Robber Barony Is Back

http://topincomes.g-mond.parisschoolofeconomics.eu/#Graphic:
select:
United States
1917-2009
Average Incomes
bottom 90% average income - including capital gains

Shows the submerged 90% of us earn the same (per family) in real terms as we did in the late 1960s. Yet the typical family now has more wage earners, working more hours.

Same site, select
Top Income Shares
top .01% - including capital gains

Shows the hunting animals eating the entire carcass except during 1942-1981, when we had effective antitrust law, labor law, and progressive taxation.

In only these forty years was the average family income of the top .01% "only" 165 times the average family income.  Before 1942 and after 1981, the rich took a much larger share.  In 2010 it was 462 times the average and increasing.  (If only the top .01% earned anything, their share would be 10,000 times the average.   That the one family in 10,000 now takes nearly 5% of all the income, is appalling.)

The rich get their income not for what they do, but for what they own.  They claim to be "job creators."  In truth, the only job creator is a customer, who buys something.  We have to get money back in the hands of those who spend it--the nonrich.  When the only people with money to spend have all the stuff they can use, the economy collapses.  These booms and busts happened regularly up through the Great Depression.  It was political action that transformed the working class into the middle class, avoiding the booms and busts.  Deregulation, detaxing the rich, eroding worker rights, free trade, since 1981 are bringing back the bad old days of many serfs, one lord.  Only political action can reverse the trend.  We have to restore antitrust laws, restore workers' rights, establish fair trade not free trade, tax the rich.

Norway has a much fairer balance of power between employees and employers, partly due to nationwide collective bargaining.  U.S. labor laws have been eroded since they were enacted in 1935, by anti-labor court decisions and anti-labor legislation.  Now, management can ignore labor agreements and labor law without serious consequences.

The Price of Inequality

This article, adapted from The Price of Everything: Solving the Mystery of Why We Pay What We Do, by Eduardo Porter, explains that wider communications, bigger companies, and deregulation are creating a pay structure where fewer and fewer people are taking more and more of the money, leaving the vast majority with no hope of sharing the benefits. This is a natural process. Wealth concentrates until the only people who can buy anything don’t need to, and the economy collapses. Both that article and this one point out that, in Frank Rich's words, "America can’t move forward until we once again believe . . . that everyone can enter Frontierland if they try hard enough, and that no one will be denied a dream because a private party has rented out Tomorrowland." Bob Herbert points out that in the recession of 2008 to the present, many unemployed people have lost that hope. As Paul Krugman says in The Conscience of a Liberal 2007 (p. 18), “Middle-class societies don’t emerge automatically as an economy matures, they have to be created through political action.” The political actions we need are progressive taxation, regulation to prevent abuse of economic power, public education, and a social safety net. And we should focus not on Gross Domestic Product, which harmfully accrues disproportionately to the wealthy, but on the average income of the poorest half or poorest 35% of the people, as recommended by Muhammad Yunus, "banker to the poor" and Grameen Bank founder.

Too, corporate executive pay often is more plunder than compensation.

Let the Revolution Begin!

I refuse to live in a country like this anymore—and I am not leaving.
—Michael Moore

Haven't seen Capitalism: A Love Story yet? Stop everything and make haste to the nearest movie theater. You really don't want to miss this, and the sooner you see it, the sooner you can get with the program. Moore is audacious. He's gutsy. He's irreverent. He's right.

Our root problem as a nation is that we are being run—and overrun—by corporations whose only value, whose only vision is the bottom line. Do we want to be a country run and bullied by greedy bastards? Or do we want to be a people who does their best to respect each other, to treat each other fairly, to protect the most vulnerable in our midst for no reason other than that they are our most vulnerable. They are our people. Not just strangers down on their luck or unwilling to take responsibility for their own lives. They are our people, and we are a people who do what we can to support and protect each other.

We can do better. Much better. And we must do better. If we disengage, things will get much, much worse in a big ol' hurry. And there will be much more suffering before we get ourselves on a better path.

We've been fed a lot of assumptions and propaganda about capitalism. It's time to reexamine them and to examine the alternatives.

I don't always agree with Noam Chomsky, but he never fails to be thought-provoking. So here's a start on examining the alternatives to capitalism.



