Tag Archives: inequality

are “western elites” “irrational”?

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This long article on Naked Capitalism claims the leadership of western countries is not effective in a crisis, and I think there may be something to this. The Covid non-response and some recent bungled natural disaster responses from New Orleans to Puerto Rico to Hawaii come to mind. This article focuses more on Ukraine, and while that situation is certainly unsatisfactory, it is hard to see what the good options would have been. The U.S. choices (NATO expansion, Balkan War, CIA interference with foreign elections) you can point to as questionable were all made years or decades ago, when this author presumably thinks leadership was better.

I certainly share the sense that our political leadership today is not particularly confidence-inspiring. So why is this? The author gives a few possibilities [my thoughts in brackets]:

  • the rich and powerful are out of touch with ordinary people [nothing new here]
  • stormtrooper syndrome – assuming you are the good guys, your opponents or competitors are the bad guys, and the bad guys can’t win [but this was certainly the case during the Cold War and the public loved it!]
  • a “conspiracy of degenerates” – this would have to be hidden from public view
  • right-wing demagogues promoting conspiracy theories and offering a simple message as an alternative that appeals to the public [certainly happening, and this is the good old Hitler playbook we have to watch out for]
  • Iron Law of Oligarchies – any organization is controlled by a small number of powerful individuals whose top priority is increasing their own power, rather than the success of the organization
  • crabs in a bucket – one crab can escape a bucket, but supposedly two or more crabs will stop each other from escaping, the implication being that relative rank is important to us animals – if I can’t succeed at everyone else’s expense, I will make sure nobody can succeed
  • the “Mowshowitz theory” – a variation on the above where power seeking behavior is rewarded within organizations rather than alignment with the stated goals of the organization, and in fact furthering the goals of the organization without seeking power can be punished
  • “intra-elite signaling dynamics” – the power of ritual to signal acceptance of a particular belief system, and the more bizarre the better [exactly what these rituals are I had trouble following]

I have had my own theories for awhile, and they have to do with education. I do not think children are being educated well in basic logic and being able to spot logical fallacies. This makes us susceptible to propaganda. They are not being educated well in the behavior of complex, dynamic systems. They are learning plenty of math and science, but it results in short-term and literal thinking rather than longer-term and abstract thinking. And finally, I don’t think children are being challenged to think morally. I’m just talking about the habit of asking yourself before you make a small daily decision whether you think on balance the consequences are on the side of right or wrong, justice or injustice.

Saturday Morning Breakfast Cereal

land value tax plan

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Detroit is considering a land value tax.

The proposal, dubbed the Land Value Tax Plan, would increase taxes on land while reducing taxes on homes and structures by an expected 30%, or roughly $38 million total. This would apply to every neighborhood in Michigan’s largest city, requires no application and never expires.

If approved by the Michigan Legislature, and later by Detroit voters, Duggan said, the plan would provide relief to homeowners who have been struggling under the burden of high taxes, encourage further neighborhood growth and hold land speculators accountable.

Detroit Free Press

It makes a lot of sense to me. The cynic in me has to ask, how much are the politicians that would have to vote for this in on the land speculation game? Here in Philadelphia they certainly are. But I’m not one to name names…ah hell, COUNCILMAN KENYATTA JOHNSON I’M TALKING TO YOU.

Peter Turchin has a new book

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His new book is called End Times but it does not appear to be about the apocalypse, but about a cyclical view of political history with some evidence to back it up.

When a state, such as the United States, has stagnating or declining real wages, a growing gap between rich and poor, overproduction of young graduates with advanced degrees, declining public trust, and exploding public debt, these seemingly disparate social indicators are actually related to each other dynamically. Historically, such developments have served as leading indicators of looming political instability. In the United States, all of these factors started to turn in an ominous direction in the 1970s. The data pointed to the years around 2020 when the confluence of these trends was expected to trigger a spike in political instability.

Peter Turchin

I haven’t read the book, but I have officially added it to my queue of too-many-books-to-read-before-I die. (I’m not terminally ill that I know of, it’s just a long and growing list.) The queue is periodically randomized, so just because it already has too many books to read before I die does not mean I will never read this particular book.

Anyway, one disturbing implication just from the brief description above is that we may not be able to educate our society out of economic inequality. That seems to go against the data which clearly show that people with more education earn more than people with less education. So it’s a case where a dynamic model leads to a different, counterintuitive conclusion compared to a linear extrapolation of data from the recent past.

fair start

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I’m not sure, I agree on everything in this opinion piece, but it does help make a connection between childcare and family policy and the rest of society.

