Trillions Upon Trillions of Dollars

Trillions upon trillions of dollars. It adds up, year after year. Corporate subsidies, environmental damage, pollution-caused disease, defense spending, and on and on. An ever increasing national debt with benefits going to those getting the tax cuts. It’s socialism for the rich. A few trillion a year for subsidies to the oil industry, a few more trillion a year somewhere else, and so it goes. Throw in no-bid contracts, crony capitalism, revolving door politics, regulatory capture. Let’s start another war to defend some corporate interest or another.

It’s not a net benefit for society. We aren’t talking about an investment that somehow trickles down in benefitting Americans and the global population. It doesn’t float all boats. If anything, large numbers of boats are taking on water and sinking. A UN report found that entire industries, when environmental costs were added back in, were a net loss to society. The benefits are being privatized while the costs externalized and socialized.

Take the oil industry that receives those trillions of dollars of subsidies every year and, at the same time, causes trillions of dollars of harm to the health of people and ecosystems. And it’s not just money, as this represents suffering and lives lost. The tragedy is compounded a thousandfold as our entire military-industrial complex is built on this altar of endless human sacrifice. We send off our sons and daughters to fight and die to protect oil fields, ports, and trade routes to guarantee continuing profits for big biz.

The rich get richer, as inequality grows more vast. But how about a fraction of the wealth and resources stolen from the public instead being used for the public good? We couldn’t do that. We can’t afford it! Really? Americans should be shocked by this theft, this corruption. But lost in cynicism, they are not shocked at all. Why not? Trillions… It’s just a word. It’s incomprehensible and unimaginable. When someone says trillions of dollars, at best it feels like an abstraction and at worst it sounds like hyperbole. But it is a real number that represents actual reality.

A plutocracy doesn’t just happen. It takes immense stolen wealth to create it, to pay for it. And in America, we have the most expensive plutocracy the world has ever seen. That is  way beyond the wealth that would be required to house, feed, educate, and give medical treatment to every US citizen. And with such a generous (i.e., liberal) social democracy or even democratic socialism, there still would be hundreds of trillions of dollars left over to save for a rainy day. Why do we tolerate such waste, such cruelty?

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Old School Progressivism

I’ve had a suspicion for a while and some statements by Trump’s adviser, Steve Bannon, seem to confirm it. Bannon said that he isn’t a white nationalist, rather an American nationalist and economic nationalist, and that if they do things right even minorities will support them. He talked about concrete policies like a trillion dollar infrastructure project. The Trump administration apparently is trying to revive old school progressivism. I find it interesting that liberal Democrats no longer recognize it, even as it smacks them upside the head — they viciously attacked economic populism as if it were a dangerous invader when it showed up in their own party.

Public Health, Public Good

The reality is that the US is the wealthiest country in the world. In global capitalism, the public wealth and resources regularly given away and wasted for private interests is easily in the trillions of dollars on a yearly basis. It might be trillions in just considering the direct benefits corporations have on US land and waters. The precise amount has never been calculated because the corporatist don’t want to know or rather don’t want the rest of us to know, although I’m sure they have a good sense of the approximate amount of what is being sucked out of the system. Whatever the exact amount, it’s guaranteed that it could pay for healthcare for every US citizen, along with so much else.

Get on board or get out of the way!

The intellectual elite over at Reason Magazine, the propaganda rag for the Koch Robber Barons with numerous corporate front groups as the funding sources (SourceWatch, Reason Foundation), want to help us understand the error of our ways: “Tens of trillions of dollars in new taxes are likely to prove a bit of a hurdle for Americans who want lots of new goodies from the government only if they’re entirely free” (J. D. Tuccille, More Americans Want Bigger Government—If It’s Free).

Trillions? Such a big scary number. Really, asshole? I think I’ve seen where the trillions go. We can’t afford ‘socialism’, you say. Well, I suspect most Americans would agree with me in thinking that we can’t afford kleptocracy, socialism for the rich (Americans Can’t Afford Kleptocracy). Just look at one small part of one industry over a single year, and it still would be an underestimation because most of the wealth, resources, and other benefits given away goes uncounted: “fossil fuels enjoy $5 trillion in direct and indirect subsidies” (Brian Kahn, Building All the Fossil Fuel Projects Already in the Pipeline Would Wreck the Climate). Multiply that by the other areas of big energy such as nuclear and coal. Then multiply that by the numerous other industries that suck at the government teat: big tech, big ag, etc. And finally multiply that over the many decades that have bled the American public dry. Just over the past decade alone, we could be talking about the equivalent of hundreds of trillions of dollars of public wealth being stolen and stuffed into the pockets of the already rich. Now think about the incomprehensible amount of wealth that has disappeared into the private sector over our lifetimes, most of it probably having been diverted into foreign investments and secret bank accounts or wasted in financial gambling and conspicuous consumption.

All that money stolen and wasted, not to mention externalized costs on top of that. According to a study sponsored by the United Nations, “The report found that when you took the externalized costs into effect, essentially NONE of the industries was actually making a profit. The huge profit margins being made by the world’s most profitable industries (oil, meat, tobacco, mining, electronics) is being paid for against the future: we are trading long term sustainability for the benefit of shareholders. Sometimes the environmental costs vastly outweighed revenue, meaning that these industries would be constantly losing money had they actually been paying for the ecological damage and strain they were causing” (Michael Thomas, New UN report finds almost no industry profitable if environmental costs were included; also see An Invisible Debt Made Visible). So, not only are industries like that of big energy taking trillions of dollars of corporate welfare as part of plutocratic socialism for they are simultaneously, on the other side of the equation, offloading trillions of dollars of costs onto the public. And we have no way to measure the further costs externalized through pollution and ecological destruction. It is an incomprehensibly large net loss for all of society, in the United States and across the world.

We are told that we can’t afford a few trillion to ensure most Americans don’t suffer and die from preventable and treatable health concerns, some of it caused by the very costs of pollution externalized on the public, especially the poor who are more likely to live in industrial toxic zones.

The United States of Inequality

George Lakoff, Moral Politics, pp 194-6:

Liberals like to think of Ronald Reagan as stupid. Whether he was or not, those around him certainly were not. While constantly attacking liberals as big spenders, the Reagan and Bush administrations added three trillion dollars to the national debt by drastically increasing military spending while cutting taxes for the rich. They could count; they saw the deficit increasing. They blamed the increases on liberal spending, but Reagan did not veto every spending bill. Moreover, Reagan’s own actions accounted for much of the deficit increase. Had financial responsibility and the lessening of spending been Reagan’s top priorities, he would not have allowed such an increase in the deficit, simply by not cutting taxes and not pushing for a military buildup far beyond the Pentagon’s requests. . .

Adding three trillion dollars to the deficit actually served a moral purpose for Ronald Reagan. It meant that, sooner or later, the deficit would force an elimination of social programs. He knew perfectly well that the military budget would never be seriously cut, and that a major increase in tax revenues to eliminate the deficit would never be agreed upon. In the long run, the staggering deficit would actually serve Strict Father morality – conservative morality – by forcing Congress to cut social programs. From the perspective of Strict Father morality, Ronald Reagan looks moral and smart, not immoral and dumb as many liberals believe.

National Debt, Starve the Beast, & Wealth Disparity

Increases in the National Debt Chart

Bill Clinton steadily reduced the debt increase while he was in office, thanks largely to the 1993 Debt Reduction Act* that was OPPOSED BY EVERY SINGLE REPUBLICAN IN CONGRESS, led by Newt Gingrich! The Republicans claimed that the Debt Reduction Act would result in HIGHER deficits and also result in an economic recession during President Clinton’s term. Obviously, with hindsight they were completely wrong. Republicans don’t seem to be very good at math, or economics.

