Clueless in Washington

The upper middle class bureaucrats (and journalists) in Washington are well insulated from the real world. As Dean Baker points out in this post on his CEPR blog:

In keeping with the policy of fact-free reporting at the Post, David Ignatius touts the economic successes of the last year and proclaims: "much of the necessary repair work has been done, with one nagging exception -- the lack of a credible long-term plan to control the deficit."

Wow, no one told him about 9.7 percent unemployment.

Yep... it is awfully hard to feel the pain and despair of long term unemployment of neighborhoods with 20% and 30% unemployment when you live in Washington suburbia with 2% unemployment that masks itself under "taking personal time off to get my priorities straight". It is sure nice to have the cash cushion to "take time off". Not something that somebody working at or near minimum wage experiences. So, without putting in effort to stretch the imagination, or taking time to spend hours among the hard hit neighborhoods, or having the kind of empathy that gets you outside your happy little yuppie lifestyle. It is awfully easy to overlook 9.7% unemployment.

But can a person call himself a reporter or journalist if they can't see beyond their own nose?

Dean Baker in a related post notes:

The Washington Post reported on the Senate's refusal to extend unemployment benefits. At one point it referred to plans to change the tax treatment of income earned by managers of hedge funds, private equity funds, and real estate funds as a "new tax."

Currently, much of the income of these managers is taxed as capital gains even though it is paid in exchange for work. As a result, many of the richest people in the country are paying a 15 percent tax on their earnings, instead of the 33 percent rate that high earners would otherwise pay (39.6 percent after the end of the year). The proposed change in the tax code would treat some of their earnings as labor income subject to ordinary taxes. It is not clear that change should be described as a new tax.

The article also discusses the additional debt that would incurred if the unemployment extension bill was approved by Congress. It tells readers that the proposal would have increased deficits over the course of the decade by $33 billion. It would have been helpful to note that this is equal to approximately 0.02 percent of projected GDP over this period.

It is cruel to allow people earning hundreds of millions to play the fantasy game of "my income is not earned, it is really 'capital gains'" and get a knockdown of over 50% in the taxes they owe while at the same time playing Scrooge and saying that "the nation cannot afford the onerous cost of unemployement benefits". This kind of cold-hearted cruelty was something I read about in my youth in Dickens and associated with the peculiar cruelties of the early industrial revolution. It is sad to note that the same cruel indifference is practiced in the post-industrial world of today. Or... as Marie Antoinette so eeriely identified the problem and the most apt solution: "let them eat cake!"