EPOP Goes the Weasel?

Conventional wisdom has it that our current biggest economic problem — nagging high unemployment — began, starting in 2007, with the Great Recession, and that everything was rosy before that.

Trouble is, that's not quite the whole story. This chart from The Washington Post shows why:

Today, according to the "epop" statistics, only 66.7 of every 100 Americans of working age have jobs. For women, the figure is 62 percent; for men, 71.4 percent. But overall employment and that for each of the two sexes taken individually used to be significantly higher, reaching a peak in the total population in the year 2000.

An accompanying story by The Post's Peter Whoriskey can be read here.

Notice that the percentage of working-age men that are actually employed has been trending downward since at least 1970, according to the graph, while "epop" for women was trending upward prior to the general downturn in 2000.

Here's a longer-term look at the men's ratio, taken from FRED (Federal Reserve Economic Data) here:

(Click to enlarge.)

And the longer-term women's ratio, from here:

(Click to enlarge.)

From as far back as the start of the post-WWII era, in about the year of my own birth, 1947, to the start of the present century, employment among men has trended downward while that among women has trended upward. But since 2000, employment among both sexes has been heading downward, and the Great Recession has only exacerbated the problem.

I think we all need to keep these "epop" trends in mind as we debate what to do about the high unemployment rates that nag us today.

Equality of Economic Opportunity: Obama's Main Thrust

In the print edition for Sunday, Nov. 25, 2012, Washington Post economics writer Zachary Goldfarb offers his take on "How fighting income inequality became Obama’s driving force." This title is a misnomer because, as the article reveals, President Obama has worked most consistently to increase equality of economic opportunity — not income equality per se — for America's lower-middle and working classes.

Yet, overall, there is an increasing gap in incomes, wealth, and opportunity.

Obama's "consistent and unifying principle," writes Goldfarb, is "to use the powers of his office to shrink the growing gap between the wealthiest Americans and everyone else." And make no mistake, the gap between the incomes of the wealthiest among us and the incomes of everyone else has widened over the past 30 years. Here is a graph showing the extent to which the top 0.01% have increased their share of total national income since the Reagan years in the 1980s:

But Obama's solution to income inequality is not so much to redistribute income downward directly, through out-and-out welfare programs, as it is to open up new avenues of economic opportunity for those who need them most.

Perhaps surprisingly, the nation's first black president has long seen economic class, not race, as the great dividing line in our society, says Goldfarb. President Obama knows full well that "economic mobility has slowed or declined," according to Goldfarb, "providing young people with fewer opportunities than their parents had to ascend the economic ladder." So the Obama administration has done certain things to help offset that:

• The "Obamacare" health care reform law will, starting in 2014, charge the richest 1% an income surtax that will nick them for an average of an extra $20,000 apiece, with the proceeds going to "finance insurance subsidies and other coverage in 2014 for people in the lower middle class and below."

• The richest 1% along with the next 1% will pay income tax at a higher marginal rate of 39.6%, if Obama gets his way during the current "fiscal cliff" bargaining.

* * * * *

By the way: We are hearing a lot about what income levels at the top of the spectrum would be taxed more heavily under the Obama administration's plan. The figure $250,000 for families ($200,000 for individual tax filers) keeps cropping up as, supposedly, the bottom end of the 2% range that would be taxed at a marginal 39.6% rate. But $250,000 represents a figure in the top 3%, not the top 2% ... see Want to Know Your Household Income Percentile Ranking? and also What Percent Are You?.

H-m-m-m-m-m-m ...

Here is a useful chart from Want to Know Your Household Income Percentile Ranking?:

* * * * *

Yet President Obama's biggest concern is education, not taxation, Goldfarb writes. "Despite budget pressures," the article says, "he made a goal of having every student receive at least one year of college. ... Obama’s rhetoric reflects an acute awareness of recent research. The data show that rising inequality is largely the result of a changing economy that handsomely rewards people with better skills or credentials — a college education — and leaves people with a basic education at a disadvantage."

