Politics
4:37 pm
Fri December 6, 2013

Week In Politics: Looming Unemployment Cuts And Income Inequality

Originally published on Fri December 6, 2013 6:35 pm

Transcript

MELISSA BLOCK, HOST:

So the lowest unemployment rate in five years, down to 7 percent. To talk about the economic picture and more from this week's news, I'm joined by our regular Friday political commentators, David Brooks of the New York Times and E.J. Dionne of The Washington Post and Brookings Institution. Welcome back to you both.

DAVID BROOKS: Good to be here.

E.J. DIONNE: Good to be with you.

BLOCK: So David, let's start with you. We saw the government shutdown not long ago fight over the debt limit, ongoing wrestling in Congress over budget cuts and the sequester, but the jobs market seems to be shrugging all of this off. What's the message?

BROOKS: These are surface epiphenomena, as Marx would say. So the government did some harm to the economy, but the economy is still reasonably strong, but there are these underlying trends. And the underlying trends are, as the president said this week, inequality and social mobility. And so I think we're shaking off some of the worst effects that the government has done to the economy and now we're sort of back to the basic structural health of the economy.

BLOCK: E.J., I'm going to get back to that economic inequality question in a second, but we did hear the speaker of the House, John Boehner, today, say that the positive signs in this jobs report should discourage calls for more emergency government stimulus. Does this strengthen the hand of people who would say that the government should not be extending emergency unemployment benefits for the unemployed, for the long term unemployed?

DIONNE: Well, I don't think it should. I mean, on the whole, this is, as my Washington Post colleague Neil Irwin said, a merry Christmas, happy Hanukkah jobs report. I mean, this is the best one we have seen a while. But there are still serious pockets of unemployment. Seven percent is still not a great unemployment rate.

Unemployment among younger people, among teenagers is at 20 percent. For people without a high school diploma, it's a 10.8 percent. So the economy is on a better road. We've produced over 2 million jobs this year, but we're not there yet. And so I hope that the Fed does not abruptly begin to pull out its own stimulus and I think we could still use some help to drive this down another couple of points, the unemployment rate.

BLOCK: Well, let's talk about President Obama's speech on Wednesday. It was a long speech all about upward mobility and growing economic inequality in this country and he was making the argument, in his words, that the basic bargain at the heart of our economy has frayed.

PRESIDENT BARACK OBAMA: A relentlessly growing deficit of opportunity is a bigger threat to our future then our rapidly shrinking fiscal deficit.

BLOCK: And E.J., President Obama was calling for, among other things, raising the minimum wage. Did you hear a shift in tone or message here, or is this something we've heard from him before?

DIONNE: Well, I think it's a consistent message, but I think it was a very strong and, in some ways, his most coherent argument about inequality and also declining social mobility. I think two - I think several important things. One is he linked inequality to declining social mobility, very dramatic numbers about how, if you're stuck at the bottom 20 percent you've only got one chance in 20 to make it to the top.

So inequality is not just about inequality, but our American dream, the whole idea is in jeopardy. And that quotation you just played was important. You know, he had been very involved, really, in spreading the word that the deficit is a central issue. He is really saying, wait a minute, growth matters more, lowering inequality matters more.

And the last thing, I think that he is really taking a turn here. He is saying to the Republicans, if you're against my healthcare proposal, this proposal is a practical thing to reduce inequality. What do you guys have to say about healthcare in particular and about reducing inequality generally?

BLOCK: Yeah. Well, David, what about that? I mean, because the president did issue that challenge to Republicans. He said if you have better plans, let's hear them. Do they?

BROOKS: Maybe not. You know, I think they do have some. You know, one of the things the president put together which is not so easy to put together is inequality and social mobility. He used them together. In fact, they point in different policy directions. If you emphasize inequality, then you tend toward a redistributive set of policies. If you emphasize social mobility, then you emphasize human capital policies such as early childhood education and college grants and things like that.

The president actually has both in his quiver to the extent that he has any policies. But I do think they do point in slightly different directions. And if I were the Republicans, I would emphasize social mobility, giving people the tools to rise and compete rather than redistribution.

The president is wrong finally on the fiscal situation. The long term deficits are still ruinous and they have to be dealt with while we deal with the inequality and mobility issues.

DIONNE: I really profoundly disagree with David's couple of points on that, but in particular, inequality does seem to go with declining social mobility. If we look at the other wealthy countries in the world, countries that are more equal than we are have much better rates of social mobility. And so if you care about mobility, which I know David does, then you have to care about rising inequality which I think he should.

BLOCK: David, do you want to rebut?

BROOKS: Yes. I mean, it's really a question what policies. I mean, if we're going to have high tax rates in an attempt to redistribute wealth downward, then I think that's really a palliative. I think the core of the inequality problem and the core of the mobility problem is a widening education premium or widening rewards for education, the concentration of an educated class into really a very segregated elite.

And so giving people outside of that class, giving them the human capital tools to rise and compete is a lot better to me than to raise the tax rates and redistribute money downwards.

DIONNE: And human capital costs money, and it's at the heart of Obama's proposal.

BLOCK: I want to make sure we have time here to get to our last topic, which is the death yesterday of Nelson Mandela at the age of 95; really hard, I think to fathom the total transformation that he brought to the lives of people not just in South Africa but really all over the world.

And David, you were just telling me that you were in South Africa in 1990 when Nelson Mandela was released from prison.

BROOKS: Yeah, and I got it wrong because I thought South Africa was in for some horrible times, not so much the white-black violence but the black-black violence in Kotha, which was a different movement that was then alive and Chief Buthelezi was fighting at the ANC. And they were necklacing, if people remember, putting tires around people's heads, putting gasoline in them and burning them up. And it just looked ugly.

And I really think it was the moral presence of Nelson Mandela that really helped calm that. And so I was way more pessimistic because Nelson Mandela made it a lot better.

BLOCK: E.J.?

DIONNE: He's an extraordinary figure. We put heavy emphasis on his role as a conciliator, and we should. He was also an organizer, and he was someone who was sort of - and many were afraid of in the West. President Reagan vetoed the anti-apartheid law. He shows how much he achieved by the universal praise he's gotten the last few days.

BLOCK: OK, E.J. Dionne of The Washington Post, David Brooks of The New York Times, have a good weekend.

BROOKS: You, too.

DIONNE: Thank you. Transcript provided by NPR, Copyright NPR.