Just One Minute
Balanced Fare: We Report, You Deride

Thursday, October 31, 2002

Bellbottom Blues

No, the bluesy bit isn't that they look ridiculous. Actually, that is not a bug, that's a feature - it's Halloween!

And I understand that the fact that I can actually find these things after lo these decades lapsed might merit a bit of self-examination - what do I value, what do I cling to, why can't I Just Let Go?

But we don't have time for deep thoughts - the unexamined life may not be worth living, but the fully examined day will never be completed.

No, our issue is much broader - how did I ever, ever fit into these things, and where is my card to the YMCA?

Happy Halloween!

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Leadership: It's About Making Choices

Or maybe it's about promoting your agenda. Hmm. Maybe it's about telegenics. Hard to decide.

And it's not just me who can't decide. Let's hear from the late (to the race), great Walter Mondale, in his acceptance speech last night:

"He quoted the biblical verse, "To every thing there is a season," and said: "Fate has thrust upon us a double season, it is both a time to break down and a time to build up."

Well, he must be right once. At least. I suppose.

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Safire Delivers

Safire answers our questions about the mysterious Mohammed Atta and the Prague connection. My man:

"...Because the C.I.A. had refused to interrogate Al Qaeda assassins captured by Kurdish forces in northern Iraq, I had a hunch that our spooks' overly eager "discreditation" of the Czech report was misleading..."

And now, following the "Havel called Bush", "Havel didn't call Bush" byplay:

"...it's time for a follow-up hunch. I suspect that the coterie around President Havel — the great former dissident we all admire — despises the prime minister, the interior minister and the Czech intelligence agencies. In Havel's name, that weakening coterie misled a fine reporter and lashed out at the rest of the government's officials by making them out to be publicity hounds of war. Why? The dispute about Atta's visits to Prague and contact with Iraq is not about Middle Eastern intelligence; it's only about middle European politics."

Well, that is clear. Or, I am sure it would be if I had opened the same Chinese fortune cookie Safire did.

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Why Is It Always Political?

SO, I am continuing my parental due-diligence by watching "Birds of Prey" with my twelve year old. Huntress, the super-powered Baddy-Bashing Beauty has, you may be interested to know, met with a fashion consultant. Now, she dresses for fights in, well, fighting clothes. Something I might wear to the gym, she wears to kick ass - good for her! The disco wardrobe is saved for, we presume, the disco. An unexpected ray of light.

But not my point! Last night's show revolved around some poor kid/adult/geezer with a weird disease that caused accelerated aging - roughly eighty years in three days. It's not all bad - everything he buys comes with a lifetime guarantee. But the highlight was the big finish, when he ages about twenty five years in two minutes. Man, I thought I was watching the Senate races in New Jersey and Minnesota. Where is the Fairness Doctrine now?

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Wednesday, October 30, 2002

This Will Be Interesting

Check out No War Blog. The goal is to present a range of views across the political spectrum opposing the war in Iraq. I am firmly of two minds on this. I support a war against Saddam (Sully approved construction, there), but I can not say I found the national debate to be particularly edifying.

So, check it out. With luck and skill, it will be a valuable forum for sensible debate. Or, it may become an intriguing sociological exercise. Go, read, contribute.

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Darn It! This Equipment Is Expensive!

Pat Leahy just broke my Irony Detector. We may have a real humor blackout here until it is fixed. (YES, this is a new development, I resent that "what else is new" guff). Anyway, the killer quote came here, in response to a Bush plan to change the judicial confirmation process:

"Senate Judiciary Chairman Patrick Leahy, D-Vt., in a Friday letter to the president, complained that the White House has chosen to "politicize" the judicial selection process to "create a partisan campaign issue."

Uhh, here in my section of the time warp, keeping control of the Senate in order to rein in Bush's judicial selections is one of, if not the, central motivators of the Dem side in this election. Is that not partisan, or am I confused?

And have we not moved past this idea that politics should not be "politicized" or "partisan"? Oh, forget it.

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We Drift From "The Picture" to "The Memorial"

As to the memorial, outrage. Two issues strike me:

The Fairness Doctrine: this memorial was broadcast, evidently live, as "news". As a political rally, it would have been covered very differently. Atrios calmly explains why this does not matter.

The campaign moratorium: the two sides had agreed to suspend campaigning until after the memorial. Story, and killer Dem quote:

"In a letter to [Rep.] Eibensteiner Monday, [Dem.] Carlson wrote that "the sensitivities of the Wellstone family should be respected." He also wrote, "I understand your desire to get on with politics. However, I would respectfully request that the Republican Party cease issuing debate challenges, etc., and wait until the Democratic Party has named its candidate."

Which is happening this very Wednesday morning.

So, remember Paul Wellstone any way you want. But I am surprised to think that he would want to be remembered as a man who broke his promises, and side-stepped campaign rules. All of this could have been avoided by "ending the truce", agreeing to resume campaigning, and billing this as a memorial rally. All of it.

UPDATE: Hmm, the head of the Wellstone campaign seems to be leaning this way.

"In the wake of the controversial memorial service for Sen. Paul Wellstone Tuesday, the head of the Wellstone campaign apologized Wednesday for the event’s sharply political tone."

OK, I have my "Dark Force" Decoder Ring working. Why did he apologize? Is he a stand-up guy who made a mistake? Or is he trying to head off the TV people?

And it is worth remembering - the good people of the great state of Minnesota will have a chance to comment on this next Tuesday.

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If The Shoe Fits...

Wear it, and walk tall. When Jeff Hauser gets his new site, he will have easy time-stamps, and I will be green with envy. Meanwhile, he points to this cartoon as the story of his life. Worth squinting over.

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"You Want Me On That Wall"

Follow the links, and wonder with me - what was this guy thinking? He made Susanna mad, he paid the full price, and for what? Next time, buddy, go with Plan B - it can't be worse, and it will introduce some variety.

Oh, a housekeeping note - if you link to Susanna'a archives, you miss the comments section. Hmm. Well, at least you will know what story you are looking for if you want to come in the front door and comment.

UPDATE: She is resisting the power of the Dark Side.

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Instant Grief Analysis

Atrios was critical of this comment by the InstaPundit. Gentleman, we have walked this road before, complete with Clinton-bashing for faux-emotion.

UPDATE: When Worlds Collide: I am currently getting more hits from Atrios than from the InstaPundit, both of whom have linked. May I say one thing? I am afraid to look. If I had any guts, I would get out from under my desk and see what they said. Just give me a minute.

OK, time for a forceful statement. I did not think of Wellstone, per se, when I saw the picture of Carter and Mondale laughing together. My first thought was "Clinton must have forgotten about the cameramen, here we go again". My second thought was, this pic needs a little explanatory dialogue. So, my suggestions:

(1) "Walt, you'll be a great candidate. You're not even as old as Lautenberg."

(2) "Hey, did you hear your old boss won the Nobel Peace prize?"
"Yeah, I wonder if he knows about North Korea?"

And, if they bring in a righty from the bullpen, I am ready:

(3) "The Treasury Secretary says the economic figures look pretty good."
"Well, the economy would be even better if Paul O'Neill hadn't retired".

And, a final thought, which will exhaust me on this subject. It passes as a word to the wise to the Dems, and it is "Reap what you sow". It is a sad fact that Ronald Reagan is an old, sick man who might, because life is so damn funny, die in the fall of 2004. In which case he may confound the Constitution by being elected to a third term.

UPDATE 2: Oh, final, not final, whatever. Nathan Newman has a good piece on why Wellstone's memorial had to be a political rally. But below that is a post that, beyond being interesting, has a computer generated graphic that any drug-law liberalizer could love. Check it out, and then explain it to me.

Can't stop. The Man Sans Q is unhappy. Orrin Judd drops the gloves. And a few stories have noted that both campaigns had agreed to suspend campaigning through Tuesday, and that the memorial was given three hours of expensive TV time. So, celebrate him as you wish - if that includes breaking a promise to your opponent, and exploiting the sometimes blurry line between legitimate news and partisan campaigning, so be it.

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Tuesday, October 29, 2002

Strange Things Happen

So says the InstaPundit. But did he notice this "Day at the Races" story?

Oh, you know one explanation - how many "Pick Six" events are there each year? How many do you read about? Do newspapers report all the incidents when lightning does not strike?

But I know better - he hacked the system. The clock changeover has something to do with it, even though the races were on Saturday. That's my longshot. If I'm right, it's the "Today" show for me!

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Wow! This Will Be The Last Word On Krugman and Income Inequality

Well, until the next time. From Andrew Kling at Tech Central Station:

"In fact, most economists who examine the income distribution do so because they worry about how to eliminate poverty, not how to eliminate wealth. In making the argument that disparities between the highest earners and median matter in a society with a prosperous middle class, Krugman is breaking new ground.

Hmm, I had put that slightly differently: After the Clinton boom years, Democrats are fretting about how to achieve growth and general prosperity without anyone actually getting rich.

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The Political Pros Take Over

There is, after all, an election to win.

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Here Is A Forceful Statement Of The Obvious

Well, obvious to me. A much simpler explanation - we are a reasonable people who do not rush to judgement - totally eludes the reporters.

