Thirty-four percent of Americans think there are strong conflicts between the young and the old. Thirty-eight percent say there are strong conflicts between blacks and whites. Sixty-two percent of Americans say there are strong conflicts between immigrants and native-born citizens. But topping the list is the number of Americans who think there are strong conflicts between the rich and the poor: According to a new Pew poll, fully 66 percent of Americans believe there's some serious class warfare in this country.


They're also relatively robust among political affiliations. Seventy-three percent of Democrats, 68 percent of independents, and 55 percent of Republicans see strong conflicts between the rich and the poor. That's a majority across-the-board.

One possible interpretation is that this isn't a conflict between the haves and the have-nots. Perhaps it's a conflict between the worked-for-everything-they-haves and the got-a-leg-ups. Asked why the rich are rich, 46 percent said it was because they knew the right people and were born into the right families. Only 43 percent said it was due to their own hard work. But if you look into the guts of the poll, this belief has only a modest effect on attitudes. Three-quarters of those who believe the rich are rich through connections or birth see a class conflict, and so do 60 percent of those who believe the rich are rich through their own sweat and toil.

Note, too, that the percentage of Americans detecting serious conflict between the rich and the poor have risen 20 percent from 2009. Whether that's because of economic stress, or the rebounding profits of Wall Street amidst the stagnation of Main Street, or Occupy Wall Street, or the rhetoric of Democrats and Republicans, is unclear. But it's a sharp rise -- and a worrying trend in public opinion for a candidate like Mitt Romney, who was born into wealth, and who made much of his money in ways that often did lead to serious conflict between the interests of the workers at a plant or store and the interests of Romney and his investors.

Top stories

1) The campaign has brought the issue of ‘creative destruction’ to the forefront, reports Jia Lynn Yang: "Mitt Romney’s rivals this week intensified their attacks over business failures that happened on his watch at the investment firm Bain Capital. But even the successes touted by Romney’s campaign involved some painful decisions and layoffs. Both the successes and the failures reveal the candidate’s faith in 'creative destruction,' the notion that the new must relentlessly replace the old so that companies and the economy can become more efficient. The concept is gospel to many businesspeople. But its intersection with politics has created what may be a recurring line of attack against Romney’s record."

@JimPethokoukis: BREAKING: Capitalism means people sometimes lose money, jobs

@tylercowen: Is anyone asking how many of those "Romney-destroyed jobs" would have vanished anyway?

2) Republican turnout is up by 3% over 2008, reports Janet Hook: "Turnout rose almost 3% over 2008 levels in the first two contests of the Republican presidential nominating process, yielding a record number of GOP primary voters in both Iowa and New Hampshire. Republican officials have been hoping that an eagerness to defeat President Barack Obama would drive voters to the polls, and public-opinion surveys have shown that Republican voters are more energized than are Democrats this year. With no Democratic race to siphon away swing voters, some had expected a bigger bump. But Bill McInturff, a Republican pollster, said it was a good sign for the party that more voters were casting ballots than in 2008, which featured lively primary contests in both parties that drew voters to the polls."

3) Mitt Romney is a solid bet to win South Carolina, reports Nate Silver: "The conventional wisdom holds that South Carolina is likely to be the toughest test yet for Mitt Romney’s campaign. But I’m not so sure that’s true. From my vantage point, Mr. Romney’s position there looks fairly robust...Even if Mr. Romney loses South Carolina, he’ll have won two of the first three states, and his campaign has some advantages in the next stop on the primary calendar, Florida, where you generally need a lot of money to compete because of the state’s large population and expensive media markets. I’m not quite ready to say that Mr. Romney has the nomination locked up, but when you evaluate the known unknowns, they don’t seem that threatening to him. We may be nearing the point where an unknown unknown -- a heretofore unexposed scandal, a major gaffe, an 'oops' moment in a debate -- is what it would take to trip Mr. Romney up."