Now, after 20 years of huge Republican deficits and Republican recessions, the National Debt has increased from $937 Billion — LESS than $1 Trillion — the day Ronald Reagan took office to ALMOST $10 TRILLION!!! The Debt has increased more than TEN TIMES what it was when Ronald Reagan promised to reduce the National Debt by 1983! We and our children and their children will be paying off the debt added by Ronald Reagan, George H.W. Bush and George W. Bush for the next 100 years and more! For what !?!? Services have been cut across America. Police and Fire Departments haven’t grown nearly as fast as our population. Even the number of troops in the military has been cut while military spending has skyrocketed!

Re: Poor investments

Poor investments
by Shay O’Reilly

. . . Even on a purely monetary scale, the money lost to Solyndra is overwhelmed by the amount spent on other failed causes. The money squandered on Solyndra is measured in hundreds of millions, but a Brown University study released earlier this year puts the total cost of our “War on Terror” at $4 trillion — nearly one-third of the national debt.

Investing in Violence and Death

US Budgetary Costs of Wars through 2016: $4.79 Trillion and Counting Summary of Costs of the US Wars in Iraq, Syria, Afghanistan and Pakistan and Homeland Security
by Neta C. Crawford, Watson Institute

As of August 2016, the US has already appropriated, spent, or taken on obligations to spend more than $3.6 trillion in current dollars on the wars in Iraq,  Afghanistan, Pakistan and Syria and on Homeland Security (2001 through fiscal year 2016). To this total should be added the approximately $65 billion in dedicated war spending the Department of Defense and State Department have requested for the next  fiscal year, 2017, along with an additional nearly $32 billion requested for the Department of Homeland Security in 2017, and estimated spending on veterans in  future years. When those are included, the total US budgetary cost of the wars reaches $4.79 trillion. . .

In addition, any reasonable estimate of the costs of the wars includes the fact that each war entails essentially signing rather large promissory notes to fulfill the US obligations for medical care and support for wounded veterans. These future obligations will total approximately an additional $1 trillion in medical and disability payments and additional administrative burden through 2053.

Post-9/11 Wars Have Cost Nearly $5 Trillion (and Counting)
by Nadia Prupis, Common Dreams

What’s more, a recent Inspector General audit report found a “jaw-dropping” $6.5 trillion could not be accounted for in Defense spending.

The results of Crawford’s report, released last week, follow previous estimates by prominent economists like Nobel Prize-winning Joseph Stiglitz and Harvard professor Linda Bilmes, whose 2008 book The Three Trillion Dollar War made similar claims.

Crawford’s report continues: “Interest costs for overseas contingency operations spending alone are projected to add more than $1 trillion dollars to the national debt by 2023. By 2053, interest costs will be at least $7.9 trillion unless the U.S. changes the way it pays for the war.” . . .

War on Terror Could Be Costliest Yet
by Andrew Soergel, U.S. News

$4.79 trillion total exceeds spending on any single war the U.S. has ever fought.

The Congressional Research Service, for example, estimates the U.S. spent $4.4 trillion on World War II, when adjusted for inflation and converted to 2016 dollars. The Vietnam War is estimated to have cost $789.5 billion, while the Korean War cost $364.8 billion.

Even in terms of noncombat government expenditures, Crawford’s multitrillion-dollar price tag is daunting. The Interstate Highway System is believed to have cost $500 billion to construct, according to the American Society of Civil Engineers. The Project Apollo missions that first sent men to the moon cost more than $135 billion in 2016 dollars. Digging the original Panama Canal is believed to have cost a little more than $9 billion. […]

But even if the U.S. stopped spending on war at the end of this fiscal year, interest costs alone on borrowing to pay for the wars will continue to grow apace,” she said. “Interest costs for overseas contingency operations spending alone are projected to add more than $1 trillion dollars to the national debt by 2023.”

Evil Empire

Seeing Our Wars for the First Time
by Tom Engelhardt

Who could be surprised that such a “war” has been eating American taxpayer dollars at a rate that should stagger the imagination in a country whose infrastructure is now visibly crumbling? In a separate study, released in November, the Costs of War Project estimated that the price tag on the war on terror (with some future expenses included) had already reached an astronomical $5.6 trillion. Only recently, however, President Trump, now escalating those conflicts, tweeted an even more staggering figure: “After having foolishly spent $7 trillion in the Middle East, it is time to start rebuilding our country!” (This figure, too, seems to have come in some fashion from the Costs of War estimate that “future interest payments on borrowing for the wars will likely add more than $7.9 trillion to the national debt” by mid-century.) . . .

Horrors Wrought On The World Since 9/11
by Nicolas Davies, Popular Resistance

Since 2001, the U.S. has borrowed and spent $3.3 trillion in additional military spending to pay for the largest unilateral military build-up in history, but less than half the extra funding has been spent on current wars. (See Carl Conetta’s 2010 paper, “An Undisciplined Defense”, for more analysis of the Pentagon’s “spending surge.”) . . .

90% of All Deaths In War Are CIVILIANS
by WashingtonsBlog

U.S. military spending dwarfs all other countries:
“The United States is responsible for 41% of the world’s total military spending. The next largest in spending are China, accounting for 8.2%; Russia, 4.1%; and the United Kingdom and France, both 3.6%. . . . If all military . . . costs are included, annual [US] spending amounts to $1 trillion . . . . According to the DOD fiscal year 2012 base structure report, ‘The DOD manages global property of more than 555,000 facilities at more than 5,000 sites, covering more than 28 million acres.’ The United States maintains 700 to 1000 military bases or sites in more than 100 countries. . . .”

Capitalism as Social Control

World’s top firms cause $2.2tn of environmental damage, report estimates
by Juliette Jowit

The cost of pollution and other damage to the natural environment caused by the world’s biggest companies would wipe out more than one-third of their profits if they were held financially accountable, a major unpublished study for the United Nations has found. […]

The study, conducted by London-based consultancy Trucost and due to be published this summer, found the estimated combined damage was worth US$2.2 trillion (£1.4tn) in 2008 – a figure bigger than the national economies of all but seven countries in the world that year.

The figure equates to 6-7% of the companies’ combined turnover, or an average of one-third of their profits, though some businesses would be much harder hit than others. […]

The biggest single impact on the $2.2tn estimate, accounting for more than half of the total, was emissions of greenhouse gases blamed for climate change. Other major “costs” were local air pollution such as particulates, and the damage caused by the over-use and pollution of freshwater.

The true figure is likely to be even higher because the $2.2tn does not include damage caused by household and government consumption of goods and services, such as energy used to power appliances or waste; the “social impacts” such as the migration of people driven out of affected areas, or the long-term effects of any damage other than that from climate change. The final report will also include a higher total estimate which includes those long-term effects of problems such as toxic waste. . .

Hitting toughest climate target will save world $30tn in damages, analysis shows
by Damian Carrington

Achieving the toughest climate change target set in the global Paris agreement will save the world about $30tn in damages, far more than the costs of cutting carbon emissions, according to a new economic analysis.

Most nations, representing 90% of global population, would benefit economically from keeping global warming to 1.5C above pre-industrial levels, the research indicates. This includes almost all the world’s poorest countries, as well as the three biggest economies – the US, China and Japan – contradicting the claim of US president, Donald Trump, that climate action is too costly. […]

The research, published the journal Nature, is among the first to assess the economic impact of meeting the Paris climate goals. Data from the last 50 years shows clearly that when temperatures rise, GDP and other economic measures fall in most nations, due to impacts on factors including labour productivity, agricultural output and health.

The scientists used this relationship and 40 global climate models to estimate the future economic impact of meeting the 1.5C target – a tough goal given the world has already experienced 1C of man-made warming. They also assessed the long-standing 2C target and the impact of 3C of warming, which is the level expected unless current plans for action are increased.

