Paul Krugman: Our Political System Has Been Warped By A Small, Wealthy Minority

The New York Times:

Before the Great Recession, I would sometimes give public lectures in which I would talk about rising inequality, making the point that the concentration of income at the top had reached levels not seen since 1929. Often, someone in the audience would ask whether this meant that another depression was imminent.

Well, whaddya know?

Read the whole story at The New York Times

Comments

[whitcombc]

09:04 AM on 05/07/2012

Mr Krugman is - as usual - right on target. One thing he didn't get a chance to add is that after Reagan won his first term, the Democrats began to join in - reluctantly - to raising money form the same corporate Billionaires that Reagan, and the GOP had been tapping for years. The reason became obvious when left leaning Senators and Congressmen had less influence and access to agencies like SEC, FTC, FAA, EPA, HUD, DOJ, DOD, etc. than the Corporate Donors and the GOP had. The reason was the Corporations had paid for the access and for the legislators who agreed to follow orders shared the access. Notably, Ralph Nader found his non-profits totally locked out of discussions and information. He related that this was the reason he began running for office because he would have to be INSIDE to bust the doors back open. Today both parties are linked to the same donors. That Obama is being shunned by Wall St. now is not a good sign. Not because he'll have less money, but because he will have even less access to his own agencies.

[rich maytard]

03:12 PM on 05/05/2012

And there's nothing you can do about it because I have more money than YOU. I'm a proud 1% earner and my money buys influence which in turn makes me richer. Sux to be YOU!!!

[Linda Motley]

04:42 PM on 05/05/2012

No, you're not. You're just a little boy on mommy's computer trying to be a big shot. FAIL. Utterly pathetic post.

[rich maytard]

05:08 PM on 05/05/2012

My parents are dead.

[takingtones]

02:03 PM on 05/05/2012

- The rich and their puppet politicians have fooled half of the country into believing that trickle down works even though decades worth of evidence proves otherwise.

- They have fooled half the country into believing that the wealthiest among us are patriots and are "job creators" even though new jobs are being outsourced abroad. They actually do not care about this country but only how much money they can exploit out of it.

- They have fooled half the country into believing that it is un-American to criticize them and that regulations, closing loopholes, and ending corporate entitlements is a socialist or communist plot. When in actuality it is a strong democratic government protecting its citizens that enforces regulations, closes loopholes and ends corporate entitlements.

- They have fooled half of America into believing they care about social issues such as abortion and gay marriage and gun ownership when in actuality it is just a way to create a bigger voting base and gain office.

- Another problem is that there is no checks and balances to the rich. Unions used to play that role but they have been decimated and marginalized. Do you think the Republicans have made unions the enemy because of any other reason but to take away their power? Without any kind of counter-balance, we may have moments of reason in politics but it will be short-lived.

[Infiniti]

05:57 PM on 05/05/2012

Hear Hear. F&F!

In Washington today no one really takes responsibility for their actions. For the last 3 decades, very few politicians/leaders have been held accountable for the rotten things they’ve done to this country – financial crisis, the wars, housing crisis, tax cuts, NDAA, Patriot Act, torture etc.. It’s like we live in a fantasy world where certain companies and individuals take whatever they want and then leave the scene when things go sour.

The aftermath inevitably falls on the American people who have been duped and forsaken so many times by phony politicians and the MSM, they have all but tuned out. Special interests, lobbyists, ALEC, MIC and a whole host of other parasites have controlled the levers of government by pulling the strings of our elected officials. Common sense, reason and morality have been forsaken for power, greed and money.

Maybe in a different time, those people that pushed us into war(s) (called us unpatriotic and worse if we spoke out against it) would be held accountable for their actions. If the Conservatives and Neocons had to pay damages (civil and criminal) for their incompetence, we would have left years ago. The Bush doctrine would be in the trash bin of history. Alas, holding people accountable is a fantasy, so America just moves on. Nothing here, just move along.