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Monday, October 28, 2002

Did the WaPo Bury The Lead?

The anthrax investigation is getting a new look. So says the Old Crow, who has survived the first wave of the baffling assault on right wing bloggers noted below.

Now, here is the lead paragraph, and deep in the story, my candidate for hysterical scare headline:

"A significant number of scientists and biological warfare experts are expressing skepticism about the FBI's view that a single disgruntled American scientist prepared the spores and mailed the deadly anthrax letters that killed five people last year...."

Instead, suggested Spertzel and more than a dozen experts interviewed by The Washington Post in recent weeks, investigators might want to reexamine the possibility of state-sponsored terrorism..."

And you will not be surprised that the state in question is Iraq. An Administration leak?

"The Defense Department and FBI refused repeated requests from The Post to discuss recent developments in the anthrax investigation."

OK, it was on the front page, so the WaPo did not bury the story. Well, there is at least a chance they know what they are doing. And the NY Times endorsed Bush's approach to the UN!

UPDATE: In answer to a reader's question, yes, I do read these stories, a lot of the time. And yeah, I kind of noticed this, and yes, it is sort of odd. Sort of. But judge for yourself:

"The FBI acknowledged that the sender may not have been a native English speaker but emphasized that there was no "direct or clear" link between the attacks and foreign terrorism.

More recently, investigators appear to have abandoned the idea of an amateur attacker, but they continue to focus on a lone, domestic scientist, probably an insider...."

Really? That hardly squares with our sense of the Bush Administration, as described here:

"Bush administration officials have acknowledged that the anthrax attacks were an important motivator in the U.S. decision to confront Iraq, and several senior administration officials say today that they still strongly suspect a foreign source -- perhaps Iraq -- even though no one has publicly said so."

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The InstaPundit Down?

Om my goodness, sheep without a shepherd! Now we are going to get flocked! Could this be a left-Blog pre-election counterinsurgency? Can Sullivan survive?

While I refesh the tin-foil lining in my Yankees cap, let me say one thing - I voted for Carter in '76! AND, Clinton in '92! OK, that's two things. Anyway, Safire went for Clinton too, if you read his pre-archival columns carefully, although how can you? And as for all those times I said "Never again", well, never say never again. People can change. I can change. Oh, mercy.

UPDATE: Damn, when I'm right, I'm right.

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OK, It Can't Be Made Any Easier Than This

And time will tell who has failed, and who's been left behind...

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Drezner on Bush, the NY Times, Carter...

Well, Drezner on a roll.

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Am I Joining In, Or Predicting?

Re: "Melissa Rules": A bit of whimsey from Sully, right?

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Get Your Ice Skates

Last week, Paul Krugman had Part One in a NY Times magazine series about wealth in America. This week, Michael Lewis has Part Two: "In Defense of the Boom". The Times makes a Very Interesting choice of authors - I have had a bit of a motto at this site: "How Many Trees Must Die In Vain - before the Times gives Krugman's space to Michael Lewis?". Not "Blogger delenda est", but still, a straw in the wind?

The blogosphere reviews are piling up. Are they? Well, here is Charles Dodgson. A bit of head-scratching at TAPPED. And I expect I will say something eventually. One dark obsession at a time, that is the editorial policy around here.

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All Saddam, All The Time

This news might prompt Saddam's surrender. Give him the Condit treatment! Or, really jazz the ratings: give OJ a mike, and let him continue his relentless pursuit of the real killers right in Saddam's bunkers. Have the audience vote one weapons inspector off the team each week. "You are the weakest nuclear engineer - good-bye." Oh, this could be big.

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Just Take Two Aspirin and Call Me Angel In The Morning

The Angels win the World Series. If this had happened a week ago, I would have celebrated by driving down to Washington DC and pumping some gas. Now, I am at a bit of a loss.

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Sunday, October 27, 2002

Now, Why Can't I Manage To Speak Like This?

This story on the sniper raises the bar on clear communication:

"...the investigation turned on a series of cryptic communications between the sniper and the police. "You are dancing with a guy and you know the lights are out and you don't know where the edge of the dance floor is," one senior government official said in an interview earlier this week."

Huh? Was Mike Taylor a suspect?

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We Provide The Ritual Denunciation

Oh, Hillary, throwing red-meat to the crowd at a fund-raiser!

"At a private fund-raiser in Los Angeles for Democratic Sen. Jean Carnahan of Missouri, Sen. Hillary Rodham Clinton told the crowd that President Bush merely had been "selected" president, not elected, Newsweek reports in the current issue. "You know, I'm a fan of Clintonomics," she told the crowd while standing from a perch on the staircase of movie producer Alan Horn's art-filled Bel Air home, "and this administration is destroying in months our eight years of economic progress.' "

Well, several points:

Roe v. Wade was "selected", not "elected", or more properly, made into law by elected representatives.

Secondly, as to Clintonomics, the stock market peaked while old Bill was in office. But set that aside. Since we are still darkly obsessing on income inequality, we can predict some good news: When the stats are available in a few years, we will surely see that the stock market collapse has reduced income inequality in this country after the surge in inequality under the previous administration. Bushnomics works!

UPDATE: Hey, welcome back to Jesse from Pandagon. In a bit of a role reversal, I seem to have given him a bit of indi"Jess"tion. I provide something like a clarification in the post above.

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The Partisan Nature of Politics

OK, first, a comic.

Second, we continue to mull over Prof. Krugman's concern that politics have become increasingly partisan as wealth has become more concentrated in this country.

Here is an interesting quote from our "not to be doubted" NY Times:

"Since at least 1992, when Bill Clinton won the White House by, in part, appropriating traditionally Republican issues, the nation's two political parties have increasingly sounded the same notes during campaigns.

If the Republicans were left at the gate in 1992, they have surely caught up this year, blurring the lines on everything from prescription drug coverage to corporate malfeasance to the handling of Social Security.

Democrats and Republicans are lamenting the prospect of another election with low voter turnout, but in truth, they have only themselves to blame. What initially had been seen as a clever, if perhaps cynical, gambit for political advantage has ended up giving voters a choice between beige and brown."

Well, something for everyone: If politics is more partisan, gerrymandering and safe seats may be a part of it.

How any of this reinforces Prof Krugman's thesis eludes me. But hey, it's only the Times.

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Truth Takes a Holiday

We admire Jeff Cooper. But check this:

It's inevitable that, as election day draws nearer, partisanship is going to increase... . At a time like this, I think it's unrealistic to expect that people are going to engage in extensive criticism of those who fall, roughly speaking, on their side of the political divide.... if a Democratic commentator is reluctant to criticize the flaws in a Democratic candidate for fear of assisting the campaign of an even worse Republican, I'm not going to throw stones.... At this point, I'm much more concerned with keeping control of the Senate than I am with reforming the Democratic Party; as far as I'm concerned, we can return to that long-term project two weeks from today.

Oh, I'm just having fun with my "Creative Excerpter"; it makes more sense when he says it. I have noticed a distinctive leftward drift over at Kausfiles. Of course, motion is relative.

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I Don't Have The Stomach For This

Oh, game six of the World Series was going beautifully. Not only were the hated Angels, a subsidized "small market" team owned by Disney, losing, but they were doing it with style - offering no resistance through six innings, and seemingly poised on the brink of total humiliation and abject submission. Excellent! 44,000 Angel fans could watch the Giants dance on the Angels home field. Oh, how great would that be?

Instead, what happens? Three runs in the seventh, three more in the eighth, and the Angels win 6-5. In style! A gritty comeback, showing patience and character.

And what about the Angels fans? These clowns can't figure out how to cheer so they give them those Thunderstix. They can't figure out when to cheer, so the management has to have a "rally monkey" jump around to remind them there is a ballgame underway. Oh, man, if the Angels win the decisive game tonight, will these undeserving lamers even know that it's time to celebrate? Or will they just sit in their seats, spanking the rally monkey? This is not going well.

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Saturday, October 26, 2002

Weekend Relief

I have a short, snarky comment about an Egyptian television series, a death march through Prof. Krugman's NY Times magazine article, and then back to Friday.

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Must-See TV

Anti-Semitic 'Elders of Zion' Gets New Life on Egypt TV

An Egyptian satellite television channel has begun teasers for its blockbuster Ramadan series that its producers acknowledge incorporates ideas from the infamous czarist forgery "The Protocols of the Elders of Zion." That document, a pillar of anti-Semitic hatred for about a century, appears to be gaining a new foothold in parts of the Arab world, some scholars and observers say.

The series, "Horse Without a Horseman," traces the history of the Middle East from 1855 to 1917 through the eyes of an Egyptian who fought British occupiers and the Zionist movement...

The "Protocols," which purports to depict Jewish leaders plotting world dominion, has long been recognized as a fabrication by the czarist secret police. It was used in early 20th-century Russia and in Nazi Germany as a pretext for persecution of Jews. Still, the show's backers say they are keeping an open mind about its authenticity. They say that in any event, reality seems to bear them out, in that Israel controls part of the Middle East.