“By the end of the century, we find the world will be about 3% wealthier if we actually achieve the 1.5C target relative to 2C target,” said Marshall Burke, assistant professor at Stanford University in the US, who led the new work. “In dollar terms, this represents about $30tn in cumulative benefits.”

The estimated cost of meeting the 1.5C target is about $0.5tn over the next 30 years,” he said: “So our evidence suggest the benefits of meeting the targets vastly outweigh the costs.”

“We also calculated what’s going to be the additional economic cost if we hit 3C instead of 2C. This will cost the globe an additional 5-10% of GDP, relative to 2C; that is tens of trillions of dollars. These are very large numbers,” he said.

The researchers acknowledge there are significant uncertainties in their economic modelling, but said they are confident that keeping climate change to 1.5C is very likely to benefit the vast majority of the world’s people.

Americans Can’t Afford Kleptocracy

“. . . In addition, fossil fuels enjoy $5 trillion in direct and indirect subsidies, and there’s ample infrastructure to extract and burn them. . .”

. . . What disturbs me is that the US ruling elite throw around trillions of dollars as if it were chump change. That is trillions of dollars every year (quite possibly an undercount at that, as not only is wealth given away but resources, opportunities, and access are given away before they are measured as wealth in any accounting, all of it defended and enforced by a military empire that is costly beyond imagination, costly also in terms of lives and human potential callously sacrificed). And we are talking about only one industry. They also waste trillions of dollars in selling other natural resources below market prices, in no-bid contracts for the defense industry, in all that goes into big ag, and much else. A few trillion here, a few trillion year, and on and on, in every sector of the economy every year, repeat ad nauseum for decades and generations on end. Yet we are told we don’t have enough money for basic needs of survival for Americans, that we can’t afford even to raise minimum wage for those who don’t earn enough to pay the bills, despite working multiple jobs. There are millions of Americans without affordable healthcare, sometimes without homes even, and going without food on a regular basis. But we can’t afford to ensure the public good. Well, I’m pretty sure those trillions upon trillions multiplied over a lifetime or longer could have gone a long way in investing in housing for all, universal healthcare, good schools even for the poor, clean water that is free of lead, and on and on.

Ralph Nader: . . . “These are trillions and trillions of dollars that come from people who work hard every day, but have not received what they should have received given their earned effort. . . And that’s why they’re huge polls supporting a lot of Sanders and Warren’s measures and they include quite a few conservative voters. You can’t have 65, 70, 75 percent vote for cracking down on corporate abuses, for a living wage, for universal health care unless you have quite a bit of conservative voters as well, right?”

Corporate Veganism

“This Poison Cartel of companies,” writes Vandana Shiva in reference to the corporate alliance behind EAT-Lancet, “have together contributed up to 50% Green house gases leading to climate change, and the chronic disease epidemic related to chemicals in food, loss in diversity in the diet, industrially processed junk food, and fake food.” The Lancet Journal itself, from a new report, is now warning of us the exact same thing, in that many corporate sectors (including those backing EAT-Lancet) receive $5 trillion in government subsidies: “Big Food’s obstructive power is further enhanced by governance arrangements that legitimize industry participation in public policy development” (Swinburn et al, The Global Syndemic of Obesity, Undernutrition, and Climate Change).”

Climate Change Worsening Faster Than Expected

A warming Arctic could cost the world trillions of dollars
by Stephen Leahy

Companies Expect Climate Change to Cost Them $1 Trillion in 5 Years
by Sara Harrison

The Bank of England lays bare the “very real” trillion-dollar risks of climate change
by Akshat Rathi

Arctic Warming Will Cost At Least $24 Trillion More Than We Thought, Study Finds
by Becky Ferreira

The $70-Trillion Climate Bill Coming Our Way
by Tim Radford

A 99’er Welcomes Death

A Disillusioned 99’er Shares His Disappointment With The American Dream, Welcomes Death

Since the end of 2008, when corporate America began enjoying the resumption of growth, profits have swelled from an annualized pace of $995 billion to the current $1.66 trillion as of the end of September 2010. Over the same period, the number of non-farm jobs counted by the Labor Department has slipped from 13.4 million to 13 million — there is no recovery for the unemployed and main street. We taxpayers have handed trillions of dollars to the same bank and insurance industry that started our economic disaster with its reckless gambling. We bailed out General Motors. We distributed tax cuts to businesses that were supposed to use this lubrication to expand and hire. For our dollars, we have been rewarded with starvation, homelessness and a plague of fear — a testament to post-national capitalism.

Freedom From Want, Freedom to Imagine

40 Acres and a Mule Would Be at Least $6.4 Trillion Today—What the U.S. Really Owes Black America
by Tracy Loeffelholz and DunnJeff Neumann

This is a struggle for power.

“[D]espite their misgivings, conservatives have reconciled themselves to capitalism because the expansion of the market has also meant the growth of the private sphere of domination and control. . . . [C]onservatism is about the freedom and ability of some people to dominate, control, and extract from others, which capitalist inequality and hierarchy make possible.”
Peter Kolozi

The United States is a plutocracy. But ultimately that means oligarchy. The reason that the wealthy rule is because wealth is power. I would clarify a point, though. Wealth isn’t limited to direct power over the masses for it also allows the wealthy to control all aspects of society, even those not directly related to wealth.

The plutocrats aren’t powerful merely because of wealth. It is that they are part of a ruling elite that works together to shut out everyone else, to exclude the majority not just from wealth but more importantly from power. This means maintaining their control of privileges and resources, by controlling the system of politics, economics, media, and education.

This is why the United States is such a brutally oppressive society. Much of what the ruling elite does comes at great costs to themselves, although at even greater costs to everyone else, which is the point in always ensuring others are harmed more. First and foremost, the purpose is social control. Wealth is a means to that end, but there are many other means to that end: military imperialism, police-intelligence state, mass incarceration, media propaganda, and much else.

It’s not so much class war, in the simple sense. “This is a struggle for power,” as Caitlin Johnstone makes clear in the piece below. And at present most Americans are losing the fight. This isn’t a metaphor. Millions of Americans are victims — locked away or otherwise trapped in the legal system, struggling in poverty and homelessness, sick and dying because lack of healthcare. Millions more are barely getting by and, out of fear, kept in their place as slaves to the system. The power and its consequences are concretely and viscerally real.

It is a war with growing numbers of casualties. But if the American public could realize the power that exists in numbers, it could instead become a revolution.

On a related note, thoughts along these lines lead straight to issues of inequality. As with oligarchy, inequality isn’t only about who has most of the wealth. As a divide in wealth indicates a divide in power, what this means is a divide in political membership and representation. It becomes harder for most Americans to participate in politics, partly because they don’t have the time or money to participate.

It requires ever larger amounts of wealth and resources, not to mention crony connections, to engage a successful campaign. And for those who do get elected, they do so either by belonging to the oligarchy or by becoming indebted to the oligarchy. This is why, as Johnstone points out, studies have shown that politicians mostly do whatever the rich want them to do.

As the rich gain greater power, they gain greater leverage to take even more power. It’s a cycle that has only one end point, total authoritarianism. That is, unless we the public stop it.

Some ask why does it matter that an elite has more money than everyone else. What an unbelievably naive question that is. To anyone who is confused on the issue, I’d suggest that they simply open their eyes.

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The Real Reason The Elites Keep Killing Single-Payer
by Caitlin Johnstone

The word “oligarchy” gets thrown around a lot in progressive discourse, usually to highlight the problem of money in politics, but not many people seem to really settle in and grapple with the hefty implications of what that word actually means. If you say that America is an oligarchy (and it certainly is, which we’ll get to in a second), you’re not merely saying that there is too much money in US politics or that the wealthy have an unfair amount of power in America. Per definition, you are saying that a small class of elites rule over you and your nation, like a king rules over his kingdom.

