Listen to this silliness from Alan Blinder, Princeton Economics professor and vice chairman of the Federal Reserve, 1994-96. 
In Praise of the Great Society
Blinder wants to raise the minimum wage, encourage unions and fight monopsony by handing out a “predistribution” of free money and by making the government the buyer of last resort.
Please consider Alan Blinder’s WSJ op-ed, Shore Up the Social Safety Net With ‘Predistribution’
For nearly a century, we have relied on a suite of programs known as the social safety net. The idea is straightforward: Let the market determine the rewards to capital and labor, and to high- and low-wage earners, but then allow the government to redistribute money through progressive taxation, Social Security, unemployment benefits, and other transfer payments to the needy.
If pursued vigorously, such programs could achieve what Franklin D. Roosevelt called a New Deal and Lyndon B. Johnson called a Great Society. America, however, doesn’t pursue these policies vigorously enough.
Amazingly, Blinder moans …
The Organization for Economic Cooperation and Development tracks member countries’ comparative “social spending”—defined as cash benefits, direct in-kind provision of goods and services, and tax breaks with social purposes—as a percentage of gross domestic product. Benefits may target “low-income households, the elderly, disabled, sick, unemployed or young persons.” By this measure, 22.7% of U.S gross domestic product is social spending, compared with 31.6% in France and 26.7% in Germany.
… Which explains why the EU is the beacon of global leadership, technology, jobs production, and innovation. /not
The Need for Predistribution
“Interest among economists appears to be growing in what Yale professor Jacob Hacker dubs “predistribution” policies: those that reduce inequalities in how markets dish out rewards rather than redistribute income after the fact.
Absolutely! And we even did a comprehensive test proving how well the idea works. When we paid people not to work in the Covid pandemic. They didn’t. Prices soared and companies had a miserable time finding workers.
I see the problem here. Do you? As Blinder suggests, we did not “pursue these policies vigorously enough.” /not
Predistribution How?
The most obvious predistribution policy is the federal minimum wage, which has been stuck at a paltry $7.25 an hour since 2009. It’s time Washington changed that. Polling has long shown that raising the minimum wage commands broad support.
Of course. Polling also suggests people want a chicken in every pot and a free EV to drive. But is there a test of this idea?
Yes!
Please note the Cost of Running a McDonalds Jumps $250,000 in CA Due to Minimum Wage Hikes
Tut! Tut! you might say, and those are indeed harsh words. I sympathize. California must be booming after pursuing policies like those for decades, leading the nation in employment.
Hmm. That might look damning, but I am quite sure you are with me right now.
The problem is obvious. California is just not doing enough! /not
The Need for Antimonopsony Policies
Many economists have also come to realize that monopsony—a market condition in which there’s only one buyer—is more common in labor markets than originally thought. In a monopsony, employers have more power to set compensation rates, leading to reduced wages. Just as we have antimonopoly policies, we should put in place antimonopsony policies.
The Biden administration has promulgated some good predistributive policies. It has reversed the Trump administration’s approach to unions, choosing to strengthen, not undermine, them. The Federal Trade Commission’s new limits on noncompete agreements, which impair workers’ ability to move to better-paying jobs, will likely boost wages.
This is another promising idea, fully tested in Chicago.
Please note Chicago Teachers’ Union Seeks $50 Billion Despite $700 Million City Deficit
Wait a second. Did Blinder forget to address the public union monopsony where corrupt politicians get in bed with corrupt union leaders, holding the taxpayers hostage?
Well. Tut Tut again. I am sure this is unique to Chicago. /not
Do It Voluntarily (Or Else?)
And here’s an out-of-the-box idea: Perhaps top executives could narrow the gap between their compensation and that of ordinary employees—not because the government mandates it but voluntarily, because doing so would make America better. Wishful thinking, you say, and you’re probably right. But a few CEOs have done so. Some nations manage fine with smaller wage gaps—without destroying capitalism. Maybe America could, too.
In his last op-ed paragraph, Blinder finally gets to the key point. I am sure everyone who is still following along agrees.
We need to voluntarily destroy capitalism to save it. The unfortunate corollary is … otherwise, governments will have to destroy capitalism to save it.
We fully tested this idea in the Vietnam War decades ago with the philosophy “We have to destroy the town to save it.”