Obama's economic advisers, during his initial bid for the presidency in 2008, demonstrated to him that "the income of top earners had once climbed at about the same pace as every other category, but had sharply diverged in the previous 30 years. ... [And] the value of a college degree, always lucrative, had soared as a financial advantage. ... [And there's been a] startling drop in the demand for workers — in auto factories and clerical positions — who were being replaced by computers and machines."

Hence, in a nutshell, candidate Obama was convinced that "increasingly sophisticated technology required more educated workers, who subsequently could capture more of the nation’s income."

Fast forward to Obama's second term as president. What is now needed, say some experts, are accordingly "universal child-care and preschool programs, designed to start children on an early path to the skills they will need to succeed while freeing parents to earn more." Also needed are further government outlays to "reduce the escalating cost of college."

But both of those initiatives would cost the taxpayers considerable money. Goldfarb asks whether Obama dares propose them, in the teeth of a hostile Republican-run House of Representatives and of the current fiscal cliff discussions.

Stay tuned for more on that ...

The "Fiscal Cliff"

What is the "fiscal cliff"?

The federal government spends more money than it takes in in revenue. That's the annual federal budget deficit. Each year in which that happens, the cumulative size of the federal debt goes up. The federal debt is money owed to the public: lenders who buy government bonds. The government has to regularly pay those lenders interest on the debt. The higher the federal debt, the more interest is owed in each fiscal year.

It's dangerous to let the debt get too large as a percentage of "the economy," a.k.a. the gross domestic product. GDP is a measure of the size of the economy. It aggregates the money value of everything that is produced in a given year.

As the ratio of federal debt to GDP goes up, there is increasing fear that the government will someday have to default on its regular interest payments due to not having enough money left over from other spending to cover the payments. So the interest rate on government bonds has to rise to induce the public to keep buying bonds, and the whole debt-to-GDP problem spirals out of control as the ballooning size of interest payments eventually eats up the entire federal budget.

According to "Choices for Deficit Reduction," a November 2012 report by the Congressional Budget Office, in the 2012 fiscal year the federal deficit will be $1.089 trillion. The federal debt at the end of 2012 will expand to $11,280 trillion, or 72.6 percent of GDP.

To rein in the deficit and blunt the debt threat, Congress passed a law, the Budget Control Act of 2011, that would cause federal taxes in several categories to rise in 2013. The tax hikes would by accompanied by across-the-board cuts in defense spending and in discretionary domestic spending. Here is a graph showing what would happen on January 1, 2013, if we go over the "fiscal cliff":

(Click to enlarge.)

This graph comes from The Washington Post. You can access it here. You can also just click on the graphic to enlarge it.

The related Post article says that the fiscal cliff is "a towering accumulation of $500 billion in budget cuts and expiring tax breaks that would abruptly reduce government borrowing but could trigger a new recession."

Note that there are three kinds of tax hikes in store if we go over the "fiscal cliff" in January:

1. The "tax holiday" that was instituted during the first Obama administration will end, and so payroll taxes will rise.
2. The "Bush era tax cuts" on personal incomes will expire.
3. "Tax extenders" such as the "patch" which keeps the Alternative Minimum Tax on personal income from kicking in at very moderate income levels will vanish.

There is also the threat of the looming "sequester," a feature of the "fiscal cliff" in which automatic across-the-board cuts in the Pentagon budget and in so-called discretionary domestic spending will kick in, reflecting the terms of the 2011 "debt-ceiling deal." In that deal, Congress and the president agreed to set up a committee to devise a fair and balanced plan to cut the deficit. If the committee failed to agree on a plan, the automatic sequester would instead arrive on January 1, 2013. Well, the committee failed to agree, and the fabled sequester now looms.

Mandatory spending on entitlements such as Medicare and Social Security was left alone by the Budget Control Act and the debt-ceiling deal.

If sequestration actually goes into effect on January 1, 2013, along with the various tax increases, the CBO projects that the fiscal 2013 deficit will drop to $641 billion. It would otherwise be $1.037 trillion if the automatic spending cuts and tax hikes of the "fiscal cliff" were not to go into effect.

