U.S. economy

Progressive conditions for a bailout, by Dean Baker

Why the bailout?, by Bruce Bartlett (via Brad DeLong)

Understanding the three ways of dealing with financial crises, by Brad DeLong

Lessons from the Great Depression, by Barry Eichengreen

Financial rescue models: solutions past and present, Financial Times

Does the financial crisis threaten your job?, by Alan Krueger

Cash for trash, by Paul Krugman

Washington’s invisible hand, by David Leonhardt

Stopping a financial crisis, the Swedish way, New York Times

What Wall St. should be required to do to get a blank check from Main St., by Robert Reich

Where did we go wrong?, by Dani Rodrik

Everybody calm down: a government hand in the economy is as old as the republic, by Robert Shiller

Taxpayers can still benefit from a bailout, by Lawrence Summers

Public humiliation, by James Surowiecki

Reactions to Monday’s House rejection of the bailout plan, by Mark Thoma

Worst crisis since ’30s, with no end yet in sight yet, Wall Street Journal

U.S. politics

Having a beer, by Larry Bartels

Lipstick bungle, by Charles Blow

On strategy and tactics, by James Fallows (via Josh Marshall)

The bailout debate and partisan realignment, by Henry Farrell

What does it take to define away the statistics showing superior economic performance under Democratic presidents?, by Jeffrey Frankel

Obama recovery across red, yellow, and blue states, by Charles Franklin

An open letter to Barack Obama, by William Galston

Popular governor of a small state, by Andrew Gelman

Why it matters: McCain vs. Obama and the problems of the American economy, by Reed Hundt

The resentment strategy, by Paul Krugman

Do more unequal places tend to vote for Democrats?, by Jim Manzi (via Andrew Gelman)

Obama and the closing of the American dream, by Aziz Rana (via Shawn Fremstad)

Are you better off now than you were eight years ago?, by John Schmitt and Hye Jin Rho

John McCain’s “big” economic plans, by Mark Thoma

For those of you who are confused, by Michael Tomasky (via Ezra Klein)

Obama’s message deficit, by Jacob Weisberg

Palin is ready? Please, by Fareed Zakaria

Living standards, poverty, inequality, well-being

Medicine for Wall Street: a financial transactions tax, by Dean Baker

401(k)s are not replacing Social Security as the main source of retirement savings, by Dean Baker

How we measure poverty, by Rebecca Blank

Pathways to economic mobility, Economic Mobility Project

Spend it while you can, by Ray Fisman

Congress passes bill with protections for disabled, New York Times

Health care costs increase strain, studies find, New York Times

In bailout furor, Wall St. pay becomes a target, New York Times

Understanding the black-white earnings gap, by William Rodgers

Breaking asset poverty, by Ellen Seidman

Closing the gap in a generation: health equity through action on the social determinants of health, WHO Commission

The natural inequality experiment, by Matt Zeitlin (via Megan McArdle)

Taxes

Regressive taxes and redistribution, by Chris Dillow

Tax cuts on profits, savings, and the wealthy fail to spur economic growth, by Mike Ettlinger and John Irons

Tax-cut snake oil, by Jeffrey Frankel

The McCain tax increases, by Joe Klein (via Matt Yglesias)

Tax plans, by Viveka Weiley

Health care

Why Obama’s health plan is better, by David Cutler, Brad DeLong, and Ann Marie Marciarille

Colder than thou, by Ezra Klein

An examination of the Wyden-Bennett health reform plan, by Edwin Park

Education

Protect our kids from preschool hype, by Christina Satkowski

Cities and transportation

Walkability, by Ryan Avent

Putting America’s transportation system on track, by Paul Weinstein Jr.

Transit and density, by Matthew Yglesias

Environment

And then there was one, by Thomas Friedman

Migration

Migrants to Spain find welcome mat withdrawn, Financial Times

The anti-immigrant movement that failed, Progressive States Network

Abroad

Olivier Blanchard is the IMF’s new chief economist

Can the west save Africa?, by Chris Blattman

A measure of hope, by Paul Collier

The new class struggle: educating girls, by Caroline Daniel

Precarious in Pretoria: Zuma will struggle to fulfill pledges to poor, Financial Times

United less than ever, the world’s nations ponder reform, Financial Times

Spain’s new nationalism, by Simon Kuper

Indonesia’s democratic miracle, by Kishore Mahbubani

The lame left?, by Douglas Muir

Fast food hits Mediterranean; a diet succombs, New York Times

U.N. study finds more women in politics, New York Times

Wage gaps for women frustrating Germany, New York Times

Is export-led growth passé?, by Dani Rodrick

Miscellaneous

Let’s talk about sex, by Charles Blow

Fab four born in soccer’s most fertile week, by Simon Kuper

Answer here, from John Schmitt and Hye Jin Rho at the Center for Economic and Policy Research. Nicely done.

