Must-Read: Ezra Klein gets it right about the Republican Party and health care reform. Let us dispel with the illusion that these people have any intention of trying to keep America great, or make America greater:

Ezra Klein: The GOP Health Bill Doesn’t Know What Problem It’s Trying to Solve: After seven years of drafting a replacement plan, we get… this?…

…Have you read Sarah Kliff’s thorough look at the GOP Obamacare replacement? You have? Good. Some thoughts.

1. Little in politics shocks me. The process House Republicans want to use for their health care bill does…. Committee votes… two days after releasing it, and without a Congressional Budget Office report estimating either coverage or fiscal effects….
2. If Republicans believed the American people—or even their own legislators—would like the results of a thorough estimate of their proposal’s effects, they would have waited for one…. The GOP plan will lead to… 15 to 20 million people… los[ing] insurance…. After years of Republicans complaining that co-pays and deductibles were too high in Obamacare, co-pays and deductibles will be significantly higher…. The plan will significantly reduce taxes on the rich….
3. The deficit—it’s hard to see any short-term reduction, and if there’s a long-term reduction, it will only be due to deep, deep Medicaid cuts…. The GOP’s main idea for reducing health care costs—ending or capping the tax break for employer-provided insurance—has been left out of this legislation. There is simply no theory of cost control in this bill at all.
4. Adverse selection seems like a huge problem….
5. The plan is strikingly regressive….
6. Hypocrisy is a minor sin in politics, but still, it is remarkable how much of it there is to be found in this legislation….
7. It is difficult to say what question, or set of questions, would lead to this bill as an answer. Were voters clamoring for a bill that cut taxes on the rich, raised premiums on the old, and cut subsidies for the poor? Will Americans be happy when 15 million people lose their health insurance and many of those remaining face higher deductibles?
8. Nor are movement conservatives pleased….
9. This is much more Obamacare 2.0 than I expected….
10. All this speaks to the Republican Party’s fundamental difficulty on health care…. Suderman…. “hey don’t agree on, or in some cases even have, basic goals when it comes to health policy.”
11. Because Republicans aren’t even trying to win Democratic votes, they’re stuck designing a bill that can wiggle through the budget reconciliation process….
12. This bill has a lot of problems… more will come clear…. But the biggest problem this bill has is that it’s not clear why it exists. What does it make better? What is it even trying to achieve? Democrats wanted to cover more people and reduce long-term costs, and they had an argument for how their bill did both…. Republicans have neither. At best, you can say this bill makes every obvious health care metric a bit worse, but at least it cuts taxes on rich people? Is that really a winning argument in American politics?…
13. We’re seeing… Republicans trying desperately to come up with something that would allow them to repeal and replace Obamacare… a compromise of a compromise aimed at fulfilling that promise. But “repeal and replace” is a political slogan, not a policy goal. This is a lot of political pain to endure for a bill that won’t improve many peoples’ lives, but will badly hurt millions.

Should-Read: Martin Sandbu: Globalisation Will Survive: “The emerging world has both a deep interest in keeping globalisation going and greater power to defend it than ever before…

…Erecting trade barriers between the US and Mexico is like building a wall in the middle of a factory floor. it would not make domestic industry more competitive. The same goes for the UK leaving the single market…. Anti-globalism cannot deliver: globalisation bears little of the blame for the west’s economic problems…. Just as agriculture feeds entire populations while employing only a tiny fraction of its workers, so manufacturing work will keep shrinking. The remaining jobs will be high-skilled, managing advanced machinery…. Blue-collar jobs… are not coming back…

On Globalization and Trade

Emerging Markets Want Globalization:

• Globalisation has boosted emerging economies.
  • Trade helped lift more than 1bn people out of extreme poverty.
• The emerging world has:
  • a deep interest in keeping globalisation going
  • greater power to defend it
  • will fiercely contest a return to protectionism.

International Trade Today:

• Driven by knowledge flows.
• Consists of cross-border supply chains.
• Richard Baldwin: “erecting trade barriers between the US and Mexico is like building a wall in the middle of a factory floor”.
  • It would not make domestic industry more competitive.

