Everything you NEED to know about that thing you heard was trending

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fox and msnbc – a small sample

I was at the hospital yesterday – no, nothing serious and no, no baby yet – and I had a chance to catch a little TV. I watched a few minutes of Fox News and MSNBC.

On Fox, Sean Hannity was engaging in what appeared to be a duck call competition with that bearded duck hunting reality TV guy. No, I will not bother to google his name.

On MSNBC, Chris Hayes was engaging in some back and forth joking about the West and East wings of the White House with Karen Finney (I googled). He then awkwardly stopped to half-explain the giggles to viewers who do not regularly share cocktails with Democratic Party elites.

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finally, a conversation about inequality (all nytimes)

Populist politicians, economists and ordinary citizens have long suspected that the rich have been getting richer. What is making people sit up now is recent evidence that the richest 1 percent of American families appears to have reaped most of the gains from the prosperity of the last decade and a half.

S. Nasar. The 1980’s: A Very Good Time for the Very Rich. (1992)

Among the nation’s counties, the income gap between rich and poor in Manhattan is surpassed only by a group of 70 households near a former leper colony in Hawaii. Now an analysis of Census results shows that the gap widened in Manhattan in the 1980’s, a decade whose extremes of wealth and want inspired Tom Wolfe’s “Bonfire of the Vanities.”

S. Roberts. Gap Between Rich and Poor in New York City Grows Wider. (1994)

Inequality is rising nearly everywhere. In 1960, the richest 20 percent of the world’s population had 70 percent of the global income. By 1991 that rose to 85 percent. During the same period, the share of the poorest 20 percent fell from 2.3 to 1.7 percent.

B. Gosh. Glaring Inequality Is Growing Between and Inside Countries. (1996)

Still, the rise of America’s low-wage workers is at an early stage and must go a long way to make up for all the ground lost. Starting in the mid-1970’s, the weekly earnings of full-time adult workers in the bottom 10 percent of the wage distribution fell by nearly 20 percent, when adjusted for inflation. The improvement over the last 18 months has restored only about one and a half percentage points of that loss. In the late 1980’s, a similarly long economic expansion also began to raise low-end wages, but by much less than now. And even that modest gain was wiped out by the 1990-91 recession.

L. Uchitelle. For Now, Earnings Gap Has Stopped Widening (1997)

If this sounds a little like the creative destruction of capitalism and its discontents, it is. But Mr. Greider goes farther. New features of global capitalism, he argues, will bring unparalleled inequality and exploitation. The coming power of new computer chips makes job losses from automation look piddling. Worldwide competition drags wages in advanced nations down toward those of the poorest countries. Capital, answerable only to itself, seeks maximum returns, regardless of the dislocations its sudden flight brings or the chaos its burst speculative bubbles can shower. As poor nations race to get into the industrial game and rich ones innovate to stay ahead, the globe is flooded with chronic overproduction, sure to bring mass plant closings and unemployment. With labor unorganized or suppressed, inhuman treatment becomes routine.

M. Miller A Rising Tide… (1997)

THE trend is painfully evident in the statistics. Over the last quarter century, the incomes of millions of Americans have grown farther apart, so much so that a phrase, income inequality, has been coined to describe what has happened. Income inequality has persisted, undented so far, through the economic expansion of the 1990’s. Now social scientists are beginning to assess the damage that it inflicts on Americans — the rich as well as the much less rich — in their daily lives.

L. Uchitelle. Economics View: Even the Rich Can Suffer From Income Inequality. (1998)

If anything is a truism in American politics, it is that people do not care about income inequality. And as most such truisms eventually are, this one may be about to be contradicted.

The 1990’s will be remembered as a time of Reaganism without Reagan. In an ironic confirmation of the conservative dictum that most consequences are unplanned, President Reagan’s deliberate attempts to redistribute wealth to the rich now appear puny compared with what stock options and C.E.O. compensation have done under President Clinton.

Economists love to argue about numbers, but no study has disputed, because no study can dispute, that the boom of the past decade has widened an already large gap between rich and poor. The incomes of the best-off Americans have risen twice as fast as those of middle-class Americans, according to data from the Congressional Budget Office. The gap between the rich and the working class has grown even more. A study sponsored by the left-leaning Institute for Policy Studies in Washington showed that executives made 419 times more than factory workers in 1998, compared with 42 times more in 1980.

A. Wolfe. The New Politics of Inequality. (1999)

For 30 years the gap between the richest Americans and everyone else has been growing so much that the level of inequality is higher than in any other industrialized nation.