4) Obama is planning a push for policies to reward firms that return jobs to the U.S., reports Zachary Goldfarb: "President Obama said Wednesday that he plans to put forward a series of tax proposals to 'reward companies that choose to bring jobs home' and eliminate tax breaks 'for companies that are moving jobs overseas.' The announcement offers a clue about the president’s agenda for the State of the Union address on Jan. 24 and his reelection campaign. Obama did not give any more details about the proposals he will make. But some close to the White House expect him to repackage old ideas, such as making it harder for U.S. companies to postpone paying taxes on foreign profits, along with new ideas. One idea that the administration has explored is a recurring tax credit for profits derived from selling products developed in the United States, but it is unclear whether this will be part of the package the president will announce."

5) A growing number of Americans see conflict between the rich and poor, reports Annie Gowen: "About two-thirds of the public now believes there are strong conflicts between the rich and poor in America, making class a likelier source of tension than traditional flash points of race or nationality, a study from the Pew Research Center found. The nonprofit think tank in Washington released a study Wednesday that reported a growing number of Americans say there are 'very strong' or 'strong' conflicts between the rich and poor -- a number that has grown 19 percent since July 2009. This growing class friction is a greater potential source of tension in the country now than traditional divides over immigration, race and age. This pronounced attitude shift occurred throughout the income spectrum -- to the very poor to wealthy -- as well as among those with diverse political views. But younger adults, Democrats and African Americans were more likely than others to sense the class tension, according to the study, a national survey of 2,048 adults."

Top op-eds

1) Maybe Republican primary voters just prefer moderates, writes Conor Friedersdorf: "George H.W. Bush. Bob Dole. George W. Bush. John McCain. For all the talk about how Republicans are desperate for a conservative alternative to Mitt Romney -- and the audition process that elevated Michele Bachmann, Rick Perry, Herman Cain, Newt Gingrich, and Rick Santorum in turn -- a look back at the men who've won the GOP nomination since Ronald Reagan left office suggests that maybe a majority of Republicans are happy to have a moderate as their nominee...Perhaps the GOP always has been and always will be inclined to nominate relative moderates, and conservatives only break through if they manage an exceptional mix of principle and charisma, and come along at exactly the right moment. By those metrics and others Goldwater and Reagan were candidates unusually well suited to the primaries in which they triumphed. This year Paul is the only Romney alternative who has managed to excite anyone for an extended period of time. And if that's the choice, more Republicans than not will probably prefer the moderate."

@jpodhoretz: Big mistake in understanding GOP voter is confusion of word "conservative" with word "purist."

2) Presidential candidates are peddling outlandish myths about job creation, writes Ezra Klein: "Mitt Romney’s campaign would have you believe that every job lost over the past three years is President Barack Obama’s fault. That includes the 820,000 jobs lost in January 2009, even though Obama didn’t become president until the 20th of the month...The Obama campaign isn’t much better. They want credit for every job created, but not for every job lost...To buy much of this requires you to hold deeply ridiculous beliefs about the American economy. You must believe that Obama bears responsibility for events that predate his presidency and deserves applause for the demand created by aging cars and worn- down machinery. You must believe that Congress, which controls fiscal policy, and the Federal Reserve, which controls monetary policy, bear little or no responsibility for the economy, but that the president, who controls neither fiscal nor monetary policy, is the primary driver of job creation."

@RameshPonnuru: You know what I wouldn't invest in if I had spare money to invest? A company that took job creation as its goal.

3) Attacks on Romney's Bain record have gone too far, writes Steven Rattner: "Bain Capital is not now, nor has it ever been, some kind of Gordon Gekko-like, fire-breathing corporate raider that slashed and burned companies, immolating jobs wherever they appear in its path. Wall Street has its share of the vulture capitalists that Texas Gov. Rick Perry enjoyed mocking in South Carolina earlier this week. But Romney was almost the furthest thing from Larry the Liquidator...I have no idea whether Bain Capital created 100,000 net new jobs, and I think Romney was silly to even engage in that debate. What we know for certain is that Bain Capital more than fulfilled its responsibility to a gaggle of investors, who were mostly foundations, endowments, pension funds and the like...It’s certainly fair game for any candidate’s opponents to dig into his record. But in Romney’s case, focusing on questions about his principles -- and his currently staunchly conservative principles -- could be more productive than trying to rewrite the firm’s history."

