Biggest Flaw in the Democratic Party, revisited

A couple years ago I posted about "the biggest flaw in the Democratic Party", where I said the overriding concern for American inequality seemed strange in comparison to global inequality/poverty. At the time it was something I was just wondering about and didn't know what conclusion I should come to. Over time I've come to take this problem more seriously, and it's one of the main reasons I feel less supportive of the Democratic Party than I used to.

Another change I've gone through over that time is a slow transition from being a Paul-Krugman-fanboy to a Scott-Sumner-fanboy. And the other day Scott Sumner made this post, which is different from the kinds of things he usually blogs about, but hit the nail on the head for the same problem that bothers me the most about the Democratic Party:

I think the biggest area where I disagree with the left is that I’m way less nationalistic than most liberals, or Pat Buchanan. If anything I care more about the overseas poor, because they are much poorer. I actually find some of the things I read on the progressive side (and on the right as well) to be almost grotesquely insensitive. In recent decades living standards in places like China, India and even Africa have grown considerably faster than in the developed world. And yet we are constantly told that inequality is getting worse and that it is the defining issue of our time. If we dissent we are scolded for being “insensitive.”

Remember the famous joke about the Lincoln assassination? It would have been insensitive to say to Mrs. Lincoln; “Yes, your husband was shot, but the play was pretty good.” In 1945 it would have been insensitive to say to a European; “Yes, there was WWII and the Holocaust, but overall Europe’s done well in the past 5 years because the economies of Sweden, Switzerland, and Spain have boomed.” And it is insensitive to say; “Yes, billions have been raised out of abject misery but inequality is getting worse because the gap between average Americans and the top 1% is widening.”