You’ve studied history, in school if nowhere else. How often have you read about kings voluntarily relinquishing their thrones and handing power to their subjects out of the goodness of their hearts? Once someone makes it to the very top of a society, how often have you known them to eagerly step down from that power position in order to give the people self-rule?

This isn’t about money, this is about power. The wealthiest of the wealthy in America haven’t been doing everything they can to stave off universal healthcare and economic justice in order to save a few million dollars. They haven’t been fighting to keep you poor because they are money hoarders and they can’t bare to part with a single penny from their trove. It’s so much more sinister than that: the goal isn’t to keep you from making the plutocrats a little less wealthy, the goal is to keep you from having any wealth of your own.

Power is intrinsically relative: it only exists in relation to the amount of power that other people have or don’t have. If we all have the same amount of government power, then none of us has any power over the other. If, however, I can figure out a way to manipulate the system into giving me 25 percent more governmental power than anyone else, power has now entered into the equation, and I have an edge over everyone else that I can use to my advantage. But that edge only exists due to the fact that you’re all 25 percent less powerful than I am. If you all become five percent more powerful, my power is instantly diminished by that much, in the same way a schoolyard bully would no longer enjoy the same amount of dominance if everyone at school suddenly grew five percent bigger and stronger.

Here’s where I’m going with all this: the ruling elites have set up a system where wealth equals power. In order for them to rule, in order for them to enjoy the power of kings, they necessarily need to keep the general public from wealth. Not so that they can have a little more money for themselves in case they want to buy a few extra private jets or whatever, but because their power is built upon your lack of power. By keeping you from having a few thousand extra dollars of spending money throughout the year, they guarantee that you and your fellow citizens won’t pool that extra money toward challenging their power in the wealth-equals-power paradigm that they’ve set up for themselves. […]

You can see, then, why the oligarchs must resist socialism and populism tooth and claw. You can see why their media propaganda outlets are so ferociously dedicated to tearing down any sincere attempt to fight the Walmart economy or allow an inch of ground to be gained in bringing any economic power to ordinary Americans. By asking for economic justice, you may think that you are simply asking for a small slice of the enormous pie the billionaire class could never hope to eat in a single lifetime, but what you are actually doing is asking for their crown, their throne and their scepter. You are making yourself a direct existential threat to their dynasty.

This is why they fought so hard to stomp out the Sanders movement. It wasn’t that Sanders himself was a threat to them, it’s that a large group of the unwashed masses was pooling their wealth together and leaping over seemingly insurmountable obstacles using nothing but tiny $27 donations as fuel. Imagine if Americans had more disposable income to invest in a better future for their kids by pointing it at changing America’s political landscape? Imagine a populist movement where Americans pushing for economic justice can suddenly all afford to pool a bunch of $270 donations to support a beloved candidate or agenda? Or $2,700? Under the current money-equals-power paradigm, the will of the people would become unstoppable, and the US power establishment would be forced to reshape itself in a way that benefits the people instead of benefitting a few billionaires.

* * *

Basalat Raja, Jun 24

This is why you will find them behaving in ways that are opposite to their “direct interests” — if you assume that their “direct interests” are making more money. A prosperous middle class will make the rich even richer, because more of us will be able to buy the products from the companies that they own large amounts of shares in, leading to more profits for those companies, and obviously, lifting share prices, making them richer.

But that means less control, since economically contented people are harder to herd. If you have a decent job and a decent house, it’s harder to tell you that Mexicans/Muslims/Russians/gays/etc. have stolen your job, etc.

Conservatives Pretending to Care About Economic Problems

Here is how a recent Wall Street Journal article begins (The Partisan Tax Policy Center):

For centuries discussions of tax policy centered on the collection of government revenues. As Louis XIV’s finance minister, Jean-Baptiste Colbert, famously wrote: “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the smallest possible amount of hissing.” This was the received wisdom until Adam Smith pointed out in 1776 that the wealth of nations—not the wealth of governments—is what really matters. The debate about the proper ends and means of taxes has raged ever since.

The authors, Marc Sumerlin and Noah Williams, invoke Adam Smith. They are relying upon the ignorance of their readership in not knowing what he actually wrote.

Smith was a strong critic of economic inequality. He didn’t think a free market and a free society was possible when inequality was allowed to grow. It corrupts the moral sentiments and destroys the social fabric, as he explained in great detail.

For this reason, Smith thought the upper classes should be taxed at a higher rate than the lower classes (i.e., progressive taxation). He also supported other progressive ideas such as public education to counter the negative consequences of industrial labor, and of course that public education would be paid for with progressive taxation.

It is either ignorant or dishonest of the authors to not mention any of this. I understand it’s an opinion piece, but that is not an excuse for disinforming the public. It is the job of journalists to know what they’re talking about. These two writers are acting as experts about the topic, and so they should hold themselves to a higher standard.

They then go on with stating that,

This year’s presidential election is no different. High marginal personal income-tax rates provide a disincentive for work, and the tax system heavily penalizes saving. American corporations face the highest statutory tax rate in the developed world. The disincentives to invest lead to slower growth, fewer jobs, lower wages and a less vibrant economy; and the fundamental purpose of tax reform should be to achieve broad prosperity.

This is further dishonesty. I’m not even going to pretend it might be mere ignorance at this point.

No one could honestly say that US corporations have the highest actual tax rate in the developed world. They are being misleading in what they say. There are so many loopholes and offshore accounts that many corporations avoid a lot of taxes.

Plus, corporate profits are higher than they’ve ever been, even after taxation. If there is a lack of investment, it isn’t because of a lack of money to invest. Part of the problem is some corporations spend more money on advertising, lobbying, astroturf, etc than they do in research and development.

What creates disincentive for work is the fact that there are more people than jobs. Also, there are more people who would like to start a business than can afford to start a business or can get a loan to do so. There is a reason the black market is one of the biggest sectors of the economy. People are willing to work, but when they can’t find legal work they look for illegal work. This has the sad side effect of landing many people in prison, which then further economically devastates these communities of high unemployment. Between offshoring and mechanization, the old good jobs are unlikely to come back.

These authors attack the Tax Policy Center. They do so not because they actually believe the data is wrong. It just doesn’t fit their ideological agenda and political narrative. They see it as an extension of the Democratic Party, as if the TPC simply speaks for the campaigns, which isn’t even accurate considering Sanders’ criticisms. Their attack on the TPC is simply a partisan tactic—the authors just dismiss the political left:

Democrats Hillary Clinton and Bernie Sanders are more focused on redistribution of income and have proposed higher taxes on capital gains and on high-income earners.

That goes back to my point about Smith. Redistribution has been a part of capitalism from its beginning. It was considered a necessary part of creating and maintaining a free market.

Neither Clinton nor Sanders is against capitalism. Clinton is a full on capitalist, to the point of being a globalist, corporatist neoliberal. As for Sanders, I just heard him make a strong defense of corporations in a debate, when discussing gun manufacturers. His ‘socialism’ is of an extremely capitalist-friendly variety… some might not even call it socialism. Sanders’s view is basically a moderate form of New Deal politics.

Many older conservatives who fear Sanders have themselves benefited earlier in their lives from redistributionist programs and funding, from cheap housing to cheap education. The older generations grew up at a time of the highest rate in US history for taxes on the rich and corporations. That was what paid for all the opportunities they had and helped so many of them get into the middle class. So, now they want to pull up the ladder behind them, really?

Like Smith, Sanders points to inequality as a central concern (and then Clinton parrots Sanders rhetoric). It turns out that Smith was right about inequality, and hence so is Sanders. I’ve previously pointed to a ton of data that shows that many social problems are directly correlated to inequality, and that for this reason decreasing inequality ends up benefiting the poor as well as the rich. Free markets function better to the degree inequality is decreased, as that guarantees economic mobility, grows the middle class, and incentivizes hard work—all of which most American conservatives and libertarians claim to value.

