You Won't Save Middle Class Jobs with Talk About Teaching Motivation

A few days ago, Thomas Friedman took a kernel of truth and attempted to run much too far with it. At this point there is immense downward pressure on middle class incomes and job security, and in many fields - particularly those likely to offer the best wages - it is more important than ever to maintain an up-to-date skill set if you want to remain employed. I'm all for teaching students at all levels to be more entrepreneurial and about the expectations they are likely to face in a future job market. I question the conceit,

Now there is only a high-wage, high-skilled job. Every middle-class job today is being pulled up, out or down faster than ever. That is, it either requires more skill or can be done by more people around the world or is being buried — made obsolete — faster than ever.

Specifically, what middle class jobs are being pulled up? Also, frankly, the correlation between wages and "skill" is far less precise than Friedman assumes. If you have unusual skills that happen to be in demand, you are much more likely to get a job and a decent wage than you are if you have far more developed skills that happen to be in low demand or aren't materially different from the skill set held by the larger applicant pool. Part of the problem with telling workers, "You're responsible for your own career development" is that it's much easier to evolve skills that ultimately become commonplace or obsolete than it is to identify and master new skills on your own time and your own dime that your employer may not presently value but will ultimately prove to have significant value in the marketplace.

Friedman seems excited by the notion that knowledge is becoming unimportant,

I tracked ["education specialist Tony] Wagner down and asked him to elaborate. “Today,” he said via e-mail, “because knowledge is available on every Internet-connected device, what you know matters far less than what you can do with what you know. The capacity to innovate — the ability to solve problems creatively or bring new possibilities to life — and skills like critical thinking, communication and collaboration are far more important than academic knowledge.

Frankly, hearing a statement like that from a self-described "education specialist" would leave me looking for a new expert. Let's use a simple example from early elementary school - math facts. It is very difficult to progress in mathematical knowledge and skills without a mastery of basic math facts, because if you can't do simple math problems quickly in your head you will not develop the speed necessary to keep up with the rest of the class as lessons become more complex. Sorry, no, "You can use a calculator instead", is not an answer. First, if you need a calculator for basic math facts it's still going to slow you down. Second, it's a highly unusual person who succeeds in math-dependent fields who cannot do basic math problems in her head, and quickly solve problems that would confound most of the rest of us (we might not even know what information to punch into a calculator or how to order the operations) with pen and paper.

Friedman might object, "But math is different." But it's really not. You're not going to be a good lawyer unless you have a decent understanding of the legal principles you encounter. You're not going to be a good doctor unless you quickly recognize medical conditions and symptoms within your field of practice, and know how to perform a physical examination. Friedman's perspective is probably colored by his profession - few pundits have any meaningful subject matter expertise, so they spend much of their time aggregating information and whittling it down to column length. To some degree you might be able to get away with that as an "education expert" - you're not likely to be called upon for instant answers, and to the extent that your primary focus is on research and publication you're going to be drawing upon a broad variety of sources to produce your next paper. But even in that latter context, you need enough knowledge of your subject matter to know what has come before, as you're not going to successfully publish papers that betray a fundamental ignorance of the research that has been done in the past - and you can't trust Wikipedia to bring you up to speed.

But more than that, if you want to become good at grappling with a particular set of ideas or concepts, you need to actually wrestle with the facts. You can't learn or be taught how to be a good thinker without a framework. There's a reason that traditional education typically begins with a survey course - to provide students with the necessary foundation to understand more complex concepts and ideas. As much fun as it might be to pretend otherwise, "They can look it up on the Internet" isn't a substitute. If you don't learn the basics, you're going to end up in over your head.

There's something of a tension in Friedman's assertion,

My generation had it easy. We got to “find” a job. But, more than ever, our kids will have to “invent” a job.

As evidenced by his continued statement,

Sure, the lucky ones will find their first job, but, given the pace of change today, even they will have to reinvent, re-engineer and reimagine that job much more often than their parents if they want to advance in it.

First of all, there's no evidence that jobs are going away. No major employer is casting off its employees in favor of an all-independent contractor workforce. Nor is outsourcing key functions all it's cracked up to be - when Boeing attempted to minimize its in-house expertise and rely on contractors... disaster followed. One of Yahoo!'s recent steps to re-invigorate its corporate culture was to stop employees from working at home. If there's evidence that employers are moving away from the concept of "jobs" and "employees", it's well-hidden.

Second, Friedman's expansion upon his comment reveals what I previously suggested. The issue is much less, "There won't be jobs in the future," and much more, "If employers realize that your skills aren't special your earning capacity will flatten or decline, and if your employer decides that your skills are obsolete you'll probably be shown the door." More than that, while corporations might historically have helped employees update their skills or develop new skills, Friedman sees that cost and burden as being shifted to the employee. I think he's correct, but as with professionally managed pension funds vs. individual retirement accounts I think he's missing something important: the professionals have access to information and resources that allow them, on the whole, to better predict market trends and by scaling up their operations they can take advantage of efficiencies that should allow for better training at a lower cost. When you transform that into, "Every man for himself", no matter how well you try to prepare employees for their "self-managed" future you will see a great number of them flounder or drown.

Friedman continues by speaking of the importance of motivation, more specifically of "intrinsic motivation":

Young people who are intrinsically motivated — curious, persistent, and willing to take risks — will learn new knowledge and skills continuously.

That observation is, for lack of a better word platitudinous. Of course people who are intrinsically motivated to learn and expand their skills will do so. They always have and they always will. The problem is that the forces Friedman describes are extrinsic - they come from outside the worker. Fear of job loss can be a powerful motivator, but it's extrinsic. The statement only has significance if we can teach intrinsic motivation, but unfortunately that seems to be much more a component of personality than a product of a particular pedagogy.

Which is probably why, when asked how to produce more intrinsically motivated students, Friedman's expert may as well be clicking on a "mission statement generator":

“Teachers,” he said, “need to coach students to performance excellence, and principals must be instructional leaders who create the culture of collaboration required to innovate. But what gets tested is what gets taught, and so we need ‘Accountability 2.0.’ All students should have digital portfolios to show evidence of mastery of skills like critical thinking and communication, which they build up right through K-12 and postsecondary. Selective use of high-quality tests, like the College and Work Readiness Assessment, is important. Finally, teachers should be judged on evidence of improvement in students’ work through the year — instead of a score on a bubble test in May. We need lab schools where students earn a high school diploma by completing a series of skill-based ‘merit badges’ in things like entrepreneurship. And schools of education where all new teachers have ‘residencies’ with master teachers and performance standards — not content standards — must become the new normal throughout the system.”

To me, that sounds a lot like doubling down on the status quo (although if student work is assessed through the year rather than through high-stakes standardized testing, that would be a positive step)... but with badges. (Pieces of flair?) What's missing? Anything concrete. If I were the type of boss Friedman predicts for our collective futures, and somebody handed that statement to me as a meaningful reform proposal, he would quickly find himself testing his ability to invent his own job.

Saving the Middle Class By Hurting the Middle Class

A few days ago, Robert Samuelson wrote an odd column addressing the middle class. He points to the two candidates,

Republicans will accuse Barack Obama of destroying the middle class through policies perpetuating high joblessness and feeble economic growth. Democrats will portray Mitt Romney as a tool of the rich who doesn’t understand the middle class.

Samuelson responds,

This is mostly political symbolism. The idea that anyone can “save” the middle class assumes that it’s in danger of disappearing, which it isn’t, and that presidents possess sufficient powers to resurrect it, which they don’t.

Let's take a step back. Samuelson has told us that he expects the Republicans to (continue) accusing the President of "destroying the middle class through policies perpetuating high joblessness and feeble economic growth", and that he believes that claim to be false. He compares that to the anticipated Democratic Party argument that "Mitt Romney [is] a tool of the rich who doesn’t understand the middle class", an assertion that is fairly described as "mostly political symbolism", but which is not an economic argument. That is, Samuelson's attempted parallel between that statement and what he describes as a fabricated economic narrative from the Republicans fails, because they address different issues. He's also comparing a statement of opinion about Romney, one with which he expresses no actual disagreement, with what he claims to be a false statement of fact about the economy. A better comparison would be if Samuelson had said, "Democrats will portray Mitt Romney as a tool of the rich who wants to cut taxes for the rich while implementing policies that make life harder for everybody else." Samuelson could argue that such a position would be an exaggeration - for example, Samuelson might believe that we need only make life more difficult for a huge swath of the population, not for the entire middle class - an argument he makes later in his editorial. But his attempt to analogize a false statement of fact on economics to a statement of opinion on personality does not hold up. Samuelson next tells us why the parties are attempting to connect with the middle class - or at least to create a rift between the middle class and the other party,

Still, the symbolism is potent because most Americans equate the middle class with the kind of society we are and ought to be. It is a society where hard work and personal responsibility are rewarded — where “getting ahead” is expected; where economic security and social stability are enjoyed; and where privilege is minimized.

Samuelson then proceeds to fumble between two competing arguments, the first being that "the middle class is fine, thank you very much" and the second being that the middle class is in serious peril. He does not attempt to reconcile his competing thoughts. In support of his position that the middle class is fine, Samuelson argues:

1. Most Americans think of themselves as middle class - "Only 7 percent of Americans called themselves “lower class,” although the government’s poverty rate is 15 percent.... Despite decades of rising inequality, only 2 percent put themselves in the “upper class.... Nine of 10 Americans locate themselves somewhere in the middle class.”

   The problem with that argument is that it does not rely upon either fact or economics. If I go to a prison and survey the inmates, and 90% of the inmates tell me that they are innocent, would Samuelson truly conclude "Therefore the vast majority of prisoners are innocent," or would he say, "We need a better measure"?

