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Redistribution of wealth up as the essence of neoliberalism

Decline of middle class in the USA under neoliberal regime
and rise of Economic Royalists ("Let them eat cake ")

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"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

-- Abraham Lincoln

Isn’t inequality merely the price of America being No. 1? ... That’s almost certainly false... Prior to about 20 years ago, most economists thought that inequality greased the wheels of progress. Wealth Inequality in America Overwhelmingly now, people who study it empirically think that it’s sand in the wheels. ... Inequality breeds conflict, and conflict breeds wasted resources”

Samuel Bowles,
cited from Economist's View: Inequality and Guard Labor

From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.

Nicholas D. Kristof, NYT, November 6, 2010

Roughly 1 in 4 Americans is employed to keep fellow citizens in line and protect private wealth from would-be Robin Hoods

Guard Labor Why is Inequality Bad

If labor is a commodity like any other, who is the idiot in charge of inventory management?.

Economist's View '


Introduction

As aptly noted Neoliberalism – the ideology at the root of all our problems ( The Guardian,  April 15, 2016)

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you'll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness , the collapse of ecosystems, rejection of the current neoliberal elite by majority of American people and the rise of candidates like Donald Trump . But we respond to these developments as if they emerge in isolation, apparently unaware that they have all been either catalyzed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly? 

One of the key property of neoliberalism is that it recasts inequality as virtuous. The market ensures that everyone gets what they deserve. If you deserve to die, so be it. Of course. that does not apply to the financial oligarchy which is above the law and remains unpunished even for very serious crimes. This fate is reserved for bottom 99% of population.

One of the key property of neoliberalism is that it recasts inequality as virtuous. The market ensures that everyone gets what they deserve. If you deserve to die, so be it. Of course. that does not apply to the financial oligarchy which is above the law and remains unpunished even for very serious crimes.

Neoliberalism sees competition as the defining characteristic of human relations, In other words neoliberal economic model uses "unable to compete in the labor market" label for poor people in the same way Nazi used concept of Untermensch for Slavic people.

That also mean that for those outside top 20% of population the destiny is brutal exploitation not that different then in slave societies. It victimizes and artfully creates complex of inferiority among poor people trying to brainwash that they themselves are guilty in their status and that their children do not deserve better. This is why subsidies for colleges are cut. Unfortunately now even lower middle class is coming under tremendous pressure and essentially is moved into poverty. Disappearance of well-paid middle class "white collar" jobs such as IT jobs and recently oil sector jobs  and conversion of many jobs to temp or to outsourcing/off-shoring model is a fact that can't be denied. Rise in inequality in the USA for that last twenty years of neoliberalism domination is simply dramatic and medial income per family actually dropped.

Everything is moving in the direction of a pretty brutal joke: poor Americans just got a new slave-owners. And now slaves are not distinguished by  the color of their skin.

The economic status of Wal Mart employees (as well as employees of many other retailers, who are predominantly women) are not that different from slaves. In "rich" states like NY and NJ Wal-Mart cashiers are paid around $9 an hour. That's around $18K a year if you can get 40hours a week (big if),  You can't survive on those money living alone and renting an apartment. Two people might be able to survive if they share the apartment costs.  And forget about that if you have a child (aka "single mothers"  as a new face of the US poverty). You can survive only with additional social programs like food stamps. In other words the federal state subsidizes Wal-Mart, increasing their revenue at taxpayers expense.

Piketty thinks a rentier society (which is another definition of neoliberal society) contradicts the meritocratic worldview of democratic societies and is toxic for democracy as it enforces "one dollar one vote" election process (corporation buy politicians; ordinary people just legitimize with their votes pre-selected by elite candidates, see Two Party System as Polyarchy):

 “…no ineluctable force standing in the way to extreme concentration of wealth…if growth slows and the return on capital increases [as] tax competition between nations heats up…Our democratic societies rest on a meritocratic worldview, or at any rate, a meritocratic hope, by which I mean a belief in a society in which inequality is based more on merit and effort than on kinship and rents. This belief and hope play a very crucial role in modern society, for a simple reason: in a democracy the professed equality of rights of all citizens contrasts sharply with the very real inequality of living conditions, and in order to overcome this contradiction it is vital to make sure that social inequalities derive from ration and universal principles rather than arbitrary contingencies. Inequalities must therefore be just and useful to all, at least in the realm of discourse and as far as possible in reality as well…Durkheim predicted that modern democratic society would not put for long with the existence of inherited wealth and would ultimately see to it that the ownership of property ended at death.” p. 422

A neo-liberal point discussed in Raymond Plant's book on neo-liberalism is that if a fortune has been made through no injustice, then it is OK. So we should not condemn the resulting distribution of wealth, as fantastically concentrated as it may be. That that's not true, as such cases always involve some level of injustice, if only by exploiting some loophole in the current laws. Piketty is correct that to the extent that citizens understood the nature of a rentier society they would rise in opposition to it. The astronomical pay of "super-managers" cannot be justified in meritocratic terms. CEO's can capture boards and force their incentive to grow faster then  company profits. Manipulations with shares buyback are used to meet "targets". So neoliberal extreme is definitely bad.

At the same time we now know the equality if not achievable and communism was a pipe dream that actually inflicted cruelty on a lot of people in the name of unachievable utopia. But does this means that inequality, any level of inequality, is OK. It does not look this way and we can actually argue that extremes meet.

But collapse of the USSR lead to triumph of neoliberalism which is all about rising inequality. Under neoliberalism the wealthy and their academic servants, see inequality as a noble outcome. They want to further enrich top 1%, shrink middle class making it less secure, and impoverish poor. In other words they promote under the disguise of "free market" Newspeak a type of economy which can be called a plantation economy. In this type of the economy all the resources and power are in the hands of a wealthy planter class who then gives preference for easy jobs and the easy life to their loyal toadies. The wealthy elites like cheap labor. And it's much easier to dictate their conditions of employment when unemployment is high. Keynesian economics values the middle class and does not value unemployment or cheap labor. Neoliberals like a system that rewards them for their loyalty to the top 1% with an easier life than they otherwise merit. In a meritocracy where individuals receive public goods and services that allow them to compete on a level playing field, many neoliberal toadies would be losers who cannot compete.

In a 2005 report to investors three analysts at Citigroup advised that “the World is dividing into two blocs—the Plutonomy and the rest … In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer", or indeed the “Russian consumer”.

In other words there are analysts that believe that we are moving to a replay of Middle Ages on a new, global level, were there are only rich who do the lion share of the total consumption and poor, who does not matter.

We can also state, that under neoliberal regime the sources of American economic inequality are largely political. In other words they are the result of deliberate political decision of the US elite to shape markets in neoliberal ways, and dismantle New Deal.

Part of this "shaping the markets in neoliberal ways" was corruption of academic economists. Under neoliberalism most economists are engaged in what John Kenneth Galbraith called "the economics of innocent fraud." With the important correction that there is nothing innocent in their activities. Most of them, especially "neoclassical" economists are prostitutes for financial oligarchy. So their prescription and analysis as for the reasons of high unemployment should be taken with due skepticism.

We also know that power corrupts and absolute power corrupts absolutely. That means that existence of aristocracy might not be optimal for society "at large". But without moderating influence of the existence of the USSR on appetites of the US elite, they engage is audacious struggle for accumulation as much power and wealth as possible. In a way that situation matches the situation in 1920th, which was known to be toxic.

But society slowly but steadily moves in this direction since mid 80th. According to the official wage statistics for 2012 http://www.ssa.gov , 40% of the US work force earned less than $20,000, 53% earned less than $30,000, and 73% earned less than $50,000. The median US wage or salary was $27,519 per year. The amounts are in current dollars and they are "total" compensation amounts subject to state and federal income taxes and to Social Security and Medicare payroll taxes. In other words, the take home pay is less.

In other word the USA is now entered an inequality bubble, the bubble with the financial oligarchy as new aristocracy, which strives for absolute control of all layers of the government. The corruption has a systemic character. It take not only traditional form of the intermarriage between Wall street and DC power brokers (aka revolving doors). It also create a caste of guard labor to protect oligarchy.

Redistribution of wealth up as the goal of neoliberalism makes it unsustainable social system

As George H.W. Bush once  said (can't find exact quote):   Neoliberalism is about redistribution of wealth into fewer, higher and tighter hands. Until approximately 2008  the increasing disparity between rich and poor has, largely been non-disruptive in the USA because the lower 90% have been placated enough, by way of the proverbial bread and circuses, not to cause any waves. Sure, there have been little movements here and there, such as Occupy Wall Street, but they were quickly crashed by enormous national security state intelligence agencies.

But just imagine another financial crisis and its consequences

The public mindset might quickly turn against the neoliberal "The New Class" -- neoliberal nomenklatura. Even under Trump with his fake promises social tension had risen significantly because:

Can you imagine the backlash against the Neoliberalism in such circumstances? I suspect it might be larger then in 2008 despite the power of national security state and the fact that the Americans are too dumbed down and drugged to revolt.

As one ZeroHedge commenter put it: "It's not rich against poor. It's FIRE sector parasites vs. earned income hosts."

New global caste structure and stratification of the US society

Some researchers point out that neoliberal world is increasingly characterized by a three-tiered social structure(net4dem.org):

This process of stratification and fossilization of "haves" and "haves-not" is now pretty much established in the USA. The US population can be partitioned into five distinct classes, or strata:

  1. Lower class (poor) bottom 20%. Those folks have income close to official poverty line, which varies from state to state. In "expensive states" like NJ and NY this category ranks much higher then national level, up to 40%. Official figures from a Census Bureau that state that in 2010 twelve states had poverty rates above 17%, up from five in 2009, while ten metropolitan areas had poverty rates over 18%. Texas had the highest poverty rate, at 33.4%, followed by Fresno, California, at 26.8%.

    According to figures published by the Social Security Administration in October 2011, the median income for American workers in 2010 was $26,364, just slightly above the official poverty level of $22,025 for a family of four. Most single parent families with children fall into this category. Many single earner families belong to this category too.

    The median income figure reflects the fact that salaries of 50% of all workers are less then $26,364 and gives a much truer picture of the real social conditions in the United States than the more widely publicized average income, which was $39,959 in 2010. This figure is considerably higher than median income because the distribution of income is so unequal—a relative handful of ultra-high income individuals pulls up the average.

  2. Lower middle class (60%). Depending on class model used, the middle class may constitute anywhere from 25% to 66% of households. Typically includes households with incomes above $46,326 (all households) or $67,348 (dual earners households) per year. The latter is more realistic. In order for two earners family to qualify each earner should get approximately $34K a year or more ($17 per hour wage with 40 hours workweek). Per household member income is around $23.5K
    The lower middle class... these are people in technical and lower-level management positions who work for those in the upper middle class as lower managers, craftspeople, and the like. They enjoy a reasonably comfortable standard of living, although it is constantly threatened by taxes and inflation. Generally, they have a Bachelor's and sometimes Masters college degree.

    —Brian K. William, Stacy C. Sawyer and Carl M. Wahlstrom, Marriages, Families & Intimate Relationships, 2006 (Adapted from Dennis Gilbert 1997; and Joseph Kahl 1993)[4]

  3. Upper middle class (top 20%). The includes households with incomes above 91K per year.
  4. Upper class (elite): top 1%. Annual comes (AGI) for this group exceed $380K per year. Commonly called multimillionaires (net worth two millions or more). In 2010 controlled at least 25% of total nation income (23.5% in 2007, 8.9% in 1979) . Top 1% owns more than 90% of combined or 33.8% of the nation private wealth.
  5. Super rich (top 0.01%, oligarchs, super-elite, or top 1000 families). A close to this category of super-rich are billionaires. US is home of 425 billionaires, while Russia and China have 95 and 96 correspondingly. The average worth of the world's billionaires is now $3.5 billion, or $500 million more than last year.( Forbes)

Share of consumption for families outside upper middle class (with income, say, below $91K per year (80% of US households) is much less then commonly assumed. That means that in the USA consumer spending are driven by upper class and as such is pretty much isolated from decline of wages of lower 80% of population. The median household income in the United States is around $50K.

Possibility of the return to the clan society

The danger of high level of inequality might be revival of nationalism and return to clan (mafia) society in the form of corporatism or even some form of national socialism. Mark S. Weine made this point in his book The Rule of the Clan. What an Ancient Form of Social Organization Reveals About the Future of Individual Freedom . From one Amazon review:

Weiner's book is more than worth its price simply as an armchair tour of interesting places and cultures and mores, deftly and briefly described. But he has a more serious and important point to make. While the social cohesion that the values of the clan promote is alluring, they are ultimately at odds with the values of individual autonomy that only the much-maligned modern liberal state can offer.

Even the state's modern defenders tend to view it, at best, as a necessary evil. It keeps the peace, upholds (somewhat) international order, and manages the complexity of modern life in ways that allow individuals to get on with their journeys of personal fulfillment.

Weiner shows (in too brief but nevertheless eloquent ways) that this reductive view of the state is insufficient to resist the seductive appeal of the clan, and that it will be for the worse if we can't find ways to combat this allure within the legal structures of modern liberalism.

Read alongside James Ault's masterful participant study of fundamentalist Baptism, Spirit and Flesh, and draw your own conclusions.

Dramatic increase in the use of guard labor and conversion of the state into National Security State

Of course the elite is worried about security of their ill-gotten gains. And that's partially why the USA need such huge totally militarized police force and outsize military. Police and military are typical guard labor, that protects private wealth of the US plutocrats. Add to this equally strong private army of security contractors.

Other suggested that not only the USA, but the global neoliberal society is deeply sick with the same disease that the US society expected in 20th (and like previously with globalism of robber barons age, the triumph of neoliberalism in 1990th was and is a global phenomenon).

High inequality logically leads to dramatic increase of guard labor and inevitable conversion of state into National Security State. Which entail total surveillance over the citizens as a defining factor. Ruling elite is always paranoid, but neoliberal elite proved to be borderline psychopathic. They do not want merely security, they want to crush all the resistance.

Butler Shaffer wrote recently that the old state system in the United States is dying before our very eyes:

A system that insists on controlling others through increasing levels of systematic violence; that loots the many for the aggrandizement of the few; that regulates any expressions of human behavior that are not of service to the rulers; that presumes the power to wage wars against any nation of its choosing, a principle that got a number of men hanged at the Nuremberg trials; and finally, criminalizes those who would speak the truth to its victims, has no moral energy remaining with which to sustain itself.

Low mobility created potential for the degeneration of the elite

It is pretty clear that the USA became a society where there is de facto royalty. In the form of the strata which Roosevelt called "Economic royalists". Jut look at third generation of Walton family or Rocafeller family.

Remember the degenerative Soviet Politburo, or, for a change, unforgettable dyslexic President George W Bush ? The painful truth is that in the most unequal nations including the UK and the US – the intergenerational transmission of income is very strong (in plain language they have a heredity-based aristocracy). See Let them eat cake. In more equal societies such as Denmark, the tendency of privilege to breed privilege is much lower but also exists and is on the rise. As Roosevelt observed in a similar situation of 30th:

These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power.

High inequality undermines social cohesion

Neoliberalism and its ideology(Randism) undermined social cohesion, making society members more hostile to each other and as such less willing to defend the country in case of real danger. Betrayal of the country is no longer an unspeakable crime.

The purpose of government should be to foster a "civil society". The slogan of the "oligarchic right" is "me first", or, as in Paul Ryan's adoration of Ayn Rand, greed is good. Objectivism became kind of new civic religion, with the goal of maximizing the wealth of a single individual at the expense of the civil society is a virtue. And those new social norms (instilled by MSM) allow the fat cats simply to stole from everybody else without fear of punishment. See an outburst from Stephen Schwarzman. If there are two societies inside of the country with bridges burned, the bottom part is less willing to spill blood for the upper part. And having a contractual army has its own set of dangers, as it spirals into high level of militarism (being in war is a new normal for the USA during the last 30 years or so), which while enriching part of the elite bankrupts the country. The quality of roads is a testament of this process.

Countervailing mechanisms and forces are destroyed. Plutocrats now can shape the conversation by buying up newspapers and television channels as well as funding political campaigns. The mousetrap of high inequality became irreversible without external shocks. The more unequal our societies become, the more we all become prisoners of that inequality. The key question is: Has our political system been so degraded by misinformation and disinformation that it can no longer function because it lost the touch with reality? The stream of outright falsehoods that MSM feed the lemmings (aka society members) is clearly politically motivated. But a side effect (externality) of all that brainwashing efforts is that nobody including players at the top of the government now understands what's going on. Look at Obama and Joe Biden.

As the growth of manufacturing base slowed down and return on capital dropped, the elite wants less government social spending. They wants to end popular government programs such as Social Security, no matter how much such cuts would cause economic dislocation and strains in the current social safety net. The claims are that these programs are "Waste" and could be cut without anyone, but the "moochers" noticing the effects. They use the economic strain felt by many in the economy to promote these cuts. They promise that cuts to vital programs will leave more money in the pockets of the average person. In reality, the increase in money will be marginal, but the effects on security and loss of "group purchasing power" economy of scale will make the cuts worse than worthless (Economist's View Paul Krugman Moment of Truthiness)

Two party system makes the mousetrap complete

The US system of voting (winner take all) leads inexorably to Two party system. Third parties are only spoilers. Protest votes in the current system are COUNTERPRODUCTIVE (i.e. they help the evil, not the merely bad). Deliberate and grotesque gerrymandering further dilutes protest votes.

Again, I would like to stress that rich consumers, few in number, getting the gigantic slice of income and the most of consumption (that's why the US consumption was so resilient during two last financial crises). There are the rest, the “non-rich”, accounting for surprisingly small bites of the national pie.

The question arise "Why we should care?". Most of the readers of this page are not at the bottom bracket anyway. Many are pretty high up. Here is one possible answer:

But should we care? There are two reasons we might: process and outcome.

Creating a strata of the outcasts aka permanently unemployed

It is very difficult to understand the real situation with inequality in the USA today without experiencing long term unemployed.

Or if you forced into job of a WalMart cashier or other low paid employee. Job that does not provide a living minimum wage. You need to watch this YouTube video Wealth Inequality in America to understand the reality. The video was posted anonymously by someone using the YouTube handle politizane. It is pretty clear that not only the USA became a society where there is de facto royalty, economic royalty but also a strata of people completely deprived. An Outcaste.

And the royalty became recklessly like it should promoting to the top the likes of recovered alcoholic Bush II or "private equity shark" Romney (and remember who Romney father was).

See Over 50 and unemployed

Education is no longer the answer to rising inequality

In the current circumstances education is no longer the answer to rising inequality. Instead of serving as a social lift it, at least in some cases, became more of a social trap. This is connected with neoliberal transformation of education. With the collapse of post-war public funded educational model and privatization of the University education students face a pretty cruel world. World in which they are cows to milk. Now universities became institutions very similar to McDonalds ( or, in less politically correct terms, Bordellos of Higher Learning). Like McDonalds they need to price their services so that to receive nice profit and they to make themselves more attractive to industry they intentionally feed students with overspecialized curriculum instead of concentrating on fundamentals and the developing the ability to understand the world. Which was a hallmark of university education of the past.

Since 1970th Neo-Liberal University model replaced public funded university model (Dewey model). It is now collapsing as there are not that many students, who are able (and now with lower job prospects and tale of graduates working as bartender, willing) to pay infated tuition fees. That means that higher education again by-and-large became privilege of the rich and upper middle class.

Lower student enrollment first hit minted during dot-com boom expensive private colleges, who hunt for people with government support (such a former members of Arm forces). It remains viable only in elite universities, which traditionally serve the top 1% and rich foreigners. As David Schultz wrote in his article (Logos, 2012):

Yet the Dewey model began to collapse in middle of the 1970s. Perhaps it was the retrenchment of the SUNY and CUNY systems in New York under Governor Hugh Carey in 1976 that began the end of the democratic university. What caused its retrenchment was the fiscal crisis of the 1970s.

The fiscal crisis of the 1970s was born of numerous problems. Inflationary pressures caused by Vietnam and the energy embargoes of the 1970s, and recessionary forces from relative declines in American economic productivity produced significant economic shocks, including to the public sector where many state and local governments edged toward bankruptcy.

Efforts to relieve declining corporate profits and productivity initiated efforts to restructure the economy, including cutting back on government services. The response, first in England under Margaret Thatcher and then in the United States under Ronald Reagan, was an effort to retrench the state by a package that included decreases in government expenditures for social welfare programs, cutbacks on business regulations, resistance to labor rights, and tax cuts. Collectively these proposals are referred to as Neo-liberalism and their aim was to restore profitability and autonomy to free markets with the belief that unfettered by the government that would restore productivity.

Neo-liberalism had a major impact on higher education. First beginning under President Carter and then more so under Ronald Reagan, the federal and state governments cut taxes and public expenditures. The combination of the two meant a halt to the Dewey business model as support for public institutions decreased and federal money dried up.

From a high in the 1960s and early 70s when states and the federal government provided generous funding to expand their public systems to educate the Baby Boomers, state universities now receive only a small percentage of their money from the government. As I pointed out in my 2005 Logos “The Corporate University in American Society” article in 1991, 74% of the funding for public universities came from states, in 2004; it was down to 64%, with state systems in Illinois, Michigan and Virginia down to 25%, 18%, and 8% respectively. Since then, the percentages have shrunk even more, rendering state universities public institutions more in name than in funding.

Higher education under Neo-liberalism needed a new business model and it found it in the corporate university. The corporate university is one where colleges increasingly use corporate structures and management styles to run the university. This includes abandoning the American Association of University Professors (AAUP) shared governance model where faculty had an equal voice in the running of the school, including over curriculum, selection of department chairs, deans, and presidents, and determination of many of the other policies affecting the academy. The corporate university replaced the shared governance model with one more typical of a business corporation.

For the corporate university, many decisions, including increasingly those affecting curriculum, are determined by a top-down pyramid style of authority. University administration often composed not of typical academics but those with business or corporate backgrounds had pre-empted many of the decisions faculty used to make. Under a corporate model, the trustees, increasingly composed of more business leaders than before, select, often with minimal input from the faculty, the president who, in turn, again with minimal or no faculty voice, select the deans, department heads, and other administrative personnel.

University presidents became way too greedy

Neoliberalism professes the idea the personal greed can serve positive society goals, which is reflected in famous neoliberal slogan "greed is good". And university presidents listen. Now presidents of neoliberal universities do not want to get $100K per year salary, they want one, or better several, million dollar salary of the CEO of major corporation (Student Debt Grows Faster at Universities With Highest-Paid Leaders, Study Finds - NYTimes.com)

At the 25 public universities with the highest-paid presidents, both student debt and the use of part-time adjunct faculty grew far faster than at the average state university from 2005 to 2012, according to a new study by the Institute for Policy Studies, a left-leaning Washington research group.

The study, “The One Percent at State U: How University Presidents Profit from Rising Student Debt and Low-Wage Faculty Labor,” examined the relationship between executive pay, student debt and low-wage faculty labor at the 25 top-paying public universities.

The co-authors, Andrew Erwin and Marjorie Wood, found that administrative expenditures at the highest-paying universities outpaced spending on scholarships by more than two to one. And while adjunct faculty members became more numerous at the 25 universities, the share of permanent faculty declined drastically.

“The high executive pay obviously isn’t the direct cause of higher student debt, or cuts in labor spending,” Ms. Wood said. “But if you think about it in terms of the allocation of resources, it does seem to be the tip of a very large iceberg, with universities that have top-heavy executive spending also having more adjuncts, more tuition increases and more administrative spending.”

... ... ...

The Chronicle of Higher Education’s annual survey of public university presidents’ compensation, also released Sunday, found that nine chief executives earned more than $1 million in total compensation in 2012-13, up from four the previous year, and three in 2010-11. The median total compensation of the 256 presidents in the survey was $478,896, a 5 percent increase over the previous year.

... ... ...

As in several past years, the highest-compensated president, at $6,057,615 in this period, was E. Gordon Gee, who resigned from Ohio State last summer amid trustee complaints about frequent gaffes. He has since become the president of West Virginia University.

This trick requires dramatic raising of tuition costs. University bureaucracy also got taste for better salaries and all those deans, etc want to be remunerated like vice presidents. So raising the tuition costs became the key existential idea of neoliberal university. Not quality of education, but tuition costs now are the key criteria of success. And if you can charge students $40K per semester it is very, very good. If does not matter that most population get less then $20 an hour.

The same is true for professors, who proved to be no less corruptible. And some of them, such as economic departments, simply serve as prostitutes for financial oligarchy. So they were corrupted even before that rat race for profit. Of course there are exceptions. But they only prove the rule.

As the result university tuition inflation outpaced inflation by leaps and bounds. At some point amount that you pay (and the level of debt after graduation) becomes an important factor in choosing the university. So children of "have" and "have nots" get into different educational institutions and do not meet each other. In a way aristocracy returned via back door.

Neoliberal university professes "deep specialization" to create "ready for the market" graduates. And that creates another problem: education became more like stock market game and that makes more difficult for you to change you specialization late in the education cycle. But early choice entail typical stock market problem: you might miss the peak of the market or worse get into prolonged slump as graduates in finance learned all too well in 2008. That's why it is important not to accumulate too much debt: this is a kind of "all in" play in poker. You essentially bet that in a particular specialty there will be open positions with high salary, when you graduate. If you lose this bet you are done.

As a result of this "reaction to the market trends" by neoliberal universities, when universities bacem appendixes of HR of large corporations students need to be more aware of real university machinery then students in 50th or 60th of the last century. And first of all assume that it is functioning not to their benefits.

One problem for a student is that there are now way too many variables that you do not control. Among them:

On the deep level neoliberal university is not interested to help you to find specialization and place in life where can unleash your talents. You are just a paying customers much like in McDonalds, and university interests are such they might try to push you in wrong direction or load you with too much debt.

If there is deep mismatch as was with computer science graduates after crash of dot-com boom, or simply bad job market due to economy stagnation and you can't find the job for your new specialty (or if you got "junk" specialty with inherent high level of unemployment among professionals) and you have substantial education debt, then waiting tables or having some other MacJob is a real disaster for you. As with such selaries you simply can't pay it back. So controlling the level of debt is very important and in this sence parents financial help is now necessary. In other words education became more and more "rich kids game".

That does not mean that university education should be avoided for those from families with modest means. On the contrary it provides unique experience and help a person to mature in multiple ways difficult to achieve without it. It is still one of the best ways to get vertical mobility. But unless parents can support you you need to try to find the most economical way to obtain it without acquiring too much debt. This is you first university exam. And if you fail it you are in trouble.

For example, computer science education is a great way to learn quite a few things necessary for a modern life. But the price does matter and prestige of the university institution that you attend is just one of the factors you should consider in your evaluation. It should not be the major factor ("vanity fair") unless your parents are rich and can support you. If you are good you can get later a master degree in a prestigious university after graduation from a regular college. Or even Ph.D.

County colleges are greatly underappreciated and generally provide pretty high standard of education, giving ability to students to save money for the first two years before transferring to a four year college. They also smooth the transition as finding yourself among people who are only equal or superior then you (and have access to financial respource that you don't have) is a huge stress. The proverb say that it is better to be first in the village then last in the town has some truth in it. Prestigious universities might provide a career boost (high fly companies usually accept resumes only from Ivy League members), but they cost so much that you need to be a son or daughter of well-to-do parents to feel comfortably in them. Or extremely talented. Also amount of career boost that elite universities provide depends on whom your parents are and what connections they have. It does not depend solely on you and the university. Again, I would like to stress that you should resist "vanity fair" approach to your education: a much better way is to try to obtain BS in a regular university and them try to obtain MS and then, if you are good, PHD, in a prestigious university. Here is a fragment of an interesting discussion that covers this topic (Low Mobility Is Not a Social Tragedy?, Feb 13, 2013 ; I recommend you to read the whole discussion ):

kievite:

I would like to defend Greg Clack.

I think that Greg Clack point is that the number of gifted children is limited and that exceptionally gifted children have some chance for upper move in almost all, even the most hierarchical societies (story of Alexander Hamilton was really fascinating for me, the story of Mikhail Lomonosov http://en.wikipedia.org/wiki/Mikhail_Lomonosov was another one -- he went from the very bottom to the top of Russian aristocracy just on the strength of his abilities as a scientist). In no way the ability to "hold its own" (typical for rich families kids) against which many here expressed some resentment represents social mobility. But the number of kids who went down is low -- that's actually proves Greg Clack point:

(1) Studies of social mobility using surnames suggest two things. Social mobility rates are much lower than conventionally estimated. And social mobility rates estimated in this way vary little across societies and time periods. Sweden is no more mobile than contemporary England and the USA, or even than medieval England. Social mobility rates seem to be independent of social institutions (see the other studies on China, India, Japan and the USA now linked here).

Francisco Ferreira rejects this interpretation, and restates the idea that there is a strong link between social mobility rates and inequality in his interesting post.

What is wrong with the data Ferreira cites? Conventional estimates of social mobility, which look at just single aspects of social status such as income, are contaminated by noise. If we measure mobility on one aspect of status such as income, it will seem rapid.

But this is because income is a very noisy measure of the underlying status of families. The status of families is a combination of their education, occupation, income, wealth, health, and residence. They will often trade off income for some other aspect of status such as occupation. A child can be as socially successful as a low paid philosophy professor as a high paid car salesman. Thus if we measure just one aspect of status such as income we are going to confuse the random fluctuations of income across generations, influenced by such things as career choices between business and philosophy, with true generalised social mobility.

If these estimates of social mobility were anywhere near correct as indicating true underlying rates of social mobility, then we would not find that the aristocrats of 1700 in Sweden are still overrepresented in all elite occupations of Sweden. Further, the more equal is income in a society, the less signal will income give of the true social status of families. In a society such as Sweden, where the difference in income between bus drivers and philosophy professors is modest, income tells us little about the social status of families. It is contaminated much more by random noise. Thus it will appear if we measure social status just by income that mobility is much greater in Sweden than in the USA, because in the USA income is a much better indicator of the true overall status of families.

The last two paragraphs of Greg Clark article cited by Mark Thoma are badly written and actually are somewhat disconnected with his line of thinking as I understand it as well as with the general line of argumentation of the paper.

Again, I would like to stress that a low intergenerational mobility includes the ability of kids with silver spoon in their mouth to keep a status close to their parent. The fact that they a have different starting point then kids from lower strata of society does not change that.

I think that the key argument that needs testing is that the number of challengers from lower strata of the society is always pretty low and is to a large extent accommodated by the societies we know (of course some societies are better then others).

Actually it would be interesting to look at the social mobility data of the USSR from this point of view.

But in no way, say, Mark Thoma was a regular kid, although circumstances for vertical mobility at this time were definitely better then now. He did possessed some qualities which made possible his upward move although his choice of economics was probably a mistake ;-).

Whether those qualities were enough in more restrictive environments we simply don't know, but circumstances for him were difficult enough as they were.

EC -> kievite...

"the number of gifted children is limited"

I stopped reading after that. I teach at a high school in a town with a real mix of highly elite families, working class families, and poor families, and I can tell you that the children of affluent parents are not obviously more gifted than the children of poor families. They do, however, have a lot more social capital, and they have vastly more success. But the limitations on being "gifted" are irrelevant.

According to an extensive study (Turkheimer et al., 2003) of 50,000 pregnant women and the children they went on to have (including enough sets of twins to be able to study the role of innate genetic differences), variation in IQ among the affluent seems to be largely genetic.

Among the poor, however, IQ has very little to do with genes -- probably because the genetic differences are swamped and suppressed by the environmental differences, as few poor kids are able to develop as fully as they would in less constrained circumstances.

kievite -> EC...

All you said is true. I completely agree that "...few poor kids are able to develop as fully as they would in less constrained circumstances." So there are losses here and we should openly talk about them.

Also it goes without saying that social capital is extremely important for a child. That's why downward mobility of children from upper classes is suppressed, despite the fact that some of them are plain vanilla stupid.

But how this disproves the point made that "exceptionally gifted children have some chance for upper move in almost all, even the most hierarchical societies"? I think you just jumped the gun...

mrrunangun:

The early boomers benefitted from the happy confluence of the postwar boom, LBJ's Great Society efforts toward financial assistance for those seeking to advance their educations, and the 1964 Civil Rights Act which opened opportunities for marginalized social groups in institutions largely closed to them under the prewar social customs in the US.

The US Supreme Court is made up of only Jews and Catholics as of this writing, a circumstance inconceivable in the prewar America. Catholics were largely relegated to separate and unequal institutions. Jews' opportunities were limited by quotas and had a separate set of institutions of their own where their numbers could support such. Where their numbers were not sufficient, they were often relegated to second rate institutions.

Jewish doctors frequently became the leading men in the Catholic hospitals in Midwestern industrial towns where they were unwelcome in the towns' main hospitals. Schools, clubs, hospitals, professional and commercial organizations often had quota or exclusionary policies. Meritocracy has its drawbacks, but we've seen worse in living memory.

College textbook publishing became a racket with the growth of neoliberalism. That means at least since 1980. And it is pretty dirty racket with willing accomplishes in form of so called professors like Greg Mankiw. For instance, you can find a used 5th edition Mankiw introductory to Microeconomics for under $4.00, while a new 7th edition costs over $200. An interesting discussion of this problem can be found at Thoughts on High-Priced Textbooks'

See Slightly Skeptical View on University Education

New generation of robber barons: US oligarchy never was so audacious

As Jesse aptly noted at his blog post Echoes of the Past In The Economist - The Return of the Übermenschen the US oligarchy never was so audacious.

And it is as isolated as the aristocracies of bygone days, isolation reinforced by newly minted royalty withdrawal into gated estates, Ivy League Universities, and private planes.

They are not openly suggesting that no child should rise above the status of parents, presumably in terms of wealth, education, and opportunity. But their policies are directed toward this goal. If you are born to poor parents in the USA, all bets are off -- your success is highly unlikely, and your servile status, if not poverty is supposedly pre-destined by poor generic material that you got.

This is of course not because the children of the elite inherit the talent, energy, drive, and resilience to overcome the many obstacles they will face in life from their parents. Whatever abilities they have (and regression to the mean is applicable to royalty children too), they are greatly supplemented, of course, by the easy opportunities, valuable connections, and access to power. That's why the result of SAT in the USA so strongly correlated with the wealth of parents. And a virtual freedom from prosecution does not hurt either, in case they have inherited a penchant for sociopathy, or something worse, along with their many gifts.

The view that the children of the poor will not do well, because they are genetically inferior became kind of hidden agenda. These are the pesky 99% just deserve to be cheated and robbed by the elite, because of the inherent superiority of the top one percent. There is no fraud in the system, only good and bad breeding, natural predators and prey.

This line of thinking rests on the assumption that I succeed, therefore I am. And if you do not, well, so be it. You will be low-paid office slave or waiter in McDonalds with a college diploma as it is necessary for the maximization of profits of the elite. There is no space at the top for everybody. Enjoy the ride... Here is an typical expression of such views:

"Many commentators automatically assume that low intergenerational mobility rates represent a social tragedy. I do not understand this reflexive wailing and beating of breasts in response to the finding of slow mobility rates.

The fact that the social competence of children is highly predictable once we know the status of their parents, grandparents and great-grandparents is not a threat to the American Way of Life and the ideals of the open society

The children of earlier elites will not succeed because they are born with a silver spoon in their mouth, and an automatic ticket to the Ivy League.

They will succeed because they have inherited the talent, energy, drive, and resilience to overcome the many obstacles they will face in life. Life is still a struggle for all who hope to have economic and social success. It is just that we can predict who will be likely to possess the necessary characteristics from their ancestry."

Greg Clark, The Economist, 13 Feb. 2013

Mr. Clark is now a professor of economics and was the department chair until 2013 at the University of California, Davis. His areas of research are long term economic growth, the wealth of nations, and the economic history of England and India.

And another one:

"During this time, a growing professional class believed that scientific progress could be used to cure all social ills, and many educated people accepted that humans, like all animals, were subject to natural selection.

Darwinian evolution viewed humans as a flawed species that required pruning to maintain its health. Therefore negative eugenics seemed to offer a rational solution to certain age-old social problems."

David Micklos, Elof Carlson, Engineering American Society: The Lesson of Eugenics

If we compare this like of thinking with the thinking of eightieth century and you will see that the progress is really limited:

“With savages, the weak in body or mind are soon eliminated; and those that survive commonly exhibit a vigorous state of health. We civilized men, on the other hand, do our utmost to check the process of elimination; we build asylums for the imbecile, the maimed, and the sick; we institute poor-laws; and our medical men exert their utmost skill to save the life of every one to the last moment.

There is reason to believe that vaccination has preserved thousands, who from a weak constitution would formerly have succumbed to small-pox. Thus the weak members of civilised societies propagate their kind. No one who has attended to the breeding of domestic animals will doubt that this must be highly injurious to the race of man.

It is surprising how soon a want of care, or care wrongly directed, leads to the degeneration of a domestic race; but excepting in the case of man himself, hardly any one is so ignorant as to allow his worst animals to breed.

The aid which we feel impelled to give to the helpless is mainly an incidental result of the instinct of sympathy, which was originally acquired as part of the social instincts, but subsequently rendered, in the manner previously indicated, more tender and more widely diffused. Nor could we check our sympathy, if so urged by hard reason, without deterioration in the noblest part of our nature. The surgeon may harden himself whilst performing an operation, for he knows that he is acting for the good of his patient; but if we were intentionally to neglect the weak and helpless, it could only be for a contingent benefit, with a certain and great present evil.

Hence we must bear without complaining the undoubtedly bad effects of the weak surviving and propagating their kind; but there appears to be at least one check in steady action, namely the weaker and inferior members of society not marrying so freely as the sound; and this check might be indefinitely increased, though this is more to be hoped for than expected, by the weak in body or mind refraining from marriage.”

Charles Darwin, The Descent of Man

So all this screams of MSM about dropping consumer spending is just a smoke screen. In oligarchic republic which USA represents, consumption is heavily shifted to top 20% and as such is much less dependent of the conditions of the economy. And top 20% can afford $8 per gallon gas (European price) without any problems.

John Barkley Rosser, Jr. With Marina V. Rosser and Ehsan Ahmed, argued for a two-way positive link between income inequality (economic inequality) and the size of an underground economy in a nation (Rosser, Rosser, and Ahmed, 2000).

Globally in 2005, top fifth (20%) of the world accounted for 76.6% of total private consumption (20:80 Pareto rule). The poorest fifth just 1.5%. I do not think the USA differs that much from the rest of the world.

Citigroup Plutonomy Research reports

There was two famous Citigroup Plutonomy research reports (2005 and 2006) featured in in Capitalism: A Love Story . Here is how Yves Smith summarized the findings (in her post High Income Disparity Leads to Low Savings Rates)

On the one hand, the authors, Ajay Kapur, Niall Macleod, and Narendra Singh get some credit for addressing a topic surprisingly ignored by mainstream economists. There have been some noteworthy efforts to measure the increase in concentration of income and wealth in the US most notably by Thomas Piketty and Edmund Saez. But while there have been some efforts to dispute their findings (that the rich, particularly the top 1%, have gotten relatively MUCH richer in the last 20 years), for the most part discussions of what to make of it (as least in the US) have rapidly descended into theological debates. One camp laments the fall in economic mobility (a predictable side effect), the corrosive impact of perceived unfairness, and the public health costs (even the richest in high income disparity countries suffer from shortened life spans). The other camp tends to focus on the Darwinian aspects, that rising income disparity is the result of a vibrant, open economy, and the higher growth rates that allegedly result will lift help all workers.

Yet as far as I can tell, there has been virtually no discussion of the macroeconomy effects of rising income and wealth disparities, or to look into what the implications for investment strategies might be. One interesting effect is that with rising inequality the share of "guard labor" grows very quickly and that puts an upper limit on the further growth of inequality (half of the citizens cannot be guards protecting few billionaires from the other half).

Now the fact that the Citi team asked a worthwhile question does not mean they came up with a sound answer. In fact, he reports are almost ludicrously funny in the way they attempt to depict what they call plutonomy as not merely a tradeable trend (as in leading to some useful investment ideas), but as a Brave New Economy development. I haven't recalled such Panglossian prose since the most delirious days of the dot-com bubble:

We will posit that:

1) the world is dividing into two blocs – the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S.

What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time…..Most “Global Imbalances” (high current account deficits and low savings rates, high consumer debt levels in the Anglo-Saxon world, etc) that continue to (unprofitably) preoccupy the world’s intelligentsia look a lot less threatening when examined through the prism of plutonomy. The risk premium on equities that might derive from the dyspeptic “global imbalance” school is unwarranted – the earth is not going to be shaken off its axis, and sucked into the cosmos by these “imbalances”. The earth is being held up by the muscular arms of its entrepreneur-plutocrats, like it, or not..

Yves here. Translation: plutonomy is such a great thing that the entire stock market would be valued higher if everyone understood it. And the hoops the reports go through to defend it are impressive. The plutomony countries (the notorious Anglo-Saxon model, the US, UK, Canada and Australia) even have unusually risk-seeking populations (and that is a Good Thing):

…a new, rather out-of-the box hypothesis suggests that dopamine differentials can explain differences in risk-taking between societies. John Mauldin, the author of “Bulls-Eye Investing” in an email last month cited this work. The thesis: Dopamine, a pleasure-inducing brain chemical, is linked with curiosity, adventure, entrepreneurship, and helps drive results in uncertain environments. Populations generally have about 2% of their members with high enough dopamine levels with the curiosity to emigrate. Ergo, immigrant nations like the U.S. and Canada, and increasingly the UK, have high dopamine-intensity populations.

Yves here. What happened to “Give me your tired, your poor/Your huddled masses yearning to breathe free/The wretched refuse of your teeming shore”? Were the Puritans a high dopamine population? Doubtful. How about the Irish emigration to the US, which peaked during its great famine?

Despite a good deal of romanticization standing in for analysis, the report does have one intriguing, and well documented finding: that the plutonomies have low savings rates. Consider an fictional pep rally chant:

We’re from Greenwich
We’re invincible
Living off our income
Never touch the principal

Think about that. If you are rich, you can afford to spend all your income. You don’t need to save, because your existing wealth provides you with a more than sufficient cushion.

The ramifications when you have a high wealth concentration are profound. From the October 2005 report:

In a plutonomy, the rich drop their savings rate, consume a larger fraction of their bloated, very large share of the economy. This behavior overshadows the decisions of everybody else. The behavior of the exceptionally rich drives the national numbers – the “appallingly low” overall savings rates, the “over-extended consumer”, and the “unsustainable” current accounts that accompany this phenomenon….

Feeling wealthier, the rich decide to consume a part of their capital gains right away. In other words, they save less from their income, the wellknown wealth effect. The key point though is that this new lower savings rate is applied to their newer massive income. Remember they got a much bigger chunk of the economy, that’s how it became a plutonomy. The consequent decline in absolute savings for them (and the country) is huge when this happens. They just account for too large a part of the national economy; even a small fall in their savings rate overwhelms the decisions of all the rest.

Yves here. This account rather cheerily dismisses the notion that there might be overextended consumers on the other end of the food chain. Unprecedented credit card delinquencies and mortgage defaults suggest otherwise. But behaviors on both ends of the income spectrum no doubt played into the low-savings dynamic: wealthy who spend heavily, and struggling average consumers who increasingly came to rely on borrowings to improve or merely maintain their lifestyle. And let us not forget: were encouraged to monetize their home equity, so they actually aped the behavior of their betters, treating appreciated assets as savings. Before you chide people who did that as profligate (naive might be a better characterization), recall that no one less than Ben Bernanke was untroubled by rising consumer debt levels because they also showed rising asset levels. Bernanke ignored the fact that debt needs to be serviced out of incomes, and households for the most part were not borrowing to acquire income-producing assets. So unless the rising tide of consumer debt was matched by rising incomes, this process was bound to come to an ugly end.

Also under Bush country definitely moved from oligarchy to plutocracy. Bush openly claimed that "have more" is his base. The top 1% of earners have captured four-fifths of all new income.

An interesting question is whether the extremely unequal income distribution like we have now make the broader society unstable. Or plebs is satisfied with "Bread and circuses" (aka house, SUV, boat, Daytona 500 and 500 channels on cable) as long as loot from the other parts of the world is still coming...

What is the upper limit of inequality?

Martin Bento in his response to Risk Pollution, Market Failure & Social Justice — Crooked Timber made the following point:

Donald made a point I was going to. I would go a bit further though. It’s not clear to me that economic inequality is not desired for its own sake by the some of the elite. After all, studies suggest that once you get past the level of income needed for a reasonably comfortable life – about $40K for a single person in the US - the quest for money is mostly about status.

Meeting your needs is not necessarily zero sum, but status is: my status can only be higher than yours to the extent that yours is lower than mine.

The more inequality there is, the more status differentiation there is. Of course, there are other sources of status than money, but I’m talking specifically about people who value money for the status it confers. This is in addition to the “Donner Party Conservatism” calls to make sure the incentives to work are as strong as possible (to be fair, I think tolerating some inequality for the sake of incentives is worthwhile, but we seem to be well beyond that).

For example currently the USA is No.3 in Gini measured inequality (cyeahoo, Oct 16, 2009), but still the society is reasonably stable:

Gini score: 40.8
GDP 2007 (US$ billions): 13,751.4
Share of income or expenditure (%)
Poorest 10%: 1.9
Richest 10%: 29.9
Ratio of income or expenditure, share of top 10% to lowest 10%: 15.9

What is really surprising is how low the average American salary is: just $26,352 or ~$2,200 a month. This is equal approximately to $13 an hour.

At the same time:

Some interesting facts about upper class (top 1% of the US population). First of all this is pretty self-isolated group (a nation within a nation). They associate almost exclusively with members of their own social and economic standing, few members of the bottom 90% of Americans have ever even personally met a member of the upper class.

Now about top 400:

Here are some interesting hypothesis about affect of inequality of the society:

Higher inequality is somewhat connected with imperial outreach. As Kevin de Bruxelles noted in comment to What collapsing empire looks like - Glenn Greenwald - Salon.com

I’m surprised a thoughtful guy like Glenn Greenwald would make such an unsubstantiated link between collapsing public services for American peasants and a collapse of America’s global (indirect) imperial realm. Is there really a historic link between the quality of a nation’s services to its citizens and its global power? If so the Scandinavian countries would have been ruling the world for the past fifty years. If anything there is probably a reverse correlation. None of the great historic imperial powers, such as the British, Roman, Spanish, Russian, Ottoman, Mongolian, Chinese, Islamic, or Persian, were associated with egalitarian living conditions for anyone outside of the elite. So from a historic point of view, the ability to divert resources away from the peasants and towards the national security state is a sign of elite power and should be seen as a sign increased American imperial potential.

Now if America’s global power was still based on economic production then an argument could be made that closing libraries and cancelling the 12th grade would lower America’s power potential. But as we all know that is no longer the case and now America’s power is as the global consumer of excess production. Will a dumber peasantry consume even more? I think there is a good chance that the answer is yes.

Now a limit could be reached to how far the elite can lower their peasant’s standard of living if these changes actually resulted in civil disorder that demanded much energy for American elites to quell. But so far that is far from the case. Even a facile gesture such as voting for any other political party except the ruling Republicrats seems like a bridge too far for 95% of the peasants to attempt. No, the sad truth is that American elites, thanks to their exceptional ability to deliver an ever increasing amount of diverting bread and circuses, have plenty of room to further cut standards of living and are nowhere near reaching any limits.

What the reductions in economic and educational options will result in are higher quality volunteers into America’s security machinery, which again obviously raise America’s global power potential. This, along with an increasingly ruthless elite, should assure that into the medium term America’s powerful position will remain unchallenged. If one colors in blue on a world map all the countries under de facto indirect US control then one will start to realize the extent of US power. The only major countries outside of US control are Iran, North Korea, Syria, Cuba, and Venezuela. Iraq and Afghanistan are recent converts to the blue column but it far from certain whether they will stay that way. American elites will resist to the bitter end any country falling from the blue category. But this colored world map is the best metric for judging US global power.

In the end it’s just wishful thinking to link the declining of the American peasant’s standard of living with a declining of the American elite’s global power. I wouldn’t be surprised to see this proven in an attack on Iran in the near future.

High inequality and organized crime

Higher pay inequality feeds organized crime (and here we assume that banksters are different from the organized crime, which is probably a very weak hypothesis ;-). That's why Peter Drucker was probably right. He thought that top execs shouldn't get more than 25 times the average salary in the company (which would cap it around $2 millions). I would suggest a metric based on multiple from the average of lower 50% full time jobs for a particular firm (for example in Wal Mart that would cashers and cleaners, people who are living in Latin American style poverty, if they are single mothers as many are). One of the particular strengths of the idea of the maximum wage base on average of lower 50% of salaries is that if senior managers want to increase their own pay, they have to increase that of the lower-paid employees too.

