses on the “wealthy” having too much. That misses the point I think is most important: The middle class and the poor do not have enough.

    The resulting productivity gap (from weakened demand)gives us poor growth, much below economic potential.

    Davidson’s bias is supply side and therefore he misses more “demanding logic.” (Pardon my pun.)

    Bottom line: If you can assume that the wealthy “deserve” their wealth, and by and large I do, the thinking should be less on how to take from the wealthy and more on how to give opportunity to the less wealthy.

    I recently posted an Op Ed which focused on deficiencies in education which contribute to the problem:

    1. JGordon

      Yeah, you’re exactly right. How do you make poor people more wealthy? The answer is obvious: find ways of building wealth that don’t rely on the market economy and the government’s fiat currency (which is controlled and manipulated thoroughly by the wealthy elites to their advantage).

      The idea that wealth can only be built via fiat currency units is one of the primary drivers tearing our society apart. And those who figure that out early are going to be the ones who are best off in the new paradigm.

    2. from Mexico

      John Lounsbury says:

      Bottom line: If you can assume that the wealthy “deserve” their wealth, and by and large I do, the thinking should be less on how to take from the wealthy and more on how to give opportunity to the less wealthy.

      That talking point comes right straight out of the neoliberal playbook. As Bruno Amable explains in “Morals and politics in the ideology of neo-liberalism”:

      The whole concept of “equality of opportunity” is thought of as a substitute for the equality of outcomes, not a complement. Inequalities of situations are under such conditions expected to reflect the differences in merit and thus be justified with reference to the objective of individual autonomy, a major value in this perspective. The loser in the economic competition has had a fair chance; he or she is expected to be a good sport and gracefully accept defeat.

      The ethical content of such a policy is, therefore, central: an ethos of merit, effort and self-discipline that justifies inequalities of situations. The political dimension of the reference to principles of justice and individual merit is self-evident. The reference to justice and ethics makes it possible to reduce the political struggle to a debate about what is fair and unfair. If the competition is fair, so are its outcomes. The delegitimating of collective action towards redistribution is a political resource to be used in the construction of the cognitive framewithin which the political struggle will take place. The emphasis on the individual dimension of the social question is instrumental in making the emergence and recognition of a community of interests among the losers of the economic competition more difficult and contributes to keeping them in their position. Likewise, a social policy that only deals with individuals and not groups makes collective action more difficult.

      1. John Lounsbury

        Very good points.

        I might have done well to continue my (too brief?) comment. I am a strong believer in aggressive progressive taxation. I think it is no coincidence that strongest period of growth without excessive use of credit since WW II occurred during the period when the top income tax brackets were the highest.

        During the 1950s and 60s incomes rose across the entire spectrum and fortunes were made in equity more than in rents. Taxation affects behavior and rather than extract rents those building wealth did so by reinvesting profits to build a future equity position.

        Those with an extractive rentier mentality scream about punishing initiative with more progressive income taxes. I disagree. You are simply changing behavior from extractive to investive. That reduces consumption by the “higher earners” but increases consumption across all other segments of the population, maximizing economic returns on a macro scale.

        What is the bottom line for the wealthy? Over a full generation or more are they any worse off or better off? I really don’t know – it would be worth a study of hypotheticals. I am suspecting that the fat tail on the high side of income distribution might be more smoothed downward into the top 2% (or 5% or 10%) but the total wealth at the top might not be changed significantly.

        I would expect that the result of the less extractive behavior would produce a larger economy and from that more income and wealth opportunity down into middle and lower parts of the distribution.

        Is there a hypothesis to be tested? Does a less extractive system produce greater macro benefit? Is wealth extracted less efficient because of reduced market competition compared to wealth reinvested?

        I’ll just point out one thing to suggest why I suspect there may be affirmative answers to the questions. I’ll do it with another question:

        Which has more macroeconomic benefit: $1 billion spent on luxury toys or $1 billion spent on growing companies?