2. Some people with pretty high incomes think of themselves as middle class - "Many Americans with incomes of $200,000, $300,000 or more refuse to count themselves as rich."

   As previously noted, the self-report is not what matters. There are plenty of reasons why people at the lower end of the upper income brackets may say that they're "middle class" instead of "upper middle class" or... would Samuelson say "upper class"? They are likely to live in houses and drive cars not much different from those of their middle class peers, they may be burdened by large amounts of student loan debt, they may have very little in the way of accumulated assets. Also, as many have pointed out, the distance between those in the 95th to 99th percentile of income has expanded to the degree that the concept of what constitutes "wealth" has shifted - If your household income is $300K and you compare yourself to a family earning minimum wage, you might feel rich, but if you compare yourself to the class of people who are unquestionably rich, your lifestlye seems objectively middle class. Definitions and points of comparison matter.

3. A big part of the problem is "confidence" - "The middle class can’t regain its self-confidence and financial health without a strong economic recovery. But the economy can’t recover strongly without a financially healthy middle class, which provides most consumer spending."

   I know that economists like to speak of consumer confidence as a measure of how willing people are to make large expenditures, buy on credit, and the like, but the debt overhang to which Samuelson alludes diminishes the role of confidence. You can be certain that the economy is going to recover, but if your house is upside-down, your income is down and you can't get credit, you won't be spending money. Samuelson nods to that fact, "Not surprisingly, the economic expansion is glacial", but assumes that the government is powerless to assist. I suspect that if you were to point out possible interventions - debt forgiveness, across-the-board mortgage write-downs and the like Samuelson would speak of moral hazard. That type of relief, it appears, should be reserved for the financial industry and the unquestionably rich people who mismanaged them to the point of collapse.

4. Being "middle class" is a state of mind - Samuelson argues, "Personal responsibility and a strong work ethic still matter and suggest a durable middle class. It will survive today’s economic setbacks — and political pandering."

   The problem here is that there are plenty responsible, hard-working individuals who are falling out of the middle class, or who lack the skills, education, or toehold they need to pull themselves up the proverbial economic ladder. Samuelson's point reminds me of one of my pet peeves about Nicholas Kristof and his defense of sweatshops - yes, it's true that people work in sweatshops because the other options available to them are worse, but that doesn't mean the problem is solved. The idea that "[p]ersonal responsibility and a strong work ethic" should be enough to get you into the middle class is, as Samuelson notes, an American ideal. But its truth is diminishing.

A fair response to Samuelson is that the middle class is not a state of mind. If you're not in the economic middle class, your thought to the contrary will not change that fact. Your strong sense of personal responsibility and good work ethic may help you get and hold jobs, and get promotions, but personal virtues and "confidence" do not, of themselves, generate income.

Also, while it is true that if you define "middle class" as a strata of wealth between "poor" and "rich" it will in some sense always exist, that's not the issue we're confronting. The issue is, can we can maintain the ideal that every American who demonstrates the virtues Samuelson describes will have a chance for a bona fide, secure middle class lifestyle, or are we transitioning into a country with a smaller, less financially secure, less stable middle class. Are we going to be a nation in which most people want to be rich but are content to call themselves middle class, or a nation in which people at the lower end of wealth become, statistically speaking, the "middle class" between the ultra-rich and the working poor? Let's not forget, when you look at history, the modern world's experience with a large, robust middle class is the exception.

Samuelson also describes problems faced by the middle class,

1. People are no longer confident that they will achieve or sustain a middle class income: "The financial crisis and Great Recession subverted two core beliefs: that hard work ensures “getting ahead” and that being middle class provides security."

   Perhaps that's the "confidence" to which Samuelson was alluding, as opposed to "consumer confidence", but either way it remains the case that the present problem is not a state of mind. If people are no longer feeling secure, it's because the reality of the past few decades is that they are less secure. They can be less confident about how much they will earn, income growth, being able to afford a conventional "middle class lifestyle", how long they'll be able to keep their jobs, whether they'll be able to save for retirement.... And let's note at this juncture, the big "fixes" Samuelson keeps pushing for the nation's budget, specifically cuts to both Social Security and Medicare, will worsen that insecurity.

2. Unemployment is high and people are losing their homes: "True, they don’t affect everyone (about 5 million unemployed have now been jobless for more than six months; from 2007, completed home foreclosures total 4.5 million, reports Moody’s Analytics). But the demonstration effect is strong.... This psychological pall is compounded by widespread wealth loss."

   I'm reminded of a place I once worked where, during a previous economic downturn, any time an employee inquired about a raise the head honcho would pull a stack of papers out of her desk drawer, "These are unsolicited resumes from people who want your job, and they will work for less than you're already getting." It's not just that people are looking at the population of workers who cannot find jobs - it's that an increased population of workers realize that they're on the razor's edge. Their jobs could be outsourced, domestically or internationally. Their skills may be deemed obsolete. Samuelson should note, one of the reasons for middle class wage stagnation is that the middle class lacks the economic clout to force higher wages, and that's a problem that existed considerably before the start of the 2008-2012 recession.

3. People can't afford to save or invest, and there is a debt overhang in housing: I extrapolate from Samuelson's statement, "Wealth is slowly rebuilt through higher saving and stock prices — and the hope that home values will follow."

   I know that "on paper" many people were (and probably still are) "saving more" because they can't get credit, but even that's far from enough to "rebuild" their wealth. Samuelson alludes to the housing bubble, and the fact that much of the spending of the G.W. Bush era involved people cashing out "'paper wealth and housing wealth' — which went poof" when the housing market collapsed. Samuelson can't bring himself to say it, but he's implicitly arguing that the problem he describes dates back at least to the start of G.W.'s presidency and was masked by the housing bubble. Further, absent significant income growth or a new asset bubble, we're not going to see both significant increases in saving and investment and significant spending that will drive a strong economic recovery. It's not clear how Samuelson proposes that we achieve "higher saving and stock prices" for the benefit of the middle class, and in fact it appears that he's offering no solution beyond "keep waiting and keep hoping".

Samuelson then turns to a class warfare argument - not a war between classes, but a war he hopes to see played out within the middle class:

There is also a larger conflict. Sooner or later, broad-based tax increases will be needed to reduce budget deficits. How large depends on how much federal spending is cut. This creates an unavoidable conflict between workers and retirees, because workers are the biggest taxpayers and retirees are the biggest beneficiaries of federal spending. Which middle class deserves support? Cut Social Security and Medicare and help workers. Raise taxes and help retirees.

And we're back to one of my long-term frustrations with Robert Samuelson. To Samuelson, the only path to national financial stability is to cut programs he doesn't care about so we can afford to spend hundreds of billions of dollars in "pocket change" to support discretionary spending he endorses. Even if he underestimates he cost of government ventures he supports, even if by a factor of ten, twenty or more, they're still worth it. But if he doesn't support the program, don't look at the actual economics, don't examine reforms, certainly don't look at how other nations are providing similar programs at much lower cost - just cut 'em to the bone.

Social Security doesn't matter to Robert Samuelson, as he's a wealthy man. He can get by without it, and so can all of his friends, so it apparently doesn't enter his consciousness that many middle class Americans rely upon those benefits to make ends meet during retirement. It similarly appears to be outside of the scope of his experience that some people work a lifetime in jobs that don't generate enough income to allow them to accumulate significant wealth, or work in jobs that involve activity more strenuous than going to a comfortable office, sitting at a desk and typing on a keyboard. Samuelson is in a position in which he could reduce his work to one day a week and he would still pull in six figures; he does not appear to fully understand that most Americans don't have that luxury.

Samuelson has a similar history of decrying any effort to reform Medicare or rein in its costs, and rejects the idea that we should look at how other developed nations are able to achieve similar, sometimes better, health care outcomes while serving their entire populations, at considerably less expense than the U.S. system. He diminishes or criticizes efforts to limit the growth in healthcare expenditures, even though (or perhaps because) that's how we could make the present system sustainable, while providing no criticism of programs that would arbitrarily cap Medicare spending or replace the present guaranteed benefit program with a voucher program, without regard to whether retirees would be able to afford the care they need.

The only conclusion that can be drawn from Samuelson's refusal to acknowledge basic facts on the economics of Social Security and Medicare is that he is philosophically opposed to the programs, or perhaps supports them if they provide only the most basic of safety nets, and if people can't afford to retire or can't get needed healthcare, well, too bad. His "solution" is purely numbers based, after all who cares about good policy formation, and is built on the false premise that retirees are somehow depriving the "middle class" of a decent lifestyle. Never mind that middle class workers might hope to one day retire, or might not be rich and blessed (as is Samuelson) with gold plated employer-sponsored health insurance during their senior years.

Samuelson also appears to believe that healthcare spending does not impact the economy, never mind that healthcare spending is a huge portion of our nation's economy. He does not explain how Medicare cuts will not result in a reduction in healthcare spending, how the cuts will translate into middle class workers being able to afford to engage in more consumer spending, or how the two might balance out. For that matter, if we're overspending on Medicare and Social Security, Samuelson should be able to identify yet another internal inconsistency in his argument - the subsidy results in an increase in middle class spending (albeit by middle class retirees) over what would otherwise be the baseline and program cuts to help balance the budget will result in a net reduction in middle class spending.

