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The White Working Class: The Most Pessimistic Group In America

Almost no one noticed, but around George W. Bush’s reelection in 2004, the nation crossed a demographic milestone.

From Revolutionary days through 2004, a majority of Americans fit two criteria. They were white. And they concluded their education before obtaining a four-year college degree. In the American mosaic, that vast white working class was the largest piece, from the yeoman farmer to the welder on the assembly line. Even as late as the 1990 census, whites without a college degree represented more than three-fifths of adults.

But as the country grew more diverse and better educated, the white working-class share of the adult population slipped to just under 50 percent in the Census Bureau’s 2005 American Community Survey. That number has since fallen below 48 percent.

The demographic eclipse of the white working class is likely an irreversible trend as the United States reconfigures itself yet again as a “world nation” reinvigorated by rising education levels and kaleidoscopic diversity. That emerging America will create opportunities (such as the links that our new immigrants will provide to emerging markets around the globe) and face challenges (including improving high school and college graduation rates for the minority young people who will provide tomorrow’s workforce).

Still, amid all of this change, whites without a four-year college degree remain the largest demographic bloc in the workforce. College-educated whites make up about one-fifth of the adult population, while minorities account for a little under one-third. The picture is changing, but whites who have not completed college remain the backbone of many, if not most, communities and workplaces across the country.

They are also, polls consistently tell us, the most pessimistic and alienated group in American society.

The latest measure of this discontent came in a thoughtful national survey on economic opportunity released last week by the Pew Charitable Trusts’ Economic Mobility Project. If numbers could scream, they would probably sound like the poll’s results among working-class whites.

One question asked respondents whether they expected to be better off economically in 10 years than they are today. Two-thirds of blacks and Hispanics said yes, as did 55 percent of college-educated whites; just 44 percent of noncollege whites agreed. Asked if they were better off than their parents were at the same age, about three-fifths of college-educated whites, African-Americans, and Hispanics said they were. But blue-collar whites divided narrowly, with 52 percent saying yes and a head-turning 43 percent saying no. (The survey, conducted from March 24 through 29, surveyed 2,000 adults and has a margin of error of ±3.4 percent.)

What makes these results especially striking is that minorities were as likely as blue-collar whites to report that they have been hurt by the recession. The actual unemployment rate is considerably higher among blacks and Hispanics than among blue-collar whites, much less college-educated whites.

Yet, minorities were more optimistic about the next generation than either group of whites, the survey found. In the most telling result, 63 percent of African-Americans and 54 percent of Hispanics said they expected their children to exceed their standard of living. Even college-educated whites are less optimistic (only about two-fifths agree). But the noncollege whites are the gloomiest: Just one-third of them think their kids will live better than they do; an equal number think their children won’t even match their living standard. No other group is nearly that negative.

This worry is hardly irrational. As Massachusetts Institute of Technology economists Frank Levy and Tom Kochan report in a new paper, the average high-school-educated, middle-aged man earns almost 10 percent less than his counterpart did in 1980. Minorities haven’t been exempt from that trend: In fact, high-school-educated minority men have experienced even slower wage growth than their white counterparts over the past two decades, calculates Larry Mishel, president of the liberal Economic Policy Institute.

But for minorities, that squeeze has been partially offset by the sense that possibilities closed to their parents are becoming available to them as discrimination wanes. “The distinction is, these blue-collar whites see opportunities for people like them shrinking, whereas the African-Americans [and Hispanics] feel there are a set of long-term opportunities that are opening to them that were previously closed on the basis of race or ethnicity,” said Mark Mellman, a Democratic pollster who helped conduct the Pew survey.

By contrast, although it is difficult to precisely quantify, the sense of being eclipsed demographically is almost certainly compounding the white working class’s fear of losing ground economically. That huge bloc of Americans increasingly feels itself left behind–and lacks faith that either government or business cares much about its plight. Under these pressures, noncollege whites are now experiencing rates of out-of-wedlock birth and single parenthood approaching the levels that triggered worries about the black family a generation ago. Alarm bells should be ringing now about the social and economic trends in the battered white working class and the piercing cry of distress rising from this latest survey.

By: Ronald Brownstein, Political Director, The Atlantic, May 27, 2011

May 30, 2011 Posted by | Capitalism, Class Warfare, Economy, Education, Immigrants, Immigration, Middle East, U.S. Census, Unemployed, Unemployment | , , , , , , , , | Leave a comment

Are Members Of Congress Engaged In Insider Trading?

When Congress isn’t sending billions in taxpayer money to bail out Wall Street firms, some of its legislators appear to be using information unavailable to the general public to personally profit on stock trades.

So says a study just published in Business and Politics. A portfolio that imitates the stock purchases of House members outperforms the market by more than 6 percent in the course of a year, its authors found. “A previous study of the stock returns of U.S. Senators in a leading finance journal indicates that their portfolios show some of the highest excess returns ever recorded over a long period of time, significantly outperforming even hedge fund managers,” they wrote. “Until now, there has been no similar study of Members of the U.S. House of Representatives.”

Now we know that from 1985 to 2001, the specific interval used to generate the data, senators do the best, House members follow, and the average American investor brings up the rear. In defense of Congress, however, most legislators weren’t exploiting their advantage: on average only 27 percent of senators and 16 percent of House members bought and sold common stock. Interestingly, in the House “by far the most successful traders were those Representatives with the least seniority.” The authors acknowledge that result is counterintuitive, and posit this explanation:

Whereas Representatives with the longest seniority (in this case more than 16 years), have no trouble raising funds for campaigns, junkets and whatever other causes they may deem desirable owed to the power they wield, the financial condition of a freshman Congressman is far more precarious. His or her position is by no means secure, financially or otherwise. House Members with the least seniority may have fewer opportunities to trade on privileged information, but they may be the most highly motivated to do so when the opportunities arise.

So what should be done?

It’s presented as a thorny problem. “To restrain Members from taking personal advantage of non-public information and using their positions for personal gain, Congress has decided that such unethical behavior is best discouraged by the public disclosure of financial investments by Representatives and the discipline of the electoral process,” the authors point out, but “to form a reasonable opinion of a Representative’s conflicts of interest, voters must familiarize themselves with their Representative’s personal asset holdings, the details of each law under consideration in the House and the voting record of the Representative. This could be difficult for any voter.”

That’s why faster disclosure would work best here. Forget filing periodic reports. Just force Members of Congress to be transparent about their stock trades in real time. Voter oversight wouldn’t even be needed — the idea is that self-interested traders would closely monitor the buying and selling of stock by legislators, who’d thereby lose a lot of their ability to get a jump on other investors.

Right?

By: Conor Friedersdorf, The Atlantic, May 27, 2011

May 30, 2011 Posted by | Capitalism, Congress, Democracy, Elections, Government, Lawmakers, Middle Class, Politics, Regulations, Voters | , , , , , , , , | Leave a comment

   

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