        1. Hugh

          It is never just about the money. We live in a kleptocracy. Great fortunes are not the result of merit. As Balzac wrote, “Derrière chaque grande fortune se cache un crime.” Gates did not earn his tens of billions. It was Americans workers who made Microsoft happen. It was government at all levels which provided the infrastructure to make it function, the educated work force he needed, etc. A tax code written by and for the rich multiplied his wealth. Gates only amassed his great fortune from stealing from everyone including his customers. Such absurd fortunes represent massive maldistributions of our society’s resources. The only way a Gates or Buffett or Soros can defend such indefensible wealth is by using it to buy power and control. They can only maintain it by unleashing a class war against the rest of us. If Gates had made $40 million out of Microsoft instead of $40 billion, he would still have been more than amply rewarded for his efforts. The question we need to ask as a society is how much is enough? We can have billionaires or we can have a fair and equitable society. We can not have both. Simply redistributing resources at the high end simply perpetuates the massive wealth inequalities that already exist. In our modern kleptocracy, behind every great fortune is a great pirate, a looter.

          Taxing, like spending, legislation, and regulation are always about social engineering. The question is why we should expect a destructive unproductive rentier class to change their ways their ways and engage in productive investments. It is rather like a policy of encouraging the French aristocracy under Louis XVI to do something similar. It is like expecting bank robbers to return the money. It is not going to happen.

    3. Glasshammer

      If you are in an unequal society and you are unable to use the market economy or the state to remedy the problem then education is/embodies all of your societal failings.

      But should education be the place where your society holds all of its sins?

      I am not suggesting that education needs no improvement but making it the linchpin of re-vitalizing our society might be asking too much. I find it hard to believe that a perfect system of education could overcome a failing market economy and a failing state.

      We know that our market economy plays a large role in determining the vale of labor and by extensions the value of being certified to perform that labor (what we frequently call education). And if our market economy is setting the value of education (because education is now a commodity) then it is not possible for education to set its own value.

      And if (as others have suggested) the state is simply a handmaiden to the market economy then it will simply comply with the markets determination of education’s value.

      We can enhance education all we like but we should admit to ourselves that at best all it can do is influence the market economy and the state. At some point we are going to have to deal with our problematic market economy and our powerless state.

  26. Trendisnotdestiny

    Paragraph 2 —–> Davidson obfuscation #1
    “As the financial crisis wanes, economist are shifting
    their attention toward a more subtle, possibly more
    upsetting crisis in the US: the significant increase
    in income inequality.”

    **** First, who says the financial crisis is waning? Secondly, this appears to me to be a Bernaysian strategy of unbinding (obfuscating the processes of privatization) as if the causal factors that lead financial crises are somehow separate of the causal factors that lead to income inequality.

    Paragraph 3 —–> Davidson obfuscation #2
    “Much of what we consider the American way of life
    is rooted in the period of remarkably broad, shared
    economic growth (1990-1978).”

    *** No mention of shared risk (Jacob Hacker’s work is relevant here) and how it has shifted onto unsuspecting and often unprepared groups by the neoliberal financial establishment via externalities/informational asymmetries.

    Paragraph 4 ——> Davidson obfuscation #3
    “These days, there’s a lot of disagreement about
    what actually happened during these years”

    **** Clearly ready to name Larry Mishel (EPI) by name the the first paragraph, but Davisons is pretty vague about lead stakeholders of financialization in this build up. If there is a disagreement, then make it clear. Allow us to be part of the argument and not just take your word for it.

    Paragraph 5 ——-> Davidson obfuscation #4
    “The standard explanation of this unhinging, repeated
    in graduate-school classrooms and in advice to
    politicians is technology change.” (SBTC)

    **** Not sure that this is the standard explanation for the elite’s wealth accumulation. I am sure we could all think of a few much more relevant (see Bill Black, Matt Taibbi, Chris Hedges, Gretchen Morgenson and beloved Yves Smith).
    The standard explanation for this unhinging is that this has been engineered over the last 40 years using a variety of tools (political, social, educational, and economic)

    Paragraph 7 ——-> Davidson obfuscation #5
    “Inequality was merely a side effect of the digital
    revolution, Autor said; it didn’t begin and end in

    **** I am sitting in utter awe of how easy it is for Davidson manufactures a faux debate here. As Chomsky has said previously(concision in the media is designed to create false debates/dichotomies in an attempt to distract from brazen tactics of dividing and conquering). The Mishel/Autor debate never happened, but it is reported as it did. Davidson’s inclusion of this is remarkable because of the absence dialogue. And then we get the awe-shucks Gary Becker credential (Nobel) as a voice of reason among two schlepps.