And in a way financial industry itself became an organized crime. The notion of exorbitant wages prevalent in financial industry (and, before it, pioneered by in high-tech companies during dot-com boom via stock options) is based on the idea that some people are at least hundred times more productive then the others. In some professions like programming this is true and such people do exists. But any sufficiently large company is about team work. No matter what job a person does and no matter how many hours they work, there is no possible way that an single individual will create a whole product. It's a team effort. That means that neither skill nor expertise or intelligence can justify the payment of 200, 300 or even 400 times the wages of the lowest-paid 20% workers in any large organization.

This is especially questionable for financial professionals because by and large they are engaged in non-productive. often harmful for the society as whole redistribution activities, the same activities that organized crime performs. Moreover, modern traders are actually play a tremendously destructive role as subprime crisis (and before it saving and loans debacle) aptly demonstrated. which make them indistinguishable in this societal roles from cocaine pushers on the streets.

Drucker's views on the subject are probably worth revisiting. Rick Wartzman wrote in his Business Week article Put a Cap on CEO Pay' that "those who understand that what comes with their authority is the weight of responsibility, not "the mantle of privilege," as writer and editor Thomas Stewart described Drucker's view. It's their job "to do what is right for the enterprise—not for shareholders alone, and certainly not for themselves alone."

Large pay also attracts sociopathic personalities. Sociopathic personalities at the top of modern organizations is another important but rarely discussed danger.

"I'm not talking about the bitter feelings of the people on the plant floor," Drucker told a reporter in 2004. "They're convinced that their bosses are crooks anyway. It's the mid-level management that is incredibly disillusioned" by CEO compensation that seems to have no bounds. " This is especially true, Drucker explained in an earlier interview, when CEOs pocket huge sums while laying off workers. That kind of action, he said, is "morally unforgivable." There can be exceptions but they should be in middle management not in top management ranks.

Put it all together, and the picture became really discouraging. We have an ill-informed or misinformed electorate, politicians who gleefully add to the misinformation, watchdogs who are afraid to bark and guards on each and every corner. Mousetrap is complete.

Recommended Books

Winner-Take-All Politics How Washington Made the Rich Richer -- and Turned Its Back on the Middle Class by Paul Pierson, Jacob S. Hacker

Henry J. Farrell

Transforming American politics, September 16, 2010

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover) This is a transformative book. It's the best book on American politics that I've read since Rick Perlstein's Before the Storm. Not all of it is original (the authors seek to synthesize others' work as well as present their own, but provide due credit where credit is due). Not all of its arguments are fully supported (the authors provide a strong circumstantial case to support their argument, but don't have smoking gun evidence on many of the relevant causal relations). But it should transform the ways in which we think about and debate the political economy of the US.

The underlying argument is straightforward. The sources of American economic inequality are largely political - the result of deliberate political decisions to shape markets in ways that benefit the already-privileged at the expense of a more-or-less unaware public. The authors weave a historical narrative which Kevin Drum (who says the same things that I am saying about the book's importance) summarizes cogently here. This is not necessarily original - a lot of leftwing and left-of-center writers have been making similar claims for a long time. What is new is both the specific evidence that the authors use, and their conscious and deliberate effort to reframe what is important about American politics.

First - the evidence. Hacker and Pierson draw on work by economists like Picketty and Saez on the substantial growth in US inequality (and on comparisons between the US and other countries), but argue that many of the explanations preferred by economists (the effects of technological change on demand for skills) simply don't explain what is going on. First, they do not explain why inequality is so top-heavy - that is, why so many of the economic benefits go to a tiny, tiny minority of individuals among those with apparently similar skills. Second, they do not explain cross national variation - why the differences in the level of inequality among advanced industrialized countries, all of which have gone through more-or-less similar technological shocks, are so stark. While Hacker and Pierson agree that technological change is part of the story, they suggest that the ways in which this is channeled in different national contexts is crucial. And it is here that politics plays a key role.

Many economists are skeptical that politics explains the outcome, suggesting that conventional forms of political intervention are not big enough to have such dramatic consequences. Hacker and Pierson's reply implicitly points to a blind spot of many economists - they argue that markets are not `natural,' but instead are constituted by government policy and political institutions. If institutions are designed one way, they result in one form of market activity, whereas if they are designed another way, they will result in very different outcomes. Hence, results that appear like `natural' market operations to a neo-classical economist may in fact be the result of political decisions, or indeed of deliberate political inaction. Hacker and Pierson cite e.g. the decision of the Clinton administration not to police derivatives as an example of how political coalitions may block reforms in ways that have dramatic economic consequences.

Hence, Hacker and Pierson turn to the lessons of ongoing political science research. This is both a strength and a weakness. I'll talk about the weakness below - but I found the account of the current research convincing, readable and accurate. It builds on both Hacker and Pierson's own work and the work of others (e.g. the revisionist account of American party structures from Zaller et al. and the work of Bartels). This original body of work is not written in ways that make it easily accessible to non-professionals - while Bartels' book was both excellent and influential, it was not an easy read. Winner-Take-All Politics pulls off the tricky task of both presenting the key arguments underlying work without distorting them and integrating them into a highly readable narrative.

As noted above, the book sets out (in my view quite successfully) to reframe how we should think about American politics. It downplays the importance of electoral politics, without dismissing it, in favor of a focus on policy-setting, institutions, and organization.

In Hacker and Pierson's account, these three together account for the systematic political bias towards greater inequality. In simplified form: Organizations - and battles between organizations over policy as well as elections - are the structuring conflicts of American politics. The interests of the rich are represented by far more powerful organizations than the interests of the poor and middle class. The institutions of the US provide these organizations and their political allies with a variety of tools to promote new policies that reshape markets in their interests. This account is in some ways neo-Galbraithian (Hacker and Pierson refer in passing to the notion of `countervailing powers'). But while it lacks Galbraith's magisterial and mellifluous prose style, it is much better than he was on the details.

Even so (and here begin the criticisms) - it is not detailed enough. The authors set the book up as a whodunit: Who or what is responsible for the gross inequalities of American economic life? They show that the other major suspects have decent alibis (they may inadvertently have helped the culprit, but they did not carry out the crime itself. They show that their preferred culprit had the motive and, apparently, the means. They find good circumstantial evidence that he did it. But they do not find a smoking gun. For me, the culprit (the American political system) is like OJ. As matters stand, I'm pretty sure that he committed the crime. But I'm not sure that he could be convicted in a court of law, and I could be convinced that I was wrong, if major new exculpatory evidence was uncovered.

The lack of any smoking gun (or, alternatively, good evidence against a smoking gun) is the direct result of a major failure of American intellectual life. As the authors observe elsewhere, there is no field of American political economy. Economists have typically treated the economy as non-political. Political scientists have typically not concerned themselves with the American economy. There are recent efforts to change this, coming from economists like Paul Krugman and political scientists like Larry Bartels, but they are still in their infancy. We do not have the kinds of detailed and systematic accounts of the relationship between political institutions and economic order for the US that we have e.g. for most mainland European countries. We will need a decade or more of research to build the foundations of one.

Hence, while Hacker and Pierson show that political science can get us a large part of the way, it cannot get us as far as they would like us to go, for the simple reason that political science is not well developed enough yet. We can identify the causal mechanisms intervening between some specific political decisions and non-decisions and observed outcomes in the economy. We cannot yet provide a really satisfactory account of how these particular mechanisms work across a wider variety of settings and hence produce the general forms of inequality that they point to. Nor do we yet have a really good account of the precise interactions between these mechanisms and other mechanisms.

None of this is to discount the importance of this book. If it has the impact it deserves, it will transform American public arguments about politics and policymaking. I cannot see how someone who was fair minded could come away from reading this book and not be convinced that politics plays a key role in the enormous economic inequality that we see. And even if it is aimed at a general audience, it also challenges academics and researchers in economics, political science and economic sociology both to re-examine their assumptions about how economics and politics work, and to figure out ways better to engage with the key political debates of our time as Hacker and Pierson have done. If you can, buy it.

Great Faulkner's Ghost (Washington, DC)

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover) Many people have observed that American politics and the American economy reached some kind of turning point around 1980, which conveniently marks the election of Ronald Reagan. Some also pointed to other factors such as the deregulation of stock brokerage commissions in 1975 and the high inflation of the 1970s. Other analysts have put the turning point back in 1968, when Richard Nixon became President on the back of a wave of white, middle-class resentment against the 1960s. Hacker and Pierson, however, point the finger at the 1970s. As they describe in Chapter 4, the Nixon presidency saw the high-water market of the regulatory state; the demise of traditional liberalism occurred during the Carter administration, despite Democratic control of Washington, when highly organized business interests were able to torpedo the Democratic agenda and begin the era of cutting taxes for the rich that apparently has not yet ended today.

Why then? Not, as popular commentary would have it, because public opinion shifted. Hacker and Pierson cite studies showing that public opinion on issues such as inequality has not shifted over the past thirty years; most people still think society is too unequal and that taxes should be used to reduce inequality. What has shifted is that Congressmen are now much more receptive to the opinions of the rich, and there is actually a negative correlation between their positions and the preferences of their poor constituents (p. 111). Citing Martin Gilens, they write, "When well-off people strongly supported a policy change, it had almost three times the chance of becoming law as when they strongly opposed it. When median-income people strongly supported a policy change, it had hardly any greater chance of becoming law than when they strongly opposed it" (p. 112). In other words, it isn't public opinion, or the median voter, that matters; it's what the rich want.

That shift occurred in the 1970s because businesses and the super-rich began a process of political organization in the early 1970s that enabled them to pool their wealth and contacts to achieve dominant political influence (described in Chapter 5). To take one of the many statistics they provide, the number of companies with registered lobbyists in Washington grew from 175 in 1971 to nearly 2,500 in 1982 (p. 118). Money pouring into lobbying firms, political campaigns, and ideological think tanks created the organizational muscle that gave the Republicans a formidable institutional advantage by the 1980s. The Democrats have only reduced that advantage in the past two decades by becoming more like Republicans-more business-friendly, more anti-tax, and more dependent on money from the super-rich. And that dependency has severely limited both their ability and their desire to fight back on behalf of the middle class (let alone the poor), which has few defenders in Washington.

At a high level, the lesson of Winner-Take-All Politics is similar to that of 13 Bankers: when looking at economic phenomena, be they the financial crisis or the vast increase in inequality of the past thirty years, it's politics that matters, not just abstract economic forces. One of the singular victories of the rich has been convincing the rest of us that their disproportionate success has been due to abstract economic forces beyond anyone's control (technology, globalization, etc.), not old-fashioned power politics. Hopefully the financial crisis and the recession that has ended only on paper (if that) will provide the opportunity to teach people that there is no such thing as abstract economic forces; instead, there are different groups using the political system to fight for larger shares of society's wealth. And one group has been winning for over thirty years.

Citizen John (USA)

In Winner-Take-All Politics, two political science professors explain what caused the Middle Class to become vulnerable. Understanding this phenomenon is the Holy Grail of contemporary economics in the U.S.

Some may feel this book is just as polarizing as the current state of politics and media in America. The decades-long decline in income taxes of wealthy individuals is cited in detail. Wage earners are usually subjected to the FICA taxes against all their ordinary income (all or almost their entire total income). But the top wealthy Americans may have only a small percentage (or none) of their income subjected to FICA taxes. Thus Warren Buffett announced that he pays a lower tax rate than his secretary. Buffett has cited income inequality for "poisoning democracy."

When you search the Net for Buffett quotes on inequality, you get a lot of results showing how controversial he became for stating the obvious. Drawing attention to the inequity of the tax regime won him powerful enemies. Those same people are not going to like the authors for writing Winner-Take-All. They say these political science people are condescending because they presume to tell people their political interests.

Many of studies of poverty show how economic and political policies generally favor the rich throughout the world, some of which are cited in this book. Military spending and financial bailouts in particular favor the wealthy. Authors Jacob Hacker and Paul Pierson document a long U.S. policy trend favoring wealthy Americans. This trend resulted in diminished middle class access to quality healthcare and education, making it harder to keep up with the wealthy in relative terms. Further, once people have lost basic foundations of security, they are less willing and able to take on more risk in terms of investing or starting a business.

The rise of special interests has been at the expense of the middle class, according to the authors. Former President Carter talked about this and was ridiculed. Since then government has grown further from most of us. Even federal employees are not like most of us anymore. In its August 10, 2010 issue, USA Today discussed government salaries: "At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds."

An excellent documentary showing how difficult it is to address income inequality is One Percent, by Jamie Johnson of the Johnson & Johnson family. Collapse: How Societies Choose to Fail or Succeed, by Pulitzer Prize-winner Jared Diamond Collapse: How Societies Choose to Fail or Succeed shows examples of what can happen when a society disregards a coming disaster until too late. I hope that Winner-Take-All will prompt people to demand more of elected officials and to arrest the growing income gap for the sake of our democracy.

Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States)

4.5 stars-Wall Street speculators control both parties, September 19, 2010 See all my reviews

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)

This book basically argues that Wall Street controls both political parties through the use of massive campaign contributions and lobbyists who buy off both the Republicans and Democrats in the White House,Senate and House.This is essentially correct but obvious.Anyone can go back to the 1976 Jimmy Carter campaign and simply verify that the majority of his campaign funds and advisors came from Wall Street.This identical conclusion also holds with respect to Ronald Reagan,George H W Bush,Bill Clinton,George W Bush and Barack Obama. The only Presidents/Presidential candidates not dominated by Wall Street since 1976 were Gerald Ford, Walter Mondale, Ross Perot, Ralph Nader and Pat Buchanan.

For instance,it is common knowledge to anyone who carefully checks to see where the money is coming from that Wall Street financiers, hedgefunds, private equity firms and giant commercial banks are calling the shots. For example, one could simply read the July 9,2007 issue of FORTUNE magazine to discover who the major backers of John McCain, Hillary Clinton and Barack Obama were. One could also have read Business Week(2-25-2008) or the Los Angeles Times of 3-21-2008.Through February, 2008 the major donors to the McCain campaign were 1)Merrill Lynch, 2) Citigroup, 3)Goldman Sachs, 4)J P Morgan Chase and 5)Credit Suisse

The major donors to the Hillary Clinton campaign were 1)Goldman Sachs, 2)Morgan Stanley, 3)Citigroup, 4)Lehman Brothers and 5)J P Morgan Chase.

Guess who were the major donors to the Obama campaign ? If you guessed 1)Goldman Sachs,2)UBS Ag,3)J P Morgan Chase ,4)Lehman Brothers and 5)Citigroup, then you are correct.

It didn't matter who became President-Hillary Clinton,Barack Obama or John McCain.All three had been thoroughly vetted by Wall Street. The campaign staffs of all three candidates ,especially their economic and finance advisors, were all Wall Street connected. Wall Street would have been bailed out regardless of which party won the 2008 election.

Obama is not going to change anything substantially in the financial markets. Neither is Rep. Barney Frank, Sen. Chris Dodd, Sen. Kerry or Sen. Schumer, etc. Nor is any Republican candidate going to make any changes, simply because the Republican Party is dominated even more so by Wall Street(100%) than the Democratic Party(80%). The logical solution would be to support a Third Party candidate, for example, Ross Perot .

One aspect of the book is deficient. True conservatives like Ross Perot, Pat Buchanan and Lou Dobbs have been warning about the grave dangers of hallowing out and downsizing the American Manufacturing -Industrial sector, with the consequent offshoring and/or loss of many millions of American jobs, for about 20 years at the same time that the " financial services " sector has exploded from 3% of the total service sector in 1972 to just under 40% by 2007. This is what is causing the great shrinkage in the middle class in America .

Matt Milholland (California)

An Important Book, October 9, 2010 See all my reviews

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)

This is a phenomenal book and everyone interested in how American politics works (or more accurately, doesn't work) should pick it up. It's both really smart and really accessible to a lay audience, which is rare for a political science book.

Extreme economic inequality and the near paralysis of our governing institutions has lead to a status-quo that is almost entirely indifferent to the needs of working families. Hacker & Pierson chronicle the rise of this corrupt system and the dual, yet distinct, roles the Republican and Democratic Parties have played in abetting it.

Seriously, it's top-notch. Read this book.

Loyd E. Eskildson "Pragmatist" By(Phoenix, AZ.)

4.0 out of 5 stars Interesting and Timely, but Also Off-Base in Some Regards, September 15, 2010 See all my reviews

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover) The thirty-eight biggest Wall Street companies earned $140 billion in 2009, a record that all taxpayers who contributed to their bailouts can be proud of. Among those, Goldman Sachs paid its employees an average $600,000, also a record, and at least partially attributable to our bailout of AIG, which promptly gave much of the money to Goldman. Prior to that, the top 25 hedge fund managers earned an average of $892 million in 2007. "Winner-Take-All Politics" is framed as a detective story about how we got to inequality levels where the top 300,000 (0.1%) receive over 20% of national income, vs. 13.5% for the bottom 180 million (60% of the population).

Between 1947 and 1973, real family median income essentially doubled, and the growth percentage was virtually the same for all income levels. In the mid-1970s, however, economic inequality began to increase sharply and middle-incomes lagged. Increased female workforce participation rates and more overtime helped cushion the stagnation or decline for many (they also increased the risk of layoffs/family), then growing credit card debt shielded many families from reality. Unfortunately, expectations of stable full-time employment also began shrinking, part-time, temporary, and economic risk-bearing (eg. taxi drivers leasing vehicles and paying the fuel costs; deliverymen 'buying' routes and trucks) work increased, workers covered by employer-sponsored health insurance fell from 69% in 1979 to 56% in 2004, and retirement coverage was either been dropped entirely or mostly converted to much less valuable fix-contribution plans for private sector employees. Some exceptions have occurred that benefit the middle and lower-income segments - Earned Income Tax Credit (EITC), Medicaid, and Medicare were initiated or expanded, but these have not blunted the overall trend. Conversely, welfare reform, incarceration rates rising 6X between 1970 and 2000, bankruptcy reform, and increased tax audits for EITC recipients have also added to their burden, Social Security is being challenged again (despite stock market declines, enormous transition costs, and vastly increased overhead costs and fraud opportunity), and 2009's universal health care reform will be aggressively challenged both in the courts and Washington.

Authors Hacker and Pierson contend that growing inequality is not the 'natural' product of market rewards, but mostly the artificial result of deliberate government policies, strongly influenced by industry lobbyists and donations, new and expanded conservative 'think tanks,' and inadequate media coverage that focused more on the 'horse race' aspects of various initiatives than their content and impact. First came the capital gains tax cuts under President Carter, then deregulation of the financial industry under Clinton, the Bush tax cuts of 2001 and 2003, and the financial bailouts in 2008-09. The authors contend that if the 1970 tax structure remained today, the top gains would be considerably less.

But what about the fact that in 1965 CEOs of large corporations only earned about 24X the average worker, compared to 300+X now? Hacker and Pierson largely ignore the role of board-room politics and malfeasance that have mostly allowed managers to serve themselves with payment without regard to performance and out of proportion to other nations. In 2006, the 20 highest-paid European managers made an average $12.5 million, only one-third as much as the 20 highest-earning U.S. executives. Yet, the Europeans led larger firms - $65.5 billion in sales vs. $46.5 billion for the U.S. Asian CEOs commonly make only 10X-15X what their base level employees make. Jiang Jianqing, Chairman of the Industrial and Commercial Bank of China (world's largest), made $234,700 in 2008, less than 2% of the $19.6 million awarded Jamie Dimon, CEO of the world's fourth-largest bank, JPMorgan Chase.

"Winner-Take-All Politics" also provides readers with the composition of 2004 taxpayers in the top 0.1% of earners (including capital gains). Non-finance executives comprised 41% of the group, finance professionals 18.4%, lawyers 6%, real estate personages 5%, physicians 4%, entrepreneurs 4%, and arts and sports stars 3%. The authors assert that this shows education and skills levels are not the great dividers most everyone credits them to be - the vast majority of Americans losing ground to the super-rich includes many well-educated individuals, while the super-rich includes many without a college education (Sheldon Adelson, Paul Allen, Edgar Bronfman, Jack Kent Cook, Michael Dell, Walt Disney, Larry Ellison, Bill Gates, Wayne Huizenga, Steve Jobs, Rush Limbaugh, Steve Wozniak, and Mark Zuckerberg).

Authors Hacker and Pierson are political science professors and it is understandable that they emphasize political causes (PACs, greater recruitment of evangelical voters, lobbying - eg. $500 million on health care lobbying in 2009, filibusters that allow senators representing just 10% of the population to stop legislation and make the other side look incompetent, etc.) for today's income inequality. However, their claim that foreign trade is "largely innocent" as a cause is neither substantiated nor logical. Foreign trade as practiced today pads corporate profits and executive bonuses while destroying/threatening millions of American jobs and lowering/holding down the incomes of those affected. Worse yet, the authors don't even mention the impact of millions of illegal aliens depressing wage rates while taking jobs from Americans, nor do they address the canard that tax cuts for and spending by the super-wealthy are essential to our economic success (refuted by Moody's Analytics and Austan Goolsbee, Business Week - 9/13/2010). They're also annoyingly biased towards unions, ignoring their constant strikes and abuses in the 1960s and 1970s, major contributions to G.M., Chrysler, and legacy airline bankruptcies, and current school district, local, and state financial difficulties.

Bottom-Line: It is a sad commentary on the American political system that growing and record levels of inequality are being met by populist backlash against income redistribution and expanding trust in government, currently evidenced by those supporting extending tax cuts for the rich and railing against reforming health care to reduce expenditures from 17.3+% of GDP to more internationally competitive levels (4-6%) while improving patient outcomes. "Winner-Take-All Politics" is interesting reading, provides some essential data, and point out some evidence of the inadequacy of many voters. However, the authors miss the 'elephant in the room' - American-style democracy is not viable when at most 10% of citizens are 'proficient' per functional literacy tests ([...]), and only a small proportion of them have the time and access required to sift through the flood of half-truths, lies, and irrelevancies to objectively evaluate 2,000+ page bills and other political activity. (Ideology-dominated economic professionals and short-term thinking human rights advocates are two others.) Comments (2)

Brian Kodi

"Americans live in Russia, but they think they live in Sweden." - Chrystia Freeland, March 26, 2011 See all my reviews

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)

No one should doubt the rising income inequality in America, which the authors trace back to the late 1970s since the latter part of Carter's presidency in what they call the "30 Year War". Zachary Roth, in a March 4th Time magazine article stated "A slew of conservative economists of unimpeachable academic credentials--including Martin Feldstein of Harvard, Glenn Hubbard, who was President Bush's top economic adviser, and Federal Reserve chair Ben Bernanke--have all acknowledged that inequality is on the rise."

And why should we care that most of the after tax income growth since 30 years ago has gone the way of the richest Americans in a "winner-take-all" economy? Because as Supreme Court justice biographer Melvin Urofsky stated, "in a democratic society the existence of large centers of private power is dangerous to the continuing vitality of a free people." (p. 81) Because if unchecked, a new economic aristocracy may replace the old hereditary aristocracy America's Founders fought to defeat (p. 298). Because unequal societies are unhappy societies, and inequality can foster individual resentment that may lead to a pervasive decline in civility and erosion of culture.

And why should we be concerned that this trend in rising inequality may not experience the period of renewal the authors are optimistic about? Because unlike the shock of the 1930s' Great Depression that served as the impetus for the politics of middle class democracy, the potential shockwaves of the 2008 Great Recession were tempered by massive government stimulus, resulting in no meaningful financial reform, and an extension of the tax cuts for the wealthy. And because of the lottery mentality of a large swath of the population which opposes tax increases on the rich. One day, they or their children too can share in the American dream. According to an October 2000 Time-CNN poll, 19 percent of Americans were convinced they belonged to the richest 1 percent. Another 20 percent thought they'd make the rank of the top 1 percent at some point in their lives. That's quite a turnover in the top 1 percent category to accommodate 20 percent of the population passing through.

Mr. Hacker and Mr. Pierson have put together powerful arguments on the root causes of income inequality in the U.S., its political and economic ramifications, and to a lesser extent, a roadmap to returning democracy to the masses. This is an eye opening and disturbing, yet informative book, even for readers who may disagree with their opinions.

J. Strauss (NYC)

3.0 out of 5 stars great history of big money influence on policy but needs more analysis of the ways policy affects the winner-take-all economy, September 21, 2011 See all my reviews

Amazon Verified Purchase(What's this?)

This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)

Writing:

A bit hokey and repetitive for the first couple chapters. Much better after that. Stick with it if you're interested in the subject.

Content:

This book does a very good job explaining how and why certain special interest groups (notably those that represent the wealthiest .1%) have come to have such a stranglehold on government, particularly Congress. I come away with a clear understanding of how the wealthiest citizens are able to exert their influence over legislative policy and enforcement at the federal level.

What I would have liked more of are better explanations of the mechanisms through which government policies exacerbate the winner-take-all economy. Tax policy (rates and loopholes) is the most obvious answer, and the book provides plenty of stats on the regression of tax policy over the past 30 years.

But complicated, interesting, and largely missing from public discourse is why PRE-TAX incomes have become so much more radically skewed during that time. This is certainly touched on - the authors are deliberate in saying it's not JUST tax policy that's contributing to increased inequality - but I would've liked much more analysis of the other policy-driven factors. "Deregulation" is too general an explanation to paint a clear picture.

The authors make it clear that they believe the increasing divide in pre-tax incomes (the winner-take-all economy) is not the inevitable result of technological changes and of differences in education ("the usual suspects"), but of policy decisions made at the state and, especially, federal levels. Personally, I wasn't fully convinced that technological change has little or nothing to do with the skew (though I agree that while education goes a long way toward explaining the gap between poor and middle class, it doesn't explain much of the gap between middle class and super rich). But I do believe, as they do, that public policy plays a large role in influencing the extent of inequality in pre-tax incomes, even beyond more obvious market-impacting factors like union influence, and mandates including the minimum wage, restrictions on pollution, workplace safety and fairness laws, etc.

Off the top of my head, here are some regulatory issues that affect market outcomes and can influence the extent of winner-take-all effects in the marketplace (a few of these may have been mentioned in the book, but none were discussed in detail):

And many more. I know regulatory issues like that play huge roles in the distribution of pre-tax "market" incomes, but I'd like to have a better understanding of how, and also to be better able to articulate how in response to those who seem to believe taxes (and perhaps obvious restrictions, such as on pollution or the minimum wage) are the only significant means through which governments influence wealth disparities.

There wasn't a whole lot of discussion of these or similar regulatory issues in the book. I would like to see another edition, or perhaps another book entirely, that does. Please let me know if you have any recommendations.


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"You load 16 tons and whaddaya get??
Another day older and deeper in debt
Saint Peter don'tcha call me 'Cause-I can't go…
I owe my soul to the Company Store"

-- "Sixteen Tons"

[May 15, 2019] Tariffs won't bring back manufacturing jobs...

The key factor here is that the USA is a neoliberal state which means profits before people and outsourcing to area with lower labor cost. Like leopard can't change its spots, neoliberalism can't change it "free movement of goods and labor" principles, or it stop being neoliberalism.
No jobs will come back to the USA as financial oligarchy is transnational body that uses the USA military as an enforcer for their gang. It does not care one bit about the common people in the USA.
May 15, 2019 | www.zerohedge.com

Originally from: Pepe Escobar Warns Over US-China Tensions The Hardcore Is Yet To Come

... ... ...

Where are our jobs?

Pause on the sound and fury for necessary precision. Even if the Trump administration slaps 25% tariffs on all Chinese exports to the US, the IMF has projected that would trim just a meager slither – 0.55% – off China's GDP. And America is unlikely to profit, because the extra tariffs won't bring back manufacturing jobs to the US – something that Steve Jobs told Barack Obama eons ago.

What happens is that global supply chains will be redirected to economies that offer comparative advantages in relation to China, such as Vietnam, Indonesia, Bangladesh, Cambodia and Laos. And this redirection is already happening anyway – including by Chinese companies.

BRI represents a massive geopolitical and financial investment by China, as well as its partners; over 130 states and territories have signed on. Beijing is using its immense pool of capital to make its own transition towards a consumer-based economy while advancing the necessary pan-Eurasian infrastructure development – with all those ports, high-speed rail, fiber optics, electrical grids expanding to most Global South latitudes.

The end result, up to 2049 – BRI's time span – will be the advent of an integrated market of no less than 4.5 billion people, by that time with access to a Chinese supply chain of high-tech exports as well as more prosaic consumer goods.

Anyone who has followed the nuts and bolts of the Chinese miracle launched by Little Helmsman Deng Xiaoping in 1978 knows that Beijing is essentially exporting the mechanism that led China's own 800 million citizens to, in a flash, become members of a global middle class.

As much as the Trump administration may bet on "maximum pressure" to restrict or even block Chinese access to whole sectors of the US market, what really matters is BRI's advance will be able to generate multiple, extra US markets over the next two decades.

We don't do 'win-win'

There are no illusions in the Zhongnanhai, as there are no illusions in Tehran or in the Kremlin. These three top actors of Eurasian integration have exhaustively studied how Washington, in the 1990s, devastated Russia's post-USSR economy (until Putin engineered a recovery) and how Washington has been trying to utterly destroy Iran for four decades.

Beijing, as well as Moscow and Tehran, know everything there is to know about Hybrid War, which is an American intel concept. They know the ultimate strategic target of Hybrid War, whatever the tactics, is social chaos and regime change.

The case of Brazil – a BRICS member like China and Russia – was even more sophisticated: a Hybrid War initially crafted by NSA spying evolved into lawfare and regime change via the ballot box. But it ended with mission accomplished – Brazil has been reduced to the lowly status of an American neo-colony.

Let's remember an ancient mariner, the legendary Chinese Muslim Admiral Zheng He, who for three decades, from 1405 to 1433, led seven expeditions across the seas all the way to Arabia and Eastern Africa, reaching Champa, Borneo, Java, Malacca, Sumatra, Ceylon, Calicut, Hormuz, Aden, Jeddah, Mogadiscio, Mombasa, bringing tons of goods to trade (silk, porcelain, silver, cotton, iron tools, leather utensils).

That was the original Maritime Silk Road, progressing in parallel to Emperor Yong Le establishing a Pax Sinica in Asia – with no need for colonies and religious proselytism. But then the Ming dynasty retreated – and China was back to its agricultural vocation of looking at itself.

They won't make the same mistake again. Even knowing that the current hegemon does not do "win-win". Get ready for the real hardcore yet to come.


Tachyon5321 , 35 minutes ago link

The Swine fever is sweeping china hog farms and since the start of 2019 200+ millions hogs have been culled. Chinese hog production is down from 2016 high of 700 million to below 420 million by the end of the year. The fever is not under control.

Soybeans from Ukraine are unloaded at the port in Nantong, in eastern China. Imports of soy used to come from the US, but have slumped since the trade war began. Should point out that the Ukraine soy production matures at a different time of the year than the US soybean. The USA planting season starts in Late april, may and june. Because of the harvest time differences worldwide the USA supplies 80% of the late maturing soybeans needed by October/Nov and December.

A propaganda story by the Asian Times

BT , 46 minutes ago link

Orange Jesus just wants to be re-elected in 2020 and MIGA.

Son of Captain Nemo , 52 minutes ago link

Perhaps this is one of the "casualties" ( https://www.rt.com/news/459355-us-austria-embassy-mcdonalds/ ) of economic war given the significance of China and just how important it is to the U.S. in it's purchases of $USD to maintain the illusion of it's reserve currency status and "vigor"...

Surprised this didn't happen first at the U.S. Embassies in Russia and China?... Obviously Ronald McDonald has turned into a charity of sorts helping out Uncle $am in his ailing "health" these dayz!...

SUPER SIZE ME!... Cause I'm not lovin it anymore!... I'm needin it!!!!

joego1 , 52 minutes ago link

If Americans want to wear shoes they can make them or have a robot make them. Manufacturing can happen in the U.S. **** what Steve Jobs told Oblamy .

ElBarto , 1 hour ago link

I've never understood this "jobs aren't coming back" argument. Do you really think that it will stop tariffs? They're happening. Better start preparing.

ZakuKommander , 1 hour ago link

Oh, right, tariffs WILL bring back American jobs! Then why didn't the Administration impose them fully in 2017? Why negotiate at all; just impose all the tariffs!?! lol

Haboob , 1 hour ago link

Pepe is correct as usual. Even if America tariffs the world the jobs aren't coming back as corporations will be unable to turn profits in such a highly taxed country like America would be. What could happen however is America can form an internal free market again going isolationist with new home grown manufacturing.

Gonzogal , 41 minutes ago link

You VERY obviously have ZERO knowledge of Chinas history and its discoveries/inventions etc USED BY THE WEST.

I suggest that you keep your eyes open for "History Erased-China" on Y Tube. The series shows what would happen in todays world if countries and their contributions to the world did not happen.

here is a preview: https://youtu.be/b6PJxuheWfk

[May 14, 2019] Employers say this is the most annoying characteristic of new grads

"Excessive zeal" is really a problem with people on their first job. But at the same the companies try to pressure new hires to do more.
Notable quotes:
"... "Patience is the one word I would tell [new grads] to think about and remember," Wolfe says. "You're not going to know everything walking in the door, especially if you've just graduated college. Really be a sponge and ask tons of questions." ..."
May 14, 2019 | finance.yahoo.com

A new pack of college grads are gearing up to enter the job market -- this year, 1.9 million people will graduate with a bachelor's degree, and another 1 million will graduate with a master's or doctorate degree, according to the National Center for Education Statistics .

Employers plan to hire 17% more graduates than in previous years, and with the unemployment rate at 3.6% , it's a great time to enter the job market. According to LinkedIn , Amazon , EY (Ernst and Young) , Price WaterHouse Coope r, Deloitte , and Lockheed Martin plan to hire the most new grads this year. Graduates are flocking toward professions like software engineer, registered nurse, salesperson, teacher and accountant, according to LinkedIn.

It's important to have your resume ready and your interview skills polished as you start the application process. It typically takes five months to find a job, according to a study by Ranstad Recruiting . But once you secure a position, it's important to prepare for the professional world by keeping your expectations in check, says Paul Wolfe , senior vice president at Indeed .

"Patience is the one word I would tell [new grads] to think about and remember," Wolfe says. "You're not going to know everything walking in the door, especially if you've just graduated college. Really be a sponge and ask tons of questions."

[May 14, 2019] How Much Money Do You Need to Be Wealthy in America

May 14, 2019 | finance.yahoo.com

(Bloomberg) -- Rich is relative.

Merely having a net worth of $1 million, it seems, doesn't mean you're wealthy. In Charles Schwab's annual Modern Wealth Survey, the amount people said it took to be considered rich averaged out to $2.3 million. That, the company said, is "more than 20 times the actual median net worth of U.S. households."

It's also a very slight drop from the $2.4 million average in the two previous iterations of the survey.The older one gets, the higher the bar goes, predictably. Among baby boomers (roughly age 55 to 73), the average net worth you need to be considered wealthy is $2.6 million, 35% higher than what millennials envision as the admission price to the plutocracy.

For someone to be deemed merely financially comfortable, the required net worth shrinks significantly. The average amount was $1.1 million, and only Generation Z (about age 9 to age 22, though Schwab's sample was 18 to 22) cited a number below $1 million ($909,600, to be exact.)

The Schwab survey, which took a national sample of 1,000 Americans between the ages of 21 and 75, also revealed that the majority of Americans really crave real estate. More than 50% of respondents across generations said that if they got a $1 million windfall, they'd spend it, and the most popular purchase would be a place to live -- particularly among millennials (roughly age 22 to 37). Those millennials also took issue with the premise of the survey. More than three-quarters of them said their personal definition of wealth was really about the way they live their lives, rather than a discrete dollar amount.

Nevertheless, 60% of them aren't all that worried, since they plan to be wealthy within one to 10 years. The survey results suggest an interesting strategy to help them get there -- ignore their friends' social media posts.

How's that? Well, it seems virtual covetousness has taken on a life of its own for the digital generation. According to the survey, overspending because of what they see on social media (in tandem with the ease with which it takes your cash) was the largest "bad" influence on how they managed their money.

And the negative influence of social media on spending is only going to grow. In March, Instagram announced that it's testing a shopping feature called Checkout that lets users buy things directly within the app, rather than being directed to a retailer's website. So much for one-stop shopping. Now you won't even have to stop.With 59% of the Americans surveyed saying they live paycheck to paycheck, instant gratification comes with a high price. While a strong economy and low unemployment are helping consumers stay current on their debt payments, the largest U.S. banks are seeing losses on credit cards outpace those of auto and home loans at a rate not seen in at least 10 years.And when the bottom does finally fall out, the last thing most Americans will be thinking of is whether they qualify as wealthy.

To contact the author of this story: Suzanne Woolley in New York at swoolley2@bloomberg.net

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

For more articles like this, please visit us at bloomberg.com

[May 11, 2019] Having grown up and gone to university in Germany it is simply incomprehensible to me that there is tuition supporters on the political left in the US

Access to the college is a privilege that typically is granted to children with high IQ. In europlpe that is doene via entrance exams. If you pass you are in, if not, so be it. So the very notion of college is discriminative in this sense, as it should be. All this posturing about neighborhoods with bad schools does not change the fact that individual with high IQ can prosper and pass entrance earn to the college even graduating from "bad schools", so mostly marginal individual are affected.
But if you need to pay for the college that poor kids with high IQ are cut out. Forever. and that's grossly unfair (as many things under neoliberalism)
Notable quotes:
"... As a matter of principle, an egalitarian society of the future that I'd want to help building would in fact contain free or inexpensive access to any level of education, at a high base standard of quality. Like, every school is a good school, there is a mechanism for tackling exceptions, and everyone can access whatever level of basic education or fundamental vocational training without having to pay for it in major financial hardship. (There are of course many ways to implement such a system.) ..."
"... I'm surprised at the number of people on this thread who seem to think the purpose of free university education is to help lift people out of poverty. How many times do you have to be shown that this upward mobility thing is a Ponzi scheme? The goal of free education is to ensure that poor people can get access to the same things rich people can, so that everyone is able to live a fulfilling life. ..."
"... Harry @82 -- my understanding is that while the NHS has improved health outcomes for everyone, it has also (counter-intuitively) increased health inequality. More affluent people are better able to take advantage of healthcare. The interventions which tend to reduce health inequality are things like clean water and closing the sewers, not universal access to care. ..."
"... (*) Under German law, students can sue their parents if they have the means but refuse to fund an adequate education. But of course you would rather not sue your parents. ..."
"... Poor children should be able to go to university. That's a simple statement of what is right. Warrens offering a fix for ONE of the two big barriers to doing that. Her fix also helps middle class kids. Lucky them! Why should a poor kid care? ..."
"... I think focusing on high income parents is a bit misleading. Yes the very poorest don't go to college, but plenty of kids from median income, and sub-median income, households do. And plenty of kids are graduating from college and getting jobs that don't pay particularly well, and probably will never pay brilliantly. ..."
"... Also once again: we target income inequality, not variation. We don't oppose a program because 30% of the population won't use it. If you're going to make that your yardstick for public investment then you should at least try to address the consequences for public funding of women's health, childcare, and indeed universal health coverage! ..."
May 11, 2019 | crookedtimber.org

nastywoman 05.07.19 at 6:30 am ( 52 )

@Christina.H
"Having grown up and gone to university in Germany it is simply incomprehensible to me that there is tuition supporters on the political left in the U.S".

"Having grown up in the US, Italy and Germany and gone to university in Germany -(for FREE) I very well understand -- that there are tuition supporters on the so called political left in the U.S. -- as firstly -- if you ever have grown up in a family where most of the members have such a emotional -(and funny) attachment to "their schools" -(and universities) -- as "them Anglo-Saxons" you very well understand that:

2. -- how far the so called "left" in the U.S. is -- concerning "being progressive" -- so "many moons" behind the European Left -- which get's illustrated by this what did Nia Psaka write: "one of those supposedly-left-but-actually-right arguments that I get so tired of."

Ben 2 05.07.19 at 2:56 pm ( 65 )
"Opportunity cost" is bearing a huge load in the argument, and it can't take the weight

Is there an opportunity cost in the sense that the US can't afford to do Warren's plan and also spend the same amount on prek-12 ? No.

Is there an opportunity cost politically? Also no. An administration that can create a new wealth tax ex nihilio to free wage slaves from debt bondage -- for this what this is -- is also an administration that can spend huge sums on prek-12 at the same time

We're left with an opportunity cost for airing policy ideas during a campaign. Here there *are* actual trade offs involved; attention / time is limited etc.

But, uh, a quarter of that wealth tax which pays the college plan goes toward establishing universal pre-k.

What we're left with is an argument that "Warren's proposal for universal prek and writing down college debt / cheap state college is crowding out talk during the campaign for increased k-12 spending"

Which rests on the assumptions 1) "a campaign which talks about universal prek / fixing college debt won't increase k-12 spending on the same scale once in power unless it's talked about during the campaign"

and

2) "the best way to get k-12 spending talked about during the campaign is to denigrate the fixing college debt proposal"

Neither of which, at least to me, is obvious or that coherent.

Contrast this with a shrewd political calculation for *not* mentioning massive k-12 funding increases during the campaign. It's a charged issue which cuts across usual infra-coalition groups, so the effect of bringing it up is complex and the positives are mitigated more than prek / college. And, as explored above, an admin which can do prek / college can also do k-12. (The Arne Duncan example cuts both ways; the 08 campaign wasn't caught over massive changes in fed education policy, but it still happened.)

Lastly, prek/fixing college debt are *overwhelmingly popular*. It's *tremendous political terrain to occupy*. It gets people used to spending huge sums of money on education, and it does so in a way that even non-brain-worked Republicans have to nod in agreement makes good fiscal sense.

Muddying those waters based on the dubious assumptions above, and ignoring the other political dynamics, seems unwise.

steven t johnson 05.07.19 at 3:46 pm ( 69 )
Somehow I thought the main topic of the OP was how Warren's plan would increase inequality, which still strikes me as highly dubious, especially as argued in the link. Apparently the real topic is supposed to be how funding public college tuition for all students increases inequality by diverting funds from primary education (and maybe secondary?)

I'm not convinced the implicit premise that a poor education is the main generator of inequality. I rather think lack of high-paying jobs, unemployment, inordinate rewards to owners of property, a multitude of secondary forms of exploitation such as higher prices for necessities in poor neighborhoods and so on, endlessly, have much more to do with that. Improvements to primary and secondary education like Warren's improvements to tertiary education, are a reform, of minor effect in the end as regards to reducing inequality.

Insofar as some colleges and universities graduate credentials more acceptable to the bosses, credentialism is not to be reformed by increasing funding to preK12 schooling. The fact that you can't say "a degree from a comprehensive regional university is worth as much as a degree from a public flagship" also reduces all benefit of education to simple monetary returns. Further, it abstracts from the benefits to social mobility in the lower ranks of society. Personally I think economic anxiety fuels status anxiety, that the prospect of no change or even descent goads people into seeking scapegoats who will be the historical ones.

In short, I tend to think the primary inequality in other words is in property.

Further the massive funding increases imagined as the alternative excluded by Warren will still have their effects undercut but a multitude of structural deficits. The lesser revenues from the poor districts are bad enough. Any reform that could help that would be desirable. But in the long run the suburbs need to be reintegrated into urban life, the elite need to be reintegrated into common life and those areas where social decay has rotted the fabric of society need to be rebuilt. And by the way, those rotted areas also include rural ones and deindustrialized ones as well as inner cities.

Matt 05.07.19 at 8:49 pm ( 74 )
The break in the pipeline comes well before college. Poor neighborhoods have bad schools and rich neighborhoods have good schools, because they're locally funded. This is not to say that the cost of education from a state college is not a problem, but rather that there is a bigger problem which might be easily solved with a lot of money.

I think it's even harder than equalizing funding. According to Ballotpedia's analysis of spending in America's largest school districts , the Baltimore City Public School System actually spends more per student than the Palo Alto Unified School District. But it has a lower graduation rate and I suspect that their graduates would not fare well against the Palo Alto graduates on measures of academic skills. Comparisons like this are a right-wing favorite for showing that the "real" problem is not insufficient spending on students but actually unions, or bureaucracy, or big city corruption

I think that the problem is that some school districts have much harder jobs than others, because some students live desperate lives outside of school. Desperation among students is not uniformly distributed across school districts.

Some students start the school year prepared to acquire and apply academic knowledge from day 1. Some students start with a raft of unmet basic needs. Like food, shelter, and safety.

You can deliver more education-per-dollar if the schools just focus on education and medical services/psychological counseling/basic nutrition/law enforcement are well-handled elsewhere. That seems to me the greatest advantage of affluent school districts, charter schools, and schools in other developed nations: they don't have to compensate as often for overwhelming problems in their students' lives that come from outside the campus. Affluent districts also having newer books, more electives, and less crowded classrooms is just the icing on the cake.

steven t johnson 05.07.19 at 9:12 pm ( 75 )
Ben2@72 writes of "tools to resist " This would be one of the nonmonetary benefits to Warren's college reform excluded from Baum and Turner's presentation. It's one reason why I think the benefit of the college education to the lower income families isn't measured by the extra $7 700 higher (not highest, though,) income families would receive. But even solely in money terms, I still fancy that most under $35 000 families will find $2 300 makes a bigger difference in meeting necessities than the over $120 000 families will get from $11 000.

To quote from the link, again:
""'Free tuition' is the opposite of progressive policymaking
It's presented as leveling the playing field. It would worsen economic inequality."

Baum and Turner's essential criticism is about the money payments, discussed in a misleading way. Two working parents, both with an income about $60 000, would get maybe, at most, $11 000 in a year. IN US politics this is supposed to be middle class, but I think real middle class people own property (not a mortgage.) No, I don't think we're talking about Warren making the world more unequal.

Most of the other thrown in criticisms, like the different monetary values of credentials from regional comprehensive vs. public flagship, do indeed implicitly assume that educational inequality is a prime cause, if not the cause, of inequality. I still haven't followed the logic of how Warren's college reform makes this worse.

Warren's plan is a school voucher plan for that part of the school system that isn't free. Extra subsidies to some parents when there is a publicly provided alternative, as in primary and secondary education, does actually have the regressive effects wrongly claimed by Baum and Turner. Doing away with this bug in Warren's proposed college system could be resolved by price controls to equalize college tuitions, which requires public provision of schools in the long run to keep the system from collapsing, which to be effective would probably require in the long run some sort of industrial policy giving a better idea of labor needs. And that might end up giving students stipends to go into areas where anticipated needs are highest. Etc. Etc.

Chris (merian) W. 05.08.19 at 1:51 am ( 79 )
I think one of the reasons this policy proposal isn't discussed in these terms, and comes across as progressive, is that it is being framed not as higher education funding, but as debt relief.

And I think that the levels of debt that people get themselves into just for wanting an education in line with their interests and talents (even leaving aside the whole aspects of preparing for certain types of jobs) is, to me, a problem. As a first generation higher education graduate (from Europe, now living in the US) with no family money this sort of situation would have put me into even more of a state of permanent anxiety. College graduates of not even very long ago talk of times where you could finance a year of tuition at a solid state school by working through the summer. This time is very far from the realities of today, even in places where in-state tuition is considered "affordable" (as in the institution I consider my home).

As a matter of principle, an egalitarian society of the future that I'd want to help building would in fact contain free or inexpensive access to any level of education, at a high base standard of quality. Like, every school is a good school, there is a mechanism for tackling exceptions, and everyone can access whatever level of basic education or fundamental vocational training without having to pay for it in major financial hardship. (There are of course many ways to implement such a system.)

I'm not really fundamentally feeling much in conflict with Harry's argument, though, because OF COURSE PreK-12 has the bigger impact for fighting inequality. So we'd disagree about priorities, mostly. (I hope, because I hope that inexpensive access to tertiary and non-tertiary post-secondary education is also something Harry subscribes to.)

A twist, though, is that I'm not sure it's only money that K-12 is missing. Sure, there are means-starved districts that first and foremost need MONEY. But others have, at least on an international scale, a lot of funding, but it doesn't lead to good educational outcomes. The reasons for this are myriad: For good outcome, you also need high-quality curricula, teaching being a valued profession, and students who are psychologically and physically in a position to focus on learning. Schools alone can't heal traumatized communities. So much as I will always join the cries for more funds for education, it would be a mistake to think you can just throw money at the problem, at least not through the channels that money has been used traditionally.

faustusnotes 05.08.19 at 5:09 am ( 81 )
I'm surprised at the number of people on this thread who seem to think the purpose of free university education is to help lift people out of poverty. How many times do you have to be shown that this upward mobility thing is a Ponzi scheme? The goal of free education is to ensure that poor people can get access to the same things rich people can, so that everyone is able to live a fulfilling life.

