DEMOCRATIC ECONOMISTS TAKING ON THE NEOPOPULISTS
February 16, 2007
A report released Monday by the Democratic activist group Third Way is remarkable in that it challenges the overwhelming neopopulist and economic nationalist sentiment prevalent within the Democratic Party, says New York Times columnist David Brooks.
The first myth challenged in the report, is that of the failing middle class. While it's true there are more households headed by young and old people, who tend to have lower incomes, it does not tell the entire story, says Brooks:
- If you take households headed by people in their prime working years, 25 to 59, you find that those people are not failing; their median income is $61,000, if they are married, their median income is $72,000.
- Moreover, their living standards are not stagnant; from 1979 to 2005, the percentage of prime-age households making more than $100,000 in current dollars rose by 12.7 percentage points.
- The authors also dispute recent warnings of wildly increasing income volatility; the main reason incomes have grown more volatile over the past decades is motherhood, they write.
- As women play a more significant role in the economy, their movements in and out of the labor force to care for children increase volatility.
The report goes on to challenge the direst warnings about rising credit card debt (household assets have risen faster than debts), rising corporate profits (they are cyclical and pretty much normal for this stage in a recovery) and American decline.
Overall, the authors are not saying everything is perfect -- far from it -- but they are saying Democrats tend to lose when they are relentlessly grim and when the reality they describe is detached from the reality most Americans experience.
Source: David Brooks, "Democratic economists taking on the neopopulists," Dallas Morning News, February 14, 2007.
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