Somehow, the idea never quite caught on. The reason is clear. We did not pursue the policy vigorously enough! If only we did, we could be better than the EU and more like Venezuela.
Who wouldn’t want that?
Good( Friday) Morning Mish : You have outdone yourself in this response to yet another push under the door from our Communist friends across the aisle, dressed up in their Socialist suits! Am printing this one to leave in the coffee room. Thank you.
Alan Blinder is a lifetime member and former director of the liberal-fascist Council on Foreign Relations (CFR) which has controlled the US govt and media since WW2. Most of the Fed chairmen and Treasury secretaries, including Powell and Yellen, have been CFR members. The major finance, energy, defense, pharma and media corporations are CFR “partners”. As usual, the “Biden team” is dominated by CFR members. See lists at the CFR website.
Alan Blinder is Stephanie Kelton. Stephanie Kelton is Alan Blinder.
Finkle is Einhorn. Einhorn is Finkle.
It is an indictment of the system whereby corporate value is determined by the personality at the helm instead of the product it sells. This was evident in the severange package of twenty millions to the CEO of Xerox twelve years ago, afer he captained that corporation into near death. The board thanked him for his servce and let it be known that “it took care of its family” no matter how wretchedly the corporation performed. But the sickness of CEO worship is not confined to the private sector. Ten years ago the President of UCONN justified a ridiculous multimillion dollar salary of their basketball coach by stating “We want to make sure we attract the best talent”, as though a public school’s survival hinges on a coach instead of its unpaid players — or better, its student body.
Whatever. The topic is not relevant to the philosophy of big government. Everyone knows the bureaucrat bigwigs get the best treatment. They are the CEO superstars of socialism.
I remember after the “Great Society” was installed (I’m older than 99% of the posters here), Lyndon Johnson proudly proclaimed, “The Blacks will now be a permanent voting block in the Democrat party”.
I need not remind everyone that the main accomplishment of the Great Society was the destruction of the black family. Government replaced fathers in what was once two parent black households.
Remember Psychology 101? Behavior (success in this case) that is punished diminishes. Behavior (failure) that is rewarded (with government benefits) increases.
We didn’t buy a voting block of the poor we are just renting it and the cost of that monthly rent is more than anyone can afford.
The government COULD deregulate to make starting a company easier, but that would put some bureaucrats out of a job.
Blinder is blinder than most but the big governmenters will love it, and you will have the Blinder leadng the blind.
Instead of constantly increasing the money supply, we should keep it flat for years and see what happens. My.guess is everything would deflate accordingly. The problem with too much money creation is it leads to massive amounts of inflation and leaves too many people behind. The banking system is to blame foe most of society’s ills.
Of the top 10 states with the lowest unemployment rate, only 4 are democratic. Of the top 10 states with the highest unemployment rate, 6 are democratic. But there are other broad measures of the economy. The lowest poverty rate, 9 of 10 are democratic, and the highest poverty rate 9 of 10 are rebublican. Same exact numbers for per capita income, 9 of the 10 highest are democratic and 9 of the 10 lowest are republican. Pick your poison.
Not pursuing the policies enough is always the problem, as they can never be pursued enough, due to the laws of math. As president, Clinton said, “we need a benefit.” Well, benefits had been created and amended onto in the past, yet here was Clinton proclaiming the need for a new benefit. Once implemented, it would then not have been enough, needing to be expanded. Then something else would need to be a benefit, as money taxed away to pay for the previous benefit, would leave people unable to pay for something they previously could afford.
When California legislators created paid family leave, they said that eventually employers would have to pay their fair share. It’s never going to be enough.
These programs have to be paid for by taxes and inflation, which impoverish people. We can’t create prosperity by redistributing money from the people who earned it to people who didn’t. We need to incentive productivity by letting people keep what they earn and stop making life more expensive by inflating the money supply.
”
Benefits may target “low-income households, the elderly, disabled, sick, unemployed or young persons.”
”
Yes, they MAY.
But they don’t.
Who they DO target, OTOH, are those who lobby. Directly. Or indirectly, by being connected to the “rulers.”