Also I'm surprised at the number of people who, after the last 30 years of vicious anti-poor rhetoric from the right and from "centrists" (i.e. crypto-rightists), still think it's a good idea to propose programs that target only the very poor through tight means testing. Yes, they are ultimately more "progressive" since they definitely help the poor more than those on middle incomes. They are also extremely vulnerable to political attack because the majority of the population doesn't benefit from them.

I mean, does anyone on here seriously think that if the UK National Health Service (NHS) were designed only to benefit people on welfare, it would still be around now after Thatcher? The only thing that stopped her from completely killing it was the fact that her own constituency depended on it.

Also, imagine someone in the Labour left in 1944, talking like Harry (and others) about the NHS: saying that this universal health coverage thing is not progressive because middle class people would also benefit. They would be laughed out of the party room. It's madness to talk this way. If something -- education, healthcare, transportation, environmental protection -- is a public good you fund it publicly so everyone can afford it and access it, and then no matter how much the rich and their centrist shills may hate it, they'll never be able to cancel it.

Mrmister 05.08.19 at 1:32 pm ( 84 )
Harry @82 -- my understanding is that while the NHS has improved health outcomes for everyone, it has also (counter-intuitively) increased health inequality. More affluent people are better able to take advantage of healthcare. The interventions which tend to reduce health inequality are things like clean water and closing the sewers, not universal access to care.

This is also part of why I think an absolute prioritarian/progressivism is misguided. Beyond the working poor who were helped by the NHS, just less than the middle and upper classes were, the genuinely worst off people are another group entirely: the mentally ill, homeless, addicted, those trapped in domestic violence and sex trafficking, etc. They will often fail to benefit from even generally downward distribution programs because the problems with reaching and helping them are technical and complex. But we should not wait on the problems resolution or, worse yet, political resolution before pursuing other moderate forms of downward distribution aimed at helping eg the working poor.

With respect to Warren's proposal, it is not maximally progressive but is more progressive than the status quo and additionally strikes me as an excellent way to convince lower middle through upper class people that they, too, are part of the Great Society, which is important given that their political influence is considerable. People still wax nostalgic about the days that a tradesman's kid could go to a flagship state school on summer job money and enter into the professional world -- despite the fact that a tradesman's kid, and presumably bright, is far from the worst off, that still seems worth bringing back.

TM 05.08.19 at 1:45 pm ( 85 )
Isn't it true that the wealthy can get substantial tax reductions by deducting educational expenses, and those deductions are higher the wealthier the parents and the more expenses their education? If I understand correctly, those tax savings need to be counted against the benefits that would accrue to the wealthy.

I studied at University in Germany on a means tested benefit (for living expenses -- remember there was and is no tuition) which unfortunately was converted to a repayable grant in the 1980s and later to 50% repayable. Wealthy parents of students could actually get higher benefits from tax deductions than the poor students could get from this program. I wouldn't have begrudged the affluent kids the same benefit that I enjoyed -- in fact I felt it was unfair that they had to depend on their parents while I was entitled to my own money (*). But I think it exceedingly unfair that their parents could get those tax deductions. Best would be to raise the taxes and fund a living wage for all.

(*) Under German law, students can sue their parents if they have the means but refuse to fund an adequate education. But of course you would rather not sue your parents.

Faustusnotes 05.08.19 at 2:21 pm ( 87 )
Mrmister is wrong, the NHS helped all people in Britain including the very poor.

Harry, I don't get your response. Are you trying to say that free education only helps the most educated? This is true in the trivial sense that it only helps people who can qualify for university. Similarly free cancer care only helps those with cancer! What of it? Unless you think anyone who wants to go to university should be allowed in, this is irrelevant. Perhaps you're trying to imply that warrens proposal only helps the wealthy because only the wealthy get good high school? Well yes, and the nhs gave better health outcomes to wealthier people and non-smokers, so what? That's not an argument against making it universal, it's an argument for banning smoking. You shouldn't conflate the problems in high school funding with university funding, because the upshot of that is that the few poor kids (of whom I am one) who manage to fight free of our shit high school education have done it for nothing because we can't get into uni because it's too expensive. Yes it's better to do both! But as people above have observed it's hard for the federal govt to fix secondary education (fuck, they can't even stop school shootings!) So fix what you can and come back to the next stages later. America has sooooo many problems that it's madness to oppose fixing the ones you can because some people who are benefiting from an inequality the federal govt can't fix will benefit a little more from its efforts to fix the ones it can fix.

Poor children should be able to go to university. That's a simple statement of what is right. Warrens offering a fix for ONE of the two big barriers to doing that. Her fix also helps middle class kids. Lucky them! Why should a poor kid care?

Cian 05.08.19 at 3:27 pm ( 90 )
I think focusing on high income parents is a bit misleading. Yes the very poorest don't go to college, but plenty of kids from median income, and sub-median income, households do. And plenty of kids are graduating from college and getting jobs that don't pay particularly well, and probably will never pay brilliantly.

Secondly there is the way that college has increased very rapidly in the past 10 years, mostly at the state level. There are a range of reasons for this, but a generation of students have been forced to pay more money than previous generations for higher education, during a period when college education is becoming necessary for a wider range of jobs.

Thirdly there is the debt element. Not only is student debt becoming a more and more significant problem (affecting career choices and the economy), but the way that students are unable to escape it even into bankruptcy is an outrage.

I don't particularly care if wealthier parents also benefit from this. The solution would seem to be to tax them more. And one could also craft this in ways which would be less helpful to them (for example focus solely on state colleges and remove tax savings for education).

I also think we should spend more on K-12 schooling, preschool and a range of other things. I don't see these two things as particularly incompatible. The advantage of this policy is (like healthcare) is that it is good politics as it would have a quick and measurable impact, which would build political credibility (which could then be used for tougher fights, like increased taxation for education, infrastructure, transport, etc). There was an interesting interview with one of Corbyn's ex-advisors recently, who pointed out that you can't just raise taxes immediately. Instead you have to build people's trust that taxes will be used in ways that benefit them, and that will then change the way people think about taxes. This is one way to change that conversation.

You also need to be careful interpreting recent studies like those by Dixon et al (I used to work with Anna and I know the context of her studies). The NHS has gone backward since the end of the Labour government, and a lot of studies published in the last 10 years are actually showing the consequence of Tory attacks on the system, not the long-term outcomes of the NHS as a whole. Also the NHS was massively underfunded relative to European systems during the Thatcher era, and that has long-term implications for the structure of the system and its effects on inequality, which New Labour was not in power long enough to reverse.

Harry I think this is important:

Warren or any other President in the near future is going to do more than one big thing altogether, let alone in education, and I want people to take seriously the opportunity cost of this being the one big thing in education.

But I think you're underestimating how transformative the end of student debt will be for a lot of poor people. And given that a lot of the other strategies you identify are not feasible for the federal government (due to the states), I think you overstate this issue in this case.

David J. Littleboy 05.10.19 at 6:38 am ( 111 )
The problem with "vouchers" in a K-12 context is that they are used to steal funding from public schools and give it to private and/or religious schools. They're a scam. If you are doing vouchers for public college, they don't have that problem. (Leo Casey has this right.)

Also, on means testing. I think that means testing is largely a bad idea. If you are funding things from a progressive income tax, then the very rich are getting much less back than they are putting in, and that's fine. Also, it's easy for means testing to be made demeaning to recipients of the aid. If everyone gets and has to use vouchers*, that can't happen. Also, implementing means testing isn't free, and a lot of the time, it'll cost as much as it saves. And finally, if you can force rich folks to declare the benefit as income, you can tame much of it back in taxes (this works great for the sort of childbearing encouragement programs the Japanese ought to be implementing, i.e. direct, generous, flat rate (same amount for any child) child support payments to everyone who has a child.)

*: In my fantasy world here, the vouchers are more of payments to the schools for educating people than benefits to the students. Sort of like how Obamacare only pays insurers if they actually pay for medical care. (Obamacare is way more wonderful than you think.)

TM 05.10.19 at 9:52 am ( 113 )
TJ 93: "There are some tax breaks available, but these income out for a couple at earned income of around $230,000"

Can you tell us how much in annual college cost an affluent family could at the most deduct? And is it restricted to tuition? Until what age do the parents get a dependent deduction for a child in college and how much does it save them in taxes?

I don't know the details of the plan discussed here but if it is true that the parents can save taxes by having a child in college/uni (as is the case in Germany) then it would seem fair to me to publicly fund the college expenses for everybody while at the same time denying affluent parents the deduction (as is not the case in Germany).

Collin Street 05.11.19 at 12:04 am ( 117 )
Also, on means testing. I think that means testing is largely a bad idea.

Means testing for education specifically is a problem because basically nobody has "means" when they're twenty. [and absolutely nobody has means when they're fifteen]. Practically when people say means-testing here they mean -- although they may not recognise it or admit it -- parental means testing, and

Remember: the core of opposition to welfare is that it weakens dependence on rich relatives and other patronage networks, and thus reduces the ability of abusers to find people willing to subject themselves to abuse. Because education and student means-testing effectively means parental means-testing, a means-testing framework basically eliminates the children-of-the-rich -- a-fortiori the children-of-rich-abusers -- from protection. Of course the abusers are OK with means-tested welfare here, it leaves their targets unprotected. [see slavery: more expensive and lower productivity than free labour, but you can rape people and beat them to death, which some find more attractive than money, enough to fight a war over.]

[which is to say: if you make a model of right-wing thinking that supposes the sole motivation of right-wingers is to emotionally and physically abuse people and to create spaces and situations where that can happen, you get something that's like 90% accurate to what the actual right actually propose and implement. I mean, slavery! Free workers are more productive and cost about the same or less [lower overheads through savings in chains] but you can't rape them or beat them to death and that was worth fighting a war over.]

[I did once consider an education voucher that was structured with a taper like some welfare payments: for every extra dollar put in by the parents/holder, the voucher goes down fifty cents ]

[vouchers rely on individual selection, of course, and there are well-known problems with quality guarantees here with education, given the long timeframes and &c]

[the thought just struck me that the education and professional-development elements of employment -- which have to be hugely important if we're not doing lifetime jobs -- are also underserved by market self-regulation ]

Faustusnotes 05.11.19 at 1:32 am ( 118 )
Harry, what is this? You say it's means tested and you also say it doesn't help the poor. Are you saying warrens plan is means tested to ensure it only goes to the wealthy? Because that doesn't seem likely to me.

Also once again: we target income inequality, not variation. We don't oppose a program because 30% of the population won't use it. If you're going to make that your yardstick for public investment then you should at least try to address the consequences for public funding of women's health, childcare, and indeed universal health coverage!

nastywoman 05.11.19 at 3:06 pm ( 122 )
@
"I want the most talented kids taking the course they're most suited for."

Me too -- and as "Free Public Education" in "Civilised Western Democracies" wants exactly the same thing -- there is no reason -- for anybody -- to support any kind of educational system which depends on "privatized" -- aka "privately financed" education" -- as it allows "Rich kids --
even if they are NOT the most talented --
to become doctors and vets".

So "the most talented kids" should become doctors and vets -- Right? -- And they only can become doctors and vets -- if they don't have to buy themselves into becoming doctors and vets.

Right?

As buying yourself -(without talent) into "better education" -- (of whatever level) -- is only possible in a society where school kids and students have to pay for their education.

Right?

It's like currently trying to get a Green Card for my homeland -(or a permit to reside in the UK) You can buy it with absolutely NO talent.

Or in other words: That's why (civilised and social) countries like France -(or Germany) never will go back to any type of education where -- YOUR -(or your families) dough matters MORE -- than your talent.

One of the major ("policies"?) in fighting inequality!

And could this comment please be posted?

[May 11, 2019] Is Warren's college plan progressive -- Crooked Timber

Notable quotes:
"... It's not obvious to me that universal access to college education is a progressive goal. ..."
"... I think it is extremely important to understand where Warren is coming from on this. Warren initially became active in politics because she recognized the pernicious nature of debt and the impact it had on well-being. I ..."
"... Warren's emphasis in this particular initiative, it seems to me, is to alleviate debt so that individuals can pursue more advanced functionings/capabilities. ..."
"... The more a college degree is the norm, the worse things are for people without one. Making it easier to get a college degree increases the degree to which its the norm, and will almost inevitably have the same impact on the value of a college degree as the growth in high-school attendance (noted by Sam Tobin-Hochstadt above) had on the value of a high school degree. ..."
"... The debate on this subject strikes me as misguided because it says nothing about what students learn. A good high school education should be enough to prepare young people for most kinds of work. In most jobs, even those allegedly requiring college degrees, the way people learn most of what they need to know is through on the job training. Many high school graduates have not received a good education, though, and go to college as, in effect, remedial high school. ..."
May 11, 2019 | crookedtimber.org

Is Warren's college plan progressive?

by Harry on May 6, 2019 Ganesh Sitaraman argues in the Garun that, contrary to appearances, and contrary to the criticism that it has earned, Elizabeth Warren's college plan really is progressive, because it is funded by taxation that comes exclusively from a wealth tax on those with more than $50 million in assets. Its progressive, he says, because it redistributes down. In some technical sense perhaps he's right.

But this, quite odd, argument caught my eye:

But the critics at times also suggest that if any significant amount of benefits go to middle-class or upper-middle class people, then the plan is also not progressive. This is where things get confusing. The critics can't mean this in a specific sense because the plan is, as I have said, extremely progressive in the distribution of costs. They must mean that for any policy to be progressive that it must benefit the poor and working class more than it benefits the middle and upper classes. T his is a bizarre and, I think, fundamentally incorrect use of the term progressive .

The logic of the critics' position is that public investments in programs that help everyone, including middle- and upper-class people, aren't progressive. This means that the critics would have to oppose public parks and public K-12 education, public swimming pools and public basketball courts, even public libraries. These are all public options that offer universal access at a low (or free) price to everyone.

But the problem isn't that the wealthy get to benefit from tuition free college. I don't think anyone objects to that. Rather, the more affluent someone is, on average, the more they benefit from the plan. This is a general feature of tuition-free college plans and it is built into the design. Sandy Baum and Sarah Turner explain:

But in general, the plans make up the difference between financial aid -- such as the Pell Grant and need-based aid provided by states -- and the published price of public colleges. This means the largest rewards go to students who do not qualify for financial aid. In plans that include four-year colleges, the largest benefits go to students at the most expensive four-year institutions. Such schools enroll a greater proportion of well-heeled students, who have had better opportunities at the K-12 level than their peers at either two-year colleges or less-selective four-year schools. (Flagship institutions have more resources per student, too.) .

For a clearer picture of how regressive these policies are, consider how net tuition -- again, that's what most free-tuition plans cover -- varies among students at different income levels at four-year institutions. For those with incomes less than $35,000, average net tuition was $2,300 in 2015-16; for students from families with incomes between $35,000 and $70,000, it was $4,800; for those between $70,000 and $120,000, it was $8,100; and finally, for families with incomes higher than $120,000, it was more than $11,000. (These figures don't include living expenses.)

Many low-income students receive enough aid from sources like the Pell Grant to cover their tuition and fees. At community colleges nationally, for example, among students from families with incomes less than $35,000, 81 percent already pay no net tuition after accounting for federal, state and institutional grant aid, according to survey data for 2015-16. At four-year publics, almost 60 percent of these low-income students pay nothing.

... ...

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Mike Huben 05.06.19 at 1:16 pm ( 1 )

If you take progressivism to mean "improvement of society by reform", Warren's plan is clearly progressive. It reduces the pie going to the rich, greatly improves the lot of students who are less than rich, and doesn't harm the poor.

Don't let the perfect be the enemy of the good.

nastywoman 05.06.19 at 1:37 pm ( 2 )
@
"Is Warren's college plan progressive"?

Who cares – as long as this plan -(and hopefully an even more extended plan) puts an end to a big part of the insanity of the (stupid and greedy) US education system?

In other words – let's call it "conservative" that might help to have it passed!

Trader Joe 05.06.19 at 1:49 pm ( 3 )
The difficulty with the plan as proposed is not whether it is progressive or not but that it targets the wrong behavior – borrowing for education. If the goal is to make education more accessible – subsidize the university directly to either facilitate point of admission grants in the first place or simply bring down tuition cost to all attendees.

Under this proposal (assuming one thinks Warren would win and it could get passed) the maximizing strategy is to borrow as much as one possibly can with the hope/expectation that it would ultimately be forgiven. If that's the "right" strategy, then it would benefit those with the greatest borrowing capacity which most certainly is not students from low income families but is in fact families which could probably pay most of the cost themselves but would choose not to in order to capture a benefit they couldn't access directly by virtue of being 'too rich' for grants or other direct aid.

L2P 05.06.19 at 1:50 pm ( 4 )
"Rather, the more affluent someone is, on average, the more they benefit from the plan. "

This doesn't seem like a fair description of what's going on. If Starbucks gives a free muffin to everyone who buys a latte, it's theoretically helping the rich more than the poor under this way of looking at things. The rich can afford the muffin; the poor can't. So the rich will get more free muffins. But the rich don't give a crap. They can easily just buy the damn muffin in the first place. They're not really being helped, because the whole damn system helps them already. They're just about as well off with or without the free muffin.

Same here. My kid's going to Stanford. I'm effin rich and I don't give a crap about financial aid. If it was free I'd have an extra 75k a year, but how many Tesla's do I need really? How many houses in Hawaii do I need? But when I was a kid I was lower middle class. I didn't even apply to Stanford because it was just too much. Yeah, I could have gone rotc or gotten aid, but my parents just couldn't bust out their contribution. Stanford just wasn't in the cards. And Stanford's a terrible example, it had needs blind admissions and can afford to just give money away if it wants.

This sort of analysis is one step above bullshit.

bianca steele 05.06.19 at 2:02 pm ( 5 )
I don't understand the fear, in certain areas of what's apparently the left, of giving benefits to people in the middle of the income/wealth curve.

The expansion of the term "middle class" doesn't help with this, nor does the expansion of education. These debates often sound as if some of the participants think of "middle class" as the children of physicians and attorneys, who moreover are compensated the way they were in the 1950s.

The ability to switch between "it's reasonable to have 100% college attendance within 5 years from now" and "of course college is only for the elite classes" is not reassuring to the average more or less educated observer (who may or may not be satisfied, depending on temperament and so on, with the answer that of course such matters are above her head).

Ben 05.06.19 at 2:12 pm ( 7 )
The actual plan is for free tuition at public colleges. So not "the most expensive four-year institutions" that Baum and Turner discuss. [HB: they're referring to the most expensive 4-year public institutions]

There's also expanded support for non-tuition expenses, means-tested debt cancellation, and a fund for historically black universities, all of which make the plan more progressive. And beyond that, I could argue that, for lower-income students on the margin of being able to attend and complete school, we should count not only the direct financial aid granted, but also the lifetime benefits of the education the aid enables. But suffice it to say, I think you're attacking a caricature.

Dave 05.06.19 at 2:17 pm ( 9 )
the college plan does not actually offer 'universal access'

Given that something like one third of Americans gets a college degree, Warren's plan seems good enough. It's not obvious to me that universal access to college education is a progressive goal.

Michael Glassman 05.06.19 at 3:46 pm ( 16 )
I think it is extremely important to understand where Warren is coming from on this. Warren initially became active in politics because she recognized the pernicious nature of debt and the impact it had on well-being. If you are trying to get out from under the burden of debt your capabilities for flourishing are severely restricted, and these restrictions can easily become generational. One of the more difficult debts that people are facing are student debts. This was made especially difficult by the 2005 bankruptcy bill which made it close to impossible for individuals to get out from under student debt by entering in to Chapter 7 bankruptcy.

Warren's emphasis in this particular initiative, it seems to me, is to alleviate debt so that individuals can pursue more advanced functionings/capabilities. So if you think that the definition of progressive is creating situations where more individuals in a society are given greater opportunities for flourishing then the plan does strike me as progressive (an Aristotelian interpretation of Dewey such as promoted by Nussbaum might fall in this direction). There is another issue however that might be closer to the idea of helping those from lowest social strata, something that is not being discussed near enough. Internet technologies helped to promote online for profit universities which has (and I suppose continues to) prey and those most desperate to escape poverty with limited resources. The largest part of their organizations are administrators who help students to secure loans with promises of high paying jobs once they complete their degrees. These places really do prey on the most vulnerable (homeless youth for instance) and they bait individuals with hope in to incurring extremely high debt. The loan companies are fine with this I am guess because of the bankruptcy act (they can follow them for life). This is also not regulated (I think you can thank Kaplan/Washington Post for that). Warren's initiative would help them get out from under debt immediately and kick start their life.

I agree k-12 is more important, but it is also far more complicated. This plan is like a shot of adrenaline into the social blood stream and it might not even be necessary in a few years. I think it dangerous to make the good the enemy or the perfect, or the perfect the critic of the good.

nastywoman 05.06.19 at 5:28 pm ( 22 )
– and how cynical does one have to be – to redefine a plan canceling the vast majority of outstanding student loan debt – as some kind of ("NON-progressive") present for "the rich"?
Sam Tobin-Hochstadt 05.06.19 at 5:59 pm ( 25 )
I think this work by Susan Dynarski and others really makes the case that reducing price will change access and populations significantly: https://www.chronicle.com/article/How-U-of-Michigan-Appealed-to/245294

But even apart from that, the argument of the post seems like it would suggest that many things that we currently fund publicly are not progressive in a problematic way. Everything from arts to national parks to math research "benefits" the rich more than the poor. There's possibly a case that public provision of these goods is problematic when we as a society could spend that money on those who are more disadvantaged. But that's a very strong claim and implicates far more than free college.

Finally, it's worth comparing the previous major expansion of education in the US. The point at which high school attendance was as widespread as college attendance is now (about 70% of high school graduates enroll in college of some form right away) was around 1930, well after universal free high school was available. I think moving to universal free college is an important step to raise those rates, just as free high school was.

Leo Casey 05.06.19 at 7:31 pm ( 29 )
It strikes me that the argument made here against a universal program of tuition free college is not all that different than an argument made against social security -- that the benefits go disproportionately to middle class and professional class individuals. Since in the case of Social Security, one has to be in gainfully employed to participate and one's benefits are, up to a cap, based on one's contributions, middle class and professional class individuals receive greater benefits. Poor individuals, including those who have not been employed for long periods of time, receive less benefits. (There are quirks in this 10 second summary, such as disability benefits, but not so much as to alter this basic functioning.)

Every now and again, there are proposals to "means test" social security, using this functioning as the reasoning. A couple of points are worth considering.

First, it is the universality of social security that makes it a political 'third rail,' such that no matter how it would like to do away with such a 'socialist' program, the GOP never acts on proposals to privatize it, even when they have the Presidency and the majorities that would allow it to get through Congress. The universality thus provides a vital security to the benefits that poor and working people receive from the program, since it makes it politically impossible to take it away. Since social security is often the only pension that many poor and working people get (unlike middle class and professional class individuals who have other sources of retirement income), the loss of it would be far more devastating to them. There is an important way, therefore, that they are served by the current configuration of the system, even given its skewing.

Second, and following from the above, it is important to recognize that the great bulk of proposals to "means test" Social Security come from the libertarian right, not the left, and that they are designed to undercut the support for Social Security, in order to make its privatization politically viable.

Most colleges and universities "means test" financial aid for their students, which is one of the reasons why it is generally inadequate and heavily weighted toward loans as opposed to grants. I think it is a fair generalization of American social welfare experience history to say that "means tested" programs are both more vulnerable politically (think of the Reagan 'welfare queen' narrative) and more poorly funded than universal programs.

There are additional argument about the skewing of Social Security benefits, such as the fact that they go disproportionately to the elderly, while those currently living in poverty are disproportionately children. This argument mistakes the positive effects of the program -- before Social Security and Medicare the elderly were the most impoverished -- for an inegalitarian design element.

The solution to the fact that children bear the brunt of poverty in the US is not to undermine the program that has lifted the elderly out of poverty but to institute programs that address the problem of childhood poverty. Universal quality day care, for example, provides the greatest immediate economic benefits to middle class and professional class families who are now paying for such services, but it provides poor and working class kids with an education 'head start' that would otherwise go only to the children of those families that could afford to pay for it. And insofar as day care is provided, it makes it easier for poor and working class parents (often in one parent households) to obtain decent employment.

So the failings of universal programs are best addressed, I would argue, by filling in the gaps with more universal programs, not 'means testing' them.

To the extent that Warren's 'free tuition' proposal addresses only some of the financial disadvantages of poor and working people obtaining a college education, the response should not be "oh, this is not progressive," but what do we do to address the other issues, such as living expenses. It is not as if there are no models on how to do this. All we need to do is look at Nordic countries that provide post-secondary students both free tuition and living expenses.

christian h. 05.06.19 at 9:15 pm ( 31 )
Having grown up and gone to university in Germany it is simply incomprehensible to me that there is tuition supporters on the political left in the U.S. It's true that free college isn't universal in the same sense free K-12 education is. But neither are libraries (they exclude those who are functionally illiterate completely, and their services surely go mostly to upper middle class people who have opportunity and education to read regularly), for example. Neither are roads – the poor overwhelmingly live in inner cities, often take public transport – it's middle class suburbanites that mostly profit. Speaking of public transport, I assume Henry opposes rail; it is very middle class, the poor use buses. (The last argument actually has considerable traction in Los Angeles, it's not completely far fetched.)
SamChevre 05.06.19 at 11:57 pm ( 40 )
I agree that Warren's free college and debt forgiveness plans would not be very progressive, but I'd propose that I think the dynamic mechanism built in would make it worse than a static analysis shows.

(Note that most of my siblings and in-laws do not have college degrees; this perspective is based on my own observations.)

The more a college degree is the norm, the worse things are for people without one. Making it easier to get a college degree increases the degree to which its the norm, and will almost inevitably have the same impact on the value of a college degree as the growth in high-school attendance (noted by Sam Tobin-Hochstadt above) had on the value of a high school degree. (We're already seeing this: many positions that used to require a college degree now require a specific degree, or a masters degree.) This will increase age discrimination, and further worsen the position of the people for whom college is unattractive for reasons other than money.

To give a particular example of a mechanism (idiosyncratic, but one I know specifically). Until a couple decades ago, getting a KY electrician's license required 4 years experience under a licensed electrician, and passing the code test. Then the system changed; now it requires a 2-year degree and 2 years experience, OR 8 years experience. This was great for colleges. The working electricians don't think the new electricians are better prepared as they used to be, but all of a sudden people who don't find sitting in a classroom for an additional 2 years attractive are hugely disadvantaged. Another example would be nursing licenses; talk to any older LPN and you'll get an earful about how LPN's are devalued as RNs and BSNs have become the norm.

Dr. Hilarius 05.07.19 at 12:39 am ( 42 )
I suspect tuition reform will be complex, difficult and subject to gaming. Being simple minded I offer an inadequate but simple palliative. Make student loan debt dischargeable in bankruptcy. You can max out your credit cards on cars, clothes, booze or whatever and be able to discharge these debts but not for higher education. The inability to even threaten bankruptcy gives all the power to collection companies. Students have no leverage at all. The threat of bankruptcy would allow for negotiated reductions in principal as well as payments.

Bankruptcy does carry a lot of negative consequences so it would offset the likely objections about moral hazards, blah, blah. I would also favor an additional method of discharging student debt. If your debt is to a for-profit school that can't meet some minimum standards for student employment in their field of study then total discharge without the need for bankruptcy. For-profit vocational schools intensively target low income and minority students without providing significant value for money.

John Quiggin 05.07.19 at 1:44 am ( 44 )
Progressivity looks much better if the program sticks to free community college, at least until there is universal access to 4-year schools. That's what Tennessee did (IIRC the only example that is actually operational).
Gabriel 05.07.19 at 3:03 am ( 47 )
Harry: it doesn't seem as if you responded to my comment. I'll try again.

1. A policy is progressive if it is redistributive.
2. Warren's plan is redistributive.
3. Thus, Warren's plan is progressive.

Comments about how effective the redistribution is are fine, but to claim a non-ideal distribution framework invalidates the program's claims to being progressive seems spurious. And I don't think this definition of progressive is somehow wildly ideosyncratic.

Nia Psaka 05.07.19 at 4:01 am ( 48 )
To whine that free college is somehow not progressive because not everyone will go to college is a ridiculous argument, one of those supposedly-left-but-actually-right arguments that I get so tired of. To assume that the class makeup of matriculators will be unchanged with free college is to discount knock-on effects. This is a weird, weird post. I guess I'm going back to ignoring this site.
Kurt Schuler 05.07.19 at 4:04 am ( 49 )
The debate on this subject strikes me as misguided because it says nothing about what students learn. A good high school education should be enough to prepare young people for most kinds of work. In most jobs, even those allegedly requiring college degrees, the way people learn most of what they need to know is through on the job training. Many high school graduates have not received a good education, though, and go to college as, in effect, remedial high school.

Readers who attended an average American high school, as I did long ago, will know that there are certain students, especially boys, who are itching to be done with school. It is far more productive to give them a decent high school education and have them start working than to tell them they need another two to four years of what to them is pointless rigamarole.

Rather than extending the years of education, I would reduce the high school graduation age to 17 and reduce summer vacations by four weeks, so that a 17 year old would graduate with as many weeks of schooling as an 18 year old now. (Teachers would get correspondingly higher pay, which should make them happy.)

Harry Truman never went to college. John Major became a banker and later prime minister of Britain without doing so. Neither performed noticeably worse than their college-educated peers. If a college education is not necessary to rise to the highest office in the land, why is it necessary for lesser employment except in a few specialized areas?

An experiment that I would like to see tried is to bring back the federal civil service exam, allowing applicants without college degrees who score high enough to enter U.S. government jobs currently reserved for those with college degrees.

[May 08, 2019] Elizabeth Warren Student Loan Debt Forveness propasal: critique from the conservarives

Not all specialties are created equal. It is clear that a person who take loan to became obtain a degree in communications is deeply misguided as chances to get a well paying job with this specially are close to zero. Many "humanitarian" specialties are similar -- unemployment is almost guaranteed and if a person was misled we should prosecute greedy university administrators and jail some of them. Such specialties should have a disclaimer: employment is difficult to obtain. Unemployment is almost garanteed. Take the courses at your own risk.
At the same time for STEM degrees Warren proposal makes more sense as people who enrolled into those specialties tried a more realistic approach, but probably job market turned bad or level of talent is not enough or both. while people in this specialties are needed but their chances for employment are crippled by the flow of H1B applicants so part of those costs should be subsidized by fees for large H1B employers, such as Microsoft and Google. Or something like that.
At the same time why we should forgive a person the debt if the particular person specialized in, say, dance? What is the social value of oversupply of dancers? So probably subsidies should be selective and limited to STEM specialties and selected "high social value" humanitarian specialties.
So the loan forgiveness is a crippled, somewhat unfair but still a reasonable approach.
But the key problem is not loads but greed of neoliberal educational institutions. Cost of tuition skyrocketed after 1980 and that's not accidental: this is drect result of neoliberalism corruption of higher education. The ability of government to prosecute "too greedy" colleges is important. Limits of salary of administrators and especially president and vice president and deens are critical.
Notable quotes:
"... The total cost of Warren's plan would be $1.25 trillion over 10 years, with the debt forgiveness portion consisting of a one-time cost of $640 billion. Warren plans to pay for her plan by imposing an annual tax of 2 percent on all families that have $50 million or more in wealth. ..."
"... Warren is right to focus attention on the matter of student loans. This is a major issue for young people and experts have been warning of a crisis for years. ..."
"... After all, they are victims of a scam perpetrated by the education cartel and the federal government. ..."
"... Here's how it works: the education cartel sells the lie that only those with four-year college degrees can succeed in life. Then they steer everyone with a pulse towards a university. ..."
"... The government steps in and subsidizes student loans that allow almost anyone to go to college, regardless of their ability to pay the loans back. ..."
"... College is not for everyone and there's no reason to keep promoting that idea. ..."
"... Reduce the overabundance of administrators. The number has exploded since the 1990s. ..."
"... A lot of required courses are just padding to make the experience drag on for four years. That creates unneeded expenditures of time and money. ..."
"... several nations currently do offer virtually free college educations & I don’t believe their diplomas are of less value for it. ..."
May 08, 2019 | www.theamericanconservative.com

Massachusetts Senator Elizabeth Warren recently jolted the Democratic presidential primary race by tackling one of the most important issues of our time: student loans and the cost of higher education. Warren called for canceling up to $50,000 of student loan debt for every American making under $100,000 a year. In addition, she would make two- and four-year public college tuitions free for all new students.

The total cost of Warren's plan would be $1.25 trillion over 10 years, with the debt forgiveness portion consisting of a one-time cost of $640 billion. Warren plans to pay for her plan by imposing an annual tax of 2 percent on all families that have $50 million or more in wealth.

Warren is right to focus attention on the matter of student loans. This is a major issue for young people and experts have been warning of a crisis for years.

But in most cases, it isn't right to blame student loan borrowers for their predicaments. After all, they are victims of a scam perpetrated by the education cartel and the federal government.

Here's how it works: the education cartel sells the lie that only those with four-year college degrees can succeed in life. Then they steer everyone with a pulse towards a university.

The government steps in and subsidizes student loans that allow almost anyone to go to college, regardless of their ability to pay the loans back. These loans are a trap, and not just with regard to their cost. The government, which took over the student loan industry , forbids borrowers from discharging that debt in bankruptcy proceedings.

How do such cheap and easy student loans affect universities? For starters, they have caused a proliferation of degrees that offer poor returns on investment . In addition, they have led to the dilution of the value of previously marketable degrees such as those in the humanities and international relations, as more students enter those programs than could ever hope to work in their respective fields. For example, in 2013, half of all those who had graduated from college were working in jobs that did not require degrees .

But worst of all, the easy access to student loans has destroyed the price mechanism, which is so important for determining the real supply and demand of a product. Since government is the ultimate payer, tuition has been pushed sky high. The rate of tuition increase has actually outpaced inflation threefold .

Is Elizabeth Warren's plan the solution? No! It will only make things worse.

For starters, the wealth tax that she would use to fund her plan is likely unconstitutional . But even if it was upheld by the Supreme Court, it would still be bad policy. Countries that have imposed wealth taxes like France and Sweden have found that the rich simply leave and take their assets with them rather than pay more.

As for the idea of universal student loan debt forgiveness, it is a bad policy on the merits. For starters, it does not make economic sense to forgive the debts of those who will earn at least $17,500 more a year than those who don't go to college.

Also, although the student loan bubble has been inflated by the actions of both the education cartel and government, at the end of the day, loans are a contract. Those who are able to pay them down should and not be bailed out.

... ... ...

Finally, we need to promote alternatives to college. There are many well-paying jobs out there that don't require degrees . There are also apprentice programs offered by organizations like Praxis . We should encourage entrepreneurship, which is how so many in this country have lifted themselves out of poverty. College is not for everyone and there's no reason to keep promoting that idea.

Kevin Boyd is a freelance writer based in Louisiana. He is a contributor to The Hayride, a southern news and politics site. He has also been published in , The Federalist, The Atlanta Journal-Constitution , and The New York Observer among other publications.


Lert345, says: May 8, 2019 at 3:14 pm

How to make college cost effective. Two major reforms

1. Reduce the overabundance of administrators. The number has exploded since the 1990s.

2. Restructure college. Most programs don’t need to be four years long. Most can be cut to 2 1/2 – 3 years. A chemistry student should be taking courses required for a chemistry degree, nothing more (unless he/she wants to). A lot of required courses are just padding to make the experience drag on for four years. That creates unneeded expenditures of time and money.

After doing the above, then maybe we can talk about “free” college.

mrscracker, says: May 8, 2019 at 4:04 pm
I personally believe that we should each pay our own way through life as much as possible, but several nations currently do offer virtually free college educations & I don’t believe their diplomas are of less value for it.

I agree with you that other avenues like trades should be encouraged. A four year degree isn’t necessary for everyone.

DavidE, says: May 8, 2019 at 5:46 pm
@workingdad. If a wealth tax is unconstitutional, do you consider a property tax also unconstitutional?

[May 06, 2019] America's $1.6 trillion student debt woe spurring suicidal thoughts survey The Japan Times

May 06, 2019 | japantimes.co.jp

America's $1.6 trillion student debt woe spurring suicidal thoughts: survey

Bloomberg

WASHINGTON - The $1.6 trillion in U.S. student debt may not pose a direct threat to the economy, but it's causing anguish that goes far beyond financial concerns for the people who owe it.

One in 15 borrowers has considered suicide due to their school loans, according to a survey of 829 people conducted last month by Student Loan Planner, a debt advisory group.

Most student debt is held by people with balances on the lower end of the scale, with only 0.8 percent of the U.S. population owing more than $100,000, according to Deutsche Bank economists. They have labeled the issue as a "micro problem" for individuals, rather than a macro problem for the economy.

Yet that still equates to 2.8 million people with around $495 billion in debt as of March, according to Department of Education data. Even more worrying is that it's an increase of almost $61 billion since the end of 2017.

Student loans are the second-biggest kind of debt in America behind home mortgages and often more expensive to service relative to the amount owed because interest rates are generally higher. Not to mention that unlike buying a home, an education isn't a tangible asset that can be sold.

It's also turning into a hot political issue as next year's presidential election approaches. Sen. Elizabeth Warren has proposed a plan to cancel loans for many borrowers, while former Colorado Gov. John Hickenlooper addressed some of the knock-on effects for the economy in a presentation at the Milken Institute conference earlier this week.

"Of course millennials would love to buy a house," Hickenlooper said April 30 in Los Angeles. But, "they're buried in debt!"

The following scenarios show the monthly costs associated with different levels of student debt. The first envisages a 10-year loan at 6 percent. To put the figures into perspective, a 30-year mortgage of $400,000 at current interest rates would cost about $2,000 per month.

In the second scenario, loans are shown over a 20-year term with rates at 7 percent. Monthly payments are smaller but the overall burden is bigger, with total interest payments on $100,000 of debt rising above $86,000.

[May 06, 2019] Neoliberal Universities are corrupt by definition

May 06, 2019 | www.nakedcapitalism.com

Hugh: , July 12, 2013 at 1:27 pm

Lobbying and campaign finance are two forms of legalized bribery. Citizens United legalized political corruption for corporations and showed the complete corruption of the Supreme Court which decided it. Astroturfed political organizations, the manufacture of "popular consent", are another form of corruption in politics. The hiding of contributors to these and other groups gives cover to their corruption.

The media are corrupt, even a lot of the blogosphere is. It is all propaganda all the time, just segmented and tailored to different audiences of rubes.

Universities are corrupt. They no longer fulfill an educational mission rather they are purveyors of the status quo. They are corrupt in their corporate structure, in their alliances with other corporations, and in their foisting of debt on to their students.

Academia is corrupt. There is the whole publish or perish thing that results in most of academia's research product being worthless and useless. This is even before we get to the quack sciences like economics. Academic economics is completely corrupt. The dominant politico-economic system of our times is kleptocracy. Yet almost no academic economist will acknowledge it let alone make it central to their point of view.

The judicial system and the judiciary are corrupt. How else to explain our two-tiered justice system? The great criminals of our times, the largest frauds in human history, are not only not prosecuted, they are not even investigated. And how can anyone take the Supreme Court to be anything but corrupt? This is an institution that except for a couple of decades around the Warren Court has, for more than 200 years, always been on the side of the haves against the have-nots, for the powerful, against the powerless, pro-slavery, pro-segregation, and anti-worker. How can anyone take decisions like Bush v. Gore or Citizens United to be anything other than corrupt, politics dressed up as legal thinking?

In a kleptocracy, all the institutions, at least those controlled by the rich and elites, are put into the service of the kleptocrats to loot or justify and defend looting and the looters. So corruption is endemic and systemic.

[May 06, 2019] Brain Drain and the Polarization of America

May 06, 2019 | www.theamericanconservative.com

Brain Drain and the Polarization of America The highly educated are concentrating together, depriving struggling communities and dividing the country. By Rachel Sheffield and Scott Winship May 3, 2019

Detroit, Michigan | Credit: Hotforphotog; Shutterstock Are we more divided as a nation today than we were before? Our new research within the Joint Economic Committee's Social Capital Project suggests that we are. The findings indicate that Americans are more frequently dividing themselves geographically and along lines of education. Highly educated Americans have increasingly moved to a handful of states over the last several decades, leaving other places behind.

This "brain drain" has clear economic implications. Beyond economics though, it's also likely draining social capital from many places, as communities lose talent and resources that would help support civic institutions. Brain drain and educational sorting exacerbate political and cultural divides as well: Americans segregate themselves into communities where they more frequently reside near those similar to themselves, decreasing the likelihood of rubbing shoulders with those who see the world differently.

The Rust Belt, the Plains, and some states in New England are experiencing high levels of brain drain.

It's not news that highly educated Americans are more likely to move. America's highly educated have consistently been more prone to pack up their bags and seek opportunity outside their hometowns. But surprisingly, there have been few attempts to quantify the magnitude of the problem and assess whether it is getting worse. To rectify that, we created brain drain measures that compare the share of people leaving their birth states who are highly educated to either the highly educated share of people staying in their birth states or the share entering the states who are highly educated. We found that today, highly educated movers in the U.S. tend to leave certain states and regions of the country at higher rates than in the past and concentrate in a smaller group of states that are home to booming metropolitan areas. This leads to growing geographic divides between areas that are thriving and places that struggle. With fewer states retaining and attracting talent, more areas are left behind.

A handful of states have become exclusive destinations for the highly educated. They not only hold onto more of their homegrown talent, but they also gain more highly educated adults than they lose. These talent-magnet states are along the West Coast, as well as the Boston-Washington corridor.

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Beyond the coasts, a few other states, like Texas, are retaining their homegrown talent while simultaneously winning a balance of talent from elsewhere.

These "brain gain" states are like an elite club whose members trade among themselves. For example, California draws the greatest share of its highly educated entrants from other brain gain states: New York, Illinois, and Texas, which are ranked third, fourth, and eighth, respectively, on net brain gain. New York pulls in highly educated entrants primarily from New Jersey (ranked sixth on net brain gain) and California. Massachusetts (ranked second) is also among its top five sending states. The most common origins of Texas's entrants include California, Illinois, and New York. New Jersey draws its highly educated from the likes of New York, Massachusetts, California, and Illinois. New York and New Jersey are among Massachusetts' most common sending states. New York, New Jersey, California, and Virginia (ranked seventh) are among the top states sending highly educated natives to Maryland.

On the opposite side of the coin are the many states that are not only bleeding highly educated adults but failing to attract others to replace them. Rust Belt states -- Pennsylvania, Ohio, Indiana, Michigan, Wisconsin, and Missouri -- are particularly plagued by brain drain. Several Plains states -- Iowa and the Dakotas -- as well as states in New England -- Vermont and New Hampshire -- are also experiencing high levels of brain drain. Although this is hardly a new phenomenon for the Rust Belt, it's become a worsening problem over the last 50 years for the other high brain-drain states mentioned.

Brain drain's effects on state economies are obvious. Places that lose more of their highly educated adults are likely going to be economically worse off than those that retain or attract highly educated adults. And if the highly educated are concentrating in fewer areas, then more parts of the country will be prone to economic stagnation. But beyond the economic implications, brain drain also has an impact on social capital. If areas are drained of their most highly educated, those left behind may struggle to support churches, athletic leagues, parent-teacher associations, scouting groups, and so forth. These institutions matter for the well-being of communities, as they bring people together in purposeful relationships, ultimately creating the social fabric of our nation.

Another way that brain drain's educational divides can deplete social capital is by creating deeper political and cultural divides between Americans. The highly educated more often hold liberal political views compared to those with less than a college education. America's major metropolitan areas (many of the states that win the highly educated are home to thriving cities) tend to vote Democratic , while most other areas of the country vote Republican . Those living in urban areas are also more likely to hold liberal political views , whereas those living in rural areas are more commonly conservative.

Thus, as a result of brain drain and self-sorting, Americans are now more likely to live in communities where they are isolated from people who hold different ideologies and values. Less association between people of different viewpoints can exacerbate political divides, as people become more steeped in their own beliefs. When those who are different are further away, it is easier to cast them as a faceless group of opponents upon whom all blame for America's problems belongs, rather than as neighbors with whom to find common ground. Ultimately, social segregation weakens the idea that, as Americans, we share something important in common with one another.

A growing federal government only adds to the problem of geographic divide. Naturally, neither heartland traditionalists nor coastal cosmopolitans want to be ruled by the other camp. However, with more power at the national level, national elections have higher stakes for everyone. Each camp feels threatened when its party loses control. With less association among those with different viewpoints, political discourse turns into fever-pitched discord.

The strength of our relationships is crucial to the strength of our nation. Americans will have to work to make their communities places in which not only the most highly educated benefit, but others as well. We must find ways to reach across the divides that separate us.

Rachel Sheffield is a senior policy advisor in the chairman's office of the Joint Economic Committee of Congress, and Scott Winship is the executive director of the committee.

[May 04, 2019] Someone is getting a raise. It just isn't you

stackoverflow.com

As is usual, the headline economic number is always the rosiest number .

Wages for production and nonsupervisory workers accelerated to a 3.4 percent annual pace, signaling gains for lower-paid employees.

That sounds pretty good. Except for the part where it is a lie.
For starters, it doesn't account for inflation .

Labor Department numbers released Wednesday show that real average hourly earnings, which compare the nominal rise in wages with the cost of living, rose 1.7 percent in January on a year-over-year basis.

1.7% is a lot less than 3.4%.
While the financial news was bullish, the actual professionals took the news differently.

Wage inflation was also muted with average hourly earnings rising six cents, or 0.2% in April after rising by the same margin in March.
Average hourly earnings "were disappointing," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

Secondly, 1.7% is an average, not a median. For instance, none of this applied to you if you are an older worker .

Weekly earnings for workers aged 55 to 64 were only 0.8% higher in the first quarter of 2019 than they were in the first quarter of 2007, after accounting for inflation, they found. For comparison, earnings rose 4.7% during that same period for workers between the ages of 35 and 54.

On the other hand, if you worked for a bank your wages went up at a rate far above average. This goes double if you are in management.

Among the biggest standouts: commercial banks, which employ an estimated 1.3 million people in the U.S. Since Trump took office in January 2017, they have increased their average hourly wage at an annualized pace of almost 11 percent, compared with just 3.3 percent under Obama.

Finally, there is the reason for this incredibly small wage increase fo regular workers. Hint: it wasn't because of capitalism and all the bullsh*t jobs it creates. The tiny wage increase that the working class has seen is because of what the capitalists said was a terrible idea .

For Americans living in the 21 states where the federal minimum wage is binding, inflation means that the minimum wage has lost 16 percent of its purchasing power.

But elsewhere, many workers and employers are experiencing a minimum wage well above 2009 levels. That's because state capitols and, to an unprecedented degree, city halls have become far more active in setting their own minimum wages.
...
Averaging across all of these federal, state and local minimum wage laws, the effective minimum wage in the United States -- the average minimum wage binding each hour of minimum wage work -- will be $11.80 an hour in 2019. Adjusted for inflation, this is probably the highest minimum wage in American history.
The effective minimum wage has not only outpaced inflation in recent years, but it has also grown faster than typical wages. We can see this from the Kaitz index, which compares the minimum wage with median overall wages.

So if you are waiting for capitalism to trickle down on you, it's never going to happen. span y gjohnsit on Fri, 05/03/2019 - 6:21pm

Carolinas

Teachers need free speech protection

Thousands of South Carolina teachers rallied outside their state capitol Wednesday, demanding pay raises, more planning time, increased school funding -- and, in a twist, more legal protections for their freedom of speech
SC for Ed, the grassroots activist group that organized Wednesday's demonstration, told CNN that many teachers fear protesting or speaking up about education issues, worrying they'll face retaliation at work. Saani Perry, a teacher in Fort Mill, S.C., told CNN that people in his profession are "expected to sit in the classroom and stay quiet and not speak [their] mind."

To address these concerns, SC for Ed is lobbying for the Teachers' Freedom of Speech Act, which was introduced earlier this year in the state House of Representatives. The bill would specify that "a public school district may not willfully transfer, terminate or fail to renew the contract of a teacher because the teacher has publicly or privately supported a public policy decision of any kind." If that happens, teachers would be able to sue for three times their salary.

Teachers across the country are raising similar concerns about retaliation. Such fears aren't unfounded: Lawmakers in some states that saw strikes last year have introduced bills this year that would punish educators for skipping school to protest.

[May 02, 2019] If The U.S. Economy Is So Great, Why Are So Many Workers Miserable

May 02, 2019 | www.zerohedge.com

If The U.S. Economy Is So Great, Why Are So Many Workers Miserable?

by Tyler Durden Thu, 05/02/2019 - 17:45 2 SHARES Authored by Mac Slavo via SHTFplan.com,

Millennial and generation Z workers are becoming increasingly miserable with their jobs and careers. Since we are told several times a day by the media that the economy is booming, why are so many young workers so disastrously melancholy all the time?

