Let’s be honest: there are a lot of problems in the Donald Trump administration so far, and it’s not because there aren’t enough black feminists or transgendered activists. It’s because there’s too many military generals and ties to Wall Street, particularly Goldman Sachs.
However, if you ask Keynesian economist Paul Krugman what exactly is the problem with the Trump administration thus far, he will pull out the race card vacuous accusations of white supremacy.
Here is what Krugman tweeted on Tuesday:
“To join Trump admin, you have to be white nationalist conspiracy theorist, but must also be always wrong re your supposed area of expertise.”
To join Trump admin, you have to be white nationalist conspiracy theorist, but must also be always wrong re your supposed area of expertise https://t.co/9Bxtoo1BnG
— Paul Krugman (@paulkrugman) December 20, 2016
With that line of thinking, Ben Carson (black) is a white nationalist conspiracy theorist. Ditto for Elaine Chao (East Asian) and Nikki Haley (Indian). They’re all a bunch of white nationalist conspiracy theorists!
Besides, this goes back to the idea that skin color is the only thing that counts in today’s world. You could make the case that these individuals aren’t qualified for the position based on their experience or credentials, but to concentrate only on race is absurd and racist in itself.
This proves that Krugman’s stupidity has no bounds. It would be better for him to remain silent and thought a fool, than to open his mouth and remove all doubt. He has stuck his big foot in his mouth once again.
Many who have been vociferous in criticizing income and wealth inequality such as Paul Krugman and Joseph Stiglitz have not pointed to the increase income inequality as the cause of the depression. Those on the left who might be the natural proponents of a more progressive tax system have not connected the dots. They have a different theory as to the cause of the depression. They are adherents to the regulatory fallacy, the belief that the depression was caused by insufficient regulation.
To determine if someone is an adherent of the regulatory fallacy ask this question: Do you believe that given the degree that the tax burden was shifted from the rich to the middle class, was there any type of regulatory policy which would have prevented the financial crisis and subsequent depression? If they answer yes, they are adherents to the regulatory fallacy
In Paul Krugman’s 2012 book “End this Depression Now!” he comes heartbreakingly close to connecting the dots between the reduction in the progressivity of the tax system and the cycle of overinvestment that caused the depression. He states that the book is much less concerned with the cause of the depression than what should be done to end it. His prescription is fiscal stimulus focused on the spending side that has even less of a chance of being enacted than the tax cuts suggested above.
Those on the right have their own version of the regulatory fallacy. They blame the government sponsored enterprises Federal National Mortgage Association Fannie Mae (FNMA.OB) and Federal Home Loan Mortgage Corp. (FMCC.OB) and the Community Reinvestment Act. According to their theory, regulation such as the Community Reinvestment Act resulted in a vast increase in subprime mortgage lending that caused the financial crisis. Possibly the non-bank private entities that originated and securitized most of the subprime loans mistakenly thought the Community Reinvestment Act applied to them.
A slight variation on the regulatory fallacy is the financial innovation fallacy. As with the regulatory fallacy, both left and right versions, there is a miniscule grain of truth to it. Financial innovations such as credit default swaps and regulatory changes like repeal of the Glass-Steagall Act slightly affected the exact timing of the onset of the depression. However, once the tax burden was shifted from the rich to the middle class it was just a matter of time before middle-class consumers became unable to absorb the increased production and service the debt that accompanied the overinvestment. Different regulatory policies might have shifted the bubble more towards commercial real estate rather than residential real estate or vice-versa but the outcome would have been similar.
Blaming regulatory policies and financial innovation for the depression is like blaming the armaments manufacturers and soldiers for World War II. In order for the war to occur there had to some weapons made and some soldiers to fight. If those particular armaments manufacturers and soldiers were not available, others would have taken their place.
Equally unhelpful in terms of addressing the income and wealth inequality which results in the overinvestment cycle that caused the depression are those who emphasize various non-tax factors. Issues such as globalization, minimum wage laws, outsourcing, free trade, unionization, minimum wage laws, problems with our education system and infrastructure can increase the income and wealth inequality. However, these are extremely minor when compared to the shift of the tax burden from the rich to the middle class. It is the compounding year after year of the effect of the shift away from taxes on capital income such as dividends over time as the rich get proverbially richer which is the prime generator of inequality…”
http://seekingalpha.com/article/1543642
So, CEO and top management pay increases moving them from 50 times the average worker’s wages ( in the 1970’s) to multiples of 200 to 500 have nothing to do with income inequality. 50 % of workers make less than $30,000. When you figure out a way to increase their income above inflation, you may start to close the gap. I have watched my standard of living decline so much over the last 20 years. From 1975 to 1995 my standard of living increased almost every year. I am spending more to feed 2 people today, than I did to feed 6 people in 1995.