But those arbitrary expenditure cuts and tax increases which make up the "fiscal cliff" would mean less money is spent by the government and by consumers on goods and services. GDP would shrink as businesses sell fewer products and have to lay off more workers. The economy would surely enter another recession.

Those arbitrary expenditure cuts and tax increases will indeed happen unless a "grand bargain" is agreed to between Congress and the president before the end of 2012.

* * * * *

So we are between a rock and a hard place. If we don't tame the deficit and pare down the federal debt, we face the looming threat of federal insolvency. But if we let automatic across-the-board spending cuts and tax increases go into effect at the end of 2012, we'll drive the economy back into negative GDP growth with a concomitant rise in unemployment.

Meanwhile, pending the arrival of either the "fiscal cliff" or some sort of "grand bargain," businesses can't estimate how fast GDP is going to grow. Anticipated fast GDP growth might induce corporations and small businesses to spend more money to expand. They'd hire more employees, more people would receive regular paychecks, and so they'd spend more money. Businesses would sell more goods and services, and GDP would grow still faster.

But worry about the "fiscal cliff" keeps that virtuous circle from developing. Businesses generally need to wait to expand until they know what the federal government is going to do about the deficit and the debt. They expect looming tax hikes would adversely affect them, as small business income is taxed as personal income of business owners ... and as corporate taxes would go up as well. Government spending cuts would likewise hurt businesses, as aggregate demand for what they make or do is concomitantly reduced in quantity.

Barack Obama, as our newly re-elected Democratic president, has said he wants to work with Congress to figure out how to combine tax increases with spending cuts in a way that would avert the most disastrous effects of the "fiscal cliff." He wants to increase taxes on people with incomes over $250,000, while holding taxes steady on those with smaller incomes. For each dollar of increased tax revenue, he wants to find $2.50 in carefully designed spending cuts that would minimally impact ongoing federal responsibilities and the economy.

Speaker of the House John A. Boehner, an Ohio Republican who was also just re-elected, objects to any tax-rate increase for richer Americans. Instead, Boehner prefers to collect additional income tax by virtue of eliminating or limiting deductions which reduce tax filers' taxable incomes below their actual incomes. Those "loophole" reductions would ostensibly accomplish the goal of collecting more money from the well-to-do while not hurting the middle class. Boehner would complement that aspect of deficit reduction with his own selection of appropriate spending cuts.

But Democrats charge that eliminating or limiting such deductions as those for home mortgages and charitable contributions would unacceptably nick the middle class, and in any case could not bring in enough new revenue. The rich would not be required to pay their "fair share." The economic recovery would be set back because too many of the dollars not collected from the well-off would be saved by those wealthy folks, rather than shelled out for goods and services. Dollars left with the middle class, on the other hand, would tend to be spent right away on things that businesses make or do. So the preference of Boehner and the Republicans for loophole reductions rather than tax-rate hikes, the Democrats say, wouldn't be the best thing for the economy.

And, Democrats say, Boehner would need deeper spending cuts than he admits to needing, in order to achieve any given deficit reduction target. That would cut too much into the ability of the government to carry out the functions most Americans expect of it.

The CBO report says that leaving the 2011 Budget Control Act in place, without any "grand bargain" modification, which the CBO calls its "baseline" scenario — it is the scenario represented by actually going over the "fiscal cliff" — will indeed reduce the deficit exactly as advertised. By fiscal 2020 the deficit would drop from the current $1.089 trillion to just $142 billion, after having dropped as low as $79 billion in fiscal 2018.

Under the CBO's "alternative fiscal scenario" — in which current tax breaks get extended rather than expiring, and the other provisions of the 2011 Budget Control Act get set aside — the deficit would stay big, so that by fiscal 2020 it would be fully $1.102 trillion annually. The debt would balloon to $19,477 trillion — where under the baseline scenario it would be only $13,964 trillion, or just 61.4 percent of the estimated GDP at that time. Under the CBO's "alternative fiscal scenario," the debt-to-GDP ratio would bloat to fully 85.7 percent. Even worse, by 2037 the debt-to-GDP ratio would skyrocket such that the federal debt is (gasp!) 200 percent of GDP!