The mental well being of the American worker hit an all-time low in 2018, according to a report by Barron's . That's a bit shocking considering the economy is booming and wages are rising, right? Well, wages aren't rising that much, and much of the consumer spending is being put on credit cards , creating a vicious cycle of depression and consumerism that will repeat for a lot of folks.

Americans Are Financially And Mentally Unstable: Crippling Debt Is Linked To Chronic Depression

"When you're struggling with your mental health it can be much harder to stay in work or manage your spending, while being in debt can cause huge stress and anxiety – so the two issues feed off each other, creating a vicious cycle which can destroy lives," said Helen Undy the institute's chief executive. "Yet despite how connected these problems are, financial services rarely think about our mental health, and mental health services rarely consider what is happening with our money."

So why are we constantly being told everything is fine? The mainstream media loves to say that the U.S. is nearly ten years into one of the longest economic expansions in history, unemployment is the lowest it's been in almost half a century, and employees have more job choices than they've had in years. But there's just one problem. That's not actual truthful when taking all of the data into consideration. Sure, unemployment is low the way the government calculates it, but there's a reason for that. 102 million Americans are no longer "in the workforce" and therefore, unaccounted for.

Michael Snyder, who owns the Economic Collapse Blog s ays: "Sadly, the truth is that the rosy employment statistics that you are getting from the mainstream media are manufactured using smoke and mirrors."

When a working-age American does not have a job, the federal number crunchers put them into one of two different categories. Either they are categorized as "unemployed" or they are categorized as "not in the labor force".

But you have to add both of those categories together to get the total number of Americans that are not working.

Over the last decade, the number of Americans that are in the "unemployed" category has been steadily going down, but the number of Americans "not in the labor force" has been rapidly going up.

In both cases we are talking about Americans that do not have a job. It is just a matter of how the federal government chooses to categorize those individuals. – Michael Snyder, The Economic Collapse Blog

That could partially explain the misery some are feeling, but those who have jobs aren't happy either. They are often reeling from student loan and credit card debt. Being depressed makes shopping feel like a solution, but when the bill comes, the depression once again sets in making this a difficult cycle to break for so many just trying to scrape by.

Depression and suicide rates are rising sharply and other than putting the blame on superficial issues, researchers are at a loss as to the real reason why. But could it possibly be that as the elite globalists continue to take over the world and enslave mankind, people are realizing that they aren't meant to be controlled or manipulated, but meant to be free?

There's something we are all missing all around the globe. Could it possibly be free will and a life of freedom from theft and violent coercion and force that's missing?


Sick , 31 minutes ago link

Freedom to assemble is gone. That would be the only way for the awake people to make a change. Unfortunately everyone is glued to their electronics

CashMcCall , 57 minutes ago link

When even your own article lies to everyone... so the modern person that does well are those who lie the best and are the best con artists. Trump is an example. Low talent High con.

Example the US unemployment number.

Only the pool of unemployed that is Presently eligible for unemployment benefits is counted in the Unemployment number. That means self employed, commissioned workers, contractors etc are not included in the pool of unemployment even if they are out of work because they are unemployment ineligible.

Thus, over time, as unemployment benefits are lost, the unemployment pool shrinks. This is called a mathematical regression. How far does it shrink? To the point of equilibrium which is roughly 4% in which new persons enter the work force to the same extent of those losing benefits and being removed and become invisible.

Thus, Unemployment is a bogus number grossly understating truthful Unemployment. This method was first used under Obama and persists today under the Orange poser.

Nepotism and Affirmative action

Why would this make people unhappy? Chronic underemployment. Advancement is mostly by nepotism or affirmative action the flip side of the same coin. The incoming Harvard Class this year was 30% legacy student... and 30% affirmative action and the rest be damned. Happy?

Feminism has gripped the workplace.

Men hate working for female bosses. They don't trust them, they don't trust their judgment which often looks political and never logical. Men feel those women were promoted because of gender.

I saw this years ago in a clean room at National Semiconductor. A woman was put in charge of a team of roughly 30 white nerd males. She was at them constantly for not locking doors behind them and other menial infractions. She could not comprehend the complexity of the work or how inspiration operates but she would nag them and bully them.

At another facility there was a genius that would come to work and set up a sleeping bag and go to sleep under his desk. He was a Unix programmer and system engineer. So when something went wrong they would wake him and he would get up, solve the problem and go back to sleep.

Then the overstuffed string of pearls showed up as the new unit boss. She was infuriated that somebody would dare sleep on the clock and so blatantly. So she would harass him and wake him. Then one day she got so mad she started kicking him while he was sleeping. He grabbed his sleeping bag and briefcase and stormed out.

Ultimately the woman's boss took her to task and explained to her that it didn't matter if that employee slept under his desk because when he worked to solve problems only he could solve he saved the company millions. She was fired. As a token stipulation the sleeping genius came back and a sign was posted on his desk. "Kicking this employee is grounds for immediate dismissal."

Usually the nerd walks and just gets replaced by some diversity politician and string of pearls then sets the tone by making the workplace ****. Women simply are not as intelligent as men and pretending they are just wrecks morale of the people who are really intelligent. The rise of the shoulder padded woman string of pearls bully is a scourge to one and all.

bizznatch14 , 2 hours ago link

Simple answer: because people are spineless and terrible negotiators.

Long answer: for years the adage has been "do what you love and you'll never work a day in your life" or "find a good job and never leave" or "work your way to the top" or "be a hard worker, trust your leadership, keep your head down, and don't make waves."

********.

If you do what you love, you'll learn to hate it. Welcome to misery.

Upward mobility doesn't happen unless you leave. If you're a good little productive worker drone, management has no incentive to give you more than 1-3% raises every year to keep you 'loyal.' Once you've wasted 20 or so years being a robot, welcome to misery.

Nobody gets promoted unless you're a useless ***-kisser who fails to be productive and hasn't done anything egregious enough to get canned. Once you've been passed by for that promotion you want enough times, welcome to misery.

The people making the decisions at the top are the useless ***-kissers that can't do what you do but they talk a good game. Most of them are case studies in the Peter Principle. Once you realize that the 'top' consists of nothing but fuckwads, welcome to misery.

The only way to get ahead and get what you want out of a career is to develop the skills you need and market yourself top someone who'll pay you what you're worth.

Develop strong negotiation skills early, know your market value, and don't be afraid of change.

Employer loyalty is a farce; if you think your employer is loyal to you, I've got some oceanfront property in New Mexico to sell you.

Interested_Observer , 2 hours ago link

All the good jobs are being taken over by "imported labor" who are getting paid 1/2 of what Americans are getting paid.

There is no longer upward mobility unless you are part of an Indian Mafia.

Enjoy working for these freaks who treat everyone like crap?

[May 01, 2019] Ray Dalio: Capitalism Is Broken; Dalio Was The Highest Earning American Of 2018

May 01, 2019 | www.zerohedge.com

Less than a month ago, Bridgewater founder Ray Dalio was warning the world that there would be a "revolution" unless the country could fix its income inequality problem. He's also been repeatedly claiming that capitalism is broken.

Broken, that is, for everyone other than Ray Dalio , who was last year's best paid hedge fund manager, according to DealBook ; and since hedge funders generate the highest current income of all "workers", he was effectively the highest paid American in 2018 (this, of course, excludes capital gains and other non-current income), when it is estimated that Dalio earned $2 billion over the last 12 months , up from a reported $1.3 billion in 2017.

Dalio beat out other big names like Jim Simons of Renaissance Technologies, who earned $1.5 billion, Ken Griffin of Citadel, who earned $870 million, David Shaw of D.E. Shaw, who earned $500 million, Chase Coleman of Tiger Global Management, who earned $465 million and Steve Cohen of Point72, who earned a tiny, by his standards, $70 million.

Of course, this raises the obvious question of whether or not Dalio is doing enough to reform a system that he rails against. "As most of you know, I'm a capitalist, and even I think capitalism is broken," Dalio wrote on Twitter in early April. He then defended the hedge fund business model to NPR last week, stating: "If you were to ask the pensioners and you were to ask our clients, who are teachers or firemen, whether we've contributed to their well-being, they would say that they, we, contribute."

Andrew Ross Sorkin questioned whether or not Dalio is putting his money where his mouth is: "...the magnitude of the hedge fund managers' compensation raises a very basic question about whether capitalism is 'broken'. Even if Mr. Dalio took home $500 million, the rest of his income could pay 10,000 families $150,000 each. "

For a little over a year now, Dalio has been warning any journalist who will listen that the looming market crash and economic downturn, which always seems to be between a year or two years away, will stress the fraying fabric of our disintegrating capitalist system to the point where it simply breaks apart. Central banks, already out of ammo from their pre-crisis stimulus programs will be powerless to pull us back from the precipice, and with our federal debt burden already so heavy, Congress will have little wiggle room to spend us out of the mess (that is, unless they finally cave to the MMTers).

But in his latest 18-page treatise entitled "Why and How Capitalism Needs To Be Reformed (Part 1)" , published - as per usual - on LinkedIn, Dalio kicks his fearmongering approach up to '11', surpassing redistributive rhetoric of Bernie Sanders and Alexandria Ocasio-Cortez and going straight for Vladimir Lenin.

According to Dalio, the flaws in the American capitalist system are breeding such horrific inequality between the wealthy and the poor that at some point in the not-too-distant future, the only sensible recourse for the unwashed masses will be a bloody revolution.

To support this theory, Dalio points to statistics showing that the bottom 60% of Americans are lagging further and further behind the top 40% in the areas of education, social mobility, assets, income and - crucially - health. American men earning the least will likely die ten years earlier than those making the most.

In previous essays, Dalio has warned about the threat of economic populism (the anti-establishment trend that helped deliver both Brexit and President Trump's stunning upset victory over Hillary Clinton). Now, he's apparently identifying with populists of a different stripe (namely, those on the left). All of these sources of inequality, Dalio argues, represent an "existential threat" to the American economy, that will only be exacerbated by falling competitiveness relative to other nations and the "high risk of bad conflict."

Conveniently absolving himself and his fellow billionaires of any blame for this sad state of affairs, Dalio claimed that the cause of this sad state of affairs was simply a poorly designed system that can, with a little effort, be corrected.

"These unacceptable outcomes aren't due to either a) evil rich people doing bad things to poor people or b) lazy poor people and bureaucratic inefficiencies, as much as they are due to how the capitalist system is now working," Dalio said.

Maybe we're just conservative old fashioned pragmatists, but isn't there a bit of extremely convenient hypocrisy in calling for socialism in the year that capitalism made you the best paid person in America? And, if we're mistaken, why isn't Dalio shelling out his billions for the cause he so loudly has been advocating for?

John Law Lives , 18 minutes ago link

That's brilliant. The middle class is getting blown away like dust in the wind, and one dude makes an estimated $2 Billion in 12 months betting on a rigged game. It this what has become of the American dream?

Banana_Republic_FUBAR

[Apr 28, 2019] Prisoners of Overwork A Dilemma by Peter Dorman

Highly recommended!
This is true about IT jobs. Probably even more then for lawyers. IT became plantation economy under neoliberalism.
Notable quotes:
"... mandatory overwork in professional jobs. ..."
"... The logical solution is some form of binding regulation. ..."
"... One place to start would be something like France's right-to-disconnect law . ..."
"... "the situation it describes is a classic prisoners dilemma." ..."
Apr 28, 2019 | angrybearblog.com

The New York Times has an illuminating article today summarizing recent research on the gender effects of mandatory overwork in professional jobs. Lawyers, people in finance and other client-centered occupations are increasingly required to be available round-the-clock, with 50-60 or more hours of work per week the norm. Among other costs, the impact on wage inequality between men and women is severe. Since women are largely saddled with primary responsibility for child care, even when couples ostensibly embrace equality on a theoretical level, the workaholic jobs are allocated to men. This shows up in dramatic differences between typical male and female career paths. The article doesn't discuss comparable issues in working class employment, but availability for last-minute changes in work schedules and similar demands are likely to impact men and women differentially as well.

What the article doesn't point out is that the situation it describes is a classic prisoners dilemma.* Consider law firms. They compete for clients, and clients prefer attorneys who are available on call, always prepared and willing to adjust to whatever schedule the client throws at them. Assume that most lawyers want sane, predictable work hours if they are offered without a severe penalty in pay. If law firms care about the well-being of their employees but also about profits, we have all the ingredients to construct a standard PD payoff matrix:

There is a penalty to unilateral cooperation, cutting work hours back to a work-life balance level. If your firm does it and the others don't, you lose clients to them.

There is a benefit to unilateral defection. If everyone else is cutting hours but you don't, you scoop up the lion's share of the clients.

Mutual cooperation is preferred to mutual defection. Law firms, we are assuming, would prefer a world in which overwork was removed from the contest for competitive advantage. They would compete for clients as before, but none would require their staff to put in soul-crushing hours. The alternative equilibrium, in which competition is still on the basis of the quality of work but everyone is on call 24/7 is inferior.

If the game is played once, mutual defection dominates. If it is played repeatedly there is a possibility for mutual cooperation to establish itself, but only under favorable conditions (which apparently don't exist in the world of NY law firms). The logical solution is some form of binding regulation.

The reason for bringing this up is that it strengthens the case for collective action rather than placing all the responsibility on individuals caught in the system, including for that matter individual law firms. Or, the responsibility is political, to demand constraints on the entire industry. One place to start would be something like France's right-to-disconnect law .

*I haven't read the studies by economists and sociologists cited in the article, but I suspect many of them make the same point I'm making here.

Sandwichman said...
"the situation it describes is a classic prisoners dilemma."

Now why didn't I think of that?

https://econospeak.blogspot.com/2016/04/zero-sum-foolery-4-of-4-wage-prisoners.html April 26, 2019 at 6:22 PM

[Apr 27, 2019] Free Speech, Safety and the Triumph of Neoliberalism naked capitalism

Notable quotes:
"... Amen. This attitude of fearing speech reflects a deeper problem which is valuing fear and cowardice as a virtue. ..."
"... The "fight" against "Hate Speech" is a cunning maneuver of Our Ivy-League overlords. They are materialists , living A Bucket List existence. Their lives are "felt" as a succession of positive and negative experiences. "God is dead. We are gods!" ..."
"... Thus if someone says for instance "migrants come to steal your job or reduce your salary" this is not purely hate as it has a persuasive intent so it can pass. Then if you "say migrants are ugly thieves" it has more hate content but still a persuasive intent so it can pass under this free speech rule. If you finally say "migrants are ugly" it is pure hate and forbidden. Did I get it? ..."
"... Slightly sideways, but another indication that neo-liberalism is just another religion: ..."
"... So when we come to considering the social environment inside a bourgeois institution like a university, we must consider it from a certain point of view, a certain framing, connected to its purposes and performance from the point of view of those who have relevant power. The primary purposes of most such institutions currently seem to be class filtering, indoctrination, and vocational training. ..."
"... This post makes an interesting encapsulation of Neoliberalism: "life is an accumulation of moments of utility and disutility". I am not convinced this formulation is sufficient to characterize Neoliberalism. How well would this formulation distinguish between Neoliberals and Epicures? ..."
"... All about the motive, eh? That is neoliberal–i.e. sure we wrecked the economy and bombed the smithereens out of some foreign countries but we meant well. ..."
"... Shutting off debate is the worst way to prepare for a society that is undergoing undying stresses and even deformations of freedoms plastered over the word democracy. ..."
"... The neoliberal preference for comparing measurable effects, scoring them as costs or benefits, is the standard MBA religion. Why if you can't measure it, it mustn't exist! ..."
"... The problem is just about anything "becomes" "hate speach" as a means of censorship. Calling out Isrial's influence on US politics becomes antisimitism. Being critical of Hillary is misogany. Hell, not liking Campain Marvel is an example of hate speach. Recently negative reviews of the movie were removed from Rotten Tomatos as an example. ..."
"... An example of how this plays out mentioned in comments is about the conflating of anti-Israel and antisemitic being the one and the same ..."
Apr 27, 2019 | www.nakedcapitalism.com

ambrit , April 26, 2019 at 2:51 pm

From this jaundiced perspective, what makes the proposed "neo-liberal speech" Marketplace(TM) inauthentic is that it bases it's existence upon the realm of 'social ephemera.'

If the long run winners in the hurly burly of ideological struggle are at present unknown, then it behooves us to place no limits upon the nature of the originating "entry level" concepts, memes, etc. Such early selection is a purely serendipitous process. Then, not reason, nor "utility" determines the eventual outcome, but chance. Now there's a philosophy for you. Chaos Theory as Political determinate.

David , April 26, 2019 at 2:55 pm

´ .how bad speech can make us feel.´

Sorry, no. How we feel is up to us. We are not machines and we are not robots. We are in charge of our emotions and our reactions.
What I find astonishing about this line of argument is that it completely ignores thousands of years of wisdom literature, from ancient India through Greece and Rome to the mystics of different traditions up to today's Cognitive Behavior Therapies , all of which remind us' in different ways, that whilst we cannot control the outer world, we can control our reactions to it. If I didn't know better I would think that the current ´don't say that it makes me unhappy' movement was a Russian plot to destroy the West by promoting a epidemic of mental illness.

Chris Cosmos , April 26, 2019 at 3:16 pm

Amen. This attitude of fearing speech reflects a deeper problem which is valuing fear and cowardice as a virtue. It reminds me of the male attitude towards upper class women in Victorian times as hopelessly in need of protection from crude language and the dirt from the hoi poloi.

Sometimes I feel like being part of the alt-right because this perverse form of political correctness is way too Maoist for my taste.

clarky90 , April 26, 2019 at 4:17 pm

The "fight" against "Hate Speech" is a cunning maneuver of Our Ivy-League overlords. They are materialists , living A Bucket List existence. Their lives are "felt" as a succession of positive and negative experiences. "God is dead. We are gods!"

"The decor is fabulous. The waiters hair is unkempt. We had to wait to be seated. My fork was not polished. The soup was delicious. The crab was over salted "

The empty lives of "the feelers".

The People of the Land watch incredulously; this slow motion train wreck.

Sanxi , April 26, 2019 at 5:15 pm

'we can control our reactions to it.' – Indeed we can with training and with that on occasion it's good to listen to those that are [family blog] because it's good to know what's going on inside their heads. It also good to know where they are. Hate to say it but the founders of this country really encouraged free speech and then all loyalists were rounded out of it or made extremely miserable.

Ignacio , April 26, 2019 at 3:06 pm

Thus if someone says for instance "migrants come to steal your job or reduce your salary" this is not purely hate as it has a persuasive intent so it can pass. Then if you "say migrants are ugly thieves" it has more hate content but still a persuasive intent so it can pass under this free speech rule. If you finally say "migrants are ugly" it is pure hate and forbidden. Did I get it?

Sanxi , April 26, 2019 at 5:35 pm

Ya, but its all free speech. You'd need to say a lot more than 'ugly'. The whole notion of 'hate speech' is problematic. As it usually is associated with illegal actions, i.e., crimes it has not become a first amendment issue but it should be. Historically, one had a right to say what one wanted and historically, the people often did everything, up to and including, killing one for doing it. The question then becomes what speech is tolerated in what manner. There are no absolute answers, just absolute people.

a different chris , April 26, 2019 at 3:16 pm

Slightly sideways, but another indication that neo-liberalism is just another religion:

>what affect does salmon restoration have on your sense of preference satisfaction, on your utility or disutility?

What affect does it have on the salmon, (family blog) what *I* feel, is my reaction. And saying that, I do notice the further hogwash where "utility" which sounds all manly and right-thinking is actually all about our tender feelings.

Anarcissie , April 26, 2019 at 5:04 pm

'What affect does it have on the salmon, (family blog) what *I* feel, is my reaction. '

That's what 'utility' means: 'stuff I like', such as getting basic survival needs met, and so on up. Most people don't care about the utility of the salmon because the salmon have no power, not because they lack feelings. So generally we only consider people's feelings about the salmon.

So when we come to considering the social environment inside a bourgeois institution like a university, we must consider it from a certain point of view, a certain framing, connected to its purposes and performance from the point of view of those who have relevant power. The primary purposes of most such institutions currently seem to be class filtering, indoctrination, and vocational training.

These purposes (utilities) seem to be damaged or impeded by certain kinds of speech and other social practices, so those forms of speech and practice are likely to be restrained or forbidden on the institution's turf. I don't see how the ruling class and other elites can do otherwise if they want to preserve their system as it stands, which of course most of them do because it is the system which supports their way of life and privileges.

h2odragon , April 26, 2019 at 3:21 pm

Few are able to have their errors explained without feeling bad about being wrong. I hate being wrong, don't you? And yet I'd rather learn of, and from, my mistakes than cheerfully continue being wrong.

Therefore, in the spirit of the Golden rule, I have to say "no one should have the right to make us feel bad." is WRONG. If that means I am speaking hate, and need to be ignored and de-platformed and possibly further censured by society I've never been that social anyway. Fuck 'em.

Tom Doak , April 26, 2019 at 3:36 pm

I tend to think it would always be better if people just said what they were really thinking, instead of trying to figure out what they can say that will be politically correct.

If what they have to say is hateful, at least you know where they are really coming from, and you can treat them accordingly going forward.

Jeremy Grimm , April 26, 2019 at 3:50 pm

This post makes an interesting encapsulation of Neoliberalism: "life is an accumulation of moments of utility and disutility". I am not convinced this formulation is sufficient to characterize Neoliberalism. How well would this formulation distinguish between Neoliberals and Epicures?

"Although Epicureanism is a form of hedonism insofar as it declares pleasure to be its sole intrinsic goal, the concept that the absence of pain and fear constitutes the greatest pleasure, and its advocacy of a simple life, make it very different from "hedonism" as colloquially understood."

[https://en.wikipedia.org/wiki/Epicureanism]

Is 'utility' greatly different than 'pleasure' as Epicures frame that word?

I do like the last sentence of the post: "It's the greatest power of an ideology that it can seep into the worldview of those who claim to oppose it." I think that applies to all too many of those debating about how to deal with Climate Chaos in terms of the economic costs, price per kilowatt, carbon taxes, or jobs lost or created. Economic issues are not unimportant but some of the consequences of Climate Chaos are clearly "priceless" to ape a recent credit card commercial.

vegasmike , April 26, 2019 at 4:38 pm

I think Peter Dorman is being coy. In 2017 at his college there was the "Day of Absence" Controversy. A biology professor refused to cancel his classes on the Day of Absence and became the subject of much rage. He and his wife left the college and taught else where.

I remember the Free Speech movement of the earl 60s. At some public universities, members of the communist party were banned from speaking on campus. We protested this ban. Eventually the bans were lifted. Nobody cared whose feeling were hurt.

Jeremy Grimm , April 26, 2019 at 4:57 pm

The topic of free speech per se free speech was excellently covered by Howard Zinn in his talk "Second Thoughts on the First Amendment". [I received a copy of the mp3 of this speech as a premium from my contribution to Pacifica Radio WBAI. The lowest price mp3 or written transcript for the speech was at https://www.alternativeradio.org/products/zinh006/ transcript for $3 or mp3 download for $5.]

Zinn's speech made it clear that free speech was no simple matter contained within the meaning of the words 'free speech'. There are questions of the intent of speech -- the effects of a speech bad feelings? inciting a riot -- capacity for speech that spreads fear spreading unwarranted panic the classic yelling "Fire" in a crowded building -- questions of the forum? There is free speech on a street corner and free speech on television, and they differ greatly in kind, and there is defamatory and slanderous speech.

I am open to allowing any speech. I heard enough unpleasant and upsetting speech from my ex-wife to last several lifetimes but my ears grew deaf to the sounds she made and remained acute to other speech, even became more acute. The equation between speech and money our 'Supremes' made is little short of the complete debasement of the Supreme Court as a forum of jurisprudence. The 'prudence' must be expunges from any characterizations of their judgments FAVORABLE or otherwise. The Supreme Court does not interpret the laws of the land. Like our Legislatures they are 'bought' and 'bot' to the whims of money.

Carolinian , April 26, 2019 at 5:13 pm

All about the motive, eh? That is neoliberal–i.e. sure we wrecked the economy and bombed the smithereens out of some foreign countries but we meant well.

My library just put a sign next to the entrance saying "This is a safe space–no racism or sexism allowed." I haven't bothered to object to what was doubtless considered boilerplate–nor will I–but that's a highly political statement and especially for a library where free speech should be paramount. For example some claim that Huckleberry Finn is racist (and it is a bit). Off the shelves? Once you start judging motives then the slope is quite slippery.

IMHO we should be worrying about the real dangers and abuses and not the imagined ones. Those college students need thicker skins.

dutch , April 26, 2019 at 5:34 pm

1) No one has a right not to feel bad.
2) Everyone has a right to speak his/her mind.
3) Everyone has the right to ignore someone.

Sanxi , April 26, 2019 at 5:38 pm

If to ignore someone, permits their death, that's ok? Thought, experiment, my friend.

Disturbed Voter , April 26, 2019 at 5:58 pm

Unfortunately death is guaranteed. It is unavoidable. We all try to avoid it. And most of us try to not be responsible for causing it (in humans). But there are systemic ills that magnify the risks of mortality (lead in water supply etc). And the limits to "paying attention" are part of those systemic ills. Deliberately ignoring someone, of course, is callous.

JCC , April 26, 2019 at 7:44 pm

Relative to free speech, that almost sounds like "moving the goalpost".

RWood , April 26, 2019 at 6:16 pm

Think for yourselves and let others enjoy the privilege to do so too. A translation of the famed passage by Voltaire, Essay on Tolerance

In college, an antidote to what is called "hate speech" used to be teach-ins. Setting these up could be an exercise in arguments or debates, depending on the vehemence and sanctimony of participants, and taking part in the selection of moderators and agendas, but it could be done so long as there were those dedicated to hearing, sharing and holding onto the value of information and debate.

Shutting off debate is the worst way to prepare for a society that is undergoing undying stresses and even deformations of freedoms plastered over the word democracy.

twonine , April 26, 2019 at 6:56 pm

Heard on Democracy Now this afternoon, that U Mass Amherst will be allowing an appearance/discussion re Palestine with Roger Waters and others, to go on regardless of protests against.

Adam Eran , April 26, 2019 at 7:06 pm

I'd suggest the dispute is theological. Everyone wants a "higher power" to bless their particular approach. The neoliberal preference for comparing measurable effects, scoring them as costs or benefits, is the standard MBA religion. Why if you can't measure it, it mustn't exist!

The whole approach doesn't require too much thinking, and has the imprimatur of "science" and "reason" both Excellent gods, all. Graeber's Debt: The First 5,000 Years makes a good case for the way our confusion of monetary with ethical comparisons has managed to bamboozle humanity for literally thousands of years. You see rich people deserve their wealth. They are good , and you can tell by the amount of money they have. See!

Code Name D , April 26, 2019 at 7:14 pm

Some speech has as its primary purpose making others suffer, through insult or instigating fear, and has little or no persuasive intent. That's hate speech, and I don't see a problem with curtailing it.

The problem is just about anything "becomes" "hate speach" as a means of censorship. Calling out Isrial's influence on US politics becomes antisimitism. Being critical of Hillary is misogany. Hell, not liking Campain Marvel is an example of hate speach. Recently negative reviews of the movie were removed from Rotten Tomatos as an example.

You might imagin that a line could be drawn some where. But when ever you draw that line, it always migrates over time.

Bernalkid , April 26, 2019 at 8:39 pm

Isn't part of the question what intellectually backs up drone strikes that demonstrably cause innocent casualties along with the various physical aggressions against the enemy by the empire.

Mirror shot time with Nuremberg principles in the background for the now grizzled neo leaders one hopes.

The Rev Kev , April 26, 2019 at 9:00 pm

I can imagine a professor at Evergreen State College having firm views of freedom of speech after what has been happening to that place over the past coupla years. Last year it ranked as one of the worst colleges in the US for free speech-

https://www.thestranger.com/slog/2018/02/14/25815286/evergreen-ranks-as-one-of-the-worst-colleges-in-the-us-for-free-speech

A college tailored to the demands of these extremist students would be a very sterile place indeed for original thinking. In college, ideas are supposed to undergo savage debate and examination to sort out the wheat from the chaff. Of course at this point I will not bring up the fact that CalPERS's Marcie Frost is a graduate from here as being an example of what is being produced.

Those more recent students will find themselves in a radically new environment when they graduate. It will be called the real world. But I have no doubt that many of them will be able to junk their ideas when it comes to earning a living as those ideas would have served their purpose of giving them power while in college.

An example of how this plays out mentioned in comments is about the conflating of anti-Israel and antisemitic being the one and the same. But if you give this idea a pass, who is to say that in a generation's time that a new wave of students may define pro-Israeli as being anti-American? It could happen you know. Until a few years ago the obvious flaw of conflating two such different identities would have been taken down promptly but no longer. And why? Because it has been found to be an expedient tactic, especially by politicians. A way of shutting down critics and right-thinkers. But there will be blowback for making this part of the norm and I predict that it will be massive.

Anon , April 26, 2019 at 9:43 pm

Of course at this point I will not bring up the fact that CalPERS's Marcie Frost is a graduate from here as being an example of what is being produced.

But she's not .

The Rev Kev , April 26, 2019 at 10:10 pm

My mistake. I meant to type "is an attempted graduate" but lost track of my thread of thought. Thanks for the pointer to my mistake.

meadows , April 26, 2019 at 10:11 pm

A point to remember is that to obtain a conscientious objector status (which I had in 1971) one had to object to ALL war as a pacifist and not just the Vietnam War

Try telling that to a bunch of WW2 vets on your draft board!

[Apr 25, 2019] The Great Deformation Why Income Inequality Has Become Intractable

Apr 25, 2019 | www.nakedcapitalism.com

Details III

"Middle class" households (in the 61 st to 99 th
percentiles of the size distribution) rely mainly on
wage incomes.

Bottom 60% households rely roughly equally on
wages and fiscal transfers net of taxes. They
appear to have negative saving and negligible
wealth.

After transfers and capital gains, the share of the
top 1% has risen, while the bottom 60% income
share has been stable. Hence the middle class
has been squeezed.

https://eus.rubiconproject.com/usync.html

https://acdn.adnxs.com/ib/static/usersync/v3/async_usersync.html

https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F04%2Fthe-great-deformation-why-income-inequality-has-become-intractable.html <img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" />

Synoia , April 23, 2019 at 11:15 am

Why no mention of the tripling of oil prices and the end of the Vietnam war as contributors to stagflation?

The oil price increased costs across the board.

The end o the Vietnam war, including the "Vietnamization" started in about 1993 cut Government money creation.

John Wright , April 23, 2019 at 11:42 am

As has been mentioned at NC before, historian Walter Scheidel did not find prior eras when lessening income equality occurred peacefully.

I find it noteworthy that Scheidel is an historian, not an economist or political science professor, so he is somewhat outside the normally viewed expert classes quoted in op-eds/media.

Scheidel sees violent transformations and demographic contractions as, historically, the only drivers to lessen inequality.

see http://tuvalu.santafe.edu/~bowles/Scheidel.pdf

From slide 9 of the above:

"Summary of the argument"

"Development tends to increase resource inequality (Agrarianism; Industrialism)"

"Violent shocks are the only factors capable of significantly reducing resource inequality (for a while)"

"Violence: Mass-mobilization wars, Transformative revolutions, State collapse"
"Demographic contraction: Pandemics"

"Other factors are exotic or ineffective (abolition of slavery, migration, financial crises)"

Sheidel has that financial crises CAN lessen inequality, at least temporarily.

In the USA, in 2008 crisis, the political class prevented this from happening as they "avoided a new great depression"

When one looks at the current political system and control of the media in the USA, it can be postulated that the small rays of hope (such as Bernie, AOC or liberal economists) may be tolerated by those in control because they offer some cheap palliative "hope" to the masses.

Yves closing comment " I would not give self-reform much hope." may be an excellent prediction.

I believe the extremely wealthy are looking to game the system, keeping the rabble at bay as inexpensively as possible, using the top 10% as buffers.

And I wait for the Democrats to blame Russia

[Apr 22, 2019] the United States has the highest level of inequality among the advanced countries and one of the lowest levels of opportunity -- with the fortunes of young Americans more dependent on the income and education of their parents than elsewhere.

Apr 22, 2019 | economistsview.typepad.com

Fred C. Dobbs , April 20, 2019 at 04:20 AM

Progressive Capitalism Is Not an Oxymoron
https://nyti.ms/2GpsQoQ
NYT - Joseph E. Stiglitz - April 19, 2019

We can save our broken economic system from itself.


Fred C. Dobbs said in reply to Fred C. Dobbs... , April 20, 2019 at 04:23 AM
Despite the lowest unemployment rates since the late 1960s, the American economy is failing its citizens. Some 90 percent have seen their incomes stagnate or decline in the past 30 years. This is not surprising, given that the United States has the highest level of inequality among the advanced countries and one of the lowest levels of opportunity -- with the fortunes of young Americans more dependent on the income and education of their parents than elsewhere.

But things don't have to be that way. There is an alternative: progressive capitalism. Progressive capitalism is not an oxymoron; we can indeed channel the power of the market to serve society.

In the 1980s, Ronald Reagan's regulatory "reforms," which reduced the ability of government to curb the excesses of the market, were sold as great energizers of the economy. But just the opposite happened: Growth slowed, and weirder still, this happened in the innovation capital of the world.

The sugar rush produced by President Trump's largess to corporations in the 2017 tax law didn't deal with any of these long-run problems, and is already fading. Growth is expected to be a little under 2 percent next year.

This is where we've descended to, but not where we have to stay. A progressive capitalism based on an understanding of what gives rise to growth and societal well-being gives us a way out of this quagmire and a way up for our living standards.

Standards of living began to improve in the late 18th century for two reasons: the development of science (we learned how to learn about nature and used that knowledge to increase productivity and longevity) and developments in social organization (as a society, we learned how to work together, through institutions like the rule of law, and democracies with checks and balances).

Key to both were systems of assessing and verifying the truth. The real and long-lasting danger of the Trump presidency is the risk it poses to these pillars of our economy and society, its attack on the very idea of knowledge and expertise, and its hostility to institutions that help us discover and assess the truth.

There is a broader social compact that allows a society to work and prosper together, and that, too, has been fraying. America created the first truly middle-class society; now, a middle-class life is increasingly out of reach for its citizens.

America arrived at this sorry state of affairs because we forgot that the true source of the wealth of a nation is the creativity and innovation of its people. One can get rich either by adding to the nation's economic pie or by grabbing a larger share of the pie by exploiting others -- abusing, for instance, market power or informational advantages. We confused the hard work of wealth creation with wealth-grabbing (or, as economists call it, rent-seeking), and too many of our talented young people followed the siren call of getting rich quickly.

Beginning with the Reagan era, economic policy played a key role in this dystopia: Just as forces of globalization and technological change were contributing to growing inequality, we adopted policies that worsened societal inequities. Even as economic theories like information economics (dealing with the ever-present situation where information is imperfect), behavioral economics and game theory arose to explain why markets on their own are often not efficient, fair, stable or seemingly rational, we relied more on markets and scaled back social protections.

The result is an economy with more exploitation -- whether it's abusive practices in the financial sector or the technology sector using our own data to take advantage of us at the cost of our privacy. The weakening of antitrust enforcement, and the failure of regulation to keep up with changes in our economy and the innovations in creating and leveraging market power, meant that markets became more concentrated and less competitive.

Politics has played a big role in the increase in corporate rent-seeking and the accompanying inequality. Markets don't exist in a vacuum; they have to be structured by rules and regulations, and those rules and regulations must be enforced. Deregulation of the financial sector allowed bankers to engage in both excessively risky activities and more exploitive ones. Many economists understood that trade with developing countries would drive down American wages, especially for those with limited skills, and destroy jobs. We could and should have provided more assistance to affected workers (just as we should provide assistance to workers who lose their jobs as a result of technological change), but corporate interests opposed it. A weaker labor market conveniently meant lower labor costs at home to complement the cheap labor businesses employed abroad.

We are now in a vicious cycle: Greater economic inequality is leading, in our money-driven political system, to more political inequality, with weaker rules and deregulation causing still more economic inequality.

If we don't change course matters will likely grow worse, as machines (artificial intelligence and robots) replace an increasing fraction of routine labor, including many of the jobs of the several million Americans making their living by driving.

The prescription follows from the diagnosis: It begins by recognizing the vital role that the state plays in making markets serve society. We need regulations that ensure strong competition without abusive exploitation, realigning the relationship between corporations and the workers they employ and the customers they are supposed to serve. We must be as resolute in combating market power as the corporate sector is in increasing it.

If we had curbed exploitation in all of its forms and encouraged wealth creation, we would have had a more dynamic economy with less inequality. We might have curbed the opioid crisis and avoided the 2008 financial crisis. If we had done more to blunt the power of oligopolies and strengthen the power of workers, and if we had held our banks accountable, the sense of powerlessness might not be so pervasive and Americans might have greater trust in our institutions.

There are many other areas in which government action is required. Markets on their own won't provide insurance against some of the most important risks we face, such as unemployment and disability. They won't efficiently provide pensions with low administrative costs and insurance against inflation. And they won't provide an adequate infrastructure or a decent education for everyone or engage in sufficient basic research.

Progressive capitalism is based on a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un- or underemployed.

Part of this new social contract is an expanded public option for many programs now provided by private entities or not at all. It was a mistake not to include the public option in Obamacare: It would have enriched choice and enhanced competition, lowering prices. But one can design public options in other arenas as well, for instance for retirement and mortgages. This new social contract will enable most Americans to once again have a middle-class life.

As an economist, I am always asked: Can we afford to provide this middle-class life for most, let alone all, Americans? Somehow, we did when we were a much poorer country in the years after World War II. In our politics, in our labor-market participation, and in our health we are already paying the price for our failures.

The neoliberal fantasy that unfettered markets will deliver prosperity to everyone should be put to rest. It is as fatally flawed as the notion after the fall of the Iron Curtain that we were seeing "the end of history" and that we would all soon be liberal democracies with capitalist economies.

Most important, our exploitive capitalism has shaped who we are as individuals and as a society. The rampant dishonesty we've seen from Wells Fargo and Volkswagen or from members of the Sackler family as they promoted drugs they knew were addictive -- this is what is to be expected in a society that lauds the pursuit of profits as leading, to quote Adam Smith, "as if by an invisible hand," to the well-being of society, with no regard to whether those profits derive from exploitation or wealth creation.

ken melvin -> Fred C. Dobbs... , April 20, 2019 at 06:07 AM
https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality

Check out the inequality curves about half way thru the article

anne -> Fred C. Dobbs... , April 20, 2019 at 06:19 AM
In the 1980s, Ronald Reagan's regulatory "reforms," which reduced the ability of government to curb the excesses of the market, were sold as great energizers of the economy. But just the opposite happened: Growth slowed, and weirder still, this happened in the innovation capital of the world....

-- Joseph Stiglitz

[ Really important. ]

anne -> Fred C. Dobbs... , April 20, 2019 at 06:41 AM
Part of this new social contract is an expanded public option for many programs now provided by private entities or not at all. It was a mistake not to include the public option in Obamacare: It would have enriched choice and enhanced competition, lowering prices. But one can design public options in other arenas as well, for instance for retirement and mortgages. This new social contract will enable most Americans to once again have a middle-class life....

-- Joseph Stiglitz

[ What a splendid essay. ]

anne -> Fred C. Dobbs... , April 20, 2019 at 07:21 AM
https://twitter.com/paulkrugman/status/1119592496173129728

Paul Krugman‏ @paulkrugman

Very good and smart from one of our greatest economists. (I don't think laypeople fully appreciate Joe Stiglitz's greatness as a theorist) "Progressive capitalism" is a good phrase, in part because it does involve reviving a lot of the original progressive agenda

6:23 AM - 20 Apr 2019

RC (Ron) Weakley said in reply to Fred C. Dobbs... , April 20, 2019 at 08:28 AM
Good choice. THANKS!
Fred C. Dobbs said in reply to Fred C. Dobbs... , April 20, 2019 at 04:28 AM
Socialist! Capitalist! Economic Systems as Weapons
in a War of Words https://nyti.ms/2ZncMwz
NYT - Andrew Ross Sorkin - April 19, 2019

The economist Joseph Stiglitz discusses Bernie Sanders, social policy and how we define ourselves -- and one another.

Joseph Stiglitz settled into a booth at his favorite diner on the Upper West Side last week with a curious, almost satisfied smile on his face.

He won a Nobel Prize nearly two decades ago for identifying the inequities and imperfections in market economies and has spent a career warning of the perils of wealth concentration, railing against monopoly power and championing higher taxes.

At last, a lot of people seem to be listening.

"It's been a long fight," he said.

The cause has been taken up by the new stars of the left, like Representative Alexandria Ocasio-Cortez, and can trace much of its current momentum to the rumpled rabble-rousing of Senator Bernie Sanders. The policy points Mr. Stiglitz talks about -- a higher minimum wage, a public option for health insurance and more -- could just as easily come from the mouths of any of those seeking to unseat President Trump in 2020.

And yet they demonstrate how the words we choose to talk about our economic priorities are almost as important as the priorities themselves.

Last year, for the first time in a decade, a Gallup poll showed that Democrats had a more positive view of socialism than they did of capitalism. Those two words may play a pivotal role in our next election: Some Democrats have embraced the label of socialist, one long attacked by Republicans. And even some of those who have profited most from American-style free markets have worried about their sustainability, with the billionaire investor Ray Dalio going so far as to say that "capitalism is broken."

Mr. Stiglitz, stabbing his fork into his salad, said he believed there had been a critical misunderstanding of the terms themselves -- and the economic theories behind them -- that had allowed for their weaponization.

"The meanings of the words have changed over time," said Mr. Stiglitz, the chairman of the Council of Economic Advisers under President Bill Clinton and a former chief economist of the World Bank. And the words have become the subject of a branding battle crossing political and generational divides.

The professor in Mr. Stiglitz shared a history lesson that reached back to the early 20th century, about how socialism and communism became linked. And he made the case that Mr. Sanders, a self-described democratic socialist, wasn't actually a socialist -- at least as the identity has long been defined.

Mr. Sanders's agenda -- which drew a fair share of cheers during a Fox News town-hall-style meeting this week -- is not focused on "ownership of the means of production" or a statist system, Mr. Stiglitz said. "He's really concerned about the social contract of health, education," he added.

It is not surprising that Mr. Sanders's supporters trend young, a group for which the word "socialism" holds no fears of conflict with the Soviets or baggage associated with the Berlin Wall.

"Some people are trying to attach more emotions to the historical legacy of socialism
, which was never the same as communism, but in the United States those distinctions have gotten blurred," Mr. Stiglitz said.

The attacks from the right have been anything but subtle. Just this month, Mr. Trump declared, "We're going into the war with some socialists." And Republicans have posited that Venezuela's challenged economy is the inevitable result of any movement in the policy directions embraced by the left.

The word leaves a bad taste even in the mouths of many on the left, including Nancy Pelosi, the speaker of the House, who lived through the height of the Cold War. "I do reject socialism as an economic system," she said on "60 Minutes" last weekend. "If people have that view, that's their view. That is not the view of the Democratic Party."

(In Europe, Mr. Stiglitz said, similarly minded politicians might rightly be called social democrats. A simple switch in word order emphasizes the "social" instead of "socialist.")

It all comes back to semantics, Mr. Stiglitz said. And perception was on his mind when titling his new book, "People, Power and Profits: Progressive Capitalism for an Age of Discontent," which is to be published next week.

In it, he maps out a plan that he calls a "social contract" to improve jobs, health, education, housing and retirement. In fact, it wouldn't be surprising if it turned into the economic platform for a presidential candidate.

Mr. Stiglitz proposes using a combination of market forces and government nudges -- a higher minimum wage and an expanded earned-income tax credit, for example -- to help the poorest among us. He also supports a "public option" to improve competition in the private sector in areas like health care and even retirement savings.

That's not to say he views government as a panacea. For example, he wants to see the mortgage industry privatized. "In a private-sector economy, to have this huge piece of the economy that's not run by the private sector is odd," he said. Still, he also recommends a public option so that the government could support the mortgage market in certain cases.

Mr. Stiglitz said he had chosen "progressive capitalism" for his book's title because he worried about triggering a visceral reaction to the word "socialism."

"I'm trying to avoid some of the emotions that are still attached," he said. "I try in my title to use progressive capitalism to try to say I believe in a market economy, but I also believe in government regulation."

Even as popular figures on the left have embraced the label of socialist -- Ms. Ocasio-Cortez is a member of the Democratic Socialists of America -- others have sought, like Mr. Stiglitz, to underscore their capitalist views. Pete Buttigieg, the mayor of South Bend, Ind., who formally announced his candidacy for president this week, calls himself a proponent of "democratic capitalism."

If the evolving meaning of socialism strikes you as an inventive bit of rebranding, Mr. Stiglitz believes the conservative idea of American capitalism as an unfettered free-market system is itself a myth.

"There is no Darwinian capitalism," he said. "Everybody would say you need some degree of regulation of banks. I mean, no one is talking about real laissez-faire banking."

Even the word "capitalist" has evolved, Mr. Stiglitz said. It is only since the late 20th century and the rise of the economist Milton Friedman, he contends, that "capitalist" stopped being a dirty word. It was once used in what he called "a pejorative way."

Capitalists were "people who were exploiting workers," he said.

That is an opinion, of course. And it is a view that is not hard to come by in some circles now, either.

Language changes, and as convenient as it can be to use linguistic shorthand, it's important to remember that beneath the words are ideas -- the things we should be talking about.

Fred C. Dobbs said in reply to Fred C. Dobbs... , April 20, 2019 at 04:34 AM
Nobel Laureate Joseph Stiglitz on "People,
Power and Profits: Progressive Capitalism
for an Age of Discontent"
https://www.moaf.org/events/general/2019-04-24-nobel-laureate-joseph-stiglitz-on-people-power-and-profits-progressive-capitalism-for-an-age-of-discontent

Evening Lecture Series

Nobel Laureate Joseph Stiglitz

Wednesday, April 24, 2019 | 6:00 PM to 8:00 PM

Event Location:
Fordham University – Lincoln Center Campus
140 West 62 Street, McNally Amphitheatre | Ground Floor

... Stiglitz has long sounded the alarm about growing economic inequality in the United States. As chief economist of the World Bank and Chairman of Clinton's Council of Economic Advisors, he saw first-hand the toll that financial deregulation, globalization and government inaction can take on a community. This has played out over and over again in cities and towns across the United States, feeding into the resentment that fueled Donald Trump's election in 2016. The question we should ask ourselves today, Stiglitz says, is "What can we do about it?"

In his new book, People, Power and Profits: Progressive Capitalism for an Age of Discontent, Stiglitz answers that question by laying out a 21st Century Social Contract to rebuild the American middle class and reinvigorate the American economy. Many candidates will likely use Stiglitz's timely advice in their 2020 presidential campaigns.

Prof. Stiglitz will be interviewed by Bruce Greenwald, the Robert Heilbrunn Professor of Finance and Asset Management at Columbia Business School and the academic co-director of the Heilbrunn Center for Graham & Dodd Investing. Described by The New York Times as "a guru to Wall Street's gurus," Greenwald is an authority on value investing with additional expertise in productivity and the economics of information.

[Apr 20, 2019] Neoliberal education became a tool of social control and brainwashing, not so much developing of the person and his ability of critical thinking.

Apr 20, 2019 | www.zerohedge.com

The Death Of Education In America

Authored by W.J.Astore via BracingViews.com,

Trump! Mueller! Collusion!

I know: who cares about the education of our kids as the redacted Mueller Report dominates the airwaves on CNN, MSNBC, and similar cable "news" networks?

I care. I spent fifteen years as a history professor, teaching mostly undergraduates at technically-oriented colleges (the Air Force Academy ; the Pennsylvania College of Technology). What I experienced was the slow death of education in America. The decline of the ideal of fostering creative and critical thinking ; the abandonment of the notion of developing and challenging young people to participate intelligently and passionately in the American democratic experiment. Instead, education is often a form of social control , or merely a means to an end, purely instrumental rather than inspirational. Zombie education .

Nowadays, education in America is about training for a vocation, at least for some. It's about learning for the sake of earning, i.e. developing so-called marketable skills that end (one hopes) in a respectable paycheck. At Penn College, I was encouraged to meet my students "at their point of need." I was told they were my "customers" and I was their " provider ." Education, in sum, was transactional rather than transformational. Keep students in class (and paying tuition) and pray you can inspire them to see that the humanities are something more than "filler" to their schedules -- and their lives.