Samuelson offers no explanation for how the cuts he repeatedly endorses will benefit current workers, as he is not proposing FICA tax cuts. Similarly, when Samuelson says "Raise taxes and help retirees" he's talking about income tax - not FICA - and his objection is to the expiration of G.W. Bush's temporary tax cuts (never mind that they did not deliver the promised economic boom) that benefit him. I don't recall Samuelson overtly playing the game of pretending that the only taxes Americans pay are federal income taxes, but when he conflates all tax increases in this manner his approach is not much different. It is very possible to increase taxes in a manner that puts the cost of maintaining Medicare and Social Security directly upon those who will eventually benefit from those programs, but Samuelson's concern appears to be that it will be his economic class, to which the benefits form those programs are literal "pocket change", that will be asked to share the burden.

Samuelson's "solution" is for workers to keep on paying what they're presently paying, but to receive considerably less upon retirement. That's from from cutting "Social Security and Medicare [to] help workers". It's cutting those programs to either reduce the deficit or to fund the continuation or expansion of tax cuts for the wealthy, and so Samuelson can continue to endorse enormously expensive discretionary spending programs or wars on the basis that we can easily afford the added debt.

Samuelson knows he's a rich man. He's simply not honest enough, perhaps with himself and certainly not with others, to admit that the class war he endorses is not within the middle class, but is instead between himself and his wealthy, like-minded peers and the middle class. Samuelson and his peers will feel no pain from the cuts he proposes, and apparently would prefer to keep Social Security and Medicare in somewhat precarious states such that they can hand-wring about the "necessity" of reform, rather than implementing meaningful reforms that would undermine the case for cuts.

Which Voters are Getting What They Want?

Charles Pierce has taken apart most of David Brooks' exposition on "The Age of Innocence", but I think that the following claim deserves some attention:

Leaders today do not believe their job is to restrain popular will. Their job is to flatter and satisfy it. A gigantic polling apparatus has developed to help leaders anticipate and respond to popular whims. Democratic politicians adopt the mind-set of marketing executives. Give the customer what he wants. The customer is always right.

Having lost a sense of their own frailty, many voters have come to regard their desires as entitlements. They become incensed when their leaders are not responsive to their needs. Like any normal set of human beings, they command their politicians to give them benefits without asking them to pay.

I don't think that there's any way to dispute how poll-driven politics has become. Mitt Romney personifies the worst of that phenomenon - if you want to know what he thinks about an issue, all you have to do is check the latest poll and you'll find that he has undergone a heartfelt transformation from his previous stated opinions and now agrees, with every fiber of his being, with the position he believes will help him win the election. Don't ask him what he said on prior occasions because he may not remember the position he took - but rest assured, whatever it was, he stands by it.

Brooks suffers from the standard beltway pundit's obsession with Social Security and Medicare, so I expect that if pushed on the issue he would point to those two government programs as proof of his latest imagined transformation of human nature. But Medicare and Medicaid were created in 1965, a mere three years after Brooks' imagined peak of American civil society, by which time Social Security had been in effect for thirty years. The good, wholesome voters of the past asked for and received those programs from enlightened politicians who respected the way government was supposed to work - unlike the self-interested voters of today who merely ask that those programs be continued, or at least not too badly devastated. Shame!

Brooks thus complains about how workers "want great lifestyles without long work hours." (Alas, we cannot all be New York Times columnists.) "They want dynamic capitalism but also personal security." If you could accomplish that, would it not be a good thing? "European welfare states go broke trying to deliver these impossibilities." Um, yeah, rather than legislating a shortened work week, supporting unions, and offering a broad social safety net, it's a darn shame this country isn't more like Germany.

Seriously, though, if workers want short work weeks and politicians do exactly what workers want, why don't we have a shorter work week? Why do we have, instead, more jobs being classified as "exempt" such that workers can be salaried with no cap on their weekly hours? Why isn't the minimum wage higher? Why do middle class voters pay any taxes at all - who, after all, wants to pay taxes? Brooks shares a common sentiment about populism and describes the slippery slope that should be resulting from that populism, but where can we actually see that slippery slope in action?

Meanwhile, we have had poll-driven promises from both political parties, and most notably from the Republican Party, for decades. All of the Republican litmus test issues are poll-driven. Yet when in office, even when they hold all three branches of government, the Republicans tend not to deliver on those issues. Worse, even though their voters say they want a balanced budget, the Republicans habitually break the bank. The reasons for that are obvious - the Republican Party is interested in winning elections. By becoming the "pro-life" party, the Republicans can push that issue in every election. But if Congress and the President were to deliver, pfft - gone. Yes, we get lots of populist, poll-driven promises in their campaigns, but if it's not an issue the party actually cares about you simply cannot expect that anything will get done - and should expect the opposite if it's an issue that can be recycled from election to election.

Brooks is, in effect, confusing the bread and circuses with the actual work of government. Brooks could find plenty to criticize in the actual workings of government, and how the system has become skewed to the incredible advantage of wealthy people (like him) but... nah, easier to blame the plebs.

I Know Exactly How Things Always Used to Be....

Because I've seen a few episodes of Ozzie and Harriet. Seriously, can we expect pundits to ever tire of cherry-picking a date from the late 1950's or early 1960's as the date that society was perfect, and acknowledge both that the period at issue was anything but perfect - particularly for non-whites - and is not representative of the rest of human history?

In 1957, 57 percent of those surveyed said that they believed that adults who preferred to be single were “immoral” or “neurotic.” But today, as Eric Klinenberg reminds us in his book, “Going Solo,” more than 50 percent of adults are single. Twenty-eight percent of households nationwide consist of just one person. There are more single-person households than there are married-with-children households. In cities like Denver, Washington and Atlanta, more than 40 percent of the households are one-person dwellings. In Manhattan, roughly half the households are solos.

In 1857, what percentage of people do you suppose would have argued that marriage should be based upon romantic love, and that the romantic feelings should last a lifetime? What percentage of people would argue that it is never acceptable for a husband to strike his wife? I've heard it argued that conservatism is predicated upon trying to identify and preserve the best elements of the past, while acknowledging and accepting change of the worst, but the Brooks-style argument is far more prevalent: Pick a point in history, most often when the commentator was a child, romanticize the era, ignore its bad points, ignore the social factors that contributed to the often historically brief high points of the era, and argue that everything would be perfect if only we could build some form of social engineering time machine and force society into the fictionalized mold of that era.

Brooks observes,

A few generations ago, most people affiliated with one of the major parties. But now more people consider themselves independent than either Republican or Democrat.

Um... so what? At one point it was Whigs versus Tories, right? Times change. More to the point, the fact that people call themselves "independent" does not mean that they in fact vote differently than people with stated party affiliations. If you follow up with "do you lean toward the Republican Party or the Democratic Party", you'll get an answer that his highly predictive of how an independent will vote.

A few generations ago, many people worked for large corporations and were members of a labor union. But now lifetime employment is down and union membership has plummeted.

An interesting observation, given that union jobs, stable employment and the ability to earn a solid, middle class salary as a blue collar worker factored into the middle class culture of the late 1950's that Brooks so adores, but I somehow doubt that Brooks is arguing for more unions, higher wages for factor jobs and job protections. It's like that song, Love and Marriage, which I believe was released in 1955 - you can't have one without the other. Except in relation to marriage you can, and for most historical marriages you did. What you can't have is a strong, economically stable blue collar middle class if you don't have job opportunities and labor laws that will support and sustain a strong, economically stable blue collar middle class - history teaches us that lesson, as well.

A few generations ago, teenagers went steady. But over the past decades, the dating relationship has been replaced by a more amorphous hook-up culture.

A few generations ago, boys were allowed to "sow their wild oats" while girls were to remain chaste and to marry, often at a very young age, the man their parents chose for them to marry. Brooks also later suggests that if teenagers hang out in groups instead of going steady, this is indicative society's evolution away from a time when "America was groupy". Um, yeah.... Needless to say, Brooks carries on for a while longer in that vein.

Brooks makes an interesting observation,

But if there is one theme that weaves through all the different causes, it is this: The maximization of talent. People want more space to develop their own individual talents. They want more flexibility to explore their own interests and develop their own identities, lifestyles and capacities. They are more impatient with situations that they find stifling.

Brooks overstates his case. As with his attempt to attribute major changes in society and culture to technologies that have only existed for the past ten to twenty years, he overstates both the role of talent in society and the extent to which talented individuals can carve out their own successful career paths. But there's a lot of truth to the fact that our society has evolved toward an expectation that people have the right to make their own choices, to "be happy", and to be fulfilled, even if we don't have a clear sense of what that means. In Brooks' "groupy" past, there were strong group pressures to tolerate miserable situations lest you lose your status within your groups. I don't consider it to be a bad thing that some of the groups that once dominated social behavior have lost their stranglehold, but at the same time we have evolved into a society in which people feel more free to pursue their individual wants and needs and that the freedom has had an impact on traditional groups and upon the institution of marriage. Like pretty much every process of social evolution, the result is a mixed bag.

Predictably, Brooks imagines that society is composed of two kinds of people:

Over all, we’ve made life richer for the people who have the social capital to create their own worlds. We’ve also made it harder for the people who don’t — especially poorer children.

If life is harder for children who are poor we're not actually talking about social capital, are we? Because poverty is an economic construct. Here Brooks appears to be trying to sustain his weak argument from recent columns in which he attempts to argue that the bottom thirty percent of wage earners have lost their moral bearings but that, even though he sees something close to a perfect correlation between economic trends and the changes in social behavior, their situation has nothing to do with economics. It's a bit like his allusion to union membership in this column - he can identify and track myriad economic factors that correlate with what he perceives to be a shift in values, but then turn on a time and argue without evidence that we're actually seeing some form of transformation of human nature. Correlation should not be confused with causation, but if the correlation holds for pretty much all of human history and you have no other evidence to support your claim....

