Gore's Hotel Room
August 20, 2000
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With his convention speech attacking "Big tobacco, big oil, the big polluters, the pharmaceutical companies, the H.M.O.'s," and railing at the "big drug companies" that "run up record profits" while seniors "have to choose between food and medicine," Al Gore seems to have unleashed the class warriors who populate the op-ed page of the New York Times.
Today's salvo in the class war comes from Times columnist Paul Krugman, who backs Mr. Gore's argument that a tax cut would favor mainly the rich. He also tries to rebut the conservative argument that, as the Wall Street Journal put it in an editorial Thursday, "The political difficulty with all this Democratic class warfare rhetoric is that the intended targets are too busy moving up the ladder to pay much attention to the populist rant."
Here's what Mr. Krugman has to say:
The economic historian Joseph Schumpeter compared income distribution in a society to a hotel in which some rooms are nicer than others and all the rooms are occupied. As Isabel Sawhill and Daniel McMurrer wrote in a 1996 Urban Institute study, to get a complete picture, we need to know how often individuals switch hotel rooms. The Krugman view is pretty grim: the poor are stuck in their crummy hotel rooms for a pretty long time. The Wall Street Journal sees more opportunity: the poor and working class individuals are "Movin' On Up," as the title of that Thursday editorial put it, and have plenty of chances to check into the ritzy rooms on the top floor of the hotel. (Not to mention that the growth effects of the tax cuts are constantly adding brand-new luxury rooms to the hotel.)
Krugman can quibble with the Treasury and Federal Reserve Bank of Dallas studies cited by the Wall Street Journal. (Disclosure: the editor of Smartertimes.com is a part-time paid freelance contributor to a web site of the Wall Street Journal editorial page, opinionjournal.com.) But even honest liberals such as Ms. Sawhill and Mr. McMurrer, reviewing a number of recent studies, wrote in their December 1996 paper on "Economic Mobility in the United States": "The bottom line? It is clear that there is substantial mobility -- both short-term and long-term -- over an average life-cycle in the United States. The studies reviewed above suggest that approximately one-quarter to one-third of the population moves into a new income quintile in any given year. Given a longer time horizon, an even greater percentage of individuals switch income quintiles -- perhaps slightly less than one-half over a five-year period, and about 60 percent over a ten-year period."
The big technical complaint about the Treasury numbers that were among those cited by the Journal was that they only counted households that paid taxes over a ten-year period, which, as Ms. Sawhill and Mr. McMurrer put it, "introduced a bias toward the economically successful." But for the purpose for which Mr. Krugman is writing -- assessing the fairness of the Bush tax cut -- it seems pretty reasonable to try to gather some data from tax returns.
But the best rebuttal to Mr. Krugman comes not from the footnotes of detailed economic studies but from the personal experience of millions of Americans whose parents and grandparents arrived penniless on boats from Europe or planes from China and whose children and grandchildren have clawed their way -- by dint of hard work, education and luck -- into the upper reaches of the American economy. Of course this sometimes takes more than a decade; it can take a generation. But it happens.
In fact, if Mr. Krugman needs a lesson on economic mobility in America, he might check with the presidential candidate waging the class warfare, Al Gore. Mr. Gore wound up his acceptance speech by saying, "I also want to tell you just a little bit more about two of my greatest heroes, my father and my mother. They did give me a good life. But like so many in America, they started out with almost nothing. My father grew up in a small community named Possum Hollow in Middle Tennessee. When he was just 18, he went to work as a teacher in a one-room school. Then the Great Depression came along and taught him a lesson that couldn't be found in any classroom."
Gore went on: "My mother grew up in a poor farming community in Northwest Tennessee. Her family ran a small country store in Cold Corner, a store that went bust during the Great Depression. She worked her way through college. Then she got a room in Nashville at the YWCA and waited tables at an all-night coffee shop for 25-cent tips. She then went on to become the first woman in history to graduate from Vanderbilt Law School."
Al Gore -- the son of a coffee-shop waitress and a country schoolteacher -- went to prep school at St. Alban's and college at Harvard and now is the trustee of his dad's estate, which includes between $250,000 and $500,000 worth of Occidental Petroleum stock. As Joe Lieberman would say, America is a great country. So why do Mr. Krugman and some Democrats paint a false picture of a nation in which the poor are stuck forever in crummy hotel rooms?
Arafat and the Arabs: The New York Times book review chooses to assign a review of Yossi Beilin's book to a noted anti-Zionist agitator, Avi Shlaim. Mr. Shlaim claims that the Oslo accord between Israel and the PLO "represented a dramatic reversal of Zionist strategy in the Middle East conflict. Zionist leaders, before and after 1948, sought to bypass the local Arabs and to reach an understanding with the rulers of the neighboring Arab states. Oslo marked a historic breakthrough because it was the first formal agreement between the two principal parties to the conflict: Israel and the P.L.O."
This is just flat-out false. The Israelis tried constantly to deal with the local Arabs. For example, in his article in the July-August 2000 issue of Commentary, Efraim Karsh details how, in 1948, the Jewish mayor of the city of Haifa pleaded with the official leadership of Haifa Arabs and went through truce terms point by point, "modifying a number of them to meet Arab objections." The negotiations broke down only after the Arabs took a recess "to contact their brothers in the Arab states." In other words, it was the local Arabs who sought to involve the neighboring Arab states, not the Jews. The same pattern is visible today, as Yasser Arafat tours Arab capitals in an effort to build support for his positions following the Camp David summit. Indeed, the Israeli objection to negotiating with the P.L.O. was for a long time precisely that, being based at Tunis, Tunisia and being headed by Mr. Arafat, an Egyptian, it did not represent the local Palestinian Arabs but was rather a group of outside agitators backed by the Soviet Union.
Mr. Shlaim also claims that Benjamin Netanyahu "spent his three years in power trying to subvert the Oslo accords." This is also false. Mr. Netanyahu if anything was a more fervent adherent to the Oslo accords than were his Labor Party predecessors, because he insisted that the Palestinian Arabs comply with the provisions of the accords with respect to such matters as disarming terrorists, refraining from incitement, and limiting the size of the Palestinian Arab "police force." Mr. Netanyahu also continued down the path of the Oslo accords by withdrawing Israeli troops from parts of Hebron and by signing the Wye agreement that committed Israel to further territorial withdrawals if the Palestinian Arabs met certain conditions.
Yolk's On Them: The women's fashion supplement to the Times magazine this morning contains a recipe for "Sally Bowles's prairie oyster hangover remedy: yoke of one egg in tomato juice with Worcestershire sauce." When it comes to eggs, it should be a "yolk," not a yoke.
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