Diagnosing America

I see that the erudite Peter Whiteford has re-tweeted about the Niskanen Centre, indicating that he agrees that it's a good site for "bleeding heart" libertarianism.  I have looked at something there before, some time ago, but can't remember what, and thought it looked OK.  I think it was on climate change, now that I think of it.   But it does call itself "libertarian", so I'm sure it's objectionable in one way or another.

Anyway, another specific link to it by Whiteford is to a lengthy piece by Will Wilkinson looking at the various explanations for social and political division in America at the moment.  I think it's not bad, but I have some reservations.  The best paragraphs are these:

It has become conventional wisdom in some circles that “the elites” and “the people” are divided by cultural and informational “bubbles” that offer incompatible perspectives on the facts of the world and the nature of a good society, and thus regard each other with mutual distrust and contempt. All this demographic complexity aside, the conventional wisdom that there is a widening cultural gap between “the people” and “the elites,” and that the rise of populist nationalism is due to backlash against “the establishment,” contains more than a grain of truth. But we need to get much clearer about what exactly that truth is. 
 
Because “the establishment” (including the Republican political establishment) is relatively cosmopolitan and liberal (in the broad sense), an outpouring of populist anti-establishment sentiment is going to assume a nationalistic, illiberal form more or less by default. The good news is that anti-elite anybody-but-Hillary-ism doesn’t really imply serious public appetite for anything like alt-right authoritarianism. The bad news is that the liberal-democratic capitalist welfare state and the so-called “neoliberal” global order is far and away the best humanity has ever done, and we’ve taken it for granted. We could very well trash it in a fit of pique, and wind up a middle-income kleptocracy boiling with civil strife and/or destabilize the global order in a way that ends in utter horror.

It is very important to keep this from happening!

Further down in the article, Wilkinson relies a lot on the Cato Freedom index (which actually ranks Australia very highly internationally - take that, whining Australian libertarian types); but to be honest, I don't know how reliable that index really is.   I tend not to trust anything from Cato.

Wilkinson also looks briefly at rising inequality in America, and he seems to have a somewhat more nuanced view than the average libertarian (who doesn't give a toss) in that he says that rising inequality per se is not a problem, as long as poverty is being lifted by deliberate policy action at the same time.  (I think that's where he differs from other libertarians, who may argue that the rising tide lifts all boats anyway.  Wilkinson seems realistic enough to not trust that unfettered capitalism works that way - government policy is needed too.)

That seems to be his position, as he links back to an 2009 piece he wrote which says:

There is little evidence that high levels of income inequality lead down a slippery slope to the destruction of democracy and rule by the rich. The unequal political voice of the poor can be addressed only through policies that actually work to fight poverty and improve education. Income inequality is a dangerous distraction from the real problems: poverty, lack of economic opportunity, and systemic injustice.

 What I don't see there is reference to social mobility:  that was supposed to be the deal with America, wasn't it? - they have a system with pathetic minimum wages, for example, but everyone knew that they were just the first stepping stone that people used to build up to a comfortable life income.   But as been noted recently, this isn't happening so much in the US any more.  In The Atlantic:

It’s not an exaggeration: It really is getting harder to move up in America. Those who make very little money in their first jobs will probably still be making very little decades later, and those who start off making middle-class wages have similarly limited paths. Only those who start out at the top are likely to continue making good money throughout their working lives.

That’s the conclusion of a new paper by Michael D. Carr and Emily E. Wiemers, two economists at the University of Massachusetts in Boston. In the paper, Carr and Wiemers used earnings data to measure how fluidly people move up and down the income ladder over the course of their careers. “It is increasingly the case that no matter what your educational background is, where you start has become increasingly important for where you end,” Carr told me. “The general amount of movement around the distribution has decreased by a statistically significant amount.”

 And here's another article from The Atlantic in 2015:

America Is Even Less Socially Mobile Than Most Economists Thought

Maybe Wilkinson has written about social mobility before (and I admit, I haven't read his 2009 article.)  But unless he does, I'll be a bit skeptical about his thoughts on inequality.  

Finally, one graphic in the Wilkinson article is really good, I think.  It shows economic output according to regions.  Here it is:

Interesting how the highest economic output is clearly from such Democrat dominated regions.  The highlight of Republican low tax, low regulation policies seems to come down pretty much to only Texas.   The importance of Republican policy to regional (and national) economic health looks particularly weak, when you look at it that way...