I’m pretty sure nobody at CAP favors the 100 percent cuts scenario outlined in our “A Thousand Cuts” report detailing possible approaches to achieving primary balance of the budget by 2015. But the econ team tried to be rigorous about what would be a good way to do that, and it looks like Reihan Salam is on board:

What might they do? The left-of-centre Centre for American Progress recently published a guide to balancing the federal deficit. As a provocation, they offer one plan for reducing it by $255bn through spending cuts, including the elimination of many cherished federal programmes. Although not in the pledge, it would make an excellent start.

They could then take a page from the right-of-centre American Enterprise Institute, and implement a competitive pricing system that applies equally to Medicare FFS and Medicare Advantage, a reform that would yield an additional $50bn in annual savings. Paring back the $300bn tax break for employer-provided health insurance would also make a big dent in the deficit. And that is just a start.

(Peeve here: Just because the FT is a British publication is no reason, in my view, why we should suddenly become a “Centre”—that’s a proper name)

At any rate, I only wish Salam had detailed what some of these cuts are. For example, reductions of 20% in Immigration and Customs Enforcement, and Customs and Border Protection; 8% in federal corrections activities, 5% in the federal judiciary, the FBI, and the Marshall’s Service. We’ve got a 12.5% cut in defense spending, a 75% reduction in agricultural subsidies, and the elimination of the tax deduction for business meals and entertainment. The plan cuts International Security Assistance in half and even trims veterans’ disability payments. Leaving questions of political feasibility aside, I’d actually be interested in how many conservatives think these kind of reductions are good ideas on the merits. My sense of the right-of-center conventional wisdom is that the United States is currently doing far too little in the way of defense spending, immigration crackdowns, counterinsurgency, etc.

Now maybe I’m wrong and it really is the case that conservatives generally favor the kind of steep reductions needed to implement their tax agenda but conservative elected officials lack guts and courage. But I think I’m not wrong and that actually a fair amount of the debate over federal spending is phony and grassroots conservatives are just confused (as many Americans are) about what programs cost how much.

Jordi Blanes i Vidal, Mirko Draca, and Christian Fons-Rosen from the LSE report in a new discussion paper (PDF) that lobbyist compensation is linked to legislator ties:

Washington’s “revolving door” – the movement from government service into the lobbying industry- is regarded as a major concern for policy-making. We study how ex-government staffers benefit from the personal connections acquired during their public service. Lobbyists with experience in the office of a US Senator suffer a 24% drop in generated revenue when that Senator leaves office. The effect is immediate, discontinuous around the exit period and long-lasting. Consistent with the notion that lobbyists sell access to powerful politicians, the drop in revenue is increasing in the seniority of and committee assignments power held by the exiting politician.

Of course this still leaves the nature of the policy impacts a somewhat open question. To some extent lobbyists make money by hustling their clients and pretending to offer services that aren’t, in fact, valuable. For example, there was a frenzy of lobbying in 2009 dedicated to making sure congress didn’t enact a new tax on sodas even though there was basically no congressional move to enact such a tax. Having an ex-boss in an important job on the Hill could be valuable for influencing policy or it could be valuable for acting like you’re in a position to influence policy. Or, of course, both.

I’ve been meaning all week to write something up about Jacob Hacker and Paul Pierson’s Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class but I’ve had difficulty knowing what to say. It’s received a level of praise from people I respect like Kevin Drum, Bob Kuttner, James Fallows, and E.J. Dionne that strikes me as wildly overstated but it’s also not by any means a bad book or something worthy of a “takedown.” But even though I think it’s not as great as its biggest fans say, it is recommended to those interested in the debate over U.S. economic policy and especially to anyone who hasn’t already read Krugman’s The Conscience of a Liberal or Larry Bartels’ excellent Unequal Democracy: The Political Economy of the New Gilded Age.

Either way, it’s a great review of the state-of-the-art thinking on the scope of the inequality explosion and I think it correctly frames this as a non-inevitable consequence of policy decisions where “don’t do anything” counts as a policy decision.

But I think the book has a crucial flaw. The implicit argument of the book is that stagnating middle class wages are in some sense causally linked to skyrocketing high-end inequality. But in order to demonstrate the political origins of skyrocketing high-end inequality, they rely on international comparative data which shows it hasn’t really happened in non-Anglophone countries. But when discussing wage stagnation in the United States, they fail to attend to the fact that this has happened outside the Anglosphere. This suggests the conclusion that these are, in fact, separate phenomena. On the one hand, across the developed world there was a slowdown in growth and wages. On the other hand, there was an explosion in the earnings of finance types in the more deregulated Anglophone countries. This means that if there’s a policy problem to which super-inequality is tightly linked it’s probably the problem of macroeconomic stability—financial crises and panics—rather than the problem of middle-class wage stagnation.

Last, Hacker & Pierson diagnose the political problem as in part driven by a waning level of interest among leftwingers in income inequality as the central political problem. I am, in that case, part of the problem. In broad terms, I’m more much more worried about the interrelated issues of peace, trade, migration, climate change, third world economic development, and the international spread of liberalism than about the problems Hacker & Pierson are writing about.

Or to look at it in historical terms, I think if you looked at the United States in 1970 and said “raising the relative social status of women and the range of opportunities available to them is a higher priority than increasing the quantity of consumer goods available to the typical middle class family” I don’t think that would be an erroneous judgment. And guess what? Since 1970 the range of opportunities available to women, and their social status relative to men, has gone way up. Between feminism in the developed world over the past 40 years, the enormous economic progress in the developing world over the past 30 years, and the massive reduction in the risk of global nuclear annihilation I have a difficult time with the idea of recent history as a big political sob story. That’s not to say this isn’t a good book, or that these aren’t interesting and important issues, but I think progressives should resist the idea that the rise of postmaterial politics is a right-wing triumph rather than a correct response to changing conditions.