Inequality

[kenberg]

What next? Attack ads funded by outside business interests in the Water Cooler?

I have been outed! Who blabbed?

 

 

Seriously I think that the biggest problem is that no normal human being would want to run for election for anything anymore. "Coddled child molesters"? Maybe we need to bring back dueling as a way to deal with such accusations. I would hold a press conference, say "You can all go eff yourselves" and walk away. And unlike Nixon, I would not be back two years later.

 

Maybe it has always been this way. As I have mentioned, and yes I know it is more than once. in 1952 I came home from a Boy Scout meeting to see McCarthy on the tv implying Adlai Stevenson was at best a Communist Fellow Traveler or maybe an outright Soviet agent. Who needs this crap?

 

The solution has to come from the public. In 1962 in Minnesota the campaign for governor produced, late in the season, corruption charges against the Republican incumbent. The charges seemed iffy, and when Hubert Humphrey came on tv assuring us that the claims were solidly based I decided that for sure they were crap, which they were. The Democratic candidate won, probably based on the charges, but four years later he was ousted by a Republican. Part of the Republican strategy in that revenge campaign was to set up, with great media coverage, a "Last minute phony charges" committee. People remembered what this referred to, and they voted accordingly.

 

The public needs to make clear its revulsion at the Willie Horton style of campaign ads. The only way to put a stop to it is by making sure that such ads hurt more than they help. GHWB would say, as I recall, "I just don't know where those ads came from". That's not good enough. Running such ads has to cost the candidate votes, or they will continue to be run.

 

It's a cliche, but we get the government that we are willing to put up with.

 

And while I am on this soapbox, let me say a few words about the Supremes and prayers at city council meetings. In the supposedly conservative and unimaginative 1950s we, at least some of us, knew enough not to ram our religious views down the throats of others.

[y66]

From How 2014 Is Shaping Up to be the Darkest Money Election to Date:

 

April 30, 2014 -- When it comes to voters' knowledge about the deep-pocketed donors who are trying to influence their vote, the 2014 election cycle is on track to be the darkest election in recent history. And that's saying a lot, as each of the last three elections has shattered dark money records set in the preceding cycle.

 

http://www.opensecrets.org/news/assets_c/2014/04/chart%201%20-%20total%20spending%20by%20nondisclosing%20groups-thumb-620x260-12182.png

 

As the Senate Rules Committee convenes a hearing Wednesday to look at the surge in election spending by nondisclosing groups, we know that in the 2014 midterm cycle, three times more dark money spending has already been reported to the Federal Election Commission than at this point during the 2012 presidential campaign. In that election, 501©(4) social welfare organizations and 501©(6) trade associations, which do not have to disclose their donors to the public, spent more than $310 million.

 

To see the changes in action, just look at Iowa. At the beginning of April, a group called Freedom Partners ran an ad that accused Rep. Bruce Braley, a Democrat, of handing out special favors to donors. The ad claims that Braley "takes tens of thousands from his friends in the health insurance industry" who "stand to make billions" from the implementation of the Affordable Care Act.

 

"Call Bruce Braley," a masculine voice says in the ad. "Tell him: Stand with Iowa. Stop supporting Obamacare."

 

As it turns out, the accusations in the ad are false -- as in, flaming "pants on fire" false. Braley, who is running for U.S. Senate, campaigned on overhauling health care, and -- perhaps as a result -- his contributions from the health-care industry amount to a relative pittance.

 

The organization that targeted Braley, Freedom Partners, is not a PAC or a super PAC. It's a 501©(6) trade association, which, unlike other vehicles for political money, doesn't have to disclose its donors to the public.

 

Freedom Partners is the poster child for the growing flood of dark money in elections. It has fewer employees and more money than almost any other such entity. Of 19,240 recognized trade associations that filed tax returns in 2012, Freedom Partners' revenues clocked in at No. 9. In its first year, this group outraised established heavyweights such as the National Football League, the American Petroleum Institute, PhRMA, and the Chamber of Commerce -- all of which fall under the same tax classification.

 

And while trade associations with more than $100 million in annual expenditures employ, on average, more than 500 people and spend only about 6 percent of their outlays on grants to other organizations, Freedom Partners gave more than 99 percent of the $238 million it spent in 2012 to other groups, without hiring a single employee.