    Paragraph #8 ——> Davidson obfuscation #6
    “How are we to make sense of these competing claims?”

    **** I make sense from this by reading Edward Bernays’ book on Propaganda, but that’s just me.

    Davidson ends this piece with an ultimatum of sorts (using language like value judgment)to demand an answer to an arrogant dichotomy: growth or fairness? The critical thinkers of the world realize that these are not mutually exclusive and to sell them as individual products debases the conversation.

  27. Bingo

    Another confusing article from Adam Davidson, providing yet more evidence that his drivel ably serves a primary MSM goal – frustrate popular interest in economics and finance. This writer again uses his soapbox to complain about complexities posed by economics and finance, thereby adeptly cultivating resigned helplessness in readers.

    This article begins instilling confusion from the get go. The editorial choice of title, “Smartphone Have Nots” — likely a result of the intellectual snoozing intended by the writer — is a shorthand attempt to restate a common MSM message: employment levels reflect technology adoption/education levels. Instead, AD summarizes: “After all, when economists talk about technological innovation, they are thinking beyond smartphones; they’re usually considering innovations that affect production.” In the formulation of this deceptive title, the editor reveals a bias for the SBTC Theory. The title encourages readers to embrace sloppy thinking even though AD briefly alerts the reader otherwise.

    Then there is AD’s selectively citations of an OECD study into inequality and growth to assert inconclusiveness about an association between equality and growth. However, the OECD webpage summarizing this study ( ) evidences that public policy choices can be made to dually fuel growth and equality.

    Yet, despite telling readers to regard associations between equality and growth with suspicion, AD ends by throwing down the gauntlet, or more accurately, inviting us to “throw up our arms in resignation.” AD slyly exhorts us (or our political and commercial leaders?) to consider choosing either a path to growth or a path to “fairness.” (Incidentally, AD’s use of the term “fairness,” given his historical propensity to steer readers down blind alleys, seems intended to divert readers from using the more meaningful term, “inequality,” which he used liberally elsewhere in this article.) This final, dangling dilemma, so disconnected from the rest of the article, is the final blow to the hapless reader who is left to conclude that such deliberations are best left to others…or mere chance.

    This article also displays the willingness of AD to be a handmaiden for the MSM in distracting readers from pondering more critical ethical dilemmas such as: 1) whether financial “innovation” is more strongly associated with increased inequalities, 2) whether the financial crisis is associated with corruption and fraud, and 3) whether technological innovation (for economic growth) comes at the expense of robustness of ecological and biological systems.

  28. Glasshammer

    “On the other hand, Greece, Spain and Portugal have so thoroughly protected their workers that they are increasingly unable to compete in the global economy.”
    -Where did he provide the reader with evidence of this?

    “The rest of the world is all over the place, with no obvious connection between a country’s level of inequality and its economic growth.”
    -No evidence is given for this sweeping claim.

    “What do we value more: growth or fairness?”
    -And we end this article with the Either-or fallacy.

  29. optimader

    Who actually read past “As the financial crisis wanes… ” without feeling their time was being stolen?

    1. Glasshammer

      I knew I wasting my time when I read the title “The Smartphone Have-Nots”.

      “iPhoned In My Title” is not a strong opening message.

      1. Optimader

        “…“The rest of the world is all over the place…”
        -Fallacy of Composition While High On Cocaine”
        I wonder if the writer can expense it on his income tax as an unreembursed professional expense?

  30. Xelcho

    It seems we are provided with yet another strawman situation. This guy must have studied under George Bush Jr. As most declared economists, he seems to think his mission is to concoct a story that makes the status quo the best solution. Needless to say, he neglects to consider many facts and instead employs the economists favorite trick(s) of using select metrics and “theories” (untestable of course so not really theories at all, simply empty assertions based upon authoritative positions) to support their goals. Swill.
    As an engineer, I find this stuff boring beyond belief, no raw data used, no testing of the data, no peer review, no value. My god, it is so transparent and child-like that only the most gullible would believe any of it makes a wit of sense.