The CBO explores other deficit reduction schemes besides the "baseline" scenario in its report, and suggests that some of them would successfully pare down the deficit in much the same way as the baseline "fiscal cliff" scenario does, but with fewer negative side effects on the economy or on the level of government services. In other words, there is much room for a "grand bargain" to be struck.

* * * * *

Yet the CBO also finds that the 800-lb. gorilla in the room is something the "baseline" or "fiscal cliff" scenario doesn't address: entitlements. The anticipated level of "benefits from Social Security and Medicare and long-term care services financed through Medicaid" are set to grow unsustainably, mainly due to a large rise in the cost of delivering health care:

(Click to enlarge.)

The growth in Social Security benefits between now and 2037 is meanwhile expected to be quite moderate as a percentage of GDP, and other noninterest spending as a percentage of GDP is expected to decline. But government health care expenditures as a percentage of GDP will rise from roughly five percent today to around 10 percent by 2037!

Of that rise, the lion's share is due to Medicare. An aging population is expected to demand correspondingly more health coverage under the Medicare program ... even as the cost of health care delivery continues on its present trajectory of swift growth.

The CBO report says, "Unless [major federal health care programs and Social Security] are changed, or the increased spending is accompanied by some combination of sufficiently lower spending on other programs and sufficiently higher revenues, deficits will be much larger in the future than they have tended to be in the past."

So merely finding a way to avoid going over the "fiscal cliff" is not enough. Congress and the president have to find a way to tame the growth of Medicare as well.

Stay tuned for more about the "fiscal cliff" ...

E.J. Dionne on Remaining a (Liberal) Catholic

E.J. Dionne

Washington Post op-ed columnist E.J. Dionne writes from the perspective of a Catholic liberal, which is what I also am. A number of his columns this year have made specific reference to his religion, as when he was critical of the Obama Administration's original decision to force Catholic institutions to pay for contraception coverage in their employees' health plans. (Mr. Dionne liked the ensuing compromise which will have insurers pay for the coverage instead.)

Mr. Dionne not long ago wrote in some detail about how his politics and his religion intertwine. In "I’m not quitting the church," he wrote in contradiction to a full-page ad sponsored by Freedom from Religion Foundation (FFRF) and appearing recently in The Post urging Catholics on the political left to "Please, Exit en Mass" — meaning leave the church entirely.

The ad said:

If you think you can change the church from within — get it to lighten up on birth control, gay rights, marriage equality, embryonic stem-cell research — you're deluding yourself. By remaining a “good  Catholic,” you are doing “bad” to women’s rights. You are an enabler. And it’s got to stop.

To which Mr. Dionne responded:

I’m sorry to inform the FFRF that I am declining its invitation to quit. It may not see the Gospel as a liberating document, but I do, and I can’t ignore the good done in the name of Christ by the sisters, priests, brothers and lay people who have devoted their lives to the poor and the marginalized.

And on women’s rights, I take as my guide that early feminist Pope John XXIII. In Pacem in Terris, his encyclical issued in 1963, the same year Betty Friedan published “The Feminine Mystique,” Pope John spoke of women’s “natural dignity.” ... 

... A thoughtful friend recently noted that carrying a child to term is an act of overwhelming generosity. For nine months, a woman gives her body to another life, not to mention the rest of her years. Might the bishops consider that their preaching on abortion would have more credibility if they treated women in the church, including nuns, with the kind of generosity they are asking of potential mothers? They might usefully embrace a similar attitude toward gay men and lesbians. 

Too many bishops [today] seem in the grip of dark suspicions that our culture is moving at breakneck speed toward a demonic end. Pope John XXIII, by contrast, was more optimistic about the signs of the times.

“Distrustful souls see only darkness burdening the face of the earth,” he once said. “We prefer instead to reaffirm all our confidence in our Savior who has not abandoned the world which he redeemed.” The church best answers its critics when it remembers that its mission is to preach hope, not fear.

Hear, hear!

The Political Situation Today

Mitt Romney

Our Democratic standard bearer, the admittedly lib­er­al President Barack Obama, is in the fight of his life against Mitt Romney, the ex-Massachusetts governor and GOP nominee-presumptive for president.

