Blog #91: Explaining the Election in 10 sentences – preliminary


Explaining the election (in parentheses: to pursue):

1. A critical shift in the organization of the economy post 1968, from industrial to hi-tech capitalism (occupational structures?).
2. Leaving many dependent on the old economy hurt and at a loss, largely the white working class, hold-over racism and sexism accentuated as scapegoats. (foreclosures, evictions, bankruptcies, struggling suburban homeowners – not the really poor, homeless)
3. They reacted with anxiety and an emotional attachment to the past Deep Story (their traditional identity?)
4. They blamed, quite rightly, “the” establishment, although not clear as to its membership, pushed by media etc. to blame “government” (social media, TV, not press?)
5. Trump as politician picked up on this, despite his own membership in the new establishment (motivation? pathological egotism? Business).
6. The anxious white ex-working class built up a deep story, a vision, abetted by Trump and the media that was heavily emotional (shaping identities?)
7. That story, built on real anxiety-inducing experience, mis-interpreted history, and built a psychological/ideological barrier that facts and reason could not penetrate (high school or less education?). Trump offered the charismatic fairy tale leader, believe me, trust me, not them, they have failed you (over 30 years? 8. Since Reagan? since Johnson?)
9. Hillary offered no vision that addressed the grounded anxiety (health care costs? Real unemployment levels?).
10. But Trump’s allegiance as a businessman is and always was to the new elite establishment, and he will unify the Republican Party around it. The holdouts will be those with a personal repugnance to Trump’s personal behavior, which they will swallow. (social circles, clienteles, customers, tenants?)

The Blog #90 series will deal with some of these isssues in more detail.

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Blog #55a – Why is there Inequality? It’s no Mystery


Blog #55a – Why is there Inequality in the U.S.A.?

An Answer in 22 and 7 words.

Piketty showed, in 648 pages, that inequality is increasing long-term. It continued in the short term:

In 2009, figures were: average net worth, top 1%;   $16,439,400   bottom 20% minus $14,000

Total Net Worth[1]      Top 1 percent              Bottom 80 percent

1983       33.8%                   18.7%

2010       35.4%                   11.1

Why is this so?

The wrong answers:

1.     Because the need for higher education and more skills is growing. Wrong because:

  1. Access to higher education and skill training is controlled by the 1%. They support education that helps them produce profit, do not support that which could lead to criticism and organization for higher pay.
  2. And higher pay and greater net worth are more related to parents’ incomes, s4ector of the economy, e.g. financial, education, social work, art, than to training and skills.

Because it is just, and criteria for justice in the distribution of income is that a person works harder, contribute more to society, is smarter, needs more, is justly entitled to have more. Wrong because:

  1. Sitting in an office is not harder work than working on an assembly line or collecting garbage, but is paid more because hedge fund managers have more power than factory workers or garbage collectors.
  2. And hedge fund managers do not contribute more to society than social workers or teachers, in fact do major damage.
  3. And there is no evidence the 1% have higher innate IQ’s than the 99%.
  4. And the 1% have more than they need, most of the 99% less.
  5. And the 1% have vastly more than the 99% to begin with.

 

 

The right answer, in 22 words.

 

The 1% are rich because they profit by keeping the 99% poorer. There is only one pie to divide, whatever its size; if the 1% take more, the rest will take proportionately less..

Why is this so, in a democracy, and so little understood?

The wrong answer:

1.     Because the people wanted it that way. The wrong answer because:

2. Wealth provides political power also. And apparent prosperity co-opts opposition.

3. And the 1% control the means of mass communication, and bury the alternatives.And presumed experts of the 1% pontificate that trickle-down will work to the benefit of all.

4. And the 1% control the use of physical force, the use of incarceration, etc.

 

The right answer, in 7 words:

 

Political and economic democracy are too limited.

Blog #55b expands on this answer. Blog # 55c gives concrete examples.

[1] G. William Domhoff, at http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Blog #49 Picketty, Leonhardt, and Market Economics


 

Blog #49 draft Picketty, Leonhardt, and Market Economics

David Leonhardt writes: “What is it about market economies that typically causes the assets and incomes of the rich to rise more rapidly than those of everyone else?”[1]

Picketty’s First Law of Inequality explains some – they accrue capital, invest, it,and benefit from the return on it (although the rich don’t invest all of their profits in capital to make more profits, but send a good bit of it on consumption, , from yachts on down. And a good bit of investment capital comes from borrowing from the savings of the non-rich, e.g. pension plans and savings accounts).