As a college professor, I was lucky. I taught five classes a semester (a typical teaching load at community colleges), often in two or three subjects. Class sizes averaged 25-30 students, so I got to know some of my students; I had the equivalent of tenure, with good pay and decent benefits, unlike the adjunct professors of today who suffer from low pay and few if any benefits. I liked my students and tried to challenge and inspire them to the best of my ability.

All this is a preface to Belle Chesler's stunning article at TomDispatch.com , "Making American Schools Less Great Again: A Lesson in Educational Nihilism on a Grand Scale." A high school visual arts teacher, Chesler writes from the heart about the chronic underfunding of education and how it is constricting democracy in America. Here she talks about the frustrations of classes that are simply too big to teach:

[ Class sizes grew so large ] I couldn't remember my students' names, was unable to keep up with the usual grading and assessments we're supposed to do, and was overwhelmed by stress and anxiety. Worst of all, I was unable to provide the emotional support I normally try to give my students. I couldn't listen because there wasn't time.

On the drive to work, I was paralyzed by dread; on the drive home, cowed by feelings of failure. The experience of that year was demoralizing and humiliating. My love for my students, my passion for the subjects I teach, and ultimately my professional identity were all stripped from me. And what was lost for the students? Quality instruction and adult mentorship, as well as access to vital resources -- not to mention a loss of faith in one of America's supposedly bedrock institutions, the public school

The truth of the matter is that a society that refuses to adequately invest in the education of its children is refusing to invest in the future. Think of it as nihilism on a grand scale.

Nihilism, indeed. Why believe in anything? Talk about zombie education!

What America is witnessing, she writes, is nothing short of a national tragedy:

Public schools represent one of the bedrock institutions of American democracy. Yet as a society we've stood aside as the very institutions that actually made America great were gutted and undermined by short-term thinking, corporate greed, and unconscionable disrespect for our collective future.

The truth is that there is money for education, for schools, for teachers, and for students. We just don't choose to prioritize education spending and so send a loud-and-clear message to students that education doesn't truly matter. And when you essentially defund education for more than 40 years, you leave kids with ever less faith in American institutions, which is a genuine tragedy.

Please read all of her article here at TomDispatch.com . And ask yourself, Why are we shortchanging our children's future? Why are we graduating gormless zombies rather than mindful citizens?

Perhaps Trump does have some relevance to this article after all: "I love the poorly educated," sayeth Trump . Who says Trump always lies?

[Apr 19, 2019] Education as a scam: shadow of Trump university over the USA

Apr 19, 2019 | angrybearblog.com

Now if these six words "gainful employment in a recognized occupation" magically disappeared (psst and they did), what would it take for a career education program to lose its eligibility for federal student aid under DeVos? . . . a for-profit institution could not lose its financial lifeline or federal student aid no matter how poorly it performed its mission as spelled out in a statute to prepare students for "gainful employment in a recognized occupation" resulting from that education as stipulated previously.

One hundred percent of students could be dropped from their career program with all of them deeply in debt, or perhaps no single graduate landing a job in their field of training, and still . . . still the federal government would keep the pipeline of guaranteed federal student loans and Pell Grants flowing in to the school.

With DeVos's reversal, the NYT surmised: "Executives in the for-profit education industry would be sleeping better, secure in the knowledge that even the worst schools and programs were no longer at risk of "magically" being thrown off the taxpayer-backed gravy train, no matter how epically they failed and robbed their students." This AB author took liberty and added words to make his point.

Under Obama, "the Job Training industry was on its heels. Under DeVos, they had been given a magical new life, a second chance by the department," said Eileen Connor, the director of litigation at Harvard Law School's Project on Predatory Student Lending.

Ms. DeVos, who invested in companies with ties to for-profit colleges before taking office, has made it an agency priority to unfetter schools offering training in professional jobs and trades by eliminating restrictions on them and also nonprofits. She also allowed a growing number of for-profit schools to magically evade those loosened rules by converting to nonprofits.

That is what the Los Angeles Pentecostal megachurch's affiliate Dream Center wanted to do in 2017 when it asked to buy the remains of Education Management Corporation . . . change it from for-profit to nonprofit and use the profits to fund its other programs. One year after taking over a chain of for-profit schools, dozens of Dream Center schools are near bankruptcy and others have been sold with a hope they can survive.

Collectively Argosy University, South University and the Art Institutes have ~26,000 students in programs resulting in associate degrees in dental hygiene and doctoral programs in law and psychology. Fourteen campuses of mostly Art Institute schools have a new owner after an arranged transfer involving private equity. Another 40 or so others are now under the control of a court-appointed receiver who has accused school officials of trying to keep the doors open by taking millions of dollars earmarked for students to pay operating expenses.

Federal funding for Argosy ceased from the Department of Education when the court-appointed receiver discovered school officials had taken about $13 million owed to students at 22 campuses and used it for payroll expenses, etc. Lauren Jackson seeking a doctorate at Argosy's Illinois School of Professional Psychology in Chicago did not receive the $10,000 she was due in January. She was paying expenses for herself and her 6-year-old daughter with borrowed money and GoFundMe donations.

26,000 students being defrauded by schools offering programs meant to teach them a skill leading to "gainful employment in a recognized occupation" is only a start to which DeVos has failed to account for in the Department of Education. DeVos does profit by this failure due to her own dabbling in areas feeding off of these failures. There is money to be made in preying on defrauded students, so many of them, and larger than the baby boomer generation. The most tragic consequence of conservatives' abandonment of federal accountability of career programs is just that and the devastating personal toll it will take on hundreds of thousands of hopelessly indebted students" for whom there is no relief.

[Apr 16, 2019] It s A Wake Up Call 7 Charts That Clearly Show The Middle Class Is Being Left Behind

Notable quotes:
"... The Organization for Economic Cooperation and Development said: "The middle class is increasingly only a dream for many. This bedrock of our democracies and economic growth is not as stable as in the past." ..."
"... Only incomes in the top 25% were able to outpace this rate on an annual basis, according to the Atlanta Fed. For everyone else, a greater share of income must be allocated to property taxes, leaving less to spend on everything else. ..."
"... Equity ownership in companies, both public and private, is also sliding for the upper middle class. The share of equity ownership for citizens in the 50th to 90th percentile of net worth has fallen and the top 1% of Americans still own the majority of shares. ..."
"... By the end of 2018, net worth as a share of the U.S. total had shrunk considerably for the upper middle class. During the course of just one generation, U.S. wealth held by households from the 50th to the 90th percentile fell from 35.2% of the total to 29.1%. Most of this wealth has been transferred to the top 1% of U.S. households. ..."
"... Stefano Scarpetta, OECD director of employment, labor and social affairs said: "There is a risk of a spiral to the extent that the middle class is the one main sources of political and economic stability." ..."
Apr 14, 2019 | www.zerohedge.com

New data from the Federal Reserve detailing citizens' net worth shows that the issue of being "left behind" has now spread to all Americans aside from the top 10%, according to Bloomberg . This means that even the upper middle class is starting to feel the pain of income stagnation. The growth of upper middle class income continues to lag behind that of those both lower and higher than them on the socioeconomic ladder, according to the data.

The cost of many items purchased by the upper middle class, including things like college education and cars, is outpacing inflation. That is causing upper middle class households to tap into more expensive forms of debt. The debt these households is taking on is shifting from mortgages to credit with higher financing costs.

In addition, the overall middle class' share of total income is falling while home prices have increased faster than median incomes.

The Organization for Economic Cooperation and Development said: "The middle class is increasingly only a dream for many. This bedrock of our democracies and economic growth is not as stable as in the past."

Credit card rates recently hit a "generational high" despite the low prime rate. The spread between the prime rate and credit card interest rates is at its highest point in almost 10 years.

2018 property taxes rose by 4% annually, on average, according to an analysis of more than 87 million U.S. single family homes by ATTOM Data Solutions.

Todd Teta, chief product officer for ATTOM Data Solutions said : "Property taxes levied on homeowners rose again in 2018 across most of the country. While many states across the country have imposed caps on how much taxes can go up, which probably contributed to a slower increase in 2018 versus 2017. There are still many factors at play that can contribute to local property tax hikes, and without major changes in the way a community runs public services, tax rates must rise to pay for them."

Only incomes in the top 25% were able to outpace this rate on an annual basis, according to the Atlanta Fed. For everyone else, a greater share of income must be allocated to property taxes, leaving less to spend on everything else.

Equity ownership in companies, both public and private, is also sliding for the upper middle class. The share of equity ownership for citizens in the 50th to 90th percentile of net worth has fallen and the top 1% of Americans still own the majority of shares.

By the end of 2018, net worth as a share of the U.S. total had shrunk considerably for the upper middle class. During the course of just one generation, U.S. wealth held by households from the 50th to the 90th percentile fell from 35.2% of the total to 29.1%. Most of this wealth has been transferred to the top 1% of U.S. households.

The Organization for Economic Cooperation and Development has said that the middle class is "essential" for growth and countries where it thrives are healthier, more stable, better educated and have lower crime rates while boasting higher life satisfaction.

The OECD defines middle class as households with incomes between 75% and and 200% of the national median. Over the last 3 decades, incomes have increased 33% less than the average of the richest 10%, according to the OECD. Real income of the middle class has grown only 0.3% a year since the financial crisis.

Stefano Scarpetta, OECD director of employment, labor and social affairs said: "There is a risk of a spiral to the extent that the middle class is the one main sources of political and economic stability."

Rising to the middle class is also getting tougher. More skills are needed, as more than 50% of middle income workers are now in high skilled occupations, up from about 33% two decades ago.

"It's a wake up call. Overall there is a need to really focus on targeted policy intervention for those with specific problems. General policies may not work very well," Scarpetta concluded.


CarmenSandiego , 5 minutes ago link

Hahaha real state mafia. 200% price increase wtf???

green dragon , 54 minutes ago link

Work 12 hours a day, 6 days a week: Jack Ma demands of his staff at Alibaba

Welcome to Globalism, you are now seeing managers from non-western countries bringing their values into the western organizations as they climb the ladder. Not all countries share the same cultural values and work ethics.

7 Signs that you may have become a Corporate Slave


1. You sleep less than an average of 6 hours every night.

2. Part of your daily routine involves turning the floor lights on, when you arrive, and off, when you leave.

3. You have never attended your daughter's dance recital.

4. You can't remember the last time you had a day off, let alone a vacation with your family.

5. You are constantly anxious about your performance, or rather the way it is perceived by your manager.

6. You feel you cannot talk to your manager, your HR or your colleagues about your grievances.

7. ­­Your work-life balance has taken a nose dive.

WorkingClassMan , 1 hour ago link

Our political whores...******* us into poverty, day after day, year after year. I hope I am alive to see (and take part in) the day people get fed up enough to actually reach critical mass and DO something about it.

It used to be easy to buy subservience with bread & circuses, but now even those things are growing out of reach. Hopefully we reach critical mass breaking point and the political whores' minions (the boys in blue, etc..) don't have the capacity to stop what transpires. Nothing less than a cathartic release of blood will do for me personally speaking.

JibjeResearch , 1 hour ago link

I understand you... but ....

I'm not waiting/hoping for people to rise up.... because they are too dumb..

I"m busy hedging so that I will win in the long run ..

gatorengineer , 1 hour ago link

Article lost me when it showed health care cost rising less than wages...

AHBL , 1 hour ago link

What is mind boggling is that one sees how Republicans and Democrats caused this by deregulating (finance, trade, immigration, etc) and allowing multinationals free reign and yet...you have Trump supporting assholes blaming "communist democrats" when this is all a result of the private sector running wild.

[Apr 13, 2019] For those IT guys who want to change the specalty

Highly recommended!
The neoliberal war on labor in the USA is real. And it is especially real for It folk over 50. No country for the old men, so to speak...
Notable quotes:
"... Obviously you need a financial cushion to not be earning for months and to pay for the training courses. ..."
"... Yeah, people get set in their ways and resistant to make changes. Steve Jobs talked about people developing grooves in their brain and how important it is to force yourself out of these grooves.* ..."
"... Your thoughts construct patterns like scaffolding in your mind. You are really etching chemical patterns. In most cases, people get stuck in those patterns, just like grooves in a record, and they never get out of them. ..."
"... The brain is like a muscle, it needs to be constantly worked to become strong. If you waste it watching football or looking at porn your brain will atrophy like the muscles of a person in a wheelchair. ..."
"... IBEW (licensed electricians) has no upper age limit for apprentices They have lots of American engineers who applied in their 30s after realizing most companies want diverse HI-B engineers. ..."
"... At 40+, I still can learn advanced mathematics as well as I ever did. In fact, I can still compete with the Chinese 20 year olds. The problem is not mental horsepower, it's time and energy. I rarely have time to concentrate these days (wife, kids, pets), which makes it hard to get the solid hours of prime mental time required to really push yourself at a hard pace and learn advanced material. ..."
"... That's a huge key and I discovered it when I was asked to tutor people who were failing chemistry. I quickly discovered that all it took for most of them to "get it" was to keep approaching the problem from different angles until a light came on for them and for me the challenge of finding the right approach was a great motivator. Invariably it was some minor issue and once they overcame that, it became easy for them. I'm still astonished at that to this day. ..."
"... Sorry man, English teaching is huge, and will remain so for some time to come. I'm heavily involved in the area and know plenty of ESL teachers. Spain for me, and the level of English here is still so dreadful and they all need it, the demand is staggering and their schools suck at teaching it themselves. ..."
"... You have to really dislike your circumstances in the US to leave and be willing to find some way to get by overseas. ..."
"... We already saw this in South Africa. Mandela took over, the country went down the tubes, the wealthy whites left and the Boers were left to die in refugee camps. They WANT to leave and a few went to Russia, but most developed countries don't want them. Not with the limited amount of money they have. ..."
"... Americans are mostly ignorant to the fact that they live in a 2nd world country except for blacks and rednecks I have met in the Philippines who were stationed there in the military and have a $1000 a month check. Many of them live in more dangerous and dirty internal third worlds in America than what they can have in Southeast Asia and a good many would be homeless. They are worldly enough to leave. ..."
Apr 13, 2019 | www.unz.com

Anonymous [388] Disclaimer , says: March 12, 2019 at 1:26 pm GMT

@YetAnotherAnon

" He's 28 years old getting too old and soft for the entry-level grunt work in the skilled trades as well. What then?"

I know a UK guy (ex City type) who retrained as an electrician in his early 50s. Competent guy. Obviously no one would take him on as an apprentice, so he wired up all his outbuildings as his project to get his certificate. But he's getting work now, word gets around if you're any good.

Obviously you need a financial cushion to not be earning for months and to pay for the training courses.

Yeah, people get set in their ways and resistant to make changes. Steve Jobs talked about people developing grooves in their brain and how important it is to force yourself out of these grooves.*

I know a Haitian immigrant without a college degree who was working three jobs and then dropped down to two jobs and went to school part time in his late 40's and earned his degree in engineering and is a now an engineer in his early 50's.

*From Steve Jobs by Walter Isaacson (Simon and Schuster, 2011), pp.330-331:

"It's rare that you see an artist in his 30s or 40s able to really contribute something amazing," Jobs said wistfully to the writer David Sheff, who published a long and intimate interview in Playboy the month he turned thirty. "Of course, there are some people who are innately curious, forever little kids in their awe of life, but they're rare." The interview touched on many subjects, but Jobs's most poignant ruminations were about growing old and facing the future:

Your thoughts construct patterns like scaffolding in your mind. You are really etching chemical patterns. In most cases, people get stuck in those patterns, just like grooves in a record, and they never get out of them.

I'll always stay connected with Apple. I hope that throughout my life I'll sort of have the thread of my life and the thread of Apple weave in and out of each other, like a tapestry. There may be a few years when I'm not there, but I'll always come back. . . .

If you want to live your life in a creative way, as an artist, you have to not look back too much. You have to be willing to take whatever you've done and whoever you were and throw them away.

The more the outside world tries to reinforce an image of you, the harder it is to continue to be an artist, which is why a lot of times, artists have to say, "Bye. I have to go. I'm going crazy and I'm getting out of here." And they go and hibernate somewhere. Maybe later they re-emerge a little differently.

anonymous [191] Disclaimer , says: March 12, 2019 at 9:59 pm GMT
@The Anti-Gnostic

"fluid intelligence" starts crystallizing after your 20's". Nonsense, I had a great deal of trouble learning anything from my teen years and 20's because I didn't know how to learn. I went for 30 years and eventually figured out a learning style that worked for me. I have learned more and mastered more skills in the past ten years ages 49-59 than I had in the previous 30.

You can challenge yourself like I did and after a while of doing this (6 months) you will find it a lot easier to learn and comprehend than you did previously. (This is true only if you haven't damaged your brain from years of smoking and drinking). I constantly challenged myself with trying to learn math that I had trouble with in school and eventually mastered it.

The brain is like a muscle, it needs to be constantly worked to become strong. If you waste it watching football or looking at porn your brain will atrophy like the muscles of a person in a wheelchair.

Anon [257] Disclaimer , says: March 15, 2019 at 4:29 am GMT
@YetAnotherAnon

IBEW (licensed electricians) has no upper age limit for apprentices They have lots of American engineers who applied in their 30s after realizing most companies want diverse HI-B engineers.

Upper age limits for almost every occupation disappeared decades ago in America because of age discrimination laws.

I can't see how any 28 year old could possibly be too soft to go into any kind of manual labor job.

jbwilson24 , says: March 15, 2019 at 9:31 am GMT
@anonymous Yeah, there was a recent study showing that 70 year olds can form neural connections as quickly as teenagers.
At 40+, I still can learn advanced mathematics as well as I ever did. In fact, I can still compete with the Chinese 20 year olds. The problem is not mental horsepower, it's time and energy. I rarely have time to concentrate these days (wife, kids, pets), which makes it hard to get the solid hours of prime mental time required to really push yourself at a hard pace and learn advanced material.

This is why the Chinese are basically out of date when they are 30, their companies assume that they have kids and are not able to give 110% anymore.

jacques sheete , says: March 15, 2019 at 11:14 am GMT
@anonymous

eventually figured out a learning style that worked for me.

That's a huge key and I discovered it when I was asked to tutor people who were failing chemistry. I quickly discovered that all it took for most of them to "get it" was to keep approaching the problem from different angles until a light came on for them and for me the challenge of finding the right approach was a great motivator. Invariably it was some minor issue and once they overcame that, it became easy for them. I'm still astonished at that to this day.

The brain is like a muscle, it needs to be constantly worked to become strong. If you waste it watching football or looking at porn your brain will atrophy like the muscles of a person in a wheelchair.

No doubt about it. No embellishment needed there!

s.n , says: March 15, 2019 at 11:42 am GMT
@The Anti-Gnostic

Yeah. He's 28 years old and apparently his chosen skillset is teaching EASL in foreign countries. That sector is shrinking as English becomes the global lingua franca and is taught in elementary schools worldwide. He's really too old and soft for his Plan B (military), and getting too old and soft for the entry-level grunt work in the skilled trades as well. What then?

do you know anything first hand about the teaching- english- as-a- second- language hustle?

Asking sincerely – as I don't know anything about it. However I kinda suspect that 'native speakers' will be in demand in many parts of the globe for some time to come [as an aside – and maybe Linh has written of this and I missed it – but last spring I was in Saigon for a couple of weeks and, hanging out one day at the zoo & museum complex, was startled to see about three groups of Vietnamese primary-school students being led around by americans in their early 20s, narrating everything in american english . Apparently private schools offering entirely english-language curriculum are the big hit with the middle & upper class elite there. Perhaps more of the same elsewhere in the region?]

At any rate the young man in this interview has a lot more in the way of qualifications and skill sets than I had when I left the States 35 years ago, and I've done just fine. I'd advise any prospective expats to get that TEFL certificate as it's one extra thing to have in your back pocket and who knows?

PS: "It really can't be overstated how blessed you are to have American citizenship" – well, yes it can. Everyone knows that the best passport on earth is from Northwest Euroland, one of those places with free university education and free health care and where teenage mothers don't daily keel over dead from heroin overdoses in Dollar Stores .. Also more places visa-free

The Anti-Gnostic , says: Website March 15, 2019 at 2:37 pm GMT
@s.n

When you left the States 35 years ago, the world was 3 billion people smaller. The labor market has gotten a tad more competitive. I don't see any indication of a trade or other refined skillset in this article.

People who teach EASL for a living are like people who drive cars for a living: you don't do it because you're really good at teaching your native language, you do it because you're not marketable at anything else.

jeff stryker , says: March 15, 2019 at 3:20 pm GMT
@jacques sheete JACQUES

I think being Australian is the best citizenry you can have. The country is far from perfect, but any lower middle class American white like myself would prefer to be lower middle class there than in Detroit or Phoenix, where being lower income means life around the unfettered urban underclass that is paranoia inducing.

Being from the US is not as bad as being Bangladeshi, but if you had to be white and urban and poor you'd be better off in Sydney than Flint.

The most patriotic Americans have never been anywhere, so they have no idea whether Australia or Tokyo are better. They have never traveled.

s.n , says: March 15, 2019 at 11:42 am GMT
@The Anti-Gnostic

Yeah. He's 28 years old and apparently his chosen skillset is teaching EASL in foreign countries. That sector is shrinking as English becomes the global lingua franca and is taught in elementary schools worldwide. He's really too old and soft for his Plan B (military), and getting too old and soft for the entry-level grunt work in the skilled trades as well. What then?

do you know anything first hand about the teaching- english- as-a- second- language hustle?

Asking sincerely – as I don't know anything about it. However I kinda suspect that 'native speakers' will be in demand in many parts of the globe for some time to come [as an aside – and maybe Linh has written of this and I missed it – but last spring I was in Saigon for a couple of weeks and, hanging out one day at the zoo & museum complex, was startled to see about three groups of Vietnamese primary-school students being led around by americans in their early 20s, narrating everything in american english .

Apparently private schools offering entirely english-language curriculum are the big hit with the middle & upper class elite there. Perhaps more of the same elsewhere in the region?]

At any rate the young man in this interview has a lot more in the way of qualifications and skill sets than I had when I left the States 35 years ago, and I've done just fine. I'd advise any prospective expats to get that TEFL certificate as it's one extra thing to have in your back pocket and who knows?

ps: "It really can't be overstated how blessed you are to have American citizenship" – well, yes it can. Everyone knows that the best passport on earth is from Northwest Euroland, one of those places with free university education and free health care and where teenage mothers don't daily keel over dead from heroin overdoses in Dollar Stores ..

Also more places visa-free

s.n , says: March 16, 2019 at 7:23 am GMT
@The Anti-Gnostic

People who teach EASL for a living are like people who drive cars for a living: you don't do it because you're really good at teaching your native language, you do it because you're not marketable at anything else.

well that's the beauty of it: you don't have to be good at anything other than just being a native speaker to succeed as an EASL teacher, and thousands more potential customers are born every day. I'd definitely advise any potential expats to become accomplished, and, even better, qualified, in as many trades as possible. But imho the real key to success as a long term expat is your mindset: determination and will-power to survive no matter what. If you really want to break out of the States and see the world, and don't have inherited wealth, you will be forced to rely on your wits and good luck and seize the opportunities that arise, whatever those opportunities may be.

Thedirtysponge , says: March 16, 2019 at 4:01 pm GMT
@The Anti-Gnostic

Sorry man, English teaching is huge, and will remain so for some time to come. I'm heavily involved in the area and know plenty of ESL teachers. Spain for me, and the level of English here is still so dreadful and they all need it, the demand is staggering and their schools suck at teaching it themselves.

You are one of those people who just like to shit on things:) and people make a lot of money out of it, not everyone of course, like any area. But it's perfectly viable and good to go for a long time yet. It's exactly that English is the lingua Franca that people need to be at a high level of it. The Chinese market is still massive. The bag packer esl teachers are the ones that give off this stigma, and 'bag packer' and 'traveller' are by now very much regarded as dirty words in the ESL world.

Mike P , says: March 16, 2019 at 5:52 pm GMT
@Thedirtysponge

ESL teachers. Spain for me

There is a very funny version also with Jack Lemmon in "Irma la Douce", but I can't find that one on youtube.

jeff stryker , says: March 17, 2019 at 7:26 am GMT
@Thedirtysponge S.N. & DIRTY SPONGE

Most Americans lack the initiative to move anywhere. Most will complain but will never leave the street they were born on. Urban whites are used to adaptation being around other cultures anyhow and being somewhat street smart, but the poor rural whites in the exurbs or sticks whose live would really improve if they got the hell out of America will never move anywhere.

You have to really dislike your circumstances in the US to leave and be willing to find some way to get by overseas.

Lots of people will talk about leaving America without having a clue as to how hard this is to actually do. Australia and New Zealand are not crying out for white proles with high school education or GED. It is much more difficult to move overseas and stay overseas than most Americans think.

Except of course for the ruling elite. And that is because five-star hotels look the same everywhere and money is an international language.

We already saw this in South Africa. Mandela took over, the country went down the tubes, the wealthy whites left and the Boers were left to die in refugee camps. They WANT to leave and a few went to Russia, but most developed countries don't want them. Not with the limited amount of money they have.

Australia and NZ would rather have refugees than white people in dire circumstances.

Even immigrating to Canada, a country that I worked in, is much much harder than anyone imagines.

jeff stryker , says: March 17, 2019 at 7:37 am GMT
A LONGTIME EXPAT ON LIVING ABROAD

Americans are mostly ignorant to the fact that they live in a 2nd world country except for blacks and rednecks I have met in the Philippines who were stationed there in the military and have a $1000 a month check. Many of them live in more dangerous and dirty internal third worlds in America than what they can have in Southeast Asia and a good many would be homeless. They are worldly enough to leave.

But most Americans whose lives would be vastly improved overseas think they are living in the greatest country on earth.

[Apr 08, 2019] Simon Kuznets famously argued that inequality is beneficial for economic growth at an early stage of development... but is harmful at a later stage

Apr 08, 2019 | economistsview.typepad.com

Arthurian , April 07, 2019 at 06:52 AM

Inequality of opportunity, income inequality, and economic growth - VoxEU: "Simon Kuznets famously argued that inequality is beneficial for economic growth at an early stage of development... but is harmful at a later stage."

Where did Kuznets say this? I find him saying inequality varies. I find other people saying the benefit or harm from inequality varies.

Anybody got a link to Kuznets saying the benefit or harm varies?

Fred C. Dobbs said in reply to Arthurian ... , April 07, 2019 at 07:29 AM
(Possibly.)

Just Right Inequality https://nyti.ms/1fFLGqx
NYT - Thomas B. Edsall - March 4, 2014

If we can't have (and don't actually want) total equality or total inequality, what is the right amount of inequality?

Anemic economic growth and the gutting of middle class jobs have given new impetus to a debate over "optimal inequality," a concept dating back at least six decades to a legendary speech given in 1954 at the annual meeting of the American Economic Association by Simon Kuznets, a Nobel Prize-winning economist, who asked, "Does inequality in the distribution of income increase or decrease in the course of a country's economic growth?"

( http://gabriel-zucman.eu/files/teaching/Kuznets55.pdf )

Kuznets's research into the relationship between inequality and growth laid the foundation for modern thinking about what has become a critical question: Has inequality in this country reached a tipping point at which it no longer provides an incentive to strive and to innovate, but has instead created a permanently disadvantaged class, as well as a continuing threat of social instability? ...

anne -> Fred C. Dobbs... , April 07, 2019 at 05:31 PM
I too appreciate the reference:

http://gabriel-zucman.eu/files/teaching/Kuznets55.pdf

March, 1955

Economic Growth and Income Inequality
By SIMON KUZNETS

The central theme of this paper is the character and causes of long-term changes in the personal distribution of income. Does inequality in the distribution of income increase or decrease in the course of a country's economic growth? What factors determine the secular level and trends of income inequalities?

These are broad questions in a field of study that has been plagued by looseness in definitions, unusual scarcity of data, and pressures of strongly held opinions. While we cannot completely avoid the resulting difficulties, it may help to specify the characteristics of the size-of-income distributions that we want to examine and the movements of which we want to explain.

Five specifications may be listed. First, the units for which incomes are recorded and grouped should be family-expenditure units, properly adjusted for the number of persons in each-rather than income recipients for whom the relations between receipt and use of income can be widely diverse. Second, the distribution should be complete, i.e., should cover all units in a country rather than a segment either at the upper or lower tail. Third, if possible we should segregate the units whose main income earners are either still in the learning or already in the retired stages of their life cycle-to avoid complicating the picture by including incomes not associated with full-time, full-fledged participation in economic activity. Fourth, income should be defined as it is now for national income in this country, i.e., received by individuals, including income in kind, before and after direct taxes, excluding capital gains. Fifth, the units should be grouped by secular levels of income, free of cyclical and other transient disturbances.

For such a distribution of mature expenditure units by secular levels of income per capita, we should measure shares of some fixed ordinal groups-percentiles, deciles, quintiles, etc. In the underlying array the units should be classified by average income levels for a sufficiently long span so that they form income-status groups-say a generation or about 25 years. Within such a period, even when classified by secular income levels, units may shift from one ordinal group to another. It would, therefore, be necessary and useful to study separately the relative share of units that, throughout the generation period of reference, were continuously within a specific ordinal group, and the share of the units that moved into that specific group; and this should be done for the shares of "residents" and "migrants" within all ordinal groups. Without such a long period of reference and the resulting separation between "resident" and "migrant" units at different relative income levels, the very distinction between "low" and "high" income classes loses its meaning, particularly in a study of long-term changes in shares and in inequalities in the distribution. To say, for example, that the "lower" income classes gained or lost during the last twenty years in that their share of total income increased or decreased has meaning only if the units have been classified as members of the "lower" classes throughout those 20 years-and for those who have moved into or out of those classes recently such a statement has no significance.

Furthermore, if one may add a final touch to what is beginning to look like a statistical economist's pipe dream, we should be able to trace secular income levels not only through a single generation but at least through two-connecting the incomes of a given generation with those of its immediate descendants. We could then distinguish units that. throughout a given generation, remain within one ordinal group and whose children-through their generation-are also within that group, from units that remain within a group through their generation but whose children move up or down on the relative economic scale in their time. The number of possible combinations and permutations becomes large; but it should not obscure the main design of the income structure called for-the classification by long-term income status of a given generation and of its immediate descendants. If living members of society-as producers, consumers, savers, decision-makers on secular problems-react to long-term changes in income levels and shares, data on such an income structure are essential. An economic society can then be judged by the secular level of the income share that it provides for a given generation and for its children. The important corollary is that the study of long-term changes in the income distribution must distinguish between changes in the shares of resident groups-resident within either one or two generations-and changes in the income shares of groups that, judged by their secular levels, migrate upward or downward on the income scale.

Even if we had data to approximate the income structure just outlined, the broad question posed at the start-how income inequality changes in the process of a country's economic growth-could be answered only for growth under defined economic and social conditions. And, in fact, we shall deal with this question in terms of the experience of the now developed countries which grew under the aegis of the business enterprise. But even with this limitation, there are no statistics that can be used directly for the purpose of measuring the secular income structure. Indeed, I have difficulty in visualizing how such information could practicably be collected-a difficulty that may be due to lack of familiarity with the studies of our colleagues in demography and sociology who have concerned themselves with problems of generation or intergeneration mobility and status. But although we now lack data directly relevant to the secular income structure, the setting up of reasonably clear and yet difficult specifications is not merely an exercise in perfectionism. For if these specifications do approximate, and I trust that they do, the real core of our interest when we talk about shares of economic classes or long-term changes in these shares, then proper disclosure of our meaning and intentions is vitally useful. It forces us to examine and evaluate critically the data that are available; it prevents us from jumping to conclusions based on these inadequate data; it reduces the loss and waste of time involved in mechanical manipulations of the type represented by Pareto-curve-fitting to groups of data whose meaning, in terms of income concept, unit of observation, and proportion of the total universe covered, remains distressingly vague; and most important of all, it propels us toward a deliberate construction of testable bridges between the available data and the income structure that is the real focus of our interest.

ken melvin said in reply to Arthurian ... , April 07, 2019 at 08:46 AM
The working class' struggle to just survive while the very wealthy splurged on glitter during the 'Gilded Age' brought Brandies to speak of 'involuntary servitude' and lead to Teddy Roosevelt's 'trust busting' else there be 'a revolution'. During the Gilded, capitalism, a creation of the capitalist, was touted by the capitalist gilded as essential to growth giving them an excuse to use armies to bust anti-capitalist unions.

Teddy may have prevented a revolution, saved democracy, and capitalism; and Franklin may have saved democracy and capitalism; both using most non-capitalistic means.

anne -> Arthurian ... , April 07, 2019 at 08:51 AM
http://en.wikipedia.org/wiki/Kuznets_curve

In economics, a Kuznets curve represents graphically the hypothesis advanced by Simon Kuznets in the 1950s and 1960s that as an economy develops, a natural cycle of economic inequality occurs, driven by market forces which at first increase inequality, and then decrease it after a certain average income is attained.

anne -> anne... , April 07, 2019 at 08:52 AM
http://econ.worldbank.org/external/default/main?pagePK=64210502&theSitePK=469372&piPK=64210520&menuPK=64166093&entityID=000009265_3961005200139

January, 1994

Determinants of cross-country income inequality: an augmented Kuznets hypothesis
By Branko Milanovic

Summary

Why does income inequality differ among countries? Using a sample of 80 countries from the 1980s, the author shows that two types of factors explain variations in income inequality. The first are factors that are, in the short term, independent of economic policies and are included in the standard formulation of the Kuznets' curve: * the level of per capita income and the country's regional heterogeneity. From the viewpoint of economic policy, these are "given" factors, resulting in a "given inequality." The second group of factors are the social-choice factors reflected in the size of social transfers and of state sector employment, both of which reduce inequality. For this sample, the reduction amounts to about a quarter of "given" inequality. The importance of social-choice factors rises as the level of income rises. The divergence between actual inequality and the inequality predicted by the standard Kuznets' curve therefore systematically widens as a society develops. This discrepancy is systematic, the author contends. Inequality in richer societies decreases not only because of economic factors but also because societies choose less inequalities as they grow richer.

* https://en.wikipedia.org/wiki/Kuznets_curve

In economics, a Kuznets curve graphs the hypothesis that as an economy develops, market forces first increase and then decrease economic inequality. The hypothesis was first advanced by economist Simon Kuznets in the 1950s and '60s.

anne -> anne... , April 07, 2019 at 08:56 AM
Correcting link:


http://documents.worldbank.org/curated/en/407801468764743215/Determinants-of-cross-country-income-inequality-an-augmented-Kuznets-hypothesis

anne -> anne... , April 07, 2019 at 05:16 PM
Here are the 2 specific Kuznets references as used by Branko Milanovic:

http://documents.worldbank.org/curated/en/407801468764743215/Determinants-of-cross-country-income-inequality-an-augmented-Kuznets-hypothesis

Kuznets, Simon (1955), "Economic Growth and Income Inequality", American Economic Review,
45:March, pp. 1-28.

Kuznets, Simon (1966), Modern Economic Growth: Rate, Structure and Speed, New Haven: Yale
University Press.

anne -> anne... , April 07, 2019 at 03:06 PM
https://en.wikipedia.org/wiki/Kuznets_curve

The East Asian miracle has been used to criticize the validity of the Kuznets curve theory. The rapid economic growth of eight East Asian countries -- Japan, South Korea, Hong Kong, Taiwan, Singapore (Four Asian Tigers), Indonesia, Thailand, and Malaysia -- between 1965 and 1990, was called the East Asian miracle (EAM). Manufacturing and export grew quickly and powerfully. Yet simultaneously, life expectancy was found to increase and population levels living in absolute poverty decreased. This development process was contrary to the Kuznets curve theory. Many studies have been done to identify how the EAM was able to ensure that the benefits of rapid economic growth were distributed broadly among the population, because Kuznets' theory stated that rapid capital accumulation would lead to an initial increase in inequality. Joseph Stiglitz argues the East Asian experience of an intensive and successful economic development process along with an immediate decrease in population inequality can be explained by the immediate re-investment of initial benefits into land reform (increasing rural productivity, income, and savings), universal education (providing greater equality and what Stiglitz calls an "intellectual infrastructure" for productivity), and industrial policies that distributed income more equally through high and increasing wages and limited the price increases of commodities. These factors increased the average citizen's ability to consume and invest within the economy, further contributing to economic growth. Stiglitz highlights that the high rates of growth provided the resources to promote equality, which acted as a positive-feedback loop to support the high rates of growth. The EAM defies the Kuznets curve, which insists growth produces inequality, and that inequality is a necessity for overall growth.

[Apr 07, 2019] The Most Least 'Stressed-Out' States Zero Hedge

Apr 07, 2019 | www.zerohedge.com

Across the US, suicide rates, drug overdoses and other "deaths of despair" are soaring - and recently contributed to the third-straight year of life-expectancy decline. Meanwhile, millennials, saddled with debt and suffering with a paucity of marketable skills, are putting off parenthood and homeownership as they toil away in expensive urban centers, surrendering more than half of their monthly income to rent and debt service.

With the outlook on the future of American society as grim as it has ever been (thanks to widening economic inequality, the dire warnings of climate alarmists, and the erosion of confidence in American institutions, among other reasons), it shouldn't come as a surprise that Americans - particularly young Americans - are extremely stressed out.

Though stress can be an amorphous concept, researchers at WalletHub have tried to quantify stress-level trends across the US, incorporating data from average hours worked per week to personal bankruptcy rate to share of adults getting adequate sleep and using these data to assign a score to individual states.

Their study turned up an interesting result: It showed that states in the Deep South tended to be the most stressed, followed by expensive coastal states like New York and California, with the sleepy Midwest and plain states bringing up the rear.

[Apr 05, 2019] 1% Politics and the Scandals of a New Gilded Age by Rajan Menon

Apr 04, 2019 | www.counterpunch.org
Despair about the state of our politics pervades the political spectrum, from left to right. One source of it, the narrative of fairness offered in basic civics textbooks -- we all have an equal opportunity to succeed if we work hard and play by the rules; citizens can truly shape our politics -- no longer rings true to most Americans. Recent surveys indicate that substantial numbers of them believe that the economy and political system are both rigged. They also think that money has an outsized influence on politics. Ninety percent of Democrats hold this view, but so do 80% of Republicans. And careful studies confirm what the public believes.

None of this should be surprising given the stark economic inequality that now marks our society. The richest 1% of American households currently account for 40% of the country's wealth, more than the bottom 90% of families possess. Worse yet, the top 0.1% has cornered about 20% of it, up from 7% in the mid-1970s. By contrast, the share of the bottom 90% has since then fallen from 35% to 25%. To put such figures in a personal light, in 2017, three men -- Jeff Bezos, Warren Buffett, and Bill Gates -- possessed more wealth ($248.5 billion) than the bottom 50% of Americans.

Over the last four decades, economic disparities in the U.S. increased substantially and are now greater than those in other wealthy democracies. The political consequence has been that a tiny minority of extremely wealthy Americans wields disproportionate influence, leaving so many others feeling disempowered.

What Money Sounds Like

Two recent headline-producing scandals highlight money's power in society and politics.

The first involved super-affluent parents who used their wealth to get their manifestly unqualified children into highly selective colleges and universities that previously had reputations (whatever the reality) for weighing the merits of applicants above their parents' wealth or influence.

The second concerned Texas Senator Ted Cruz's reported failure to reveal, as election laws require, more than $1 million in low-interest loans that he received for his 2012 Senate campaign. (For that lapse, the Federal Election Commission (FEC) fined Senator Cruz a modest $35,000.) The funds came from Citibank and Goldman Sachs, the latter his wife's longtime employer. News of those undisclosed loans, which also cast doubt on Cruz's claim that he had funded his campaign in part by liquidating the couple's assets, only added to the sense that favoritism now suffuses the politics of a country that once prided itself on being the world's model democracy. (Journalists covering the story couldn't resist pointing out that the senator had often lambasted Wall Street's " crony capitalism " and excessive political influence.)

The Cruz controversy is just one reflection of the coming of 1% politics and 1% elections to America at a moment when the first billionaire has been ensconced in the Oval Office for more than two years, posing as a populist no less.

Since the Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission , money has poured into politics as never before. That's because the Court ruled that no limits could be placed on corporate and union spending aimed at boosting or attacking candidates running for political office. Doing so, the justices determined in a 5-4 vote, would be tantamount to restricting individuals' right to free speech, protected by the First Amendment . Then came the Court's 2014 McCutcheon v. Federal Election Commission decision (again 5-4), which only increased money's influence in politics by removing the aggregate limit on an individual's contribution to candidates and to national party committees.

In an age when money drives politics, even ex-presidents are cashing in. Fifteen years after Bill Clinton departed the White House, he and Hillary had amassed a net worth of $75 million -- a 6,150% increase in their wealth. Barack and Michelle Obama's similarly soared from $1.3 million in 2000 to $40 million last year -- and they're just warming up. Key sources of these staggering increases include sky-high speaking fees (often paid by large corporations), including $153 million for the Clintons between February 2001 and May 2016. George W. Bush also made tens of millions of dollars in this fashion and, in 2017, Obama received $400,000 for a single speech to a Wall Street firm.

No wonder average Americans believe that the political class is disconnected from their day-to-day lives and that ours is, in practice, a democracy of the rich in which money counts (and counts and counts).

Cash for College

Now let's turn to what those two recent scandals tell us about the nexus between wealth and power in America.

First, the school scam. Parents have long hired pricey tutors to coach their children for the college admissions tests, sometimes paying them hundreds of dollars an hour, even $1,500 for 90 minutes of high-class prep. They've also long tapped their exclusive social and political connections to gin up razzle-dazzle internships to embellish those college applications. Anyone who has spent as much time in academia as I have knows that this sort of thing has been going on for a long time. So has the practice of " legacy admissions " -- access to elite schools especially for the kids of alumni of substantial means who are, or might prove to be, donors . The same is true of privileged access to elite schools for the kids of mega-donors. Consider, for instance, that $2.5 million donation Charles Kushner made to Harvard in 1998, not long before his son Jared applied. Some of the folks who ran Jared's high school noted that he wasn't exactly a whiz-bang student or someone with sky-high SAT scores, but -- surprise! -- he was accepted anyway.

What's new about the recent revelations is that they show the extent to which today's deep-pocketed helicopter parents have gone into overdrive, using brazen schemes to corrupt the college admissions process yet more. One unnamed parent spent a cool $6.5 million to ensure the right college admitted his or her child. Others paid hefty amounts to get their kids' college admissions test scores falsified or even hired proxies to take the tests for them. Famous actors and financial titans made huge payments to university sports coaches, who then lied to admissions officers, claiming that the young applicants were champions they had recruited in sports like water polo, crew, or tennis. (The kids may have known how to swim, row, or play tennis, but star athletes they were not .)

Of course, as figures on the growing economic inequality in this country since the 1970s indicate, the overwhelming majority of Americans lack the connections or the cash to stack the deck in such ways, even assuming they would do so. Hence, the public outrage, even though parents generally understand that not every aspirant can get into a top school -- there aren't enough spots -- just as many know that their childrens' future happiness and sense of fulfillment won't depend on whether they attend a prestigious college or university.

Still, the unfairness and chicanery highlighted by the admissions scandal proved galling, the more so as the growing crew of fat cats corrupting the admissions process doubtless also preach the gospel of American meritocracy. Worse, most of their kids will undoubtedly present their fancy degrees as proof that quality wins out in our society, never mind that their starting blocks were placed so far ahead of the competition.

To add insult to injury, the same parents and children may even portray admissions policies designed to help students who lack wealth or come from underrepresented communities as violations of the principles of equal opportunity and fairness, democracy's bedrock. In reality, students from low-income families, or even those of modest means, are startlingly less likely to be admitted to top private universities than those from households in the top 10%. In fact, applicants from families in the top 1% are now 77 times more likely than in the bottom 20% to land in an elite college, and 38 of those schools admit more kids from families in that top percentage than from the bottom 60%.

Buying Politics (and Politicians), American-Style

Now, let's return to the political version of the same -- the world in which Ted Cruz swims so comfortably. There, too, money talks, which means that those wealthy enough to gain access to, and the attention of, lawmakers have huge advantages over others. If you want political influence, whether as a person or a corporation, having the wealth needed to make big campaign contributions -- to individuals or groups -- and to hire top-drawer lobbyists makes a world of difference.

Official data on the distribution of family income in the United States show that the overwhelming majority of Americans can't play that game, which remains the preserve of a tiny super-rich minority. In 2015, even with taxes and government-provided benefits included, households in the lowest 20% accounted for only about 5% of total income. Their average income -- not counting taxes and government-provided assistance -- was only $20,000. The share of the bottom 50% -- families making $61,372 or less -- dropped from 20% to 12% between 1978 and 2015. By contrast, families in the top 1% earned nearly 50% of total income, averaging $215,000 a year -- and that's only income, not wealth. The super-rich have plenty of the latter, those in the bottom 20% next to none.

Before we proceed, a couple of caveats about money and political clout. Money doesn't always prevail. Candidates with more campaign funds aren't guaranteed victory, though the time politicians spend raising cash leaves no doubt that they believe it makes a striking difference. In addition, money in politics doesn't operate the way simple bribery does. The use of it in pursuit of political influence works more subtly, and often -- in the new era opened by the Supreme Court -- without the slightest need to violate the law.

Still, in Donald Trump's America, who would claim that money doesn't talk? If nothing else, from inaugural events -- for Trump's inaugural $107 million was raised from a host of wealthy donors with no limits on individual payments, 30 of which totaled $1 million or more -- to gala fundraisers, big donors get numerous opportunities to schmooze with those whose campaigns they've helped bankroll. Yes, there's a limit -- currently $5,600 -- on how much any individual can officially give to a single election campaign, but the ultra-wealthy can simply put their money into organizations formed solely to influence elections as well as into various party committees.

Individuals, companies, and organizations can, for instance, give money to political action committees (PACs) and Super PACs. Though bound by rules , both entities still have lots of leeway. PACs face no monetary limits on their independent efforts to shape elections, though they can't accept corporate or union money or take more than $5,000 from individuals. They can provide up to $5,000 to individual election campaigns and $15,000 per party committee, but there's no limit on what they can contribute in the aggregate. Super PACs have far more running room. They can rake in unlimited amounts from a variety of sources (as long as they're not foreign) and, like PACs, can spend limitless sums to shape elections, providing they don't give money directly to candidates' campaigns.

Then there are the dark money groups, which can receive financial contributions from any source, American or foreign. Though their primary purpose is to push policies, not individual campaigns, they can engage in election-related work, provided that no more than half their funds are devoted to it. Though barred from donating to individual campaigns, they can pour unlimited money into Super PACs and, unlike PACs and Super PACs, don't have to disclose who gave them the money or how much. Between 2008 and 2018, dark money groups spent $1 billion to influence elections.

In 2018 , 2,395 Super PACs were working their magic in this country. They raised $1.6 billion and spent nearly $809 million. Nearly 78% of the money they received came from 100 donors . They, in turn, belonged to the wealthiest 1%, who provided 95% of what those Super PACs took in.

As the 2018 congressional elections kicked off, the four wealthiest Super PACs alone had $113.4 million on hand to support candidates they favored, thanks in substantial measure to business world donors. In that election cycle, 31 individuals ponied up more than $5 million apiece, while contributions from the top four among them ranged from almost $40 million to $123 million.

The upshot: if you're running for office and advocate policies disliked by wealthy individuals or by companies and organizations with lots of cash to drop into politics, you know from the get-go that you now have a problem.

Wealth also influences political outcomes through the lobbying industry. Here again, there are rules, but even so, vast numbers of lobbyists and eye-popping amounts of lobbying money now are at the heart of the American political system. In 2018 alone , the 50 biggest lobbying outfits, largely representing big companies, business associations, and banks, spent $540 million, and the grand total for lobbying that year alone was $3.4 billion.

Nearly 350 of those lobbyists were former legislators from Congress. Officials departing from senior positions in the executive branch have also found artful ways to circumvent presidential directives that prohibit them from working as lobbyists for a certain number of years.

Do unions and public interest groups also lobby? Sure, but there's no contest between them and corporations. Lee Drutman of the New America think tank notes that, for every dollar the former spent in 2015, corporate donors spent $34. Unsurprisingly, only one of the top 20 spenders on lobbying last year was a union or a public-interest organization.

The sums spent by individual companies to gain political influence can be breathtaking. Take now-embattled Boeing . It devoted $15 million to lobbying in 2018 -- and that's not counting its campaign contributions, using various channels. Those added another $8.4 million in the last two-and-a-half years. Yet Boeing only placed 11th among the top 20 corporate spenders on lobbying last year. Leading the pack: the U.S. Chamber of Commerce at $94.8 million.