In a way, don't they dominate?" said Hala Sarhan, Dream TV's vice president and feisty personality on the air. "Of course, what we read from the `Protocols,' it says it's a kind of conspiracy. They want to control; they want to dominate. I represent everybody in the street. We will see whether this happened throughout history or not."

...An Egyptian government spokesman, Nabil Osman, rejected criticism of "Horseman Without a Horse."

So, watch for it - "Horseman Without a Horse" - although it looks like they have at least found the horse's ass.

UPDATE: OK, the name of the show flip-flops during the Times story. I figure my chances are 50/50 when they edit their site.

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My Open Letter to Prof. Krugman

Dear Professor Krugman;

I greatly enjoyed your NY Times magazine article titled “The End of Middle Class America (and the Triumph of the Plutocrats). I think the notion of an explosion in wealth at the top end of the income scale is well worth exploring and I certainly agree that it may have many profound consequences for American politics and society.

Now, I should provide a bit of a warning here – I am one of those deplorable right-wing bloggers that pounce on you from time to time. My own background is an MBA, and twenty years in finance, but beyond that, I am no one – I am probably overestimating my impact when I describe myself as the flea that bites the flea that bites Paul Krugman. Hmm, do fleas even bite each other? Anyway, I am also, in my dark and twisted way, an admirer of yours, as I am of my fellow bloggers. I have a certain respect for anyone who actually gets “in the arena” and publishes their thoughts, if I may borrow Teddy Roosevelt’s metaphor. Anyone who is putting their ideas out there for the rest of us to peck at deserves credit.

So, enough with the compliments – it’s treacly, and it’s over! On to the article. Snide comments are sort of inevitable at some point to follow, but maybe it will liven this up. In fact, I can hint at a poem to come. However, it’s all meant to be positive – the underlying topic clearly merits serious discussion.

The Title: – “The End of Middle Class America…”: Well, wouldn’t that best be demonstrated by defining a poverty line and a “wealthy” line, and showing how there is a declining population in the middle? My recollection is that the percent of folks living below the poverty line is roughly stable at roughly 12%. If the middle class is disappearing, where are they going? Upward to prosperity? Is this really happening, and is this really a problem? I think a better “scare headline” might be “Triumph of the Plutocrats and the Purchase of American Democracy”.

Your introduction is as follows:

We are now living in a new Gilded Age…

The explosion in C.E.O. pay over the past 30 years is an amazing story in its own right, and an important one. But it is only the most spectacular indicator of a broader story, the reconcentration of income and wealth in the U.S. The rich have always been different from you and me, but they are far more different now than they were not long ago -- indeed, they are as different now as they were when F. Scott Fitzgerald made his famous remark. "

Your article cites Thomas Piketty, at the French research institute Cepremap, and Emmanuel Saez, who is now at the University of California at Berkeley, as the experts in the field. May I quote what they say on this subject?

One might also be tempted to interpret the large upturn in top income shares observed since the 1970s as a revival of very high capital incomes. The interesting point, however, is that it is not so. In fact, as shown in Figure 6, the income composition pattern has changed considerably between 1929 and 1998. In 1998, salary income and business income form the vast majority of the largest incomes. Wage and entrepreneurial income make about 80% of the resources of fractile P99.99-100, and capital income brings a mere 20% income supplement. Therefore, highest incomes at the end of the 20 th century are very different from the highest incomes in the early part of the century. Before WWII, the highest incomes were overwhelmingly composed of rentiers deriving most of their incomes from their wealth holdings (mainly in the form of dividends). Today, the “working rich” celebrated by Forbes magazine seem to have overtaken the “coupon-clippers”."

So, the rich may be different from us, and the F Scott Fitzgerald reference may be meant to take us back to the Roaring 20’s. One presumes the “Gilded Age” statement has a similar impact. However the researchers are clearly seeing something else. Interesting.

Causation: What caused this compression of income? From your article, we enter the Golden Era of income equality thusly:

The Great Compression -- the substantial reduction in inequality during the New Deal and the Second World War -- also seems hard to understand in terms of the usual theories

I imagine you will admit that this is pretty light on causation. In fact, when I do a word search of your text, the word “depression” as in, for example, “Great Depression” does not appear. Perhaps the Great Depression caused the Great Compression, and the New Deal was an attempt to address the depression?

From Saez/Pikkety:

”The large depressions on the first part of the century destroyed
many businesses and thus reduced significantly top capital incomes.
(p. 2)”


“This very specific timing, together with the fact that very high incomes account for a disproportionate share of the total decline in inequality, strongly suggests that the shocks incurred by capital owners during 1914 to 1945 (depression and wars) have played a key role. The depressions of the inter-war period were far more profound than the post-WWII recessions. They destroyed many businesses and had a stronger impact on capital income than labor income.” P. 9

Now, with respect to wage income (as distinct from capital income) they say this:

”We also show that top wage shares were flat before WWII and dropped precipitously during the war.” P. 2

I have electronically searched your article and found no mention of “depression”. I have eyeballometrically searched their document and found no mention of “New Deal”.

As a marketing decision, associating compression of incomes with the “New Deal” makes perfect sense – bold government action producing a desired result. However, the folks doing the analysis do not make that association. So, Professor, are you providing your readers with analysis or advocacy?

Now, I can find points where the authors cite New Deal programs as an example of changes in social norms, and New Deal progressive taxation as preventing a re-accumulation of vast fortunes. But this is a follow-up to the Great Compression, not a cause.

Social Norms: Well, I expect your Nobel Prize will be for something other than pop sociology. You offer us this:

”Some -- by no means all -- economists trying to understand growing inequality have begun to take seriously a hypothesis that would have been considered irredeemably fuzzy-minded not long ago. This view stresses the role of social norms in setting limits to inequality. According to this view, the New Deal had a more profound impact on American society than even its most ardent admirers have suggested: it imposed norms of relative equality in pay that persisted for more than 30 years, creating the broadly middle-class society we came to take for granted. But those norms began to unravel in the 1970's and have done so at an accelerating pace.
Exhibit A for this view is the story of executive compensation. In the 1960's, America's great corporations behaved more like socialist republics than like cutthroat capitalist enterprises, and top executives behaved more like public-spirited bureaucrats than like captains of industry. I'm not exaggerating.”

Let’s see what the authors you cite had to say on this:

”…we emphasize the role of changing social norms as a potential explanation for the observed patterns.

Although our proposed interpretation for the observed trends seems plausible to us, we stress that we cannot prove that progressive taxation and social norms have indeed played the role we attribute to them. In our view, the
primary contribution of this paper is to provide new series on income and wage inequality.”
p. 3

Hmm, they use the word “changing” where you elect to use “unraveling”. More advocacy?

Perhaps something about the social norms adopted in 1950 required modification over time. A few points:

- Absence of foreign competition: our natural industrialized competitors were devastated by WWII. Did US steel or auto workers face significant foreign competition in the 60’s? How about the 70’s, or the 80’s? Might this have affected the ability of US corporations to pay high wages for semi-skilled work?

- Did these “socialist republics” you mention actually work? The Dow crossed 1,000 in 1966, and again, briefly, in 1974. Chrysler went bankrupt in 1979. Ford was believed to be on the brink of bankruptcy then. People who did not know Japan made cars in 1965 wanted nothing else by the late 70’s. If these corporations were failures at their basic business, shouldn’t we expect them to change? Perhaps you remember Jimmy Carter’s “national malaise” speech of 1979.

Let’s talk about change for a moment. Another well known economist, Keynes, had some thoughts. He is ranked slightly ahead of you alphabetically and perhaps by other measures, so let’s consider this comment attributed to him:

“When somebody persuades me that I am wrong, I change my mind. What do you do?"

Cold it have been time for a change in America? And why did America change, per your article?

” Let's leave actual malfeasance on one side for a moment, and ask how the relatively modest salaries of top executives 30 years ago became the gigantic pay packages of today. There are two main stories, both of which emphasize changing norms rather than pure economics

So, changing norms. Surely you do not fear change. Or, is this an unexpected conservative side to your thinking, heretofore unrevealed? I am sure you have given this some thought, as have the professors you cite. However, neither your article nor theirs offers much speculation on why norms might have changed. May I offer mine?

Wartime solidarity: WWII represented a nearly complete mobilization of the US economy, and nearly universal military experience for men of a certain age. Especially since this was followed by the Cold War (Berlin Airlift, 1948), and the Korean War, that sense of shared experiences, shared values, and a common foe may very well have promoted a sense of equality and community. By 1980, the proportion of veterans in the work force had fallen due to retirements. New workers included women, blacks, other ethnics, and 60’s Baby Boomers who viewed the military and hierarchies through the prism of Vietnam. I applaud increased diversity in the work place as a good thing, as I am sure you do. However, a probable consequence would be a decline in the sense of community created by the War, and an introduction of new values, i.e., a change in norms. In fact, a change in certain norms, specifically the belief in the unsuitability of woman and minorities in the workplace, was, I expect we agree, a very good thing.

Could this “life in wartime” idea be tested”? Well, the Civil War represents a comparable level of national commitment, but good luck finding statistics. WWI was shorter and, I suspect, represented a lesser percentage level of male involvement.