Obama has had a checkered presidency, from many liberals' standpoint. Yes, he has gotten a health insurance reform through Congress that conservatives still lambaste as "Obamacare." Yes, he has done many other things we liberals applaud, such as:

• Standing up for women's rights to cost-free contraception and legal abortions
• Putting in place higher auto fuel-efficiency standards
• Temporarily blocking the Keystone tar-sands oil pipeline
• Pitting the weight of the federal government against states such as Alabama and Arizona, where recent laws potentially harass citizens and legal immigrants over their immigration status
• Ending the gay-unfriendly "don't ask, don't tell" policy in the military
• Coming out in favor of same-sex couples' right to wed

President Obama

Yet he has also failed to do a lot of things liberals assumed would be part of the "change we can believe in" touted in Obama's 2008 campaign. His health reform did not include any "public option," much less a government-run "single payer" system that many believe is the only way to sufficiently rein in the country's spiraling health costs.

He has not advanced a convincing long-range energy policy for the country that would show the way for reducing our "carbon footprint": our nation's hefty contribution to global climate change. Yes, Obama has called for an "all of the above" approach that would continue America's use of polluting coal- and petroleum-generated energy as it also embraces natural gas and nuclear energy, en route to full reliance on true renewables such as wind and solar power. But where, specifically, is the road map for his "all of the above" energy change?

Abroad, we're still at war in Afghanistan. Oddly, this doesn't seem to be a major point of contention at home, politically. Most Americans seem pretty numb to the continuing toll on our fighting personnel and on our military in general.

The President has, as promised, wrapped up the unpopular war in Iraq. He, at long distance, tracked down and killed the despised Osama bin Laden. His policy of limited but ultimately deadly intervention in Libya, undertaken in concert with our European allies, paid off in the elimination of dictator Muammar Gaddafi.

Chen Guangcheng

On the other hand, he and the international community seem helpless to help rid Syria of its despised strongman, Bashar al-Assad. We seem to be no nearer to peace in Israel than we were in 2008. Countries like Iran and North Korea continue to threaten to go nuclear. Our relations with China, the world's second superpower nowadays, were supposedly going to be solidified by the recent visit of Secretary of State Clinton and Treasury Secretary Geithner, only to be preempted in the eyes of the world by the ongoing saga of an escaped dissident, the blind, self-taught lawyer Chen Guangcheng.

"It's the Economy, Stupid!"

But the 800-lb. gorilla in the room is — as always, these days — the economy. Unemployment is still way too high.

We've had some good news from recent monthly jobs reports. In January, unemployment decreased to 8.3 percent, as America added 243,000 jobs. In February, 227,000 more jobs were added ... but unemployment remained stuck at 8.3 percent. Many commentators, however, were (albeit hesitantly) suggesting the worst of the slump might be behind us.

(Click to enlarge.)

By the time the March report came out, showing 120,000 more jobs had been added and unem­ploy­ment had ticked down to 8.2 percent, there was less giddiness (if that's the right word) on offer.

Then, after the April report — 115,000 jobs added, the unemployment rate lit­tle changed at 8.1 percent — the recovery was being called "soft." The drop in the official unemployment figure was due, it was sadly confessed, mostly to unsuccessful job hunters dropping out of the workforce.

True, we've been adding jobs right along for more that a year (see chart at above right). And unemployment has edged downward. But the number of Americans out of work for over a year has remained problematically large. And the number of recent college grads that can find no jobs — or can get only jobs that they're over-educated for — is huge.

Lessons of the Past

If past election seasons are any guide ...

(Click to enlarge.)

... President Obama will have an uphill battle against Romney unless unemployment drops greatly between now and November. Since the end of World War II there have been ten presidents who've run for reelection (not counting Obama this year). The New York Times says (as reflected in the chart above) that no incumbent president since FDR has won reelection with unemployment over 7.2%. George H.W. Bush in 1992, Jimmy Carter in 1980, and Gerald Ford in 1976 — all three tried, and all three failed.