Defenders of the status quo will warn that substantially reducing money's role in American politics is sure to threaten democracy and civil liberties by ceding undue power to the state and, horror of horrors, putting us on the road to "socialism," the right wing's bogeyman du jour . This is ludicrous. Other democracies have taken strong steps to prevent economic inequality from subverting their politics and haven't become less free as a result. Even those democracies that don't limit political contributions have adopted measures to curb the power of money, including bans on television ads (a huge expense for candidates in American elections: $3 billion in 2018 alone just for access to local stations), free airtime to allow competitors to disseminate their messages, and public funds to ease the financial burden of election campaigns. Compared to other democracies, the United States appears to be in a league of its own when it comes to money's prominence in politics.

Those who favor continuing business as usual like to point out that federal "matching funds" exist to help presidential candidates not be steamrolled by competitors who've raised mounds of money. Those funds, however, do no such thing because they come with stringent limits on total spending. Candidates who accept matching funds for a general election cannot accept contributions from individuals. Moreover, matching funds are capped at $20 million, which is a joke considering that Barack Obama and Mitt Romney spent a combined $1.2 billion in individual contributions alone during the 2012 presidential election. ( Super PACs spent another $350 million to help Romney and $100 million to back Obama.)

A New American Tradition?

Rising income inequality , wage stagnation , and slowing social mobility hurt ordinary Americans economically, even as they confer massive social and political advantages on the mega-rich -- and not just when it comes to college admissions and politics either.

Even the Economist , a publication that can't be charged with sympathy for left-wing ideas, warned recently of the threat economic inequality poses to the political agency of American citizens. The magazine cited studies showing that, despite everything you've heard about the power of small donations in recent political campaigns, 1% of the population actually provides a quarter of all the money spent on politics by individuals and 80% of what the two major political parties raise. Thanks to their wealth, a minuscule economic elite as well as big corporations now shape policies, notably on taxation and expenditure, to their advantage on an unprecedented scale. Polls show that an overwhelming majority of Americans support stricter laws to prevent wealth from hijacking politics and want the Citizens United ruling overturned . But then just how much does the voice of the majority matter? Judging from the many failed efforts to pass such laws, not much.

This article originally appeared on TomDispatch .

[Apr 05, 2019] Inequality of opportunity, income inequality, and economic growth

Inequality of means leads to inequality of opportunity and further stratification of the society.
Apr 05, 2019 | voxeu.org

The empirical evidence is similarly mixed. Barro (2000) finds that for developed economies income inequality raises growth. On the other hand, Berg et al. (2012, 2018) find that income inequality tends to reduce the duration of growth spells. Forbes (2000) and Panizza (2002) find no systematic effect.

The missing link: Inequality of opportunity

In recent work (Aiyar and Ebeke 2018), we point to the neglected role of equality of opportunity in mediating this relationship. Our hypothesis is simple. In societies where opportunities are unequally distributed – where the material circumstances of parents act as binding constraints on the opportunities available to their children – income inequality exerts a greater drag on growth. Any increase in income inequality tends to become entrenched, limiting the investment opportunities – broadly defined to include investment in children – available to low-income earners, thereby retarding long-term aggregate growth. On the other hand, in societies with a more equal distribution of opportunities, an increase in income inequality can be more easily reversed and need not constrain investment opportunities and growth. To the extent that inequality of opportunity matters in this way, its omission from standard regressions of growth on income inequality leads to misspecification, which can help explain the inconclusive nature of the empirical literature to date.

... ... ...

...we can think of at least three lines of enquiry for future research, which our results suggest might be of first order importance.

[Apr 05, 2019] Belief in Meritocracy under Neoliberalism Is Not Only False, It's Bad for You by Clifton Mark

All known societies were to a certain extent meritocratic and allowed people of exceptional ability to get to higher classes (often via military commander position, or sometime via administrator or scholar position). Under neoliberalism the main problem is that criteria of success are corrupted (if we are taking about money you need to go to major investment bank do do some stupid staff for several years, if not a decede)
So morality also plays a role and neoliberal society can be called 'amoral meritocracy" which rewards people with abilities who demonstrate amoral, harmful for the society behaviour, such as loan sharks, private equity sharks, debt merchants, etc. In other words neoliberal society is favorable to psychopaths.
Notable quotes:
"... It's not just a matter of "the material status and class of your parents." What about sheer luck? Or shall we believe also that luck is distributed meritocratically? ..."
"... Meritocracy is utopian. What we currently have is a 100M race with everyone starting at different distances. That's not meritocracy by any reasonable interpretation of the word, its something else, yet we have the spectacle of ideologues who pretend its reality and in effect right now. ..."
Apr 05, 2019 | www.nakedcapitalism.com
Yves here. The fact that meritocracy is a useful illusion ties into the discussion in the Michael Hudson interview today by John Siman of how in antiquity, Stoicism's emphasis on resignation helped citizens accept iniquities that they otherwise might have opposed.

By Clifton Mark. Originally published at Aeon

'We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else ' Barack Obama, inaugural address, 2013

'We must create a level playing field for American companies and workers.' Donald Trump, inaugural address, 2017

Meritocracy has become a leading social ideal. Politicians across the ideological spectrum continually return to the theme that the rewards of life – money, power, jobs, university admission – should be distributed according to skill and effort. The most common metaphor is the 'even playing field' upon which players can rise to the position that fits their merit. Conceptually and morally, meritocracy is presented as the opposite of systems such as hereditary aristocracy, in which one's social position is determined by the lottery of birth. Under meritocracy, wealth and advantage are merit's rightful compensation, not the fortuitous windfall of external events.

Most people don't just think the world should be run meritocratically, they think it is meritocratic. In the UK, 84 per cent of respondents to the 2009 British Social Attitudes survey stated that hard work is either 'essential' or 'very important' when it comes to getting ahead, and in 2016 the Brookings Institute found that 69 per cent of Americans believe that people are rewarded for intelligence and skill. Respondents in both countries believe that external factors, such as luck and coming from a wealthy family, are much less important. While these ideas are most pronounced in these two countries, they are popular across the globe .

Although widely held, the belief that merit rather than luck determines success or failure in the world is demonstrably false. This is not least because merit itself is, in large part, the result of luck. Talent and the capacity for determined effort, sometimes called ' grit ', depend a great deal on one's genetic endowments and upbringing.

This is to say nothing of the fortuitous circumstances that figure into every success story. In his book Success and Luck ( 2016), the US economist Robert Frank recounts the long-shots and coincidences that led to Bill Gates's stellar rise as Microsoft's founder, as well as to Frank's own success as an academic. Luck intervenes by granting people merit, and again by furnishing circumstances in which merit can translate into success. This is not to deny the industry and talent of successful people. However, it does demonstrate that the link between merit and outcome is tenuous and indirect at best.

According to Frank, this is especially true where the success in question is great, and where the context in which it is achieved is competitive. There are certainly programmers nearly as skilful as Gates who nonetheless failed to become the richest person on Earth. In competitive contexts, many have merit, but few succeed. What separates the two is luck.

In addition to being false, a growing body of research in psychology and neuroscience suggests that believing in meritocracy makes people more selfish, less self-critical and even more prone to acting in discriminatory ways. Meritocracy is not only wrong; it's bad.

The 'ultimatum game' is an experiment, common in psychological labs, in which one player (the proposer) is given a sum of money and told to propose a division between him and another player (the responder), who may accept the offer or reject it. If the responder rejects the offer, neither player gets anything. The experiment has been replicated thousands of times, and usually the proposer offers a relatively even split. If the amount to be shared is $100, most offers fall between $40-$50.

One variation on this game shows that believing one is more skilled leads to more selfish behaviour. In research at Beijing Normal University, participants played a fake game of skill before making offers in the ultimatum game. Players who were (falsely) led to believe they had 'won' claimed more for themselves than those who did not play the skill game. Other studies confirm this finding. The economists Aldo Rustichini at the University of Minnesota and Alexander Vostroknutov at Maastricht University in the Netherlands found that subjects who first engaged in a game of skill were much less likely to support the redistribution of prizes than those who engaged in games of chance. Just having the idea of skill in mind makes people more tolerant of unequal outcomes. While this was found to be true of all participants, the effect was much more pronounced among the 'winners'.

By contrast, research on gratitude indicates that remembering the role of luck increases generosity. Frank cites a study in which simply asking subjects to recall the external factors (luck, help from others) that had contributed to their successes in life made them much more likely to give to charity than those who were asked to remember the internal factors (effort, skill).

Perhaps more disturbing, simply holding meritocracy as a value seems to promote discriminatory behaviour. The management scholar Emilio Castilla at the Massachusetts Institute of Technology and the sociologist Stephen Benard at Indiana University studied attempts to implement meritocratic practices, such as performance-based compensation in private companies. They found that, in companies that explicitly held meritocracy as a core value, managers assigned greater rewards to male employees over female employees with identical performance evaluations. This preference disappeared where meritocracy was not explicitly adopted as a value.

This is surprising because impartiality is the core of meritocracy's moral appeal. The 'even playing field' is intended to avoid unfair inequalities based on gender, race and the like. Yet Castilla and Benard found that, ironically, attempts to implement meritocracy leads to just the kinds of inequalities that it aims to eliminate. They suggest that this 'paradox of meritocracy' occurs because explicitly adopting meritocracy as a value convinces subjects of their own moral bona fides . Satisfied that they are just, they become less inclined to examine their own behaviour for signs of prejudice.

Meritocracy is a false and not very salutary belief. As with any ideology, part of its draw is that it justifies the status quo , explaining why people belong where they happen to be in the social order. It is a well-established psychological principle that people prefer to believe that the world is just.

However, in addition to legitimation, meritocracy also offers flattery. Where success is determined by merit, each win can be viewed as a reflection of one's own virtue and worth. Meritocracy is the most self-congratulatory of distribution principles. Its ideological alchemy transmutes property into praise, material inequality into personal superiority. It licenses the rich and powerful to view themselves as productive geniuses. While this effect is most spectacular among the elite, nearly any accomplishment can be viewed through meritocratic eyes. Graduating from high school, artistic success or simply having money can all be seen as evidence of talent and effort. By the same token, worldly failures becomes signs of personal defects, providing a reason why those at the bottom of the social hierarchy deserve to remain there.

This is why debates over the extent to which particular individuals are 'self-made' and over the effects of various forms of 'privilege' can get so hot-tempered. These arguments are not just about who gets to have what; it's about how much 'credit' people can take for what they have, about what their successes allow them to believe about their inner qualities. That is why, under the assumption of meritocracy, the very notion that personal success is the result of 'luck' can be insulting. To acknowledge the influence of external factors seems to downplay or deny the existence of individual merit.

Despite the moral assurance and personal flattery that meritocracy offers to the successful, it ought to be abandoned both as a belief about how the world works and as a general social ideal. It's false, and believing in it encourages selfishness, discrimination and indifference to the plight of the unfortunate.


JCC , April 5, 2019 at 10:20 am

The correct link for the Aeon source article:

https://aeon.co/ideas/a-belief-in-meritocracy-is-not-only-false-its-bad-for-you

jrs , April 5, 2019 at 11:21 am

I always though the title was off, the point being made is meritocracy is bad for society and people's moral behavior, but I still think people adapt meritocracy because they think it is good for them individually, to a degree.

I think we need to differentiate between purely individual beliefs and larger social beliefs, the purely individual beliefs are way less important but are sometimes used by people a means to cope.

There's the extreme in believing that luck has no role in life, and another extreme of believing nothing one can do personally (except you know join the revolution) can have an effect on their life. And as for being psychologically harmful to the individual, they both can be.

The person just out of luck, who say can't seem to find a job, who endlessly blames themselves falls into despair. Blaming themselves less would help a little bit, however this can not be changed so easily by a change of personal beliefs, as one's feelings are a product of their society, beliefs themselves to the extent they affect feelings are NOT entirely individual. So in this case the social belief in meritocracy becomes harmful to the individual, but the individual belief frankly just doesn't matter as much.

OTOH if there is something an individual has some chance of changing then believing they can't obviously isn't helpful – so in this case some personal belief in agency may be helpful.

But is meritocracy even the right term? When we are actually talking about belief in individual agency, they may be related to a degree, but are they really the same thing? Belief in agency is more like "I may be able to have some influence on my fate", whereas meritocracy seems to posit some perfectly just world that we all know we don't live in! But yes sometimes belief in individual agency is helpful and sometimes it's not.

Adam Eran , April 5, 2019 at 1:35 pm

This is actually an ancient conversation. In those times meritocracy was called "salvation by works." That is what Jesus condemned the pharisees for promoting. Orthodox Christianity (really, of any denomination) promotes "salvation by grace " so your position is the result of a gift, not your merit. So meritocracy is heretical.

This is a consistent theme throughout the New Testament. For example, the "Prodigal Son" gets the celebration with the fatted calf, while the good son does not.

Even worse, the idea that meritocracy motivates people turns out to be false. Sticks and carrots are not effective motivators. See this TED talk for more about that.

Sol , April 5, 2019 at 2:18 pm

Synchronicity! *throws confetti*

I suspect Nietszche understood why "salvation through good works" was rejected by the Bible in favor of salvation by faith alone. The glue that would hold salvation-by-works together lies in the hands of those privileged to define good. For when "good people" get to define what they do to, or at, others as "good works", humans can tend to become blissfully self-satisfied monsters.

djrichard , April 5, 2019 at 3:53 pm

Yes, but Jesus didn't make it very far in the church hierarchy did he. Hence the take-away lesson: if you want to move up the church hierarchy, you have to demonstrate your merit to those in authority.

Amfortas the hippie , April 5, 2019 at 4:45 pm

lol.

Like reagan being chased out of the tea party as a commie. I'm not sure that the orthodoxy/orthopraxis argument is a good fit, here although i will venture that we could use a little more thought about the latter, and not just in religion.

in this as in JR's agency vs some sort of hard determinism, maybe an actual middle road (μηδὲν ἄγαν–https://en.wikipedia.org/wiki/Moderation) is something we could try.(look what they've done to my centrism, Ma )

as for meritocracy i inherited the virus from my grandad small industrial manufactor, Houston, circa mid 50's to late 90's.
good work=better pay, pride in one's work, and such. I'd still like to believe this,lol.

but i've seen little evidence to support it. system selects for psychopathy.

Summer , April 5, 2019 at 11:03 am

Like the old saying goes, "I'd rather be lucky than smart."

mle detroit , April 5, 2019 at 11:49 am

There is also the other old saying, "The harder I work, the luckier I get."

GERMO , April 5, 2019 at 12:59 pm

LOL

"The harder I work, the luckier I get."

said everyone's jerk boss, ever

djrichard , April 5, 2019 at 3:56 pm

Evolution of capitalism's redeeming value:
– if you work hard, you'll do fine
– if you work hard and save, you'll do fine
– if you work hard, save and invest, you'll do fine
– if you work hard, save and invest and are lucky (to get a job, not get laid off or to lose out on your investments), you'll do fine

Eudora Welty , April 5, 2019 at 6:03 pm

& "play by the rules"

Alex , April 5, 2019 at 11:08 am

I don't think that the facts in this post support the central premise ( that it "ought to be abandoned both as a belief about how the world works and as a general social ideal"). First of all, the dichotomy between meritocracy and aristocracy is not false. The chances of someone born in a median family in modern-day Sweden to achieve success (whatever definition you use) are much higher than of one born in Victorian England. Would you argue against the meritocracy defined as having your odds of success being independent of the material status and class of your parents?

I would suspect that the belief in meritocracy would also correlate with a bunch of positive traits like honesty, creativity and industriousness, it would be interesting to test that.

Alex , April 5, 2019 at 11:38 am

I've done a quick google scholar search and apparently no one is interested whether the meritocracy belief is associated with anything positive.

So I can't cite anything as a proof but this is what I observed myself having lived most of my life in a place where the belief that hard work is rewarded by success is not very widespread, to put it mildly. By coincidence or not, there is a lot of short-termism among both businesses and people and a lot of opportunistic behaviour – think of a prisoner game where defecting makes most sense when you don't trust others and don't expect to play with them any more.

mle detroit , April 5, 2019 at 12:00 pm

And how many of those search results used subjects who were not "college white rats"?

Sanxi , April 5, 2019 at 1:37 pm

Depends on the value any given culture at any given time places on whatever criteria minus a system based on birth. Given where we are at now, I'm looking at several, meta studies at NIH from who gets into Medical schools, choice residencies, and all that and the data shows a little aptitude, some attitude, and mostly luck goes a long way. But, surveys 20, 30, 40 years out, 90+ seem to think they did it all themselves, unfortunately, patients are less then satisfied (49% more or less). Just saying.

diptherio , April 5, 2019 at 11:51 am

It's not just a matter of "the material status and class of your parents." What about sheer luck? Or shall we believe also that luck is distributed meritocratically?

At least in non-meritocratic societies, it was clear that someone wasn't wealthier than another because they had worked harder or were somehow a better person. It's still the case now that "it's not what you know, it's who you know," but now we can lie to ourselves that our success (or someone else's) must be due to their innate worthiness, since we have a supposedly "level playing field."

Alex , April 5, 2019 at 1:28 pm

Who said luck doesn't play a role? Especially at the very top where by definition you have very few slots and lots of people with more or less similar abilities. Definitely luck has played a lot of role in my life and I'm sure that in yours as well.

Obviously luck is not distributed meritocratically, I'd be really surprised if someone believed that. Why insist that it's either 100% luck or 100% merit?

Martin Finnucane , April 5, 2019 at 11:16 am

That Obama quote is a real gem. It's ok to have the "bleakest poverty," provided that the impoverished one – that natural born 10%er – has to the chance to be, say, Neera Tanden's secretary some day. Obama is the center-left's Reagan.

Sanxi , April 5, 2019 at 1:39 pm

Never hurts to have a few billionaire friends at your disposal. As Obama did.

Alex Cox , April 5, 2019 at 11:27 am

Regarding Gates, I would suggest greed is a bigger element in his success than luck. Richard Stallman and Linux Torvalds are also great programmers. But they are less focused on the bucks.

Anon , April 5, 2019 at 12:24 pm

Bill Gates was NOT a skilled programmer. He, and friends, saw an opportunity to take a basic operating system developed by others (IBM?) and meld it with a graphic user interface (first developed at Stanford University) into a marginal system that was able to survive because the personal computer revolution (inspired by Apple) was beginning its incredible rise. (He was swept along by the tide.)

Gates then used the legal skills learned from his daddy (a corporate attorney) to limit competitors by using legal threats and court actions and anti-competitive methods. Remember? He LOST the antitrust case brought against him; where he played "dumb as a rock" under cross-examination. Microsoft survived because the "remedy" instituted by the court was Pablum. To this day Microsoft products are junk, but for the average user one of only two choices; Apple is the other. (Linux desktop is still not broadly accessible to most users.)

Bill Gates is the poster boy for the "meritocracy" joke.

Arizona Slim , April 5, 2019 at 2:02 pm

Yours Truly is using Linux right now. On a made-in-the-USA System76 laptop.

Works for me

human , April 5, 2019 at 2:56 pm

GNU/Linux desktop is more broadly available than either any M$ or Apple operating system if only because of cost! Granted, one may have network and printer issues with state-of-the-art hardware, but, with with anything older than about one year, it will work better out-of-the-box than either of the big 2. Once set up, most will see little difference and setting up is easier than either with a worldwide support base of users.

It's time to post this link again: He Who Controls the Bootloader

RMO , April 5, 2019 at 3:39 pm

MS-DOS was purchased as Q-DOS from Seattle Computer Products – IBM had nothing to do with developing it. Their strategy for making the PC was to outsource everything because producing in-house as they usually did would have taken far too long (the head of their PC project said that IBM's internal approval processes meant that it would have taken at least two years to ship an empty box as a product). IBM went to Microsoft looking to buy BASIC and the CPM operating system. IBM was under the impression that Microsoft owned both. Microsoft sent them to Gary Kildall's company to get CP-M but IBM didn't make a deal at first (various reasons have been given including Kildall not showing up for the meeting as he wanted to go flying and his wife and partner not being willing to sign the onerous NDA IBM required). IBM came back to Microsoft and they scrambled to find an OS as they were terrified of losing the language business. They realized that getting in at the start with IBM would be huge. Q-DOS (Quick and Dirty Operating System) was, shall we say heavily influenced by CP-M and Microsoft bought it so they could offer it to IBM.

The GUI/mouse interface was derived from the Apple Mac and Gates is on record demanding "Mac on a PC." when it was being developed. The Mac interface in turn came about directly from a system that was the product of Xerox's PARC operation after Jobs visited the facility.

Gates was a skilled programmer but nowhere near the skill level of Gary Kildall or many of the people at Xerox PARC to mention just a few. His massive success certainly isn't a result of him being a code god. He sure was ambitious, well placed to take a large part of the PC market due to his family background, could see just how big PC's would be and as greedy as hell though – none of those things support the proposition that we're in a meritocracy that's for sure.

poopinator , April 5, 2019 at 12:32 pm

I completely agree. A lot of technical folk simply value the satisfaction of solving complex problems more than financial remuneration. I think the same can be said of those who work in social services, journalism and the arts as well. Unfortunately our society has always been married to the notion that financial success is equivalent to merit, and this belief is almost inextricably tied to our religion of capitalism. It's also the reason our country's best technical talents end up building gigantic ad platforms, surveillance technology, and high frequency trading systems instead of focusing on the existential issues that face humanity/nature.

Svante Arrhenius , April 5, 2019 at 12:49 pm

Effluvium floats, since it's devoid of substance?

https://foe.org/the-study/

Amfortas the hippie , April 5, 2019 at 4:59 pm

you touch on something ive thought about a lot lately defining "success".
usually while riding around in the woods and fields in a bathrobe, in a golf cart, thinking.(it's a working golf cart, with a rifle rack)
i read zarathustra when i was a kid, and ever after wanted to "live on a mountain and wear robes and be a philosopher."
am I not, therefore, a Success?
who gave "our betters" the privilege of defining such things?
and why do we continue allow it?

Carla , April 5, 2019 at 12:41 pm

I once met and got to know, in a group situation, a married couple who struck me as the stupidest people I had ever encountered. I learned that they successfully operated a highly profitable family business. It seemed to me then (and still does now) that the pure desire for money was probably the main thing required for obtaining it. OK, maybe some luck doesn't hurt, but main thing is the focus and pure desire.

Sanxi , April 5, 2019 at 1:41 pm

Alex Cox, greed maybe, but the massively stupid IBM sure helped. He tried ending his contracting with IBM over and over. Nope.

Marc , April 5, 2019 at 11:29 am

What exactly is the article trying to suggest? It is quite condescending to suggest that people are under the illustion that priviledge and luck doesn't exist. The surveys cited asked whether hard work, intelligence and skill contribute to success. They clearly do as reflected in the result but that doesn't exlcude also recognising that you also need luck and you can have bad luck. I'm surrounded by people who have been more lucky and less lucky than I have from a similar starting point. I'm not exactly sure what you are supposed to do with that other hope that people are self-aware enough to realise this and not be arrogant etc but humans will be humans and there are all kinds. I just tell my children, that they have had a lot of the priviledges they've had, to work as hard as they can. That won't guarantee success but at least they have made the effort and put themsleves in front of more opportunity than someone who hasn't.

Sanxi , April 5, 2019 at 1:43 pm

All my brother ever had to do was show up. And he keep falling up from there. I'm happy for him as he had no skills to speak of.

anon y'mouse , April 5, 2019 at 4:13 pm

the ability to take advantage of the luck thrown your way is a skill to exploit, but it is usually predicated on being the previous recipient of a lucky circumstance that gave you enough chances to try (and prove, or improve) your skill.

if you are never offered the chance, you cannot improve your skill. and being offered the chance is down to luck.

we are shaped so much by our experiences, that the truth is found by studies that people who are more attractive are more successful and smarter, generally, than those who are not as attractive? why? because people treated them differently from the very beginning of their lives (or their period of attractiveness started) which made them more confident and thus able to exploit these opportunities that came their way, thus more room to expand whatever skills they may have had in the first place.

this is a nature/nurture problem at the heart of it all. you want to believe that skill makes a difference, and it does. but why did that particular person develop those skills to begin with? they definitely weren't "born that way". society chooses what success means. the system determines what the grade for "failure" is. meaning it is somewhat arbitrary to begin with, and malleable (if we had a different system, with a different set of values, we would possibly choose different benchmarks).

most important of all: a mentor or some figure around you that recognizes, early on, that you are capable of learning and developing talents and invests some time and trouble into you to make sure that you do develop them. some of us were lucky enough to have parents who did this. my own parents taught me to clean beer bottles, wash dishes, do laundry, etc. that is as far as their instruction went. all of my other training i had to pick up from school, or from reading, or from observation in life. the fact that i had an employer, at one time, who alllowed me to take on a wide range of duties resulting in developing skills at her business when i knew absolutely nothing to begin with, was totally down to luck on my part at that time.

is any of that making sense? i have no idea anymore.

Temporarily Sane , April 5, 2019 at 8:44 pm

Your post makes perfect sense to me. Nobody gets to choose their parents, their personality traits, the socio-economic class they are born into etc. or the early childhood experiences that play such a major role in shaping a person's psychological core. Someone who consistently gets negative feedback from their parents or peers will be psychologically hamstrung from an early age and without a mentor figure to help guide them, or blind genetic luck gifting them with a disposition that lets them overcome negative reinforcement and land on their feet, that can really damage their future potential.

Another limiting factor is society itself. Example: A hypothetical person who spent their 20s and much of their 30s caught up in a heavy opiate addiction but manages to kick the habit before age 40. They can be smart, motivated, have a positive attitude and all that stuff, but unless that person also has resourceful family or connected friends who are willing to help them with jobs, money, references etc. and the transition into a "productive" member of society, they will likely be SOL and live on the margins for the rest of their life.

America does not do second chances. There is no structure in place to assist people who messed up their young adulthood in finding a dignified position in society. Fu*k up once and unless you're lucky and have people in your life willing and able to help, you're finished as far as sustainable employment that pays a living wage goes.

The same is true for a person who did time in jail. When they get out after serving their sentence, they have paid their debt to society and been deemed stable and rehabilitated enough to be allowed back into that society. But they will be forever stigmatized as an ex-con, a criminal, not to be trusted and, unless they have family or friends who can give them a leg up, they too are denied the opportunity to earn a dignified living and to make something of themselves.

In America and other countries with a similar social system it is blind luck that determines if a person who "made poor choices" in early adulthood or, for whatever reason, got a later start in life will have an opportunity to thrive and be accepted as a full member of their community.

People who think that luck and circumstances outside of their control have nothing to do with what they have acheived are simply wrong. It is also supremely ironic that STEM bro types who aggressively push biological determinism don't see any contradiction between that position and their waffle about the supposed fairness of meritocracy and "equality of opportunity" that is supposed to highlight their sensitive "hey I'm not a total crypto fascistic eugenicist" side. Bah. Family blog all those miserable family bloggers.

Tim , April 5, 2019 at 5:53 pm

I agree with Marc. As everybody knows on this site framing is everything in a survey, and the author takes a massive leap on the referenced surveys to reach her conclusions of how the majority of people think.

Watt4Bob , April 5, 2019 at 11:37 am

There's a subtlety to the cognitive dissonance involved in believing in the meritocracy.

That is IMO, many folks understand that 'merit' in a certain sense means being able to put up with BS, and many folks think a college diploma is actually proof of the bearers ability and willingness to swim upstream in sh*t creek.

So meritocracy means different things to different people.

Some folks even go so far as believing that a person's inability to " Go along to get along" is proof of lower intelligence, and by extension, lack of 'merit' .

So one of the wrinkles in the story, lies in two different definitions of 'merit' , one of which, though correct, is not a key to success, and believing in it is naive, and maybe a waste of time, the other though crooked and false, is actually useful to the crooked and dishonest in getting ahead under current management.

Fiery Hunt , April 5, 2019 at 1:56 pm

Ding, ding!

rd , April 5, 2019 at 2:15 pm

I think part of it is that there are different definitions of value. for some people, it is measured purely in money, for others in time, and for others in general happiness. https://www.forbes.com/sites/nextavenue/2018/10/09/can-money-buy-happiness-a-new-way-to-measure/#309bf40a4e89

In general, it is pretty clear that money is directly correlated with happiness up to something like $70k to $135k per year in the developed world. https://www.usatoday.com/story/money/nation-now/2018/02/26/does-money-equal-happiness-does-until-you-earn-much/374119002/

Beyond that, extra money does not mean extra happiness. So it is very difficult to measure meritocracy past about $100k as many people make decisions where they could make more money but choose not to for a number of reasons.

On the other hand, it is clear that many people struggle to break out of poverty no matter how hard they work, so there are systemic barriers preventing them from reaching that threshold value where money doesn't buy more happiness. I think this is where the proof of US inequality and lack of meritocracy comes to the fore.

LifelongLib , April 5, 2019 at 4:23 pm

Arguably money is like air or food, you need a certain amount or you're constantly impaired by not having enough, but once you have enough more doesn't make much difference

shinola , April 5, 2019 at 11:41 am

How does meritocracy differ from social Darwinism?

diptherio , April 5, 2019 at 11:52 am

Is that a trick question? There is no difference, right?

shinola , April 5, 2019 at 12:24 pm

Oh, and there's this thing called the "Peter Principle".

Svante Arrhenius , April 5, 2019 at 1:34 pm

The harder YOU work, the luckier I get? Nudge, nudge!

http://www.csustan.edu/history/socialist-darwinism

Sanxi , April 5, 2019 at 1:46 pm

No, the harder you work the harder you work. That kind of Effort bears almost no relationship to outcome.

jrs , April 5, 2019 at 1:54 pm

One has to work just to avoid getting fired (not that it's the only reason people get fired of course). so there's your relationship to outcome right there.

But sure people work very hard at jobs that are poorly paid and others less hard at well remunerated jobs.

Svante Arrhenius , April 5, 2019 at 2:20 pm

I'm doubting I'd be doing anybody a favor by posting any of Mike Judge's movies or series here, in their entirety? https://m.youtube.com/watch?v=YwZ0ZUy7P3E of course, FOX cut the good parts! "Hard work.. bears no relationship" agreed!

WobblyTelomeres , April 5, 2019 at 6:37 pm

Sanxi has it right. The only thing I ever got from working 70 hour weeks was a sociopath asking for 80.

Temporarily Sane , April 5, 2019 at 8:52 pm

It doesn't. The meritocratic "if you want it badly enough you will find a way to get it" line that is pushed onto kids from an early age basically encourages them to be sociopaths. Herbert Spencer would wholeheartedly approve.

jake , April 5, 2019 at 11:43 am

This piece promotes its own myth of meritocracy when it notes "There are certainly programmers nearly as skilful as Gates who nonetheless failed to become the richest person on Earth."

Nobody actually knows how skillful a programmer Gates is, but it doesn't matter, because his programming skills have absolutely nothing to do with his wealth. Look up the history of IBM-DOS, for his pilfering of intellectual property and the colossal mistake of IBM, in allowing Microsoft, then a one-horse company, to retain rights to the operating system it didn't actually write.

Gates enjoys vast wealth thanks to incredible luck, crime and personality traits which have nothing to do with intellectual achievement.

poopinator , April 5, 2019 at 12:48 pm

Gates was a ruthless businessman. He was a monopolist. He was a bundler. He tried to rip off Paul Allen when he was stricken with cancer (Paul Allen was no sympathetic character in this either, btw). Gates was a notorious creep in the office during the early years. He would not have survived the scrutiny of a modern day internet enabled press. His philanthropy seems to serve his vanities more so than the immediate needs of the society that enabled his rise to wealth. Hell, until he was about 40 or so , he was a notorious miser when it came to charitable causes. Most of his charitable work seems to be aimed at pushing PR to rehabilitate the reputation that he so richly earned during the 80s and 90s.

Whenever I hear or read about people talking about benevolent billionaires such as him or Buffet, I immediately know that the messenger is susceptible to propaganda. When Gates announced that he was leaving MS and concentrate on giving away his mountain of money, he was worth 10-20 billion. He's now worth 100 billion, and most of that recent growth was due to rentier capitalism. Bill Gates firmly believes that he knows what society needs are better than the masses.

Arizona Slim , April 5, 2019 at 2:05 pm

Ummm, Mr. Gates, about that charitable work. Here's a local problem that could use a bit of your attention.

Here's the link to a recent documentary produced by KOMO-TV in your hometown, Seattle:

https://www.youtube.com/watch?v=bpAi70WWBlw

poopinator , April 5, 2019 at 2:52 pm

Been meaning to watch that. I think that's a great example considering the topic of this thread. Society looks down on the homeless as losers in a meritocracy and deserving of their plight. Hence they are unworthy of charity from our plutocrats, despite being the product of the system they created.

Svante Arrhenius , April 5, 2019 at 12:01 pm

EWwww Marx worked FOR Greeley! AmiRIGHT, huh, huh? Who decides, what MERITS whom? Certain towns sop up slime like SpongeBob. The 1% hasn't the brains to replace their craven 9.9% churls with self-disinfecting robot whores YET? Without all these ivy league media hyenas feasting on the pyritic brains of inbred Reagan era pundits, wonks, gurus and deadeyed ofay hammerheads. What we have here is a meritocracy of mendacious moronic Munchkins? https://www.counterpunch.org/2009/06/12/elmer-fudd-nation/ https://caitlinjohnstone.com/2019/04/03/nine-reasons-why-you-should-support-joe-biden-for-president/

Sol , April 5, 2019 at 12:23 pm

Perhaps more disturbing, simply holding meritocracy as a value seems to promote discriminatory behaviour.

Well, sure. See, one of the things we know for sure is that we are the good guy. And once we – the good guys – are also convinced of our own merit, from there determining who is also meritorious and good is a simple matter of examining those not like us for the flaws that made them dysfunctional, and examining those like us for the traits that made them excellent.

Easy-peasy, lemon-squeezy.

:D

ape , April 5, 2019 at 1:48 pm

Yes, being delusional about reality leads to pathologies.

Very great pathologies.

In fact, there have been studies/simulations of pure meritocratic models versus partially random models -- eg, a redistribution of wealth between plays so that early winners don't get all the wealth. Unsurprisingly, a less "meritocratic" model is more meritocratic, because the problem isn't in the winning, which is a partial winnow, but in the leveraging.

You can see how deeply this bites even on this thread -- if you're a winner, and you think you're a winner, you're a loser.

Ape , April 5, 2019 at 1:49 pm

And allow me to self-comment: this ties in very strongly with Hudson's series.

JerryDenim , April 5, 2019 at 2:16 pm

As far as societal outcomes and world-views that squelch introspection I wonder how the Anglo concept of 'meritocracy' as a value system compares to other value systems that serve an entrenched elite at the top of a highly stratified society, like say, the Indian caste system? One system believes the gods and past deeds in previous lives determine your lot in this life, while the other system lays everything at the feet of each individual, in one lifespan, regardless of the hand they've been dealt, in effect elevating each man to god status deciding their own fates through sheer will. It could be argued the caste system is the more fatalist world view of the two, but it seems less psychologically corrosive for the losers. Not as much blame to internalize. Society-wide the outcome seems identical; Don't question your betters, everybody gets what they deserve.

Rosario , April 5, 2019 at 3:55 pm

An observation I have made over the years. There are people who work hard (in a material and metaphysical/emotional sense), are smart, contribute to society in positive ways, and all the while, they gain little material or social wealth from it because they shun those "rewards" out of principle. I know some of those people and admire them very much. They are often a bit neurotic but very thoughtful and empathetic.

Being successful in the sense that one is "helpful" to the world they live in is very different from being successful by typical cultural metrics. One is somewhat easy to quantify the other is not. Maybe the problem is, the way many people measure success is simplistic but easily quantifiable, and this half-picture approach to success, leads to "incompetence of morality", similar to poor performance on the job as a result of not seeing the whole picture (put bluntly, being a dumbass). Not that bad behavior should be absolved because of this, but that perspective at least offers a less abstract approach to conditioning better behavior in people. We could create a model of human value and success that acknowledges our experience on this planet as more complicated than money, views, likes, etc.

Tim , April 5, 2019 at 5:48 pm

I believe the following three things:
– I believe everybody should try as hard as they can to do their best for themselves and their loved ones in a moral/ethical way
-I believe every individual should strive for a meritocracy in their own actions, and retain humility through empathy for those that are not as successfully in life. Luck and the starting point are huge factors
– Even the most meritocractic of systems is not very meritocratic. Especially in the USA the ginni coefficient proves the american dream is dead.

Raulb , April 5, 2019 at 6:33 pm

Meritocracy is utopian. What we currently have is a 100M race with everyone starting at different distances. That's not meritocracy by any reasonable interpretation of the word, its something else, yet we have the spectacle of ideologues who pretend its reality and in effect right now.

Let's start every child with the exact same circumstances till 18, how many meritocrats are open to that because that's the only thing that can be called 'meritocracy'? And its at this point that the arguments starts to rapidly degenerate into things like 'parental meritocracy to pass on to children as perfectly fair' ie feudalism or odious eugenics with more value placed on puzzle solving tests that they can logically provide. So every generation is squandering time arguing in good faith with disingenuous neo-feudals and their paid ideologues who use whatever they can to perpetuate privilege and wealth.

Wealthy and able backgrounds are going to make a huge difference to children, as are connections and privilege in opportunities and perceptions. Since every society has an underclass that suffers prejudice and lack of opportunities and an upperclass that get the exact opposite meritocracy does not in fact exist.

Even more damning how exactly are you going to get a meritocracy in a capitalist system that privileges wealth and capital, and by design produces a large underclass because demand, resource shortages and resulting prices hikes will always limit access only for the top echelons. There is no way any claims of merit can be made or taken with good faith. So what we get instead is celebrating the rich and privileged and a few odd naturally gifted who can start a race with a disadvantage and still compete as examples of meritocracy when it is only be the conditions of the average and not the exception that reflects a meritocracy.

[Apr 01, 2019] Retail Layoffs Are 92% Higher In 2019, And Now Even Wal-Mart Is Quietly Closing Stores by Michael Snyder

Notable quotes:
"... "The decision to close our local stores is a difficult one," said Lifeway Chief Executive Officer Brad Waggoner. "While we had hoped to keep some stores open, current market projections show this is no longer a viable option." ..."
"... And yes, Internet retailing has been growing, but it still accounts for less than 10 percent of all U.S. retail sales. In addition, it is important to point out that Internet retailers had a very disappointing holiday season just like brick and mortar retailers did. ..."
"... Ultimately, the truth is that the U.S. economy has been steadily slowing down in recent months. During the months of December, January and February, the amount of stuff being moved around the country by truck, rail and air was lower than during all of those same months a year earlier. The following comes from Wolf Richter ..."
"... Unfortunately, it appears that things are only going to get rougher for the U.S. economy in the months ahead. So more retail workers are going to get laid off, more stores are going to close, and there are going to be a lot more stories about our ongoing "retail apocalypse" in the mainstream media. ..."
Apr 01, 2019 | www.zerohedge.com

Authored by Michael Snyder via The Economic Collapse blog,

Just like we witnessed during the last recession, major retailers are laying off tens of thousands of workers, and it looks like this will be the worst year for store closings in all of U.S. history. Many are referring to this as "the retail apocalypse" , and without a doubt this is one of the toughest stretches for retailers that we have ever seen. But many believe that what we have witnessed so far is just the beginning . After all, if retailers are struggling this much now, how bad will things be once the next recession really gets rolling? Of course the truth is that things have been rocky for the retail industry for quite a few years, but the numbers are telling us that this crisis is really starting to accelerate.

According to Challenger, Gray & Christmas, retail layoffs were up a whopping 92 percent in January and February compared to the same period a year ago. The following comes from NBC News

More than 41,000 people have lost their jobs in the retail industry so far this year -- a 92 percent spike in layoffs since the same time last year, according to a new report.

And the layoffs continue to mount, with JCPenney announcing this week it would be closing 18 stores in addition to three previously announced closures, as part of a "standard annual review."

Yes, competition from Internet commerce is hurting the traditional retail industry, but it certainly doesn't explain a 92 percent increase.

And very few retailers have been able to avoid this downsizing trend. At this point, even the largest retailer in the entire country has begun "quietly closing stores"

Walmart is closing at least 11 US stores across eight states.

The stores include one Walmart Supercenter in Lafayette, Louisiana, and Walmart Neighborhood Market stores in Arizona, California, Kansas, South Carolina, Tennessee, Virginia, and Washington.

For decades, Wal-Mart has been expanding extremely aggressively.

They have plenty of cash, and so the only way that it would make sense for them to close stores is if they anticipated that we are heading into a recession.

Here is a list of the addresses where Wal-Mart stores are closing

Of course Wal-Mart is in far better shape than almost everyone else in the industry.

One of Wal-Mart's key competitors, Shopko, has just announced that they will be shutting down all of their stores

Shopko will liquidate its assets and close all of its remaining locations by mid-June.

The company was unable to find a buyer for the retail business and will begin winding down its operations beginning this week, the company said in statement released Monday. The decision to liquidate will bring an end to the brick-and-mortar business that began in 1962 with one location in Green Bay, Wisconsin.

And personally I was very saddened to learn that Lifeway Christian Bookstores has also decided to close all their brick and mortar stores

Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.

"The decision to close our local stores is a difficult one," said Lifeway Chief Executive Officer Brad Waggoner. "While we had hoped to keep some stores open, current market projections show this is no longer a viable option."

Whenever I do an article like this, I always have some readers that try to convince me that this is only happening because of the growth of Internet retailing.

And yes, Internet retailing has been growing, but it still accounts for less than 10 percent of all U.S. retail sales. In addition, it is important to point out that Internet retailers had a very disappointing holiday season just like brick and mortar retailers did.

Ultimately, the truth is that the U.S. economy has been steadily slowing down in recent months. During the months of December, January and February, the amount of stuff being moved around the country by truck, rail and air was lower than during all of those same months a year earlier. The following comes from Wolf Richter

Now it's the third month in a row, and the red flag is getting more visible and a little harder to ignore about the goods-based economy: Freight shipment volume in the US across all modes of transportation – truck, rail, air, and barge – in February fell 2.1% from February a year ago, according to the Cass Freight Index , released today. The three months in a row of year-over-year declines are the first such declines since the transportation recession of 2015 and 2016.

I have a feeling that when we get the final numbers for March that they will show that this streak has now extended to four months.

Right now, unsold goods are starting to pile up in U.S. warehouses at a rate that we haven't seen since the last recession. Many retailers that are barely clinging to life will simply not survive if economic conditions continue to deteriorate.

Unfortunately, it appears that things are only going to get rougher for the U.S. economy in the months ahead. So more retail workers are going to get laid off, more stores are going to close, and there are going to be a lot more stories about our ongoing "retail apocalypse" in the mainstream media.

[Mar 31, 2019] The Conservation of Controversy Outraged students, helpless teachers, and the President's executive order by Joshua Blair

Notable quotes:
"... Professor Weinstein is an avowed liberal with a long history of progressive thinking. As a young man, he was the center of another controversy when he blew the whistle regarding the exploitation of black strippers by a college fraternity. Regardless, his refusal to participate in what can be described as a "no-white-people-day" ironically earned him the brand "racist" by the student body. He was essentially removed from the campus on the threat of physical harm. ..."
"... Bret Weinstein is on the left, politically, but the leftist students and administration attacked him for not being left enough . Imagine now, how the college may have treated a person who leaned right. As it turns out, there are quite a few examples. ..."
"... Dr. Peterson is a psychology professor, clinician, and best-selling author. He is also, perhaps, today's most controversial academic. He burst into the public consciousness after he opposed bill C-16 in Canada. The bill added gender expression and gender identity to the various protections covered by the Canadian Human Rights Act. ..."
"... One example comes from Queens University. While Dr. Peterson gave a lecture, student protestors broke windows, tried to drown him out with noisemakers and drums, and one protestor told others to burn down the building with Dr. Peterson and the attendees locked inside. ..."
Mar 23, 2019 | blog.usejournal.com

In March 2017, young people armed with baseball bats prowled the parking lots of Evergreen State College. They hoped to find Bret Weinstein, a biology professor, and presumably bash his brains in. Bret had caught the ire of the student body after he refused to participate in an unofficial "Day of Absence," in which white students and faculty were told to stay home, away from the campus, while teachers and students of color attended as they normally would. In prior years, people of color voluntarily absented themselves to highlight their presence and importance on campus. In 2017, the event's organizers decided to flip the event, and white people were pressured to stay away from the school.

In a letter to the school's administration, Bret explained why he opposed the idea:

There is a huge difference between a group or coalition deciding to voluntarily absent themselves from a shared space in order to highlight their vital and under-appreciated roles and a group or coalition encouraging another group to go away. The first is a forceful call to consciousness which is, of course, crippling to the logic of oppression. The second is a show of force, and an act of oppression in and of itself
On a college campus, one's right to speak  --  or to be  --  must never be based on skin color.

When word of Professor Weinstein's objection got out, enraged student activists began a hostile takeover of the school, and the college president ordered the campus police force not to intervene. Professor Weinstein was told, in essence, that nobody would protect him from young people with baseball bats. The police warned Professor Weinstein that their hands were tied and that he should stay off campus for his own safety.

Professor Weinstein is an avowed liberal with a long history of progressive thinking. As a young man, he was the center of another controversy when he blew the whistle regarding the exploitation of black strippers by a college fraternity. Regardless, his refusal to participate in what can be described as a "no-white-people-day" ironically earned him the brand "racist" by the student body. He was essentially removed from the campus on the threat of physical harm.

And its core, the story of Bret Weinstein and Evergreen State College is about a college's descent into total chaos after someone presented mild resistance to a political demonstration.

Bret Weinstein is on the left, politically, but the leftist students and administration attacked him for not being left enough . Imagine now, how the college may have treated a person who leaned right. As it turns out, there are quite a few examples.


Before discussing what the Wilfrid Laurier University did to a woman named Lindsay Shepherd, it's important to know about Jordan Peterson.


Dr. Peterson is a psychology professor, clinician, and best-selling author. He is also, perhaps, today's most controversial academic. He burst into the public consciousness after he opposed bill C-16 in Canada. The bill added gender expression and gender identity to the various protections covered by the Canadian Human Rights Act.

Dr. Peterson objected to the bill because it set a new precedent  --  requiring citizens to use certain pronouns to address people with non-traditional gender identities. Dr. Peterson calls transexual people by whatever gender they project , as long as he feels like they're asking him to do so in good faith, but he's wary of people playing power games with him, and he saw something dangerous about the government mandating which words he must use. He believed that under C-16, misgendering a person could be classified as hate speech, even it was just an accident.

Having spent much of his life considering the dangers that exist at the furthest ends of the political spectrum  --  Nazi Germany on the far right, the Soviet Union on the far left  --  Dr. Peterson has developed a tendency to see things in apocalyptic terms. In bill C-16, he saw what he considered the seeds of a serious threat to the freedom of expression  --  a list of government-approved words  --  and decided it was a hill worth dying on.

He's controversial, verbose, discursive, sometimes grouchy, and almost incapable of speaking the language of television sound-bites. He makes it easy for critics to attack and misrepresent him  --  and ever since he took a stance against C-16, he's been subjected to student protests and journalistic hit-pieces.

One example comes from Queens University. While Dr. Peterson gave a lecture, student protestors broke windows, tried to drown him out with noisemakers and drums, and one protestor told others to burn down the building with Dr. Peterson and the attendees locked inside.

Regardless of whether one agrees or disagrees with his opinions, Dr. Peterson should have the right to express them without other people suggesting that he be murdered with fire. Furthermore, people should be able to talk about what he says.

Enter the case of Lindsay Shepherd.


While working as a teacher's aid at Wilfrid Laurier University, Lindsay Shepherd showed students two clips from public access television featuring Jordan Peterson debating someone over bill C-16. After showing the clips, she asked her students to share their thoughts.

Days later, the school called her into a meeting with a panel of three superiors. They said that they had gotten a number of complaints from students. Lindsay asked how many complaints they had received, and was told that the number was confidential.

The panel claimed that she had created a toxic environment by showing the clips and facilitating a discussion without taking a side against Dr. Peterson's view. They said it was as if she had been completely neutral while showing one of Hitler's speeches. The panel thought the clip probably violated the Human Rights Code, and they demanded Shepherd to submit all of her future lesson plans ahead of time so that they could be vetted.

Although one student expressed some concern about the class, the number of formal complaints that the administrators had received was actually zero.

During their discussion, Lindsay said:

The thing is, can you shield people from those ideas? Am I supposed to comfort them and make sure that they are insulated away from this? Is that what the point of this is? Because to me that is against what a university is about.

Lindsay found herself at the mercy of school administrators whose brittle spirits couldn't bear to present students with opinions that they might have found offensive. She had believed that universities were places where people could explore ideas. On that day, the panel showed her just how wrong she'd been.

And she caught it all on tape.