Both of these post-war experiences would be confounded by another factor to which you give short shrift (if you give it any shrift at all): immigration. America took in many starving Irish during the 1880’s. Good for them, good for America, but bad for any statistics on income inequality in that Gilded Age. Similarly, I have read that immigration was low in the 50’s and 60’s, then increased in the 70’s through to today – good for low-skilled workers already here, good for certain statistics for that time period. I do not know when the surge in illegal immigration began – a modest hint comes from the release of “The Border” with Jack Nicholson in 1981, but as you are an economist I have no doubt you can do much better research on this.

The point - allowing lots of poor, unskilled, poorly educated people into the country is, I believe, a great thing for the people in question. I still believe in “Give me your tired, your poor, your huddled masses yearning to breathe free”. I am sure you do to. However, it plays hell on statistics such as literacy, lowest quintile income, longevity, and health-related numbers. Far better, for presenting better such statistics, to manage your country like an exclusive, hereditary country club – poor foreigners need not apply. For an example of such a country, how about Sweden, which you mention in your article? I understand their population is about 5% immigrants, and they find it to be a strain. Regrettably, I do not know how to say “Hard Luck” in Swedish.

So, I have mentioned a couple of reasons that income on the low end may have been “above trend” in the 50’s and 60’s – lack of foreign competition, wartime solidarity, and low immigration. The “wartime solidarity” argument may explain a bit of moderation at the high end as well.

The authors you cite believe that their analysis covers this point as to income distributions at the top end. However, I believe my point is valid as to literacy and health statistics.

Yet another point – in 1950, earnest capitalists could look back on a fairly bleak twenty years. Confidence that capitalism was a better system than socialism did not have tremendous supporting evidence, based on a depression and a war. Nor did early Soviet advances in science, such as rockets, reassure us that we had the winning formula. However, through the 70’s as the failure of socialist states abroad and the failure of socialist corporations at home became clear, confidence in capitalism may have had good reason to increase. Hence, the advice of Keynes – what we were doing was not working – time for a change.

That is my pop sociology: norms changed to reflect new entrants into the workforce, the passing of a WWII generation, and the failure of the “socialist” style adopted immediately after the War. I don’t expect I will be getting any prizes for it either. But it does suggest that the Golden Era of Income Equality that you look back to with fondness was a bit of an historical anomaly not easily repeated.

Now, your article blends together what I think of as three ideas. First, what happened to unskilled or low skilled workers – the high school grads? I have already hit on reasons for their decline, summarized as globalization and new entrants to the work force. But how about the top end of the income scale?

Wealth: Here, I think you are a bit of a prisoner of the limitations of the data. I will, after warning deeply committed Marxists to avert their eyes, boldly assert the following: there is “good” wealth, and “bad” wealth”. Bad wealth seems easy to depict – Enron. Truly committed free-marketeers will argue that that is the price you pay for a free and vibrant system. Good point! But Enron-style abuse is still a “price”, not something to be desired. If it could be costlessly eliminated, we would choose to eliminate it, I suspect.

And “good” wealth”? Well, Craig Venter was a pioneer in mapping the human genome as founder of Celera. The possible health benefits are enormous, and I recall reading that Celera had a big sign in their lobby reminding employees that, paraphrasing, “The sooner we finish this, the sooner we start saving lives”. So, Mr. Venter is rich – I don’t begrudge him his wealth.

Similarly, we have seen a tremendous upsurge in worker productivity in the US economy. This is attributed to the widespread adoption of new technology. Well, some techies, like Steve Jobs, helped make this happen and are newly wealthy. But they have greatly benefited society – this is not a zero-sum game.

The income statistics you present are not designed to separate “bad” wealth” from “good” wealth. Failure to make this distinction puts a lot of sand in the gears of your presentation. If we “all agree” that some forms of wealth represent socially desirable outcomes, then the observation that there is an explosion of the super-rich may simply be an observation that we have passed through a wildly innovative era. This is a problem?

Saez and Pikkety mention this:

”Obviously, explanations based on technical changes that point out that periods of industrial revolutions such as the end of the 19 th century or the end of the 20 th century are more favorable to the making of fortunes than other periods, might also be relevant.34 Unfortunately, there are not yet rigorous studies trying to quantify the relative contribution of the technological effect versus the fiscal effect on the pattern of top incomes in the US.” p. 20

So, time will tell. But they at least give a nod to the possibility of wealth associated with innovation.

You might save the day by pointing to other social organizations that have a comparable level of innovation without the emergence of the super-rich. Good luck. Europe is a terrible laggard in new drugs and new technologies generally. Their one-time lead in telecoms seems to have vanished. Japan? Well, as I said, good luck. However, the authors do present data showing that France is trudging along nicely at its earlier levels of income inequality. By that limited measure of success, vive la France!

Consequences: As to consequences, I think it is well worth a discussion of where this emergence of a new plutocracy might take us. You seem to worry that politics have become more partisan. To highlight just one of my responses, and for variety, I actually have a poem:

The egos are large
And the issues are small
So Faculty politics
Are most brutal of all.

OK, no Pulitzer Prize coming my way either. And you are better positioned to comment on the accuracy of the underlying observation regarding faculties.

However, I think Ralph Nader had a point in complaining that, in 2000, voters contemplating Bush and Gore were being offered a choice between chocolate ice cream with vanilla swirls, and vanilla ice cream with chocolate swirls. How do you tell them apart? And what about angel food cake, or tofu and fried rice? I am not original in thinking that a lot of the partisan posturing today is for the sake of “energizing the base” to vote and write checks. For example, it’s not enough to disagree with Ashcroft – he must be depicted as the Anti-Christ. Maybe we should attribute this partisan rhetoric to the financing challenge caused by the post-Watergate campaign finance reforms.

For context, let me offer some phrases to spark a bit of free association. “Who lost China”; Alger Hiss; Joe McCarthy; the Civil Rights movement; the Vietnam protests; the Eugene McCarthy campaign; the Kennedy assassinations; the King assassination; the urban riots of several “long, hot summers”; the Chicago police riots of ’68; the Kent State killings; Cambodia; Watergate. Now, tell me, honest Injun – is this nation more polarized now than it was then? The end of the Cold War opened the door to some partisan kookery culminating in an impeachment, but that was faculty politics. The contemporary “partisan” list could have: the follow-up to Roe v. Wade, Robert Bork, John Tower, Clarence Thomas, Iran-Contra, a hundred Clinton scandals about nothing, and impeachment – how do the lists compare?

You also mention a study that shows a congressmen’s vote is today more reliably predicted by party affiliation. Please. We saw a big realignment in the South of conservative Democrats over to the Republican Party. Something similar happened to the Rockefeller Republican in the Northeast. If this is related to the emerging plutocracy, you ought to tell us why.

As to policy, even if you were to demonstrate that the presence of these plutocrats was undesirable, certain policies advocated by the Democrats do not connect. For example, higher income taxes on “the wealthy” start at incomes of roughly $250,000 per year – a good living, but “super-rich”? Especially if this is a two-earner household, probably not.

Similarly, the estate tax threshold is $5 Million – a comfortable figure, but hardly enough to go out and purchase a Senate seat. Perhaps if you advocated policies that pointed the guns at the identified target, you would be more convincing.

OK, let me exit by the same door I entered – I think you have brought useful attention to an important issue, and I eagerly await part 2. I think you have a much stronger piece if you explore the causes of the Great Compression more carefully and address the suspicion many of us feel, that not all wealth is created equal, and consequently, not all evidence of wealth concentration is evidence of a problem.


UPDATE: Boy, that upgrade to Blogger-Pro went smoothly! Other than deleting this entire post, no problem.

Thans to Brad DeLong for the link. We will see how long this stays up. Yes, we know that somewhere at Prof. DeLong's site is the correct Keynes quote. But did you know that admirers of Prof D. will find him in the footnotes of the NBER Working Paper? He notes that reduced anti-trust enforcement in the 80's was also a factor in wealth accumulation.

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Friday, October 25, 2002

OK, A Nearly pain-Free Transition to Blogger-Pro!

The Krugman piece to which Prof. DeLong linked, prior to its disappearance, has reappeared, and is directly above. Sorry, thanks, whatever. Have a great weekend - I sure am.

Paul Wellstone, his wife, his daughter, and five others die in plane crash

Our prayers and condolences to their family and friends.

The Man Without Qualities said this about Wellstone several days ago:

"There are signs that the widely but vaguely perceived change in voter attitudes may have consequences in these elections that are not being clearly identified by ordinary methods. For example, politicians who have treated the current mix of national issues as a matter of principle, such as Senator Paul Wellstone may have benefited even while going against the public by voting against the Iraq war resolution."

Stand up, state your position, vote your beliefs, face your voters; Paul Wellstone, 1944-2000.

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Prayers and Good Luck To Putin In Moscow

There but for the grace of God go we. The hostage situation is Moscow is stunning, and I can scarcely imagine plausible scenarios with a happy ending. Prayers and good luck.