If we keep up these destructive ways, blithely moving along may not be possible in the future. At some point, something has got to give…

[SapientiaAudit]

07:29 PM on 05/05/2012

You're both F&F!

[Pappadave]

07:49 PM on 05/05/2012

Hasn't it yet dawned on ANY of you that "the rich" are mostly Democrats who've bought Democrat politicians? Who do you think "benefitted" from all that "stimulus" money. Hint: It WASN'T "the poor" that Democrats profess to care about. It was Wall Street, unions and the wealthy owners of all those failed "green" industries, and the MONEY came out of OUR pockets...not theirs. Democrats only "care" for the poor if they can continue to convince them to vote for them. As soon as the poor start leaving Democrats for the GOP, they'll start moving upward economically. It's always BEEN so and it'll always BE so. During the Reagan years, for example, the most upwardly-mobile segment of society was black families. Look it up sometime.

[alexeiz]

08:50 PM on 05/05/2012

Sane and rational - it's not supported by your post. Conservative - may be, but what kind of concervative? There is a minority of real rational concervatives that are completely out of the polotical picture now, and the groop you seem to belong to - insane and irrational.

Please post more, it reveals your insanity.

[takingtones]

10:27 PM on 05/06/2012

1. Over 68% of TARP has been paid back with interest and there are multiple sources that said it was required to prevent the total collapse of the financial industry. Who knows for sure? It is hard to prove that something worked - if you quite smoking and don't get cancer can you say for sure that you would have gotten cancer if you kept smoking?
2. I don't see any evidence and you provided none that the rich are mostly Democrats. I know lots of rich people and 80% of them are Republicans and only because of taxes.
3. Actually, the Red States are the poorest States so I would turn your comment back on you. However, the Republicans don't even pay lip service to caring for the poor even though on a per capita basis their constituents are amongst the poorest.
4. Under Reagan there was a major rise in homelessness, hundreds of billions of dollars taken out of programs for the poor as well as dismantling of civil rights enforcement. Reagan appointed William Reynolds, to lead the Justice Department's civil rights division - a known enemy of civil rights. When Ronald Reagan took office in January 1981, the unemployment rate among African Americans was 14.6 percent. In December 1982, it was 20.9 -- 43 percent higher. When Obama took office in January 2009, unemployment was at 12.7 percent. In December 2010, it was 15.8 -- 24 percent higher.

[rickroland]

09:52 PM on 05/04/2012

I agree with Mr. Krugman on this one:

George Soros and the leaders of nationalized unions should be barred, by constitutional amendment, from contributing to any political campaign or directly to candidates from here on out. Oh, and outlaw the Federal Reserve and any concept of a national bank.

Thanks,

[RBet]

11:03 AM on 05/05/2012

Oddly I saw nothing about George Soros specifically, or unions, or even the Federal Reserve in what Krugman said. It seems odd to me that you and I may have read the same article.

[jcrum417]

03:35 PM on 05/09/2012

Krugman doesn't fully understand this topic.

[starchildjg24]

07:05 PM on 05/04/2012

We also have to consider our senior citizens, and those close to that age. In the olden days, though not so very long ago, people often had a pension and social security and could frequently get a part-time job. Now, fewer and fewer companies offer pensions. Saving for retirement is not easy when you make $30,000 or less. Especially if you hit a few bumps on the way, and have kids to help get started One serious accident and your savings can disappear. Most health insurance plans have yearly and lifetime caps, and you can hit those caps very quickly with medical care becoming more expensive every year. $30,000 a year times 40 years comes out to $1.200,000 over a lifetime. When they recommend you have savings of at least a couple of million, you can see how impossible that is, even making $50 grand. Without pensions, food stamps, medicare, social security will be all the elderly have to survive. We cannot cut social security.
What wealthy person who makes that much in a month or less can understand what it is like? But the majority of voters understand, and we need to vote accordingly.