These family policies (which might be called constitutive or de-constitutive) do nothing to ensure that all children are born into conditions that comply with the United Nations Children’s Rights Convention—the minimum children need to comprise democracies—but instead push children into horrible conditions with no minimum levels of welfare, something done to ensure economic growth and to avoid “baby busts” or declining fertility rates. This puts wealth in the hands of a few, argues Nobel Laureate Steven Chu…

These policies, designed around a system premised on unsustainable growth, aim to prepare children, already suffering from vast inequality, to become consumers and workers for shopping malls rather than preparing them equitably to grow up to become effective citizens in democratic town halls. These inequitable policies have created a fantasy world of self-determination—freedom to take part in markets—while stealing the power each voice should have in true democracies.

Alternet

Logically, if you wanted to create a truly equal opportunity society and level playing field for all people at the moment they are born, you would start with a 100% inheritance tax. Then you would provide some combination of excellent parental leave and childcare benefits and services, so parents have the choice to either take time out from a career to focus on young children, or else have excellent childcare options available to them. You would need excellent health care for all children. Then you would move on to excellent public education, probably extending all the way through four-year college. This would obviously be “expensive”, but the benefits to society would almost certainly outweigh the costs to society. The way to pay for it would be for everybody participating in the economy to pay a little bit for it all the time, rather than the cost falling just on parents just for a few years while their children are young. Society as a whole, and the vast majority of parents, would be best off under this system. A tiny fraction of wealthy individuals and organizations would be worse off, and as long as our system gives these people the vast majority of political power, they will fight like hell against this system and they will prevail.

Inheritance taxes are fair and logical, but I admit they seem distasteful because it seems like you have worked hard your whole life to set your children up for success, and then the government is taking that away and giving it to other children whose parents were not as responsible or hard working. Under this system though, you would know your children are going to be fine, and logically you should be fine with it. I am not claiming logic, human emotions and politics are closely correlated! A value added tax might approximate the same benefit and be more politically palatable. Serious campaign finance reform has to come first before we can even begin to consider this.

U.S. life span inequality

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We hear a lot about health and life expectancy differences between ethnic groups and income levels in the U.S. This article shows those same numbers by county. Not too surprisingly, Appalachia and the southeast have some of the lowest average life expectancies. Heart disease and drug overdoses are major reasons why. The most shocking numbers though are from heavily Native American areas.

The article prescribes more exercise, healthier food, blood pressure and cholesterol control, and lower health care costs. Sounds good. In my opinion, high cost is certainly an issue, but it is really a proxy for access. We need a health care system that provides access to everyone, at least starting with basic preventive care. This is not particularly high tech. Let’s do it.

Roubini on debt and inequality

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Nouriel Roubini says the world is headed for a debt crisis. This kind of makes sense. Countries that have to repay their debts in U.S. dollars are in trouble as more of their currencies are required to buy a U.S. dollar. And everybody including the U.S. will be paying more in interest on their debts and this will cut into our budgets for other things.

Income and wealth inequality have been rising within countries for many reasons. Notable factors include trade and globalization, technological innovation (which is capital-intensive, skill-biased, and labor-saving), the self-reinforcing political power of economic and financial elites, the concentration of oligopolistic power in the corporate sector, and the declining power of labor and unions. Together, these factors have triggered a backlash against liberal democracy.

Project Syndicate

I’m with his logic up to that last sentence. Logically, the solution to these problems would seem to be more democracy rather than less. But we seem to be caught in a situation where the rich and powerful are able to influence the masses through propaganda to oppose policies that would help to address these very problems. Solutions would include (1) limits on the ability of wealthy people, institutions and corporations to pay for political campaigns that elect politicians who are then beholden to their interests, (2) value added taxes designed to raise revenue from the fruits of labor-saving technological innovation, which can then be spent on services to benefit the displaced laborers, and (3) anti-monopoly action, and (4) pro-union policies. I’m always a bit shaky on #4, because unions can serve as a break on innovation and efficiency, and they often benefit some workers at the expense of others, and they have a history of corruption. But they are undeniably a political counterweight to corporate power.

Progressive policies are popular, goddamnit!

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You see this in the media fairly often, and it is occasionally brought up by (losing) courageous politicians like Bernie Sanders and Elizabeth Warren. Large majorities of voters support benefits programs, particularly Medicare and Social Security. These politicians can’t get elected though because of the anti-tax narrative that is convenient for the wealthy and powerful interests that buy and own our successful politicians. So around and around we go.

Sensible policies are obvious. Incrementally lower eligibility ages, or at least allow younger citizens to opt in at cost. The latter would be win-win for everyone except the finance and insurance industries.

