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In fact, there are numerous other channels through which the higher wage is absorbed:

–profits: to the extent that the increase is paid for out of profits, we shouldn’t expect job losses. And in an economy where profits have dazzled while paychecks have fizzled, that ain’t a bad thing.

–prices: some studies find that a small bit gets passed through to higher prices.

–productivity: to the extent that higher wages reduce turnover and vacancies, a higher minimum can partially pay for itself by squeezing out such inefficiencies. It’s not wishful thinking—some studies have found just that.

–reasonable rates: it matters what the level you raise it to, and historically, increases have affected less than 10% of the workforce, often even smaller shares. With relatively few in the “affected range” we wouldn’t expect to see large distortions.

–it’s stimulus! Minimum wage workers tend to spend the extra cash, so there’s more economic activity than otherwise would occur—btw, even under the redistributive scenario described under “profits” above, you’ll get this affect if low-wage workers consume more of their last dollar than those in the sky boxes.

Here is one thing we know about Mitt Romney: He loves Ronald Reagan (or at least he does now). Here is another: He also loves the Cayman Islands. It’s something he kind of shares with the Gipper: creativity in sheltering his fortune from the prying eyes of tax collectors. But here’s something he does not share with Ronald Reagan at all: skill at waving his hands and making the story go away. Not many people remember this now, but when Reagan was governor of California in the early 1970s, it came out that he’d paid no state income taxes – none – one year, despite being a wealthy man. And yet, he went on to run – twice – for the highest office in the land, without the revelation making any sort of dent at all. Learn from the master, Mitt.

It happened like this. One Friday in late April of 1971, a student-operated radio station at Sacramento State College reported that Reagan’s 1970 California tax return claimed the governor owed precisely zero dollars and zero cents.

Brazen stuff. For one thing, Gov. Reagan pulled his tax dodge during an election year, when he was running for a second term. For another, his big crusade after reelection was fighting the Democratic legislature’s attempts to institute tax withholding on salaries to make up for a budget shortfall. He wanted people should know exactly what they were paying; “taxes should hurt,” was his slogan.

The following week, the story was the talk of the State Capitol. At Reagan’s weekly press conference, after he announced the state was running so short of cash that by fall it would be forced, for the first time since the Great Depression, to rely on outside borrowing to pay the bills – because, of course, Democrats were “playing fast and loose with the fiscal integrity of this state for purely partisan advantage” – a newsman asked him if it was true that he himself had contributed nothing to state coffers the previous year. Obviously taken aback, he responded slowly: “You know something? I don’t actually know whether I did or not. I’d have to check up …. I have a fellow making it our for me — a lawyer makes it out.” He added, “I know in the federal the last couple of years I got a rebate back.”

Five minutes after the press conference his office released a one-sentence statement: “Because of business reverses of Gov. Reagan’s investments, he owed no state income tax for 1970.”

Well. The UPI wire service did the accounting. It turned out that, in addition to his $41,100 salary as governor, for which a Californian would ordinarily owe $2,700 without deductions, Reagan had sold 236 acres of his Yearling Row Ranch in the Malibu Mountains in 1968 to 20th Century Fox studios for a reported $1.93 million. (To figure these sums in current dollars, multiply by a factor of about 5.5). He refused to say how this all added up to an absence of taxable income. He also refused to make his tax records public, or say what the “business reversals” were – refused with a vengeance. Arriving at the Capitol the next day, asked whether he would clarify his federal tax status, he answered, “Why should I have to clarify the status? Frankly, I think the Capitol press corps demeaned itself a little by engaging in invasion of privacy.” (Turn the question around, playing the victim card against the wicked jackals of the press: Newt Gingrich would absorb the lesson well.)

Kesey’s novel was a rapid bestseller, but his fame came from what he did after: name a bus Further, paint it outrageous colors, fill it with counterculture friends he called the Merry Pranksters and take it on the road. It was part Beat — Neal Cassady was its driver — and part antecedent to the tune-in, drop-out psychedelic ’60s. Kesey was one of the first proponents of mind-altering drugs: He’d been a Stanford test subject for mescaline and lysergic acid diethylamide before LSD was banned. The mad bus trip was documented by Tom Wolfe in his 1968 book “The Electric Kool-Aid Acid Test,” another bestseller, making Kesey a highly prominent hippie.

Then, pushing his novel further into the background, came the 1975 film — more than a film, a juggernaut. Despite its anti-establishment themes, “One Flew Over the Cuckoo’s Nest” was the first film in 40 years to sweep five major Oscars: adapted screenplay, director for Milos Forman, lead actress for Louise Fletcher, lead actor for Jack Nicholson and best picture. It was Nicholson’s first Academy Award, and something in the character McMurphy, a petty con with wickedly charming rebelliousness, seemed to catapult him to an indelible level of stardom.

