Paul Krugman comments on Angus Deaton, Today's Nobel Prize winner in Econ

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Angus Deaton has won the Nobel, which is wonderful — dogged, careful empirical work at the micro level, tracking and making sense of individual households, their choices, and why they matter.

Oh, and cue the usual complaints that this isn’t a “real” Nobel. Hey, this is just a prize given by a bunch of Swedes, as opposed to the other prizes, which are given out by, um, bunches of Swedes.

Anyway, Deaton is also a fine writer with important things to say about political economy. Cardiff Garcia excerpts a passage in which he explains why we should care about the concentration of wealth at the top:

There is a danger that the rapid growth of top incomes can become self-reinforcing through the political access that money can bring. Rules are set not in the public interest but in the interest of the rich, who use those rules to become yet richer and more influential.

…

To worry about these consequences of extreme inequality has nothing to do with being envious of the rich and everything to do with the fear that rapidly growing top incomes are a threat to the wellbeing of everyone else.

As if to illustrate his point, this remarkable piece of reporting by Confessore, Cohen, and Yourish documents the remarkable fact that campaign finance this election cycle is dominated by a tiny number of extremely wealthy people — more than half the total from just 158 families. This money is overwhelmingly flowing to Republicans.

Some analysts suggest that this is just because there’s more action on the Republican side, with the field still wide open. But I’m pretty sure that’s nothing like the whole story. The biggest piece of the super-rich-super-donor story is money from the financial sector. And there has, as the chart above shows, been a huge swing of finance capital away from Democrats to Republicans that began in the 2012 election cycle — that is, after the passage of financial reform. Basically, we’re looking at the people who brought you the financial crisis trying to buy the chance to do it all over again.

http://krugman.blogs.nytimes.com/2015/10/12/angus-deaton-and-the-dodd-frank-election/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body

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