Brooks concludes,

These trends are not going to reverse themselves. So maybe it’s time to acknowledge a core reality: People with skills can really thrive in this tenuous, networked society. People without those advantages would probably be better off if we could build new versions of the settled, stable and thick arrangements we’ve left behind.

It's a shame he couldn't find room in his column to suggest a means through which we can push the working poor through that social engineering time machine and recreate the world of Ozzie and Harriet. (Perhaps we could call that world Pleasantville.) But really, if Brooks breaks away from his standard cocktail circuit and explores the real world, he will likely find that people with the "skills" and opportunities necessary to create a wholly independent life are few in number, and that most people are pretty much embedded in a culture of jobs and paychecks. One might argue that if we lived in the meritocracy that Brooks imagines himself to be a part of, a better columnist would be composing a column in his place and would be acknowledging that reality.

Class and Income Rigidity in the United States

I don't want to pick on Megan McArdle, as I think her heart's in the right place on this one, but.... In an effort to explore inequality, some time back, Megan McArdle argued,

The old aristocracy was, I think, at least dimly aware that it wasn't quite fair for them to have what they had by mere virtue of being born to the right parents. But in the new aristocracy, it is rarely enough to just get born to the right parents; you also have to work very hard. (Higher earning men are now more likely to work more than 50 hours a week than are men in lower earnings quintiles.)

Has McArdle ever worked at a job that paid by the hour?

When Eric Erickson made a fool of himself by arguing that he worked three jobs, it wasn't just his white T-shirt that was intended to send the message, "I'm just a working guy". It's typically those who work in hourly jobs who can legitimately claim to be working multiple jobs. Why? Because their employers have only so many hours of work to offer, and when the schedule fills up you can only get more hours by changing jobs or moonlighting. If your a non-exempt employee, such that you're entitled to overtime, your employer also has a strong incentive to cap your work week at 40 hours, leaving you with more time to find and work a second job - not that you would find that to be an ideal use of your time, were you in that position, but if you need the income that's how you'll get it.

When the economy is booming, a lot of the workers that McArdle suggests aren't "work[ing] very hard" in fact put in ridiculous hours. I know some people in the construction trades who were working seventy or more hours per week during the boom. Some now have difficulty finding full-time employment, and an even harder time finding employers who are willing to pay overtime. They didn't get lazy - the economy changed.

As for those hard-working white collar types, one of the big reasons why they work more than forty hours is that they are exempt and thus their employers can require them to work more hours without paying them any additional money. Yes, some people who are chained to their desks do work very hard. Others put in a lot of face time. Others do work that's pretty mundane and could easily be distributed to other workers, but for the fact that hiring additional help would increase the employer's costs. (Perhaps McArdle has forgotten the Bush Administrations expansion of jobs that could be classified as exempt, and has overlooked the frequency with which employers are accused of cheating workers out of overtime pay - it's a big deal.)

In speaking of poverty and income inequality, McArdle argues,

I don't care about income inequality. I care about the absolute condition of the poor -- whether they are hungry, cold, and sick. But I do not care about the gap between their incomes, and those of Warren Buffett and Bill Gates. Nor the ratio of Gates and Buffett's incomes to mine. And I'm not sure why anyone should.

McArdle's examples seem a bit odd. I can't recall hearing anybody argue that either Gates and Buffett are undeserving of their wealth. On the one hand, McArdle seems to recognize that the two issues are unrelated - and in fact that inequality of income and wealth is what allows some entrepreneurs and investors to come out on top. But on the other she appears to be suggesting that if you're concerned about anything beyond absolute poverty, you're engaging in some form of class resentment whereby you want to strip wealth away from people like Gates and Buffett. The disconnect is highlighted by the fact that McArdle wants people to have equal economic opportunity, independent of their economic status. If McArdle's statement is meant to be, "As long as there's a reasonable path from poverty to wealth, I don't care about income inequality," fair enough. But if her statement is taken literally, surely she is aware that there is a tipping point at which income inequality will pretty much lock the class structure in place.

Despite her implication that professionals work harder than hourly workers, McArdle does recognize that there's a lot more to the picture than that. She suggests, in my opinion quite rightly, that higher wage earners are apt to give their children better education and better opportunities, and in many cases "the actual skills required to earn more money than everyone else". I read a comment a while back, I believe from one of Donald Trump's children, describing how he had proposed attending a college that would have allowed him more time to pursue sports or hobbies. He was told to go to the best college he could get into. Did he necessarily get a better education there? Perhaps, but probably not. But "The Donald" has a very clear understanding of the value of branding. Trump provides an example of how somebody can benefit not just from family money, but from entering the same business as their parent. Trump's father was a successful real estate developer in New York City, so it's far from a surprise that Trump became a real estate developer in New York City. And with some hard work, luck, no small amount of ego and force of personality, along with dad's money and connections, Trump succeeded (and failed) on a much larger scale than his father. The lesson to be inferred is less that Trump received an unfair advantage, and more that children will often follow a career path consistent with that modeled for them by their parents. And yes, if you learn the ins and outs of any job from somebody who already holds it, you're more apt to succeed in that job.

Children of the wealthy are also more likely to get a level of support unavailable to the rest of us - a job at their parent's firm to help establish them in their parent's profession. Yes, about forty percent of sons at some point work for one of their father's past employers, but it should go without saying that at the bottom end of the labor pool that is more likely to establish you as a lower-end wage earner than to help propel you to the top 1% (where the number of sons working at dad's current or old employer approaches 70%).¹

Also, it's not like the top 1% through the remaining 32% of their children to the wolves. A couple of "sons of bankers" come to mind, one of whom was sharp as a tack but uninterested in banking. His father put him through law school and funded his founding of a law firm. Another was not very bright or motivated. His father bought him a commercial janitorial services company. It's much easier to enter into a profession, or to succeed as an entrepreneur, when your path to success is greased with family money.

The benefits of having wealthy parents can't be avoided and, even if you believe it should be, it's difficult to impinge a cure that would not be worse than the disease. But let's recognize that if Donald Trump's dad were a shift manager at a restaurant, Trump would be a success if he became a general manager. He would be a phenomenal success if he became a successful restauranteur - but probably still somebody we wouldn't have heard of. Trump moved from third base to home plate - but unlike most of the rest of us, he started on third.

While McArdle professes some level of surprise that although "Ivy League colleges threw open their doors to the bourgeois masses, and cut back on the Saint Grottlesex crowd," inequality persists, perhaps she should consider both that the Ivy Leagues have not eliminated preferences for the children of alumni, and that the number of people who can attend Ivy League schools remains insignificant - even though the signal drawn from attendance is massive. Using McArdle's own anecdote from another piece, quoting Bryan Caplan's finding that "Super-elite credentials matter much more than your academic record",

You see this in Washington all the time -- a friend who went to a lesser-known state school said he could always tell the people he wasn't going to like when he met them at cocktail parties, because the minute he told them where he'd gone to school, they became extremely interested in going to get another drink or find the cheese dip. This is one of the smartest, most consistently interesting and original, most talented writers I know. Having actually attended one of those elite schools that apparently make you fascinating, I can attest firsthand that statistically, the elitists were vanishingly unlikely to be as interesting as the person they abandoned because he'd gone to a state college.

The first question that comes to mind: Why do McArdle and her friend keep going to those parties? (The answer, of course, is obvious: They're hobnobbing with rich, powerful people and it benefits them to "see and be seen".) The second question is, why does her friend keep dropping the name of his undergraduate institution into discussions? It's truly difficult for me to believe that, as a matter of course, the people at these parties are changing the subject from his scintillating conversation and saying, "This is a nice conversation and all, but unless you went to Harvard or Yale I have to move on to more important people or, if you went to a state college, the cheese dip."²

When McArdle observes that middle class parents would be horrified if their children, like those of the bottom quintile, had only a 17% chance of achieving a household income of $90,000 or more, she's correct. But that also highlights how she misses the boat on income inequality. The more education your parents have, the more wealth they have, the more business and political connections they have, the more they can do for you - even if simply by example³ - to land you among the nation's highest wage earners. If you truly don't care about income inequality, and truly don't care if the bottom drops out on the middle class, you cannot credibly claim to be concerned about the associated collapse of opportunity to rise.
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1. Admittedly the figures are from Canada, but I expect that the experience is about the same in the U.S. and U.K.

2. Unless, perhaps, these conversations involved his lobbying various political insiders for a nomination to the Supreme Court, but that's another story.

3. Most will do much more than act as role models.

Paul Krugman's Relentless Optimism

Hey, it's wishful thinking I would prefer to share, but I still see it as wishful thinking. In something that's not quite a reply to David Brooks' standard emission of "What our country needs is a good, stiff dose of morality, which of course means stiffing the middle class and working poor", Krugman argues,

All around, right now, there are people declaring that our best days are behind us, that the economy has suffered a general loss of dynamism, that it’s unrealistic to expect a quick return to anything like full employment. There were people saying the same thing in the 1930s! Then came the approach of World War II, which finally induced an adequate-sized fiscal stimulus — and suddenly there were enough jobs, and all those unneeded and useless workers turned out to be quite productive, thank you.

That is a fair retort to those like Brooks who argue that human nature has been somehow transformed and that the nation's problems are of a moral and not an economic nature. It's not only reasonable to say that human nature is pretty much the same as it was back in the depression era, but that if you're going to blame the present economy on a shift in morality (one that, it would seem, pervades the entire developed world), you should explain why our present degenerate nature nonetheless led to a huge economic boom as recently as the 1990's, and what various people on the right were trying to tell us was a boom up to the point that the housing bubble burst in late 2006.