  31. Dan The Man

    “Too big to prosecute” is the “event horizon” or “the crossing of the Rubicon” for me. The emperor is not only naked, he has told us himself. 2+2 now equals 5 and slavery is freedom. I don’t know if NLP, hypnotism or autism is responsible but anyone who doesn’t get it now, never will. Discussing it at this point is tantamount to masturbation.

  32. rps

    After reading Davidson’s poorly written article, I can fairly summarize his myopic formulated hypothesis about growth and fairness:

    “Some circumstantial evidence is very strong, as when you find a trout in your milk” Thoreau

  33. rps

    “Meanwhile, computers and the Internet disproportionately helped people like doctors, engineers and bankers in information-intensive jobs”

    Toss aside the doctor insertion used to create a false broad based spectrum of users “helped” since doctors will tell you what a pain in the ass and time intensive process computers are as it takes away from patient care. The thieves hidden among the trio are the bankers and particularly MIT engineers who no longer use their knowledge to improve civilization, but are hired by the bankers and wall street to formulate convoluted financial game theories such as derivatives that triggered financial armageddon with a massive wealth transfer from the taxpayers to the financiers

    Let’s not forget the massive computer “glitches” and NASDAQ shut downs due to high volatile trading. Gotta love the solution for these computer geniuses: Kill switches aka pull the plug. Reuters: “Brokerage and exchange technology gurus generally endorsed the concept of deploying “kill switches” to stop computer errors before they can unleash havoc on the market, but they warned regulators on Tuesday to ensure they are not set off too easily….”

    Davidson should visit his proctologist to find out if there’s “help” for Chronic Douchebag

  34. rps

    “Gary Becker, a Nobel Prize-winning professor at the University of Chicago, who told me a few years ago that “inequality in earnings has been mainly the good kind,” meaning it rewards those people with the education and skills most needed, helping the economy.”

    I suggest Streets and Sanitation stop picking up Becker’s garbage for a month and see how that works out.

    1. Trendisnotdestiny

      Well said, Lambert! Your last sentence reminds me of an Andrew Mellon quote which amplifies your example of the difference between recognition of crisis and acting in a crisis.

      “In a depression, assets return to their rightful heirs.”

  35. Lambert Strether

    How about this one:

    … a more subtle, possibly more upsetting crisis in the United States: the significant increase in income inequality.

    1. “Subtle” to whom?

    2. Who said income equality was a crisis? Real wages have been flat for thirty years, and income inequality has steadily increased since then.

    (I’m guessing that what Adam means is that the political class is recognizing it as a “crisis” (that is, as a topic for content deliverables) but that’s not the same as being a crisis.

  36. Klassy!

    Glad it’s the good kind of inequality. Is that what they’re calling it now? Remember the quaint phrase “deserving poor”. Also, eyes on the prize, Gary– we’re all here on earth to help the economy.
    I guess you’d expect that from a guy from Chicago. Problem is, this fiction has been taken up by liberal elites and their minions too. Frankly, it is distressing to me how much they’ve internalized the bootstraps mentality.
    Here’s how the story goes. Some areas of the country are thriving in the new economy. Some are withering. Those that are thriving are full of young, educated and highly skilled workers. They have an open attitude and liberal values. These areas are rife with start ups powering their economy. They are attracted due to quality of life factors. Every podunk town in America need only to refashion themselves as a hipster heaven and they can thrive too. Attract these workers and good things follow.
    Here is the reality. Many, if not all of these areas are quite dependent on government spending. They are state capitols .They have FIRE sector firms. They have large state universities. They have large medical centers.
    Here’s the outcome. One example– My husband told me his firm was thinking of opening an office in a state that would pick up some of the payroll costs. What sort of scam was this? I had not heard of anything so brazen. I thought he was mistaken. But it was true. I looked it up. They actually stated that they would pick up a percentage of payroll for “quality jobs”– IT, film, biotech– that sort of thing.