4) But they could be his downfall, writes William Galston: "There is good news and bad news for Mitt Romney out of New Hampshire. The good news is that he won an impressively broad-based victory that did nothing to slow his drive for the Republican presidential nomination. But it also exposed a vulnerability that could soon prove debilitating, if not fatal, to his candidacy...The waning hours of the New Hampshire contest saw the emergence of a critique that could severely damage Romney’s general election prospects unless he figures out how to handle effectively. I’m referring, of course, to Bain Capital, which has become the prosecution’s Exhibit A against the candidate. Bain matters because it goes to the heart of the core case Romney is making: The economy is broken, Obama doesn’t know how to fix it, and I do. If his rivals can undermine his record as a job-creator and substitute the narrative of Romney as a 'vulture capitalist' who makes money by looting firms and firing workers, his path to the presidency becomes a lot steeper."

5) Manufacturing growth won't bring back full employment, writes David Wessel: "Recent news from the nation's factories has been good. In the past two years, manufacturing employment has grown by 334,000, a welcome upturn in a nation short of jobs. This has kicked off a mini-euphoria. Every time a big global manufacturer opens or expands a plant in the U.S., someone casts it as a sign of a manufacturing renaissance...Modern factory jobs, many of which require more brainpower and computer know-how than muscle, often pay well and are secure. Research and development--the key to maintaining the U.S. edge in innovation--sometimes migrate abroad when production does, a good reason to strive to keep production at home. But manufacturing employment isn't going to grow nearly enough to return the U.S. to full employment. It isn't going to be the chief source of jobs for the next quarter-century. And, given the demands of the modern factory, it isn't going to be the ticket to the middle class for unskilled workers who haven't gone beyond high school. Pretending otherwise is foolish."

Portland rock interlude: Modest Mouse plays "Gravity Rides Everything" live.

Got tips, additions, or comments? E-mail me.

Still to come: Business travel is growing; state lawmakers back the individual mandate; parents try to fire their school; the EPA releases data on emissions; and a baby tries lemon for the first time.


Holiday sales boosted the recovery, reports Luca Di Leo: "The U.S. economy improved somewhat across all regions in the final six weeks of 2011, boosted by holiday sales, the Federal Reserve said. However, the Fed's so-called beige book showed that persistent weakness in housing kept a lid on growth in most areas. Inflation pressures were broadly limited, leaving the door open for more stimulus by the central bank...Holiday retail sales were up noticeably in most districts, compared with 2010, the report showed. Consumer electronics and jewelry were among the strongest sellers. Luxury items in general sold well in the Chicago district. Travel and tourism were strong in most areas...But it's not clear whether consumers will sustain higher spending after the holidays. The jobless rate remains high, at 8.5%, and many households still carry heavy debt burdens. A separate Fed report this week showed that borrowing grew in November at the fastest pace in a decade, possibly to cover for holiday shopping at a time when peoples' finances remain strained."

Business travel is picking up, reports Josh Mitchell: "Business travel is perking up, two new reports say, reflecting healthier corporate profits. The Federal Reserve said Wednesday most districts reported 'solid gains or high levels' of travel and tourist activity in the final six weeks of 2011. Both business and leisure travel picked up, the report said, and officials in Boston expect double-digit growth in hotel revenues in 2012. A separate report Tuesday by the Global Business Travel Association, a trade group, estimated that business trips rose 2.1% in 2011 and that business-travel spending climbed 7.6%. The group forecasts that trips will slip in 2012, due to 'economic headwinds,' but that business travel spending will still rise a steady 4.6%."

Unemployed mortgage holders are getting help, reports Motoko Rich: "Freddie Mac and Fannie Mae, the government-sponsored housing finance companies that represent approximately half of all mortgages, have announced plans to extend their existing programs so that unemployed borrowers can defer part or all of their monthly payments for up to 12 months while they are out of work. The moves come after the Obama administration announced last July a similar program for loans backed by Federal Housing Administration insurance, as well as mortgages serviced by lenders that are participating in the government’s loan modification program. Fannie Mae sent guidance to lenders on Wednesday saying that banks could offer unemployed borrowers up to six months of lowered or skipped payments without seeking Fannie’s prior approval, and that banks could extend that forbearance up to 12 months with approval. This guidance modified a policy from September 2010, when Fannie expanded its existing forbearance option for other hardships like natural disasters to include unemployment."