Over the past few years, the news has become littered with stories of schools overrun by children while hand-wringing professors and administrators do everything possible to placate them. Recently, a group called "The Diaspora Coalition" staged a sit-in at Sarah Lawrence. Their demands included, among other things, that they get free fabric-softener. The origin of their grievance was an op-ed published in the New York Times about the imbalance between left-leaning and right-leaning school administrators.

Jonathan Haidt, social psychologist and Professor of Ethical Leadership at New York University's Stern School of Business, sums the phenomenon up tidily :

You get kids who are much more anxious and fragile, much more depressed, coming onto campus at a time of much greater political activism  --  and now these grievance studies ideas about, 'America's a matrix of oppression,' and, 'look at the world in terms of good versus evil.' it's much more appealing to them, and it's that minority of students, they're the ones who are initiating a lot of the movements

Every day, or at least every week, I get an email from a professor saying, 'you know, I used a metaphor in class and somebody reported me.' and once this happens to you, you pull back. You change your teaching style

What we're seeing on campus is a spectacular collapse of trust between students and professors. And once we can't trust each other, we can't do our job.

We can't risk being provocative, raising uncomfortable ideas. We have to play it safe, and then everybody suffers.

To understate it, President Donald Trump is a deeply troubling human being. However, he may have done a good thing on Thursday, March 21st, when he signed an executive order that requires public schools to "foster environments that promote open, intellectually engaging, and diverse debate."

Schools that don't comply may lose government-funded research grants.

In theory, the order will compel colleges to prevent scenes like those at Evergreen State and Sarah Lawrence. Schools will have serious financial incentives to protect their professors from mobs of unruly children. If all goes well, students will learn to engage with controversial opinions without resorting to baseball bats or demanding Snuggle Plus fabric softener.

One would be remiss if they didn't consider the hidden or unintended consequences of the new policy, though. The executive order is vague, and it gives no criteria for judging whether an institution complies with its requirements. Instead, the specific implementation is left for structures lower on the hierarchy to decide. Hopefully, nobody decides that Young Earth theories must be taught alongside evolution.

The policy could very well become a tool by which the dominant political party punishes schools that lean in the opposite direction. Since there is a 12-to-1 imbalance between liberals and conservative college administrators right now, it would be a Republican administration punishing liberal colleges.

This is hardly a perfect solution  --  but at least it's an effort to address the problem. The stability of our society depends on an endless balancing act between the left and the right. The political landscape of academia has tilted too far left, and it's clearly becoming insular and unstable. Now it's necessary to push things back toward the center.

Hopefully, this recent executive order does more good than harm.

Postscript

After the events at Evergreen State College, the school was forced to settle with Bret Weinstein and his wife, who was also a professor there. The college paid the couple $500,000. Enrollment at the college is said to have dropped "catastrophically."

After the events at Wilfrid Laurier University, the school released several letters of apology. It is being sued for millions of dollars by Lindsay Shepherd and Jordan Peterson.

Forty professors endorsed the demands made by the Diaspora Coalition at Sarah Lawrence, and several others endorsed challenging Samuel Abrams's tenure  --  Abrams being the person who wrote the op-ed that appeared in the New York Times.

[Mar 27, 2019] Almost Half of Older Americans Have Zero in Retirement Savings - Bloomberg

Mar 27, 2019 | www.bloomberg.com

The bad news is that almost half of Americans approaching retirement have nothing saved in a 401(k) or other individual account. The good news is that the new estimate, from the U.S. Government Accountability Office, is slightly better than a few years earlier.

Of those 55 and older, 48 percent had nothing put away in a 401(k)-style defined contribution plan or an individual retirement account, according to a GAO estimate for 2016 that was released Tuesday. That's an improvement from the 52 percent without retirement money in 2013.

Two in five of such households did have access to a traditional pension, also known as a defined benefit plan. However, 29 percent of older Americans had neither a pension nor any assets in a 401(k) or IRA account.

The estimate from the GAO, the investigative arm of Congress, is a brief update to a more comprehensive 2015 report on retirement savings in the U.S. Both are based on the Federal Reserve's Survey of Consumer Finances.

The previous report found the median household, age 65 to 74, had about $148,000 saved, the equivalent of an inflation-protected annuity of $649 a month.

[Mar 25, 2019] Over 50% of all wealth in the US is inherited not earned

Mar 25, 2019 | angrybearblog.com

NewDealdemocrat | March 24, 2019 6:40 am

US/Global Economics Over 50% of all wealth in the US is inherited not earned I got waylaid putting together a very detailed post about how the newly-widened Panama Canal is disrupting the internal US transportation network. When it goes up at Seeking Alpha, I'll link to it. In the meantime, here is something that I found a week or two ago for you to chew on. Over half of all US wealth is not earned but inherited:

Click on picture to enlarge.

According to a report summarized recently in the Washington Post , "The wealthiest 1 percent of American households own 40 percent of the country's wealth."

It's likely that about 25% of all wealth in the US is inherited of the top 1%. I strongly suspect the relationship is even more egregious at the level of the top 0.1% and top 0.01%. It's hard to argue that the US is at all a meritocracy when the starting points are so distorted.

Daniel J. Becker , March 24, 2019 9:15 am

FDR called it economic royalty. Time to return to that phrase.

SW , March 24, 2019 10:04 am

Well today it is political royalty as well. They completely own one of the major political parties, have a lien on the second, and control the boards of the primary media corporations. And we wonder why things are so screwed up? Because by and large they are idiots. Its a stagnant gene pool.

Dave Barnes , March 24, 2019 12:16 pm

What caused the drop in Europe?
Wealth/inheritance taxes or devastation from 2 wars?

run75441 , March 24, 2019 1:34 pm

Here, some reading. https://voxeu.org/article/europe-s-rich-1300

[Mar 25, 2019] The Mass Psychology of Trumpism by Eli Zaretsky

Highly recommended!
But sophistication of intelligence agencies now reached very high level. Russiage was pretty dirty but pretty slick operation. British thre letter againces were even more devious, if we view Skripals poisoning as MI5/Mi6 "witness protection" operation due to possible Skripal role in creating Steele dossier. So let's keep wanting the evnet. The election 2020 might be event more interesting the Elections of 2016. Who would suggest in 2015 that he/she elects man candidate from Israel lobby instead of a woman candidate from the same lobby?
Notable quotes:
"... The consistent derogation of Trump in the New York Times or on MSNBC may be helpful in keeping the resistance fired up, but it is counterproductive when it comes to breaking down the Trump coalition. His followers take every attack on their leader as an attack on them. ..."
"... Adorno also observed that demagoguery of this sort is a profession, a livelihood with well-tested methods. Trump is a far more familiar figure than may at first appear. The demagogue's appeals, Adorno wrote, 'have been standardised, similarly to the advertising slogans which proved to be most valuable in the promotion of business'. Trump's background in salesmanship and reality TV prepared him perfectly for his present role. ..."
"... the leader can guess the psychological wants and needs of those susceptible to his propaganda because he resembles them psychologically, and is distinguished from them by a capacity to express without inhibitions what is latent in them, rather than by any intrinsic superiority. ..."
"... The leaders are generally oral character types, with a compulsion to speak incessantly and to befool the others. The famous spell they exercise over their followers seems largely to depend on their orality: language itself, devoid of its rational significance, functions in a magical way and furthers those archaic regressions which reduce individuals to members of crowds. ..."
"... Since uninhibited associative speech presupposes at least a temporary lack of ego control, it can indicate weakness as well as strength. The agitators' boasting is frequently accompanied by hints of weakness, often merged with claims of strength. This was particularly striking, Adorno wrote, when the agitator begged for monetary contributions. ..."
"... Since 8 November 2016, many people have concluded that what they understandably view as a catastrophe was the result of the neglect by neoliberal elites of the white working class, simply put. Inspired by Bernie Sanders, they believe that the Democratic Party has to reorient its politics from the idea that 'a few get rich first' to protection for the least advantaged. ..."
"... Of those providing his roughly 40 per cent approval ratings, half say they 'strongly approve' and are probably lost to the Democrats. ..."
Sep 18, 2018 | lrb.co.uk
One might object that Trump, a billionaire TV star, does not resemble his followers. But this misses the powerful intimacy that he establishes with them, at rallies, on TV and on Twitter. Part of his malicious genius lies in his ability to forge a bond with people who are otherwise excluded from the world to which he belongs. Even as he cast Hillary Clinton as the tool of international finance, he said:

I do deals – big deals – all the time. I know and work with all the toughest operators in the world of high-stakes global finance. These are hard-driving, vicious cut-throat financial killers, the kind of people who leave blood all over the boardroom table and fight to the bitter end to gain maximum advantage.

With these words he brought his followers into the boardroom with him and encouraged them to take part in a shared, cynical exposure of the soiled motives and practices that lie behind wealth. His role in the Birther movement, the prelude to his successful presidential campaign, was not only racist, but also showed that he was at home with the most ignorant, benighted, prejudiced people in America. Who else but a complete loser would engage in Birtherism, so far from the Hollywood, Silicon Valley and Harvard aura that elevated Obama, but also distanced him from the masses?

The consistent derogation of Trump in the New York Times or on MSNBC may be helpful in keeping the resistance fired up, but it is counterproductive when it comes to breaking down the Trump coalition. His followers take every attack on their leader as an attack on them. 'The fascist leader's startling symptoms of inferiority', Adorno wrote, 'his resemblance to ham actors and asocial psychopaths', facilitates the identification, which is the basis of the ideal. On the Access Hollywood tape, which was widely assumed would finish him, Trump was giving voice to a common enough daydream, but with 'greater force' and greater 'freedom of libido' than his followers allow themselves. And he was bolstering the narcissism of the women who support him, too, by describing himself as helpless in the grip of his desires for them.

Adorno also observed that demagoguery of this sort is a profession, a livelihood with well-tested methods. Trump is a far more familiar figure than may at first appear. The demagogue's appeals, Adorno wrote, 'have been standardised, similarly to the advertising slogans which proved to be most valuable in the promotion of business'. Trump's background in salesmanship and reality TV prepared him perfectly for his present role. According to Adorno,

the leader can guess the psychological wants and needs of those susceptible to his propaganda because he resembles them psychologically, and is distinguished from them by a capacity to express without inhibitions what is latent in them, rather than by any intrinsic superiority.

To meet the unconscious wishes of his audience, the leader

simply turns his own unconscious outward Experience has taught him consciously to exploit this faculty, to make rational use of his irrationality, similarly to the actor, or a certain type of journalist who knows how to sell their sensitivity.

All he has to do in order to make the sale, to get his TV audience to click, or to arouse a campaign rally, is exploit his own psychology.

Using old-fashioned but still illuminating language, Adorno continued:

The leaders are generally oral character types, with a compulsion to speak incessantly and to befool the others. The famous spell they exercise over their followers seems largely to depend on their orality: language itself, devoid of its rational significance, functions in a magical way and furthers those archaic regressions which reduce individuals to members of crowds.

Since uninhibited associative speech presupposes at least a temporary lack of ego control, it can indicate weakness as well as strength. The agitators' boasting is frequently accompanied by hints of weakness, often merged with claims of strength. This was particularly striking, Adorno wrote, when the agitator begged for monetary contributions. As with the Birther movement or Access Hollywood, Trump's self-debasement – pretending to sell steaks on the campaign trail – forges a bond that secures his idealised status.

Since 8 November 2016, many people have concluded that what they understandably view as a catastrophe was the result of the neglect by neoliberal elites of the white working class, simply put. Inspired by Bernie Sanders, they believe that the Democratic Party has to reorient its politics from the idea that 'a few get rich first' to protection for the least advantaged.

Yet no one who lived through the civil rights and feminist rebellions of recent decades can believe that an economic programme per se is a sufficient basis for a Democratic-led politics.

This holds as well when it comes to trying to reach out to Trump's supporters. Of those providing his roughly 40 per cent approval ratings, half say they 'strongly approve' and are probably lost to the Democrats. But if we understand the personal level at which pro-Trump strivings operate, we may better appeal to the other half, and in that way forestall the coming emergency.

[Mar 23, 2019] College admissions scandal Wealthy parents told to make deal or face more charges - Los Angeles Times

Mar 23, 2019 | www.latimes.com

Federal prosecutors are seeking potential deals with some of the wealthy parents charged in the sweeping college admissions scandal as investigators continue to broaden the case, according to multiple sources with knowledge of the situation.

One source said some of the parents are being given a short window to consider a deal or potentially face additional charges.

It's unclear which parents prosecutors hope to seek out for cooperation, but sources said authorities were interested in getting a better picture of how the scam worked. The sources requested anonymity because they were not authorized to speak publicly on the matter.

[Mar 22, 2019] America's Apartheid of Dollars

Notable quotes:
"... The divisions can always be jacked up. "My opponent is a white nationalist!" and so he doesn't just think you're lazy, he wants to kill you. Convince average Americans to vote against their own interests by manipulating them into opposing any program that might benefit black and brown equally or more than themselves. ..."
"... Listen for what's missing in the speeches about inequality and injustice. Whichever candidate admits that we've created an apartheid of dollars for all deserves your support. ..."
Mar 22, 2019 | www.theamericanconservative.com

The birth lottery determines which of those three bands we'll sink or swim together in, because there is precious little mobility. In that bottom band, 81 percent face flat or falling net worths ( 40 percent of Americans make below $15 an hour) and so aren't going anywhere. Education, once a vehicle, is now mostly a tool for the preservation of current statuses across generations, to the point that it's worth paying bribes for. Class is sticky.

Money, not so much. Since the 9.9 percent have the most (except for the super wealthy at least), they have the most to lose. At their peak in the mid-1980s, the managers and technicians in this group held 35 percent of the nation's wealth. Three decades later, that fell 12 percent, exactly as much as the wealth of the 1 percent rose. A significant redistribution of wealth -- upwards -- took place following the 2008 market collapse, as bailouts, shorts, repossessions, and new laws helped the top end of the economy at cost to the bottom. What some label hardships are to others business opportunities.

The people at the top are throwing nails off the back of the truck to make sure no one else can catch up with them. There is a strong zero sum element to all this. The goal is to eliminate the competition . They'll have it all when society is down to two classes, the 1 percent and the 99 percent, and at that point we'll all be effectively the same color. The CEO of JP Morgan called it a bifurcated economy. Historians will recognize it as feudalism.

You'd think someone would sound a global climate change-level alarm about all this. Instead we divide people into tribes and make them afraid of each other by forcing competition for limited resources like health care. Identity politics sharpens the lines, recognizing increasingly smaller separations, like adding letters to LGBTQQIAAP.

Failed Georgia gubernatorial candidate Stacey Abrams, herself with presidential ambitions, is an example of the loud voices demanding more division . Contrast that with early model Barack Obama at the 2004 Democratic National Convention, who pleaded, "There's not a black America and white America and Latino America and Asian America; there's the United States of America."

The divisions can always be jacked up. "My opponent is a white nationalist!" and so he doesn't just think you're lazy, he wants to kill you. Convince average Americans to vote against their own interests by manipulating them into opposing any program that might benefit black and brown equally or more than themselves. Keep the groups fighting left and right and they'll never notice the real discrimination is up and down, even as massive economic forces consume all equally. Consumption becomes literal as Americans die from alcohol, drugs, and suicide in record numbers .

Meanwhile, no one has caught on to the fact that identity politics is a marketing tool for votes, fruit flavored vape to bring in the kiddies. Keep that in mind as you listen to the opening cries of the 2020 election. Listen for what's missing in the speeches about inequality and injustice. Whichever candidate admits that we've created an apartheid of dollars for all deserves your support.

** The author doesn't really drive for Uber but his conversation with the Spaniard was real.


JeffK March 22, 2019 at 7:39 am

Mr Van Buren. This piece nails it. The Democrats made a huge mistake focusing on race and LGBTQ instead of class. Their stated goal should be to replace race based affirmative action with class-based programs.

If there is serious violence coming to America it will come during the next major recession/financial crisis. The ARs will come out of the closet when, during the next financial crisis, the elites are bailed out (again), yet the riff raff lose their homes and pickups to foreclosure.

I am very pessimistic in this area. I believe the elites, in general, are agnostic to SJW issues, abortion, job loss, BLM, religious liberty, and on and on. The look at the riff raff with amusement, sparring over such trivial things. Meanwhile, the river of cash keeps flowing to their bank accounts.

Imagine if the digital transfer of money was abolished. Imagine if everybody had to have their money in a local bank instead of in an investment account of a major bank. Imagine if Americans saw, day after day, armored vehicles showing up at local banks to offload sacks of currency that went to only a few individual accounts held by the very rich.

Instead, the elites receive their financial statements showing an ever increasing hoard of cash at their disposal. They see it, but nobody else does. However, if everybody saw the river of wealth flowing to the elites, I believe things would change. Fast. Right now this transfer of wealth is all digital, hidden from the view of 99.99% of Americans and the IRS. And the elites, the banking industry, and the wealth management cabal prefer it that way.

It's easy to propose the ultimate goal of the elites is to have a utopian society to themselves, where the only interaction they have with the riff raff is with subservient technicians keeping it all running. Like the movie Elysium.

https://youtu.be/QILNSgou5BY

Oleg Gark , says: March 22, 2019 at 8:22 am
When feudalism comes to America, it will be justified by Libertarianism. With government defined as the bad guy, there's nothing to stop the 1% from organizing everything to their own benefit.

On the other side of the political spectrum, identity politics emphasizes people's differences and tribal affiliations over their shared citizenship. This prevents them from making common cause.

Fundamentally, these trends make the body politic so weak that it becomes susceptible to takeover by authoritarians that represent narrow interests.

Johann , says: March 22, 2019 at 8:31 am
"His skin was clearly a few shades darker than mine, though he pointed out that was only because my relatives came from the cold part of Europe and he came from the sunny part."

The Spanish in Europe got their color from the Moorish invasion, not the sun.

More of my annoying trivia that has little to do with the subject of an article.

John D. Thullen , says: March 22, 2019 at 9:15 am
Welp, the Democratic Party, by and large, believes all Americans regardless of class, race, religion, and gender should have guaranteed equal access to affordable healthcare, a substantial minimum wage, education and the rest.

Stacy Abrams wants these items too, along with equal access to the voting franchise.

"Until slavery was ended in the United States, human beings were legally considered capital, just like owning stocks and bonds today. But the Spaniard knew enough about history to wonder what reparations would be offered to the thousands of Chinese treated as animals to build the railroads or the 8,000 Irish who died digging the New Basin Canal or the whole families of Jews living on the Lower East Side of New York who were forced to employ their children to make clothing for uptown "white" stores. Later in the same century, wages were "voluntarily" cut to the bone at factories in Ohio to save jobs that disappeared anyway after the owners had wrung out the last profits."

That would be an excellent point if your inner Spaniard concluded reparations should be offered to the others as well, but ends up being merely tendentious if he contends that no one gets reparations.

But will you like it if the Democratic Party makes that part of their platform too?

I was born in Middletown, Ohio alongside the elegiacal hillbillies, who, by the way, didn't care for the blacks on the other side of the tracks anymore than my Armco-employed grandfather did, and certainly the business owners who disappeared the jobs and cut wages while voting for the so-called free traders were of the same ilk.

I didn't know any Democrats among any of my family's circle and, by the way, Middletown might as well have been south of the Mason Dixon anyway for all the white Democrats in town who gave not a crap about their fellow black citizens, certainly not the business owners who disappeared the jobs while voting for the so-called free traders.

It was the Republican Party (Larry Kudlow, I'm gunning for you) who championed creative destruction and the red tooth and claw of unfettered worldwide competition without asking, in fact jumping for joy, what the unintended consequences would be because the consequences were intended smash the unions for all, cut wages and benefits and hand the booty to shareholders, move operations to lower-tax, lower wage, environmentally unregulated parts of the globe to manufacture them thar high margin MAGA hats for the aggrieved.

What a beautiful grift!

Hello, Marianas.

That Democrats jumped on the bandwagon is no credit to them, especially while assuming the prone position as the republican party frayed the safety net.

True, the republicans laid off everyone, regardless of race, gender, and class and then cut everyone's benefits.

How equable of them.

TomG , says: March 22, 2019 at 9:44 am
As the Spaniard rightly understood, one can look way back into our history and see that the moneyed class has always used identity politics in economic control games to divide and conquer. That the Republicans rail on this as some evil creation of the modern Democrat is laughable at best. That the sheep who follow the party mouth pieces of the moneyed class in this media age can still be so easily manipulated is rather pitiful. Making common cause for the general welfare has never really sunk in as an American value.

Divide and conquer remains our true ethos. As the dole gets evermore paltry the only seeming options remaining are common cause for a common good or greater violence. One requires us to find a contentment beyond the delusional American dream of becoming that 1 to 10%. The other just requires continued anger, division and despair.

JoS. S. Laughon , says: March 22, 2019 at 10:12 am
Ironically the view that race/culture isn't at all important and should be disregarded in view of the class division (a "distraction"), is pretty much endorsing the classic Marxist critique.
ProletroleumCole , says: March 22, 2019 at 10:27 am
It's easy to notice divide and conquer when it's hate against those of the same class but are of a different culture/race.

But what's *difficult* to notice is identifying with the elites of your race in a positive way.
A lot of people, especially with the onset of realityTV, tend to think rich people are just like them (albeit a little smarter). The methods and systems to keep power aren't considered. They're made non-threatening. So many billionaires and politicians act effete today to stoke this image.

Lynn Robb , says: March 22, 2019 at 10:31 am
"Whichever candidate admits that we've created an apartheid of dollars for all deserves your support."

So we're supposed to vote for Bernie Sanders?

Connecticut Farmer , says: March 22, 2019 at 11:30 am
" Whether your housing is subsidized via a mortgage tax deduction "

This jumped off the screen. I wonder how many people even realize that. Probably the same number who still believe that social security is a "forced savings".

Connecticut Farmer , says: March 22, 2019 at 11:47 am
Not to put too fine a point on it but clearly we are wasting our time arguing. As long as the current system of government remains in effect it will be same old same old.

Many changes are in order–starting with this archaic remnant of a bygone era called "The Two Party System".

Lert345 , says: March 22, 2019 at 12:05 pm
Spaniards are indeed Hispanic. The definition of Hispanic relates to a linguistic grouping – that is, relating to Spain or Spanish speaking countries. Your friend would indeed qualify for all sorts of preferences according to the definition.

As to being a POC, I could not locate any definition as to what threshold of skin tone qualifies someone as a POC. I wager none yet exists but will be forthcoming.

Johann

As for the skin tone of Spaniards, many in the south have the Moorish influence,however, in the rest of the country skin tones range from light beige to very fair. Rather similar to Italians, actually.

Dave , says: March 22, 2019 at 12:18 pm
First, kudos to Van Buren for getting a Seamless delivery while driving. That's not easy to coordinate. Second, I look forward to more conservative policies addressing poverty, drug addiction and access to health care. This article adds to the 10-year rant against what Democrats have done or want to do.

Like nearly every Republican of the last 10 years, Van Buren offers none here. But I'm sure once the complaining is out of his system, they will arrive.

david , says: March 22, 2019 at 12:31 pm
" Whether your housing is subsidized via a mortgage tax deduction "

Sorry, not taking your money is NOT subsidizing!

I thought this is a "conservative" idea to begin with? Apparently, it is not true even here.

Jealousy that others can keep their money is driving the worse instinct of many republicans.

Sigh.

Vincent , says: March 22, 2019 at 12:32 pm
Your Spaniard friend also has it all wrong. The real division line is between those willing to initiate coercion for their own self-righteousness and those who refuse to. Anyone that supports government is one-in-the-same, regardless of color or class.
LouB , says: March 22, 2019 at 12:35 pm
Thirty years ago I'd be asking who printed the canned response pamphlet to give prepared talking points to enable anyone to provide quick sharp tongued witty criticisms of anything they may encounter that didn't tow the party line.

Now I gotta ask where do I download the Trollware to accomplish the same thing.

Sharp article, thanks.

JonF , says: March 22, 2019 at 12:42 pm
The Moors were a tiny class of invaders who left rather little imprint on the Spanish genome. That was true of the Romans and the Goths as well. Spanish genes are mostly the genes of the pre-Roman population: the Iberians in the south (who maybe migrated from North Africa), Celts in the north, and the indigenous Basques along the Pyrenees.
WorkingClass , says: March 22, 2019 at 2:27 pm
Yes. And thank you. It's a class war and the working class, divided, is a one legged man in an ass kicking contest.
Carolyn , says: March 22, 2019 at 3:36 pm
Outstanding piece!
Dave , says: March 22, 2019 at 3:39 pm
What happened to "a rising tide lifts all boats"? We've been promised for decades that the wealth generated by those at the very top would "trickle down." This was a cornerstone of Reaganism that has been parroted ever since.

There have been naysayers who say that that theory was fantasy and that all we would have is increased wealth disparity and greater national deficits.

How peculiar.

Peter Van Buren , says: March 22, 2019 at 4:06 pm
A rising tide lifts all yachts.
-- author Morris Berman

[Mar 18, 2019] Middle Class Once Meant Stability and Now Means Fragility

Notable quotes:
"... Was the American Middle Class a Cold War thing? ..."
"... The British middle class seems to have been mostly people living on investments -- not in the manorial style, but with enough to have a flat, and a servant -- in a style that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970's, it's mostly ended by now. ..."
Mar 18, 2019 | www.nakedcapitalism.com

By Alissa Quart, Executive Editor, Economic Hardship Reporting Project. Cross posted from the Institute for New Economic Thinking website

feel that being middle class is not what it once was and that we are all running in place as fast as we can to stay the same, to quote Alice in Wonderland's Red Queen," Brenda Madison, an art director and graphic designer in Laguna Beach (Orange County), told me. "Never did I think I would worry that Social Security and Medicare may not be available in my future or that a medical injury or unexpected repair would bankrupt us."

She and her husband, now in their middle years, "are not sure we will be able to retire in our home."

Patricia Moore is a single mother of three who lives in a two-bedroom apartment in Los Angeles and a licensed vocational nurse working in hospice about to take the licensing exam to be a registered nurse. Due to a shortage of space, she sleeps on the couch and is "still struggling to make ends meet." Her rent is $1,598 a month, her pay is about $3,200, and her student loan payback is $375 a month. Moore recently has had to resort to a GoFundMe campaign so she could stay home with her daughter during a monthlong health crisis, and has at times had to donate plasma. She said she is unable to provide "the extras for her kids."

Moore began to enter her youngest son in focus groups in office buildings or hotels in neighborhoods like Beverly Hills. Sometimes he would make $75 an hour and the whole family would eat from buffets, the kind with cantaloupe, and maybe they'd also get a gift card. At first, he tested toys and then video games but also an MRI to map his brain. It was only because of these gigs that Moore could finally say, "Go buy yourself something," to her children.

The extreme cost of living has forced some California families to take unusual steps like this. As the Department of Housing and Urban Development recently reported, a family of four in the San Francisco metropolitan area making $117,400 a year qualifies as "low income."

These were Americans for whom the meaning of middle-class life had altered from something stable to implied economic fragility.

Their burdens were the price of health and child care, educational debt or a housing market gone berserk. They wanted job security, pensions and Social Security and unions, but these things seemed like a fantasy out of a mid-century American novel like "The Man in the Gray Flannel Suit." The middle class' long historical association with the status quo -- strongly identifying with institutions or corporations, rejecting restive discontent -- has made their new wobbliness all the more startling to them.

But when did that vulnerability start? Toward the end of the past century into this one, there was a rise in what author Barbara Ehrenreich has called a "fear of falling," an anxiety among the professional-managerial class about downward mobility. I think of fear of falling as the opposite side of the coin of American individualism and its historic promise of social and economic progress.

Since the 1980s, some members of the middle class have gone "from a kind of security to being reduced to the kind of economic unstable state that working-class Americans have had to experience forever," explained Caitlin Zaloom, an anthropologist at New York University who studies the middle-class financial experience. The office or academic job started to resemble the precarious work life that working poor Americans have long understood to be their lot, she said. And then there are the robots waiting in the wings to take their ostensible share of middle-class jobs, and soon.

This new fragility is one theory to explain the 2016 election of Donald Trump. Trump voters were sometimes mistaken for all hillbilly elegiac or Rust Belt proletariat. In truth, an estimated 38 percent of white people with bachelor degrees voted for the man -- closer to "office worker elegy." Indeed, as much as Trump's messaging has been jingoistic or racist, he has also been addressing middle-class anxiety when he continually repeated that the system is "rigged."

While some have protested that Trump's success has more to do with loss of status or rank bigotry, Johns Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who appealed "to people who have not fared well in the postindustrial economy," such as those in some once-prosperous areas of the Midwest.

Ordinary middle-class people's struggles can be, of course, ameliorated by broad shifts, such as adopting a form of universal basic income or a flat monthly cash stipend for familial caregivers of their young or elderly kin. And we should at least explore adopting Medicare for all, to address rising health care costs. We also need to more effectively push for longer paid parental leave -- or, in many cases, any paid parental leave.

But if we can't get relief from federal programs or our employers, we will need to craft local or state solutions. Retaining rent stabilization laws is key in our cities, as is building more affordable housing for, say, teachers and municipal workers, so they can continue to live in the places they serve.

Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant they didn't simply internalize their real-world burdens into self-punishment. They seemed more able to patch together personal solutions -- small-scale child care fixes like sharing pickup with their neighbors, for instance.

Simply voicing hopes and difficulties, and making them audible for their leaders to name and address, is a small part of what must happen for things to change. Although for some, these needed transformations may seem to be coming too late.

As Madison put it, "We are trying not to think too much about the future."

This article was supported by the Economic Hardship Reporting Project and was first published by the San Francisco Chronicle .

ambrit , March 18, 2019 at 3:23 am

My ground level observations indicate that there is a lot of "denial" going on in the minds of the putative 'middle class.'

One major barrier to the public 'conversations' about the economic malaise affecting America today is the still prevalent custom of shaming the victims of bad luck. I see this tying all the way back to the Calvinist theological concept of "Election," which is an aspect of "Predestination." In effect, one suffers in life because the Deity chooses to make it so. Thus, those who do well in life can "legitimately" look down on those who suffer. It is a perfect excuse for callousness of heart.

We read Weber's "The Protestant Ethic and the Spirit of Capitalism" in class in my High School. Written around 1900, it still has merit as a descriptive and predictive tome.

Die wiki: https://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism

Old ideas die hard.

marieann , March 18, 2019 at 9:44 am

"The rich man in his castle,
The poor man at his gate,
God made them, high or lowly,
And ordered their estate."

Just so we know our place and stay there

Sanxi , March 18, 2019 at 12:24 pm

"Capitalism is a that system which has become that which the living are converted to the the living dead."

jrs , March 18, 2019 at 12:53 pm

Some of what is perceived as shaming, may just be understood as trying to understand how those with good professions etc. end up that way (and no I don't judge those without "good professions" – I don't think we choose our fate to any real degree see. It's just takes more to understand why is all). Now from the inside some good professions are not really, or have become so niche that that is the story but

Acacia , March 18, 2019 at 5:11 am

Mod: looks like some issue in the first paragraph

Amfortas the hippie , March 18, 2019 at 6:31 am

This:"Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant they didn't simply internalize their real-world burdens into self-punishment. They seemed more able to patch together personal solutions -- small-scale child care fixes like sharing pickup with their neighbors, for instance."

commiseration is new, in my experience. not too long ago, one didn't speak about economic difficulties in polite company at least in the middle class(poor people, oth, sometimes do) that they're finding such behaviour is worrying, as it means the precariousness is spreading which causes cognitive dissonance, since it's counterintuitive according the the Narrative we're all supposed to cling to.
to wit, in my recent exposure to network tv in hotels and dr's offices, i note that -- like in the Matrix–a grand illusion of the late 90's is laid across the world.

I hear locally upper middle class soccer moms having lunch, and it's oneupmanship all around everything's fine, and we went to the most wonderful resort, in our new suv, and our son married a doctor and they honeymooned as missionaries (!) but it's all nonsense, and everyone knows it.(the quick flash of panic in their eyes, "will the card work?")

That was the norm not so long ago all the way down to the dregs of the former middle class. i see the rending of that pretension the misty veil of utopian just-worldism as what's at the root of so many of these dislocations an eruptions of late.

"Believe Real Hard" just doesn't cut it any more, and those soccer moms don't know how to think about it. Per Ambrit's reference to Calvinism, at some point reality intrudes and one must climb down from the pillar.

jefemt , March 18, 2019 at 9:03 am

Becoming They and The Other. It can't happen to me -- I am a Exceptional! ™ (and white). Could Compassion be on the horizon– on the wax as more and more realize they are in the global Lemming-fall rat-race to the bottom ?

kareninca , March 18, 2019 at 8:48 pm

They're not attending/joining churches because that costs money and they don't have the money. Once there are more "churches" that only cost what people can afford, more people will attend. Just a prediction.

sanxi , March 18, 2019 at 12:30 pm

Sadly first the great suffering must turn into the great awareness that it's not your fault than love oneself and compassion for all else

jrs , March 18, 2019 at 12:58 pm

it's not all illusions, a part of the population is doing pretty well, they take vacations and crap (who even has ANY paid time off anymore anyway? not me. even STAYCATIONS are off the table! Heck getting a cold is pretty much off the table ..). But others

But yea the Big Lie Narrative of these times is that the economy is doing well, Trump's economic performance will get him reelected (this economy is total garbage, so F trump and the horse he rode in on), unemployment is low and other BS.

The Rev Kev , March 18, 2019 at 6:32 am

Lots of sad reading here. But seriously – $117,400 a year qualifies as "low income."? I know that it is true but at the same time that is so stupid on the face of it. I do have to admit here to a weakness for nostalgia – especially for places that I have never experienced but have read about. Sometimes out of idle curiosity I might flick through a few videos like that on America in earlier times and you can see one such clip at

https://www.youtube.com/watch?v=ECFH3Pe21oQ or at this one at https://www.youtube.com/watch?v=QOr1fIIHQFk

Having said this, I sometimes wonder what would have happened if neoliberalism had spluttered out during the 1970s as a nonstarter of an idea and instead a different timeline had formed. In this one, instead of wages flate-lining back in the 70s, they had kept apace with GDP like they had the previous thirty years. People, more secure in their wages, would never have embarked on the credit boom like they did when wages dropped. In this timeline too the rich are still taxed at 70% which mopped up all the surplus that would otherwise have instead gone on to founding think tanks and money in politics. With an affluent population, there was never was a need to import so much from China and the unions were still strong enough to stop industries being shipped off to there. It would have been a completely different America.

But that is another timeline and we are instead in one where people will soon be in a position where they have nothing else to lose. And that is a very dangerous proposition that. And they still have potentially a very powerful weapon – their numbers. And their votes.

russell1200 , March 18, 2019 at 9:00 am

The 70s were going to be a very tough decade: The loss of our huge post-WW2 advantages in manufacturing, oil shocks, a very expensive war to pay for, and Watergate probably fits in their somewhere.

I am not sure what we did in the 70s and after was exactly neoliberalism, but any restraint shown in the face of the new realities (Carter and his sweaters, Bush breaking his tax pledge) were massively unpopular, and I think that was going to be the case in general – regardless of what path we went down.

The very idea that neo-liberalism was the cause (as opposed to an interaction with) of the root problems I think is indicative of over optimism about our situation. Contrary, I do think it is very reasonable to say that neo-liberalism made the problems worse.

The distinction is important, you can reject our current situation and policies, and still not be particularly convinced that the opposing voices are being more realistic.

Carla , March 18, 2019 at 9:44 am

After reading "Democracy in Chains" by Nancy MacLean, I'm leaning toward neoliberalism as a cause. It kicked into high gear with Reagan's election in 1980, and Bill Clinton made sure there was no stopping it.

In reference to this from the original post: "In truth, an estimated 38 percent of white people with bachelor degrees voted for [Trump]," I have to say, I think you call those people Republicans, and don't kid yourself. They will do it again.

Sanxi , March 18, 2019 at 12:43 pm

Carla, thank you, exactly so. The technique of it all was quite insidious, as it was an appeal disguised and self righteous to greed to a two groups: baby boomers and their parents sociology primed for such pitches. Once that genie got out of the bottle there was no getting it back in.

polecat , March 18, 2019 at 1:12 pm

So, will the millenials kill-off the Genie for good .. or will they, in their turn, rub that lamp all the more, to parlay their 3 wishes towards other equally speciously sparklely endeavors ??

super extra , March 18, 2019 at 3:31 pm

we can't 'rub the lantern'; when those in power in 1981 set off down the neoliberal road, the conditions of their wish were fulfilled by debt-enslavement of everyone who came after them to support enriching those who clawed their way to the top.

the only millennial oligarch is Zuckerberg and I don't think anyone believes he is going to maintain his power even half as long as, say, Bill Gates. the only millenials who believe in neoliberalism are paid shills for the elite like Ben Shapiro or Charlie Kirk and by the same Zuckerberg:Gates ratio, they have less than half as much power as a Rush Limbaugh.

Neoliberalism is dead, we're in the gramscian interregnum, at this point I just hope and plead with the infinite that we get Bernie in 2020 instead of Cotton/Creshaw primarying Trump or something awful like that because the familyblogging Democrats refuse to pass the torch in favor of one more term of grift.

russell1200 , March 18, 2019 at 1:32 pm

Rev Kev, who I was responding to, correctly noted that the 1970s were when wages began to drop. Ronald Reagan and Bill Clinton of course come later. This doesn't mean that their policies were not problematic, but it does make it difficult to blame them as the causal agents of something that started in the 1970s.

If you want to blame Johnson/Nixon and their Vietnam War policies, that would make some sense, but they don't seem to me to be poster children for Neoliberalism with one being associated with the Great Society and the other the author of price controls to suppress inflation.

witters , March 18, 2019 at 6:48 pm

When things get a bit tough (and note that in the 70's for all the hype they were not in fact that tough – until govt policy of a NL kind stepped in) – then you have policy choices. If you go NL, then that is a choice, and causally so. (It was usual to hide this causality in TINA.)

scott 2 , March 18, 2019 at 9:15 am

Financialization of the housing market creates obscene rents, leading to less household formation, then the need to "do something" about population decline. Japan is 20 years ahead of us in that regard,

Dan , March 18, 2019 at 10:06 am

$117,400 a year qualifies as "low income"?

Indeed it does here in the SF Bay Area. The surprise of it all is part of the denial – the wife and I look at our family income (usually 10-20% less than that) and are straight up perplexed that it doesn't go as far as it "should". We certainly have a pleasant enough middle-class life, but it feels precarious in a way that we never expected. And we only have that because we have subsidized housing (we live in a house the family has owned for years, so are paying well below the insane market rates). If we had to pay market rates we would be poor, or close to it.

We certainly rant to one another about the systemic issues behind this situation, but there are a lot of California liberals who bitterly cling to questionable ideas like a balanced budget or Kamala Harris.

I've been wondering when I'll hear a candidate advocating lower home and rent prices – where I live we absolutely need that if we're to keep a semblance of civilization and democracy.

ambrit , March 18, 2019 at 11:53 am

You have hit on a major 'disrupter' of the body social. "Civilization and democracy" are being willfully sacrificed to the Gods of Profit. That betrayal is a core part of neo-liberalism.

Carla , March 18, 2019 at 5:27 pm

Re; lower home and rent prices. For the last 40 years, as the prosperous Great Lakes region became the rust belt, we who live here have been constantly told: if you want a job, just MOVE to where the jobs are.

Now are we allowed to say to the mortgage-or-rent-impoverished middle class folks who live on the coasts, "If you want lower house and rent prices, just move to where the lower priced houses and apartments are" ? We got plenty of room for y'all here, honest. And we're mostly midwest-nice, too.

Altandmain , March 18, 2019 at 5:34 pm

Unfortunately a candidate advocating for lower prices of housing will likely be defeated by thr NIMBY types.

JBird4049 , March 18, 2019 at 12:04 pm

But seriously – $117,400 a year qualifies as "low income."?

If you are very lucky, and I mean lucky , you might find an old junior one bedroom apartment for the low, low price of $1,500 a month. No patio, no dishwasher, no nothing except a parking spot. This is not exaggeration, sarcasm or humor, but reality. In some places in California it's closer to three thousand dollars.

Most of us Californians do not make even fifty thousand and, if we do, we have to live closer to the cities where the well paying jobs are. I keep waiting for the housing bust to arrive for last time the rents dropped as much as thirty percent. Hopefully, I will still be in my apartment, or at least in an apartment when that happens.

rd , March 18, 2019 at 1:49 pm

Another factor is cities not allowing for higher density housing. If somebody has a brownstone or something similar, they will fight tooth and nail against that 6 story apartment building that would allow a lot more people to live in the neighborhood. Under-investment in rapid mass transit also hurts workers commuting to jobs and forces far more cars on the roads and parking spaces.

Ed , March 18, 2019 at 7:36 am

Was the American Middle Class a Cold War thing?

pretzelattack , March 18, 2019 at 8:10 am

it was certainly precarious in the great depression, seems to thrive in boom periods. the white middle class, and some of the black middle class did well in the 50's and early 60's. that was when the us was economically at the pinnacle of the world, and i think that was because most of the other first world economies were rebuilding from the rubble of ww2.

Wukchumni , March 18, 2019 at 8:30 am

The only item I can think of that was an import from the Soviet Union and on retail shelves for sale here during the Cold War, was Stolichnaya vodka, and as far as the Peoples Republic of China goes, fireworks.

If I didn't finish the food on my plate, my parents would admonish me with tales of people starving to death in China, and indeed they were.

ambrit , March 18, 2019 at 11:16 am

For me as a child, the starvation place was Africa. I wonder about the psychological motivations that made our parents ignore the suffering right nearby in our own neighborhoods and focus instead on some far away place.

Today, that starvation is all around us. I personally feel guilty now that we cannot give very much to beggars and homeless etc. due to our own straitened circumstances. The myth of "The Exceptional Ones" (TM) is still a strong part of the social narrative today.

polecat , March 18, 2019 at 1:34 pm

I try to do my infinitesmal part, ambrit .. by taking any surplus from the garden, when there IS a surplus that is .. and donate it to the local foodbank. Last year it was 5 full lugs of grapes fresh off the vine, a few yrs before that it was an over abundance of beets. This season it might be potatoes THATs My lifestyle !

All on less than a $35,000 yr combined income. But that means no trips to Cancun, no new Car every couple of years, no DeathCare expenditures, and no mortgage.

I feel humbled every time I make a delivery, especially when I see families in obvious distress w/ young children .. looking for sustenance that they cannot otherwise afford to buy .. it breaks my heart.

ambrit , March 18, 2019 at 4:23 pm

Yes to that. We got a bumper crop of 'volunteer' Muscadines last year. They made good jelly. I should build a trellis or wire support network for the vines this year. With this weather, we should get another good crop.
Living the 'prepper' life has it's compensations.

polecat , March 18, 2019 at 6:31 pm

Our's were primarily muscat as well, what we donated. I ended up canning the rest, turning them into muscat conserves half of which we've already given away to friends and aquaintances. The other grapes, the Mars variety, became raisins, for home consumption.

Everyone should learn how to can .. cuz you never know when just-in-time .. just STOPS !

John Wright , March 18, 2019 at 11:06 am

re: American Middle Class Cold War thing?

Possibly this was a major influence. When the USA had identified large foreign enemies that must be countered (Russia and China) there was an impetus to build in America and keep the USA population engaged with the Russian and "Red" Chinese threat.

The USA was also an oil exporter until 1971, which allowed some control of oil prices.

Globalization was not prominent and I remember the poor quality Japanese tools of the 1960's (and Chinese manufactured stuff rarely seen by me (firecrackers?))

Furthermore we had two large countries that economically were not as advanced as the USA and were not viewed as particularly successful with their flawed Communist systems.

Effectively, China and Russia were playing the game with one hand tied behind their back.

This may also have allowed USA unions to be strong, increasing wages for union and non-union workers.

Perhaps the USA is currently making some other countries focus inwardly on their countries as the USA did in the 1950's and 1960's.

By forcing sanctions on various countries (Iran, Russia, Venezuela) the USA may make them less dependent on global resources and more like the more self sufficient USA of the 50's and 60's.

Mel , March 18, 2019 at 11:23 am

Very, very possibly. Thanks to Project Gutenberg, I'm reading a lot of fin de siècle novels and literature, e.g. Booth Tarkington.

The British middle class seems to have been mostly people living on investments -- not in the manorial style, but with enough to have a flat, and a servant -- in a style that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970's, it's mostly ended by now.

Harold , March 18, 2019 at 1:53 pm

Middle class always had servants because cost of labor was low. Middle class households sometimes had boarders & often elderly or unmarried relatives.

MisterMr , March 18, 2019 at 9:00 am

"While some have protested that Trump's success has more to do with loss of status or rank bigotry, Johns Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who appealed "to people who have not fared well in the postindustrial economy," such as those in some once-prosperous areas of the Midwest."

But this is circular reasoning, why would people in the "middle class" think that Trump's policies are better for them than Clinton's policies?

It's not like Trump is a sort of middle class guy himself, in facts H. Clinton is probably more "middle classey" than Trump.

Plus, what does the term "middle class" mean specifically? How are these people different from "working class" or small bourgoise?

Wukchumni , March 18, 2019 at 9:08 am

Middle class to me growing up, meant that the school custodian across the street and 3 doors down from us, could afford to buy a home, or you played little league with the son of a gas station owner, who made enough from his 2 service bays always full (cars weren't nearly as reliable in the 60's) to also own a home.

MisterMr , March 18, 2019 at 1:10 pm

Thanks for the answer.

My doubt about the middle class is this: it is a term that various schools/sociologists/economists used to mean very different things, so when someone speaks of the middle class it's difficult for me to understand what he/she is speaking about.

For example:

1) In marxism it generally means the small bourgoise, meaning the small shopkeeper, the farmer who owns his land etc;

2) at times, it just means people of the working class who have good jobs, that is different from the definition (1). The disappearence of the middle class just means the disappearence of good jobs;

3) sometimes (wrongly IMHO) "workers" are supposed to be only blue collar and only without high education, so "middle class" means people who have a degree and are white collars;

etc.

At times these categories can somehow mix but the class interest of someone who is a small business owner is different from the class interest of someone who has a good employee job which might be different from the interest of someone who could have a degree and a sucky white collar job.

So this very general idea of middle class is very confusing IMHO.

Carla , March 18, 2019 at 5:40 pm

@MisterMr -- I think that because EVERYTHING in the good ole US of A is about money, the understanding of a term like "middle class" becomes just about money, too.

When I was young (yes, a long time ago), I was given to understand that "middle class" meant basically people with white collar jobs or jobs that required some professional accreditation: teachers, nurses, lawyers, accountants, etc. "Working class" meant people with blue-collar jobs, even if some of them regularly made more money than a teacher or, say, a nurse. "Upper class" included high-earning professionals, CEO's, and of course those with inherited wealth. Poor, then as now, was the one thing you definitely didn't want to be.

But, as I said, money has obliterated all those fine distinctions of snobbery. Now there is only one: $.

JBird4049 , March 18, 2019 at 7:34 pm

The label of "Middle Class" in America can be used as either for the social class or for the economic class with the white collar workers generally being both and the blue collar workers being, before the 1950s, working class with working class wages. For about two decades the high and low ends of the income range collapsed with most people being squeezed into the economic middle class regardless of social class.

Now, income disparity has destroyed the economic middle class and the classic pyramid shaped map of the social and economic system reappearing. The tiny wealthy elites; the slightly larger service and professional class providing what the elites want; the small number of bureaucrats, lawyers, doctors, mechanics, religious workers and so that any large societies need just to function at all; the greatest numbers are the laboring class, and I don't mean the working class.

The mental map of most Americans is stuck on the almost flat pyramid of 1970 in which all classes were getting wealthier collapsing together economically, with the exception of the wealthy not gaining wealth at the same rate as the bottom 99%. Even the poorest blacks finally started to improve economically.

That picture is buried somewhere deeeep in our collective heads where the only real differences was what type of job you were going to have and where mistakes, failure, and disaster did not mean poverty. At worst, it meant a change of work or a temporary set back or a change of social class but not economic class.

Find that image in your head, yank it out, put a stake in its heart, burn it, and scatter the ashes. That picture died around 1973. Whatever the truth of that image it is long dead.

But too many people are trying to pretend that we are not living in a zero sum game of winner take all.

John Wright , March 18, 2019 at 11:17 am

Trump had the advantage that he was not tagged, directly or indirectly, with Bill Clinton's NAFTA, welfare reform or supporting "Free trade" that seemed to only work well in economists' minds (TPP).

Clinton also supported the Iraq War, Libya and other military adventures, and Trump couldn't vote for/against these operations that directly affected their communities.

Campaigning Trump called these wars "mistakes" while Hillary C would not.

Someone summed the election as "With Hillary you know you are screwed, with Trump you might not be."

