Hullabaloo

Sunday, February 20, 2011

 
"It's Politics"

by digby


This week's Ali Velshi/Christine Romans economic conventional wisdom show featured much of the usual garbage I've come to expect from the show. They even had Gloria Borger on to explain Village thinking so we don't have scratch our heads wondering where the gasbags come up with this stuff.

But, they did feature Dean Baker this week-end (who might as well have been speaking in tongues for all they could wrap their minds around what he was saying.) And they had this highly unusual exchange:

VELSHI: Time now to go beyond the headlines. Christine Romans is back. Joining me also is Pete Dominick, my good friend, host of Sirius XM "Standup." Guys take a look at this chart. If you're part of the red line, you're going to see a red line and a blue line emerging. If you're part of that red line, congratulations, you're in the top 5 percent income bracket in the United States. Almost everyone else, however, your wages have been stagnant for the past 30 years. In fact, this chart goes back to 1917; your wages have been largely stagnant for a very long time. Christine, you talk about this a lot. I have heard you talk about this for years, the fact that the middle class is disconnected from progress and growth. How did this happen?

ROMANS: How did it happen? Did it happen because of globalization? Did it happen because we don't have a manufacturing policy in this country or was it a national economic strategy? Did it happen because we sort of outsourced those jobs to multimillion dollar corporations who are looking for other countries for their profit and growth. I mean it is a combination of a lot of different things. But the bottom line is when you're talking about the American dream, which is do better than the generation before you, unless you're in that top line, and that ain't happening.

PETE DOMINICK, HOST, SIRIUS XM'S "STAND UP:" If you have a red shirt and much like the top 5 percent Christine. Let's go to the wall, you love to go to the wall. I want to examine politics. I don't know where 1981 is, but I think it's somewhere around here. We just talked about it, you just talked about who these people are, and who these are people, and these are people. These are voters, these are voters. These people got these people to vote for their interests, period. That is it, these people are still voting for their interests because these --

VELSHI: What happened toward the end here? Manufacturing jobs disappeared and markets started to take off.

DOMINICK: You could lay another graph over this, the demise of unions starts right around here, when unions are strong, union works who are middle class or who are not -- I love the life. Politics.

VELSHI: Here's a remarkable point, Pete. The rich got the average, the middle class to vote for policies that sustain them. Policies like for instance, extending a tax cut to the wealthiest in society. Christine, explain the psychology there, explain why 95 percent of the people support the system that enriches the top 5 percent?

DOMINICK: The American dream. They are going to be them some day Ali.

ROMANS: This recession has made the wall between the haves and the have-nots a lot harder to climb.

VELSHI: Interesting.

DOMINICK: Here's another thing I want to talk to you about, as if the middle class hasn't been battered enough. Food and clothing prices, you know this they're going up as a result of rising global commodity prices. Christine quickly walk us through this.

ROMANS: This is the big story of the money story of the week guys. So look you're talking about companies that are starting to say we can start passing along these higher raw materials prices, and that's going to be everything from meat to poultry to eggs. You're already seeing that. You've got grain prices that are historic. Then you take a look at cereal.

VELSHI: Or maybe the packages get smaller.

ROMANS: Or maybe the packages get smaller, or they have fewer manufacturers. Even some of these things that go into beauty products, those have been going up. Apparel, cotton prices are at record highs, they have more than doubled.

VELSHI: A 10 percent.

ROMANS: A 10 percent. This is a great CNNMoney story; you're going to see really chintzy t-shirts and jeans that have fake pockets.

DOMINICK: Here's one thing, I don't eat meat, I don't eat breakfast, I use baking soda, I go naked, I don't have a refrigerator. I have a question for you, what's the top ingredient in corn flakes? Corn right?

ROMANS: Well that's a very good point. Because you look at refrigerators, Whirlpool, LG, said they are going to be raising prices, one of the reasons is they have moved overseas, many of their manufacturing people, guess what prices are rising, it's also costing more to ship stuff halfway around the world to come back. Because of fuel costs and labor prices are going up from the quote, unquote cheap labor market. So it is a lot of different things.

VELSHI: Good to see you both as always. A very animated discussion. It's the first time I have ever seen Pete Dominick play an economist. Very nice. Good to see you Pete.

DOMINICK: It's politics.

Velshi then went on to lecture about "tough choices" and deficits and all the usual beltway rot. I'm fairly sure that the economy press is a lost cause. Even when confronted with what should produce at least a moment re-evaluation of the current thinking, they fall right back into their patterns.

Still, it's good to see it, even if it blows right past them.


h/t to PA


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digby 2/20/2011 02:30:00 PM