If one hates redistribution, then one should really hate inequality. In Redistribution, Inequality, and Growth, an interesting point was made by the authors (Ostry, Berg, & Tsangarides). After looking at a cross-country dataset, they concluded with three points:

First, more unequal societies tend to redistribute more. It is thus important in understanding the growth-inequality relationship to distinguish between market and net inequality.

Second, lower net inequality is robustly correlated with faster and more durable growth, for a given level of redistribution. These results are highly supportive of our earlier work.

And third, redistribution appears generally benign in terms of its impact on growth; only in extreme cases is there some evidence that it may have direct negative effects on growth. Thus the combined direct and indirect effects of redistribution—including the growth effects of the resulting lower inequality—are on average pro-growth.

The first point is most important. It is in an unequal society that redistribution is the most needed. This is why the US states with the highest inequality are the same states that receive more federal funding than they give in federal taxes. Partly, this is because these are the states with the highest per capita of welfare recipients. But also inequality exacerbates all of the related problems of poverty, such as health conditions which also need government funding to deal with. The US states with lower inequality tend to better solve their own problems in the first place and so are less dependent on federal redistribution.

Another paper titled The China Syndrome by Autor, Dorn and Hanson has related findings:

“Rising imports cause higher unemployment, lower labor force participation, and reduced wages in local labor markets, … [and] contemporaneous aggregate decline in U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets. … Reductions in both employment and wage levels lead to a steep drop in the average earnings of households. These changes contribute to rising transfer payments through multiple federal and state programs, revealing an important margin of adjustment to trade that the literature has largely overlooked. … The largest transfer increases are for federal disability, retirement and in-kind medical payments. Unemployment insurance and income assistance play a significant but secondary role.”

About inequality, there is another WSJ article by Lawrence B. Lindsey, How Progressives Drive Income Inequality. It’s more the same:

Hillary Clinton and Bernie Sanders are promising all types of programs to make America a more equal country. That’s no surprise. But when you look at performance and not rhetoric, the administrations of political progressives have made the distribution of income more unequal than their adversaries, who supposedly favor the wealthy.

It’s endless ignorance and ideological rhetoric. Timothy Noah, in an MSNBC article (Has income inequality lessened under Obama?), points out that,

The Tax Policy Center data show that the top 1% would get 6.5% more in income if Bush administration tax policies were still in place, while the bottom 20% would get 1.2% less. Relative to an imaginary Republican president, Obama has reduced income inequality. That’s something to be grateful for.

Only a complete ignoramus would blame Obama for inheriting the greatest economic problems since the Great Depression. It takes years for a presidents’ policies to take effect. If you want to know what the real impact is of Obama’s presidency, you’d want to look in the first few years of the next presidency who will likewise inherit the results of the prior administration. I’m no fan of Obama, but let’s do an honest appraisal.

It really pisses me off that these kinds of asshole conservatives even pretend to give a fuck about inequality. They’ve endlessly denied that it even matters. Now they have the audacity to say it matters after all, constantly backpedaling (just like with their denialist climate change arguments). They go so far as to say that inequality grew faster under Clinton than Reagan, when it was Reagan who created the permanent debt that all following presidents were forced to deal with. Can’t these people be honest for even moment?

Inequality, like the permanent debt, just keeps growing exponentially. The more it grows the faster it grows, worse leading to worse still. It’s a problem that has immense momentum for it isn’t just inequality of wealth but also of real world opportunities and political power. It just goes on and on, until something is done to stop the original cause and undo the harm done. But it is relevant that this growth slows down under Democratic administrations, as the data shows.

It is true that this slowing down doesn’t stop it, though—a valid point. Still, only a worthless piece of shit would try to blame this on ‘progressives’. The main blame recent Democrats must accept is that of embracing neoliberal voodoo economics. Clinton took up the policies of Reagan: welfare reform, deregulation, tough on crime, etc. Clinton may not have been a crazy right-winger like George W. Bush, but he certainly wasn’t much of a progressive, if we are to be honest. Both parties are corporatist at this point. Even so, the data shows there is a difference (see the work of James Gilligan, as quoted below).

I don’t get the point of these ideological games. Let me repeat one thing. I despise the two party system. They are part of the same problem. Nonetheless, the two parties aren’t exactly the same. We should acknowledge this simple fact, if we want to make any headway with these problems. It might be useful to know why rates of inequality, unemployment, homicides, suicides, etc get better or at least get less worse when Democrats win the presidency. It’s such a consistent pattern over more than a century.

Just imagine if we had an actual left-wing party, rather than just a slightly more moderate form of corporatism. If progressivism supposedly fails, then why do so many progressive countries and US states do so well? Why do Nordic social democrats do so well? Or how about social democracy in Canada, a country that by some measures has even greater diversity than the US? And what about one of the most successful local governments in US history, the Milwaukee sewer socialists?

Conservative response: *crickets chirping*

* * *

Why Some Politicians Are More Dangerous Than Others
By James Gilligan
Kindle Locations 801-830

Why has unemployment increased and then lasted longer, and why have recessions occurred so much more frequently and then lasted longer, during Republican administrations than during Democratic ones? And why have declines in unemployment and growth of the economy been so much greater when there was a Democratic president rather than a Republican in the White House? Is this simply a matter of bad luck for the Republicans and good luck for the Democrats? Is it a function of the “business cycle” that operates independently of human political choices, like a force of nature or an act of God that just happens to coincide with times when Republicans are presidents? A misfortune , to be sure, but not their fault?

As opposed to that supposition , many experts on the relationship between the political parties and the functioning of the economy have concluded that the latter is very much a function of the difference between the economic policies of the two parties. This has been shown, for example, with respect to why economic inequality increases under Republicans and decreases under Democrats. Writing in 2007, the Princeton political economist Larry Bartels 8 concluded that:

“The most important single influence on the changing US income distribution over the past half-century [has been] the contrasting policy choices of Democratic and Republican presidents. Under Republican administrations, real income growth for the lower- and middle-income classes has consistently lagged well behind the income growth rate for the rich – and well behind the income growth rate for the lower and middle classes themselves under Democratic administrations.”

Furthermore, Bartels observes that “these substantial partisan disparities in income growth … are quite unlikely to have occurred by chance.… Rather, they reflect consistent differences in policies and priorities between Democratic and Republican administrations.”

Bartels also points out that one measure of inequality, “the 80/ 20 income ratio, increased under each of the six Republican presidents in this [post-World War II] period.… In contrast, four of five Democratic presidents – all except Jimmy Carter – presided over declines in income inequality. If this is a coincidence, it is a very powerful one .” 9 He then goes on to show reasons why it “seems hard to attribute this to a mere coincidence in the timing of Democratic and Republican administrations.”

To extend the argument, the political economist Douglas Hibbs 10 points out that “Democratic adminis-trations are more likely than Republican ones to run the risk of higher inflation rates in order to pursue expansive policies designed to yield lower unemployment and extra growth.” Hibbs notes that “six of the seven recessions experienced since [1951] … occurred during Republican administrations. Every one of these contractions was either intentionally created or passively accepted … in order to fight inflation.” The cruelest irony of all, in this regard, is that from 1948 through 2005 the inflation rate during Republican administrations has been virtually indistinguishable from that achieved under Democratic ones (3.76 percent vs. 3.97 percent), while the degree of overall prosperity (real per capita GNP growth per year) has been 70 percent higher under Democrats than under Republicans (2.78 percent vs. 1.64 percent), as Bartels 11 has documented. So, while the Republicans have pursued economic policies that have increased unemployment, recessions, and inequality, all ostensibly in order to prevent inflation, they have not in fact succeeded in preventing inflation noticeably better than the Democrats have.”

