Thursday, October 20, 2011

Political regression

Are we finally "as mad as hell and not going to take it any more"? Are we finally going to reclaim our country? Robert Reich contrasts progressive and regressive movements, and the attempts to drag us back into the horrors of the Gilded Age.
Eric Cantor, Paul Ryan, Rick Perry, Michele Bachmann and the other tribunes of today's Republican right aren't really conservatives. Their goal isn't to conserve what we have. It's to take us backwards.

They'd like to return to the 1920s -- before Social Security, unemployment insurance, labor laws, the minimum wage, Medicare and Medicaid, worker safety laws, the Environmental Protection Act, the Glass-Steagall Act, the Securities and Exchange Act, and the Voting Rights Act.

In the 1920s Wall Street was unfettered, the rich grew far richer and everyone else went deep into debt, and the nation closed its doors to immigrants….

In truth, if they had their way we'd be back in the late nineteenth century -- before the federal income tax, antitrust laws, the Pure Food and Drug Act, and the Federal Reserve. A time when robber barons -- railroad, financial, and oil titans -- ran the country. A time of wrenching squalor for the many and mind-numbing wealth for the few.
Nicholas Kristoff points out some facts:
  • The 400 wealthiest Americans have a greater combined net worth than the bottom 150 million Americans. 
  • The top 1 percent of Americans possess more wealth than the entire bottom 90 percent.
  • In the Bush expansion from 2002 to 2007, 65 percent of economic gains went to the richest 1 percent. 

Here are some actual data

Kristoff goes on:
More broadly, there’s a growing sense that lopsided outcomes are a result of tycoons’ manipulating the system, lobbying for loopholes and getting away with murder. Of the 100 highest-paid chief executives in the United States in 2010, 25 took home more pay than their company paid in federal corporate income taxes, according to the Institute for Policy Studies. …

I believe that over the last couple of centuries banks have enormously raised living standards in the West by allocating capital to more efficient uses. But anyone who believes in markets should be outraged that banks rig the system so that they enjoy profits in good years and bailouts in bad years.
And far from helping us, this inequality is a hindrance. The IMF, hardly a socialist bastion, reports that increased inequality impedes growth
In fact equality appears to be an important ingredient in promoting and sustaining growth. The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality. Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth.
This is the context in which to view Occupy Wall Street (OWS)., Sally Kohn opines at Fox News:
The key isn’t what protesters are for but rather what they’re against -- the gaping inequality that has poisoned our economy, our politics and our nation.

In America today, 400 people have more wealth than the bottom 150 million combined. That’s not because 150 million Americans are pathetically lazy or even unlucky. In fact, Americans have been working harder than ever -- productivity has risen in the last several decades. Big business profits and CEO bonuses have also gone up. Worker salaries, however, have declined.

Most of the Occupy Wall Street protesters aren’t opposed to free market capitalism. In fact, what they want is an end to the crony capitalist system now in place, that makes it easier for the rich and powerful to get even more rich and powerful while making it increasingly hard for the rest of us to get by. The protesters are not anti-American radicals. They are the defenders of the American Dream, the decision from the birth of our nation that success should be determined by hard work not royal bloodlines.
Why is this so hard for us to understand?

Update:  Dr Primrose highlights this table, from the article I cited above on Wealth, Income, and Power (This is from a sociologist at UCSC).  Those at the top rank = less inequality.  (GINI coeff of 1  means everyone makes the same;  GINI coeff of 100 means one person gets everything.)

Table 7: Income equality in selected countries
Country/Overall RankGini Coefficient
1.  Sweden 23.0
2.  Norway 25.0
8.  Austria 26.0
10.  Germany 27.0
17.  Denmark 29.0
25.  Australia 30.5
34.  Italy 32.0
35.  Canada 32.1
37.  France 32.7
42.  Switzerland 33.7
43.  United Kingdom 34.0
45.  Egypt 34.4
56.  India 36.8
61.  Japan 38.1
68.  Israel 39.2
81.  China 41.5
82.  Russia 42.3
90.  Iran 44.5
93.  United States 45.0
107.  Mexico 48.2
125.  Brazil 56.7
133.  South Africa 65.0

Note: These figures reflect family/household income, not individual income.
Source: Central Intelligence Agency (2010).


Paul said...

I remember the days when skewed income distributions like these were typical of Latin America, and people in this country were talking about how much of a problem that was. Now the tables have turned. At very least, thanks to the OWS movement, we have started talking about it.

dr.primrose said...

One of the interesting tables from the article where IT got her first graph -- Wealth, Income, and Power -- compares the income equality in a variety of countries.

The ranking is based on something called the "Gini coefficient," which is a mathematical ratio that allows economists to put all countries on a scale with values that range (hypothetically) from zero (everyone in the country has the same income) to 100 (one person in the country has all the income). The complete list looks at 134 countries. The U.S. doesn't come out very well at all -- 93 out of 134.

Here's the table (sorry; it doesn't come out well in Blogger):

Table 7: Income equality in selected countries
Country/Overall Rank Gini Coefficient
1. Sweden 23.0
2. Norway 25.0
8. Austria 26.0
10. Germany 27.0
17. Denmark 29.0
25. Australia 30.5
34. Italy 32.0
35. Canada 32.1
37. France 32.7
42. Switzerland 33.7
43. United Kingdom 34.0
45. Egypt 34.4
56. India 36.8
61. Japan 38.1
68. Israel 39.2
81. China 41.5
82. Russia 42.3
90. Iran 44.5
93. United States 45.0
107. Mexico 48.2
125. Brazil 56.7
133. South Africa 65.0

Note: These figures reflect family/household income, not individual income.
Source: Central Intelligence Agency (2010).

MarkBrunson said...

It's difficult for us to see, because of complacency:

During times of weal, we all have a tendency to think that, if I'm doing fine, everyone (who counts) is doing fine. It takes a huge population not doing fine to stir us. I'm afraid we U. S. types are extremely spoiled, greedy, and self-absorbed children!

There is also the constant cloud of the lie that is the American Dream - just work hard enough, the robber-barons say, and you'll be as rich, fat and happy as I am! It's a lie because they profit by your working hard, and have no intention of letting you get wealthy enough to stop. This is not seen because, again, self-absorbed, greedy, spoiled children see only what they want.

When luxuries - and I include personal transportation, hi-def tv, game systems, even central heat and air in that - becomes an expected right, you have a country in danger of falling into its own navel.

Erika Baker said...

I remember an article in The Economist that must have been at least 17 years ago and that showed conclusively that the more equality there is in developing countries the more successful international aid and development programmes are.

The article talked about equality in terms of the status of women or people from different tribes, but the same principle must apply to rich and poor.

Paul said...

There is another index which measures social mobility. In other words, what are the chances of a poor child being able to escape poverty in adulthood, and vice versa. On this scale, the US is again near the bottom. This is the index which really has me upset. After all, this is the straitjacket of class that millions were trying to escape as the immigrated to the US. Why is this not a campaign issue?