On the cover of the Rolling Stone

I love it when serious political journalists write for Rolling Stone; this phenomenon creates some of the most fun (you are never going to see “screw” used as a verb in the Time Op-Ed pages) and smartest (yup) political reading out there.  Journalists just really let their hair down when they know they are writing for a bunch of teens and 20-somethings. 

One of the best articles I have ever read is David Foster Wallace’s “Up, Simba,” profiling John McCain in the 2000 presidential primaries.  (This article appears in a seriously unabridged version in Consider the Lobster.  If you are smart and funny, go out and get yourself a copy of that book for Christmakkah.)  And this month’s cover – in keeping with the pop-culture and smartipants juxtaposition that brought together Kurt Vonnegut and Christina Aguilera  - features the title of Paul Krugman’s* article, “How the Super-Rich are Screwing America” beside Snoop Dogg in a Santa hat.  If that doesn’t make you love American journalism, you’re just plain no fun.

The article is great, and it takes on one of the biggest baddest myths ever.  The one about the pie.  In case you slept through introductory economics, it goes like this:  The pie is wealth/money/the economy.  You should never ever worry about how the pie gets divided up.  Just make the pie as big as possible, and that way everyone will get lots of delicious pie.  If something cannot be measured in pie, it is deemed “intangible” (for which read “ignore it”), because pie is the only thing that matters.  If it seems that some people are starving while others are eating so much pie you can’t believe they haven’t gotten a raging case of type II diabetes, don’t worry!  The InvisibleWaitressHand divides and distributes the pie, and if the diner is efficient then she is all-knowing and infallible.

As Krugman points out, the pie has gotten big lately.  All of the officials ways to measure the economy – GDP, unemployment, etc. indicate that the economy is strong.  But Americans, when polled, disagree. 

“But how is this possible?  The economic pie is getting bigger – how can it be true that most Americans are getting smaller slices?  The answer, of course, is that a few people are getting much much bigger slices.”  That is the problem with the stupid pie analogy, it doesn’t allow for the fact that some people in the diner of America are fiendish pie-hounds; they own the ovens and the flour/sugar/fruit-filling supplies, and they pay off the waitresses.  Or as Krugman, who is a better writer than I am doesn’t get bogged down in analogies for no reason, puts it, “Although wages have stagnated since Bush took office, corporate profits have doubled.”

The article goes on to lay out tons of those statistics which you have heard before, about 1/3 of the Bush tax cuts going to 0.8%  (that is not a typo, my friends) of the population.  That would be the richest 0.8%, in case there was any confusion.  And how in 1970 the average CEO made 30x more than the average employee, and now the average CEO makes 300x more than the typical worker.  Want more?  There’s plenty, right here in the article.

Krugman also gives an interesting history of the distribution of wealth in American.  Between 1933 and 1945 the US underwent a period historians refer to as the Great Compression, in which the rich got poorer and the poor got richer.  Then in the 1970s inequality began to rise.  Reagan came into office and waged war on unions, while not raising the minimum wage.  Although the minimum wage was raised under Bush Senior and Clinton, the 2000 election of GW Bush brought about a new period in which policy drastically favors not just the wealthy, but the uber-rich.  Krugman writes,

“During the 2000 election, George W. Bush joked that his base consisted of the ‘haves and the have mores.’”

That’s not funny.  John Kerry gets a week of blanket media coverage for his stupid troops joke and we let this one go unpunished for 6 years?  Krugman also points out,

 ”Not only has the Bush administration favored the interests of the wealthiest efw Americans over those of the middle class, it has consistently shown a preference for people who get their income from dividends and capital gains, rather than those who work for a living.”

This, we all learned in our Ec class, is good though, because investing in the stock market is what makes the economy grow!  Taxing capital gains creates a disincentive for investment.  And if the super-rich cannot double their income in mutual funds, the economy will come crashing down around our heads.  Right?  Whatever.  The Bush tax cuts, well…. they are tax cuts.  Get me?  Not tax hold-steadies.  The rich had been raking in cash from the stock market; they were not disincentivized before the tax cuts.  Which leads to another question that Krugman raises and doesn’t have time for, “What were they doing cutting taxes yet again in the face of a huge budget deficit and an expensive war?  Never mind.”

There is a corner on 5th Avenue, where there’s a Tiffany’s, a Harry Winston, a Louis Vuitton, and some other wildly expensive luxury store.  When you stand on the corner there, blinded by all the diamonds glittering in your peripheral vision, you can sort of feel the buzz of the platinum card transactions whizzing past you in the ethers.  It’s either really fun, or really weird, depending on what mood you’re in.  The first time I encountered that corner, there was a little old lady – a homeless lady - probably 70 years old and weighing in at 90 pounds, laying on the ground wrapped in a blanket and looking like she was about to die on the sidewalk in front of Harry Winston’s.  It was like Karl Marx had put her there for a photoshoot.  This was really striking to me; I had just moved to New York and wasn’t yet used to the juxtaposition of billionaires and the homeless.  Unfortunately, I am now.  If I stopped to notice every time a trust-fund baby and a member of the working poor were sitting beside each other on the subway, I’d never get anything done.

Krugman’s article is striking and important.  And it’s not proposing some kind of pinko redistribution of wealth, it’s just calling to your attention to the redistribution of wealth that has been taking place for the last several years, under the banner of “corporate profits.”  Kudos for saying it out loud, and on the cover of the Rolling Stone.  Gonna buy five copies for my mother.

* Dear Paul Krugman, I liked this article so much that you are officially invited into the circle of celebrities on whom I have crushes.  You are in very good company, as DFW, Jonathan, and Barack can attest.