A. Stille. Grounded by an Income Gap (2001)

The booming late 1990’s appear to have left the middle class in the New York region and California no better off than it was a decade before, an analysis of Census Bureau data suggests. The poor got a little poorer, the rich got a lot richer and the large group in the middle emerged slightly worse off than when the decade began.

J. Scott. In 90’s Economy, Middle Class Stayed Put, Analysis Suggests (2001)

New research that updates and extends this classic work, however, turns the Kuznets curve on its head.

Income disparities seem to follow no automatic pattern. Instead, for long stretches the degree of inequality appears to result from norms and social policy, especially taxes, at least as much as from economic forces of supply and demand. In the United States, the Kuznets curve — the trend in inequality over time — is better described by a U shape than an inverted U. In Britain and France, the curve is more like an L.

A. Krueger. Economic Scene; When it comes to income inequality, more than just market forces are at work. (2002)

The latest blow to the Kuznets curve was struck by Thomas Piketty of École des Hautes Etudes en Sciences Sociales, in Paris, and Emmanuel Saez of Harvard. In a study, ”Income Inequality in the United States, 1913-1998” (available at www.nber.org), they provide estimates of the share of total income going to top earners…

A. Krueger. Economic Scene; When it comes to income inequality, more than just market forces are at work. (2002)

We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ”eminence of excess,” an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts. Still, even J.P. Morgan didn’t have a Gulfstream.

As the story about Despont suggests, it’s not fair to say that the fact of widening inequality in America has gone unreported. Yet glimpses of the lifestyles of the rich and tasteless don’t necessarily add up in people’s minds to a clear picture of the tectonic shifts that have taken place in the distribution of income and wealth in this country. My sense is that few people are aware of just how much the gap between the very rich and the rest has widened over a relatively short period of time.

P. Krugman. For Richer. (2002)

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Conversations on Capital

 

Everyday there is a new review of Piketty one just has to read. Unless the recommendation is coming from JWMason I assume I actually do not.

I believe I’m violating a rule of the internet by commenting on something from last month, but Mike Konczal’s review of the right and left responses to Piketty has been on my mind. There are two related points I want to make with respect to the left response.

His examples of left responses are Dean Baker, James Galbraith, and Suresh Naidu. The first two are thoroughly Keynesian responses. I’m not entirely sure how to place the latter, but there is not a single Marxianish perspective in the bunch. And no, I do not mean someone who religiously subscribes to every sentence scribbled by the prophet. I just mean someone broadly working within the tradition. This is not an attack on any of the three, all of whom are really smart and wonderful economists I respect in various ways. It is hard, however, in the context of a revived interest in Marx, not to note that lefty-progressive wonk-friendly thought is perhaps the place where Marxian influences are least apparent. Forbes is probably less hostile to Marxist political economy than Jacobin is. I’m torn on whether this matters.

My second point is a response to the repeated claim that whatever one thinks about Piketty’s argument, he has started an important conversation about inequality so we need to be really happy. Maybe this second point is a thousand-fold. I’ll try to keep it contained. First, it is hard to see how this is a new conversation. The idea that conversations about inequality are taboo in capitalist-dominated societies does not seem obvious to me. Were the debates about globalization that long ago? Do we not have reality TV and social media for the privileges to broadcast their privileges?I’m not suggesting that the conversation is always ideal, but even the insistence that you can pull yourself up out of poverty suggests the an already existing critical recognition of inequality. (Also, it is not like the current conversation is ideal either.) No, it is not taboo to talk about inequality. Capitalism is not afraid of “national conversations.” It is just taboo, except in exceptional circumstances and in half-assed ways, to do anything about it.

Second, inequality is really obvious to most people. If you’re ordering a pizza to be delivered via your iphone at 3am you might have the luxury of commodity fetishism, but the person delivering pizzas in the middle of the night knows what’s up. The person in the iphone factory knows what’s up. This has become a cliche, but anyone who keeps tabs on Santa Claus during Christmas knows what’s up. I believe I was in 3rd grade when I joined the Boy Scouts. We had a Christmas party where Santa showed up and gave out gifts to the kids. The problem was that the gifts were obviously brought by the parents, so some wealthier kids would get super cool $100 remote control cars and other kids would get a shitty $5 sled or a note saying a Nintendo is on layaway at Zares – if dad gets a new job we’ll totally finish paying for your gift![1] At that young age I remember being deeply embarrassed at adults for thinking we’d swallow this shit uncritically. I never believed in Santa, but for those that did the only possible conclusion was that Santa hated poor (even lower middle class!) people.