And for the US? It seems totally inappropriate, but we probably should pause and consider how it affects us. My guess is that we will see Russia more inclined to support us at the UN on Iraq, in exchange for a continued US blind eye towards Russian action in Chechnya. If not, it will be because, at this point, the Russians won't be worried about international reaction, or anything else - this will be their 9/11. If bombing a few apartment buildings could start a war (or was it the KGB?), this will surely not end it.

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So Much To Do, So Little Time

Interesting headlines for their columns today:

Krugman: "Dead Parrot Society". Looks like another calm, balanced presentation. I wonder if he mentions Bush?

Kristof: "Saudis in Bikinis". Hmm, I have a hard time believing this is the sort of "uncoverage" I am looking for in the Times. Still, if I can only read one...

UPDATE: Trust your instincts! Oh, don't do that - trust MY instincts! Krugman has a partisan screed from which I infer he is nervous about the upcoming election. I will save you time by presenting the comic highlight here:

"Mr. Bush retains a public image as a plain-spoken man, when in fact he is as slippery and evasive as any politician in memory."

Well, it depends on what the meaning of "slippery and evasive" is. Or maybe it depends on what the meaning of "memory" is. Apologists for Johnson, Nixon, and Clinton are loving this column, as is anyone who enjoys a hearty guffaw. This is a golden "Karaoke Krugman" moment: "Watergate does not bother me, does your conscience bother you (tell me true)"

Or maybe it depends on what the meaning of "politician" is. Al Sharpton, Mr. Probity? Bob Torricelli? Or, for balance, Simon in California? Oliver North? "Read my lips" Bush Sr.? Just who is Krugman remembering? Take two aspirin and call me in November. After the election.

Meanwhile, Kristof is great, in a strange, provacative, yet fully clothed way. Are Saudi woman, forced into traditional dress, repressed? Check this:

"I cover up my body and my face, and I'm happy that I'm a religious girl obeying God's rules," a dietician named Lana scolded me after I wrote a typically snide reference to repressed Saudi women. "... Why should I show my legs and breasts to men? Is that really freedom?"

In Riyadh, several Saudi women offered the same scathing critique, effectively arguing that Saudi women are the free ones — free from sexual harassment, free from pornography, free from seeing their bodies used to market cars and colas. It is Western women, they say, who have been manipulated into becoming the toys of men."

Hmm. Well, Kristof responds manfully, err, forcefully:

"If most Saudi women want to wear a tent, if they don't want to drive, then that's fine. But why not give them the choice? Why ban women drivers and why empower the religious police, the mutawwa, to scold those loose hussies who choose to show a patch of hair?"

Well, I suppose I could ask plenty of young women in the US why they want to dress like young hookers. Just because Britney Spears has made millions, and lots of other girls dress that way, doesn't mean everyone should. And not everyone does. However, I have the strong impression that in our culture there is a certain race to the bottom, and once standards slip, those who stay behind are, well, left behind. Man, no more sociology from me. Ladies?

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Great Baseball Moment

George Vecsey picks a great World Series moment:

"10. SAVE BY SNOW Casey Stengel used to say that every day in baseball you see something you never saw before. This time we see 3-year-old Darren Baker, son of the Giants' manager, nearly trampled at home plate in his role as youngest batboy in World Series history. Fortunately, J. T. Snow scoops the boy up in his arms as Snow crosses the plate. This playing-in-traffic might be carrying Giants family values to a dangerous extreme."

Props to the production crew at Fox for providing great reaction shots - Dusty Baker laughing in disbelief, and then J.T. Snow and little Darren Baker in the dugout. Snow smilingly delivered a pep talk, they rapped knuckles, Darren walked off, Snow laughed - classic baseball. Oh, the Giants won.

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A Gothic Mystery

The divine Ms. E has a puzzle - first, this:

"A federal official said the two were being sought for questioning about possible ties to ``skinhead militia'' groups. This entire case is beyond bizarre, but this is the nuttiest thing I have ever read in the NY Times. Have they seen a picture of the chief suspect? What do they think a black man named "John Muhammad" would have to do with skinhead militias?"

Good question. But following the link raises a new question, as she tells us in an update:

"Moira Breen writes to inform me that the reference to "skinhead militias" in the NY Times article below is not there. I re-read it, and even Nexised it, no dice. It's gone. I swear I read it there. They must have yanked it."

Hey, I believed her. And I have been swearing at that little trick of the Times, too, although I suppose they should be allowed to update their own stories. "All the news that's fit to print.. and re-print... and revise".

Anyway, how cool would I be if I knew how to take screen shots? I checked Google-news for "skinhead militia" and guess what? Two citations: the NY Times piece Diane E had, and the ever-reliable St. Pete Times! No editor there, I guess. Well, not yet anyway - they might pull the rug any minute now. How do you do screen shots? I have a page printout - do I send the printer output to fax?

Well, here is the St. Pete quote:

"Moose also cautioned that the public should not assume Muhammad is involved in any of the shootings that have stricken the Washington area since Oct. 2.

Moose said Muhammad also goes by the name John Allen Williams and may be traveling with a juvenile.

An alert for a car presumed to be carrying the two was issued at 10 p.m., calling on area police to be on the lookout for a 1990 blue or burgundy Chevrolet Caprice bearing the New Jersey license plate NDA-21Z, the New York Times reported.

A federal official said the two were being sought for questioning about possible ties to "skinhead militia" groups, the newspaper said.

Emphasis added, and how! The good people at the St. Pete Times are reporting about an account in the NY Times? Man, will their face be red. What was that about the moving pen has writ, and having writ moves on? Except when it writ electronically, I guess. Then, it leaves us looking like half-writs.

UPDATE: Hmm, a post about old NY Times archives that links to Blogger archives? Do I get credit for a touching faith in technology? Looks like you have to trust me - there is a NY Times, a "Letter From Gotham", and, I believe, a Santa Claus.

UPDATE 2: Editorial assistant? Hey, a promotion! Probably that great coffee I made, back when my job was making coffee. Is the new pay as bad as the hours? And, boss-lady, you are over the e-mail limit.

As to screen shots, thank you - I now have the power. Will I turn it to good, or ill?

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Thursday, October 24, 2002

OK, Jane G Is a Genius, Too

Darn, what were the other points? Someone I meant to mention...

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The Non-Story About the Non-Event

Mohammed Atta did not meet with an Iraqi intelligence official in Prague. We knew that from an earlier Times story, and commented "in this space", as my man Safire likes to says.

Now, the Times has a follow-up: top Czechs still discount the possibility of the meeting, but the phone calls from Havel reported earlier never happened. However, Havel has said for a while that the meeting didn't happen.

So, the non-story about the non-meeting. I am sort of non-linking, too, just to stay with the spirit. The Hammer tipped me to some "Best of the Web" reporting. Hey, another new blog!

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How Often Do I Have To Tell You: Brad DeLong Is A Genius

There are four other points I want to make. But first, a word from our sponsor...

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Increasing Crime? Eroding Civil Liberties? Mais, Non!

Well, the NY Times and the AP leave me wondering - how do you say "Ashcroft" in French?

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Jumping ahead of the story? I'm jumping for joy!

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Wednesday, October 23, 2002

Connect Enough Dots...

And you go dotty.

First, we have Bush's "gaffe" that may not have been, about regime change in Iraq.

Second, we have the news that the "Prague Spring" meeting between 9/11 mastermind Mohammed Atta and an Iraqi intelligence official didn't happen. The White House had downplayed these reports, but they were more or less fully squashed just this week.

Finally, we have the puzzling decision by Saddam to open his prisons.

Does it all mean anything? Well, Mark Kleiman had suggested this as one explanation of Bush's regime change comment:

"Here's another [piece of raw speculation], which seems less likely: the Iraqis sent some sort of signal that they'd prefer Baghdad not be reduced to smoking rubble, and for some reason the Bush team believes it enough to want to dance it out."

Well, that prison situation could be a signal that moderates are getting a toehold, either inside Saddam's palace or inside his own mind. And, since I am feeling upbeat, I can easily link it to the US urgency at the UN: if the pressure is working, keep it up.

Meaning what? Well, if Saddam takes a villa in sunny Libya sometime soon, and a new moderate government pops up in Baghdad, I can guarantee three things:

The peaceful liberation of Iraq will not get Bush a Nobel Peace Prize;

Many pundits will credit the patience of Tom Daschle and the crafty diplomacy of the French;

It will be a triumph for Bush, America, and freedom.

OK, I am dreaming out loud. Probably it all adds up to nothing at all. Darn.

UPDATE: OK, scrap the Czech "news". It's the weakest link, good-bye. Leaving me with a chain forged of putty, rather than Kool-Whip.

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I Did Not Know This

And Google-News barely knows it either.

"Albert Gore III, son of the former vice president, was recently ticketed for driving under the influence."

Well, it is one sentence in a story headlined as follows:

"Noelle Bush could be your child"

OK, I am puzzled. Back in 2000, young Albert was arrested for speeding, and that was widely, if belatedly, reported. This story, dated Oct. 6, 2002, says "DUI", and "recently". It seems to be a new, and almost totally unreported, story.