    1. Ms G

      That’s a pretty outrageous expansion of the unforgiveable corporate “incentives” packages offered by starving municipalities and states. Meanwhile I’ll be that this particular state is busy shutting schools, hospitals; eliminating funding for sanitation and road work and state schools ….

  37. Francois T

    I just finished re-reading “Simple Heuristics That Makes Us Smart” Great book!

    Let me apply a simple heuristic right here. It won’t be as detailed and scientific as other readers who are more adept than I am at literary dress down of shills and lackeys, but I promise it’ll be short and brutal:

    It’s Adam Davidson –> Publication in a US mainstream media –> complex topic with values judgement –> It ought to suck to no end & Insult our intelligence.


    BTW, it this sound simplistic…behold! Such simple processes (based on extensive experience*) are used to help physicians select best procedures in cardiac emergencies. This ain’t no joke folks!

    Gee! That was fun!

    *and we, NC readers, already have extensive experience with shills, lackeys and others adepts of the Ben Dover Dogma.

  38. Lloyd C Bankster

    I already took care of Adam Davidson, and told about it in a comments to eXiledonline and this blog, on Aug 15, 2012. Nevertheless, here it is again, in case you missed it:

    So I decided to take NPR’s Adam Davidson out to Masa’s restaurant in New York. Told him it was a reward him for the excellent job he’s been doing on Planet Money.

    Told him Jamie, Bob [Rubin] and I had decided he can stay, for now at least. As long as he doesn’t get any funny ideas and step out of line. Like that Phil Donuhue anti-war nutjob once did over at MSNBC.

    Remember Phil? You’ll notice he’s not around anymore. A couple phone calls to the parent company took care of that little problem.

    Told him Masa’s owner is a friend of mine, so I’ll order for both of us.

    It will be a surprise.

    Adam responded, “Sir, yes sir. What time shall I be there?”

    So there we are sitting at Masa’s restaurant.

    For myself I ordered the usual: the fatty bluefin tuna tartare cloaked in osetra caviar, followed by a toro-and-caviar dish, then I proceeded to an elegant kaiseki-style preparation of sea trout in a shabu-shabu broth, followed by an indulgent bite of shaved summer truffles pressed onto sushi rice and I finished up with a grapefruit granité.

    To wash it down, I had a 30-litre double Nebuchadnezzar-size bottle of Armand de Brignac Midas Champagne (a special order made days in advance for the occasion and priced at $127,600). And yes, we’re talking a huge bottle here, weighing 99 pounds, it required two waiters to bring it out, however I didn’t offer a single drop of bubbly to Adam.

    Adam must have been expecting some kind of caviar dish as well, because he tried showing off his French, asking me “quel vin boire avec le caviar?” but instead I had the waiter surprise him with a Jack-in-the-Box Junior Bacon Cheeseburger along with a diet Mountain Dew.

    For desert, I had the waiter bring Adam an Oreo Milkshake, also from the Jack-in-the-box take-out menu.

    You should have seen the excited look on Adam Davidson’s face when the waiter brought out my order first, licking his chops in anticipation, followed by the crestfallen look of absolute devastation when the waiter served him his Junior Bacon Cheeseburger and Mountain Dew.

    So I told him: “Listen to me Adam. Like I said on the phone, you can stay at NPR. For now. But never forget this: you and all the others, Ezra Klein, Andrew Ross Sorkin, Roger Lowenstein, all of you, you’re nothing but cum-buckets for the 0.01 percent, you spineless piece of shit. And the funny thing about cum-buckets is how replaceable they are. Are we getting the picture here, Adam? Am I making myself clear?”

    “Now stop looking at me like that and eat your fucking burger.”

    Adam gulped, nodded that he understood, then nibbled on his cheeseburger.

    But you should’ve seen the look on his face when I told him that.

    Bootlicking, bowing, brownnosing, compliant, cowering, crawling, cringing, servile, slavish, sniveling, spineless, submissive, subservient, and sycophantic. All at the same time. In one look, he managed to express everything I like about NPR, Adam Davidson and the entire US media.


