Monday, September 29, 2014

Who Knew? Americans Don't "Get" Income Inequality

We used to dream about these kinds of digs. Nowadays, fuggitaboutit.

I've always suspected that the reason the white working class would support the conservative Republican agenda is because they don't make substantive connections. They don't understand that tax cuts mean loss of services, often services they were quite used to their whole lives. Example of a connection they miss? Their taxes go down $20 a month, but the free sports program they enjoyed in their youth now cost them $150 for each of their children to participate in. High-school graduation that might have cost $5 when they were young now costs them $300 per kid. The prom? $100. The DMV? A ticket for a red light? Interest rate on a credit card? Living with your 75-year-old parents when your unemployment insurance runs out? And so on.

But they got that $20 a month tax cut! Tax cuts good! The white working class doesn't notice -- or they simply discount by rote -- that the vast majority of tax cuts go to the wealthy. And so it goes with incomes, especially new income. The very wealthy get a hold of the vast majority of the new money:
The rallying cry of the Occupy Movement was that the richest 1 percent of Americans is getting richer while the rest of us struggle to get by. That’s not quite right, though. The bottom nine-tenths of the 1 Percent club have about the same slice of the national wealth pie that they had a generation ago. The gains have accrued almost exclusively to the top tenth of 1 Percenters. The richest 0.1 percent of the American population has rebuilt its share of wealth back to where it was in the Roaring Twenties. And the richest 0.01 percent’s share has grown even more rapidly, quadrupling since the eve of the Reagan Revolution.
It's bad enough that the rich are getting filthy richer, but it's worse that Americans don't seem to know it:
In their study, Norton and Kiatpongsan asked about 55,000 people around the globe, including 1,581 participants in the U.S., how much money they thought corporate CEOs made compared with unskilled factory workers. Then they asked how much more pay they thought CEOs should make. The median American guessed that executives out-earned factory workers roughly 30-to-1—exponentially lower than the highest actual estimate of 354-to-1. They believed the ideal ratio would be about 7-to-1.
“In sum, respondents underestimate actual pay gaps, and their ideal pay gaps are even further from reality than those underestimates,” the authors write.
Americans didn’t answer the survey much differently from participants in other countries. Australians believed that roughly 8-to-1 would be a good ratio; the French settled on about 7-to-1; and the Germans settled on around 6-to-1. In every country, the CEO pay-gap ratio was far greater than people assumed. And though they didn’t concur on precisely what would be fair, both conservatives and liberals around the world also concurred that the pay gap should be smaller. People agreed across income and education levels, as well as across age groups.
What's a bit funny -- considering how Americans, at least conservative ones, hold a certain contempt for European-style socialism -- is that, when offered a chance to choose between living in a country like the U.S. or Sweden, Americans chose Sweden (in sort of a blind taste test):
This is the second high-profile paper in which Norton has argued that Americans have a strikingly European notion of economic fairness. In 2011, he published a study with Duke University professor Dan Ariely that asked Americans how they believed wealth should be split up through society. It included two experiments. In the first, participants were shown three unlabeled pie charts: one of a totally equal wealth distribution; one of Sweden’s distribution, which is highly egalitarian; and one of the U.S. distribution, which is wildly skewed toward the rich. Then, the subjects were told to pick where they would like to live, assuming they would be randomly assigned to a spot on the economic ladder. With their imaginary fate up to chance, 92 percent of Americans opted for Sweden’s pie chart over the United States.
Leave it to Paul Krugman to be right on top of this enigma, with his column today:
So Americans have no idea how much the Masters of the Universe are paid, a finding very much in line with evidence that Americans vastly underestimate the concentration of wealth at the top.
Is this just a reflection of the innumeracy of hoi polloi? No — the supposedly well informed often seem comparably out of touch. Until the Occupy movement turned the “1 percent” into a catchphrase, it was all too common to hear prominent pundits and politicians speak about inequality as if it were mainly about college graduates versus the less educated, or the top fifth of the population versus the bottom 80 percent.
And even the 1 percent is too broad a category; the really big gains have gone to an even tinier elite. For example, recent estimates indicate not only that the wealth of the top percent has surged relative to everyone else — rising from 25 percent of total wealth in 1973 to 40 percent now — but that the great bulk of that rise has taken place among the top 0.1 percent, the richest one-thousandth of Americans.
So how can people be unaware of this development, or at least unaware of its scale? The main answer, I’d suggest, is that the truly rich are so removed from ordinary people’s lives that we never see what they have. We may notice, and feel aggrieved about, college kids driving luxury cars; but we don’t see private equity managers commuting by helicopter to their immense mansions in the Hamptons. The commanding heights of our economy are invisible because they’re lost in the clouds.
So, education is the key to everything. How you educate the numbingly ignorant is a daunting task, but we need to keep trying. It would help if the one political party of a size decent enough to get stuff done -- the Democrats -- would be willing to mount a truly populist messaging campaign until the working class woke up. And let's not be confused: The American working class is not just the lower classes. Increasingly, it's the middle-middle and the upper-middle classes that are losing out to the wealthy. The phase "you can't get there from here" is starting to have real pertinence in today's economy.

