February 12, 2012
In a column discussing Charles Murray’s new book, Coming Apart, Ross Douthat decries the fact the choices posed are between Murray’s do-nothing libertarianism and the “liberal view” that:
“there’s nothing wrong with America’s working class that can’t be solved by taxing the wealthy and using the revenue to weave a stronger safety net.”
Of course there is a more obvious progressive response that involves reversing the policies that have led to the massive upward redistribution of income over the last three decades. This would include opening up highly paid professions (e.g. doctors, lawyers, economists) to trade in the same way that we have opened up manufacturing to trade. This would put downward pressure on the wages of these professionals. That in turn would lower the cost of health care and the other services they provide, thereby raising the wages of ordinary workers.
We could also look to alternatives to patent protection to supporting research in prescription drugs. We pay close to $300 billion a year (2.0 percent of GDP) for drugs that would cost $30 billion in a free market. The difference of $270 billion a year is roughly five times as large as what is at stake with extending the Bush tax cuts to the wealthy.
The country could change rules on corporate governance so that CEOs don’t get to effectively write themselves huge paychecks at the expense of other corporate stakeholders. If executives in the United States were paid in line with executives in other wealthy countries it would free up tens of billions of dollars for increased investment and higher pay for ordinary workers.
And, the government could end various forms of public subsidies for Wall Street banks, such as too-big-to-fail insurance. This would also save tens of billions of dollars a year.
There are many things that could be done to improve the situation of the white (and African American and Hispanic) working class that have nothing to do with tax and transfer policy. However, folks like Douthat want to restrict progressives to a loser liberalism agenda which he quite correctly points out is not very attractive.
Comments