    1. Ms G

      One thing that particularly grated in this latest Adam Davidson grotesquerie was the use of words like “gee.” This Pinguid Lackey broaching the Great Inequality with “gee,” with this casual lack of urgency, as hundreds of thousands have and continue to experience devastation and degradation under the Pinguid Plan. Was this part of his training with Lloyd — was he told to talk about this subject as if he were having Sunday morning coffee with David Brooks at ski lodge in Colorado after the morning run?

      I think I know the answer. And how improbable would it be that Lloyd just made Adam watch the Third Man and listen to the Harry Lime speech (see Hugh’s post re Mary Jo White) eleventy twenty times until writing about Kleptocracy and its Devastations in the Key of “Gee” became second nature.

      1. Klassy!

        Yes Ms. G, the phrase “casual lack of urgency” describes so well the writing of Davidson and the like.

  39. Hugh

    What I find interesting is the recycling of the technology meme. This was used to supposedly explain high unemployment as “structural” and the result of skills mismatches. This was debunked because employment losses have been widespread, not just in technologically demanding niche industries. I think Krugman among others tried to resurrect this theme recently by invoking robotics, not offshoring, as the culprit. And now we have Davidson essentially singing the same tune but applying it to wealth inequality. I guess this is why all those tech savvy recent college grads have all found high paying jobs. /s

    In a kleptocracy like ours, the essence of all propaganda is the Big Lie, that is there is no kleptocracy. Wealth is earned, not stolen. And that for the vast majority of Americans who have lost out/been looted, their condition is their own fault or the result of an inexorable, impersonal and agentless process. So why does Davidson use a meme that has already been debunked? Because propaganda is not about the truth. It is about repetition. What is repeated becomes familiar. What is familiar begins sounding reasonable. What sounds reasonable is taken in whole or in part as being true. Davidson is not about winning any arguments. Simply by having what he says taken as an argument he wins and earns the pay he gets from his masters.

      1. JEHR

        Ray, I have learned to make a copy of my comment before hitting the “submit” button in case it disappears. Then I can repaste it into another comment box and try again. I have had many of my comments disappear, too, although not on this site.

  40. Ray Phenicie

    ‘As the financial crisis wanes, economists are shifting their attention toward a more subtle, possibly more upsetting crisis in the United States: the significant increase in income inequality.’ We are so fortunate to be on the waning side of the greatest depression since the last Great Depression. Is the writer referring to the unfortunate many who still no hope, who trod hopelessly forward, after lo- these five years since Wall Street decided to take us into the desert of funky debt obligated, faith based obscurantisms that being understood by none nuclearized the world economy? Those same-relegated to the lower denizens of society by the ones above in the stratosphere lined with sandstone and marble, those lower inhabitants who have no job, no healthcare, and who are only slightly more desperate than the millions with jobs but who have no health care and no financial future nor the likelihood of ever having a financial future-are they inhabitants of the land where a crisis is on the ‘wane’? Thanks be to the purified priesthood of the inner sanctum who may now go up and give offerings to the god of mammon for bringing us out of the land of the shadow of the financial crisis into the land of waning crises. Again, ‘as the financial crisis wanes?!’ Sorry, Mr. Davidson-show me if you can what you have to support that statement.

  41. Ray Phenicie

    ‘Inequality didn’t just happen, Mishel argued. The government created it.’ This is a provocative statement and one that I might tend to agree with except I know that the term government would need to replaced by extremely wealthy, well-represented, corporate-squid-controlled government. Replace government with business controlled and carefully controlled cartel and I’d be happy. Yes, I know I need to show that and for that I’ll have to refer you to an unwritten paper of mine or to G. William Dumhoff’s ‘Who Rules America?’

