Class Warfare Blog

January 17, 2014

The Comprehension Problem of the Times’ Mr. Brooks

In an editorial in the New York Times today, Mr. David Brooks, one of the more palatable conservative commenters, took on income inequality. The editorial, entitled “The Inequality Problem,” addressed how we are going about addressing the problem the wrong way. Here’s a quote:

In the first place, to frame the issue as income inequality is to lump together different issues that are not especially related. What we call “inequality” is caused by two different constellations of problems.

At the top end, there is the growing wealth of the top 5 percent of workers. This is linked to things like perverse compensation schemes on Wall Street, assortative mating (highly educated people are more likely to marry each other and pass down their advantages to their children) and the superstar effect (in an Internet economy, a few superstars in each industry can reap global gains while the average performers cannot).

At the bottom end, there is a growing class of people stuck on the margins, generation after generation. This is caused by high dropout rates, the disappearance of low-skill jobs, breakdown in family structures and so on.

So, according to Mr. Brooks, wealth is accumulating at the top because: (a) things like perverse compensation schemes on Wall Street, (b) rich people tend to marry other rich people, and (c) superstars can reap tremendous profits of scale having global audiences. Apparently Mr. Brooks is unaware that perverse compensation schemes in Wall Street have been around for quite a long time, but taxing their billion dollar incomes at a 15% level has not. Prior to President Reagan, these incomes would have been taxed at the 70% level on the top earnings (and hence would probably not exist).

Apparently Mr. Brooks is unaware that the “inequality problem” is a problem of the last 35 years or so, making the marrying argument more than a little ludicrous, as how much wealth accumulates in one generation from “rich people tend to marry rich people” and, gosh, weren’t they doing that before?

Apparently Mr. Brooks, is unaware that Babe Ruth in the twenties and Willie Mays in the sixties made salaries many times that of a successful businessman, as did many movie and rock stars (More!), and that “stars” certainly can earn a great deal, but the “new” rich tend to be business executives, not actors, sports figures, musicians, or entrepreneurs.

Apparently Mr. Brooks is unaware that the jobs shipped overseas by the corporations making record profits are the good-paying, union-backed jobs, not min wage jobs, that the economy has become a “service economy” because of this. That more jobs require less skill than before, so how much education does one need to provide a service?

And apparently Mr. Brooks hasn’t notice that if you are black, everything is much, much worse. Nope, no racism here. We aren’t cutting the social safety net and throwing even more people into poverty because the poor tend to be overpopulated by undeserving black people; nope, none of that; we are a post-racial society.

There is not some “invisible hand” of economics at work here, there is the deliberate distortion of the political realm by very wealthy people to change the rules: the rules of how the games are played (especially the tax rules) so that their wealth would grow and other’s wealth would shrink. It began with Mr. Reagan’s bold action of cutting the federal income top marginal tax rates (the rates paid only by the very well to do and only on their top earnings, we all pay the same up to that point) from 70% to below 40% at the same time raising “payroll taxes,” taxes that we all pay at the same rate but only up to a low limit, so as to make sure the rich pay no more than the poor. Then the rich were off and running with schemes that would continue their pay day and shrink everybody else’s.

And if raising the min. wage really won’t help the poor that much how about just recognizing the fact that the min. wage has been politically held down from the $18 per hour it would be today, if the wage had just kept up with the increased amounts of money being made by those employees for their employers (called “productivity”). If those workers were given the same share of the money made that they were getting back in 1968, they would be being paid almost $20 per hour today. And what “market force” was there that prevented that from happening? It had to be something magic that happened around 1980, because all wages were adjusted for productivity (by the markets) up to that point and then it just stopped. It couldn’t have been the undermining of unions in this country, could it? It couldn’t have been any of the other changes gotten through an orchestrated attack on the poor and middle class, now could it, Mr. Brooks? No, I guess not. A class war got us here, but a class war cannot get us back.



  1. This reminded me of Romney’s fundraiser. The 47% remark made the headlines, but i think his insane statement concerning Chinese factories, workers, and the fences was far more telling to the mindset, and reason why wages there have increased.

    Comment by john zande — January 17, 2014 @ 8:47 am | Reply

    • David Brooks should know better; he is no dummy. Can it be that a certain sort of blindness comes with a conservative worldview (“sees what he wants to see and disregards the rest, lie le lie ….”)?

      Comment by stephenpruis — January 17, 2014 @ 9:17 am | Reply

      • Nah, never…

        Comment by john zande — January 17, 2014 @ 9:25 am | Reply

        • By the way, I am putting money in your pocket. We got tired of the lack of coverage of anything meaningful in the Chicago *Tribune* and have subscribed to the NY *Times*. Just trying to help out the balance of payments with Brazil.

          Comment by stephenpruis — January 17, 2014 @ 9:29 am | Reply

          • You reckon the NYT’s is any better? Oodles of long-winded drivel and terrible sentence structure. Thanks for the bucks, though, although you’re putting it in the pocket of an tremendously untalented man named Francisco.

            Comment by john zande — January 17, 2014 @ 9:52 am | Reply

  2. “Apparently Mr. Brooks is unaware that perverse compensation schemes in Wall Street have been around for quite a long time, but taxing their billion dollar incomes at a 15% level has not.”

    Brooks is obviously a student of the philosophy that too much information is not healthy for those who are trying to keep it all for themselves.

    Nicely done Stephen

    Comment by lbwoodgate — January 17, 2014 @ 9:59 am | Reply

    • Thanks, I just got up a head of steam while reading the column.

      Comment by stephenpruis — January 17, 2014 @ 10:05 am | Reply

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