Sep 26, 2013

Rising Inequality in the US. We're the Worst in Income Inequality in the Developed World.

Robert Reich's Inequality For All movie is coming out and I think it's a must-see for those who are interested to know the economic reality in the US. Here's the trailer:

As I teach political science courses, we discuss questions like, what is justice, what's the mission statement of the US, what are the priorities and public policy we should have in order to make our country a better place to live for all, or at least to maximize the good life for as many people as possible.

I'm not surprised that so many students have bought the narrative that we, Americans [not all, of course; there are other "Americans" such as Canadians, Mexicans, etc.] are so much better off than everyone else in the world that inequality is acceptable. [The public doesn't really know the obscenity of the gap] That the "free market" is best when it's left alone. That government gets in the way so smaller, impotent government is best. That the best way to create jobs is to give tax breaks and special treatment to the wealthy--the "job creators".

Quoting from Reich's blog:
In reality, the “free market” is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on. 

Back in the Middle Ages, when a new class, the merchants, began to elbow their way into the old regime. It was a good thing though, because it demonstrated the fallacy of ascribed status  and political absolutism. Competition brought new ideas and the rediscovery of the "roots of western civilization" in ancient Greece & Rome.

But, the rich, regardless of their origin and ways to the top, have understood that the biggest returns/profits come by investing in the politics. With technology, the media is another realm where influencing the public narrative also pays in spades. Oh, and in the US, making elections very expensive is also a good way to wielding power.

It's Class War!

I have to lough, though it's not funny, when Joe Lotta, the GOP's NYC mayoral candidate is accusing the Democrat Bill de Blasio of engaging in class warfare! Have you noticed that it's the conservatives and the rich who are flinging this charge? If there were a war, it's been won by the rich. 

View From the top: Contempt 

Paul Krugman in today's (9/27/13) op-ed writes about the ridiculous views people at the very top of the economic pyramid have about the rest of us, while they're exhibiting a wealth of arrogance. How else would you describe their greed and their expectation that when the going is good, the profits remain private, but when they make stupid decisions and fail, they demand that the cost is socialized!

It defies common sense to have CEOs making tons of money plus bonuses while their companies failed and the public's money is used for a bailout! They say that it's like Hitler invading Poland or like the lynchings in the South!  I say, maybe it's time to really show them how a true invasion looks like. As for the lynchings, I'm not advocating violence, but when I hear such arrogant pronouncements I see (and secretly wish) elements of the French Revolution fittingly applied here.

Sep 15, 2013

We Are So Much Better than the Syrians and the Zimbabwans. Shut Up then, and Wave the Flag!

As the new academic year begins, one has to think about the benefits of education and whether a country is better off with educated citizens. Of course, getting a job is important and a formal education makes is easier to get better paying jobs. Most countries realize that a basic education--to read and write--is necessary so they've instituted mandatory and free public education. 

But, it's getting harder, due to the rising tuition, to get into a higher education, either a 2 or 4 year college. Recently, student debt became larger than mortgage debt! In other words, graduates begin their professional life in a deep hole and now owe more that more established homeowners, who presumably have a job (or had one when they got their mortgage) and perhaps are more financially better off than a young, unemployed graduate.

We may be heading back to the old days when the children of the elite could go to college, and, perhaps, a few other token students from the lower classes. Since the 1970s, real wages have remained stagnant over all. The consumers' buying power increased however since those days, because most of the goods have become cheaper. Food, clothing, appliances, cars, etc, are now cheaper. A sense of prosperity also fueled by personal debt, plus a constant barrage of a mythic narrative about the American dream made many people content if not happy. Yet, reality eventually sinks in.

Rising Inequality

Aristotle argued that extremes aren't good for a good society, or for a society to be good for the majority of the people. Extremes of power of wealth work in the interest who have wealth, and who in turn acquire political power, at the very least to protect (and enhance, 'cause you can never have enough) their interests. The elites try to control (and they go a great job) the narrative--the story about who we are, what the country is, our greatness, the land of opportunity, freedom, etc. It seems that a system that allows some people to rise demands (and gets) that they adopt the narrative. After all, once you climb a few rungs of the ladder it may be natural to belief that anyone can make it. Those who don't have personal faults. Look at individuals like Gates, Jobs, Jordan who made it. It must be true what they say about the American dream.

Yes, we have been more mobile, successful, free in comparison to other countries over the last two centuries. But, we had slavery, oppression of women & minorities, limited free speech, authoritarian government, the Great Depression and the Gilded Age whose attributes we're began to emulate in the last 20-30 years. This is not good. We're going back to extremes.

There's been lots of reports over those years about the rising inequality. [Here's a collection from NPR/WNYC] Let me give you some food for thought. Sasha Abramsky's book, "The American Way of Poverty" is one source. This is from WNYC's interview [link]
 "Poverty in America is made up of both the long-term chronically poor and the new working poor—the tens of millions seriously affected by the economic downturn and cutbacks in social welfare programs. Sasha Abramsky argues that for the majority of Americans, financial insecurity has become the new norm. He looks at economic inequality and poverty, and suggests ways for devising a fairer and more equitable social contract. In The American Way of Poverty, he looks at topics from housing policy to wage protections to affordable higher education, and calls political changes and a new, more effective War on Poverty."

Paul Krugman [blog, The Conscience of a Liberal] wrote a recent article about "Rich Man's Recovery" showing that since 2009, 95% of the economic gains have been captured by the top 1%. It's even worse, as 60% of the same gains have gone to even a smaller number of Americans, the 1/10th of 1%! Those are the ones with incomes over $1.9 million a year! I'm sure that the same people have been racking it in for many years before this period.

The Roosevelt Institute (yes, it's about FDR's progressiveness) shows a study that last year, the top 1% took home the largest share of income since 1928. But, the rich pay a bigger share of the taxes, we often hear! Well, this is indeed outrageous! The system that allows them to have so much more money while the middle class and the poor can't pay more is unconscionable! 

Romney pays 12.9% in income taxes while I'm paying 30% of my meager income, while I feel this pain a lot more.  How ridiculous is to say that a billionaire who pays 5% in taxes, writes a check of $50 million, while a teacher with a $50K/yr, pays only $15K?!! I know, how dare those laggards, the teachers, complain about tax policies? The super rich pay more in taxes that all the teachers in America. It's a scandal. Tsk.

Pro-capitalist publications, like the Economist and the Wall Street Journal, aside from their editorials, have published numerous articles about the widening of the gap in the US, that we're falling behind class-conscious and glass-ceiling old Europe. 

Which brings us back to the value of education which has a way to open people's minds just by exposing them to possibilities, knowledge, and hopefully how to evaluate, reason, and enhance the ability to ask questions and to amend. A better affluent, secure, less stressful life also enhances citizenship. You're more likely to be engaged, interested, voting, mobilizing citizen if you have the resources and the time to do so.

But, maybe that's what the elites don't want. Instead they invest heavily in the narrative of "feel good and proud American" while cutting the social safety net. This while higher education is getting more expensive. Oh, and you know what else follows the same track? Politics! 

But, don't you worry, the rich have lots of spare change to finance multi-billion dollar campaigns. We just sit back and relax and enjoy the show. They love tired and passive viewers for the show they've designed for us. Popcorn anyone? You poor with your refrigerators, microwaves, and flat-screen tvs... what more do you want? Have you noticed how deplorable the conditions are in Syria and Zimbabwe? Shut up then.