Kindle Locations 850-853

Referring to a more recent period, Daniel Hojman and Felipe Kast14 have shown that during the 1990s (the decade when Clinton was president), significantly fewer people entered poverty and more escaped it than during the 1980s, the Reagan– Bush years.

Kindle Locations 927-95

The greatest increases in the concentration of wealth in the twentieth century occurred during the Republican administrations of the 1920s, which led to the Great Depression, and during those from the late 1960s into the 1990s (especially during the 1980s, the Reagan years). The polarization of wealth attained by the Republicans during the “Roaring Twenties” was reversed by the New Deal Consensus from 1933 to the late 1960s. This was accomplished by introducing income supplements for the needy (social security, unemployment benefits, etc.) that had not existed before, reducing unemployment, and creating not only a “minimum wage” but also what was in principle a “maximum wage,” by raising the highest marginal income tax rates above 90 percent. The result of these and other policies was what some economic historians have called the “Great Compression” in incomes and wealth that occurred during the most prosperous – and also the most economically equal, and the most non-violent – period in American history (at least with respect to domestic or intranational violence), from roughly 1940 to 1970. Once the Republicans returned to power in 1969, however, that period ended, and inequalities in wealth and income once again reached the same – or nearly the same – levels under Reagan as they had in the 1920s (as did the rates of lethal violence). The rate at which inequality was growing slowed down during the Clinton administration in the 1990s to only about a third of the rate at which it had been growing under his Republican predecessors. This may have been because he succeeded in reducing both the rate and the duration of unemployment, and increasing the highest marginal income tax rates, the Earned Income Tax Credit (the negative income tax which gives money to those who are poor despite having a job), the median and minimum wages, and applying other policies whose effect was to redistribute at least a bit of the national collective income and wealth from the rich to the poor. However, the momentum of the forces producing inequity was still so strong that by 1998 the wealthiest 1 percent of US citizens still owned 38 percent of the total household wealth of the country and 47 percent of the total financial wealth. In other words, the richest 1 percent owned nearly 40 percent of the country’s real estate and almost half of its money and other liquid assets (stocks, bonds, etc.).

Although we do not have comparable data yet for rates of lethal violence during the last year of the second Bush administration or the first two years of Obama’s presidency, we do know something about their economic policies, and their results. First of all, the current “Great Recession”—as it has been called, in acknowledgment of the fact that it is the worst economic failure the US (and perhaps the world has suffered since the “Great Depression” of the 1930s (a description that would also describe recessions that occurred during the prior Republican administrations of Nixon, Ford, Reagan, and Bush Sr., although this one is even worse)—occurred right on schedule—after one of the most conservative Republican presidents in US history had been in office for seven years. we also know that when Obama cut a deal with Congressional Republicans to extend unemployment benefits for the long-term unemployed, and to renew ax cuts for middle-class and poor families, he spoke of those groups as being taken hostage by the Republicans, who would not agree to help the unemployed and the two lower classes unless the Democrats would agree to continue the comparatively enormous income tax cuts that the Bush administration had given to the extremely rich, and to give an even larger cuts in the inheritance taxes that would primarily be of benefit only to the wealthiest 1 to 1/10 of 1 percent of the American population.

Kindle Locations 2130-2139

But even when looking only at domestic actions, I have to admit that, yes, it is true that Democrats often do the will of their corporate masters—how else could they persuade them to donate to the campaign funds without which they could not win any elections? For example, under Clinton, economic inequality continued to increase, which it had been doing since – and only since – the Republicans ended the 37– year period of Democratic hegemony that had lasted from 1933 until Nixon took office in 1969. But this inequality was increasing only about a third as fast under Clinton as it had been under Reagan and Bush Sr. 4 And there were many other indices of economic equality, which I have mentioned before, that did improve during Clinton’s terms in office. But most importantly, for the purposes of this book, lethal violence rates during Democratic administrations going back to the beginning of the twentieth century had fallen, not risen (as they had done under the Republicans). In that respect, the two parties were not merely different, they were opposite to each other! The same applies to the rates and duration of unemployment, both of which have, like the rates of suicide and homicide, also increased during Republican [administrations]

* * *

Conservatism, Murders & Suicides
Republicans: Party of Despair
Rate And Duration of Despair
Poor & Rich Better Off With Democrats
Unequal Democracy, Parties, and Class
‘Capitalist’ US vs ‘Socialist’ Germany

‘Capitalist’ US vs ‘Socialist’ Finland
Problems of Income Inequality

Immobility Of Economic Mobility; Or Running To Stay In Place
Not Funny At All

Mean Bosses & Inequality
The United States of Inequality
Economic Inequality: A Book List

Wealth, Power, and Addiction

I live and work in downtown Iowa City. I regularly walk through and spend time in the downtown area. Having lived here (with a few years spent elsewhere) since the 1980s, I’m always trying to get perspective about this city and where it is heading.

As I was meandering to work today, I went through the pedestrian mall and my mind was naturally drawn to the numerous bars. I’ve had a theory for a while about what drove out so many of the stores I used to like, the stores that the average person would want to shop at and could afford to shop at. There is a general gentrification going on that is being promoted and funded by TIFs (among I’m sure other causes), but there is more than just that going on. I’ve considered that maybe the bars have been so profitable that they’ve driven up the rental costs in the downtown, driven them too high for the average small business owner.

This is problematic. Few things can compete with alcohol. All that has been able to compete are mostly high end restaraunts, art galleries, gift shops, jewelry stores, etc.

I was thinking about what this means. Why is it that it is so hard to compete with bars? The first thing that came to mind is that alcohol is an addictive substance. For a large number of people, the more alcohol they drink the more they want to drink. It guarantees repeat customers who are willing to pay high costs for their preferred drug. There is a reason the only mom and pop grocery story left in town is a major retailer of alcohol, and of course it is downtown.

I’m not for prohibition of addictive substances. But we have to get serious about the externalized costs, whether from legal or illegal markets. I’m in favor of making most addictive substances legal, but putting high sin taxes on them and providing the highest quality rehab centers (along with whatever else is beneficial). The sin taxes should go to deal with all the externalized costs, from rehab centers to homeless shelters… also to deal with the problems developing in the downtown and other impacted areas.

There is something telling about how gentrification and the sale of addictive substances act as twin forces in utterly transforming this town. I’m far from convinced that these changes are positive.

* * * *

What is the relationship between gentrification, crony capitalism, and bars? Or to put it another way: What is the relationship between wealth, power, and addiction?

I wouldn’t be the first person to associate addiction with the consumerism of a capitalist society. Nor would I be the first to associate addiction to power relationships. I know William S. Burroughts had many interesting thoughts on the matter. Is it simply about social control? If so, to what end? Or is it as Burroughs suggests, just power serving power, like a disease?

I’m specifically thinking of the city I live in, but all of this applies more broadly. Also, the issue of alchol should be widened to all addictions and everything related to it: drug wars, mass incarceration, etc. Part of my context here is the book “Chasing the Scream” by Johann Hari. That author sees addiction as a social failure, rather than a mere personal issue. It isnt just the addict who is addicted, but the entire society addicted to the system. The alcoholic is addicted to alcohol, the bar owners are addicted to the profit they can make, and the local government is addicted to the tax money that is brought in.

The difference with alcohol, though is that it is a socially acceptable addiction. The entire identity of a small college town like Iowa City is tied up with alcoholism. The UI is famous for being a party school. The town was well known as a drinking town going back for more than a century. Generations of people have traveled from far away just to get drunk in this town.

What is at the heart of this? What is the driving force behind it all?

* * * *

I originally posted these thoughts on Facebook.

It was on my mind for some reason. Several people commented and it led to a detailed discussion, but my mind was no more clear afterwards. I still don’t quite know what to make of this line of thought.

It’s complicated, as I’m always repeating. There is a much larger context involved (German immigration, Prohibition, TIFs, etc). No changes come out of nowhere. There are always underlying causes that go much deeper, often to historical roots.