Romney backs pegging minimum wage increases to inflation, reports Dave Jamieson: "In a move that puts him out of step with his fellow Republicans on the campaign trail, frontrunner Mitt Romney said in New Hampshire that the minimum wage should be pegged to inflation and rise with the cost of living. 'My view has been to allow the minimum wage to rise with the [Consumer Price Index] or with another index so that it adjusts automatically over time,' Romney said when questioned by Anne Thompson of the National Employment Law Project Action Fund, a liberal group that lobbies for higher minimum wages. 'I already indicated that when I was governor of Massachusetts and that's my view.'...If the federal minimum wage was pegged to a price index -- as 10 state minimum wages already are -- Congress wouldn't have to go through the often-messy political process of drafting new legislation to raise it every few years. Of course, liberals and low-wage workers like the idea of automatic cost-of-living adjustments, arguing that the minimum wage should keep pace with the cost of food, gas and other staples. But business groups and most free-market conservatives intensely dislike the concept, arguing that higher minimum wages ultimately lead to job loss."

@mattyglesias: Indexing the minimum wage to inflation should appeal conservatives...would deny Democrats the political weapon of random increases.

Germany's economy contracted in the forth quarter, report Marcus Walker and Brian Blackstone: "Germany's economy contracted in the fourth quarter, putting it at risk of a shallow recession at a time when euro-zone countries struggling with their debts are looking to the bloc's biggest economy to give the region a lift. Germany's stagnation, after two years of strong growth, could fuel further international calls for the country to stimulate growth. Economists said Germany's nearly balanced budget and ability to borrow money at low cost gives it the scope to boost growth that few others in Europe have. But German Chancellor Angela Merkel is unlikely to switch her focus from budget austerity to stimulus measures--unless a more-severe recession threatens the country, something economists say could happen if the debt crisis in the euro zone's weaker members spirals out of control."

Economists are projecting a short euro zone recession, reports Phil Izzo: "The euro zone will most likely experience a short recession, but the common currency will be under pressure for years to come, according to economists surveyed by the Wall Street Journal. Concerns about a euro zone recession were elevated Wednesday, as Germany, the region’s largest and strongest economy, reported that its gross domestic product contracted in the fourth quarter of last year. Forty-eight of 50 economists said that the euro zone is in a recession now or one is imminent, while just two believe the region will avoid a downturn. But the majority of those who predict a recession -- 29 economists -- expect it to last less than a year. (Fifty-four economists were surveyed by the Journal, and the full results will be released later this week. Not all respondents answer every question.) But though they expect the recession to be relatively brief, the situation in Europe continues to worry economists. Many suggest that even if the euro zone can resolve its sovereign debt crisis, it will face depressed growth for some time. 'What’s going to lift Europe out quickly? There’s no fiscal stimulus and little monetary stimulus,' said Nicholas S. Perna of Perna Associates."

The Fed's Charles Evans is continuing his call for additional monetary stimulus, reports Michael Derby: "While the U.S. economy’s prospects are brightening, significant problems remains and the environment still calls for considerable central-bank support, a top Federal Reserve official said Wednesday. 'The somewhat firmer tone of recent economic data suggest some welcome traction, but the data are not strong enough, or uniform enough, to assert that momentum for growth is building,' Federal Reserve Bank of Chicago President Charles Evans said. 'The headwinds that we face are still substantial,' he said...Evans also carved out a notable role for advocating a new framework for monetary-policy making. He argued the Fed should pledge to keep policy very stimulative until unemployment fell to 7%-it is currently at 8.5%-or inflation went over 3%. The central bank’s understood limit for price pressures is 2%. In his speech to the Rotary Club of Lake Forest and Lake Bluff, Ill., Evans again advocated for the adoption of such a framework, arguing the Fed is missing on its employment and prices mandate, in a fashion that argues for a strong monetary-policy response."