Update: Here is another take, by Jim Kessler, Mark Donnell, and Tess Stovall at Third Way.

Much of Barack Obama’s economic policy rhetoric is aimed at middle-class insecurity and anxiety, rather than poverty. On political grounds this is hardly surprising; there are a lot more middle-class voters than poor ones. And in the current economic climate, it seems reasonable. But his platform does include a variety of proposals that are likely to improve living standards for those at the low end of the income distribution. A few highlights (details here):

1. Health care

Obama’s health care proposal would extend affordable coverage to the 15% or so of Americans currently without it, many of whom are just below or a bit above the poverty line. And it would reduce health insurance costs for many who currently have it.

2. Earnings and incomes

He proposes to raise the minimum wage to $9.50 per hour in 2011 and index it to inflation. The following chart shows what that looks like in historical context (in today’s dollars and assuming an inflation rate of 2.5% over the next few years). Obama’s minimum wage would be pretty high, and indexing it would mean no more lengthy periods — such as 1981-1990 and 1997-2007 — of steady decline in its real value.

Obama would increase the Earned Income Tax Credit for working Americans with no children and for those with three or more children, though it isn’t clear by how much. As the next chart shows, the maximum EITC for those without kids is paltry at present, and families with more than two children get the same amount as those with two.

He also proposes a “Making Work Pay” tax credit of up to $500 per person or $1,000 per couple. This would be a rebate on the Social Security payroll tax (6.2%) paid on the first $8,100 of earnings. Like the EITC, a strength of this proposal in both policy and political terms is that it creates no work disincentive.

My preference would be for a bit smaller increase in the federal minimum wage and that the “Making Work Pay” tax credit money instead be used for an across-the-board increase in the EITC. Still, there is little indication from the historical record that a minimum-wage hike to $9.50 would reduce employment. And the “Making Work Pay” tax credit is attractive politically because it’s easier to pitch as a tax cut and because all middle-class earners will be eligible for it, whereas the EITC is available only to households with incomes up to about $40,000.

3. Paid sick leave

According to the Obama campaign, about three-quarters of low-paid private sector employees get no (zero) paid sick days from their employer. He proposes to require all employers to provide seven paid sick days per year.

4. Education

Obama proposes $10 billion in federal government spending to encourage and assist state efforts to expand early education for kids age zero to five. High-quality preschool is doubly beneficial from an antipoverty perspective: it facilitates employment by parents in low-earning households, and it tends to improve cognitive ability and noncognitive skills in kids from poor families.

A refundable (available even to those who don’t owe federal income taxes) tax credit would provide $4,000 toward college tuition, in exchange for 100 hours of public service work per year. This is about two-thirds of the average cost of tuition at a four-year public university.

There is more, including money for job placement, career pathways, transportation to work, community revitalization, and others. But the proposals I’ve highlighted would, if actually enacted in the next four (or eight) years, represent considerable progress in addressing poverty in America.

John McCain’s proposals? Well, search his campaign’s website and see what you find.

In a Wall Street Journal op-ed, Casey Mulligan points out that over the past half century the pay gap between women and men has shrunk more under Republican presidents than under Democratic ones. The following chart shows this. The data are from the Census Bureau.

Mulligan argues that the best way to achieve equal pay is therefore “to work for a labor market that creates opportunities for women like it did during the Reagan and the Bush years.” But as the next two charts indicate, the Republican advantage in closing the gender pay gap owes mainly to slow earnings growth for men during Republican administrations, rather than rapid earnings growth for women.

More here and here.

The economic challenges and strains facing middle-class Americans are likely to get a good bit of attention between now and election day, at least from the Obama campaign. They include sluggish income growth, heightened financial insecurity, rising health care and college costs, and falling home values. Each of these is important, but the most critical in my view is slow growth of incomes.

The following chart tells the story. It shows inflation-adjusted GDP per capita and median family income from 1947 (the earliest year for which the income data are available) to 2007. To facilitate comparison of the over-time trends, each is indexed to its 1973 level. Since the mid-to-late 1970s, growth of income at the median has been slow — very slow — relative to growth of the economy. The current decade, with no improvement at all in median income, is especially striking.

The dashed line in the next chart shows what median income would have looked like had it risen in sync with per capita GDP. The difference is huge: in 2007, the median family’s income would have been $91,000 instead of $61,000.

Various excuses and rationalizations have been offered: It’s okay because Americans now get more in employer benefits instead of in their paycheck. Family size has shrunk, so slow income growth isn’t a big deal. A lot of those in the bottom half are immigrants, and even with slow income growth they’re better off than they would have been in their native country. None of these is compelling (see here or here).

The disconnect between economic growth and middle-class income growth is due largely to rising inequality. In the past several decades much of the economy’s growth has gone to those at the top of the income distribution.

Faster income growth wouldn’t render other middle-class strains irrelevant. But it would help.