But I find myself taking issue with Krugman's extrapolation:

There is nothing — nothing — in what we see suggesting that this current depression is more than a problem of inadequate demand. This could be turned around in months with the right policies. Our problem isn’t, ultimately, economic; it’s political, brought on by an elite that would rather cling to its prejudices than turn the nation around.

World War II was not only a "fiscal stimulus", but was also a war. The U.S. did develop huge numbers of manufacturing jobs during the war, but the success of our nation's manufacturing sector after the war was buoyed not only by the newly created technologies and capacity, but by the fact that much of Europe and Japan had been reduced to rubble.

Right now we have an economic crisis in which the world's manufacturing capacity remains intact and underutilized. Low-skilled manufacturing labor that might have provided a middle class income after WWII has in no small part been outsourced to other nations, and the low-skilled jobs that remain tend not to pay well. Thanks to automation, over the past sixty years the number of workers required to produce a given quantity of manufactured goods has declined precipitously. Also, even before the bubble burst, the middle class was under obvious stress with a ridiculous percentage of families spending more each month than they earned in wages. Even if we could return to the status quo ante, it would not be sustainable. We might be able to engineer a slower collapse, but absent something to reinvigorate the nation's middle class it was inevitable that we would reach a point where middle class standards of living could no longer be sustained by increased household debt.

I'll agree, it's possible that something as cataclysmic (and I'm leaving open the possibility of a positive upheaval, not just a war or disaster) will occur and reinvigorate the middle class. But as Krugman would be happy to point out in many other contexts, merely saying that something has happened before or assuming that something will happen falls far short of drawing sound conclusions through the application of economic principles. Economic formulas do not predict such an upheaval or make it inevitable. That part is wishful thinking.

Let's say that we were to enact a stimulus following Krugman's model and that his projections are correct: six months from now we have turned the economy around. Krugman assumes that nothing material has changed, and thus that a recovery will recreate the jobs that were lost over the past five years, and that people whose job skills are presently found wanting will once again be "quite productive". Except that's not going to happen. First, jobs will continue to be outsourced to other nations. Second, many jobs that re-emerge will pay less than they did before the bubble burst. While wage stickiness may have prevailed through this recession, for decades we've experienced stagnant middle class wages and declining working class wages. I fully expect that workers, back on the job, will be as productive as ever, but that we'll continue to see the benefit of that productivity directed to the top.

My cynical side looks at human history and sees our large, robust middle class as an aberration. I see a trend toward wealth and income distribution that looks more and more like that of the 19th century (or earlier) than that of the modern era. And I'm left wondering, how much stress can you place on the modern middle class before it cracks? And once you break the middle class, what will it take to bring it back?

Krugman is the economist, and I'm merely a cynic. But in this context his assurance does not come across as a sound application of economic theory. It strikes me as wishful thinking. I can easily see how we could have a remarkable recovery that primiarily benefits the wealthy, results in modest job creation for the working classes, and does nothing to diminish the pressures upon or wage stagnation experienced by the middle class.

Update: I just came across an article in Esquire that shares my cynical view of the economic trends in this country:

There are some truths so hard to face, so ugly and so at odds with how we imagine the world should be, that nobody can accept them. Here's one: It is obvious that a class system has arrived in America — a recent study of the thirty-four countries in the Organization for Economic Cooperation and Development found that only Italy and Great Britain have less social mobility. But nobody wants to admit: If your daddy was rich, you're gonna stay rich, and if your daddy was poor, you're gonna stay poor. Every instinct in the American gut, every institution, every national symbol, runs on the idea that anybody can make it; the only limits are your own limits. Which is an amazing idea, a gift to the world — just no longer true. Culturally, and in their daily lives, Americans continue to glide through a ghostly land of opportunity they can't bear to tell themselves isn't real. It's the most dangerous lie the country tells itself.

Post-hope , it is hard to imagine even any temporary regression back to the days of the swelling American middle class. The forces of inequality are simply too powerful and the forces against inequality too weak. But at least we can end the hypocrisy. In ten years, the next generation will no longer have the faintest illusion that the United States is a country with equality of opportunity. The least they're entitled to is some honesty about why.

Again, I'll be very happy if "something happens" that reinvigorates the middle class, and I leave open the possibility that good fortune will smile upon us. But as I look to history, the absence of any objective reason to expect that level of good fortune, and a concerted effort by powerful interests and political leaders to squash what's left of the blue collar middle class and drive more wealth to those who are already the wealthiest, I remain skeptical that the present trends won't continue and, at some point, accelerate.

Update 2: Via LG&M, a cynical response to David Brooks, also from Esquire.

Social Security and Tax Increases

If you asked Robert Reich, "Do you believe Social Security should be a form of insurance or a social welfare program," this editorial suggests that his answer would be "yes". That's not entirely unreasonable, given that Social Security does have aspects of both: It's an insurance program for workers, helping in the event of disability and providing a return on money paid into the system that's based in part upon the amount you pay in. But it's also a social welfare program that provides a much better return to workers at the low end of the income scale than those who make the largest contributions.

Reich proposes that Social Security can be made solvent for the longer term, as Reich proposes, by increasing the ceiling for payroll taxes from $106,800 to $180,000. But beyond economic viability, the taxpayers who would be hit hardest by that increase are among those whose support is needed in order to ensure Social Security's long-term political viability. The more money you take from higher wage earners to pay for Social Security, the less appealing it becomes to them.  And while few cry bitter tears for households earning enough to be hit by that increase, it is fair to observe that it would be yet another example of tax policy that has no appreciable impact on the wealthy but disproportionately affects working professionals.

My concern with this type of proposal remains that if you shift public perception of Social Security away from that of a program that guarantees a basic safety net to all workers, and toward "just another welfare program," you'll undermine support for the program and thereby upset its long-term political viability. Reich should consider for a moment that, even though every commentator from left to right found the metaphor to be inane, the New York Times treated as serious the question, "Is Social Security a Ponzi Scheme?"

What about something other than a tax increase? What if, for example, we were to implement policies that buttress and expand the middle class? Frankly if we've given up on that, we are admitting that our economy has systemic problems that cast doubt on whether even raising the payroll tax ceiling will create the sustainability that Reich predicts.

Slashing Taxes for the Idle Rich

Duly chastened, Newt Gingrich is amending his platform to include massive tax cuts for the idle rich. Your inheritance? Not only does Gingrich want to eliminate estate taxes, he wants to eliminate capital gains - tax free living in perpetuity for the Paris Hiltons of America.

For the rest of us?

"I think these kinds of steps would move us toward a very dramatic job growth, which is the best way to move towards a balanced budget—by getting people off of unemployment, off of Medicaid, off of food stamps, get them back into earning a living and paying taxes," he said.

* * *

On jobs, he said he would allow the unemployed to collect benefits for four weeks to look for a job, then would force recipients into a job training program.

That's right, you middle and working class slackers - get off your duffs and start paying taxes. After all, somebody has to, and if Newt gets his way it sure as heck isn't going to be the wealthy.

Decline of America, or Decline of the Middle Class

A couple of days ago, David Brooks offered his thoughts on the decline of the British Empire and, potentially, of the United States. Paul Krugman took a gentle poke at the column,

Reading David Brooks today, I couldn’t help thinking of Bob Solow’s old line that efforts to explain Britain’s relative decline always end up in a “blaze of amateur sociology.” That’s not an attack on David; everyone does it — although I might point out that the reason so many smart kids go into finance, not manufacturing, is that the pay is much better.

It seems fair to also note in relation to sociology (or economics, or psychology, or a lot of other 'ologies') the professional practitioners are potentially more dangerous than the amateurs. It is possible to make those fields relatively scientific, but it's difficult to see how even the best of the professional class can avoid introducing elements of subjectivity, ideology and overgeneralization. Various models or theories will work better in some contexts than in others.

In relation to the decline of the United States, Brooks offers his personal opinion, "Personally, I’m not convinced we’re in decline". It's fair to note that earlier in the editorial he argued the opposite,

This history [of Britain's decline] is relevant today because 65 percent of Americans believe their nation is now in decline, according to this week’s NBC/Wall Street Journal poll. And it is true: Today’s economic problems are structural, not cyclical. We are in the middle of yet another jobless recovery. Wages have been lagging for decades. Our labor market woes are deep and intractable.

The most charitable reading of Brooks' inconsistency is that he believes the nation as a whole can avoid decline, even as its middle class is unquestionably in decline. Such a perspective would either seem out-of-touch, a variant of "I can't understand why those factory workers don't realize that if they quit their unions, abandon job protections and take pay cuts, and they would be better off", or vested in the notion that an incredibly wealthy minority can rule over a flourishing nation of, in terms of comparative wealth and political power, serfs.

The Krugman passage quoted above partially rebuts Brooks' leading point, that "the elites. America’s brightest minds have been abandoning industry and technical enterprise in favor of more prestigious but less productive fields like law, finance, consulting and nonprofit activism." Brooks argues,

It would be embarrassing or at least countercultural for an Ivy League grad to go to Akron and work for a small manufacturing company. By contrast, in 2007, 58 percent of male Harvard¹ graduates and 43 percent of female graduates went into finance and consulting.

Sure, after pursuing the most expensive academic degrees available, large numbers of students will chase the largest paychecks available. No surprise there. But my guess is that if an Akron manufacturing concern were doing well enough to pay a competitive salary, it could attract job applications from ivy league grads. I won't say that there aren't graduates who would see anything but a six figure job with a fortune 100 company as beneath them, but the larger impediment to a small company's hiring a new college graduate, even from Harvard, is that they come with an inflated sticker price and no job experience. Smaller businesses can't invest as much money in training and shaping college graduates; they often need their new hires to hit the ground running.