[Pappadave]

07:57 PM on 05/05/2012

Don't you understand ANYTHING about economics at all? A married couple, each making $30K wind up with ONE of the two working almost exclusively in order to pay the tax bill for both. All forms of taxation...including those hidden in the products we must buy just to survive...total about 50% of the average income. If you have children, you're also forced to pay a child-care bill, too. Therefore, Mom isn't really making ANY money for her labors that the family can use to improve their lifestyles.

[starchildjg24]

03:26 AM on 05/06/2012

It is clear that you did not understand my post, not even slightly. Although I make a whole bunch of money and have never come close to paying that much money in taxes! If you are, then you really really need to consult an accountant! Taxes will kill you if you don't have some decent deductions.
Still, even if you did not understand my post, thank you for supporting my opinion.

[Infiniti]

02:37 PM on 05/04/2012

Where is America’s Exceptionalism?

• A strong middle class that has the ability and income to pay for health care, education and a house. – No longer true

• Impartial media that used to be called the Fourth Estate. The media amplifies Right wing rhetoric without filter while allowing them to spout their failed ideologies, incite fear, and spew vitriol/hatred towards anyone that disagrees with them. – Fail

• A Congress that serves the needs of the people. With lobbyists/ special interests/ Citizens United, Congress just rubber stamps the status quo. They only serve the highest bidder. – Almost hopeless

• Corporations give back to society through charities/educational/research programs. Bottom line mentality and short-term profits drive most decisions. – A lost cause until the incentives are changed which aren’t likely.

• Education is the fountain of youth/ engines of tomorrow. Out of control tuition costs compounded with curriculums not suited for the job drivers of tomorrow means students are falling behind the rest of the world. – Dire, in need of reform.

• Safety Nets: SS/ Medicare/ Medicaid are the last defense for millions of Americans. Certainly they have to be reformed, not gutted or privatized. Solutions exist: mean testing/curtailing expensive procedures. Skyrocketing healthcare costs have to be addressed. - The prognosis is bleak as top Democrats are caving without a fight.

For the top 1%, these issues don’t bother them. In the long run, all their wealth is meaningless in a society full of decay.

[mcmutter]

04:36 PM on 05/04/2012

great post !!!

[Infiniti]

11:59 AM on 05/05/2012

Why thank You!

[Pappadave]

09:37 PM on 05/05/2012

Not real certain why you think privatization of Social Security would be such a bad thing. In the late 1970's, government entities (schools, city governments, etc.) were allowed to "opt out" of the SS system and instead invest an equal amount in certain investment vehicles. The City of Galveston, Texas, was one such. City retirees there now, draw about $5K per month in retirement. Compare that to the MAXIMUM of a bit over $2K per month doled out by the feds, and that only IF the retiree had been paying close to the maximum in social security for a period before retirement. Secondly, I don't know what news you're watching, but ALL of the major networks plus CNN, MSNBC etc. are so far left in their political biases that even most LIBERALS are starting to notice and be embarassed by it. You could paper the walls of the Pentagon with the legitimate news stories, critical of this administration, that they do NOT even bother to publish...and that's not even mentioning the far left tone of the Washington Post, New York and LA Times, Boston Globe, etc. ad nauseum.

[Infiniti]

01:09 AM on 05/09/2012

1. Privatization is a good thing in certain industries because it allows companies to better allocate resources and adjust to market forces faster than any public entity. Now that city you spoke of may be a good example, but no way can you can extrapolate this to 20k cites/towns in the US. Imagine the overhead, duplication and invariably the corruption. It just doesn’t make economic sense just like doesn't make sense for each state to have its own militia.

2. You need to be more specific with the so called “liberal bias”. If you watch any MSM news/talk shows like on CNN and NBC, you realize that 70-90% of their analysts, guests, pundits and discussions are about Conservative ideas/ideologies. Most shows have a 3 to1 or 2 to 1 ratio of Republicans to Democrats (Republican to experts), but it’s not just the ratio, it’s also the makeup of that ratio. ABC has pundits that are pretty main stream in their opinion whereas some of these other news organizations have radical elements from the far Right paired up Democrats (DINOs)/non-biased people.