IRS budget cuts hurt taxpayers, reports Lisa Rein: "The Internal Revenue Service’s workload has intensified as Congress has cut its budget, resulting in slower refunds and service to taxpayers, an in-house watchdog said Wednesday. The tax agency is resorting to shortcuts, relying excessively on automation that either fails to identify fraudulent claims or flags taxpayers for making mistakes when they haven’t, National Taxpayer Advocate Nina E. Olson concluded in her annual report to Congress...Olson said Congress should give the IRS and its 95,000 employees enough money to perform properly. The agency’s budget this year is $11.8 billion. That’s $300 million less than last year and $1.5 billion below what President Barack Obama had requested as the administration argued that boosting agency spending would help it go after tax delinquents."

Movie trailer interlude: LCD Soundsystem documentary "Shut Up And Play The Hits."

Health Care

State lawmakers will ask the Supreme Court to uphold the individual mandate, reports Sam Baker: "More than 480 state lawmakers plan to file a brief Thursday urging the Supreme Court to uphold President Obama's healthcare law...The state lawmakers say requiring almost all Americans to buy insurance falls well within Congress's power under the Constitution's Commerce Clause. Echoing the Justice Department's arguments in support of the mandate, the state legislators said the Constitution gives Congress broad authority to regulate interstate commerce. The group includes at least one lawmaker from every state, including the 26 states whose attorneys general are suing to overturn the healthcare law's individual insurance mandate. The Supreme Court is scheduled to hear oral arguments in March and will likely rule on the law this summer....The brief is a joint effort of the Progressive States Network, the Working Group of State Legislators for Health Reform and the Constitutional Accountability Center."

Domestic Policy

Parents in California are trying to 'fire' their children's school, reports Stephanie Banchero: "Fed-up parents of students attending a low-performing school in Southern California aim to use the power given to them by the state to take an unusual step: fire the school. This power, called a Parent Trigger, was passed into law in California in 2010, but parents are attempting for only the second time to use it at Desert Trails Elementary outside Los Angeles. Their effort to force Adelanto Elementary School District to overhaul the school, or turn it into a charter school run by the parents themselves, is expected to be closely watched across the nation...The parents group has gathered the signatures of 70% of the parents at the school and plans to deliver a petition to school district officials on Thursday. Under the law, parents can force a district to close a school, convert it to a charter or replace the principal and the teachers if at least 50% of them sign a petition. Last year, parents in Compton tried to trigger such a change, but their petition has been tied up in a lengthy court battle with the school district."

Teacher quality should be a top priority, writes Nicholas Kristof: "Suppose your child is about to enter the fourth grade and has been assigned to an excellent teacher. Then the teacher decides to quit. What should you do? The correct answer? Panic! Well, not exactly. But a landmark new research paper underscores that the difference between a strong teacher and a weak teacher lasts a lifetime. Having a good fourth-grade teacher makes a student 1.25 percent more likely to go to college, the research suggests, and 1.25 percent less likely to get pregnant as a teenager. Each of the students will go on as an adult to earn, on average, $25,000 more over a lifetime -- or about $700,000 in gains for an average size class -- all attributable to that ace teacher back in the fourth grade. That’s right: A great teacher is worth hundreds of thousands of dollars to each year’s students, just in the extra income they will earn."

Adorable babies being adorable interlude: A baby meets a lemon, has mixed feelings about the experience.


The EPA released detailed data about carbon pollution, reports Andrew Restuccia: "The Environmental Protection Agency announced a new tool Wednesday that makes public for the first time detailed information about greenhouse gas emissions from power plants and other sources. Mandated in a 2008 spending bill, the greenhouse-gas reporting program requires that large power plants, refineries and other facilities report their emissions to the agency. Greenhouse gases such as carbon dioxide are blamed for climate change...Among EPA’s top-line findings from the data: Power plants, the largest stationary source of greenhouse gases, emitted 2,324,000,000 metric tons of carbon dioxide equivalent in 2010. The agency also found that 100 facilities, 96 of which were power plants, emitted more than 7 million metric tons of carbon dioxide equivalent in 2010."

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.