We'll look at more alternatives, more ways to get involved, and more ways to move the Revolution (with a capital R) along in the coming weeks.

I Hate Politics

Really. I hate politics. I think some of my friends think I've found a new hobby. So let me just clear this up. I do not enjoy politics. Yuck. I used to hope that if I just ignored it, it would go away. No such luck. I wasn't altogether oblivious: I knew who my representatives were; whenever there was an election, I tried to educate myself about the issues and candidates—but of course this was always a game of cursory catchup; I occasionally read a newspaper. But I found the whole thing just disheartening and overwhelming.

I still feel that way, only more so. Except. While I was not paying attention, an administration I thought was pretty much okay did some terrible things. The Clinton administration did a lot of the deregulating of financial institutions that is now causing the whole world so much agony. NAFTA made it impossible for farmers in Mexico to compete with U.S. subsidized agriculture. Clinton may have been described as centrist, but he was Republican lite; while he was in office, Reaganomics continued to sow the seeds of our current economic morass. And many of the guys who were responsible for things economic during the Clinton administration are behind the wheel once again. Gee, I wonder why it is that I don't trust them to pull us out of this mess when they were instrumental in getting us into it?

Of course, then things really went south in 2000. Like many others, I was horrified—and still am—that Bush could have made his way into office with a single vote—from the Supreme Court. That one vote led to torture, secrecy, the dissolution of our civil rights and liberties, fear mongering, war mongering, and much more. Depressing as hell, and the more we find out about what actually went on in this unprecedentedly secretive administration, the more horrifying it is.

I hate it. It regularly makes my stomach turn. But I believe that the best way for us to care for ourselves and our families is to care for our communities: our neighborhoods, our cities, our states, our country, and our world. I believe in nonviolence, because violence never accomplished anything good. Ever. The same is true of war. And greed. I long for a better world. This one is making me ill.

If you've read the book or seen the movie of The Secret Life of Bees, you'll know what I mean when I say that I need a wailing wall like the one May built in the back of the pink house. And there are days when I need to go there and just wail.

But there's nothing else for it but to pay attention and get involved to the best of my meager ability. Alas, it was the "philosophical founder of modern conservatism," Edmund Burke (1729-1797), who said, "All that is necessary for the triumph of evil is that good men do nothing." In this one respect, anyway, I agree with him. A lot of good people must have been doing a lot of nothing for some time now.

I have no idea how to make headway against all the evil evident around me, but I'm not going to retreat into my comfortable hidey-hole however much I might like to. I find it all quite overwhelming and exceedingly difficult, but my silence will only allow the great evil to persist and grow all the stronger, and my voice might just be a candle that expels at least some of the darkness.

Economic "Expertise"

Nicholas Kristof of the New York Times has a great op-ed today about experts being a "stunningly poor source of expertise. ... What matters ... isn’t so much knowledge or experience as good judgment."

I began actually paying attention to things economic, oddly enough, when the economy went south last year. As I started really trying to understand, I became increasingly aware that the economic "experts" essentially just blather. They play with numbers and theories, but they don't really know any more than the next guy.

I know this because I myself have some facility with bullshit, having bullshitted my way through many a paper in college. I learned how to sound like I knew what I was talking about, whether I did or not. What astounded me was that my professors were taken in pretty much every time. Developing this facility turned out to be less of a waste of time than you might think, because now I can smell bullshit a mile off. And so much of the economic stuff the media churns out is clearly made of the same stuff as my college papers.

The "discipline" of economics (if you can call it that) apparently labors under the illusion that people are "rational actors." Holy cow! If you start from that assumption, then everything that follows is going to be a load of blarney. In my experience, people rarely act rationally. There is nothing rational about the greedy lunacy that took the world economy to the edge of a cliff.

So I've begun thinking about economics somewhat the way I think about astrology. It's interesting in that it sometimes drives the way the people who believe in it behave. That presumably sentient beings would make weighty decisions based on a lot of hooey fascinates me. In fact, I find it cheering in one sense. I used to think of economics as a sort of recondite science of which I was woefully ignorant. Now I understand that my occasional flashes of good judgment will serve me better than a Ph.D. in economics.