But isn’t there something else going on too? The rich get rich by owning capital that they use to buy machines and hire workers to use them to produce value. They profit by the difference between what they have invested and what they sell the end product for, minus what they pay the workers that have produced that product. The less they pay the workers, the higher their profits. When unemployment is low and workers are well organized and strong, labor’s bargaining position is strong; profits are less, workers’ incomes rise, inequality is reduced. When unemployment is high and labor weak, the rich who control are strong, not just in bargaining but also in shaping labor and social welfare legislation, their profits go up. Inequality increases. The rich get richer, because the non-rich don’t.  That’s the way the market works.

For more on the political end of this, and fighting poverty just by anti-poverty measures, see pmarcuse.wordpress.com, Blogs #43-48.

The rich aren’t job creators, they’re job reducers and wage reducers, if they want to be profitable. They have to be. That’s the way the system works.

[1] David Leonhardt,”Inequality Has Been Going On Forever … but That Doesn’t Mean It’s Inevitable,” New York Times, Magazine Section, May 2, 2014

 

 

 

 

 

 

Blog #48 – Writing About Inequality


To the Editor, The New York Times,

(re: Changed Life of the Poor: Better Off,but Far Behind”.. (Front page, May 1, 2014)

 A researcher is quoted as saying: “the poor are better off than they were… but they have also drifted further away.” “Drifted away,” indeed! The story says: “…the poor have fallen further behind.” They have “fallen?” What images does such writing conjure up? Inequality increases because the poor drift away from being better off, the silly, ne’er-do-wells? They can’t keep their balance, these helpless people? That’s surely not the intent, but it’s the effect of using stock formulations without thinking about them.

Would a formulation like: “While the poor fell behind or drifted away,the rich rose higher and marched further ahead” pass muster?

Or would formulations to explain increasing inequality like: ““The rich have gotten even richer on the backs of the poor,” or “The poor have been pushed even further down by the growing wealth of the rich” pass muster at the Times? After all, it takes two to be unequal. The victims shouldn’t be blamed for their poverty without examining what happened at the other end of the divide. Inequality increases because the rich get richer as well as the poor getting poorer. A coincidence?

 Peter Marcuse                                                            May 1, 2014.

 

 

Blog #47: Anti-Poverty Measures Alone Won’t Do


It’s good that the Nation[1] calls attention to shameful way in which our economy exploits the poor and how inadequately our government responds to the problem. But calling the problem “poverty” focuses on just half of the problem. It accepts the idea that the poor are responsible for their own problems, and government needs simply to be ‘helping families pull themselves up through hard work” to let them “climb the ladder of opportunity” (Obama in the State of the Union address). But that skirts the fact that then you have to confront the other half of the problem, the fact that the poor are so poor because the rich are so rich – the two-sided problem of inequality.

Inequality isn’t wrong per se. People are different; they don’t all have the same abilities, the same interests, the same motivations, some are able to do more than others, some have greater natural abilities than others, some need more than others for a decent life. We wouldn’t want everyone to have exactly the same incomes; that would be unfair. But we don’t want anyone to be homeless, or sick, or uneducated, or excluded from the benefits of a socially just society, just because they don’t have an adequate income. And our society is rich enough that it can afford a good bit of inequality and yet provide adequately for all. Why doesn’t it?

What makes inequality an appropriate concern for public policy is not just how much inequality there is, but what its mechanisms are and what the justice or injustice of its effects is – a sort of cost-benefit analysis of inequality. “Inequality”  is not an actor, a thing; beware the fallacy of misplaced concreteness. Inequality is the result of the actions of a variety of actors, they produce ine1quality by their actions, and then inequality in turn affects others.

The gross disparity between the rich and the poor is intuitively shocking. Without reflection, most of us believe (using Rawls’ approach to defining justice) that having one person get 1,000 times more of what society produces than another person gets is on its face unfair, inequality can’t conceivably be justified at that scale by any moral standard or rational analysis.

But that intuition needs to be examined. As to moral standards or values, there’s no magic number for what the range should be. Most of us would look at the criteria by which some get more than others, the reasons for the inequality, not simply the extent of it. The question is partly one of analysis: why some are so poor, is it their own doing, are they poor or homeless or unemployed or sick or incarcerated or discriminated against when they could rectify their situation through their own efforts? If so, attention should be focused on the characteristics of the poor and how to influence their behavior. If their poverty is not subject to their remedy, if they are to a significant extent the victims of conditions outside their control, then as a matter of policy  we as a society should be concerned to make sure every individual really has the “inalienable right to life, liberty, and the pursuit of happiness?”