 

The hundreds of millions in grant money it doled out in 2012 provided most of the funding for one of the largest, most complex dark money networks in existence. This network, backed by the billionaire industrialists Charles and David Koch, was responsible for about 1 in 4 of the total dark money dollars spent in 2012. Members of the network spent more in 2012 than all liberal dark money groups combined have spent in the more than four years since the watershed Citizens United v. FEC Supreme Court decision.

 

It wasn't until this month, however, that Freedom Partners decided to forgo the network and fight its own battles. Thus one of the largest and most shadowy dark money organizations went after Braley under the guise of grassroots advocacy. It's a sign of more to come.

 

...

 

There's a disconnect between the dramatic escalation [of dark money spending] and the Supreme Court's clarity on the issue of disclosure. In the Citizens United decision, the justices were nearly unanimous in their support of disclosure as a means to inform citizens of "whether elected officials are 'in the pocket' of so-called moneyed interests." And just this month, in deciding McCutcheon v. FEC, the majority reiterated that disclosure was a reasonable burden on free speech that may "deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity."

 

Yet despite the court's recognition that voters should be able to know who's funding their elected officials, spending by dark money groups continues unabated, leaving voters in the dark.

[y66]

And while I am on this soapbox, let me say a few words about the Supremes and prayers at city council meetings. In the supposedly conservative and unimaginative 1950s we, at least some of us, knew enough not to ram our religious views down the throats of others.

 

I see one of your contemporaries authored the majority opinion. He writes that ramming religious views down the throats of others is “deeply embedded in the history and tradition of this country.” (Paraphrasing, obv.)

[kenberg]

I see one of your contemporaries authored the majority opinion. He writes that ramming religious views down the throats of others is "deeply embedded in the history and tradition of this country." (Paraphrasing, obv.)

 

Sometimes I think these folks are trying to convert the rest of us to mikeh's point of view. Myself, I am used to religious folks (correction: some religious folks) thinking that I am on the express train to Hell. If they are right then they get the last laugh. But meanwhile. maybe they could buzz off.

[barmar]

SMBC reminds us that "The rich get richer" starts at an early age:

 

http://www.smbc-comics.com/comics/20140519.png

 

[kenberg]

I have bought Capital (Piketty) and A Fighting Chance (Warren). I am reading Silken Prey (Sandford). Am I beyond hope?

[Winstonm]

I have bought Capital (Piketty) and A Fighting Chance (Warren). I am reading Silken Prey (Sandford). Am I beyond hope?

 

My god, man. Next thing you know you'll be singing the praises of Norway and Sweden.

[kenberg]

My god, man. Next thing you know you'll be singing the praises of Norway and Sweden.

 

Well, I am soon heading back to Minnesota for a bit which is almost the same thing, or so I thought. But

 

http://mentalfloss.com/article/56714/most-commonly-spoken-language-each-state-besides-english-and-spanish

 

Hmong? I repeat, Hmong? Sven? Ole? What's a Hmong?

[akwoo]

Well, I am soon heading back to Minnesota for a bit which is almost the same thing, or so I thought. But

 

http://mentalfloss.com/article/56714/most-commonly-spoken-language-each-state-besides-english-and-spanish

 

Hmong? I repeat, Hmong? Sven? Ole? What's a Hmong?

 

And I think even Somali is more common than Swedish, Norwegian, or German.

[kenberg]

And I think even Somali is more common than Swedish, Norwegian, or German.

 

Maybe Garrison Keillor needs some updating.

 

Minnesota is a wonderful place, the ice in the lakes almost always melts by June, and all the children are above average. We are looking forward to the trip.

[barmar]

Hmong? I repeat, Hmong? Sven? Ole? What's a Hmong?

 

I had to look it up -- they're people from mountain villages in Southeast Asia.

 

Wikipedia has this interesting tidbit about Hmong use in Minnesota:

In 2012 McDonald's introduced its first Hmong language advertising in the United States at a restaurant in Minneapolis. However it was unintelligible to Hmong speakers.^[22]

[y66]

Good conversation here about income inequality and what can be done about it by Robert Solow and Paul Krugman.

[Winstonm]

Good conversation here about income inequality and what can be done about it by Robert Solow and Paul Krugman.

 

I watched last night Inequality for All by Robert Reich. It is a really demoralizing explanation of where we are and what it will take to get out. The worst part was at a meeting Reich had to help workers get unionized, and one of the workers said, "I don't deserve to be treated any better than the company treats me."

 

It is that kind of faith in the right-wing ideology that makes me think there is no cure. As one comedian says, You can't fix stupid.

