Economics and Inequality – Changing Public Discourse

It has taken a groundbreaking book by French Economist Thomas Piketty (“Capital in the 21st Century”) to bring media and pundit attention to a problem which all legitimate economists have been concerned about for years. Pikkety very elegantly points out that income inequality is not only systemic, but it has systemic effects on virtually every aspect of life. This is something conservatives are keenly aware of; and a large reason, I believe, that in the current campaign term conservatives have jettisoned social issues for broader expansion of Friedman School market economic policy.

The problem for progressives in Wisconsin is that while all the macroeconomic data and facts about income inequality point to progressive solutions for our economic woes; the conservative frame of economics dominates policy, media, and language used by even the most progressive economists and policymakers. This is a critical problem. As we know from cognitive science research, trying to counter the conservative frame of economics by merely stating counterfactuals in their frame will only reinforce their frame. This is known as “negation.” Only by expressing economics in the progressive frame and providing context for the facts can this shift be achieved. So how do progressives do this in Wisconsin? First – understand the conservative frame of economics. Second, understand how to frame economics as a progressive. Finally, always frame economic facts in the progressive frame…again and again.

The conservative frame of economics is structured and expressed through the strict father metaphor of family (think James Dobson). The basic moral system goes like this: The strict father is the highest authority in the family, and as such is the highest MORAL authority. To be successful, one must be disciplined, and therefore moral. If one is not disciplined, you must be punished (usually inflicting physical pain) in order to become disciplined, and until you are disciplined, you deserve your poverty. Once you are disciplined, you will be moral, and therefore successful. While this is a complex moral system metaphor, it is easy to see it imprinted across conservative policy.

In addition, the conservative moral view of democracy is such that pursuit of one’s self interest is paramount. As such, the Public (government) and any other impediment to the pursuit of self-interest is immoral. So what does this say about economics and inequality from the conservative frame? Everything…

In order to be successful, you must be disciplined and therefore moral. If you are poor, it is because you are undisciplined and deserve your (physically painful) punishment in the form of poverty. When you become disciplined, you will be able to “pull yourself up” and be successful. It is immoral for you to receive help which you do not earn (via the Public), as that will prevent you from becoming disciplined.

Moreover, in the conservative frame, the market itself is moral, and functions as the strict father – punishing those who are undisciplined, and rewarding those who are disciplined. To conservatives, the market is the decider, making moral decisions on who prospers, and who gets punished. For this reason, the Public has no moral basis for impeding the market. The market economy is, in essence, a moral actor in the conservative frame.

The language evoking the conservative frame in economics is everywhere. It has culturally evolved over 40 years to be accepted by even progressive economists such as Paul Krugman. We know that this will continue to reinforce the entire moral frame of conservative economics – remember – all politics are moral. Here is an example from the current Wisconsin Gubernatorial race, demonstrating that even the Democratic Party candidate Mary Burke reinforces the conservative frame of the economy.

Mary Burke led the European Division at Trek…creating good jobs right here in Wisconsin. She took the same private sector approach as Secretary of the Department of Commerce... She’s the only candidate in the race to have created jobs in the private sector, and the only one to have started her own business. (Mary Burke Campaign website)

“I think we can have that sort of transformational difference — from government providing all the answers to where it empowered a partnership with employers, particularly small businesses, and created an environment for more jobs.” (Scott Walker Campaign website)

Remember, all politics are moral. We learn morality through deeply embodied metaphors which exist physically in our brains through decades of repetition and experience. Note that both candidates have “job creation” as the core of their economic platform. The Democratic candidate does not offer a contrasting view of the economy and employment. The phrase job creation evokes and activates the conservative moral frame of economics, and therefore the entire conservative moral frame as described above. How?

Using the term “job creation” accepts and reinforces the concept of the market, corporations, and wealthy individuals as moral (since they are successful, authoritarian “fathers” who rule by punishment). As such, it is only they who have the moral right to decide who is sufficiently disciplined and deserves a job. Under this moral system, if you do not have a job, it is your own fault for being undisciplined, and therefore you are immoral and deserving of your unemployment. The market and corporations are moral, it cannot be their fault. Again, this imprints onto every conservative issue, as one can easily observe. By evoking the “job creation” part of the frame, it activates the ENTIRE conservative frame, unconsciously reinforcing the entire conservative moral structure. This is a critical problem well beyond any political campaign. What to do…how do progressive reframe economics?