Brooks' larger point is misleading - many college graduates are eager to start businesses, work independently, and be masters of their own fate. Not that our society makes it easy to be an entrepreneur, or that it's easy to pick up the associated skill set in a standard college degree program.

Oddly, just after stating that too many college graduates are chasing big paychecks, Brooks holds up a quote attributed to Michelle Obama, in which she reportedly² urged women to join helping professions, as reflecting a "shift away from commercial values". Which is it - are we shifting toward commercial values, putting salary head of everything else, or are we dropping out of the corporate world to become teachers, community organizers and social workers?

Brooks next goes off on the lower middle class:

Then there’s the middle class. The emergence of a service economy created a large population of junior and midlevel office workers. These white-collar workers absorbed their lifestyle standards from the Huxtable family of “The Cosby Show,” not the Kramden family of “The Honeymooners.” As these information workers tried to build lifestyles that fit their station, consumption and debt levels soared. The trade deficit exploded. The economy adjusted to meet their demand — underinvesting in manufacturing and tradable goods and overinvesting in retail and housing.

First, the Huxtable family was not depicted as middle class - Dad was a doctor, Mom was a lawyer, and they were affluent. There are many situation comedies which depict people living far beyond the income potential of their nominal jobs, but that's not something which which Bill Cosby can be faulted. Second, the lead male characters in "The Honeymooners" were a bus driver and a sewer worker, the sole breadwinners for their families, save for a period during which Ralph Kramden was unemployed and Alice returned to work as a secretary. The most remembered line from the show evokes domestic violence. Ralph, frustrated by his economic circumstances, was often scheming about how to make money.

More to the point, the era of the Huxtables brought us a modern equivalent of "The Honeymooners", a show called "Married With Children." If you think about it, shows like Married With Children" are far more misleading about what it takes to build a middle class lifestyle (a shoe salesman and his stay-at-home, spendthrift wife support two children in a pretty large ranch house, while paying lip service to the economics of their situation) - a successful lawyer and established doctor can easily replicate the affluence of the Huxtables, who arguably lived below their means.

There's plenty of reason to doubt Brooks' notion that it was some form of "Keeping up with the Joneses" (or Huxtables) that led to increased consumer spending and debt. You know what played a huge role in the growth of consumer debt? The broad availability of credit. Can't he imagine a Honeymooner's episode along the lines of, "A credit card arrives in the name of the Kramden's dog, the family goes on a spending spree, and is shocked to learn that they have to pay back the debt." That is the summary of an episode of "Married With Children".

As for the idea that the loss of manufacturing jobs overseas was the result of a shift in U.S. culture - that poor little manufacturers were forced to seek out less skilled, less educated workers in the developing world who would work for a fraction of the wages of their U.S. counterparts, because there weren't enough U.S. workers willing or able to perform those jobs? Come on.

Brooks carries on,

Finally, there’s the lower class. The problem here is social breakdown. Something like a quarter to a third of American children are living with one or no parents, in chaotic neighborhoods with failing schools. A gigantic slice of America’s human capital is vastly underused, and it has been that way for a generation.

First, it should be noted that Brooks paints with a very broad brush, implying that the children of divorce fall into the "lower class". The reality is that, yes, divorce can cause a newly single parent to fall below the poverty line, and can cause longer-term economic stress, but most families bounce back within a few years. Beyond that, Brooks is speaking of an underclass - and it cannot be said that his "lower classes" are a product of the past generation. I'll give Brooks credit for not falling into Bell Curve-style reasoning and excuses, but people have strugged with poverty for the whole of human history.

As an amateur sociologist, Brooks misses the boat on this one:

These office workers did not want their children regressing back to the working class, so you saw an explosion of communications majors and a shortage of high-skill technical workers. One of the perversities of this recession is that as the unemployment rate has risen, the job vacancy rate has risen, too. Manufacturing firms can’t find skilled machinists.

First, children tend to learn from and model themselves after their parents, and learn how to do certain types of work by watching their parents. Certainly, the parents of a couple of generations ago may have urged their children to get college degrees as a path to upward mobility, their children entered the white collar middle class, and their grandchildren may not be becoming machinists, but that's a progression to be expected. Further, how often does Brooks imagine parents telling their children, "Don't become an engineer - there's no money in it." One of the leading reasons why we have a surplus of communications majors is because it's a relatively easy degree to earn, whereas engineering, architecture and the hard sciences are much more demanding. There's a reason David Brooks was a history major, and I dare say it has very little to do with his desire to give himself marketable job skills.

Meanwhile, what's the lesson for machinists? Perhaps, "Move to a non-union state or at least be prepared to do a lot of business travel to Mexico... no, sorry, we've decided to outsource engineering to India and manufacturing to China." Sure, it's true that there are jobs available for experienced welders and machinists, but how does Brooks imagine that they'll develop the skills to qualify for the jobs presently available given the decline of domestic manufacturing? Brooks complains,

Narayana Kocherlakota of the Minneapolis Federal Reserve Bank calculates that if we had a normal match between the skills workers possess and the skills employers require, then the unemployment rate would be 6.5 percent, not 9.6 percent.

I think it's a truism that if every employer had a candidate perfectly matched to every job opening, unemployment would drop considerably. But the displaced workers who cannot find employment, or have to take significant income cuts to find jobs, are not without job skills - it's that the skills and experience from their prior jobs aren't necessarily relevant to the modern workplace. If you have to train or retrain workers, you incur a significant cost and delay in obtaining new, qualified workers. But I see no reason to believe Brooks' suggestion that the underlying problem is that too many college students are graduating (as did he) with degrees in the humanities.

It's of course interesting to inject a bit of history into Brooks' theory that the industrial revolution emerged, like magic, due to "cultural shifts" that caused "technicians" to take scientific knowledge and put it to practical use. It would seem reasonable to mention that the industrial revolution was spurred in no small part by the development of energy sources sufficient to run large factories and foudries. The underclass Brooks appears to believe did not exist at the time in fact provided the necessary "human capital" for the industrial revolution, often working extremely long hours in hellish conditions. Eventually the labor movement emerged and transformed the workplace, but that's not to say that industries didn't find similar sources of labor to abuse in the colonies and, ultimately, in the sweatshops of the post-colonial developing world. And during that era, Brooks believes that the elite of Britain, the heirs of the landed gentry, were studying applied science and industrial management, as opposed to hiring professionals and managers to run their enterprises?³ Not a banker or a lawyer among them?

One of the big reasons that the great-grandchildren of Britain's "empire builders" didn't follow in their great-grandparents' footsteps is that the British Empire collapsed. Secondary to that, the colonies were no longer available as a captive market that could be forced to buy Britain's exports. (Ah, the good old days, when a nation would go to war to protect the rights and profits of its drug traffickers.) And let's not forget the catastrophically expensive World War I, followed all too quickly by the necessary but also catastrophically expensive World War II. Britain's fall was hastened by the amount of wealth it poured into those wars, along with the damage to its industrial infrastructure resulting from WWII. The U.S. benefited from distance, emerging from the war with its manufacturing infrastructure intact. That advantage started to falter as Germany and Japan rebuilt their industrial infrastructure and emerged as competitors.

No matter how you look at things, Brooks should have addressed the role of outsourcing in the decline of middle class jobs in the industrial fields. Over the last generation we have not only seen the loss of huge numbers of solidly middle class manufacturing jobs, those that remain tend not to pay particularly well or offer a path of career advancement. If there's a shortage of machinists, it can reasonably be said to be the result of parents and students looking at the nation's declining industrial base and questioning whether it makes sense to pursue a job that will pay, what, about $40K in a declining market? For all of Brooks' apparent scorn at choosing service jobs such as teaching or nursing, those jobs pay as well or better and are in growing fields. Meanwhile, the mantra of the past couple of generations has been that the future lies in the domestic service sector, so it's hardly a surprise that many students have internalized that message.

There is a disconnect between the manufacturing industries and U.S. employees. While I have little doubt that a manufacturer would get a stack of résumés applying for entry level assembly line work, even at minimum wage and with a minimal benefits package most employers see the advantages of operating overseas, in nations that have weak wage, employment and environmental laws (or weak enforcement of their laws) over building a plant in the U.S. The outsourced factories typically develop products developed in the west, so some jobs remain, but unless energy prices spike and stay high we can expect that the present situation will continue. That means Brooks' "lower class" will lack entry level job opportunities, his "middle class" will attempt to maintain its lifestyle as real incomes decline, and his elite? The change he describes, in fact, appears to be no change at all.

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1. How quickly Brooks leaps from "brightest minds" to "Harvard". There are a lot of bright minds who attend academic institutions that aren't as elite (or expensive) as Harvard, and Bill Gates would have more bright kids explore alternatives to a traditional college education. I suspect we can all think of mediocre minds who number among Harvard's alumni.

I'm also not clear on how having students go into fields such as "law, finance, [and] consulting" represents a "shift away from commercial values".

2. I tried to track down the actual quote and find that, although attributed to Michelle Obama at an early 2008 campaign event in Zanesville, Ohio, no official transcript appears to exist and the unofficial quote is difficult to interpret due to its unfortunate use of ellipses.

3. Brooks cites Correlli Barnett for his point that "the great-great-grandchildren of the empire builders withdrew from commerce, tried to rise above practical knowledge and had more genteel attitudes about how to live." But Barnett has made that same point about the great-grandparents.

Together with what Barnett describes as "the British distaste for a functionally coherent national system" this bias against technology led to the UK's eventual decline from the position of world leader in economics in 1870 to fifteenth place a century later.

Who Am I Describing Here?