Hence why at least 95% of the “benefits” have been, and are, handed out by monetary debasement. To Hedge Fun illiterates without a talent in the world, aside from closeness to lobbyists and politicians. Wonder which one of “low-income households, the elderly, disabled, sick, unemployed or young persons” monkeyboy Blinder(-than Blindest…) reckon those benefit recipients belong to…..
That someone can run around calling himself an “economist”; of all things; without even getting something THAT trivial, is right up there with Krugman doing the same.
shh, shh, do not disturb. If they haven’t come awake by now they are just enjoying being comfortably numb.
Bizarro world has been normalized to such a point it becomes normalcy bias.
War on Poverty
War on Drugs
War on Terror (Global no less)
War on Russia (via Ukraine)
War on Hydrocarbons (?)
….
Did I miss any? How’s Uncle Sam doing on these?
WAR ON US is one that you missed!
Hey help Joey back for another four.
Stick with your TDS no matter the consequence.
After all a person is nothing unless they follow their ideology to that all too bitter end.
If you have not gotten Hosed enough by now after the great Farce let Joey get installed for another four.
Worth asking Alan Blinder: Since California is so devoted to ecology, they may not be seeking a booming economy. But that greater-than-the-USA unemployment rate is a stain on their record. Tell me, Alan, … tell me California, what are you doing to improve employment, get more people working and fewer people leaving the state?
One of the old proposals of the left is to toss out the owners and bosses, and “the means of production” will be owned and operated by the workers. Is that still a good idea? What are you doing to implement it?
lets see if we can get Blinder and academics to do a full honest day’s work before we start asking his advice on matters of consequence.
How many academics teach a full course load? (4-5 courses per semester, as expected for full time students) … the answer is almost none.
If you are not teaching full time, you are not a professor and its false advertising to claim otherwise.
If they can’t even handle their own work load, why would anyone ask them for advice on what others should do?
Tell us why colleges can mismark their profits as business expenses, avoiding any of the taxes they insist everyone else should pay?
Blinder is a freeloader. Academics are freeloaders. Do not ask freeloaders for advice
Maybe they bring in Comrade Bernie for the ticket … paving the way so to speak.
Beverly Hills, that’s where I want to be … gimme, gimme … gimme, gimme …
Princeton began as a seminary – a place to train priests or ministers in the study of God. Monks meditating over the Bible generally didn’t cover the cost of building maintenance, much less generate a profit. That was the basis for it being tax exempt.
In the 1800s, the loss making religious mess became a finishing school for wealthy young gentleman. Teaching the young brats not to chew with their mouth open and which spoon to use offset the losses from teaching priests. Attending Princeton (and all Ivy leagues) was about conveying status and belonging to a club – it wasn’t about education. Princeton kept its tax exempt status as a historical artifact as much as anything else.
By the 1950s, the supply of wealthy gentlemen had all but dried up. The GI bill allowed not so wealthy gentleman (and later ladies) to join the club and get higher paying executive jobs. Still wasn’t about education, but they put less emphasis on spoons and chewing, more emphasis on math and accounting and “talkin’ English good”. Princeton kept its tax exempt status as a historical artifact.
Once the last of the boomers and their GI bill “free money” had flowed through schools, the schools needed a new scam. They realized they could exploit the tax code and endowment status, and fill said endowment with political influence money. Now they had a reason to keep their tax exempt status — the fraud was based on it.
Dorms and office spaces were financed with muni bonds. Endowments became tax exempt hedge funds. Government (taxpayer) subsidized student loans concealed the true cost until after graduation. Fraudulent statements about post graduation earnings potential fogged up any cost benefit analysis. An army of political activists were funded by the scam, plus an administration full of weirdos making seven figure paychecks as part of a “non profit” entity.
Colleges and universities are nothing like what they were created to be, and nothing like the entities that had tax exempt status because of the first amendment (freedom of religion).
Its time for society to call a spade a spade. College is a scam, and folks like Alan Blinder are overpaid political activists.
From Paul Krugman to Ben Bernanke to Alan Blinder … Princeton’s economic department is nothing more than a marxist PAC sucking the blood of taxpayers. Alan Blinder is a poster child for shutting Princeton down like the worn down elitist country club that it is.
There are many ways to get an education. Most of them cost less than college and yield much better results (both financial and wisdom)
In Cuba or Venezuela people are starving, so 100% of public spending is for the poor, because everybody is one. Keynesian paradise, I suppose.