You want to get a college education and make something of yourself? Don't bother. You can't get there from here.

How to get home to the Hamptons...

Saturday, September 27, 2014

Who Let All the People of Color and Women into the Cabinet Meeting?!?

You know, I bet it was a black man.

What's going to happen when we elect a woman president?

Hmm... Shudders for some, I'll warrant.

When White Men Ruled Our Country

Here is a picture of a cabinet meeting during Richard Nixon's presidency. I wanted to share it with the white males who long for the day when they, and only they, ran things. Weird, huh?

A black man slipped into this meeting. He doesn't have a "seat at the table," though. Wonder what he's doing there.

Would we want to go back to those days, even if we could? I can't imagine why, but then I can imagine there are those out there in the Heartland -- what's that exactly anyway? -- who would like it so.

Sorry, white guys. Those days have passed for good.

Note. I just thought about those days. We were in a war in Vietnam, a Cold War with the Soviet Union, a continuing arms race in which both sides spent billions on nuclear weapons, we were soon to enter a phase of stagflation that left our whole nation reeling, and then came the doubling of gas prices, twice, in one decade. Wages have been stagnant ever since. Happy days!

Nice going, white guys.

Friday, September 26, 2014

America Is the Greatest Country on Earth, Except for All the Takers

I'm a fan of Paul Krugman, and he's my go-to guy when in most things economic, including the subject of income inequality. I could, of course, get what I need from any number of left-of-center economists, like Dean Baker, Jared Bernstein, Brad De Long, Joe Stiglitz, Robert Reich, and Noah Smith. The list goes on.

Not surprisingly, those of the right side of the political spectrum hold quite nearly opposite views in this area. They either deny that income inequality is that big of a deal or find ways to blame it on the losers. This puts them squarely in the "it's the poors who are lazy and deserve what they get" camp, which of course is occupied by Mitt Romney, John Boehner, Rick Santorum, Paul Ryan, and the Republican Party in general.

It's funny that the Republican Party, which spends a good deal of its days saying variations of "America is the greatest" this-and-that, would find that the "greatest country on Earth" has about fifty percent of its citizens defined as "takers."

Where, then, is the proof that America is the greatest at anything except malingering? Riddle me that, Republicans.

You can't, except to change the subject. Weird, huh? Now, back to the right-wing economists. Where do they stand on income inequality, as exemplified by the figure above? Why on Earth did the top 10 and the bottom 90 diverge back in about 1980? Stanford economics professor and darling of conservatives, John Taylor, has an explanation:
A large body of research documents that returns to education started increasing in the 1980s as evidenced by the growing college and high school wage premium. If the supply of those completing high school, with some going on to college, had increased to keep pace with the increase in returns, it is unlikely that we would have seen such a large widening of the distribution. But supply did not increase. High school graduation rates hit a peak around 1970 and then started declining. The US international rank in test scores fell.
The source of the income distribution problem is thus related to a poor education system. We are restricting educational opportunities, especially for those who are disadvantaged.
In other words the explanation for the widening inequality is the restriction of economic freedom rather than the promotion of economic freedom. Economic freedom did not mean economic freedom for all. Remember the students from the movie “Waiting for Superman”: Bianca, Emily, Anthony, Daisy, and Francisco who had such a small chance of winning the lottery to get into a school that would open up such opportunities? Adhering more closely to the principles of economic freedom requires giving those kids more freedom of choice.
See what he did there? It's all about education. the "greatest nation on Earth" has a poor education system that doesn't produce enough high-school graduates. The solution to this is exemplified by the movie "Waiting for Superman," a deeply flawed portrait singing the praises of charter schools. Read this about its inaccuracies. Taylor's suggestion that "adhering more closely to the principles of economic freedom requires giving those kids more freedom of choice" would solve our education system is a barely cloaked promotion of charter schools -- which often under-perform local regular public schools -- while also an attack on unions and a clear push for private-school vouchers so beloved of the Republicans.