Every day, we hear the Right-wing propaganda machine(Fox News, Conservative talking heads, think tanks, Clear Channel network, Koch brothers, Neocons, MSM servants like CNN) spout their failed ideologies, incite fear, spew vitriol/hatred towards anyone that doesn’t agree with them or follow lock-step behind them.

[Devin Campbell]

01:56 PM on 05/04/2012

Damn you Paul Krugman, and your long track-record of being right!
Circa 2003:
http://archive.org/details/krugman-cambridge

[seegray]

02:39 PM on 05/04/2012

Even better....thanks again!

[wittgene]

01:39 PM on 05/04/2012

Dr. Krugman, those people are very dangerous. And it surprises me everyday that they feel the need to protect the rich: vote GOP.

[SIMPLICIMUSS]

09:49 PM on 05/04/2012

Where is Kerry hiding his yacht now-a-days ??

[RBet]

11:04 AM on 05/05/2012

How do you get "vote GOP" out of anything he said?

[Pappadave]

09:41 PM on 05/05/2012

Probably because MOST of "the rich" Democrats only seem to be attacking are Democrats themselves. Raise taxes on "the rich" and "the rich" aren't hurt much, but they WILL find other places for their money--which ultimately hurts the middle class. Obama and company know that they MUST do away with the middle class in America in order to accomplish what they want to do. They do so by "attacking" the rich, ultimately hurting the middle classes so that they'll become dependent upon government.

[tonygumbrell]

01:35 PM on 05/04/2012

It used to be that the business community, and wealthier and more successful Americans, conservative as they were, had some civic responsiblity and felt tied to the needs ot the country as a whole, and knew the importantance, for their own sake, of a strong economy. Now, they are so greedy and so avaricious that they will wreck the economy and the entire country with it if it looks like a good bargain for them. Since they own part of the media and have, in effect, clever psychologists in advertising, propaganda, and political action working for them, they have been able to foist off doctrinaire extremism as a narative that appeals to naïve, 'common sense' notions held by many e.g. deficit hawks, gold bugs, 'free market' fanatics et al. If continued, modern Republican policies will run the country further toward second world status and conditions. Taken to the ulimate end we'd be a third world country with the rich living in gated communities surrounded by concrete walls with broken bottles set in the concrete on top of the walls, guarded by video cameras, armed security, and vicious dogs, with 20% of the population in privately contracted prisons, or concentration camps, and most of the rest in slums.

[Devin Campbell]

02:33 PM on 05/04/2012

I miss principled conservatives.

[DeanAdams]

03:11 PM on 05/04/2012

They still have principles....greed, hunger for power, exploitation of people and the environment, and more greed.

[Pappadave]

12:36 AM on 05/06/2012

Your scenario sounds EXACTLY like what Obama wants for us and is working diligently to achieve. It isn't Conservatives that want this. The difference between conservatives and liberals is that conservatives would be perfectly happy if everybody was a millionaire. Liberals will only be happy when everyone is "equally" miserable.

[SeekingClarity]

01:20 PM on 05/04/2012

There will always be economic inequality, bit extreme economic inequality is something else. I some countries a few fabulously wealthy families own virtually everything that matters and the rest of the population suffers grinding poverty. It that ratio too extreme? At what point is the ratio less than ideal for democracy?

I recall that a Colorado school district was officially asking its employees to actively promote soda consumption by students. When confronted by advice from health experts, they replied that they could not fully operate without royalty payments from soda companies in the schools. The school had been made dependent on a source of wealth that did not share its best interests.

The whole nation is similarly dependent on Too Big to Fail institutions, that have had to be rescued from the consequences of their own folly by bailouts, even as they use this money to oppose reform. Almost everyone is unhappy about the Too Big to Fail situation, but the only actions we have taken has made them even bigger. This is no collective "Invisible Hand" composed of diverse and competing interests, but a giant foot permanently tipping the scales.

[PainTrain614]

01:17 PM on 05/04/2012

Speaking of income inequality, did you see how George Clooney helped rake in $12M for Obama's election campaign?