Anti-Globalism:

• Cannot deliver
• The shrivelling need for manufacturing workers is the price of success at boosting manufacturing productivity.
• Anti-globalists who promise to bring back factories are selling snake oil

Should-Read: Frank Hyman: The Confederacy Was a Con Job on Whites. And Still Is.: “I’ve lived 55 years in the South, and I grew up liking the Confederate flag…

…I haven’t flown one for many decades, but for a reason that might surprise you…. As I grew up… I learned that for black folks the flutter of that flag felt like a poke in the eye with a sharp stick. And for the most prideful flag waivers, clearly that response was the point. I mean, come on. It’s a battle flag. What the flag symbolizes for blacks is enough reason to take it down. But there’s another reason…. The Confederacy =–and the slavery that spawned it–was also one big con job on the Southern, white, working class…. funded by some of the ante-bellum one-per-centers that continues today…. Forcing blacks–a third of the South’s laborers – to work without pay drove down wages for everyone else…. Thanks to the profitability of this no-wage/low-wage combination, a majority of American one-per-centers were southerners….

Most Southerners didn’t own slaves. But they were persuaded to risk their lives and limbs for the right of a few to get rich as Croesus from slavery. For their sacrifices and their votes, they earned two things before and after the Civil War. First, a very skinny slice of the immense Southern pie. And second… the shallow satisfaction of knowing that blacks had no slice at all….

The plantation owners… managed this con job partly with a propaganda technique… that falsely touted slave ownership as having benefits that would–in today’s lingo–trickle down to benefit non-slave owning whites and even blacks… [and the] notion that any gain by blacks in wages, schools or health care comes at the expense of the white working class. Today’s version of this con job… still works… the Cato Foundation, Reason magazine, Rush Limbaugh and Fox News… underwritten by pro trickle-down one-per-centers…

Should-Read: Bernie Sanders: Civil Discourse: “We face a very serious political problem… manifested… by Amber Phillips of The Washington Post…

…[who] criticizes me for lowering the state of our political discourse, because I accused the president of being a “liar.” What should a United States senator, or any citizen, do if the president is a liar? Does ignoring this reality benefit the American people? Do we make a bad situation worse by disrespecting the president of the United States? Or do we have an obligation to say that he is a liar to protect America’s standing in the world and people’s trust in our institutions?… How do we deal with a president who makes statements that reverberate around our country and the world that are not based on fact or evidence? What is the appropriate way to respond to that? And if the media and political leaders fail to call lies what they are, are they then guilty of misleading the public?

Briefing: Elise Gould: The State of American Wages 2016: “More broadly, shared wage growth from 2015 to 2016 does little to reverse decades of rising inequality…

…Wage inequality has been rising since the late 1970s—a trend that largely stems from intentional policy choices that have eroded ordinary workers’ leverage to secure higher pay (Bivens et al. 2014). These policy choices—made on behalf of those with the most economic power—include allowing the minimum wage to stagnate, eroding workers’ rights to bargain collectively, and prioritizing low inflation over low unemployment. Policies such as these have resulted in hourly pay for the vast majority of American workers stagnating despite growing economy-wide productivity, with economic gains highly concentrated at the top. Wage growth since the Great Recession has continued to follow this trend: slower growth for most and faster growth for those at the top.

Talking Points:

Since 2000 wage growth has been consistently stronger for high-wage workers, continuing the trend in rising wage inequality:

• Those with college or advanced degrees saw average wage growth of 8.5 percent and 6.9 percent, respectively, from 2000 to 2016
  • The bottom 50 percent of workers with a college degree still have lower wages than they did in 2000 or 2007.
  • The pulling away at the top of the wage distribution cannot be explained by the rising college wage premium.
• Wage growth since 2000 was faster for white and Hispanic workers than for black workers.
  • The bottom 60 percent of black workers have seen their real wages decline since 2007
  • Black–white wage gaps are larger today than in 2000
  • Black–white wage gaps by education were larger in 2016 than in 2000
• The gender wage gap at the median has narrowed: a typical woman now earns 83 cents on the male dollar:
  • The regression-adjusted gender wage gap is currently 22.0 percent.