[kenberg]

It's late and I will listen to more of it tomorrow. I got far enough to find that Bob Solow regards me as a phony who just prattles on. This is because I am more oriented toward equality of opportunity than I am toward equality of outcome. There are many reasons for my thinking, the most obvious being that society can provide opportunity, this is under our control at least partly, but how a person responds to opportunity is under his/her control. I would like to see young people of today have opportunities, like I had, to make a decent life for themselves. Not that I didn't screw a few things up, which is sort of my point. I'll thank society for the opportunity, I'll take responsibility for the screw-ups.

 

 

I think problems can arise when we get too theoretical, and the first twelve minutes of this conversation were, I thought, vague and theoretical. Quite possibly I would agree with concrete proposals, I think it is even likely that I would. Instead I listen and find myself described as a phony prattling on.

 

It's similar in bridge. I am plating tomorrow with someone who prefers that 2H-Pass-2S be played as non-forcing. I can agree to that as long as I am not required to listen to or agree to all the theory about it. Same with Flannery. He likes it so I'll play it as long as I don't have to listen to why only stupid people like me prefer that 2D be a weak 2.

 

Anyway, I will listen to more tomorrow. Or soon.

[y66]

I watched last night Inequality for All by Robert Reich. It is a really demoralizing explanation of where we are and what it will take to get out. The worst part was at a meeting Reich had to help workers get unionized, and one of the workers said, "I don't deserve to be treated any better than the company treats me."

 

It is that kind of faith in the right-wing ideology that makes me think there is no cure. As one comedian says, You can't fix stupid.

Krugman observed in his conversation with Solow that even self identified Republicans acknowledge the value of unions and that Germany is a good example of a successful economy where industry and unions have a strong relationship. I hope you'll watch some of it. I think even kenberg will enjoy a few minutes of their conversation (the Solow parts anyway). They both talked about the era of their youth when inequality was not a problem. They both think the challenge isn't to "solve inequality" by achieving some numerical goal but to get things going in the right direction along some of the lines suggested by Atkinson whose book they were discussing. They are both optimistic that this will eventually happen but it will probably take few election cycles.

[kenberg]

I got up to 25 minutes. A concrete proposal was referred to. Apparently the book suggests making people into "mini-capitalists",perhaps just Krugmand's phrasing of the idea, by giving young people $15,000, or "the equivalent of $15,000" as Solow put it, as they turn 18. Both Solow and Krugman disagree with this idea. I had not really thought of this as an idea, but I think I also disagree.

 

Other than that, Solow opined that the way to reduce inequality would be to reduce the income of the people at the top and raise the income of people at the bottom. Yes, I can see how that would reduce inequality. He spoke of envy as a stronger motivating force than compassion. For me, that is not the case. And, observing others, I am not so sure it is generally true. He also suggests that there should be public policy to protect workers but he doesn't really see how this could be done.

 

 

Turning toward the positive.

The most informative part that I saw was that the book contains fifteen proposals. I searched a bit on the web hoping to see them, but so far to no avail. But I will try to find them or maybe even buy the book.

 

I think, at some fundamental level, I see life differently than Krugman and Solow do. As I listen to them, I realize that I just don't think their way. It's similar to my reaction to religious people when they speak. I may agree with a suggestion, we may be able to get together on practical matters, but I will never see the world in their way.

This is, of course, always the challenge. How to work productively with people who really are quite different in their outlook.

 

Added: I see that Atkinson is a Brit, I suppose that is why the $15,000 was phrased as the equivalent of $15,000.

[Winstonm]

Krugman observed in his conversation with Solow that even self identified Republicans acknowledge the value of unions and that Germany is a good example of a successful economy where industry and unions have a strong relationship. I hope you'll watch some of it. I think even kenberg will enjoy a few minutes of their conversation (the Solow parts anyway). They both talked about the era of their youth when inequality was not a problem. They both think the challenge isn't to "solve inequality" by achieving some numerical goal but to get things going in the right direction along some of the lines suggested by Atkinson whose book they were discussing. They are both optimistic that this will eventually happen but it will probably take few election cycles.

 

 

The problem is so much larger than even inequality - that inequality has led to inequality of power. Medicine is controlled by big pharma; food is controlled by big ag; the motive of all the corporations involved is not good health nor good healthy food - it is solely pofit.