Imagine a population of people who fit the following description:

clamorous but rarely confrontational politically, supporters of globalization yet highly nationalistic, proud of their nations' upward mobility yet insecure and fearful they will fall back, fiercely individualistic but reliant on government subsidies, and often socially conservative.

Nothing like us?

Saving The Party Without Ideas

David Frum has a lengthy opinion piece in the New York Times, arguing that economic inequality is not good for the Republican Party. For the most part, he's channeling his inner David Brooks - sharing superficial caricatures of American life, with a shallow analysis of what lies beneath.

I live in Washington, in a neighborhood that is home to lawyers, political consultants, television personalities and the chief executive of the TIAA-CREF pension fund. Not exactly an abode of the superrich, but the kind of neighborhood where almost nobody does her own yardwork or vacuums his own floor. Children’s birthday parties feature rented moon bounces or hired magicians. The local grocery stores offer elegant precooked dinners of salmon, duck and artichoke ravioli.

Right. And, I'm sure, it sells arugula. Let there be no doubt, by any definition other than (perhaps) his own, David Frum is among the "elite".

After noting that a mere four miles away, there's a neighborhood struggling with poverty, he depicts D.C. as an unequal nation where, increasingly, everybody votes Democratic:

As a general rule, the more unequal a place is, the more Democratic; the more equal, the more Republican.

David Frum grew up in Canada. I recognize that he was from a wealthy family and had a famous parent, but I still find it interesting that somebody with roots in Canada would make this type of generalization. Oh, you can point to the fact that Canadians are relatively socially conservative, and can even argue that their government is presently led by the Conservative Party. Yet the "big government" programs and "social safety net" that Frum would be among the first to denounce are untouchable.

My fellow conservatives and Republicans have tended not to worry very much about the widening of income inequalities. As long as there exists equality of opportunity - as long as everybody’s income is rising - who cares if some people get rich faster than others? Societies that try too hard to enforce equality deny important freedoms and inhibit wealth-creating enterprise. Individuals who worry overmuch about inequality can succumb to life-distorting envy and resentment.

Yet which group is most likely to feel that life-distorting envy and resentment. Did you guess, the already successful people just below Frum's class of wealth, who aspire to join it?

In fact, a poll of New Yorkers found that those who earned more than $200,000 a year were the most likely of any income group to agree that "seeing other people with money" makes them feel poor.

Perhaps due to his Canadian upbringing, Frum seems not to appreciate this nation's embrace of the Horatio Alger myth. In my opinion, the people he laments as turning away from the Republican Party aren't doing so out of envy, save perhaps for a few who want to move into his neighborhood.

What you see in nations like Canada and England is how a socially conservative population can reject what Frum urges us to regard as an inherently conservative view of the role of government. People like Frum assume that social conservatism automatically translates into economic conservatism. More cynical pundits and politicians flip that around - they exploit wedge issues to make voters believe that if they don't vote Republican they will end up with a government that will undermine their social values.

That latter group has it right - after all, if "red state" conservatives were voting based on conservative economic principles, we wouldn't be experiencing a series of close elections seemingly decided by those "wedge issues" - immigration, anti-gay ballot initiatives, etc. Despite its comparative economic homogeneity, this does not work as well in a nation like Canada, as due to the demographics of that country it seems to be harder to scare Canadians about the "other" - gay people, arugula-eating pro-choicers, scary foreigners, immigrants who are "trying to take our jobs".... Without those wedge issues, it's a lot harder to get people to vote against what they see as their economic interest.

Note that I'm not condescending to Canadians by telling them what their economic interests are, and thus suggesting how they should vote. I'm observing the reality. Canadians are not about to vote to significantly reduce or eliminate their national health plan, as they know it's not in their best interest. The Conservative Party knows that whatever social wedge issues it attempts to raise, it's not going to survive an election cycle if Canadians believe it will end Medicare. This type of issue is less pronounced in the U.S., although there seems to be a deep-seated Republican concern that a successful national health care system would have a similar effect here - people would reject an economic agenda that sought to undermine the program that is effective in providing them with healthcare.

Frum describes the argument over same-sex marriage as a "distraction", and yes it's a distraction from debate of economic issues. But it's a distraction that has been introduced and fostered by the Republican Party and that has benefited the Republican Party. Given all the magic shows he has surely seen while taking his kids to parties in his neighborhood, surely Frum recognizes the purpose of that sleight of hand - it's to keep people from noticing what the other hand is doing. Needless to say, that's not because the Republican Party believes that the public will support its agenda.

Frum also demonstrates an odd understanding of egalitarianism:

To witness the slow-motion withering of the G.O.P., drive a little farther west into the Washington metropolitan area, to Prince William County. Here is exurban America in all its fresh paint: vast tracts of inexpensive homes, schools built to the latest design, roads still black in their virgin asphalt.

Whether in Virginia, Missouri or Illinois, there are no more egalitarian and no more Republican places in the United States than these exurbs. The rich shun them, and the poor can find no easy foothold, but the middle-income, middle-educated, white married parents who form the backbone of the G.O.P. are drawn to them as if to a refuge.

Yes... what better demonstrates a classless society with equal access to power, influence, and wealth than a community the poor can't afford to enter, and which the rich view as far beneath them.

In classic "What's the Matter with Kansas" style, Frum suggests that these voters are turning away from the Republican Party due to lax Republican immigration policy, despite his belief that they are enriched by low-cost immigrant labor, speculating that they may resent paying "the higher local tax bills that can result from immigration." But if that's the reason, why wouldn't they be turning to a conservative, anti-immigration party or candidate instead of the Democratic Party?

It may be true, as Frum suggests, that the Republican Party would benefit from entering into the health care debate with meaningful proposals that could reign in inflation, and he describes some of the weak tea that a few within the Republican Party hold up as solutions, but he needs to come to terms with the fact that the primary reason that the Republican Party is terrified to enter the debate is that other than its usual scare tactics - it's "socialism", "a government bureaucrat will choose your doctor", etc. - their ideas are inferior.

And at the end of the day, whatever the merits of Frum's brand of economic conservatism, isn't that the problem? He is aligned with a party that, as evidenced by the last eight years of mismanagement, has no real interest in pursuing conservative economic policies. Their public lip service to economic conservatism is paper thin, and they aren't prepared to debate the issues. Frum dogmatically adheres to the view that the Republican Party could produce some compelling ideas, but for some reason just hasn't gotten around to doing so. The evidence suggests that he's waiting for a magic trick that will never come - what you see is what you get.

The Republican Party is now the party of distracting wedge issues, not the party of ideas. And you don't have to look past the hollow speeches at the Republican National Convention to know, that's not about to change. When Frum writes,

The prevailing Republican view - “of course government always fails, what do you expect it to do?” - is not what this slice of America expects to hear from the people asking to be entrusted with the government.

He needs to acknowledge that it's not only that we're expected to vote for a party that takes that view, it's also that they now have a very long record of failure.

Yes, as Frum suggests, the Republican Party is threatened by growing inequality, diminished opportunity, and middle class wage stagnation. As is the Democratic Party. As is the nation. Yes, it would be nice if we could move into a real debate about economic issues, and how to place the middle class on firmer economic ground. But right now there's an election going on and, as McCain's campaign will be the first to tell you, this election is not about issues. So we'll save that debate for another day.

Asking All The Wrong Questions

George Will criticizes John McCain today, for daring to ask people if they are better off now than they were four years ago. Will is correct that "McCain recasts Reagan's question as an assertion in order to pander to the public's dyspepsia and distance himself from George Bush." But from his perch in the upper echelons of wealth, Will is somewhat out of touch with the realities facing voters.

If you are young, since 2004 you might have found romance, had children, learned to fly-fish and become a Tampa Bay Rays fan. In which case you emphatically are better off, even if since 2004 there has been only a 0.6 percent increase - yes, increase - in the median value of single-family homes.

Oh, wow. A 0.6 percent increase over four years. How can people not be relishing that 0.6% gain Will describes loss in home values after adjustment for inflation.

But where Will really misses the boat is in his failure to acknowledge certain trends among homeowners. Homeowners have been actively encouraged to view their increases in home equity as the equivalent of "savings". The have been assured that home prices "only go up". They have been offered easy credit, "secured" by their homes, resulting in their refinancing or using home equity loans to "withdraw" equity in order to support their standard of living. So you may well have a family that had a $170,000 loan on a $200,000 home back in 2004, that now owes $250,000 on the same home. Ask that family, "How can you think you're not better off, if your home is now worth $201,200," and they're likely to see you as the out-of-touch rich guy that you are. And that's assuming that their financial situation has been otherwise stable - a big assumption.

Oh, there's something to Will's larger point, that the question focuses on economics and not on "delight, serenity and gratitude". But when you're economic circumstances are in a downward slide, it's hard to find that "delight, serenity and gratitude ". You can spare me the McCain-style clichés about how money doesn't buy happiness, or that some rich people are unhappy. People who worry about job stability, access to health care, being able to make the car and mortgage payments, the cost of back-to-school supplies and clothes? They can legitimately answer McCain's inquiry, "No, we're not better off," even if they recently learned to fly-fish.

Did I Hear That Right?

Yesterday on Marketplace, David Frum suggested that as the middle class realizes that their home values and stock portfolios don't "grow automatically", they may start saving more money. You know, because investments in stocks (is he talking about retirement savings accounts here?) aren't actually savings. They're... investments. Yeah. And because everybody owns stocks. And because the interest rates on savings accounts are so high.... And because there's nothing that drives savings like having less money to spend. And because it's not like people have to, you know, pay their bills or anything.

The Debt Spiral

An organization called the "Institute for American Values" has produced a report, For A New Thrift: Confronting The Debt Culture that, in its own modest words, "powerfully addresses the linked problems of overindebtedness, lack of savings, and growing inequality in the United States."

