Krugman and Alabama
Kevin Drum has an interesting interview with Paul Krugman. At one point in the discussion Drum asks about what happens if the gap between the rich and the poor in this country continues to go up? Krugman responds,
One thing that happens is you have an adversarial kind of society, you have a society in which people don’t share the same lives at all, don’t share the same values. Politically, it leads to erosion of the support for public institutions that we need.Take this catastrophe in Alabama just now. It was a dispute about taxes, but what’s ultimately at stake is, are they going to do anything to improve that dismal primary education system in Alabama or is it going to get even worse because of the budget crisis? And the answer is, it’s going to get even worse.
It’s funny, some of the businesses in Alabama were supporting Riley’s tax plan because they actually are starting to understand that a decent education level is more important to them than a couple of points off their taxes. But it gets harder to have that sort of enlightened social policy when you have a society that’s so radically differentiated. Think of Latin America. The characteristic thing in Latin America is that they have lousy infrastructure and lousy education systems because they’re so polarized on income, and in turn that leads to low development and polarized income. You get this kind of downward spiral. And there’s something like that happening here.
No doubt!
Of course Krugman gave his perspective on the Alabama debacle in this weekend’s NY Times Magazine. This piece includes this little nugget, “Aside from the capital gains taxes paid during the bubble years, the share of income Americans pay in taxes has been flat since Richard Nixon was president.” Feel free to use that the next time someone says taxes are out of control.