MisterMr , March 18, 2019 at 1:12 pm

Thanks, however it is a fact that a situation of bad economy and increasing inequality, that ideally is supposed to be the main reason to vote left, is causing an upsurge in right-leaning populism instead.

And not only in the USA.

john Wright , March 18, 2019 at 3:02 pm

One could argue that the USA reluctantly moved left in the Great Depression while Nazi Germany and Italy moved right.

In the USA, recently the left has been cast as weak and ineffectual.

The left doesn't "bring home the bacon" in the minds of many.

Bernie is popular, but the knives are out from the establishment pols (of both parties) to do him in.

In the USA, moving to the populist right, to me, seems quite understandable.

jrs , March 18, 2019 at 3:46 pm

there is no populist right that brings home the bacon in the U.S. either as far as I can see. Theoretically there could be, but theoretically a lot of things, including much more plausibly and likely the rise of a left that brings home the bacon. IOW the trains don't even run on time now.

jrs , March 18, 2019 at 1:05 pm

Trump's economy is scarcely better than Obama's (depends on which year though, in the worst of the Great Recession only then was it worse). So if it's really about the economy: then Trump will lose the next election.

MisterMr , March 18, 2019 at 1:14 pm

IMHO it IS about the economy, but not in the direct sense we mean: if the economy goes on as it is, Trump will be able to spin it as good, whereas a democrat would be toast.

But I expect a recession to hit earlier, in which case I think Trump will not be re-elected.

Norb , March 18, 2019 at 9:28 am

Whenever I read articles illustrating the dawning awareness of the middling classes to their extreme precarious social status, I can't help but marvel at the audacity of elites jumping to the front of the protest line proclaiming their desire to "lead" the distraught masses. Even more so, those same distraught workers giving their oppressors the opportunity to do so. That is the definition of a dysfunctional society- rewarding failure. The elites might think themselves clever, and exceptional, for dreaming up such scams, but that dynamic alone goes a long way to explaining the rapid decline of America's prominence in the world.

America is consumed by a cynical rot that has firmly entered into the body politic. There is no easy way to excise this cancer, but the answer must lie in some form of national mission. The current American leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of bringing democracy to the world. This contradictory scam will not work, and there is ample evidence showing just how destructive and impotent this strategy truly is. The rest of the world is moving on, and if Americans don't wise up to the the destructive nature of their system, they will be left behind.

Corporations must be in the service of the nation, not the other way around. Corporations must be allowed to die and change, the nation, and its people must prevail over time. It is an obscene contradiction that the American system is reversing this dynamic. The people are allowed to die, while the corporations, and those that control them are allowed to persist.

As a working class American, my only desire at this point is for an American elite leadership that has a vision larger and broader than worshiping a bank account. If American workers don't demand a better leadership, history will show them to be worse than peasants, they will be proven to be willful consumerist dupes.

America is in an identity crisis- a cultural crisis. That does not bode well for the nation and makes it ill equipped to deal with other nations and the world's problems- let alone our own.

Summer , March 18, 2019 at 10:16 am

"The current American leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of bringing democracy to the world."

That train officially left the station around 1898.

Oso , March 18, 2019 at 1:27 pm

agree although the date closer to 1620 when the militaristic conquest of nations began.

Summer , March 18, 2019 at 2:25 pm

"masked with a marketing program of bringing democracy to the world."

For the USA, those thoughts didn't get put into action until post Civil War

Rod , March 18, 2019 at 11:41 am

"There is no easy way to excise this cancer, but the answer must lie in some form of national mission."

here lies the way to better angels and there is no shortage of things that must be done

diptherio , March 18, 2019 at 1:36 pm

As someone on social.coop said the other day, "they're not 'elites,' they are 'the predatory class'."

Joe Well , March 18, 2019 at 10:31 am

Thank you for posting this.

1. The author doesn't really explore how rent extraction through housing is the single biggest destroyer of American household wealth, with housing costs outpacing wages almost everywhere.

2. "Explore" Medicare for all? Build "affordable" housing, but only for certain deserving individuals like teachers?

It's disappointing that the author chooses to end this with such centrist Dem proposals.

There needs to be a right to housing, which means a right to build housing: abolish any zoning that excludes dense residential development. Seize land by eminent domain if necessary.

Jerry B , March 18, 2019 at 1:55 pm

===There needs to be a right to housing, which means a right to build housing: abolish any zoning that excludes dense residential development. Seize land by eminent domain if necessary===

Thanks Joe. While I am not an expert in housing, the lack of affordable housing seems to be tied to:

1. As you say zoning laws that exclude dense residential development.
2. Land Use regulations which are probably tied to #1 above.
3. The high costs incurred by residential developers in navigating the byzantine and bureaucratic maze of permits and regulations at the federal, state, and local levels.
4. The speculative nature of the housing market i.e. IMO the housing bubble is driven by monetary policies and the actions of "behind the scenes" lever pullers. If housing is treated as a commodity by the finance sector then the machinations of Wall Street can impact housing prices as they did in the 2008 crash.
5. To my point above, in the far northwest suburbs of Chicago there is a lot of empty office space and light industrial space. So excess supply would tell you that the prices for these properties should go down. Not the case. They are still expensive. If a homeowner is trying to sell their house they will lower the price until it is sold or not sell it. But the same rules do not apply to businesses.

To #5 above, again if we "believe" what we are told in Econ 101 about free markets and supply and demand then an excess supply should result in a downward price drop until the excess supply is cleared. God help me! I just typed the previous sentence from memory as if verbatim from my Econ 101 class 30 years ago!! #head on desk! So if office and industrial prices are not dropping then someone has to be holding the "bank notes" as is not concerned about if or when they sell.

Basically in short it seems zoning issues and cost issues are the big obstacles in dense residential development. I am not an advocate of relaxing regulations which could result in shoddy and unsafe construction but maybe there is a middle ground. Something needs to be done.

polecat , March 18, 2019 at 3:16 pm

It's not just dense housing, it ALL housing .. in terms of livability (environs with nature as an active component), and Affordable design/construction with energy efficiency in mind .. on a large enough scale to benefit the public ! There is, for all practical purposes none of that to be had. As it currently stands, you have to be richer than God to do ANYTHING other than the unimaginative and wasteful development that has been built up to this point.
So instead of "Where's My flying car??" .. the question might now more accurately be "Where's My passive solar, earthen-berm, strawbale, rammed-earth, or cob house/apartment???"

super extra , March 18, 2019 at 3:45 pm

4. The speculative nature of the housing market

to expand and maybe add onto this, AirBnb/vacation rentals + rental 'business as income' (at institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals and small biz creating the 'income stream' via LLC pass through) is a major driver affecting the speculation. What happened to all the foreclosures from a decade ago? They were turned into rentals, they still exist.

I am all for an affordable housing mandate, but not in an Obamacare fashion by building tons more housing at crappy inflated prices with some means-tested voucher all so the rentiers can keep their profits. Destroy the rentiers and make housing right, make it a policy that is enforced with regulations and limits on numbers of rental units.

Jerry B , March 18, 2019 at 6:49 pm

Thanks Super.

==AirBnb/vacation rentals + rental 'business as income' (at institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals and small biz creating the 'income stream' via LLC pass through) is a major driver affecting the speculation===

To your point there was a recent article on NC that discussed your comment above.

https://www.nakedcapitalism.com/2018/08/wolf-richter-comes-second-wave-big-money-buy-rent-scheme.html

Across the street from the townhouse subdivision where my wife and I live is a subdivision of $275K – $350K houses. One of the more expensive houses was sold a year ago to a company that uses it for a rental.

I talked to the previous owner frequently while walking our dog, and he sold the house after it had been on the market for only about a month. As far as the previous owner was concerned the house sold for close to his asking price so he was happy. He had no concern about selling the house to a company that was going to use it for a rental. The previous owner had been living in that house in that neighborhood for 25 years and seemed to know most everybody in his subdivision. He and his wife raised their two sons in that house and also put a lot of time and effort into the landscaping around the house.

The rental company that bought the house does the absolute minimal landscaping of the house and barely mows the lawn on a semi regular basis. The company clearly does not have any regard for the "appearance" of the house or the neighborhood. Which is a shame because the other houses near it are well maintained which, due to the lack of landscape maintenance, makes the "rental company" house an eyesore as far as grass, weeds, etc. are concerned.

I do not begrudge the previous owner for selling to the rental company. His asking price was met so he was happy. And in the last few years, other houses in that subdivision have taken 1-2 years to sell. What I have an issue with is these vulture rental companies acting as mercenaries and treating houses and the neighborhood as so much fodder on a balance sheet.

One could also make the argument that without the rental company sticking it's nose where it does not belong, the (ahem, cough, cough) free market would have been allowed to work somewhat. By that I mean if this particular house had also taken a long time to sell like the others in that neighborhood, and had subsequent price reductions in order to sell it, then maybe the average housing price in that neighborhood/town/suburb would have gone down helping affordability.

justsayknow , March 18, 2019 at 11:03 am

From the Business Insider published today:

"In fact, the typical CEO made a whopping 312 times their median employees' salary in 2017, according to the Economic Policy Institute."

Note that is vs median salary not lowest paid.

The self serving disconnect between the management class and labor class is truly amazing.

Work is not valued. And the contribution to productivity is extracted and given to ownership. It's not income inequality we should emphasize but simple fairness. Let's call it Income Fairness.

anon y'mouse , March 18, 2019 at 11:35 am

"fairness" is too vague and insubstantial a concept around which to base any kind of rights, much less what some should get or we should do as a society.

we once thought it was "fair" as a society to enslave people. after we stopped that (and not because it wasn't "fair", but as a political move), we thought it was "fair" to continue to deny them many of their rights because they weren't "white".

huge numbers of us still think it is fair that people die from various issues caused by their "unwillingness to work" or "unwillingness to work smarter". how many times do people say "if you don't get more education, you can just shut up about earning enough to live on. working at McDonald's, you are slacking and therefore can not demand anything. go to school, fool!" people argue all of the time that a "living wage" is not fair, because a person who does low-value jobs isn't making enough money for their employer to justify the wage (basically, profit produced by that employee would either be nil or zero). and that is perfectly "fair" to these arguers.

fair is the idea that some deserve more and some less, due to something being "earned" by someone. it is a nice idea to teach children. real world morality is much more complicated than that, and a society of justice and laws and policies and bureaucracies can not be based around that. waaay too nebulous, and open to interpretation. everyone -knows what "fair" is- when they see it, because everyone's definition of "fairness" is different. as some kind of lofty ideal, it is fine. in practice, it is meaningless.

Robin Kash , March 18, 2019 at 11:57 am

Is this simply a Rip van Winkle account of the middle-class situation that has been well-reported and vigorously commented upon for some time? What am I missing?

ambrit , March 18, 2019 at 12:32 pm

The shift came when ol' Rip realized that the rumbling sound he heard was not the sound of the ghostly sailors bowling but the sound of distant cannon fire.

Another Amateur Economist , March 18, 2019 at 2:04 pm

The middle class stands upon the floor provided by the working class. And that floor is failing, as the human capital of society is gradually, but with increasing rapidity, plundered, from the bottom up.

The poor used to have more than they do now, and be less dependent on government redistributions of income.

Even the middle class owns less productive capital, as the small business owners who used to populate the main streets of American towns have been driven out of business by the Walmarts. Those businessmen were the social elites of their communities, giving those communities leadership, shape, structure and dimension.

Owning less productive capital, their communities pretty much hollowed out, the middle class have lost much of their self sufficiency, and have become increasingly dependent on the whims of distant oligarchs. First the Walmarts. Now the Amazons. And there will be even fewer resources available to support the necessary services local communities provide.

The middle class are right to be afraid. The distant oligarchs and their bankers will only allow so much debt before they pull out the rug.

Too bad no one paid attention what was happening to the working poor. Long ago, the 1% used to command 7% of the nation's income. Now they command 21%. That 14% had to come from someone.

rd , March 18, 2019 at 2:22 pm

With almost 40 years of work under my belt, I have been passing along some advice to my kids to help them navigate the current "middle class conundrums":

1. Owning a home is unlikely to make you wealthy. With just a few major city core exceptions, don't expect it to go up by more than inflation over the decades. So buy or rent just what you need and do real analysis of what you need and why.

2. Only live in a big expensive city if you need to for your chosen career. The smaller cities have a lot of opportunity for people with good work habits, even in the "Rust Belt" and the living costs are far lower.

3. College degrees are useful. Getting them with large debt loads is a bad idea though. Don't take on more student debt than about 2/3 of your expected starting salary for a four year degree and take on little or not debt for a 2-year degree.

4. Going to a name-brand school is worthwhile if you don't have to rack up significant extra debt. Otherwise, pick college and university by major and cost. Your internal traits make a far bigger difference than the school you went to.

5. Only go to graduate school if your desired career path requires it. Otherwise, you are losing years of earning power while incurring costs and debt. If you want a grad degree just for the joy of it, do it as night school as a hobby.

6. Start a Roth IRA with monthly contributions early, even if it is only $50/month. It builds habits and over the years will likely ensure you are in the top 25% in assets.

7. We are in a golden age of investing right now compared to 30 years ago. You can have worldwide, multi-asset class diversified investments at an annual expense ratio of 0.25% which was unheard of at the beginning of my career. So inexpensive Target Date funds or similar vehicles from companies like Vanguard mean you can do fire-and-forget investing while you focus on the rest of your life.

8. Don't assume the full value of a company or state pension will be there when you retire. These are rife with deliberate and accidental mismanagement and partial defaults are likely with many of them. Instead save so that you are not reliant on them for a basic acceptable standard of living.

8. You don't need financial advisors for investing, just to help you with personal finance instead. But that is not what they are usually selling, so 99% of the purported financial advisors are to be avoided as they are hazardous to your finances.

10. Try to get a positive cash flow in your life as early as possible to dramatically reduce stress. That is difficult if you have kids, large student loans, or large mortgage/rent costs, so those are the big decisions you need to make on life-finance balance.

Regarding Social Security, it is currently structured to provide 75% to 80% of its current benefits starting in 2034. That is still a significant safety net, but would require Congress to act to get it back to around 100%.

Medicare is just part and parcel of the US healthcare cost issues. If the US can get down to less than 14% of GDP in healthcare expenditures while providing universal coverage, then the Medicare/Medicaid funding issue effectively goes away. This is not impossible as the US is the only developed country that is above 14%.

rc , March 18, 2019 at 4:01 pm

Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet and risk shifting. Regulatory policies and a credit based monetary system have resulted in massive real price increases in inelastic areas of demand such as healthcare, education and housing eroding purchasing power. Further, trade policies have put U.S. manufacturing at a massive disadvantage to the likes of China, which has subsidized state-owned enterprises, has essentially slave labor costs and low to no environmental regulations. Unrestrained immigration policies have resulted in a massive supply wave of semi- and unskilled labor suppressing wages.

Recommended initial steps to reform:
1. Change the monetary system-deleverage economy with the Chicago Plan (100% reserve banking) and fund massive infrastructure lowering total factor costs and increasing productivity. This would eliminate
2. Adopt a healthcare system that drives HC to 10% to 12% of GDP. France's maybe? Medicare model needs serious reform but is great at low admin costs.
3. Raise tariffs across the board or enact labor and environmental tariffs on the likes of China and other Asian export model countries.
4. Take savings from healthcare costs and interest and invest in human capital–educational attainment and apprenticeships programs.
5. Enforce border security restricting future immigration dramatically and let economy absorb labor supply over time.

Video of UC-B lecture:
https://www.youtube.com/watch?v=akVL7QY0S8A&feature=youtu.be

Jerry B , March 18, 2019 at 5:26 pm

As I have said in other comments, I like Liz Warren a lot within the limits of what she is good at doing (i.e. not President) such as Secretary of the Treasury etc. And I think she likes the media spotlight and to hear herself talk a little to much, but all quibbling aside, can we clone her??? The above comment and video just reinforce "Stick to what you are really good at Liz!".

I am not a Liz Warren fan boi to the extent Lambert is of AOC, but it seems that most of the time when I hear Warren, Sanders, or AOC say something my first reaction is "Yes, what she/he said!".

[Mar 18, 2019] College-entrance-exam cheating scandal exposes corrupt aristocracy (Video)

Mar 18, 2019 | theduran.com

RT CrossTalk host Peter Lavelle and The Duran's Alex Christoforou take a quick look at the college admissions scam revolving around William Rick Singer, who was running a for-profit college-counseling program, where according to federal prosecutors, has a goal focused on helping "the wealthiest families in the U.S. get their kids into school."

Arrest warrants for Hollywood stars, Lori Loughlin and Felicity Huffman, were delivered on Tuesday following their alleged involvement in a college-entrance-exam cheating scandal.

According to CNN, the women were two of around 50 people who were the subject of federal indictment following an extensive FBI investigation named "Operation Varsity Blues."

Loughlin's husband, Mossimo Giannulli, was also implicated, and was arrested early on Tuesday morning.

TMZ reported that Huffman was arrested by seven armed FBI agents. Her husband, William H. Macy, has not been charged in connection to the case. Loughlin, Giannulli, and Huffman are all facing charges of felony conspiracy to commit mail fraud and honest services mail fraud.

Huffman is accused of spending $15,000 on an organization that allegedly helped her daughter cheat on her SATs. Loughlin and Giannulli are accused of paying $500,000 to get their daughters into University of Southern California as recruits for the crew team for which neither of Loughlin's daughters rowed crew.

All three were recorded by the FBI on phone calls discussing their plans to alter or lie about their children's college applications.

https://www.youtube.com/embed/DCX35SWyrSU?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent

Via Zerohedge


Is there anything left in this country that has not been deeply tainted by corruption?

By now you have probably heard that dozens of people have been arrested for participating in a multi-million dollar college admissions scam. Enormous amounts of money were paid out in order to ensure that children from very wealthy families were able to get into top schools such as Yale University, Stanford University, the University of Texas and the University of Southern California. And as The Economic Collapse blog's Michael Snyder writes, we should certainly be disgusted by these revelations, but we shouldn't be surprised. Such corruption happens every single day on every single level of society in America. At this point our nation is so far gone that it is shocking when you run into someone that actually still has some integrity.

The "mastermind" behind this college admissions scam was a con man named William Rick Singer. He had been successfully getting the kids of wealthy people into top colleges for years using "side doors", and he probably thought that he would never get caught.

But he did.

There were four basic methods that Singer used to get children from wealthy families into elite schools. The first two methods involved bribes

Bribing college entrance exam administrators to allow a third party to facilitate cheating on college entrance exams, in some cases by posing as actual students,' is the first.

Bribing university athletic coaches and administrators to designate applicants as purported athletic recruits – regardless of their athletic abilities, and in some cases, even though they did not play the sport,' is the second.

Because many of these kids didn't even play the sports they were being "recruited" for, in some cases Photoshop was used to paste their faces on to the bodies of real athletes

In order to get non-athletic kids admitted to college as athletes, Singer often had to create fake profiles for them. Sometimes this involved fabricating resumes that listed them having played on elite club teams, but to finish the illusion Singer and his team would also use Photoshop to combine photos of the kids with actual athletes in the sport.

A number of college coaches became exceedingly wealthy from taking bribes to "recruit" kids that would never play once they got to school, but now a lot of those same coaches are probably going to prison.

The third and fourth methods that Singer used involved more direct forms of cheating

'Having a third party take classes in place of the actual students, with the understanding that the grades earned in those classes would be submitted as part of the students' application,' is the third.

The fourth was 'submitting falsified applications for admission to universities that, among other things, included the fraudulently obtained exam scores and class grades, and often listed fake awards and athletic activities.'

Of course the main thing that the media is focusing on is the fact that some celebrities are among those being charged in this case, and that includes Lori Loughlin from "Full House"

It was important to "Full House" star Lori Loughlin that her kids have "the college experience" that she missed out on, she said back in 2016.

Loughlin, along with "Desperate Housewives" actress Felicity Huffman, is among those charged in a scheme in which parents allegedly bribed college coaches and insiders at testing centers to help get their children into some of the most elite schools in the country, federal prosecutors said Tuesday.

Despite how cynical I have become lately, I never would have guessed that Lori Loughlin was capable of such corruption.

After all, she seems like such a nice lady on television.

But apparently she was extremely determined to make sure that her daughters had "the college experience", and so Loughlin and her husband shelled out half a million dollars in bribes

Loughlin and Giannulli 'agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the USC crew team – despite the fact that they did not participate in crew – thereby facilitating their admission to USC,' according to the documents.

As bad as this scandal is, can we really say that it is much worse than what is going on around the rest of the country every single day?

Of course not.

We are a very sick nation, and we are getting sicker by the day.

William Rick Singer had a good con going, and he should have stopped while he was ahead

William "Rick" Singer said he had the inside scoop on getting into college, and anyone could get in on it with his book, "Getting In: Gaining Admission To Your College of Choice."

"This book is full of secrets," he said in Chapter 1 before dispensing advice on personal branding, test-taking and college essays.

But Singer had even bigger secrets, and those would cost up to $1.2 million.

But like most con men, Singer just had to keep pushing the envelope, and in the end it is going to cost him everything.

The ironic thing is that our colleges and universities are pulling an even bigger con. They have convinced all of us that a college education is the key to a bright future, but meanwhile the quality of the "education" that they are providing has deteriorated dramatically. I spent eight years in school getting three degrees, and so I know what I am talking about. For much more on all this, please see my recent article entitled "50 Actual College Course Titles That Prove That America's Universities Are Training Our College Students To Be Socialists" .

I know that it is not fashionable to talk about "morality" and "values" these days, but the truth is that history has shown us that any nation that is deeply corrupt is not likely to survive for very long.

Our founders understood this, and former president John Adams once stated that our Constitution "was made only for a moral and religious people"

Avarice, ambition, revenge and licentiousness would break the strongest cords of our Constitution, as a whale goes through a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.

Today, we are neither moral or religious.


What we are is deeply corrupt, and America will not survive if we keep going down this path.

[Mar 15, 2019] Patriots Turning To #YangGang In Response To Trump, Conservatism Inc. Failure by James Kirkpatrick

Highly recommended!
Notable quotes:
"... Yang promises a universal entitlement, not dependent on income, that he calls a "freedom dividend." To be funded through a value added tax , Yang claims that it would reduce the strain on "health care, incarceration, homeless services, and the like" and actually save billions of dollars. Yang also notes that "current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally." ..."
"... Yang is justifying the need for such a program because of automation . Again, VDARE.com has been exploring how automation may necessitate such a program for many years . Yang also discussed this problem on Tucker Carlson's show , which alone shows he is more open to real discussion than many progressive activists. ..."
"... Indeed, journalists, hall monitors that they are, have recognized that President Trump's online supporters are flocking to Yang, bringing him a powerful weapon in the meme wars. ..."
"... it is ominous for Trump that many of the more creative and dedicated people who formed his vanguard are giving up on him. ..."
Mar 15, 2019 | www.unz.com

The dark horse candidate of the 2020 Democratic primary is entrepreneur Andrew Yang , who just qualified for the first round of debates by attracting over 65,000 unique donors. [ Andrew Yang qualifies for first DNC debate with 65,000 unique donors , by Orion Rummler, Axios, March 12, 2019]

Yang is a businessman who has worked in several fields, but was best known for founding Venture for America , which helps college graduates become entrepreneurs. However, he is now gaining recognition for his signature campaign promise -- $1,000 a month for every American.

Yang promises a universal entitlement, not dependent on income, that he calls a "freedom dividend." To be funded through a value added tax , Yang claims that it would reduce the strain on "health care, incarceration, homeless services, and the like" and actually save billions of dollars. Yang also notes that "current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally."

As Yang himself notes, this is not a new idea, nor one particularly tied to the Left. Indeed, it's been proposed by several prominent libertarians because it would replace the far more inefficient welfare system. Charles Murray called for this policy in 2016. [ A guaranteed income for every American , AEI, June 3, 2016] Milton Friedman suggested a similar policy in a 1968 interview with William F. Buckley, though Friedman called it a "negative income tax."

He rejected arguments that it would cause indolence. F.A. Hayek also supported such a policy; he essentially took it for granted . [ Friedrich Hayek supported a guaranteed minimum income , by James Kwak, Medium, July 20, 2015]

It's also been proposed by many nationalists, including, well, me. At the January 2013 VDARE.com Webinar, I called for a "straight-up minimum income for citizens only" among other policies that would build a new nationalist majority and deconstruct Leftist power. I've retained that belief ever since and argued for it here for years.

However, I've also made the argument that it only works if it is for citizens only and is combined with a restrictive immigration policy. As I previously argued in a piece attacking Jacobin's disingenuous complaints about the "reserve army of the unemployed," you simply can't support high wages, workers' rights, and a universal basic income while still demanding mass immigration.

Yang is justifying the need for such a program because of automation . Again, VDARE.com has been exploring how automation may necessitate such a program for many years . Yang also discussed this problem on Tucker Carlson's show , which alone shows he is more open to real discussion than many progressive activists.

Yang is also directly addressing the crises that the Trump Administration has seemly forgotten. Unlike Donald Trump himself, with his endless boasting about "low black and Hispanic unemployment," Yang has directly spoken about the demographic collapse of white people because of "low birth rates and white men dying from substance abuse and suicide ."

Though even the viciously anti-white Dylan Matthews called the tweet "innocuous," there is little doubt if President Trump said it would be called racist. [ Andrew Yang, the 2020 long-shot candidate running on a universal basic income, explained , Vox, March 11, 2019]

Significantly, President Trump himself has never once specifically recognized the plight of white Americans.

...He wants to make Puerto Rico a state . He supports a path to citizenship for illegal aliens, albeit with an 18-year waiting period and combined with pledges to secure the border and deport illegals who don't enroll in the citizenship program. He wants to create a massive bureaucratic system to track gun owners, restrict gun ownership , and require various "training" programs for licenses. He wants to subsidize local journalists with taxpayer dollars...

... ... ...

Indeed, journalists, hall monitors that they are, have recognized that President Trump's online supporters are flocking to Yang, bringing him a powerful weapon in the meme wars. (Sample meme at right.) And because many of these online activists are "far right" by Main Stream Media standards, or at least Politically Incorrect, there is much hand-waving and wrist-flapping about the need for Yang to decry "white nationalists." So of course, the candidate has dutifully done so, claiming "racism and white nationalism [are] a threat to the core ideals of what it means to be an American". [ Presidential candidate Andrew Yang has a meme problem , by Russell Brandom, The Verge, March 9, 2019]

But what does it mean to be an American? As more and more of American history is described as racist, and even national symbols and the national anthem are targets for protest, "America" certainly doesn't seem like a real country with a real identity. Increasingly, "America" resembles a continent-sized shopping mall, with nothing holding together the warring tribes that occupy it except money.

President Trump, of course, was elected because many people thought he could reverse this process, especially by limiting mass immigration and taking strong action in the culture wars, for example by promoting official English. Yet in recent weeks, he has repeatedly endorsed more legal immigration. Rather than fighting, the president is content to brag about the economy and whine about unfair press coverage and investigations. He already seems like a lame duck.

The worst part of all of this is that President Trump was elected as a response not just to the Left, but to the failed Conservative Establishment. During the 2016 campaign, President Trump specifically pledged to protect entitlements , decried foreign wars, and argued for a massive infrastructure plan. However, once in office, his main legislative accomplishment is a tax cut any other Republican president would have pushed. Similarly, his latest budget contains the kinds of entitlement cuts that are guaranteed to provoke Democrat attack ads. [ Trump said he wouldn't cut Medicaid, Social Security, and Medicare . His 2020 budget cuts all 3 , by Tara Golshan, Vox, March 12, 2019] And the president has already backed down on withdrawing all troops from Syria, never mind Afghanistan.

Conservatism Inc., having learned nothing from candidate Donald Trump's scorched-earth path to the Republican nomination, now embraces Trump as a man but ignores his campaign message. Instead, the conservative movement is still promoting the same tired slogans about "free markets" even as they have appear to have lost an entire generation to socialism. The most iconic moment was Charlie Kirk, head of the free market activist group Turning Point USA, desperately trying to tell his followers not to cheer for Tucker Carlson because Carlson had suggested a nation should be treated like a family, not simply a marketplace .

President Trump himself is now trying to talk like a fiscal conservative [ Exclusive -- Donald Trump: 'Seductive' Socialism Would Send Country 'Down The Tubes' In a Decade Or Less , by Alexander Marlow, Matt Boyle, Amanda House, and Charlie Spierling, Breitbart, March 11, 2019]. Such a pose is self-discrediting given how the deficit swelled under united Republican control and untold amounts of money are seemingly still available for foreign aid to Israel, regime change in Iran and Venezuela, and feminist programs abroad to make favorite daughter Ivanka Trump feel important. [ Trump budget plans to give $100 million to program for women that Ivanka launched , by Nathalie Baptiste, Mother Jones, March 9, 2019]

Thus, especially because of his cowardice on immigration, many of President Trump's most fervent online supporters have turned on him in recent weeks. And the embrace of Yang seems to come out of a great place of despair, a sense that the country really is beyond saving.

Yang has Leftist policies on many issues, but many disillusioned Trump supporters feel like those policies are coming anyway. If America is just an economy, and if everyone in the world is a simply an American-in-waiting, white Americans might as well get something out of this System before the bones are picked clean.

National Review ' s Theodore Kupfer just claimed the main importance of Yang's candidacy is that it will prove meme-makers ability to affect the vote count "has been overstated" [ Rise of the pink hats , March 12, 2019].

Time will tell, but it is ominous for Trump that many of the more creative and dedicated people who formed his vanguard are giving up on him.

[Mar 14, 2019] Blain Global Reset Looms As Inequality Bonfire Burns Out Of Control

Mar 14, 2019 | www.zerohedge.com

Blain: Global Reset Looms As "Inequality Bonfire Burns Out Of Control"

by Tyler Durden Thu, 03/14/2019 - 09:05 30 SHARES Via Shard Capital's Bill Blain,

"Education is the most powerful weapon which you can use to change the world.. "

In the headlines this morning: https://www.morningporridge.com/stuff-im-watching

So much stuff going on.. it's shaping up to be a very interesting weekend.

But, let me start with a diversion...

There is a story of the Great Scottish King – Robert the Bruce. Having been defeated by the English multiple times, his family captured and executed, (or in the case of his daughter, left suspended in an open cage thru the winter), his army was scattered, the clans turned against him, on his own and without any support - he was on the verge of giving up. As he contemplated a bleak future, he watched a spider struggle to construct a web in the dank cave he was hiding in. The beastie failed again and again.. Finally, Bruce reached his decision. If the Spider succeeded, he would carry on.

He went on to become Scotland's Greatest King.

Try, Try, Try again ? Perhaps Scotland will pull an unlikely win at Twickenham on Saturday? She-who-is-now-Mrs-Blain did warn me not to " bore everyone about Brexit ", but needs must.

Even though a No-Deal Brexit is ruled out in the short-run, where do we go from here?

Or, perhaps, Theresa May is set to surprise us all. She really doesn't know when to give up. The scuttlebutt round Westminster is she's going to take her Brexit agreement back to the House for a third time – and is currently scaring the Rees-Moog loonies with the threat of a long extension leading to NO-Brexit and second referendum, and the Remoaners with the threat of a short-extension leading to No-Deal Brexit. At least 70 Labour MPs want to avoid a second referendum and could, perhaps, vote with her.

Of course, my above simplistic analysis ignores the EU.

"It is a very grand plan, but what about the Germans?" asked a famous Polish General in WW2...

How the EU reacts to the likely request for an extension is going to be fascinating..

Meanwhile, there is a bit of a political stramash brewing in the US after a number of fund managers and "actresses" (heaven forbid) were arrested for fraudulently bribing universities to give their kids places. Some of my more "right of centre" US correspondents are full of righteous indignation that such obvious Democrats - on the basis the whole of Hollywood are goddam-lefty-commies - are dishonestly getting their kids opportunities they don't merit. Bribery, criminal corruption, hidden influence, the haves and have nots. Oops I think one of their heads just indignantly exploded.

But this is important stuff. Firstly, isn't it obvious that any society with an ounce of common sense would make education the core of its development strategy? It's the single most important factor likely to improve an economy and raise the prospects of its population. Yet, here in the UK, the government has seen fit to chain students to years of debt and penury for pretty average university courses? Its madness. In the States, its gone a step further – another way for the rich to raise themselves higher.

The fact the monied and the wealthy across US society think its somehow acceptable to pay-to-play for the top educational places and they advantages these confer for life, sums up a moral corruption and is yet another symptom of the entitlement and pernicious income inequality now at the core of the "Land of the Free". As a chum told me yesterday.. "its last stage empire" stuff. Its neither a Democrat or Republican thing – although it doesn't help when the President is such a clearly negative role model. If its ok for the boss to lie and cheat.. then what I do wrong?

(You could argue nepotism is the ultimate and absolute corruption – the rich ensuring the rich get the best of everything and deny deserving poorer folk places they've earned. But, where does guilt begin? What's so different from those of us who paid over expensive school fees to give our kids the best chance in life? I could just about afford it. Single Parent in Brixton could not. My kids got a better start. Whether the Brixton kid now runs past them is entirely their responsibility now )

Its stories like this that are stoking the inequality bonfire. If it burns out of control then markets will have nothing to say as the global reset is pressed!

[Mar 11, 2019] The university professors, who teach but do not learn: neoliberal shill DeJong tries to prolong the life of neoliberalism in the USA

Highly recommended!
DeJong is more dangerous them Malkin... It poisons students with neoliberalism more effectively.
Mar 11, 2019 | www.nakedcapitalism.com

Kurtismayfield , , March 10, 2019 at 10:52 am

Re:Wall Street Democrats

They know, however, that they've been conned, played, and they're absolute fools in the game.

Thank you Mr. Black for the laugh this morning. They know exactly what they have been doing. Whether it was deregulating so that Hedge funds and vulture capitalism can thrive, or making sure us peons cannot discharge debts, or making everything about financalization. This was all done on purpose, without care for "winning the political game". Politics is economics, and the Wall Street Democrats have been winning.

notabanker , , March 10, 2019 at 12:26 pm

For sure. I'm quite concerned at the behavior of the DNC leadership and pundits. They are doubling down on blatant corporatist agendas. They are acting like they have this in the bag when objective evidence says they do not and are in trouble. Assuming they are out of touch is naive to me. I would assume the opposite, they know a whole lot more than what they are letting on.

urblintz , , March 10, 2019 at 12:49 pm

I think the notion that the DNC and the Democrat's ruling class would rather lose to a like-minded Republican corporatist than win with someone who stands for genuine progressive values offering "concrete material benefits." I held my nose and read comments at the kos straw polls (where Sanders consistently wins by a large margin) and it's clear to me that the Clintonista's will do everything in their power to derail Bernie.

polecat , , March 10, 2019 at 1:00 pm

"It's the Externalities, stupid economists !" *should be the new rallying cry ..

rd , , March 10, 2019 at 3:26 pm

Keynes' "animal spirits" and the "tragedy of the commons" (Lloyd, 1833 and Hardin, 1968) both implied that economics was messier than Samuelson and Friedman would have us believe because there are actual people with different short- and long-term interests.

The behavioral folks (Kahnemann, Tversky, Thaler etc.) have all shown that people are even messier than we would have thought. So most macro-economic stuff over the past half-century has been largely BS in justifying trickle-down economics, deregulation etc.

There needs to be some inequality as that provides incentives via capitalism but unfettered it turns into France 1989 or the Great Depression. It is not coincidence that the major experiment in this in the late 90s and early 2000s required massive government intervention to keep the ship from sinking less than a decade after the great unregulated creative forces were unleashed.

MMT is likely to be similar where productive uses of deficits can be beneficial, but if the money is wasted on stupid stuff like unnecessary wars, then the loss of credibility means that the fiat currency won't be quite as fiat anymore. Britain was unbelievably economically powerfully in the late 1800s but in half a century went to being an economic afterthought hamstrung by deficits after two major wars and a depression.

So it is good that people like Brad DeLong are coming to understand that the pretty economic theories have some truths but are utter BS (and dangerous) when extrapolated without accounting for how people and societies actually behave.

Chris Cosmos , , March 10, 2019 at 6:43 pm

I never understood the incentive to make more money -- that only works if money = true value and that is the implication of living in a capitalist society (not economy)–everything then becomes a commodity and alienation results and all the depression, fear, anxiety that I see around me. Whereas human happiness actually comes from helping others and finding meaning in life not money or dominating others. That's what social science seems to be telling us.

Oregoncharles , , March 10, 2019 at 2:46 pm

Quoting DeLong:

" He says we are discredited. Our policies have failed. And they've failed because we've been conned by the Republicans."

That's welcome, but it's still making excuses. Neoliberal policies have failed because the economics were wrong, not because "we've been conned by the Republicans." Furthermore, this may be important – if it isn't acknowledged, those policies are quite likely to come sneaking back, especially if Democrats are more in the ascendant., as they will be, given the seesaw built into the 2-Party.

The Rev Kev , , March 10, 2019 at 7:33 pm

Might be right there. Groups like the neocons were originally attached the the left side of politics but when the winds changed, detached themselves and went over to the Republican right. The winds are changing again so those who want power may be going over to what is called the left now to keep their grip on power. But what you say is quite true. It is not really the policies that failed but the economics themselves that were wrong and which, in an honest debate, does not make sense either.

marku52 , , March 10, 2019 at 3:39 pm

"And they've failed because we've been conned by the Republicans.""

Not at all. What about the "free trade" hokum that DeJong and his pal Krugman have been peddling since forever? History and every empirical test in the modern era shows that it fails in developing countries and only exacerbates inequality in richer ones.

That's just a failed policy.

I'm still waiting for an apology for all those years that those two insulted anyone who questioned their dogma as just "too ignorant to understand."

Glen , , March 10, 2019 at 4:47 pm

Thank you!

He created FAILED policies. He pushed policies which have harmed America, harmed Americans, and destroyed the American dream.

Kevin Carhart , , March 10, 2019 at 4:29 pm

It's intriguing, but two other voices come to mind. One is Never Let a Serious Crisis Go To Waste by Mirowski and the other is Generation Like by Doug Rushkoff.

Neoliberalism is partially entrepreneurial self-conceptions which took a long time to promote. Rushkoff's Frontline shows the Youtube culture. There is a girl with a "leaderboard" on the wall of her suburban room, keeping track of her metrics.

There's a devastating VPRO Backlight film on the same topic. Internet-platform neoliberalism does not have much to do with the GOP.

It's going to be an odd hybrid at best – you could have deep-red communism but enacted for and by people whose self-conception is influenced by decades of Becker and Hayek? One place this question leads is to ask what's the relationship between the set of ideas and material conditions-centric philosophies? If new policies pass that create a different possibility materially, will the vise grip of the entrepreneurial self loosen?

Partially yeah, maybe, a Job Guarantee if it passes and actually works, would be an anti-neoliberal approach to jobs, which might partially loosen the regime of neoliberal advice for job candidates delivered with a smug attitude that There Is No Alternative. (Described by Gershon). We take it seriously because of a sense of dread that it might actually be powerful enough to lock us out if we don't, and an uncertainty of whether it is or not.

There has been deep damage which is now a very broad and resilient base. It is one of the prongs of why 2008 did not have the kind of discrediting effect that 1929 did. At least that's what I took away from _Never Let_.

Brad DeLong handing the baton might mean something but it is not going to ameliorate the sense-of-life that young people get from managing their channels and metrics.

Take the new 1099 platforms as another focal point. Suppose there were political measures that splice in on the platforms and take the edge off materially, such as underwritten healthcare not tied to your job. The platforms still use star ratings, make star ratings seem normal, and continually push a self-conception as a small business. If you have overt DSA plus covert Becker it is, again, a strange hybrid,

Jeremy Grimm , , March 10, 2019 at 5:13 pm

Your comment is very insightful. Neoliberalism embeds its mindset into the very fabric of our culture and self-concepts. It strangely twists many of our core myths and beliefs.

Raulb , , March 10, 2019 at 6:36 pm

This is nothing but a Trojan horse to 'co-opt' and 'subvert'. Neoliberals sense a risk to their neo feudal project and are simply attempting to infiltrate and hollow out any threats from within.

There are the same folks who have let entire economics departments becomes mouthpieces for corporate propaganda and worked with thousands of think tanks and international organizations to mislead, misinform and cause pain to millions of people.

They have seeded decontextualized words like 'wealth creators' and 'job creators' to create a halo narrative for corporate interests and undermine society, citizenship, the social good, the environment that make 'wealth creation' even possible. So all those take a backseat to 'wealth creator' interests. Since you can't create wealth without society this is some achievement.

Its because of them that we live in a world where the most important economic idea is protecting people like Kochs business and personal interests and making sure government is not 'impinging on their freedom'. And the corollary a fundamental anti-human narrative where ordinary people and workers are held in contempt for even expecting living wages and conditions and their access to basics like education, health care and living conditions is hollowed out out to promote privatization and become 'entitlements'.

Neoliberalism has left us with a decontextualized highly unstable world that exists in a collective but is forcefully detached into a context less individual existence. These are not mistakes of otherwise 'well meaning' individuals, there are the results of hard core ideologues and high priests of power.

Dan , , March 10, 2019 at 7:31 pm

Two thumbs up. This has been an ongoing agenda for decades and it has succeeded in permeating every aspect of society, which is why the United States is such a vacuous, superficial place. And it's exporting that superficiality to the rest of the world.

VietnamVet , , March 10, 2019 at 7:17 pm

I read Brad DeLong's and Paul Krugman's blogs until their contradictions became too great. If anything, we need more people seeing the truth. The Global War on Terror is into its 18th year. In October the USA will spend approximately $6 trillion and will have accomplish nothing except to create blow back. The Middle Class is disappearing. Those who remain in their homes are head over heels in debt.

The average American household carries $137,063 in debt. The wealthy are getting richer.

The Jeff Bezos, Warren Buffett and Bill Gates families together have as much wealth as the lowest half of Americans. Donald Trump's Presidency and Brexit document that neoliberal politicians have lost contact with reality. They are nightmares that there is no escaping. At best, perhaps, Roosevelt Progressives will be reborn to resurrect regulated capitalism and debt forgiveness.

But more likely is a middle-class revolt when Americans no longer can pay for water, electricity, food, medicine and are jailed for not paying a $1,500 fine for littering the Beltway.

A civil war inside a nuclear armed nation state is dangerous beyond belief. France is approaching this.

[Mar 09, 2019] The USA new class in full glory: rich are shopping differently from the low income families and the routine is like doing drags, but more pleasurable and less harmful. While workers are stuglling with the wages that barely allow to support the family, the pressure to cut hours and introduce two tire system

Notable quotes:
"... Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously."" ..."
"... "Erie Locomotive Plant Workers Strike against Two-Tier" [ Labor Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it would impose a two-tier pay system that would pay new hires and recalled employees up to 38 percent less in wages, institute mandatory overtime, reorganize job classifications, and hire temporary workers for up to 20 percent of the plant's jobs. ..."
"... Workers voted on Saturday to authorize the strike." • Good. Two-tier is awful, wherever found (including Social Security). ..."
Mar 09, 2019 | www.nakedcapitalism.com

Guillotine Watch

"My Year of Living Like My Rich Friend" [ New York Magazine ].

"[S]hopping with T was different. When she walked into a store, the employees greeted her by name and began to pull items from the racks for her to try on. Riding her coattails, I was treated with the same consideration, which is how I wound up owning a beautiful cashmere 3.1 Philip Lim sweater that I had no use for and rarely wore, and which was eventually eaten by moths in my closet.

Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously.""

Indeed:

https://www.youtube.com/embed/dfO0TgcDUnI

Class Warfare

"Erie Locomotive Plant Workers Strike against Two-Tier" [ Labor Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it would impose a two-tier pay system that would pay new hires and recalled employees up to 38 percent less in wages, institute mandatory overtime, reorganize job classifications, and hire temporary workers for up to 20 percent of the plant's jobs.

Workers voted on Saturday to authorize the strike." • Good. Two-tier is awful, wherever found (including Social Security).

[Feb 27, 2019] Nomi Prins Survival of the Richest, The March of Inequality

Notable quotes:
"... Forgot to add. If any are looking for a copy of that "The Gilded Age: A Tale of Today" book mentioned near the beginning of this article and do not want to fork over the hard stuff to Bezos, you can find it also at Project Gutenberg in several different formats here- http://www.gutenberg.org/ebooks/3178 ..."
"... When inequality reaches its zenith it will be in parallel with many other disasters that we know are coming ..."
"... When the average yearly salary is $31K? There is no disposable income, as that astounding collective debt figure attests. ..."
"... "Keep in mind that historically, the levelers of inequality have been war, financial crises, protracted battles by workers to get better incomes and workplace protections, and, of course, revolutions." ..."
"... So strikes will work -- which is why they are forbidden. And maybe it is time to get truly creative with shopping strikes and boycotts–Starbucks and Amazon would learn from being shunned or, even better, forced into bankruptcy. ..."
Feb 27, 2019 | www.nakedcapitalism.com

The Rev Kev , February 27, 2019 at 6:04 am

I sometimes wonder if our elite have taken to heart this section from George Orwell's "1984"-

But the purpose of all of them was to arrest progress and freeze history at a chosen moment. The familiar pendulum swing was to happen once more, and then stop. As usual, the High were to be turned out by the Middle, who would then become the High; but this time, by conscious strategy, the High would be able to maintain their position permanently.

And that is the real purpose of all this surveillance in our lives. The reason why the governmental and commercial sector is silencing dissent by banishing it from all social media. The sidelining of all democratic participation in western countries and entities like the EU. To cement their overlordship.

It won't work. Why? Because of Newton's third law – For every action, there is an equal and opposite reaction. Historically, the more repression there is, the bloodier the reaction and the French revolution is the best example of this. Here is a good lesson for our elites. Never cheat a person that has nothing to lose. That's good advice that.

The Rev Kev , February 27, 2019 at 6:14 am

Forgot to add. If any are looking for a copy of that "The Gilded Age: A Tale of Today" book mentioned near the beginning of this article and do not want to fork over the hard stuff to Bezos, you can find it also at Project Gutenberg in several different formats here-http://www.gutenberg.org/ebooks/3178

JEHR , February 27, 2019 at 7:44 am

When inequality reaches its zenith it will be in parallel with many other disasters that we know are coming: climate change with all of its severe storms and warming of the planet, toxic plastic pollution, resource depletion, environmental degradation, loss of arable land, loss of animals and fish, insect depletion, super bugs and antibiotic resistance, threat of nuclear war and other wars, climate refugees, rising sea levels, and on and on and on. The thing is that we may not live long enough to revolt against wealth inequality!

DJG , February 27, 2019 at 8:39 am

Yves Smith. Great article from the always insightful Nomi Prins. The figures on household income and general indebtedness are something to commit to memory for the next time one of our earnest upper-middle friends goes on and on about retraining and relocating. How? When the average yearly salary is $31K? There is no disposable income, as that astounding collective debt figure attests.

The note up top from YS is sobering indeed: "Keep in mind that historically, the levelers of inequality have been war, financial crises, protracted battles by workers to get better incomes and workplace protections, and, of course, revolutions."

Which is the least painful and most effective? Strikes. And general strikes. Now that everything in the U S of A is on-line, monetized (including us), and dollar denominated, the only recourse we have is to withhold labor. (Or to stop shopping.)

So strikes will work -- which is why they are forbidden. And maybe it is time to get truly creative with shopping strikes and boycotts–Starbucks and Amazon would learn from being shunned or, even better, forced into bankruptcy.

[Feb 27, 2019] Survival of the Richest by Nomi Prins

Feb 26, 2019 | www.unz.com

Like a gilded coating that makes the dullest things glitter, today's thin veneer of political populism covers a grotesque underbelly of growing inequality that's hiding in plain sight. And this phenomenon of ever more concentrated wealth and power has both Newtonian and Darwinian components to it.

In terms of Newton's first law of motion: those in power will remain in power unless acted upon by an external force. Those who are wealthy will only gain in wealth as long as nothing deflects them from their present course. As for Darwin, in the world of financial evolution, those with wealth or power will do what's in their best interest to protect that wealth, even if it's in no one else's interest at all.

In George Orwell's iconic 1945 novel, Animal Farm , the pigs who gain control in a rebellion against a human farmer eventually impose a dictatorship on the other animals on the basis of a single commandment : "All animals are equal, but some animals are more equal than others." In terms of the American republic, the modern equivalent would be: "All citizens are equal, but the wealthy are so much more equal than anyone else (and plan to remain that way)."

Certainly, inequality is the economic great wall between those with power and those without it.

As the animals of Orwell's farm grew ever less equal, so in the present moment in a country that still claims equal opportunity for its citizens, one in which three Americans now have as much wealth as the bottom half of society (160 million people), you could certainly say that we live in an increasingly Orwellian society. Or perhaps an increasingly Twainian one.

After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an unforgettab