Years ago, a economic journalist told a funny story about how the Bank of Cuba’s vicepresident tried to sell him a bundle of marxist books for a few dollars.
Reminds of those old bumper stickers: “No Fat Chicks”.
Has anyone verified that he actually has an economics degree?
For some, the fact that he is/was an academic with economic witchcraft degree, is enough of a badge (bag).
Having a piece of paper that says “the holder of this document is smart” does not necessarily mean the guy holding it is smart.
If Blinder understood economics, he would be running a real company, and paying taxes instead of taking taxes.
Princeton has been raising the cost of attendance by double digits for decades. For that, they produced a lot of plagiarism and racist prose.
And typical of academia, they pay no taxes but think everyone else should pay much higher taxes that academics should decide how to distribute. They are con artists and parasites.
Princeton pays zero tax on their obscene endowment, zero taxes on extensive property holdings, and zero taxes on their profits — profits that get embezzled and sent to support political agitation. Just because they don’t report profits doesn’t mean they aren’t generating profits and transferring them elsewhere.
If IBM spends all its profits on a luxurious country club for its executives, does that make it a non-profit? Should it pay zero income taxes because its profits are sent elsewhere?
There is no student debt problem in the USA. There is a cost of college problem, a “product” that costs too much and delivers a worthless credential that doesn’t even pay for itself.
If Enron was a scam, academia is 1000x worse
(education and wisdom are valuable, but a college degree is a scam)
Great example of dangerous ideas, being implemented/promoted by people like Alan Blinder.
Who cares what an out-of-office washed-up 78-year-old econ professor is saying? Nobody is listening to him.
Yes. Check back in 4 years when he can be a major-party presidential candidate.
Blinder has been out to lunch for years.
Gotta go with Blinder on this one. One of the smartest people I’ve ever met.
Mish, AOC reads your blog.
Errr … I don’t think she can read.
Mish, AOC has your blog read to her.
Like all academics, Blinder is a worthless con artist and parasite.
Too strong an assertion, Dirk. Not all. There are a few good academics, like Walter Williams, Thomas Sowell, William Happer, …
Thomas Sowell makes his money writing books and giving speeches. I don’t recognize the other names, but suspect they do the same.
The fact that book authors and so-called “professors” are co-mingled and marketed as the same thing is deceptive in itself (even if you support their book writing, the academic side is a scam).
Why not just say these people write books for a living, and leave out the slimey and fraudulent credentialism?
At best, you gave a few exceptions that prove the rule that academics are con artists and parasites. But really you just listed people who make their living writing books but pretend to teach in a classroom (you know, what a professor is supposed to do if they were honest).
Show me an academic who teaches 4-5 courses every semester (aka a full course load for students) and I’ll show you a liar.
Being academic sells book in some quarters, so it’s important to make a living. I bet, libraries wouldn’t buy a book without it.
Not!
“Gotta go with Blinder on this one. One of the smartest people I’ve ever met.”
Second only to Krugman….
Both so smart heir musings are too complimecated to make sense to anyone else.
Hence, the best the rest of us can do, is just mindlessly try our best at regurgitating their brilliant insights. Then perhaps someone will think we are smart too!!
A couple of poofters with no issue.
That’s Progressivism. Implement 60-90 year programs that destroyed the currency and increased poverty.
It’s also so pervasive in what’s now passed off as “economics” departments, that it has become entirely self perpetuating. Unless you regurgitate this sort of mindless tripe; and do so to the exclusion of all else even; you’re simply not even considered for any position. Hence, unsurprisingly, “economics” have, for three quarters of a century, been about nothing other than trying to sound clever while fitting in to this sort of trivially nonsensical monoculture.
Don’t Blinder and Krugman worry about what kind of country they’re leaving for their children?
Of course.
They are leaving behind a country where the children of connecteds like themselves, will enjoy privileges vast benefits stolen by the state from other children, simply by virtue of them being the children of connected regime sycophants like Blinder and Krugman.
No different from the children of whoever happens to be Kim’s go-to “economists” in North Korea: both Blinder and Krugman’s children will be taken care of by the terror state they exist to apologize for. Who will then rob, harass and even kill other people’s children; in order to obtain the loot required to keep those close to them in unearned splendor.