Here are a few other things I’ve written before about related issues. Also, along with them, I’ll throw in some articles about the local area.

https://benjamindavidsteele.wordpress.com/2014/09/18/tifs-gentrification-and-plutocracy/

https://benjamindavidsteele.wordpress.com/2013/10/17/generational-change-and-conflict-immigration-media-tech-etc/

https://benjamindavidsteele.wordpress.com/2014/08/25/the-fight-for-freedom-is-the-fight-to-exist-independence-and-interdependence/

https://benjamindavidsteele.wordpress.com/2013/10/28/centerville-ia-meeting-point-of-diversity-conflict/

https://benjamindavidsteele.wordpress.com/2013/10/20/generations-at-the-age-of-twelve/

https://benjamindavidsteele.wordpress.com/2013/10/14/ku-klux-klan-and-the-lost-generation/

http://thegazette.com/subject/life/beer-riots-of-1884-brought-violence-and-bloodshed-to-iowa-city-20140810

http://littlevillagemag.com/the-hops-original-gangsters-the-iowa-city-beer-riots-of-1884/

https://books.google.com/books?id=WaRjYoBZO3sC&pg=PA56&lpg=PA56&dq=%22iowa+city%22+AND+englert+AND+prohibition&source=bl&ots=_tc1dCXj3S&sig=sMsBOrtOH8vUdVSPXiSkMW4EHjE&hl=en&sa=X&ei=HO_fVJjgA9OwyASv_oK4CQ&ved=0CEIQ6AEwBg#v=onepage&q=%22iowa%20city%22%20AND%20englert%20AND%20prohibition&f=false

http://www.press-citizen-media.com/150/geiger.html

http://www.press-citizen-media.com/150/englert.html

https://stateinnovation.org/uploads/asset/asset_file/1529/Tax_Increment_Financing_A_Case_Study_of_Johnson_County.pdf

http://littlevillagemag.com/the-truth-about-tifs/

http://www.dailyiowan.com/2014/06/23/Metro/38106.html

http://www.iowahouserepublicans.com/government-oversight-coralville-use-of-tif-funds

http://thegazette.com/2012/04/12/coralvilles-bond-ratings-take-hit-on-hotel-costs-tif-reliance

https://www.moodys.com/research/MOODYS-DOWNGRADES-CITY-OF-CORALVILLES-IA-ANNUAL-APPROPRIATION-URBAN-RENEWAL–PR_243553

http://www.limitedgovernment.org/brief19-5.html

http://patch.com/iowa/iowacity/iowa-city-city-council-sidesteps-petition-on-tif-vote6cce46a1fd

http://www.northlibertyleader.com/content/coralville-ailing-finances-or-healthy-debt

To Be Poor, To Be Black, To Be Poor and Black

Poor kids who do everything right don’t do better than rich kids who do everything wrong
by Matt O’Brien, The Washington Post

Poor Grads, Rich Dropouts

Specifically, rich high school dropouts remain in the top about as much as poor college grads stay stuck in the bottom — 14 versus 16 percent, respectively. Not only that, but these low-income strivers are just as likely to end up in the bottom as these wealthy ne’er-do-wells. Some meritocracy.

What’s going on? Well, it’s all about glass floors and glass ceilings. Rich kids who can go work for the family business — and, in Canada at least, 70 percent of the sons of the top 1 percent do just that — or inherit the family estate don’t need a high school diploma to get ahead. It’s an extreme example of what economists call “opportunity hoarding.” That includes everything from legacy college admissions to unpaid internships that let affluent parents rig the game a little more in their children’s favor.

But even if they didn’t, low-income kids would still have a hard time getting ahead. That’s, in part, because they’re targets for diploma mills that load them up with debt, but not a lot of prospects. And even if they do get a good degree, at least when it comes to black families, they’re more likely to still live in impoverished neighborhoods that keep them disconnected from opportunities.

White High School Drop-Outs Are As Likely To Land Jobs As Black College Students
by Susan Adams, Forbes

African-Americans college students are about as likely to get hired as whites who have dropped out of high school. So says a new report from a non-profit called Young Invincibles, which analyzed data from the Bureau of Labor Statistics and the U.S. Census and examined the effect race and education levels have on unemployment. “We were startled to see just how much more education young African-Americans must get in order to have the same chance at landing a job as their white peers,” said Rory O’Sullivan, deputy director of Young Invincibles, in a statement.

RACE, CRIMINAL BACKGROUND, AND EMPLOYMENT
by Gwen Sharp, PhD, The Society Pages

Pager

joblessness prison

Group Membership

Life Event

 

 

 

Consumerism, Poverty, and Economic Mobility

There is an article from the New York Times that points to a distinction made before. It is “Changed Life of the Poor: Better Off, but Far Behind” by Annie Lowrey. The author also includes a nifty graph that starkly portrays the data, which should definitely check out.

She begins with an observation that many on the right have brought up to question that poverty is a real issue.

“Is a family with a car in the driveway, a flat-screen television and a computer with an Internet connection poor?

“Americans — even many of the poorest — enjoy a level of material abundance unthinkable just a generation or two ago. That indisputable economic fact has become a subject of bitter political debate this year, half a century after President Lyndon B. Johnson declared a war on poverty.”

In a consumerist society, wealth is defined as access to consumer products. Is that actual wealth in any meaningful sense?

“Indeed, despite improved living standards, the poor have fallen further behind the middle class and the affluent in both income and consumption. The same global economic trends that have helped drive down the price of most goods also have limited the well-paying industrial jobs once available to a huge swath of working Americans. And the cost of many services crucial to escaping poverty — including education, health care and child care — has soared.”

From the perspective of the poor, consumer products don’t likely make them feel all that wealthy. The poor are struggling today, just as they did in the past.

“For many working poor families, the most apt description of their finances and lifestyle might be fragile. Even with a steady paycheck, keeping the bills paid becomes a high-wire act and saving an impossibility.”

Not just struggling, but living on the edge. They aren’t faced with mere poverty. They also have to fear life getting much worse, such as losing their homes and not being able to keep food on the table.

“Two broad trends account for much of the change in poor families’ consumption over the past generation: federal programs and falling prices.”

More federal programs to make being poor relatively less desperate and uncomfortable. And more access to cheap consumer crap from Walmart.

“Many crucial services, though, remain out of reach for poor families. The costs of a college education and health care have soared. Ms. Hagen-Noey, for instance, does not treat her hepatitis and other medical problems, as she does not qualify for Medicaid and cannot pay for her own insurance or care.

“Child care also remains only a small sliver of the consumption of poor families because it is simply too expensive. In many cases, it depresses the earnings of women who have no choice but to give up hours working to stay at home.

““The average annual cost for infant care in the U.S. is $6,000 or $7,000 a year,” said Professor Ziliak of the University of Kentucky. “When you look at the average income of many single mothers, that is going to end up being a quarter of it. That’s huge. That is just out of reach for many folks.””

What isn’t available to the poor is opportunity to be anything other than poor. Economic mobility has decreased these past decades. Poor people in the past were worse off in many ways, but they also had more opportunities in many ways for economic mobility (cheap housing and college education, high paying jobs with good benefits, etc). Most poor people don’t want to be poor, don’t want to rely on federal programs, and don’t want cheap consumer crap from Walmart as the only appeasement for a life of misery and desperation.

“And many poor families barely make it from paycheck to paycheck. For evidence, economists point to the fact that children living in families with food stamps eat more calories at the beginning of the month than the end of it.