 

Half of the schools in our country have ties to fast food restaurants to provide school lunches; this in turn leads to obese children; obese children lead to increased drug prescriptions, meaning more profit for pharma. There is no incentive to break this cycle.

 

We are screwed.

[y66]

25 minutes is no doubt well up into the top 1 percent of the worldwide audience for this conversation.

 

Some highlights for me:

 

Solow and Krugman both ask: What kind of a world do we want to live in? This is an obvious question. But I don’t hear it being asked much.

 

Solow and Krugman see current levels of inequality as incompatible with democratic ideals of citizenship, equal opportunity and personal dignity. Solow takes a stronger moral position. He finds the current level of inequality repulsive. Isn’t it refreshing to hear scholars and people in positions of responsibility say what they really think?

 

Solow and Krugman think the goal should be to steadily reduce inequality, get the trend going in the right direction, not try to hit specific numerical targets. This is obviously useful for keeping the focus of policy discussions and negotiations where it belongs and from getting bogged down before they even get started. But also more pragmatic than I was expecting from two Clark Medal and Nobel Prize winning progressive, liberal economists.

 

Most Democrats, Independents and Republicans see inequality as a big problem. They disagree about the roles of government and business to reduce inequality.

 

Does anyone think that a society in which government pursues a policy of less than full employment is desirable?

 

We need to strengthen the bargaining power of workers. Check.

 

We need to improve corporate governance. Check.

 

We need cumulative limits on gift giving and other tactics for avoiding estate taxes. Check.

 

This isn’t about globalization. 80 percent of U.S. GDP is services.

 

They did not discuss the role of automation.

 

The minimum wage is rising. Corporations like Walmart and McDonalds have recently raised the minimum wage they pay workers, partly in response to moral suasion and public pressure but also because of tightening labor markets and common business sense thinking about the contributions of high turnover and low productivity to the bottom line.

 

Obamacare is working.

 

The effective tax rate on 1 percenters is now close to what it was in the pre-Reagan era due to the expiration of Bush tax cuts and the 3.8 percent “Medicare surtax” on unearned income for high income taxpayers.

 

The current political climate is obviously not favorable for doing a lot to address income inequality. But this is not a short term problem. It will take a few election cycles to improve the political climate. But this will happen. And when it does, we can do more.

[StevenG]

Does anyone think that a society in which government pursues a policy of less than full employment is desirable?

 

We need to strengthen the bargaining power of workers. Check.

If you had full employment, would you need to strengthen the bargaining power of workers? Wouldn't the labour market suddenly start to give the workers power automatically?

[kenberg]

I have been thinking about this. I took an intense personal dislike toward Solow but he will survive and I will move on..

 

I live in Maryland and our ex-gov has just declared his intention to run against Hillary for the nomination.

 

The Washington Post examined his history as governor and as Baltimore mayor at some length.

 

An excerpt, concerning his time as mayor:

 

O'Malley also drew mixed reviews for his economic development strategy. As mayor, he directed money and government support toward middle-tier neighborhoods, which he thought offered the best chance of recovery, or toward ones that had access to job centers.

 

Many urban experts praised the approach as a smart use of scarce resources. But critics said it diverted aid from communities most in need of help.

 

O'Malley played a key role in pushing forward the redevelopment of a poor neighborhood near the Johns Hopkins medical complex in East Baltimore. He did so partly to keep Hopkins, the city's largest private employer, from taking its expansion plans outside the city. He also targeted that community because it had a relatively good chance to prosper, owing to its proximity to hospital jobs.

 

 

"Mixed result" is the genral tone of the Post's review of his time. But consider this. Maryland is a very Democratic state. Spiro Agnew was governor when I moved here in 1967, O'Malley's predecessor, serving one term, was a Republican, and his succcessor, our current governor, is a Republican, but the rest have been Democrats. I am sure the Legislature has been Democratic since I arrived. O'Malley was energetic and interested in doing his best. One can argue how much of that was for his own future but of course all politicians, or people in other careers, want to be successful. He is praised for "data driven" policies, for advancing gay marriage, for many things. Still, the Baltimore public school system is a disaster, the murder rate is up, poverty is up.

 

 

We are dealing with a difficult problem. Hardly news.

 

Here is a quote from the article that relates back to why I found Solow so aggravating:

 

"The problem is that it is politically unsalable," said Donald F. Norris, director of the School of Public Policy at the University of Maryland Baltimore County. "We are a nation of suburbs, and suburban residents and elected officials do not care a whit about declining central cities."