So, maybe Al Gore Jr. is no longer an interesting public figure. Really? Former Vice-President, former Presidential candidate, leading candidate for the nomination of the Democrats in 2004? I am pretty sure this is the same Al Gore III who was a stage prop in the intro to "Earth in the Balance", as well as at Big Al's Democrat Convention speech in 1992. And DUI, after an earlier speeding violation, is dangerous - folks can get hurt, or killed. We remember that the Bush girls made the cover of People for having drinks in a restaurant. Friends don't let friends drink and walk. Or something.

If anyone knows about this incident, or knows why the reporting has been non-existent, I expect there is a blogosphere (or at least, a right half) that would be curious to learn more. This story actually seems to be Drudge-worthy.

Susanna Cornett got me started on this, BTW, and she has a link to this fellow. Third time lucky?

UPDATE: I get by with a little help from my friends. Here is a link to a message board with an AP story. Here is the NRO back in 2000 (so, pre-Jenna) on Al Gore, family man. Sort of an "All the Good News That's Fit to Print" situation.

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The NY Times on Atta and the Prague Connection

Is there a link between al-Qaeda and Iraq? After Bush's mis-statement yesterday, what is our plan for Iraq? The Times wonders thusly:

"President Bush seemed to change course on Monday. He said the United States was trying to disarm Mr. Hussein "peacefully" and suggested that if Iraq complied with all United Nations resolutions, it would "signal the regime has changed." This may have been aimed at mollifying nervous allies, but it added to the impression that Mr. Bush isn't sure what his goals are in Iraq."

Oh, please. The notion that Bush has been unclear as to his goal in Iraq in ludicrous. Means, maybe. End? Regime change has been US policy since at least 1998, one mis-statement aside. Check this timeline, and "Saddam Out!" goes back to 1991.

As an aside, we continue to be curious to see how Mr. Safire treats the disappearing Atta connection.

UPDATE?: Man, Blogger has barely burped this up, and I am getting flak. Who else read Mark Kleiman's Very Interesting piece on this? I had merrily assumed we were victims of "Bush-speak". Mark links to this ABC News story which leaves us wondering, what is going on, if anything? Mark also has some ideas.

Do I have an idea? Well, fog of war, and its diplomatic counterpart. Meanwhile, between reading comics, teaching classes, and doing, like, real-world stuff, my man Drezner has left me high and dry on this.

UPDATE, AGAIN: OK, "Ooops" at the Times; not only did the meeting not take place, the Times story did not take place either. The non-story about the non-event.

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Blogging: Unto the Next Generation

We have an ongoing effort to uncover hot new writing talent. Today, we feel a bit like Dorothy, when we discover there's no place like home. My seventh grade daughter had an intriguing homework assignment - imagine yourself as a newspaper editorialist in 1776. You are solidly behind the newly-announced "Declaration of Independence" - what do you write? And no help from the 'rents.

Go, MinuteKid!

The Patriots Declare Freedom from the British

Fellow patriots, a great thing has happened today. The lousy scum bags who call themselves Englishmen received our Declaration of Independence. They claim that their unfair taxes were fair, the liars, and that we are using them. Ha! As if! They had it coming. Not giving us our rights and freedom, not allowing us a representative in parliament, levering huge taxes on us. Yet they are still under the false illusion that we did something wrong. They refuse to see that they are in the wrong. They used us, not the other way around. They used us to get more land, more money, and to make themselves feel more powerful.

Well my friends, today they realize the truth: we are free and independent. And if anyone tries to tell us otherwise than we will show them, we are as powerful as any other country in the world. We have been stupid to wait so long to declare our independence. So if they think that they can use us like that then they are even stupider than has previously been proven. Thanks to our legislature we are free from stupid, manipulative England. So patriots, if you truly love your county then you will join your local militia or the minute man teams to help prepare for the coming war.

OK, let freedom ring! But wait! It's the old switcheroo! Now she has to put herself in the place of a London editorialist back in 1776. Well, creative backpedaling is a hallmark of this site. Let's see if she can tap-dance like the old man.

Crazy Colonists Announce Independence

Earlier today the King of our fair country received word that the american colonists have written a document called the declaration of independence. This document claims that the colonists were mistreated by our wise, all knowing king! The lazy, good-for-nothing colonists claim that we are over reacting about their "civilized" Boston tea party, and that we are putting unfair taxes on them to pay for our war. What war? We fought it for them. Why should we, honest, respectable citizens of England, pay for a war fought for them? They used us. They used us to get our land, food, money, support and protection. Then they turn around and say that we are bad people who mis treat them. They are all criminals, every one of them.

Our king has a right to tax them if he needs to. It is, after all, his land that they are living on. They took advantage of us and I hope that the king will do something about it. If he lets them become independent then it is a scandal. They will think that they've won! Our poor king, so honest and hardworking, its a miracle that he hasn't gotten rid of them before now. Those lousy colonists will rue the day they lost us as allies.

Good news. The future of this site is secure for another seventy years. Well, good news for me, anyway.

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Tuesday, October 22, 2002

Hey-la, Hey-la, My Boyfriends Back!

Taylor resumes his race for the Senate out in Montana. Someone deserves props for calling this. They used a basketball metaphor to describe "out-of-cash" Taylor's strategy - run some time off the clock, let the air out of the ball, have a conference on the mound, something like that. After a brief hiatus, a newly energized and publicized Taylor would be back. Anyway, whoever you are, great call!

UPDATE: The Village People opine. Look for other good stuff there, as well.

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We Are Pleased To Present A Solution to This Problem

What problem? Rising inequality of income. Despite our criticisms of Prof. Krugman's article, we are satisifed that income inequality is rising, and we are inclined to believe that this is not good. Our customary restraint is due to our uncertainty as to causes, and a desire not to inappropriately mingle the baby and the bathwater in an untimely fashion.

That said, a reader has been kind enough to send along a Very Intriguing Idea. Jim Kennedy and his partner, Francesso Vitelli, have been successful businessmen for quite some time. This, I should note, despite an awkward "leftward tilt" to much of Jim's political thinking. So, their thoughts on how to reform the tax code to promote entrepeneurship, promote greater income equality, and provide corporate tax relief - something for everyone! Hey, the rest of you should get readers like this.

The K-F Plan

Few sensible people actively applaud the economic distortions of double-taxation (ie, corporate taxes, then taxes again on dividend income).

Few sensible people actively applaud robber-baron type abuses of corporate power (ie, Kozlowski et al).

Why not tie together a response to both phenomena?

That is, let's gradually reduce and eliminate the taxation on dividends-paid for corporations that meet specified criteria with respect to income-distribution from CEO down to janitor.

Nature loves variations on the same theme over and over again - the Normal Distribution; resistance seems to be futile. Fat tails get squashed one way or the other, eventually.

So let's make some semblance of statistical normality a GOAL, as least with respect to discouraging greedy behavior which generates the conditions for its own eventual punishment. (No robber barons, no FDR, no unfair historical
images of Herbert Hoover -- everybody wins!)

The practical idea is this:

1) Corporations that wish to reduce the tax-burden on their investors apply
for tax relief. They submit income distribution data (including all perks,
options, hidden benefits, etc) for their staff. Deep thinkers study their
college texts and comes up with some simple robust measures which applicants
must satisfy to be relieved of double-taxation on dividends. (Ratio of
highest income to lowest income, skew, fatness of tail, similarity to
log-normality, stability of distribution over time, etc.)

2) Corporations that meet the criteria can pay dividends to investors
knowing the investors will pay no taxes on that money.

3) Corporations that choose to apply for this program but fail to meet it
due to the inevitable accounting and lawyering trickery which will accompany
this new rule must pay a penalty-surtax as punishment for wasting the
people's time and resources. This will spawn a cool industry for forensic
accounting and lawyering to detect the would-be cheaters. Lawyers will try
to split companies into 'classes' just as mortgage-backed bonds are split;
former leftists will earn good money and great satisfaction catching them.
Investors will require management stay away from the tricksters and
concentrate on business.

4) Corporations which rely on exceptional individual efforts and
contributions -- which could not succeed without Michael Jordans or Barry
Bonds on staff -- just keep going along. They will not apply for this
program because they rely on special inputs for their success. They are not
being punished, so they have nothing to complain about unless they choose to
whine (which, no doubt, they will, but that is another story).

Predicted Result:

Corporations operating in genuinely competitive (ie, replicable-work)
industries will be prompted by their shareholders to meet the tax-relief
criteria, and will do so. Corporations which rely on special labor
contributions will not pay dividends.

The distinction in tax-rates between capital gains and ordinary income will
become meaningful. If you think you've got something special on your
company team, like a 10-year Derek Jeter income generator, you hold on and
cash in later at the lower tax-rate. If you are not sure, you meet the
normal-distribution requirements and you pay dividends, your investors pay
no additional tax for the dividends, and cash is freed up to so Adam Smith's
invisible hand can make its optimal investment decisions anew.

And, hey, maybe the janitor can afford to invite the spouse to stay home and
raise the kids right, and still buy the kid a new baseball glove in hopes of
raising the next A-Rod. And maybe the 'dead-peasants' mentality, now
most-wickedly exemplified by COLI scams, that threatens to bring with it the
destruction of our free markets is diminished slowly and naturally by the
nearly-invisible and most-excellent hand of Jim, Francesso, and the IRS....