There is I think a general consensus that such a right exists and should be implemented by e effective public anti-poverty policies. That’s one question. How we shape policies to deal with it depends further on rational analysis of the causes of the problem. Public policy will undoubtedly either increase or decrease inequality, but it’s the validity of the analysis and its moral justice that should determine what should be done, not the simple question whether a given measure leads to more or less inequality.  It’s the validity of the analysis and its moral justice that should determine what should be done, not the simple question whether it leads to more or less inequality. The discussion on this question is what the debate about anti-poverty policy and it successes or failures is all about – see Blog #43. Who Lost the War on Poverty, and Who Won It?

Poverty is only half of the issue of inequality. One person can be poor all by him or herself, but it takes two to be unequal. The relative wealth of the rich compared to the poor must take into account not only whether the poor deserve their poverty but whether the rich deserve their wealth. Again, it’s both a matter of the analysis and the moral and justice evaluation of the result.  It’s quite possible that, as a matter of analysis, it doesn’t matter to anyone else if the wealthy have private yachts and 100-room mansions, so long as the poor are not poor below some level considered adequate for a rich democracy. Having great wealth is not in itself bad or unjust.[2] ; It’s rather the social consequence of that wealth, how it was obtained, and the equality or inequality of its distribution, that should concern public policy. The question for analysis here, then, is whether it matters to the poor how rich the rich are.  Are the poor more poor because the rich are so rich, or might it even be that the poor are less poor because of the wealth of the rich, who are the “job-creators?” Again, it’s the validity of the analysis and its moral justice that should determine what should be done, not the simple question whether it leads to more or less inequality.   The discussion on this question is what the debate about inequality should be all about, but unfortunately is not. (yet?)

An exclusive focus on anti-poverty measures targeted at the poor can shift attention from exactly this discussion and its policy implications.  Addressing the role of the rich in creating and maintaining the poverty of the poor smacks of “class war,” raises uncomfortable questions about the 1% and whether they deserve to reap so disproportionate a share of the wealth that increasing productivity provides .It’s no wonder such questions are rarely raised. What’s wrong with inequality is not only that increasing wealth bypasses the poor, but that it increases their poverty.  Seriously addressing poverty requires addressing inequality at both ends, the wealth of those that have as well as the poverty of those who have not, reining in the rich as well as uplifting the poor.

An anti-poverty movement needs to be willing to say that, out loud.

Peter Marcuse[3]


[1] Greg Kaufman, “Building an Anti-Poverty Movement,” The Nation,  [February. 2, 2014]

[2] Although some religions seem to so hold: It is easier for a camel to pass through the eye of a needle, than for a rich man to enter into the kingdom of heaven.

[3] This is a substantially revised version of a letter in The Nation, Marcuse, Peter . 2014. “Call It Anti-Inequality.” March 3, p. 26.

The discussion is extended in blogs from Blog #43 on, and will be extended in Blog #48, .What’s so Wrong About Inequality.

Blog # 45 – Consensus on Inequality Unlikely


Consensus on Inequality Unlikely

It’s good to call attention to the shameful way in which our economy exploits the poor and how inadequately our government responds to the problem.[1] But calling the problem “poverty” focuses on just half of the problem. It accepts the idea that the poor are responsible for their own problems, and government ‘helping families pull themselves up through hard work’ will let them ‘climb the ladder of opportunity’ ” (Obama in the State of the Union message).. But that skirts the fact that the poor are so poor today because the rich are so rich, because the poor have been exploited by the rich for so long, because inequality is so great..

The focus on poverty can obscure that important conclusion. Not by accident. Criticizing the rich smacks of “class war,” raises uncomfortable questions about the 1% and whether they deserve to reap so disproportionate a share of the wealth the increasing productivity of the 99% provides. Seriously addressing inequality rather than just poverty would undercut the President’s justification of inequality in that message, that “we don’t resent those who, by virtue of their efforts, achieve incredible success.” Even if their efforts come from financial and employment practices that cause wide-spread low pay and joblessness from which the poor suffer?

Tackling poverty involves tackling inequality, involves tackling the wealth of the rich as well as the poverty of the poor. An anti-poverty movement needs to be willing to say that, out loud.  An inequality reduction strategy has some win-win aspects (see Keynesian arguments), but it has some win-lose aspects too, and the rich prospective losers are likely to fight it. Consensus won’t be reached. That has to be faced by any ultimately effective anti-poverty program.[2]

Peter Marcuse

[1] As in: “Building an Anti-Poverty Movement” The Nation, February. 2, 2014

[2] An expansion of this argument is at Blot #44, “Poverty or Inequality,” at pmarcuse.wordpress.com