    This following statement by Mishel takes the cake and left me almost speechless for a moment; I’ll just end by saying ‘ Show me!’
    –The rise of networked laptops and smartphones and their countless iterations and spawn have helped highly educated professionals create more and more value just as they have created barriers to entry and rendered irrelevant millions of less-educated workers, in places like factory production lines and typing pools.–

    There are no automatic workings anywhere in an economy that is so carefully controlled as what we currently have. The overall gestalt of the statement seems to imply that something as massive as displacement just ‘happens.’
    I’d need clarification on how exactly irrelevancy is ‘rendered’ unless it is done by conscious decision making of a small coterie of power mongers in high places. Mr. Davidson goes through much in his short essay that needs unpacking on a larger venue but that statement needed, in fact demands, to be questioned somewhere and the best that we get, the high point of philosophical musings, occurs at the end of the essay in a Quixotic wringing of the hands: “What do we value more: growth or fairness? That’s a value judgment. And for better or worse, it’s up to us.”

    As many of the comments point out we may choose and very possibly obtain both. We are compelled, if we really care about economic, social, lawful and democratic justice to find a way to both grow the economy in a sustainable manner and do that in a way that fits within our time honored sense of justice and fairness. The fact that writers on the main portals of opinion distribution, those who have time to waste on trivialities, don’t perceive the need to seek a wider scope to their discourse, who see not one iota or glimmer of a way to gain an inspiring vision for a way forward, is a comment on the tragic end of our society. On a day that celebrates the life of one of the more inspiring dreamers to pass this way lately, I’d say that we are in a very sad point, a tragic arrival at an end game that is now playing out a vicious struggle for survival led by those who present false dichotomies as though the wisdom of the ages can be boiled out to a thin gruel so as to justify the elitist attitude that sneers at those who ask for more.

  42. Tyzao

    the article is crap — and pretty much says next to nothing, reminds me of a typical beat writer who is just trying to get something to press rather than print anything of substantial content

    Two or three comments:

    (1) it is interesting to see Frank Levy included here, who is a Prof in the DURP at MIT — his comments are pretty much right on, regarding Germany etc… It is nearly impossible to look at income inequality without taking into consideration its spatial dimension, which the article makes no reference to at all. North European cities are doing quite well at the moment, because they are integrated into the fabric of their larger governmental structure (vertical integration) and have excellent comprehensive and future plans. This roots back to the disconnect in American/English culture where the word “design” is interpreted only as a drawing and not also in terms of its concepts or “concept.” German and indeed nearly all continental European countries plan their cities and regions with much more thought to infrastructure planning, social services as well as basic/non-basic floor areas.

    (2) The so called “machine age” is just lumped into one category. I believe our current period is the third machine age, and is very different from earlier periods. There needs to much clarification regarding this point.

    (3) There is no reference to favelas, slums or other emblems which are indicative of income inequality. I would have expected there to be at least some reference or comparison to Brazil, which has been the poster child for income inequality and spatial segregation since the Cidade de Deus and much later. The comparisons to the USA are very useful, and even including the gun industry debate would also be helpful.

    Just saying technological change does or does not explain income inequality isn’t saying a whole lot of anything. In fact every modern movement related to human land/urban development since the beginning of time can be attributed to either (1) a technological innovation (2) a new ideology or (3) a sustained vernacular practice (Hanoi Walter-Kruft).

  43. Historicaecon

    “As the financial crisis wanes, economists are shifting their attention toward a more subtle, possibly more upsetting crisis in the United States: the significant increase in income inequality.”

    As if there is not connection between income inequality and the crisis.

    “Much of what we consider the American way of life is rooted in the period of remarkably broad, shared economic growth, from around 1900 to about 1978.”

    UMMM…. Unless you include the Great Depression, the soaring inequality of the 1920s and boom and bust madness of early 20th century capitalism. He seems to be trying to break the connection between American prosperity and the New Deal.

    “On the other hand, Greece, Spain and Portugal have so thoroughly protected their workers that they are increasingly unable to compete in the global economy.”

    So thoroughly protected them that the IMF is now running their economies.

    “Inequality has risen almost everywhere, which, Levy says, means that Autor is right that inequality is not just a result of American-government decisions.”

    Except that it rose everywhere because, essentially, America was forcing or convincing the world to adopt its system. America cannot be seen as essentially separate from the broader, global story.

    “Still, economists certainly cannot tell us which policy is the right one. What do we value more: growth or fairness? That’s a value judgment. And for better or worse, it’s up to us.”