OK, they're flexible. Instead of tax relief for dividend payments, maybe generic tax relief. But only if you want to qualify by presenting yourself as a "fair-pay" company. Oh, picture the stormy board meetings then - CEO pay really comes out of the shareholder's pocket, the PR is crummy, why are we paying so much in taxes....

OK, my e-mail is above. Some of the obvious objections can, I think, be answered. Others, as they occur to me, are harder. Still, get ready to change corporate America!

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The French Have A Word For It

Bush said what?

"President Bush said today that the United States was trying diplomacy "one more time" to disarm Saddam Hussein "peacefully" and suggested that if the Iraqi leader complied with every United Nations mandate it would "signal the regime has changed."

The White House immediately said that Mr. Bush was not backing away from his past insistence that Mr. Hussein must leave office. His spokesman said he could not imagine a situation in which the Iraqi leader, after 11 years of defiance, would suddenly comply with the United Nations. The president himself said today, in an appearance with Lord Robertson, the secretary general of NATO, that "the stated policy of the United States is regime change."

Well, the French word is "faux pas". OK, two words. In English, it's "Huh"?

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Monday, October 21, 2002

In Which I Salute The Swedish Troll

I want to salute the Swedish Troll. Paul Krugman, in his NY Times magazine piece, picks up a discussion Glenn Reynolds launched back in May with this post. I resisted manfully, until my man Nathan pushed me over the edge.

Now, I believe the notion that a serious economist is discussing the relative economic strength of Sweden and Mississippi in a major publication is a triumph of something or other. Something very funny.

Two thoughts, ladies first: if you are having a serious argument about whether your man is better looking than Tom Cruise... you've already won! And guys, if you are having a serious discussion about whether your lady is not as ugly as RoseAnne Barr... you've lost!

Hello, Sweden is not as poor as Mississippi? Who cares? What kind of an advertisement is that for Swedish syle socialism - hey, we're not even as lame as Mississippi! Its the Absolut Truth! I can't keep a straight face.

Oh, second point - instead of looking at 1998 snapshots, run the film from, I don't know, 1970. I haven't even looked this up, but I promise you - Sweden was way ahead of Mississippi then. No serious debate about who was Numero Uno would have been imaginable.

Put it another way - South Korea and Taiwan are considered two great success stories of the last thirty years - I am sure that they are not richer than the US, but they are making great progress. It is the trend, not the current position, that is important. And with Sweden, the trend is not a friend.

Really. You could look it up.

UPDATE: I am taking on water here. A keen-eyed observer points out that Krugman mentions Mississippi briefly, then segues into a US-Sweden comparison. Hmm. My man Nathan does the same thing. Let's check out Prof. Krugman:

"A few months ago the conservative cyberpundit Glenn Reynolds made a splash when he pointed out that Sweden's G.D.P. per capita is roughly comparable with that of Mississippi -- see, those foolish believers in the welfare state have impoverished themselves! Presumably he assumed that this means that the typical Swede is as poor as the typical resident of Mississippi, and therefore much worse off than the typical American.

But life expectancy in Sweden is about three years higher than that of the U.S. Infant mortality is half the U.S. level, and less than a third the rate in Mississippi. Functional illiteracy is much less common than in the U.S.

How is this possible? One answer is that G.D.P. per capita is in some ways a misleading measure. Swedes take longer vacations than Americans, so they work fewer hours per year. That's a choice, not a failure of economic performance. Real G.D.P. per hour worked is 16 percent lower than in the United States, which makes Swedish productivity about the same as Canada's.... "

OK, so Krugman can't stay on topic. Nathan can't stay on topic. Glenn has lost focus, too. Hmm, this has turned into any ordinary cocktail party. Just as I am entering my eleventh minute on the subtleties of the Montana Senate race, folks suddenly take a desperate interest in their daughter's college application process, or their son's football game, or some darn thing of no possible general concern.

Well, at a cocktail party I know how to handle this sort of insurrection. With careful use of the interior walls, some potted plants, and perhaps a sofa, an audience is assured! A small, helpless, whining audience, but hey! What to do in the blogosphere is less clear, but I will say this - the topic is Mississippi, people - check the very first post!

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More on Krugman and Inequality

OK, Brad DeLong has TWO posts going, with energetic comments in each. Pick a side, join in, pick the opposite side in the other forum - great fun!

And, the often informative and always great-looking Jane Galt has her long thoughts, and points us to Andrew Kling for something short and sweet.

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Free Legal Advice for Andrew Sullivan

Regarding his "blog challenge", in which he suggests that someone

"take a look at Ann Coulter's recent columns and Maureen Dowd's. Using strict criteria - personal smears, rhetorical hyperbole, unprovable accusations of ill-will, bigotry (towards a class or race or group of people), unsubstantiated claims, and so on, see how the two stack up."

Look, Andrew, anyone crazy enough to sit down and read competing stacks of columns from Ann Coulter and Maureen Dowd will be ruled a suicide. And if Dr. Kevorkian can be jailed, so can you.

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Central Park Jogger - More Time

TalkLeft was right, and I was wrong - the DA will have more time to assess the case of the Central Park Jogger.

The single best summary of the story is this ABC News piece.

A surprising follow-up: there was a violent rape committed by one man a few blocks from this rape in Central Park, just two nights before the "wilding night". But the police never told the defense? And, eventually, we learn that Matias Reyes, involved with the Central Park Jogger rape, committed the earlier one? Police confusion, or police misconduct?

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What Was North Korea Thinking?

So wonders the Times.

"Experts who disagree on many other matters concerning North Korea say decision making in the country whose future holds the key to peace and stability in northeast Asia is driven by an impulse for survival amid ever constricting options...

For years, North Korea has perfected a kind of bloodcurdling official polemics used by the national radio and newspapers to denounce the United States, South Korea and Japan, and to warn its enemies that they will suffer humiliating defeat if they dare attack."

As an aside, we see that in blogdom ALL the time. Doesn't always deter folks, however.

"Faced with the urgent need to fend off economic collapse, Mr. Kim's confession of a uranium-based nuclear weapons program appears to many experts to have been a pragmatic, if ultimately misguided response to an insurmountable obstacle: a Bush Administration that had little interest in engagement."

Oh, man, is the Times admitting that this simplistic "axis of evil" stuff might be working?

"Admission of the nuclear program rather than denial, appears to have been intended to "persuade the world that Kim Jong Il is a new kind of leader, and his leadership does not resort to terrorist means, or secrecy," said Han S. Park, director of the Center for the Study of Global Issues at the University of Georgia.

Now, here is a well informed deep thinker:

""North Korea has always wanted to pursue normalization with the United States, and however awkwardly, now they are bargaining," said Selig S. Harrison, director of the National Security Program at the Center for International Policy in Washington. "What they are saying is that they are prepared to negotiate an end to all nuclear activity and allow inspections, if we agree to two things: not to threaten them militarily and to pursue normalized relations."

Mr. Harrison, who is the author of "Korean Endgame: A Strategy for Reunification and U.S. Disengagement," said Pyongyang's position was spelled out to him this week by the country's representative to the United Nations."

So, if we resume the 1994 deal, the North Koreans will too, and this time they really, really mean it? Look, I accept that this will be solved diplomatically, but I wonder just how happy the North Korean leadership will be with the solution. We may have reached a point where the neighboring powers announce that it is over. My solution - give Kim Jong Il and his family and friends $10 Bilion and an island somewhere. No trials, no hassle, just go. Worked for Marcos, sort of.

I skipped over an important part of the story: a month ago, the North Koreans came clean with the Japanese about Japanese nationals that were kidnapped in the late 70's. The initial Japanese reaction was "oh good, we are making progress with our relationship with these inscrutable North Koreans". As more press attention turns to the actual stories of these people, popular opinion in Japan seems to be turning towards revulsion - just who are these barbarians running North Korea?

So, not a good news-month for North Korea. I doubt either China or Russia wants kooks with nukes on their border. Hence, the MinuteMan Plan for East Asia - pay them off, good-bye.

UPDATE: Drezner chimes in. But how seriously can we take a guy who doesn't like the "Golden Parachute" idea for the N Koreans rulers? Kim has never left Korea, there is no reason to think he likes to travel... hey, George Bush hardly went abroad prior to has election! Anyway, never stop learning! Step out and see the world! How can you keep Kim down on the farm, now that he's seen Paree! I Love New York! Let's get this guy traveling. We'll all like it.

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William Safire Took a Bad Czech

Fascinating story in the Times:

"The Czech president, Vaclav Havel, has quietly told the White House he has concluded that there is no evidence to confirm earlier reports that Mohamed Atta, the leader in the Sept. 11 attacks, met with an Iraqi intelligence officer in Prague just months before the attacks on New York and Washington, according to Czech officials"

The Times coyly adds this:

"The White House has generally been cautious about using the reports of the Prague meeting to help make the case for war with Iraq. Yet the Prague meeting has remained a live issue with other proponents of military action against Iraq, both in and out of the government."

