Krugman’s ‘valley of despond’

Paul Krugman’s column today doesn’t exactly break new ground, but its message is an important one, nonetheless.

A quick summary: incomes for those at the top have risen dramatically, as have those for middle-income workers in developing nations. While positive on some level — gains by he middle class in India and China, for instance, have helped alleviate poverty in this nations — these gains occur against a backdrop of stagnation and decline for workers in the developed world.

Competition from emerging-economy exports has surely been a factor depressing wages in wealthier nations, although probably not the dominant force. More important, soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing.

This is not news, as Krugman’s says. The issue of growing inequality has been on the table since the Occupy Wall Street protests and was only underscored by the publication of Thomas Piketty’s surprise best-seller, Capital in the Twenty-First Century.

Politicians have given the issue lip service, but as Krugman points out, they have remained wedded to a game plan pushed by the more well-off members of the western economies. As he says,

the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen the valley of despond.

He then asks — and answers –a key question:

So who speaks for those left behind in this twin-peaked world? You might have expected conventional parties of the left to take a populist stance on behalf of their domestic working classes. But mostly what you get instead — from leaders ranging from François Hollande of France to Ed Milliband of Britain to, yes, President Obama — is awkward mumbling. (Mr. Obama has, in fact, done a lot to help working Americans, but he’s remarkably bad at making his own case.)

The problem with these conventional leaders, I’d argue, is that they’re afraid to challenge elite priorities, in particular the obsession with budget deficits, for fear of being considered irresponsible. And that leaves the field open for unconventional leaders — some of them seriously scary — who are willing to address the anger and despair of ordinary citizens.

What he is describing is a downward spiral for far too many that has the imprimatur of the decision-making classes: the elite class lacks allegiance to anything but its own well-being; the political class takes its orders allegiance from those who have money and access; and this leaves a growing population of economic outsiders who, one might expect, would be looking to upend an economic apple cart that offers them only bruised and overripe fruit.

This helps explain the rise of conservative populism here and abroad, movements that shift the blame for economic division to convenient targets — immigrants and minorities — or alchemize economic issues into social ones.

Krugman makes allusions to the 1930s, which he admits are excessive — different times, different conditions. But the discontent exists and can only be masked by our modern version of bread and circuses (our techno-toys and the array of mind-numbing entertainment options, among them) for so long. Something has to give. You can only let the pressure build for so long before it pops.

Author: hankkalet

Hank Kalet is a poet and freelance journalist. He is the economic needs reporter for NJ Spotlight, teaches journalism at Rutgers University and writing at Middlesex County College and Brookdale Community College. He writes a semi-monthly column for the Progressive Populist. He is a lifelong fan of the New York Mets and New York Knicks, drinks too much coffee and attends as many Bruce Springsteen concerts as his meager finances will allow. He lives in South Brunswick with his wife Annie. View all posts by hankkalet