Dean Baker and I are on the same page on this. Globalization doesn’t mean that you must protect (and subsidize) the wages of physicians while hammering down the wages of factory workers:
There is nothing about the globalization process that necessitated this result. Doctors work for much less money in Mexico and elsewhere in the developing world than in the United States. In fact, they work for much less money in Europe and Canada than in the United States. If we had structured the trade deals to facilitate the entry of qualified foreign doctors into the country it would have placed downward pressure on the wages of doctors (many of whom are in the top one percent of the income distribution), while saving consumers tens of billions a year in health care costs.
In other words, the government quite deliberately structured our trade to put downward pressure on the wages of much of the labor force, while protecting doctors and other highly paid professionals from similar competition.
Preserving the financial system doesn’t require that bankers’ incomes be preserved:
The subsidy for too big to fail banks, which makes the Wall Street crew incredibly rich, is another way that the government redistributes money to the top. Bloomberg estimated the size of this annual subsidy for the Wall Street gang at $80 billion a year, more than the government spends on food stamps.
And there is neither anything natural or necessary about the strength and duration of our system of protection of intellectual property:
The longer and stronger patent protection the government has given pharmaceutical companies is another way that money goes from the rest of us to the rich. The annual size of patent rents in the drug industry is currently in the neighborhood of $270 billion, more than three times as much as the government spends on food stamps.
Don’t like the income inequality? Don’t like the slow growth of the economy? It’s the policies, stupid:
And the macroeconomic policy run by the government has also worsened inequality. Budgets are crafted by politicians, not the gods or nature.
Now, I suspect that Dr. Baker and I differ on what the best remedies are. But there’s no disagreement between us that policies have consequences and we’ve arrived at the results we’ve accomplished as a result of policies rather than despite them.
There’s a broad consensus in Washington over the general direction of policy. The political conflicts there have been described as a game of football fought between the forty yard lines.
And yet, somehow, year after year and despite Congress’s 18% approval rating and a majority of voters disapproving of their own Congresscritters in opinion polls, we elect the same people again and again and will no doubt do so in November 2014. 72% of Americans see the government as the biggest problem facing the country. What’s the solution?