(Credit: AP)

Have conservatives learned their lesson from the 47 percent debacle? A new paper from arguably the most influential conservative economist in the country, titled “In Defense Of The One Percent,” suggests no. Even worse, the paper shows how dividing America into Randian producers and naturally subordinate moochers is the only way to resolve a central contradiction in modern conservative economic thinking — meaning that the GOP will be stuck making a losing argument until it conducts a total rethink of its economic philosophy.

Harvard Economics Professor N. Gregory Mankiw, the author of “In Defense,” was the chairman of George W. Bush’s Council of Economic Advisers and counseled Mitt Romney on economic issues in 2006 and 2012. Despite his occasional heresies (Mankiw famously supports a carbon tax to fight global warming), Mankiw is one of the most-respected and most-representative conservative economist active in public life today.

Mankiw’s defense of the one percent proceeds from a fairly conventional script. He argues that structural transformations in the economy, principally caused by the advent of new technology like computers, “have allowed a small number of highly educated and exceptionally talented individuals to command superstar incomes in ways that were not possible a generation ago.” The recent spike in inequality, for Mankiw, is then largely caused by the smart and talented being able to express their talents freely. Much of Mankiw’s paper is devoted to arguing that punishing these talented individuals through more progressive taxation would be unfair because they earned it fair and square.*

This argument doesn’t work if you think, like many Americans, the economic game is rigged in favor of the already-rich. As Mankiw concedes, the evidence that inequality persists over generations — that is, people with rich parents tend to end up rich too — is overwhelming. If this reflected structural disadvantage like unequal access to health care and education, then it would be hard to argue that the best and brightest, rather than richest and whitest, were being rewarded by rising inequality.

Instead of trying to argue away the facts on inequality, Mankiw attempts to reexplain them. He proceeds in part by personal anecdote: “I do not see my children as having significantly better opportunities than I had at their age,” he writes, despite growing up wealthier than their middle-class father. Recognizing this impression to not be enough, Mankiw turns to the somewhat more surprising crutch of genetics. “Parents and children share genes,” which in Mankiw’s telling explains “intergenerational persistence in income even in a world of equal opportunities.” Though he disavows “genetic determinism,” Mankiw nevertheless thinks genetic transmission of things like IQ (a common conservative trope) make it “implausible to interpret generational persistence in income as simply a failure of society to provide equal opportunities.”

Even setting aside the obvious strawmanning here (nobody thinks persistent inequality is only caused by lack of opportunity), Mankiw’s analysis is unpersuasive. It can’t explain, for instance, why the United States has one of the lowest rates of intergenerational mobility in the developed world. Presumably, if genetics overwhelmed the effects of family inequality, more egalitarian distributions of wealth wouldn’t correlate with higher rates of mobility, but evidence from the developed world suggest they do.

But more fundamentally, follow Mankiw’s logic to its conclusion. He believes both that 1) the fact that the rich tend to stay rich, and the middle class tend not to become rich, are consequences of the natural distribution of talents and that 2) the most talented, morally speaking, deserve to keep what they earn.

In essence, Mankiw is arguing that a partly genetically determined upper class deserves most of society’s wealth and deserves to pass it on to their kids. It’s an argument that we’re living in a natural American hierarchy.
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Photo credit: The Irish Times

When leaders of the world’s eight largest economies convene in Northern Ireland next month for a summit of the G8, they’ll be surrounded by fictitious prosperity. As the Irish Times’ Dan Keenan explained to Public Radio International on Wednesday, the town of Enniskillen is erecting facades over vacant storefronts to simulate active businesses in a place Keenan says “has suffered terribly as a result of the credit crisis and the resulting recession.”

In all, Keenan reported in the Times, “More than 100 properties within range of the sumptuous Lough Erne resort which hosts the world’s wealthiest leaders, have been tidied up, painted or power-hosed.” The effort covers up the grimmer reality of a place more vulnerable to austerity than much of the rest of the United Kingdom, where child poverty is substantially higher than in the rest of the country. After three years of harmful austerity under Prime Minister David Cameron, the G8 summit will be the first shot of stimulus County Fermanagh’s economy has received in a long time. The Toronto Star puts the hoped-for spending injection at just under $60 million U.S., but notes that Toronto’s experience hosting a G20 summit in 2010 cost many times that much, and left “scars” on the city.

Like much of Europe, Northern Ireland faces cripplingly high unemployment, with nearly one in four young people out of work. That’s driven partly by what Keenan calls “the demise of the Celtic Tiger,” a reference to the economic collapse in the neighboring Republic of Ireland. The “Celtic Tiger” moniker was coined in the 1990s as the Irish economy boomed. Conservative proponents of supply-side economics, including think tanks like the Heritage Foundation, Cato Institute, and American Enterprise Institute, and then-presidential candidates Mitt Romney and John McCain, credited tax cuts, spending reductions, and “Reagan-style” policy for Ireland’s prosperity.

But then Ireland went bankrupt in 2010. It accepted a bailout, which meant imposing strict austerity measures that have kept the economy so mired that young Irish are emigrating in droves to search for jobs. In retrospect, the supposed exemplar of low-tax high-growth conservative economics was a mirage. Ireland became a tax haven – the country is key to the tax avoidance strategies of companies like Google and Apple – without establishing core economic and employment growth.

Nearly three years on from its bailout and the ensuing about-face from conservative economic pundits, the Celtic Tiger’s next door neighbor is covering empty butcher shops and pharmacies in stickers that simulate the look of an active business, just in time for the international news crews.