It's unfair that all of these Hollywood elites make more money than me. It's un-American, I tell you! They should all be taxed at 95%!

[SapientiaAudit]

01:23 PM on 05/04/2012

Fund-raising a few million is a far cry from billionaires who contribute tens or hundreds of millions.

Of course, folks like you tend not to be able to understand that difference, but it exists, none-the-less.

[PainTrain614]

11:00 PM on 05/04/2012

A typical liberal sneer. Thanks for living the stereotype.

[Pappadave]

12:40 AM on 05/06/2012

And the "difference" is WHAT, exactly??? Billionaires like George Soros fund and finance some of the most anti-American organizations in the country. Do you suppose he does so out of some sense of "altruism?" If you do, you're living in a fool's paradise.

[Kyle10]

01:29 PM on 05/04/2012

A bit off topic and a bit off the rails, PainTrain.

Read the article.

[keithdengenis]

01:13 PM on 05/04/2012

There seems to be some confusion here, in the comments section. Let's clarify a few things, shall we?

1. The U.S. economy is the largest, socialized economy in the history of the world. The tax burden we all bare pays for State Operations we all take for granted. Unfortunately, there is an element among us that feels they are entitled to their wealth and choose not to contribute to the funding of said "operations". Instead, they have "offshored" their wealth (Romney; Koch Bros; etc) or, chosen to forcibly loot the wealth formerly held by others via manipulations of Public Policy (see: 1976; 1982; 1986; 2005 Tax Acts).

2. There is no such thing as "Corporate Behavior". There is, however, Behavior Exhibited by Corporate Officers. These people - a very small minority of folks - sit on the Boards of Directors and steer the bulk of profits made by said entities into their own pockets. According to the IRS, for the year 2000, 74.83% of all corporate profits went to Executive Salaries, Wages and, Other Compensations.

3. The opinions we ingest every day are filtered by and for the benefit of Corporate Officers and the Entirely Too Wealthy.

[Pappadave]

12:53 AM on 05/06/2012

But the dirty little secret that you've forgotten (or deliberately misrepresented) is that those "Other Compensations" you gloss over so glibly account for about 85% of that "74.83%" and THEY go to shareholders. You know them, the retirement funds owned by millions of workers, their unions, schools like Harvard, private investors and the little old widow lady who relies on her dividends to supplement her Social Security and provide her with a living income.

[onePERSONoneVOTE]

01:11 PM on 05/04/2012

the fact more than half of congress and about 70% of the senate are millionaires cant be helping.

[Pappadave]

12:54 AM on 05/06/2012

...and the majority of Congressional millionaires are Democrats!

[wsdave]

01:03 PM on 05/04/2012

Today, the part of Captain Obvious will be played by Paul Krugman.

[Devin Campbell]

01:26 PM on 05/04/2012

Still, it needs to be said, someone's got to do it...

[wsdave]

07:09 PM on 05/04/2012

Everyone who's even remotely paying attention already knows it. After all, it's not like it hasn't been in the news nearly every day since CU.

[Jerseytime]

12:55 PM on 05/04/2012

For those of you who think the growing income gap is a permanent feature of American political economy, please do some research. It is not. And its effects are being felt. If you think its a good idea, how long can it continue? Should it get to where 99% of the American people are essentially living in favela-like encampments? Is that the country you want to live in? For if it isn't reversed, that is exactly wher our nation is heading. The very nature of the trend means that you too will be amongst that 99%.

[Pappadave]

12:59 AM on 05/06/2012

For Obama's "transforming American" to succeed, he MUST destroy the middle class. The US has historically had the largest percentage of its population IN the middle classes and that's one of the reason the rest of the world has always considered America to be that Shining City on the Hill that they aspire to join. We've historically been the ONLY country in the world where people clamor to get IN instead of escape. Immigration has ALWAYS been INTO the U.S....not out of it. As Obama shrinks the middle class, that may be changing.

[Syllogizer]

02:38 PM on 05/07/2012

It is Obama's opponents who are successfully destroying the middle class.