From 2015 to 2016, wage growth was more evenly distributed:

• Median wages–the 50th percentile–grew 3.1 percent.
• The 20th percentile–those poorer than 80% of the population—experienced a striking 6.4 percent increase

Must-Read: March 9, 2017, Thursday, at 2 PM, in the Blum Center Board Room at U.C. Berkeley:

Peter Temin: The Vanishing Middle Class: Prejudice and Power in a Dual Economy: “The middle class, defined as households earning from two-thirds to double the median American household income… <http://amzn.to/2mlKfpH>

…went from earning over three-fifths of total national income in 1970 to earning only just over two-fifths in 2014. The lines in gure 1 were horizontal before 1970, but they are continuing their movements after 2014…. The income share lost by the middle class went to people earning more than double the median income…. I employ an economic model that was created over sixty years ago… the Lewis model… the original model of a dual economy… two separate economic sectors within one country, divided by different levels of development, technology, and patterns of demand. This definition reflects the use of the Lewis model in the eld of economic development, and I adapt it in this book to describe current conditions in the United States, the richest large country in the world. This is less paradoxical than it sounds because the political policies that grow out of our dual economy have made the United States appear more and more like a developing country….

The politics that emerge from our dual economy prevent us from acting sensibly to reconstruct our ailing educational system. As we will see, we now have two systems of education, one for each sector of the dual economy. Schools for the richer sector vary in quality, and the best of them are well within the American historical experience. By contrast, schools for the poorer sector are failing. Attempts to x these schools have been known primarily for their spectacular failures. The legacy of slavery hangs over attempts to provide every child with an education. It was illegal to educate black people under slavery, and politicians today neglect education of the poor by implicitly invoking this racist history….

• American history and politics, particularly slavery and its aftermath, play an important part in the widening gap between rich and poor.
• A well-known, simple model of a dual economy
• Ways to work toward greater equality so that America will no longer have one economy for the rich and one for the poor.

Many poorer Americans live in conditions resembling those of a developing country — substandard education, dilapidated housing, and few stable employment opportunities. And although almost half of black Americans are poor, most poor people are not black. Conservative white politicians still appeal to the racism of poor white voters to get support for policies that harm low-income people as a whole, casting recipients of social programs as the Other — black, Latino, not like “us.” Politicians also use mass incarceration as a tool to keep black and Latino Americans from participating fully in society. Money goes to a vast entrenched prison system rather than to education. In the dual justice system, the rich pay fines and the poor go to jail.

Claudia Goldin: “The Vanishing Middle Class is a book for our unsettled times. We are a divided nation economically and politically, brought on by recent changes in the demand for and supply of skill layered on top of a long history of racial politics. Part social commentary, part history, part academic inquiry, Temin’s book tells us how the two parts of the modern dual economy can be glued back together.”

Gerald Jaynes: “Arguing that the high-wage sector promotes inequality and deterioration of the middle class through its disproportionate influence on political decision making in various areas such as criminal justice, education, and social welfare policy, The Vanishing Middle Class is a significant addition to the existing literature on inequality.”

Heather Boushey: “This is not the way the American Dream was expected to play out…. Temin argues that the distribution of gains from economic growth today make the United States look like a developing economy… build[ing] on the dual sector model developed in the 1950s by W. Arthur Lewis…. Temin[‘s]… dual sectors are finance, technology, and electronics, or FTE….Mem-bers of the FTE sector seek to keep their own taxes low and suppress the wages they pay so as to maximize their profits. Mass incarceration, housing segregation, and disenfranchisement all serve—among other things—to keep the low-skill sector in a subservient labor market position. These developments play out along racial lines set by the nation’s history of slavery. The bridge between these two sides of the economy is education….This is why Temin’s top policy recommendation is universal access to high-quality preschool and greater financial support for public universities. His second recommendation is to reverse policies that repress poor folk of any race…. Alas, neither of these recommendations is potent enough to overcome the fundamental problems…. If we want to revive our vanishing middle class… we’ll need to do more to undermine the dual economy structures he so accurately details.”