“Economists pointed out that many low-income families struggled to use even the assets they had: keeping gas in the car, paying for cable and keeping the electricity on. Many families rely on expensive credit. And even if those families sold their assets, often it would only provide them with a small buffer, too. “

Owning a car was once a luxury. Now a car is a necessity and a burden. Traveling further distances to work and shopping has become more common, for the small local factory and corner store have become rare. Meanwhile, public transportation hasn’t grown with the need for it. Poor people need vehicles, even when they can barely afford to pay for gas and repairs.

Sometimes the forced choice is between a tank of gas and buying groceries. But if there isn’t a tank of gas, a person can’t get to work and might lose their job. So, basic necessities such as food get sacrificed. Skipping meals isn’t healthy, but it won’t kill you right away. People can survive on very few calories, when they have to, although most people would like more than mere survival.

“In the end, many mainstream economists argue, the lives of the poor must be looked at in light of the nation’s overall wealth and economic advancement.

““If you handpick services and goods where there has been dramatic technological progress, then the fact that poor people can consume these items in 2014 and even rich people couldn’t consume them in 1954 is hardly a meaningful distinction,” said Gary Burtless, an economist at the Brookings Institution. “That’s not telling you who is rich and who is poor, not in the way that Adam Smith and most everyone else since him thinks about poverty.””

There is the rub.

Many things have become cheaper. But the most important things have become more expensive, specifically the very things that help people get out of poverty. It costs more to not be poor than it once did.

Rich Liberals Vs Conservatives w/ Author David Callahan

In this interview, David Callahan’s view intrigues me.

He is arguing that the liberal rich has been smaller in recent decades than the conservative rich. However, supposedly with the growing technology industry and the knowledge economy, there has been a growing liberal rich. These wealthy liberals are highly educated and got their wealth through entrepreneurship. It’s an interesting argument. Entrepreneurs are more likely to be liberal whereas old money and established corporations are likely to be conservative.

Over the last half century or so, the conservative rich created a massive infrastructure of conservative media, think tanks, lobbyist groups, and astro-turf movements. Liberals, on the other hand, have been very lacking in organization. But this apparently has been changing this last decade. I’d probably say it’s the internet that has been a boon for liberals because the internet makes it easier to do grassroots bottom-up organization which is where liberals excel. The argument, however, is that the internet has boomed along with the wealth of the liberals who started businesses in this sector. So, there was the introduction of tools for grassroots organization at the same time new money was funding liberal organizations and media.

It still seems liberals aren’t quite organized in a lock-step way as is seen among conservatives, but definitely a shift has happened.

The shift the author sees is in that the upper class is shifting away from the Republican party. “The upper class is becoming more educated, more secular, more based in urban America (particularly on the coasts). And the Republican party is becoming more religious, more based in small town America, and becoming less educated.” This argument seems supported by the evidence showing the average IQ of Republicans has decreased since a high point during Reagan’s administration.

Mean Bosses & Inequality

The following video shows one of the many dangers of wealth disparity.

I’ve posted about wealth disparity in the past and I was recently reading the book The Spirit Level by Richard Wilkinson and Kate Pickett (here is the official website: The Equality Trust). Here is a video by the authors:

The data shows the correlation between wealth disparity and a wide variety of health and social problems. Some have argued against this apparent correlation being causally related (or, to the extent there is a causal relation, that the results are necessarily negative… arguing, for example, that wealth disparity is inevitable for economic growth), but the research mentioned in the first video further strengthens this correlation (and the negative conditions that result) by putting it in context of the psychology of human behavior. As Cenk Uygur points out, we all have this predisposition to misuse power (whether we meritoriously gained that power or were merely given it), but this predisposition is just a potential that we can guard against.

As a liberal, I’d argue that if you remove the temptation by decreasing the wealth disparity, then you don’t have to worry about people struggling to resist the corrupting influence of too much power. Anyways, as the data shows, societies with high wealth disparities are bad even for the wealthy in that they too suffer greater problems than the wealthy in societies with low wealth disparities. So, it does no one any good… no matter what conservatives may claim about some hypothetical meritocracy.

Even if they were correct that the economy grows quicker with greater inequality, that is hardly a moral argument for inequality (What good is growth merely for the sake of growth?). As the US data shows, even though the economy is growing, this only directly benefits the upper class. This growing economy isn’t increasing the living wage or employment rates of the lower classes.

If you’re wondering about criticisms of the data and correlations from The Spirit Level, here are some relevant links:

http://www.leftfootforward.org/2010/07/debunking-the-rights-attacks-on-the-spirit-level/

http://www.thersa.org/__data/assets/pdf_file/0008/328517/Kate-Pickett-and-Richard-Wilkinson-Responses-to-All-Critics.pdf

http://www.equalitytrust.org.uk/saunders-response

http://www.guardian.co.uk/commentisfree/2010/jul/09/spirit-level-policy-exchange

The next video is a debate the authors of The Spirit Level had with one of their critics:

Here are some further videos:

Status Anxiety

Here is a fairly nice documentary. 

Many great points are brought up about the ideal of a meritocratic society.  One point made that I highly agree with is that if the rich deserve to be rich, then the poor deserve to be poor.

Where I think this documentary missed out is on the details.  The narrator states that American meritocracy doesn’t assert that all are equal but that all are given equal opportunity.  The problem I had is he didn’t analyze this in any great detail (environment, pollution, health, nutrition, medicine, neuroscience, psychology, sociology, anthropology, etc.).  The inequality between people is so vast in the world that any theoretical equal opportunity is just a joke.  It’s quite easy to criticize the very notion of equal opportunity on any number of grounds.

A very small minority hold most of the world’s wealth and power, and the vast majority of this wealth and power is passed down from generation to generation within a very small set of families and bloodlines.  A teacher that was interviewed stated that meritocracy was an eternal goal which implies it’s a goal that never is actualized in the real world.  So, it’s a pleasant fantasy to keep the masses contented.

Furthermore, the wealth and power of the developed industrialized nations is built on the very poverty and disempowerment of the rest of the world.  Does the slave-wage worker in a sweatshop deserve his lot?  Do Americans deserve the cheap products the get through the suffering of the poor?  Do Middle Easterners deserve all the conflict that the West bestows upon them simply because we think we deserve their oil?  Does South and Central America deserve all of the political unrest caused by the CIA and the American War on Drugs?

For further information on how to be included among the elite who deserve all of their power and wealth, see the following:

How to be Successful

Also, check out Barbara Ehrenreich’s view presented in her book Bright-sided.

http://www.npr.org/templates/story/story.php?storyId=113758696

http://www.nytimes.com/2009/10/10/books/10ehrenreich.html

http://www.statesman.com/life/content/life/stories/books/2009/11/01/1101ehrenreich.html

The inspiration for her writing about positive thinking was her experience with cancer.  She saw the darkside of positive thinking within the cancer community.

This brings to mind my own grandmother who died of cancer.  It’s because of her that I was raised in New Thought Christianity where positive thinking is very popular.  She was diagnosed with cancer.  She embraced the whole alternative medicine field and she had great faith in positive thinking.  My dad says she was utterly crushed when doing all the right things didn’t make her cancer go away.  She died of cancer.  She was a woman who had a great sense of faith, and apparently I inherited my spiritual interests from her.  I’ve seen all aspects of positive thinking and so I have a personal sense of what Ehrenreich is talking about.

But what is different is that positive thinking has become mainstream like never before.  It’s not just alternative types.  Positive thinking has become merged with the early American ideals of meritocracy, and together they create something greater than either alone.

In one video I saw of Ehrenreich, she made an interesting connection.  She was talking about the meritocracy ideal, but I don’t think she was using that term.  She was just talking about the ideal of positivie thinking in general within American culture.  She connected this with Ayn Rand’s libertarians.  If I remember correctly, she was making the argument that Rand was a one of the factors in popularizing positive thinking.  She mentioned the book The Secret and how it’s representative of our whole culture.  She blames the economic troubles we’re having now with the business culture of positive thinking, and it makes a lot of sense to me.