    False choice, but still ours. He’s right there. It’s also a choice to listen economists in the first place. They have made abundantly clear that their discipline has little legitimate claim to the authority they have been given.

  44. Montanamaven

    What a bunch of baloney. Hugh is right. This piece is so sloppily written that its only real purpose is propaganda and not information or analysis.

    Germany is better than most for its workers because the workers made sure that Germany still makes the machines that make the machines. When we sold our machinists out and the machines that made the machines, we sealed our fate. Instead of an independent nation we have reverted back to a resource extraction colony. We have become a nation of looter/hoarders aka FIRE sector (Finance, Insurance and Real Estate)and those who serve them including stenographers like Davidson as a small elite and then the rest who are primarily flippers; flippers of mattresses, hamburgers, and sweaters on store racks.

    The Shock Doctrine has been going on since the 1970s. First tried here in the U.S. in NYC in 1975 when its debt to bankers led to city services being taken away and yet the people did not take to the streets. Boded well for more shock. The DLCer Carter started deregulation and it was a Democratic congress and Carter plus a Supreme Court decision “Marquette National Bank v. First of Omaha Service Corp” that jumpstarted the “legalization of usury” in the late 1970’s. (Read labor lawyer and historian Tom Geoghegan’s “Infinite Debt” in April 2009 Harper’s piece.) Geoghegan has real solutions for our problems not arguments between theorists.

    1. Tyzao

      I would like to read the Tom Geoghegan’s “Infinite Debt” but it does not appear to be open access — is there a way to read it without a DA slapping me with 30 years in prison? tks

      1. Montanamaven

        I don’t know how to do it. I have a hard copy and a pdf, but I don’t want Carmen Ortiz hounding me either. There is an interview with Tom on the article on “Democracy Now”.
        His book “Were You Born on the Wrong Continent?” is a great view of how Germany differs from the U.S. Geoghegan is a great story teller. His history of the US labor movement is “Which Side Are You On?” It’s as if you are sitting with a great Irish story teller at a bar. Wonderful writing.
        I will let my subscription to Harper’s lapse as it is not as good as it was when Silverstein and Hodge were there. But it is great to have access to all the old articles.

  45. ChrisPacific

    The howler in the last paragraph has been addressed already (most concisely by diptherio) so I’ll skip that. I think he did OK at presenting the different views on the subject from the conference, although I would have liked to see a little more critical scrutiny. The S.T.B.C. theory, for example, would more properly be called a hypothesis, in the sense that it bears all the hallmarks of being a “we don’t know why this is happening, but here’s the most plausible explanation we can come up with” argument. While these are pretty common in scientific fields, it’s important not to confuse them with theories, which by definition are backed up by a body of evidence. No evidence in support of S.B.T.C. was discussed in the article, I suspect because little or none exists. Looking at the data (as Levy suggests) would be a good next step, but it should be done with a view to proving or disproving the hypothesis, and not as a source of new plausibility arguments (Levitin’s speculations on the subject have nothing to do with the question at hand).

    A less obvious point I noticed was this section:

    These days, there’s a lot of disagreement about what actually happened during these years. Was it a golden age in which the U.S. government guided an economy toward fairness? Or was it a period defined by high taxes (until the early ’60s, the top marginal tax rate was 90 percent) and bureaucratic meddling?

    Leaving aside that this is a false dichotomy (these are more or less just descriptions of the same thing, with different spin applied) Levitin fails to explain why he has shifted from singing the praises of the early/mid 20th century to this equivocal view. We’ve heard nothing but good things about this period in the article so far – who thinks it was a bad thing? The answer is obvious – the 0.1% – and suggests an obvious explanation for why the country has moved away from that philosophy at the very time when its strongest opponents are enjoying an unprecedented level of power and political influence. The fact that Levitin completely misses this angle (which would be a strong point in support of Mishel’s argument, and certainly germane to the column) suggests that either he has unwittingly absorbed the perspective of the 0.1%, or he’s being disingenuous.

    1. ChrisPacific

      Ugh… For “Levitin” read “Davidson”. What a mistake. My sincere apologies to Adam Levitin if he reads this.

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