The focus is on institutions. When a society creates democratic institutions to encourage thrift, more people are likely to engage in the positive activities of saving, conservation, and asset building. When a society fails to nurture such institutions, limits access to them, or supports institutions opposed thrift, more people are likely to over-spend, fall into consumerism as a philosophy of life, and go into debt.

I don't know whether to congratulate them for being sufficiently thrifty to make the report available by mail for a mere $7, or point out that they could save money and trees by offering it for download. But my biggest regret in their selling the report is that it leaves me unable to see the source for David Brooks' latest column, The Great Seduction.

I think Brooks is being sincere in his column - he's a rich man, earning probably at least a mid-six-figure income, has no meaningful contact with anybody who works a low-end job, and doesn't understand why the average American can no longer save 10-20% of their wages. After speaking of the nation's "Puritan legacy", Brooks declares,

The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal.

Right.... The nineteenth century, for example, has no glaring examples of corruption by wealth. That's why terms like "robber baron" don't exist in the English language.

Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.

Is Brooks trying to be elitist and condescending, or did it just come out that way? He truly believes that the growth of debt, and the associated decline in savings, within the middle class is a form of decadence? Here's a dose of ugly economic reality - the economic changes that have led to a negative savings rate arise primarily from the costs of maintaining a two-income family, not from overspending.

Now let me take a step back here, because there's a fair response to what I just said - which is that if you're spending more than you make, you're overspending. Period, end of story. That's the way I lived most of my life, and at times I lived well below my means so I could bank funds and pay off my student loans. I've been self-employed for most of my adult life, and the best way to avoid cash flow problems is to have a decent sum of money in the bank. From the time I got my very first credit card, I've paid off my balance in full each month. I'm the type of consumer that I suspect lending institutions secretly hate - I may have a good credit score, and be a fantastically low risk borrower, but they have a hard time making money off of me. Seth Godin's advice here, on getting out of debt and staying out of debt, is tough - but I would still recommend it. My natural income is to tell people who "can't" save money, "You're not trying hard enough."

But I'm not going to condescend to a family with two wage earners, who have purchased a home in a neighborhood with decent schools and who need two cars to commute to their jobs, and who aren't being financially irresponsible in any traditional sense of the word but still can't manage to save money, or have to run up a credit card bill to cover the increased cost of their commute. I'm certainly not going to condescend to a family that has to run up some debt due to the sudden loss of income due to an illness or layoff. There's very little cushion for the modern middle class, wages are pretty stagnant, and as Brooks has profited during the Bush II "invisible recovery" he has managed to miss how his gain has come at the expense of others. Changes in the savings rate are not, as Brooks sees it, a "deterioration of financial mores" - they're a manifestation of the deterioration of the economic ground beneath the middle class.

I also don't care for his "there are two types of people" caricature of the problem:

Second, the transformation has led to a stark financial polarization. On the one hand, there is what the report calls the investor class. It has tax-deferred savings plans, as well as an army of financial advisers. On the other hand, there is the lottery class, people with little access to 401(k)’s or financial planning but plenty of access to payday lenders, credit cards and lottery agents.

If he were referencing the financial trends of the past thirty years, and the increased concentration of wealth in the hands of "the investor class", he might have a point. But a lot of the middle class people who are sqeezed and who aren't saving money have tax-deferred savings plans. Some of them have had to cash out those plans or borrow against them. It's also terribly condescending to those people suggest that, as they're not saving, they're part of a "lottery class" - they're borrowing to make the mortgage payment and car payments, put groceries in the fridge, and fill the gas tank, not to play the lotto. It seems that in Brooks' world the middle class isn't just disappearing - it has completely disappeared. (Or is it actually that the middle class is beneath his notice.)

Describing what he sees as a loss of social consciousness about money and debt, Brooks writes,

The agents of destruction are many. State governments have played a role. They aggressively hawk their lottery products, which some people call a tax on stupidity. Twenty percent of Americans are frequent players, spending about $60 billion a year. The spending is starkly regressive. A household with income under $13,000 spends, on average, $645 a year on lottery tickets, about 9 percent of all income. Aside from the financial toll, the moral toll is comprehensive. Here is the government, the guardian of order, telling people that they don’t have to work to build for the future. They can strike it rich for nothing.

My guess is that David Brooks is among the "some" who would call the lottery a "tax on stupidity". I personally find better uses for my money. But you know what? There are people who play the lottery for fun. And contrary to what Brooks suggests a lot of the tickets aren't sold on the premise that you'll win $millions. They're sold on the basis that you'll win a few dollars, or maybe a free ticket, with a chance at a five to six figure windfall if you "hit it big".

Also, even at the alarming $645, 9% of income rate Brooks observes, this unusual household (one supported by a single minimum wage earner?) is only spending $12.40 per week on the lottery. As vices go, that's about as cheap as you're going to find. I would bet that many of those people do recover a percentage of their expenditure in $2, $5, and $10 wins - with few exceptions, well below what they spend, but perhaps reducing the actual weekly loss to $10 or so. Brooks imagines that these people dream of striking it rich for nothing? Possibly in an abstract, "Imagine what we could do if..." sense, but in my experience most people who play the lottery understand the long-shot odds.

Brooks also criticizes payday lenders,

They seductively offer fast cash - at absurd interest rates - to 15 million people every month.

True, but now we've moving away from the earlier discussion of credit card debt, and into the world of people who have maxed out their cards or who can't qualify for conventional credit. Is there a person on the planet who would turn to a payday lender as their first choice? Although I admit to having little sympathy for payday lenders, there is some truth to their argument that if they could not charge their ridiculous interest rates and fees they could not serve their community of borrowers. There's enormous risk in serving the bottom end of the financial market - the people with the shakiest job histories and the worst credit scores.

Credit card companies have played a role. Instead of targeting the financially astute, who pay off their debts, they’ve found that they can make money off the young and vulnerable. Fifty-six percent of students in their final year of college carry four or more credit cards.

Speaking as somebody who could reasonably be described as a financially astute person who pays off his debt, I can tell you this: I get targeted by credit cards. I can't recall the last time a week went past without my getting a "You're preapproved!" credit card offer in the mail, along with proposals for me to transfer balances between cards at "attractive" rates, "convenience checks" to use to pay bills with a credit card... it's huge a stack of junk mail. But as I mentioned earlier, I'm not where the money is. I have no fee cards, effectively use them to float an interest-free loan for one to two months, then pay off the cards in full. The only way a credit card company makes money off of me is through the commissions they charge to merchants.

Credit card companies haven't suddenly realized that there's more profit to make off of people who don't pay off their bills - they've known that from day one. But I got my first credit cards in college, probably had four by the time I graduated, and still managed to be a responsible (and probably unprofitable) credit card borrower.

Congress and the White House have played a role. The nation’s leaders have always had an incentive to shove costs for current promises onto the backs of future generations. It’s only now become respectable to do so.

Respectable? In what sense? In the sense that hack pundits who would have been jumping down the throat of a President Gore or President Clinton, had they demonstrated the same type of fiscal irresponsibility that has been a hallmark of the G.W. Bush presidency? As perpetuated by John McCain in his effective call for larger deficits and his attacks on Obama's call for modest tax increases on the wealthy? When can we expect David Brooks to "call out" McCain on that one?

Wall Street has played a role. Bill Gates built a socially useful product to make his fortune. But what message do the compensation packages that hedge fund managers get send across the country?

Funny, I don't think that hedge fund managers' compensation makes much of an impression on the country. If it did, Congress would make short work of passing the reform bill that would tax their earnings as income, rather than turning a blind eye to the pretense that their earnings are capital gains.

The ideas Brooks describes as coming from the report, for the most part, seem reasonable.

Foundations and churches could issue short-term loans to cut into the payday lenders’ business. Public and private programs could give the poor and middle class access to financial planners. Usury laws could be enforced and strengthened. Colleges could reduce credit card advertising on campus. KidSave accounts would encourage savings from a young age. The tax code should tax consumption, not income, and in the meantime, it should do more to encourage savings up and down the income ladder.

The exception, of course, is the passing reference to taxing "consumption, not income". That sounds like a call for the most regressive of tax "reforms", removing the tax burden from the wealthy (who can afford to save their money), while increasing the tax burden on those who are already living paycheck-to-paycheck, or who are falling deeper into debt each month.

I also take issue with the suggestion that we need to enforce and strengthen usury laws, as I see a broader need for reform. It's insane, for example, that it's usury for me to lend my neighbor $500 at an 8% interest rate, but it's perfectly legal for a bank, credit card company, or "payday lender" to charge effective interest rates at many times that rate. It's even more absurd that I would be committing a crime if I were to lend somebody money "at a rate exceeding 25% at simple interest per annum", but that's par for the course (and sometimes would be a favorable rate) among lenders who serve the poor. Michigan's usury laws aren't about protecting the poor - they're about protecting commercial lenders from competition.

Brooks concludes,

There are dozens of things that could be done. But the most important is to shift values. Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future.

I understand why Brooks has drawn this conclusion. I just happen to see it, at least from a "real world" perspective, as elitist crap. The people I've met who are in a spiral of debt, fighting collection agencies or struggling to pay off a payday loan that instead grows with each new paycheck, are not imagining that there are no consequences to their debt spiral. The middle class family that sees its credit card debts grow each month, and can't quite stretch their paychecks to make ends meet, is not enjoying its high debt lifestyle. Real people are worrying themselves sick over debt.

The people who enjoy debt, and play with it as if it has no consequences? The lenders, financial managers, CEO's and others who... you know, fall within Brooks' present peer group.