Some Financial Emotions

Father Frank's Sunday sermon was cheerier than usual, thanks to his reading of Obama's victory in Iowa. FF believes Obama and Huckabee are the anti-war candidates, relatively speaking, and that voters went for them because they dislike the war.

Unfortunately, the polls that Rich cites are ambiguous, even in his own paraphrase of them, to suggest an anti-war surge among voters. There's no evidence of revolt against war as an instrument of US foreign policy, and nearly half of the public think that reduced solider body counts mean the war is going well. That kind of bare-half (48 percent here) is how Republicans and near-Republicans like Hillary Clinton maintain control. Father Frank's spirit of joy passed me by.

I would be happier if the Dims had some non-conservative economic ideas - concrete alternatives to what Paul Krugman calls the Repub's decades of "Robin-Hood-in-reverse." With the partial exception of Edwards, they don't.

The core problem for the Dims once again is that Real Beats Fake. The Repubs believe in their Darwinist business-run economy. The Dims don't believe in a social-development alternative - they don't have one. The Dims are nicer about supporting public services, yet not because they are essential to wealth creation and justice, but because they believe in charity. Hillary will follow Bill's Fake Republicanism and do even better than he did to make it real. People don't actually want this nonfunctional neo-classical anti-public economics any more. They just don't have much choice.

The most important public statement in the Iowa campaign was actually uttered on Jay Leno's strikebreaking show, and it came from Republican Huckabee: "People are looking for a presidential candidate who reminds them more of the guy they work with rather than the guy that laid them off."

More everyday signs of the need for new socially-oriented economic theory:

- a good Wall Street Journal story on Japan's stagnation that traces it to the boom in low wage workers. The US kept consumption going through borrowing. Someday we'll rediscover the basic Keynesian idea of helping the economy by supporting demand, which requires good and rising wages for the majority.

- a strange New York Times article on job sadness among affluent doctors and lawyers. The Times is very sensitive to the mood of its base, which has taken a beating: starting as a lawyer in a big firm at $200,000 a year just doesn't feel as good as it used to. Topping out at $500,000 a year hurts a lot of physician's feelings. The article claims that working everyday at really challenging jobs for lots of money pales by comparison to creating your own start-up company!

The better explanation is the combination of grotesque overwork - 80 hour-weeks make everyone feel like indentured servants - and the inequality boom. It's not that you can't live on $500,000 a year. It's that all labor, even the best-paid, is grossly under-rewarded by comparison to corporate ownership and executive placement.

The pivotal economic issue in the election is capital gains tax policy. Will any Dim candidate say unearned income (via investments) should be taxed at the same rate as the income you earn with your own skill and work? Even Edwards won't go there. Until one of the candidates can, we'll have a banker's economy that will make every one else feel kind of bad.