February 26, 2016
Fareed Zakaria used his column in the Washington Post this week to approvingly quote former British foreign minister David Miliband saying:
“The right has no good answer to the problem that globalization erodes people’s identities. The left has no good answer to the problem that it exacerbates inequality…”
Actually, the left has plenty of good answers on inequality, they just get ignored or misrepresented in outlets like the Washington Post.
For example, many progressives (including Senator Bernie Sanders) have long supported a financial transactions tax. This would raise tens of billions of dollars annually that would come almost exclusively out of the hides of the high-flyers in the financial sector. Progressives also want to end the government’s “too big to fail” insurance for the country’s largest banks, a subsidy that gives tens of billions of dollars a year to the country’s biggest banks. When these ideas appear at all in the Post they are completely misrepresented, with the paper bizarrely insisting that financial reform is about preventing the 2008 crisis instead of restructuring the financial sector to better serve the productive economy.
Beyond finance, many progressives are strongly opposed to the center’s protectionist agenda on trade, which would involves continually making patent and copyright protection stronger and longer. These forms of protection are equivalent to imposing tariffs of several thousand percent on the protected items. However since the beneficiaries in the pharmaceutical, software, and entertainment industry tend to be rich and powerful, papers like the Washington Post pretend they are the “free market.”
Furthermore, the fact that globalization has redistributed income upward was a matter of policy, not an inevitable outcome. There are millions of very bright people in countries like Mexico, China, and India who would be happy to train to U.S. standards and work as doctors, dentists, lawyers and other professionals in the United States. If our trade deals were to designed to facilitate this path to globalization, workers in these professions might get paid half or one-third as much as they do now. The rest of us would then have much higher real wages since we would be paying less money for medical care, dentists, legal services and many other items where the pay of high end professionals is a substantial portion of the cost.
Instead trade deals were quite explicitly designed to lower the wages of the bulk of the work force who do not have college degrees by putting manufacturing workers in direct competition with their lower paid counterparts in the developing world. The predicted and actual effect of this pattern of trade is to reduce employment and wages in manufacturing, as well as the sectors that are flooded with increased labor supply from displaced manufacturing workers.
And of course we have the Federal Reserve Board’s policy of deliberately keeping the unemployment rate high in order to ensure that workers do not gain enough bargaining power to secure wage increases. This was the point of the Fed’s rate hike last December and would be the purpose of the threatened future rate hikes.
In short, to say that the left does not have a good answer to the problems of inequality is what is known outside of Washington circles as a “lie.”
Zakaria’s piece also features this bizarre assertion:
“The problem is that although they may be competent, centrists are dull, practical types.”
“Competent,” really? The folks that couldn’t see the massive housing bubbles whose collapse sank both the U.S. and European economies are competent? The folks who needlessly provoked a crisis that brought the euro zone to the edge of collapse in the summer of 2011 are competent? The folks who imposed austerity across most of the world, costing tens of millions of jobs and trillions in lost output because of an Excel spreadsheet error are competent? If the centrists are competent, they do a very good job of hiding it.
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