In 1984 the incumbent Ronald Reagan faced fairly high unemployment — 7.2 percent — but won reelection anyhow, by a landslide. Why? Probably in large part because the state of the economy was trending convincingly upward. It had in recent memory been much worse. So if Obama can convince voters that the economy's trend is decidedly on the upswing in November, he'll be in much better shape to beat Romney.

Paul Krugman's Rx

Paul Krugman

That seems dubious, though. To get unemployment down to the point where it's not too much over 7.2 percent and heading convincingly downward will demand, if 2008 Nobel Laureate Paul Krugman's new book End This Depression Now! is correct, that demand for economic goods and services ramp up strongly.

To an economist, "demand" is how much money we're spending on stuff, all told. "We," in the economist's eye, includes ordinary consumers, but it also includes businesses that buy from other businesses ... and it includes federal, state, and local governments.

Consumers and businesses large and small, including big corporations, haven't been spending enough money during the slump (which Krugman calls a "depression"). Smaller economic players have been saddled with debts that they are still struggling to pay off, including "underwater" home mortgages and unwieldy credit card balances. So they have cut back on current outlays.

Big corporations, meanwhile, have been "de-leveraging." They've decided they borrowed too much in the recent past, so they've been using their current revenues to pay off outstanding debt. Once that has been accomplished, they've been hoarding cash rather than investing it in new productive capacity. One result is that they've been laying off workers.

Banks and other financial enterprises over-lent in the run-up to the credit meltdown in 2008. There's not as much lending going on now, and a lot of the money that is being lent is being used by loan recipients to retire earlier debt and build up cash balances. It's not being spent on making, or buying, a lot of extra stuff.

So aggregate demand is way too low in our economy today. And it's only vigorous demand for new stuff that can spur economic growth and put people back to work, Krugman says.

To Krugman, who writes a regular op-ed column for the New York Times, the only source for this urgently needed extra demand has to be government spending — not austerity, a word bandied about more and more today.

John Maynard Keynes

Krugman is an an unabashed Keynesian, a disciple of the economist John Maynard Keynes who wrote, during the Great Depression, “The boom, not the slump, is the time for austerity.”

Keynes believed that the solution to the Great Depression would come only when total monetary outlays — aggregate demand — increased. And that's exactly what got us off the dime, in the end. In the run-up to the U.S. involvement in World War II, writes Krugman:

Long before Pearl Harbor, military spending soared as America rushed to replace the ships and other armaments sent to Britain as part of the lend-lease program, and as army camps were quickly built to house the millions of new recruits brought in by the draft. As military spending created jobs and family incomes rose, consumer spending also picked up (it would eventually be restrained by rationing, but that came later). As businesses saw their sales growing, they also responded by ramping up spending. 

And just like that, the Depression was over, and all those “unadaptable and untrained” workers were back on the job.

We today are not going to end our current "depression" by preparing for war, clearly. But we do need, Krugman says, to see government spending soar.

More "Stimulus"?

Yes, that means more "stimulus."

Fiscal "stimulus" is the current word for what in the Keynesian past was called "priming the pump." Krugman defines it as "temporary increases in government spending and/or tax cuts, designed to support overall spending and create jobs."

We did that in 2009, early in Obama's presidency: the American Recovery and Reinvestment Act. Says Krugman:

Unfortunately, the bill, clocking in at $787 billion, was far too small for the job. It surely mitigated the recession, but it fell far short of what would have been needed to restore full employment, or even to create a sense of progress.

But here's the thing: "Stimulus" has become just as much of a dirty word among conservatives today as "Keynesian."

If it's to be accomplished by temporary increases in government spending, conservatives dig in their heels against it. If it's to be accomplished by cutting taxes, especially on higher incomes, liberals blanch. And all efforts to put together balanced packages of the two — whether they increase government deficits in the short term or not — have failed ignominiously.

What's a sitting president to do?

If he doesn't do something, and soon, I have a great deal of doubt Obama can be re-elected ...

A Socialist Behemoth?