In his column, Kristof refers to an expert on experts (that should curl your toes), Philip Tetlock, a professor at the University of California, Berkeley. (What? And we're supposed to believe this guy? But Nick, he's an expert!) Kristof scarily notes that the media's insistence on delicious little bite-size nuggets of certainty actually subverts any hope a media consumer might have of finding balanced, nuanced information. The "experts" you are most likely to read or hear in the media are the ones who offer those much lusted-after juicy sound-bites.

Mr. Tetlock called experts such as these the “hedgehogs,” after a famous distinction by the late Sir Isaiah Berlin (my favorite philosopher) between hedgehogs and foxes. Hedgehogs tend to have a focused worldview, an ideological leaning, strong convictions; foxes are more cautious, more centrist, more likely to adjust their views, more pragmatic, more prone to self-doubt, more inclined to see complexity and nuance. And it turns out that while foxes don’t give great sound-bites, they are far more likely to get things right.

I've known a number of hedgehogs in my day. They are indeed very consistent, insistent, certain in their certainty. It's a very comforting line to take, albeit with essentially no basis in reality. They will wow you with their expertise, reminding you of your own ignorance and need for guidance. Yes, they will cause you to doubt yourself and to doubt what you in your better judgment know to be true. Falling for their hoodoo has gotten us into a world of hurt and has taken us perilously close to a terrifying economic precipice.

So it's time to leave the hedgehogs—many of whom can be found, ironically enough, on Fox News—behind and find us some foxes who will help us think and act clearly, out of good conscience and sound judgment. Trust me on this. I'm an expert.

Jon Stewart: Our Best Financial Analyst

This will cheer you up, regardless of the state of your 401K. It's not enough for Stewart to take on Santelli, he goes after CNBC, and he does it brilliantly, using their own words against them.

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Trickle UP

Why is it that you never hear about trickle-UP economics? It seems to me that this is much more common (and obvious) than the other sort, the feudal fantasy of trickle-down economics. Without the people willing to work minimum wage in this country, would anybody have any money at all?

This line of thought started this morning when I read this editorial in the New York Times: The City Life: Regulating the 99-Cent Store.

I've never taken an economics course, and much of the time economics makes as much sense to me as voodoo. Thank God for Paul Krugman. Thanks to his insightful and well-written column, comprehensible to the economically uninitiated, I have at least begun to think about economics with something less akin to revulsion. But I have a lot of questions; there is much that puzzles me.

Disclaimer: I have a knee-jerk inclination to identify with lost causes, underdogs, the marginalized, and the disenfranchised. These are the corners of the world I find the most interesting, the most appealing, the most compelling, and no offense to my rich friends (all two of you, I think), but I find more to respect in those corners as well.

Since I began hanging around with my friends from the Hispanic/Latino congregation at my church, I have come to know people who have the fiercest work ethic I have ever encountered. (Gross generalization alert!) They'll work for anyone who will give them a job, they'll work whatever hours, under whatever conditions. And across the board, they do it for one reason: for their families. They just want to be able to keep their kids alive, to buy them milk and tortillas and beans. And even so, they will give you the shirt off their back if you ask for it.

The way I see it, this is the kind of work ethic that made this country strong, economically, morally, spiritually, collectively. But these are the folks that some want to bar from entrance, even though many who employ them need their services desperately (in spite of their unwillingness to pay them a just wage or provide them with health care). I suppose that with the economy in the tank, there will be more and more Americans willing to take jobs that until now only the economically desperate have been willing to take.

Some of my friends may now find that they have no recourse but to return to their home countries. That would be bad for us, because these folks are good for America. They have the fiercest of family values (the real kind, not just trotted out when it's politically expedient). They are kind, generous, inclusive, and committed to their community. We need more people like this. We shouldn't be shunning them and driving them away.

Anyway, to return to my question, what about trickle-UP economics? I've never seen a business that could function without its low-wage grunt employees. And the businesses that recognize the value of their workers -- janitors, clerks, and engineers alike -- are generally the ones that flourish, aren't they? Don't people just naturally want to do business where people are happy, growing, and invested in the well-being of the company they work for? But even the businesses that don't treat their employees well, could they survive without their janitors and clerks?

So, Mr. Krugman, can you please explain to me why no one ever talks about the theory of trickle-UP economics?