The articles reminds us of Ford's radical proposal in 1914 to increase wages, to share in the profits he was making (and later, to make them able to buy his products).

His rivals were horrified. The Wall Street Journal accused him of injecting "Biblical or spiritual principles into a field where they do not belong." The New York Times correspondent who traveled to Detroit to interview him that week asked him if he was a socialist.

Ooohh, a socialist... And the quote about keeping the Bible (which the WSJ seemed to hold as a "socialist" book at that time, it would seem!) outside of business is also to be fully appreciated...

"One's own employees ought to be one's own best customers," Ford said years later. "Paying high wages is behind the prosperity of this country."

This was one of the pillars of 20th century economic wisdom. It is time to ask, though, whether Ford's big idea is as ill-suited to this century as his car company seems to be.

This is the most terrible line in this otherwise fairly balanced article, because it implicitly accepts the most dangerous concepts introduced by the Reagan revolution:

• only things that can be expressed in money terms have value, and whether the "country does well" is determined only by its wealth;
  
• that wealth is measured only in aggregate, without taking into account who gets it.

In fact, well-off families, not cash- strapped ones, have been the ones increasing their borrowing and cutting their savings the most in recent years, according to the Federal Reserve Board. In 1992, the top fifth of U.S. households, as ranked by income, accounted for 42 percent of consumer spending. By 2000, that share had grown to almost 46 percent, and it is probably not much different today. That may sound like a small change, but it is an enormous amount of money, a shift of $300 billion a year in spending from the poor and middle class to the affluent.

The middle classes see the wages (and wealth) stagnate, while the rich indulge in an orgy of consumption that makes it appear that the country's economy is doing great.

But that orgy of consumption is not even real, and it is certainly not sustainable, in that it is paid fully by debt. If you take out debt, GDP growth looks less perky:

• The poor stay poor (and their number is on the rise)
  
• The middle class stagnates
  
• The rich only appear to be rich
  
• The ultra rich are accumulating unprecedented

  levels of wealth

(with a wink to the Canadian readers who asked for Canada data... Click both to enlarge)

How long is this going to be seen as an acceptable situation? For as long as the underlying common wisdom about "growth" is accepted by any Democrat.

This doesn't look to be a temporary phenomenon. Except for a span of a few years in the late 1990s, the hourly pay of most workers has done no better than inflation for the last 30 years. Even some Democrats, who have long made Fordism a centerpiece of their rhetoric, are coming to the conclusion that Ford's reassuring cycle is not the only thing that can keep the U.S. economy humming.

"You don't need an equitable distribution to have a sustainable recovery," said Jared Bernstein, a liberal economist in Washington.

He is a sellout. He is wrong on the politics, and he is wrong on the substance - and guys like him are the reason the Democrats don't win in the US: they don't speak about the real causes of the economic woes of the midle classes, and they accept the underlying values of the Republicans (money trumps all), making them unable to propose a coherent alternative.

But let me end on a note of hope:

Rubin group to map Democrats' economic course

Robert Rubin, the former Treasury secretary under President Bill Clinton and the most influential economic adviser to the Democrats, yesterday launched an initiative aimed at influencing the economic policy debate and charting a course "diametrically opposed to the current policy regime".

The Hamilton Project, named after Alexander Hamilton, the first US Treasury secretary, hopes to revive debate on economic policy at a time when Democrats have been accused of lacking a clear strategy.

A white paper co-written by Mr Rubin, who was a central figure in putting deficit reduction at the heart of Mr Clinton's economic agenda, makes concerns about growing income inequality in the US a central tenet of its philosophy.

Citing concerns about the sluggish growth in real median family income - which has been grown at just 1 per cent a year since 1973 - the paper contends that public policy that benefits "a select few will fail to utilise the nation's full potential . . . and risks a backlash that can threaten the very stability of democratic capitalism itself".

(...)

As chairman of the executive committee at Citigroup, Mr Rubin said his corporate colleagues "running big business" were concerned about the imbalances, but "very few will come out and support anything that is in opposition to the current regime . . . the great preponderance are greatly troubled by the same things that trouble us."

The Hamilton Project will be based at the Brookings Institution, a think-tank. It will be run by Peter Orszag, an economist and senior Brookings fellow.

Give support to such efforts by not repeating the talking points of the right, and taking any claims about "growth", or "average incomes" (as opposed to median incomes) with the requisite grain of salt.

(And yes, that includes not making fun of the French who are protesting agaisnt the exact same logic today).