To Washington Post columnist George F. Will:

George F. Will

Your noteworthy and extremely well-written column of January 6, 2012, appeared online as "Government: The redistributionist behemoth," but in the print edition it was called "The socialist behemoth." The implication of the morphing headline makes the point of the whole column: you think our federal government's policy inclinations are "redistributionist," thus "socialist," thus bad.

As an old-style liberal, I disagree with both epithets.

True, our government has been shaped by progressive policies for more than century. I don't dispute that. But I take exception to your finding this an increasingly degenerate and bankrupt way of doing things today.

I do agree that many of Uncle Sam's longstanding policies have redistributionist consequences, either intentionally or as side effects. Since we started paying federal income taxes a century ago, they have typically been progressive, with the rich paying higher rates than the less affluent. The primary intent has been to sufficiently finance government outlays. The secondary intent has been to distribute the tax burden upward. That, as a matter of simple fairness, leaves more money in the pockets of those who need every dollar they can get.

A bad idea, that? I can't see why.

Is this, as you put it, an instance of government "supplanting markets as society's primary allocator of wealth and opportunity"? It might be so if the top tax rate were downright confiscatory, with every extra dollar taken in by the wealthy vacuumed right out of their pockets, leaving no spare change. But the top rate is now only 35 percent ... far from confiscatory.

You say the redistributionist lust of progressive government "constantly expands under the unending, indeed intensifying, pressures to correct what it disapproves of — the distribution of wealth produced by consensual market activities." Were those "unending, indeed intensifying, pressures" toward ever greater wealth redistribution why we enacted the Bush tax cuts, then? But they favored the entire range of taxpayers, no? They were anti-redistributionist.

Given our country's history, in fact, I'd say that we tend to slosh back and forth between redistributionism and anti-redistributionism. Progressive government's urge to redistribute and equalize does have its checks and balances.

You note that "the elderly are, after a lifetime of accumulation, better off than most Americans: In 2009, the net worth of households headed by adults ages 65 and older was a record 47 times that of households headed by adults under the age of 35 — a wealth gap that doubled just since 2005." But that's an argument for means-testing Social Security and Medicare. It's not an effective argument that entitlements for the elderly are simply bound, by their very nature, to become a behemoth that will one day devour America.

I support means-testing, and I think many other progressives do, too. Means-testing old age entitlements is a tweak we now need to implement.

As for tweaks: you say that our tax code — "government’s favorite instrument for distributing wealth to favored factions" — gets repeatedly tweaked: " ... about 4,500 times in 10 years."

What's bad about that? At least it bespeaks that Congress can do things, despite what so many are claiming today.

Redistributionist government "siphons power into itself," you say. Concomitantly, we see a political culture of increased "rent-seeking." Rent-seeking is, says Wikipedia, an attempt to obtain economic advantage "by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth."

David Brooks

New York Times columnist David Brooks writes in his recent op-ed piece "Where Are the Liberals?" that rent-seeking, run amok, convinces us that "the whole system is rigged."

And, yes, we do hear that kind of talk today. I admit it. But what's the fix for the problem?

We learned in the late nineteenth century that unfettered economic activity on the part of railroad barons and manufacturers' trusts likewise made people feel the system was rigged. The progressive era got its start when the federal government stepped in to bust the trusts.

Sometimes effective progressive government is the fix.

Brooks calls rent-seeking "the disease that corrodes government at all times and in all places." And I would agree with him, and with Will, that we now have too much of it — what Brooks calls the Instrument Problem:

Americans may agree with liberal diagnoses, but they don’t trust the instrument the Democrats use to solve problems. They don’t trust the federal government.

But, I would say, what is needed in not government that is less progressive in its goals. Rather, we need government that is less bureaucratic and more transparent in its methods.

To get it, as Brooks points out, today's liberalism desperately needs "a Martin Luther, a leader committed to stripping away the corruptions, complexities and indulgences that have grown up over the years."

So true. President Obama ran on "change we can believe in" in 2008 and won handily. Many, myself included, thought he would become liberalism's Martin Luther. It's not too late for him to do so now. If he does, he could put paid to George Will's "socialist behemoth" argument for a generation or more.