P rominent Democrats—including the president and House Minority Leader Nancy Pelosi—are openly suggesting that Medicare be means-tested and Social Security payments be reduced by applying a lower adjustment for inflation. This is even before they’ve started budget negotiations with Republicans—who still refuse to raise taxes on the rich, close tax loopholes the rich depend on (such as hedge-fund and private-equity managers’ “carried interest”), increase capital gains taxes on the wealthy, cap their tax deductions, or tax financial transactions. It’s not the first time Democrats have led with a compromise, but these particular pre-concessions are especially unwise. For over thirty years Republicans have pitted the middle class against the poor, preying on the frustrations and racial biases of average working people who can’t get ahead no matter how hard they try. In the Republican narrative, government takes from the hard-working middle and gives to the undeserving and dependent needy...

Today the Dow Jones Industrial Average rose above 14,270 — completely erasing its 54 percent loss between 2007 and 2009. The stock market is basically back to where it was in 2000, while corporate earnings have doubled since then. Yet the real median wage is now 8 percent below what it was in 2000, and unemployment remains sky-high. Why is the stock market doing so well, while most Americans are doing so poorly? Four reasons: First, productivity gains. Corporations have been investing in technology rather than their workers. They get tax credits and deductions for such investments; they get no such tax benefits for improving the skills of their employees. As a result, corporations can now do more with fewer people on their payrolls. That means higher profits. Second, high unemployment itself. Joblessness all but eliminates the bargaining power of most workers—allowing corporations to keep wages low. Public policies that might otherwise reduce unemployment—a new WPA or CCC to hire the...