When comparing Reagan’s policies with Republican proposals today, several things stand out. Inflation is low now. We are not looking at “bracket creep” or sharply rising taxes, as we were in the late 1970s. The top income tax rate is 35 percent, half the rate Reagan inherited. And federal revenue is at a 60-year low of about 15 percent of GDP, compared with a post-World War II average of about 18.5 percent.

These differences are essential to understanding why Reagan’s policies worked when they did — and why they are not appropriate today.

All of the evidence tells us that the economy’s fundamental problem today is not on the supply side but the demand side. According to a recent study by Credit Suisse, two-thirds of the difference in growth at this point in the business cycle, compared with previous cycles, is due to slower consumer spending. And low inflation — as well as widespread unemployment, vast stocks of unsold houses, empty factories and other indicators — tells us that money is tight, not loose, as was the case in the late 1970s.

“Low interest rates are generally a sign that money has been tight,” economist Milton Friedman wrote in 1997. Yet, absurdly, Republicans continually berate the Federal Reserve for being too easy; some even insist, insanely, that the United States should return to the gold standard, even though it was a key cause of the Great Depression.

Because inflation and interest rates are low, Fed policy is constrained today in ways it was not in the early 1980s. Back then, the Fed could bring down the federal funds rate to a little less than the inflation rate and create negative real rates, thus stimulating borrowing, investment and consumption. It can’t do that now because it can’t reduce market interest rates below zero.

Economic conditions are entirely different today than they were in Reagan’s era, and different conditions demand different policies. Those who say otherwise are simply engaging in cookie-cutter economics — proposing whatever was popular and seemed to work once, without regard to changing circumstances.

Statistics are notoriously slippery, but the figures that suggest that violence has been disappearing in the United States contain a blind spot so large that to cite them uncritically, as the major papers do, is to collude in an epic con. Uncounted in the official tallies are the hundreds of thousands of crimes that take place in the country’s prison system, a vast and growing residential network whose forsaken tenants increasingly bear the brunt of America’s propensity for anger and violence.

Crime has not fallen in the United States—it’s been shifted. Just as Wall Street connived with regulators to transfer financial risk from spendthrift banks to careless home buyers, so have federal, state, and local legislatures succeeded in rerouting criminal risk away from urban centers and concentrating it in a proliferating web of hyperhells. The statistics touting the country’s crime-reduction miracle, when juxtaposed with those documenting the quantity of rape and assault that takes place each year within the correctional system, are exposed as not merely a lie, or even a damn lie—but as the single most shameful lie in American life.

From 1980 to 2007, the number of prisoners held in the United States quadrupled to 2.3 million, with an additional 5 million on probation or parole. What Ayn Rand once called the “freest, noblest country in the history of the world” is now the most incarcerated, and the second-most incarcerated country in history, just barely edged out by Stalin’s Soviet Union. We’re used to hearing about the widening chasm between the haves and have-nots; we’re less accustomed to contemplating a more fundamental gap: the abyss that separates the fortunate majority, who control their own bodies, from the luckless minority, whose bodies are controlled, and defiled, by the state.

Before this year, the federal government had never bothered to estimate the actual number of rapes that occur in prisons. Its data relied on official complaints filed by prisoners, which in recent years have averaged around 800. One such complaint was filed in 1995 by Rodney Hulin, a boy from Amarillo, Texas, who had been arrested as a 15-year-old after throwing a Molotov cocktail into a pile of garbage. The trash burned, causing about $500 worth of damage to the exterior of an adjacent house. Hulin’s prank was unimpressive, but Texas in the mid-’90s had little tolerance for teenage ruffianism; in 1994, George W. Bush had become governor, defeating Ann Richards, a popular incumbent, by depicting her as soft on crime. Hulin was charged with two counts of second-degree arson. He was a small guy—just five feet tall and 125 pounds—but he got a big sentence: eight years in adult prison.

Within a month of arriving at Clemens Unit, a temporary holding facility outside Houston for juveniles on their way to adult prison, Hulin was raped by another inmate. He asked to be moved out of harm’s way, but his request was denied, and the rapes continued. In a letter to prison authorities, he wrote, “I might die at any minute. Please sir, help me.” Help was not forthcoming: getting raped was not deemed urgent enough to meet the requirements of the prison’s emergency grievance criteria. When Hulin got his mother to complain to the prison’s warden, she was told that Hulin needed to “grow up” and “learn to deal with it.”

Hulin’s method for dealing with it was to kill himself. Ten weeks after his arrival, he was discovered dangling from the ceiling of his cell.

In the 2010 election cycle, 26,783 individuals (or slightly less than one in ten thousand Americans) each contributed more than $10,000 to federal political campaigns. Combined, these donors spent $774 million. That’s 24.3% of the total from individuals to politicians, parties, PACs, and independent expenditure groups. Together, they would fill only two-thirds of the 41,222 seats at Nationals Park the baseball field two miles from the U.S. Capitol. When it comes to politics, they are The One Percent of the One Percent.