We have to start with a fundamental economic truth which comes out of the progressive frame, and is denied by conservatives – “Private enterprise and prosperity are impossible without the Public (all of us).” There are no successful businesses or individuals without the investment we all make in each other and our communities. The progressive view of democracy says just that – democracy is caring citizens acting through the Public (government – all of us) to expand freedom for everyone. The core of this frame is simple - EMPATHY. We must start talking economics in the frame of empathy and progressive freedom.

Another key is to understand and express the fact that corporations employ people because they will generate more profit. Therefore, WORKERS ARE PROFIT CREATORS. If they weren’t, they wouldn’t be hired. There are no magic jobs creators who do so out of goodwill – profit is the motivator. This says a tremendous amount when we frame economic inequality this way:

It is workers who create profit for the wealthy and corporations. As such, those workers deserve a fair portion, as a family supporting living wage, of those profits for their work. This in turn will increase economic freedom and opportunity for more people, as it will increase the wages (share of profits) people will have to buy more goods and services. The cycle will be perpetual, bringing about greater income equality and access to capital for more and more people.

Further, the prosperity a private individual or corporation experiences is not possible without the public. The more wealth and capital one has, the more public resources and services they use – courts, infrastructure, government services, finance system, etc. It is their moral and patriotic duty to pay their fair share of taxes, as an investment in the Public which supports their prosperity. Hiding revenue and lobbying against progressive taxation is a betrayal of Public trust, immoral, and unpatriotic. It is greed, plain and simple, and this needs to be said!

When economics is considered in this frame, it takes on a very different meaning. It evokes a frame where there is economic freedom and opportunity for everyone, not just the wealthy and privileged. Where corporations gladly pay a progressive and fair share of taxes to support the investment we all make in them through public education, infrastructure, court systems, financial system, and public servants – instead of lobbying to destroy the Public.

It also evokes a moral frame where all workers are valued as profit creators, and therefore receive a fair share of those profits, to live free from fear of want now and in retirement. It evokes a sense of freedom, opportunity and fairness for everyone – not only the well connected and privileged.

These things need to be said ALL THE TIME when framing economics:

1. Private prosperity and enterprise are not possible without the Public (all of us)

2. Democracy is caring citizens acting through the Public to expand freedom for everyone.

3. Workers are profit creators, who deserve a fair, living wage share of those profits.

4. Empathy – we have a responsibility for others as ourselves.

Finally – reject the idea of the “job creator” and NEVER acknowledge it again. It is a fiction, which denies fundamental truths about a systemic economy where we are all connected, and are reliant on each other.

I am expecting a great deal of discussion and questions on this topic, as this is just the tip of the iceberg. There are deep, primary metaphors; moral hierarchies in the conservative frame; and deeply embodied frame structures at work here. To achieve a paradigm shift, we have to start being aware, and communicating effectively in our progressive frame.

Why is Paul Ryan still considered a “serious” person…when he suffers from DCFS?

After a brief hiatus, Badger Democracy is back. We’ll get to Paul Ryan and deficit hawks in a moment, but first, some announcements.

Thanks to all followers of Badger Democracy for your comments and participation in 2012. 2013 will be a critical policy year in Wisconsin, so continue to stay informed and engaged in the democratic process. To that end, Badger Democracy will focus on media coverage of political events in Wisconsin, and look to fill the void, offering media criticism when and where appropriate.