Political strategies are less obvious, and nothing that has been tried has worked lately. Politicians need to reach the same working class and professional crowd that is susceptible to the anti-tax message. A somewhat disingenuous approach would be to exaggerate the reach of those who are actually trying to dismantle the popular programs. Use their words against them, even out of context,and make their political and private associates guilty by association. Give the race and gender rhetoric a rest, because it is dividing the majority of voters you need to support sensible policies that are going to benefit disadvantaged groups the most. It’s a dirty game, but it’s a game the other side is going to play like it or not. Expand the benefits first, let people see and understand what they are getting for their taxes, and the benefits will be hard for future politicians to take away.

the Nordic welfare model

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This article explains that the Nordic welfare model succeeds by targeting the middle class, not just the poor. They provide services of high enough quality (child care, health care, education, unemployment, disability, retirement) that the private sector can’t compete. Then the middle class voters support the politicians who support the policies, and are willing to pay the taxes necessary to receive the benefits.

Seems simple, but it’s easy for anti-tax corporate and wealthy interests in the United States to prevent this feedback loop from getting established. They just spew propaganda and buy off politicians who are anti-tax and anti-deficit spending, so the government only has resources for limited programs targeting the poor, the middle class resents paying taxes and receiving little in return while having to pay for sub-par private benefits at the same time, and they continue to vote against policies to expand benefits. Breaking this loop would require a gamble on massive deficit spending (kinda sorta being tried now, legitimately during a crisis in my view) and/or constitutional changes/reinterpretation that stop the legalized propaganda and bribery (which would have to be enacted by the politicians who are being bribed, unless judges were to take the lead which seems unlikely).

a jumbo jet crashing every hour

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Here are some disturbing statistics on child mortality worldwide.

Child mortality refers to the death of children before their fifth birthday. We live in a world in which 5.4 million children die every year. That’s ten dead children every minute.

Imagine what it means for a child to lose his or her life; imagine what it means for a family to see their child die. Ten families will experience that in the next minute. This will repeat every minute for the rest of the year. That is the horror of child mortality.

These daily tragedies do not receive the attention they deserve. Comparing it with those tragedies that do receive public attention makes this clear. A large jumbo jet can carry up to 600 passengers.3 The number of child deaths is equivalent to a crash of a jumbo jet with only children on board, every hour of every day of the year. 

Max Roser, Our World in Data

It suggests a few points to me. One is that we are most scared and pay the most attention to new threats, like Covid or murder hornets. Meanwhile, old threats like car accidents, heart disease, and malaria cause suffering and death on a much larger scale. We are complacent and accepting of them either because they happen to other people far away (from the perspective of a prosperous country like the U.S.) or because they are so common we assume nothing can be done about them (traffic deaths).

Second, the enormous disparities between countries make it clear that something can be done about child mortality, and that it is a moral imperative to do so. It is not even high tech, it is just a failure of our civilization to recognize the problem, feel the responsibility, organize and act.

The plots of per capita income vs. child mortality are worth staring at. As the article drives home, there are no poor countries with low child mortality rates, suggesting that economic development is necessary in addition to direct interventions (nutrition, vaccination, sanitation, and health care are mentioned.) The U.S., of course, is in the group of richer nations with much lower child mortality rates than the poorer countries. But within its group, the U.S. is the clear laggard compared to the rest of the developed world. We are not applying our wealth and know-how effectively to keep our young children from dying.

poverty, race, and math

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Here’s some math on U.S. poverty.

  • from Census.gov: estimated U.S. population on July 1, 2019: 328,240,000
    • “Black or African American alone, percent”: 13.4% (this works out to 43,984,000, rounding all numbers to the nearest 1,000)
    • “White alone, percent”: 76.3% (this works out to 250,447,000)
  • from Urban Institute: U.S. poverty rate in 2021, all races: 13.7% (44,969,000)
    • Black poverty rate: 18.1% (7,961,000)
    • White poverty rate: 9.6% (24,043,000)

A few points/opinions, which I hope will not be too controversial.

  • A long history of legal and institutional racism in the U.S. is an obvious fact, a moral outrage, and needs to be corrected, particularly in housing and education.
  • A greater fraction of the black population is poor compared to the white population.
  • There are more poor white people than poor black people in the country.
  • You have to be careful comparing averages between groups of very different sizes.
  • From a moral perspective, if you want to help the most people, you would not only help black people. You would try to help people who need help in both groups, while trying to even out the disparities.
  • From a political perspective, an incessant focus on race, and rhetoric equating race and poverty, is going to turn off a lot of poor white voters. This ends up electing politicians who are not going to help poor people of either race.
  • There are other races, there are many mixes of races, and there are many confusing census questions about whether people consider themselves hispanic instead of or in addition to the other races. I am not a professional demographer, and do not know the absolute best way to handle these issues.