 

I really wish these guys would stop telling me what I do and do not care about. If he were just being insulting, that would be bad enough. But it drives people away when he needn't do so. Added: OK, strictly speaking, he only insulted elected officials. But his point is pretty clear. He cares, I don't care.

 

We all have a common interest in making things work. But it really is not obvious how to bring it about.

 

I'll probably get back to this later, I am getting hungry.

[MrAce]

But isn't much of the controversy over anonymous donations? If the politician doesn't know who you are, how can there be quid pro quo?

 

 

You know very well that it is anonymous to you and me and to public. Not to the person who gets the donation. When a large amount of money is donated, they know very well where it is coming from.

[y66]

If you had full employment, would you need to strengthen the bargaining power of workers? Wouldn't the labour market suddenly start to give the workers power automatically?

Full employment is a goal. You can move in the direction of full employment but you probably can’t get there or stay there very long unless the government acts as an employer of last resort which Krugman and Solow support or you have something like World War II.

 

Intuitively, it seems to me that strengthening bargaining power makes it harder to achieve full employment because it makes it harder to keep wages at levels consistent with what employers are willing to pay to maintain full employment. But if strengthening bargaining power really means creating strong unions, which I think it does, for example, like the German Confederation of Trade Unions, then it seems there’s a lot more going on than just collective bargaining for wages and that unions become a major player in determining what kind of society people want to live in, what kinds of arrangements with government and industry are needed to achieve this and, if full employment is a shared goal, what it will take to achieve it.

 

From The German Confederation of Trade Unions home page (English language site):

 

That is what we stand for

 

The German Confederation of Trade Unions strives for a society founded on solidarity. Employment and income have to be distributed fairly and people have to be given an equal chance regardless of origin, colour or gender. The DGB offers future-oriented concepts for a social market economy which is tailored to the changed social conditions of today. Humane modernisation and fair distribution: That is what we stand for.

 

Welfare state People have to be able to rely on social assistance in the future as well. They need security to be able to plan their lives, raise a family and safeguard the future. Only on this basis will each individual be ready to take on new challenges and take initiative in working life. That is the essential prerequisite for a modern working society.

 

Pay It is precisely in times of economic uncertainty that collective agreements protect the conditions of employment and payment which many now take for granted. Only strong unions can negotiate binding collective agreements and guarantee their protective, regulatory, forming and peacekeeping function. Hence free collective bargaining is and remains indispensable.

 

Codetermination The right to codetermination is a central element in any democracy. Through codetermination social responsibility is assumed – which ensures social peace. Codetermination enhances people´s quality of life by creating individual room for manoeuvre. All employees therefore have to be granted the maximum degree of own responsibility and selfdetermination.

 

Training The dynamic changes in our working environment make it all the more important that every employed person has a wide range of qualifications. Consequently all employees must be given access to further training courses. Thus prepared, each individual can face the challenges of a global, knowledge-intensive labour market with self-assurance.

 

Labour market Only a sustained recovery of the economic situation can bring about the upswing which is so urgently needed on the German labour market. Hundreds of thousands of jobs can be saved and created by means of a flexible and aggressive budgetary policy. Here the “Offensive for Employment and Economic Growth” launched by the DGB offers effective solutions in the long term.

Sorry for the long answer. I think the short answer is no.

[kenberg]

I would also expect the answer ro be no. Full employment would help. For one thing, people are employed rather than jobless, and for another it no doubt would drive up wages in at least some industries. But the good wages that working people once enjoyed were brought about by strong unions. If coal miners are prepared to go on strike, and prepared to beat the crap out of anyone who crosses the picket line, wages will go up.

 

Times change. John L. Lewis died in 1969 (I looked it up). Now we wait for the government to pass minimum wage laws. Unions wanted better than the minimum, and they did not plan to wait all that long.

 

The old days are gone, they are not coming back. Not everything was right back then either, we deal with the age that we live in.

 

But yes, full employment would be a plus.

[mike777]

Robots are coming pretty darn close to being able to sew piece work.

This is a full blown threat to garment workers.

[kenberg]

Ar bridge the other day a woman was happily telling me that her son, about to graduate from high school, has been accepted into a robotics program at Maryland and is wait listed at MIT. He, I assume with others, built a robot that shoots free throws and it sunk 9 out of 10. No doubt it is only a matter of time until it can do a mean lay up.

 

The revenge of the Tin Man!