Finally, despite the obviousness of the existence of inequality, there are important aspects that are far from obvious. In my opinion, exactly how much inequality there is really isn’t one of them. But questions about what increases or decreases inequality are not obvious. What exactly should be done about inequality? What types of equality are realistically achievable in different economic systems? These are all big questions. Despite the limitations of Piketty’s theoretical analysis, which is important for addressing these questions, I must say I was quite pleased initially to see that Piketty’s contribution to this “new” conversation about inequality was to reframe the discussion amongst cultural-academic elites from one about a particular period of capitalism (i.e. neoliberalism) to one about capitalism. Unfortunately, as Konczal’s review in part documents, it was precisely this argument that was first rejected by liberal-progressives. The problem isn’t capitalism, it is politics. Part of me doesn’t care about trending topics amongst people that might end up on MSNBC. Part of me actually does. And the part of me that does was certainly willing to overlook the horrific interpretation of the original Capital and all the measurement without theory, if it meant that the discussion of inequality (in fancy newspapers and think pieces) would start questioning the anti-Neoliberal/Golden Age nostalgia discourse. Once that potentially more radical and anti-capitalist critique was exorcised, it became more difficult to stomach the new Capital’s weaknesses.

I wish we were still talking about Debt.

 

[1] I might be embellishing a bit here.

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the ethics of competition (1923)

Frank Knight, Chicago School economist:

“Moreover, the freest individual, the unencumbered male in the prime of life, is in no real sense an ultimate unit or social datum. He is in large measure a product of the economic system, which is a fundamental part of the cultural environment that has formed his desires and needs, given him whatever marketable productive capacities he has, and which largely controls his opportunities. Social organization through free contract implies that the contracting units know what they want and are guided by their desires, that is, that they are “perfectly rational,” which would be equivalent to saying that they are accurate mechanisms of desire-satisfaction. In fact, human activity is largely impulsive, a relatively unthinking and undetermined response to stimulus and suggestion. Moreover, there is truth in the allegation that unregulated competition places a premium on deceit and corruption. In any case, where the family is the social unit, the inheritance of wealth, culture, educational advantages, and economic opportunities tend toward the progressive increase of inequality, with bad results for personality at both ends of the scale. It is plainly contrary to fact to treat the individual as a datum, and it must be conceded that the lines along which a competitive economic order tends to form character are often far from being ethically ideal.”

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vox vent

Apparently General Electric wants you to know some things about single-payer healthcare.

http://www.vox.com/2014/4/9/5595476/take-two-minutes-to-become-an-expert-in-single-payer

There is something liberals like to say about Newt Gingrich. He is a stupid person’s idea of what a smart person sounds like. There is something I like to say – Saying Newt Gingrich is a stupid person’s idea of what a smart person sounds like is a stupid liberal’s idea of what a smart person sounds like. No offense. All due respect.

I take it back. Vox is a stupid person’s idea of what a smart person sounds like.

That isn’t nice to say. I feel bad. There are no stupid people. Just stupid websites.

I’ll take it all back.

I really shouldn’t call anything stupid. It isn’t nice. But if you are giving me a 2 minute video on single-payer and claiming this creates expertise, you are treating your audience like they are stupid. Don’t call me stupid!

You begin with some benefits of the system but then break halfway through with “there is also a catch.” The government gets to decide what they pay for! There might be fewer doctors available! You will wait and die! You even use the dreaded wrong answer game show sound effect. If you want me to believe this is an objective analysis, you think I’m stupid.

To support the latter claim we have data, because wonks love data, in the form of some bar graph that is on the screen for four seconds. This is roughly how long the hammer and sickle graphic was on the screen at the beginning of the video. Seriously. I’m not fucking with you. Anyhow, the graph is only there for a few seconds, but they just made bad sound effects and said something about not having doctors and I see something about Canada and the US. Presumably that damn socialist system is killing millions of people up there. Of course, one could pause the video, but doesn’t that defeat the purpose? If thinking through the data was the point, the video would last a few more minutes (is 5 minutes really too large a cost for becoming an expert?). The flashing data is just meant to reassure us this is all serious and wonky and deep like that Nate Silver guy.

Whatever. This would less annoying if these new media ventures were not so pretentious.

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also

oh, hey 2014!

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