Zack Beauchamp has started an interesting discussion on TP Ideas on how and why conservatives love to link race and IQ. Allow me to point out that they don’t just stop with linking race and IQ. They also delight in linking economic inequality in general to IQ, for the same reasons: to make conservatives appear to be the reasonable ones not afraid to face the hard truths about a troubling social problem.

It should be no surprise to anyone that Charles Murray, author of The Bell Curve, is once again taking the lead in making this case. In last year’s Coming Apart: The State of White America, 1960-2010, he argued that to understand today’s economic inequality you need to go back to the 1960s. Since then, American society has been coming apart. Under the baleful influence of a relativistic, anything goes, 60s morality, America’s work ethic and honesty have been destroyed: the commitment to religion and the institution of marriage has been all but lost. As a result, the less-educated bottom 30 percent of whites have seen their economic and social fates diverge radically from the well-educated top 20 percent of whites. Weirdly, Murray dubs the former group “Fishtown,” in honor of a white working-class Philly neighborhood on the banks of the Delaware River; the latter group is named “Belmont,” after a tony Boston suburb.

A segment of Belmont whites — comprising perhaps 5 percent of the U.S. population — make up what Murray believes is the new upper class. These are the folks who hold the most powerful managerial and professional jobs in our social institutions and really run the country. Unlike in the good old days, they live in a culture that is separate and distinct from the rest of America (think upscale coffeehouses and restaurants, gourmet food stores, “green” consumer goods, highbrow news media, and “serious” movies and TV). They even live together in the same places, huddled together in what Murray calls “SuperZips,” where they can escape the unrefined masses, send their kids to good schools, and marry each other. Oddly, it is this very same new upper class that most fervently embraces the values of the 1960s — and yet they are doing very, very well.

And why are they doing so well? For Murray, it’s simple: they’re smarter! In his view, the sorting mechanisms in our technologically advanced society have become ever more efficient at ferreting out the cognitively gifted among us (elite colleges play a big role) and slotting them into positions where they can reap the market’s increasing return for high-level skills. So the cognitively advanced Belmont whites pull even farther away from the cognitively challenged Fishtown whites, who, you will remember, no longer have even their sturdy values of honesty, hard work, marriage, and traditional religion to rely upon.

As for the problems of blacks and Hispanics, Murray stands by his earlier work in The Bell Curve, where he argued that they’re just not as smart as whites and hence do more poorly in a society that increasingly rewards cognitive ability.  So blacks and Hispanics are dumber than whites and lower class whites are dumber than upper class whites. That’s Murray’s view of the world and his overarching explanation for the ongoing pathologies of racial and class inequality.

None of this makes any sense. On the one hand, Murray laments over and over the depth of the inequality problem we face; some of the economic trends he documents are the sorts of things you’d expect a liberal think tank or academic to lament. Yet that overlap has not led him to pay the slightest attention to the careful work these think tanks and academics have done analyzing the growth in inequality (well-summarized in Timothy Noah’s book, The Great Divergence). Murray dismisses out of hand explanations rooted in structural shifts in the economy, slower growth in educational attainment, changes in labor market institutions (unions, the minimum wage), or really anything other than increasing rewards for smart people and declining morals for dumb people. Thus in his quest for a scientific, hard-headed explanation for inequality, he winds up rejecting all the real science on the issue.

Don’t be surprised if this view, as appalling and absurd as it seems, continues to surface in conservative circles. The temptation to don the mantle of science, even when it is fundamentally fraudulent, will, for some, be too great to resist.

As ThinkProgress reported this morning, it didn’t take long for conservatives to begin pumping out conspiracy theories about today’s unexpectedly positive jobs report. The notion that the White House somehow leaned on the Bureau of Labor Statistics to cook the books is, of course, cosmically implausible. Unfortunately, the mainstream media — including outlets such as CNN, Fox News, and CNBC — were just as swift to present the conspiracy theories as matters for serious debate.

ThinkProgress has the video report. Watch it:

One of the most passionately held premises amongst conservatives and the Republican Party is that employers’ fear of taxation and regulation is what’s holding back job growth. The unspoken corollary to this premise is that demand in the economy is fine as is — that consumers could be buying far more goods and services than they are.

But as the Center for Economic and Policy Research noted on Monday, this theory is empirically testable. Measurable data in the economy would behave one way if the taxes-and-regulations theory is correct, and another way if the lack-of-demand theory is correct. A prime example is average weekly hours worked by employees across the economy:

If employers are seeing increased demand but don’t want to hire because they fear an attack from the regulation monster or higher taxes then they would work their existing work force more hours. That one should be pretty painless even for our fearful job creators. After all, do we really think that they would turn away customers from their stores, restaurants, and factories rather than have workers put in a few extra hours each week?

In other words, weekly hours worked will be up if the problem is taxes and regulations, and down if the problem is weak demand. Here are the numbers from the Bureau of Labor and Statistics:

Weekly hours worked remain down from their pre-recession level. This is not the behavior of businesses held back by government interference, but of businesses hiring as many employees as consumer demand in the economy justifies.

This finding echoes a report put out by the Economic Policy Institute last year. It noted that weekly hours worked, as well as several other economic indicators, are not behaving in accordance with the “taxes and regulation” narrative. In fact, while the 2008 recession blew a much deeper hole in the economy than previous recessions, the pace of private sector job growth in the current recovery is on par with the recovery after the 2001 recession under President Bush. That doesn’t square with the theory that America now faces a uniquely burdensome threat of taxation and regulation brought about by Obama and the Democrats.