Yes, "out of government" would include Mr. Safire, as, for example, here.

And, fans of John LeCarre will love the Times supplemental piece of the workings of the Czech intelligence service, the British M I 6, and the CIA.

UPDATE: I see the obvious, given enough time. Look, Safire is arguably a victim here. Stop laughing and listen. This Mohammed Atta connection did not come to Safire in a dream - he has government sources that were pushing this story to advance their own agenda. Rather than a two-line "ooops, I was wrong", Safire may name names as to who played games. Or, we may get what he would call a "thumbsucker" on the odd relationship between the press and its sources. But this new revelation seems to merit a full column. Let's give him a bit of time.

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Riding the Tiger - Dismount to Follow

"Tens of thousands of Iraqi prisoners stormed out of their cells to freedom today after President Saddam Hussein declared an amnesty that appeared to have all but emptied a sprawling, nationwide network of prisons that have served as the grim charnel houses of one of the world's harshest police states.

...Mr. Hussein's reasons for emptying the prisons were shrouded in the blanket of secrecy that envelops much in Iraq...

But much else suggested that the growing threat of war with the United States may have spurred what is undoubtedly the most punitive government in the Arab world toward a sudden gesture of magnanimity.

Among Iraqi exiles, the common view was that President Bush, in demanding the ouster of Mr. Hussein, has already struck at the foundations of his power, by serving notice that the days of the 65-year-old president, an absolute ruler since he seized power in 1979, may be numbered by America's military might....

Diplomats in Baghdad with memories of the rapid collapse of Communist power across Eastern Europe in 1989 said Mr. Hussein and his aging inner circle in the Revolutionary Command Council may be drawing on that experience, concerned that the specter of war with the United States could cause a crumbling of loyalties that could bring the government tumbling down from within.

But the Eastern European example, and the scenes of frenzy that developed at Abu Ghraib, suggested that gestures by autocratic regimes to release pressure can have unexpected results, signaling to people who have lived for years in fear of the state that their rulers may be wavering, and that ordinary people, gathered in large numbers, can take power into their own hands. That lesson seemed unavoidable today, as the crowds forced some cell blocks open, while jailers mostly stood passively by."

Oh, we love this story. But it gets better:

" For two hours, as the crowds gathered in their thousands outside the gates, the prison release looked like it was turning into a rally for Mr. Hussein. Young men, apparently government supporters, led relatives of the prisoners in firing Kalashnikov rifles into the air...

Once the prison gates collapsed, the mood changed. Seeing watchtowers abandoned and the prison guards standing passively by or actively supporting them as they charged into the cell blocks, the crowd seemed to realize that they were experiencing, if only briefly, a new Iraq, where the people, not the government, was sovereign. Chants of "Down Bush! Down Sharon!" referring to Prime Minister Ariel Sharon of Israel, faded. In one cell block, a guard smiled broadly at an American photographer, raised his thumb, and said, "Bush! Bush!" Elsewhere, guards offered an English word almost never heard in Iraq. "Free!" they said. "Free!"

The Times saves that for their big finish. And how great would it be if this signals a big finish for Saddam.

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Sunday, October 20, 2002

Paul Krugman Delivers A Left Dream Sequence

Writing for the NY Times magazine, Krugman delivers the intellectual equivalent of a gift-wrapped box of chocolates. All for the benefit of his left-wing readers, of course. Phrases such as "conservative commentator" appear only prior to a phony argument that manipulates and distorts the data.

It's a long article, and presents many opportunities for criticism. I'll throw out a few here.

Statistical assertion that won't withstand scrutiny: "Mansions have made a comeback... Needless to say, the armies of servants are back, too."

Armies of servants? I have vague memories of reading that Vanderbult had sixty to one hundred servants just at his summer estate. Does Bill Gates have anything like that?

Carville quality spin: "We became a middle-class society only after the concentration of income at the top dropped sharply during the New Deal, and especially during World War II."

Oh, good old FDR and his many plans. Of course, some people might attribute the change in the concentration of income to the Great Depression, but that just sounds so unpleasant, and, well, depressing. We don't really want that again, do we? Actually, avoiding World War might be a good idea, too. But the New Deal, hey, we liked it!

Non-rebuttal of plausible argument: Krugman mentions three possible causes of rising inequality: globalization, "''skill-biased technological change", and the "superstar" theory - more jobs, and businesses, resemble "winner-take-all" competitions. The rebuttal of the third theory?

"The superstar theory works for Jay Leno, but not for the thousands of people who have become awesomely rich without going on TV."

Oh, my. So much for superstar bankers, or lawyers, or economists, or software gurus, or anything beyond TV.

Most dangerous approach to "He must be kidding?!": A tie.

"John Kenneth Galbraith described the honest executive of 1967 as being one who ''eschews the lovely, available and even naked woman by whom he is intimately surrounded.'' By the end of the 1990's, the executive motto might as well have been ''If it feels good, do it.''

Please. We know what we are thinking. Second entry:

"Economists also did their bit to legitimize previously unthinkable levels of executive pay. During the 1980's and 1990's a torrent of academic papers -- popularized in business magazines and incorporated into consultants' recommendations -- argued that Gordon Gekko was right: greed is good; ...

It's hard to escape the suspicion that these new intellectual justifications for soaring executive pay were as much effect as cause. I'm not suggesting that management theorists and economists were personally corrupt. It would have been a subtle, unconscious process: the ideas that were taken up by business schools, that led to nice speaking and consulting fees, tended to be the ones that ratified an existing trend, and thereby gave it legitimacy."

As I suggested, is "Mr. Enron Consulting Fees for I Know Not What" kidding? An unconscious cry for help?

Now, a very broad criticism of interest only to folks who have made it through the article: Krugman deplores the rising income inequality in America, and wonders why we can't stay on the same path as the 50's through the 70's. It is clear, although not emphasized, that this period was anomalous. Why might that be the case? Well, US industry had not been devasted by WWII. Unskilled and union labor in this country had no significant foreign competition. Probably a good time to be a US worker. Left unmentioned is that, by the late 70's, the US economy was a disaster. The recent talk about Jimmy Carter may have reminded a few folks. But I remember, for example, that all through the 70's, Detroit refused to focus on improving the quality of their rolling rubbish, preferring instead to grovel for import quotas on Japanese cars. Is that the situation to which we should turn back the clock?

Secondly, Krugman bases a large part of his argument on the unraveling of a social compact in which executives restrained their pay back in the anomalous "Golden Era". Well, yes. Executives restrained their pay in exchange for lifetime employment, generous, unscrutinized, untaxed expense accounts, generous perks, and light hours. Remember the infamous "three-martini lunch" of the Carter era? Do you still hear about it?

And beyond that, this era of conformity in executive pay was also an era of conformity in political thought, which, at its extreme, lead to McCarthy. It was also an era of conformity in notions of professional capability: woman and blacks need not apply. Krugman does not wonder whether these forces are linked. Can we eliminate the white male country club of 1950's style corporate management, but preserve those notions of lifetime employment and stable, modestly rising compensation?

Krugman focusses entirely on higher executive pay with no mention of the other changes in executive lifestyle or expectations that have occurred since the 80's. Sort of the sound of one hand clapping. The left hand.

UPDATE: Well, well. Google. Why not? Here is stuff on the Vanderbilt Mansion, and the Vanderbilts themselves.

UPDATE 2: Yes, some of this material does seem a bit familiar. Here is a Brad DeLong piece to which we linked on June 16, suggesting it is not all darkness. And Andrew Sullivan comments on Krugman's article.

UPDATE 3: A new entrant for "Most absurd argument"? Why not? Let's go to the text:

"modern American politics is bitterly polarized. But wasn't it always thus? No, it wasn't. From World War II until the 1970's -- the same era during which income inequality was historically low -- political partisanship was much more muted than it is today.... My Princeton political science colleagues Nolan McCarty and Howard Rosenthal... have done a statistical analysis showing that the voting behavior of a congressman is much better predicted by his party affiliation today than it was 25 years ago. In fact, the division between the parties is sharper now than it has been since the 1920's.

What are the parties divided about? The answer is simple: economics... the growing inequality of our incomes probably lies behind the growing divisiveness of our politics."

Whoa. Other possible explanations of the unsurprising statistical result predicting Congressional votes: the massive realignment of Southern Democrats, who voted with Republican on many issues relating to crime, national defense, labor law, and taxes. Many of those DINOs are now formally Republicans. Similarly, where are the "Rockefeller Republicans" of yesteryear? Some, like Jeffords, have gone independent; some, like Chafee, think about it; and many have just been voted away. Please tell me that this is not news to Krugman or the professors he cites - I haven't read their work, but I am sure they address this.

As to other factors that may have contributed to a certain partisanship, one might mention the end of the Cold War. During the Cold War, a facade of national unity was important - man, am I actually writing this? I can't go on - this is so obvious a point that I can only assume Krugman is trolling us. Which also saves me mentioning Watergate, the Chicago police riots of 1968, the Viet-Nam War, the Civil Rights movement, and other profoundly bipartisan activities of the 60's and 70's.

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