Next, Congratulations and welcome back to Sly! There will again be a little balance on political talk radio in the state. Sly is taking over afternoon drive time with a three state on-air reach (Wisconsin, Illinois, Iowa), and worldwide on the web. Starting February 4th, Sly will be heard from 3 – 6:30pm, Monday – Friday on 93.7 WEKZ-FM. Updates and archived segments will be available on the revamped “Sly’s Office.” Watch out Rahm and Pat Quinn, Sly can now be heard in Illinois…

Now, for Mr. Ryan. Congressman Ryan rejoined the ranks of “serious people” on Sunday, joining Greg Neumann on Capitol City Sunday. The Congressman from the 1st District of Wisconsin continued his litany of deficit reduction being of greatest importance to the fiscal health of the nation. Unfortunately for Mr. Ryan, he is suffering from DCFS – Deficit Crisis Fear Syndrome.

The President got his tax increase.  That pays for about five percent of the deficit, (and) spending is the ultimate part of the problem here that we have to deal with.  The President has been trying to hide, or stay away from a conversation about spending.  We gotta deal with spending.

I want to do this in a responsible way, but I do not want to let an opportunity slip by to get a control on spending, which we so desperately need if we’re going to prevent a debt crisis.

Classic DCFS (Deficit Crisis Fear Syndrome). If using serious language is the new standard for being taken seriously, our nation is in serious trouble. The media in Wisconsin needs to read the memo from real economists, and see through the talking points. The deficit is not our biggest problem. Chronic, long term unemployment is our biggest problem. What the new breed of conservatives refuse to acknowledge is that by creating real, family-supporting jobs and an increase in revenue, our deficit problem will be solved.

Brad DeLong illustrates the point rather nicely today.

…policies to reduce the deficit in the short run–before 2016, say–are highly, highly likely to actually increase the long-run burden of the national debt. Even making the unlikely assumption that deficit reduction in the near future would reduce rather than increase the long-run burden of the debt, the fact is that the debt-to-GDP (Gross Domestic Product) ratio is now stable until at least 2020. A lower debt-to-GDP ratio would be a good thing in the long run, but there is absolutely no urgency. And there is enormous urgency in getting the economy moving again. (emphasis added)

“Moving again…”- as in investment to create those illusive, family-supporting jobs that pay more than $15/hour. The truth about the deficit is, that with the current growth of the economy (as slow as it is) and recent revenue measures, the debt-to-GDP ratio is already beginning to stabilize. Paul Krugman posted the Center for Budget and Policy Priorities graph last Thursday:

Image

 

The vertical line represents the projected debt as a percentage of GDP. Each colored line projection represents a different scenario affecting the deficit. Krugman breaks down the analysis:

The blue line at the top represents the projected path of that ratio as of early 2011 — that is, before recent agreements on spending cuts and tax increases. This projection showed a rising path for debt as far as the eye could see.

Conservatives are framing the discussion as if that dark blue line represents the current fiscal reality, because it re-enforces DCFS (Deficit Crisis Fear Syndrome)…but that is not the truth of the situation. Krugman continues:

The orange line shows the effects of those spending cuts and tax hikes (Budget Control Act 2011, American Taxpayer Relief Act 2013): As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon.

“The debt ratio will stabilize soon.” The CBPP advocates for an additional $1.4 trillion in combined revenue and spending cuts, represented by the red line. As a frame of reference, in 2010, debt-to-GDP exceeded 100% and has been on the decline – dropping to about 72% in 2012:

Based on the factual data, not Paul Ryan’s DCFS talking points, the deficit situation, even without any additional revenue or cuts, is stabilizing. It has been stabilizing since early 2011, a fact that is consistently ignored as the media continues allowing Ryan and company to get away with promoting their DCFS talking points.

The runaway debt crisis talking point is something that should be relegated to the 2012 election dustbin. The focus should really be jobs that get the economy moving again, and investment to make that a reality.

With all due respect to Greg Neumann, who is one of the best political reporters in the state, I would suggest referencing the final point from Krugman for his next interview with a conservative who attempts propagating Deficit Crisis Fear Syndrome (DCFS):

  …at this point reasonable projections do not, repeat do not, show anything resembling the runaway deficit crisis that is a staple of almost everything you hear, including supposedly objective news reporting.

Fear never solved anything. Paul Ryan and company need help getting over DCFS-Deficit Crisis Fear Syndrome, so we can get down to something REALLY serious – solving our long-term unemployment problem.

 

 

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