Passages from Michael Tomasky's The Middle Out

This book is the best defense I've read of the Biden administration's (and previous corporate Democrats') policies. The author believes Biden is a transformative president, and one necessary to steer the ship of state away from the neoliberal policies that have so damaged its population.

Tomasky even mentions Modern Money Theory and Stephanie Kelton and says he's not particularly a fan of deficit reduction, but continually cites deficit reduction as an economic positive, while ignoring its ill effects. That's false, but many other things are factual in the book. Here are the passages I flagged as memorable:

p.78 "The Reagan tax cuts went mainly to the rich, and the George W. Bush tax cuts were even more stacked in their favor. According to the Tax Policy Center, 73 percent of the benefits of the Bush tax cuts went to the top 20 percent of tapayers; withi that, a jaw-dropping 30 percent went to the top 1 percent. Thus revealed, the Laffer Curve's big lie has three hidden purposes: first, to shift wealth from the middle class to the top; second, to give congressional Republcans the cudgel of the deficit to scream about when the next Democratic president comes along; thrid, to use as a convenient and ever-ready excuse to cut domestic programs, especially for poor peole (the "moochers")."

p. 93f "I'd argue that the wholesale dismissal of the Clinton era as hopelessly neoliberal is too revisionist. The first thing that should be said in Clinton's defense is the obvious: The economy, in broad terms, performed very well under Clinton. He was, in fact, the most economically successful president of the last sixty years. Job creation was highest under Clinton (yes, higher than Reagan, by about six million). Median household income increased the most during his tenure. The stock market performed best during his eight years in office. And the deficit, of course, disappeared entirely, he left office handing George W. Bush a $236 billion surplus, which Bush instantly squandered on tax cuts that did not pay for themselves and a war the United States did not need to fight. 

"[interest rates were not] exatly at an all-time low under Clinton, but they were stable in the low-to-middle range...Inflation, too, was generally on the low side...between 2 and 3 percent most years."

p. 111 "After the Great Society kicked in, the poverty rate for adult Americans under age sixty-five was less than 10 percent for twelve years running, from 1968 through 1979 (inclusive), something that didn't happen before and hasn't come close to happening since. Similarly, child poverty went down in the period (fro 27.3 percent in 1958 to 14 percent in 1969), and poverty among seniors dropped even more dramatically (35.2 percent in 1959 to 14.6 in 1975). The poverty level crept back up during the early Reagan years before declining again, and went up again after the Great Meltdown of 2008-2009, which bankrupted families and devoured jbos. But it has never gotten close to where it was before the Great Society programs. These were government interventions that undeniably worked to alleviate poverty without destroying overall prosperity."

p.164 "In more recent years...systemic racism in the United States has come under much more thoroughgoing scrutiny.

    "Three recent books--none of them by economists, incidentalloy--have been particularly imprtant to this shift....Richard Rothstein's 2017 The Color of Law, which dramatically lays bare how the federal government--mostly Democrats and liberals--facilitated discrimination in the residential housing market for decades by allowing developers and lenders to bar Black families from home ownership. Rothstein noted that while 'most of these policies are now off the books, they have never been remedied and their effects indure.' Heather McGhee's 2021 The Sum of Us [shows] how racism imposes costs not just on people facing discrimination but on society as a whole. ....Finally, The Whiteness of Wealth, also from2021, by ... Dorothy Brown, shows in unrelenting detail how the tax code is in effect a tool of white supremacy--how loopholes and deductions that mostly benefit well-off white people didn't just happen but were in many cases litigated into being by wealthy whites."

p. 218 The author recommends Nick Hanauer's TED talks, which say "The problem isn't that we have some inequality. Some inequality is necessary for a high-functioning capitalist democracy. The problem is that inequality is at historical highs today, and its getting worse every day....Our society will change from a capitalist democracy to a neo-feudalist rentier society like eighteenth-century France."..."It isn't capital that creates economic growth; it's people. And it isn't self-interest that promotes the public good; it's reciprocity. And it isn't competition that produces our prosperity; it's cooperation. What we can now see is that an economy that is neither just nor inclusive can never sustain the high levels of social cooperation necessary to enable a modern society to thrive."

p.225 The author discloses what even corporate Democrats fear from Trump: "...Trump, if reelected [will] destroy the executive branch, turning it from (at its best) in essence a large corporation promoting the public interest, driven by people with expertise who actually care about outcomes, into a fiefdom of unqualified lackeys who will perform his bidding, ignoring law and custom to do what Trump wants them to do."

p. 229 Bragging about the economic legacy of the respective major parties:

"Clinton took the country from a $290 billion deficit to a $236 billion surplus, for a $526 [sic, he means $526 billion] improvement. The deficit did increase under Obama by $126 billion (though he cut it by more than half in his second term). Combined, they left the country $400 billion better off [sic!]. The Bushes and Trump combined to add nearly $3.5 trillion to the deficit.

"...median household income increas: Democrats, 9.5 percent; Republicans, 0.6 percent. Yeas, that's 0.6 percent, as in less than 1. It went up under Trump by 9.2 percent wich is very good, but it went down under both Bushes. It went up 5 percent under Obama and around 14 percent under Clinton."

p.240f. Cites studies of BIG (basic income guarantees, or transfers): "Aggregating evidence from randomized evaluations of seven government cash transfer programs, we find no systematic evidence of an impact of transfers on work behavior, either for men or women. Moreover, a 2015 review of transfer programs worldwide by Evans and Popova also shows no evidence--despite claims in the policy debat--that the transfers induce increases in spending on temptation goods, such as alcohol and tobacco. Thus, on net, the available evidence implies that cash transfer programs do not induce the 'bad' behaviors that are often attributed to them in the policy sphere."

Citing a 2018 World Banks study:"The simple 'Econ 101' model in which the income effect of a cash transfer results in recipients reducing wor and increasing leisure is very seldom what we see happening in reality. The closest approximatin to this odel appears to come in the labor of th elderly when they receive government pensions. Yet thi is hardly the group for whom more leisure is viewed as being a social bad, and ther are few headlines excoriating lazy pensioners. In contrast, prime age adults tend to see very little change in either the amount they work, or the amount they earn when receiving unconditional or conditional cash transfers, or charitable grants."