Tags: Tankersley | proposal | middle class | cost

WaPo's Tankersley Reviews Middle-Class Proposals

By    |   Friday, 23 Jan 2015 07:43 AM

Jim Tankersley, economic policy correspondent for The Washington Post, spoke with C-SPAN host Greta Wodele Brawner about the programs the president announced in the State of the Union address that are proposed as means of improving the lot of middle-class Americans.

Brawner began the discussion by asking the fundamental question of how the middle class is defined. The answer, essentially, is you know it when you see it, and he cited $50,000 per year as roughly the median national household income, which he said is about the same as in 1989.

According to Tankersley, the Great Recession was "brutal" for the middle class, with home and stock ownership declining by 10 percent or more and business ownership by more than 25 percent. (One could say that the home ownership figure was inflated and that this politically inspired drive to goose up home ownership ultimately contributed to the recession and decline in middle-class living standards.) He noted that the decline in asset ownership means that middle class investors were less well-positioned to participate in the recoveries of the stock and housing markets (to which this writer would add, "artificially stimulated by policies of the Treasury and Fed.")

Brawner asked about the cost side, specifically healthcare costs, and Tankersley responded that the rate of growth of healthcare costs has slowed (one could say that rate of growth was unsustainable), but he then shifted to the subject of fuel costs and the major break the middle class has enjoyed with the dramatic decline in gas and oil prices, but the costs of child care and education have increased.

Against this background, Brawner asked for the specifics of proposals by the administration and the Republicans. Tankersley called the latest set of administration proposals the most detailed yet and described them as intended to deal with stagnation two ways: making community college more accessible to facilitate the acquisition of marketable skills, and adding some tax breaks for the middle class and promoting infrastructure repair that will boost employment of skilled workers (so that's three ways, right?).

By contrast, Tankersley suggested that administration programs grounded in government intervention provide an opportunity for Republicans to offer to promote economic growth by getting the government out of the way, but it remains to be seen how well they will execute.

Brawner referred to a six-part series Tankersley has compiled after traveling around the country to study the middle class, and his big conclusion was that in the postwar period America was able to excel at employing talent and skill productively, but that trend reversed during the last 25 years as talented people slipped into less-productive jobs, and he referred specifically to Wall Street and K Street, as opposed to industries that thrive on innovation.

Tankersley speculated that the administration and congressional Republicans will be able to find common ground and agree on ways to mobilize skills through entrepreneurship. He has set forth some indicators as to whether the ideas of politicians are serious when it comes to helping the middle class. Tankersley recommends asking whether the proposals are actually new or whether instead they take old ideas and wrap them in middle-class rhetoric.

The cynical view of this is that what the administration is proposing is just the latest version of, "I'm from the federal government, and I'm here to help you," whereas what government has delivered is "snagflation" as the authorities continue to invest in legacy assets spawned by the "financial innovation" of "too big to fail" banks.

The beneficiaries of public policy under both parties have been Wall Street executives and their lawyers, and the burden of paying for these programs will fall on the middle class.

(Archived video can be found here.)

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Robert-Feinberg
Jim Tankersley, economic policy correspondent for The Washington Post, spoke with C-SPAN host Greta Wodele Brawner about the programs the president announced in the State of the Union address that are proposed as means of improving the lot of middle-class Americans.
Tankersley, proposal, middle class, cost
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2015-43-23
Friday, 23 Jan 2015 07:43 AM
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