As for those declining high-school graduation rates? In April of this year, Arne Duncan announced that the nation had hit its highest graduation rate in history. Weird, huh? And what about this?

John Taylor is right! Graduation rates declined beginning around 1975 before rebounding in 2000 and moving higher by 2010. So Taylor proves absolutely nothing.

To reiterate: John Taylor blames income inequality on something that barely happened, which could be fixed by charter schools, which have a very spotty record of improving anything, and if we'd only grant "school choice," then, boom!, we fix income inequality.

He teaches at Stanford but also is a fellow of the conservative Hoover Institution. And this is the drivel he produces when asked about income inequality. I wonder which side he's on?

Wonder no more.

Just a reminder: The richest man in the world, Bill Gates, is a college dropout. So was Steve Jobs. And so is Oracle's Larry Ellison. Clearly, education is where the ultra-rich get their advantage.

Dropping out of college ruined Bill Gates' chances of making the top .0001 percent.

The Moral Corruption of Banking Regulation

The Federal Reserve Bank of New York

There is some moral corruption in America that we can't lay at the Republicans' feet, unless the fact that Ben Bernanke is a Republican has any merit, a rather weak suggestion.

This story breaking this morning of the Fed's rather limp regulation of banking behavior is a major scandal. Because it doesn't involve sports, guns, or sex, it probably will reach the Richter scale of scandal of about 2. By which I mean it'll be forgotten five minutes after Meet the Press fails to mention it this Sunday. Hope I'm wrong.

Read Michael Lewis' explanation of it on Bloomberg this morning. He's pretty good at making sense out of stuff the public -- or even the Fed! -- doesn't usually understand.

We are ruled, as Atrios says, by idiots. Wish he was wrong.

The Corruption of American Airwaves, Fox News Edition

This Outnumbered screen capture tells you all you need to know about
the tenor of show, from the graphic graphic to the legs, legs, legs.

There once was an "equal time" restriction on American television, meaning if you gave fifteen minutes to a Republican, you had to give fifteen minutes, then, to a Democrat. The price of access to American airwaves was political neutrality. That ended with cable, which doesn't need federally controlled bandwidth to operate.

Fox News shows why it has almost single-handedly corrupted any sense of political neutrality among news providers (though CNBC and Fox Business News gives it a run for its money):

I suppose the conservative echo chamber has produced such crazy echoes that few inside the bubble would realize that Eric Holder has championed a lot of reasonable causes and cases in the judicial world during his tenure. I have trouble with his going soft on the banksters -- who didn't? -- and his position as an enabler of NSA and Patriot Act shenanigans was deeply troubling. But you'll notice that this Fox panel raised no objection to those areas of his legacy. They drone on and on about, well, listen to the video. Deeply stupid and uninformed -- except for Outnumbered host Kirsten Power's takedown of the non-existent New Black Panther Party non-scandal on an election day in Philly, where nothing happened except in the universe of Fox News.

This kind of obnoxious talk doesn't exist on MSNBC, despite the media's obsession with false equivalency, unless, of course, you're talking Morning Joe, MSNBC's only conservative show. Joe Scarborough can get pretty nasty.

Wednesday, September 24, 2014

The Republican Party Is Morally Corrupt: Who Is the Rush Limbaugh of the Democratic Party?

Rush is not one of a kind. There are dozens of Republican trash talkers.

The fact is, there is no Democratic equivalent of Rush Limbaugh, or Michael Savage, for that matter. Dems don't roll that way. What did liberals get when they went after the political airwaves with Air America? Rachel Maddow, Al Franken, and Ed Schultz. That's a Dream Team of garbage mouths but only if you're living in a tea-party fantasy. They're decent folks, and everyone knows it, even if you are of the conservative persuasion.

No, Rush is a different animal. Give me one good reason why this should be anywhere on American radio, let alone back in early 2012 when Rush was practically ruling the conservative base:

Tell me the Democratic equivalent of Rush Limbaugh. You can't. And don't tell me Rush is so over now that he's lost a bunch of sponsors and listeners, as well. He was your guy then. Who's your guy now? Bill O'Reilly? Don't get me started.