“Work And Worth”: What Someone Is Paid Has Little Or No Relationship To What Their Work Is Worth To Society
What someone is paid has little or no relationship to what their work is worth to society.
Does anyone seriously believe hedge-fund mogul Steven A. Cohen is worth the $2.3 billion he raked in last year, despite being slapped with a $1.8 billion fine after his firm pleaded guilty to insider trading?
On the other hand, what’s the worth to society of social workers who put in long and difficult hours dealing with patients suffering from mental illness or substance abuse? Probably higher than their average pay of $18.14 an hour, which translates into less than $38,000 a year.
How much does society gain from personal-care aides who assist the elderly, convalescents, and persons with disabilities? Likely more than their average pay of $9.67 an hour, or just over $20,000 a year.
What’s the social worth of hospital orderlies who feed, bathe, dress, and move patients, and empty their ben pans? Surely higher than their median wage of $11.63 an hour, or $24,190 a year.
Or of child care workers, who get $10.33 an hour, $21.490 a year? And preschool teachers, who earn $13.26 an hour, $27,570 a year?
Yet what would the rest of us do without these dedicated people?
Or consider kindergarten teachers, who make an average of $53,590 a year.
That may sound generous but a good kindergarten teacher is worth his or her weight in gold, almost.
One study found that children with outstanding kindergarten teachers are more likely to go to college and less likely to become single parents than a random set of children similar to them in every way other than being assigned a superb teacher.
And what of writers, actors, painters, and poets? Only a tiny fraction ever become rich and famous. Most barely make enough to live on (many don’t, and are forced to take paying jobs to pursue their art). But society is surely all the richer for their efforts.
At the other extreme are hedge-fund and private-equity managers, investment bankers, corporate lawyers, management consultants, high-frequency traders, and top Washington lobbyists.
They’re getting paid vast sums for their labors. Yet it seems doubtful that society is really that much better off because of what they do.
I don’t mean to sound unduly harsh, but I’ve never heard of a hedge-fund manager whose jobs entails attending to basic human needs (unless you consider having more money as basic human need) or enriching our culture (except through the myriad novels, exposes, and movies made about greedy hedge-fund managers and investment bankers).
They don’t even build the economy.
Most financiers, corporate lawyers, lobbyists, and management consultants are competing with other financiers, lawyers, lobbyists, and management consultants in zero-sum games that take money out of one set of pockets and put it into another.
They’re paid gigantic amounts because winning these games can generate far bigger sums, while losing them can be extremely costly.
It’s said that by moving money to where it can make more money, these games make the economy more efficient.
In fact, the games amount to a mammoth waste of societal resources.
They demand ever more cunning innovations but they create no social value. High-frequency traders who win by a thousandth of a second can reap a fortune, but society as a whole is no better off.
Meanwhile, the games consume the energies of loads of talented people who might otherwise be making real contributions to society — if not by tending to human needs or enriching our culture then by curing diseases or devising new technological breakthroughs, or helping solve some of our most intractable social problems.
In 2010 (the most recent date for which we have data) close to 36 percent of Princeton graduates went into finance (down from the pre-financial crisis high of 46 percent in 2006). Add in management consulting, and it was close to 60 percent.
Graduates of Harvard and other Ivy League universities are also more likely to enter finance and consulting than any other career.
The hefty endowments of such elite institutions are swollen with tax-subsidized donations from wealthy alumni, many of whom are seeking to guarantee their own kids’ admissions so they too can become enormously rich financiers and management consultants.
But I can think of a better way for taxpayers to subsidize occupations with more social merit: Forgive the student debts of graduates who choose social work, child care, elder care, nursing, and teaching.
By: Robert Reich, The Robert Reich Blog, August 2, 2014
“Doomsday Prepper Economics”: The Weird Obsession That’s Ruining The GOP
Call it doomsday prepper economics. For more than five years, many Republicans and conservatives have warned that catastrophe is nigh. Washington’s deficit spending and the Federal Reserve’s excessive money printing will lead to a financial crisis worse than the Great Recession, they prophesied. Inflation will skyrocket, the dollar will collapse, and the Chinese will dump treasuries, they swore. As Ron Paul, the libertarian former GOP congressman and presidential candidate, said back in 2009: “More inflation is absolutely the wrong way to go. We’re taking a recession and trying to turn it into a depression. We’re going to see a real calamity.”
Many GOP politicians have since echoed Paul’s prediction. But the Next Great Inflation never happened. The Consumer Price Index, including food and energy, has risen by an annual average of just 1.6 percent since 2008, below the Fed’s 2 percent inflation target. During the Great Inflation of the 1970s and early 1980s, by contrast, prices rose five times faster.
This information isn’t a secret. The Labor Department releases inflation data monthly on its website. Yet inflation fears still rage on the right. Those concerns are a big reason why Republicans continue to push for a balanced budget ASAP. They’re why the GOP wants to saddle the Fed with restrictive new rules.
Regardless of the potential merits of those policy ideas, the inflation alarmism driving them is taking a weird turn. Some Republicans and conservatives now argue that Washington is figuring inflation all wrong, maybe even intentionally. Better, they say, to trust independent outside sources such as the website ShadowStats, which “exposes and analyzes flaws” in government economic data. According to one set of ShadowStats calculations, the true inflation rate is nearly 10 percent today. The inflation truth is out there.
In a recent National Review Online article, conservative author Amity Shlaes approvingly cites ShadowStats as supporting her thesis that “inflation is higher than what the official data suggest.” Others fans include conservative intellectual Niall Ferguson, Sen. Tom Coburn (R-Okla.), and a good chunk of the conservative blogosphere.
ShadowStats’ popularity on the right is crazy — because the site’s methodology has been roundly ridiculed by both economists and business journalists. Critics also note that the subscription price for the ShadowStats newsletter has remained unchanged for years. Inflation for thee, but not for me. Beyond that, MIT’s Billion Price Project, which tracks prices from online retailers every day, puts U.S. inflation at just over 2 percent. And consider this: If inflation were really 10 percent, that would mean the real economy, adjusted for inflation, has been sharply shrinking — yet somehow still adding 2 million net new jobs a year.
If GOP inflationistas had their way, the weak U.S. recovery would almost surely be even weaker. Just look at Europe. Unlike the Fed, the inflation-phobic European Central Bank sat on its hands despite weak growth. The result has been an unemployment rate nearly twice America’s and a nasty double-dip recession. Of course, inflation is lower than in America — so low, in fact, that the region risks a dangerous deflationary spiral of falling prices and falling wages.
Why this GOP inflation obsession? Maybe it’s a legacy of how rapidly rising prices in the 1970s swept conservatives into power in both America and Great Britain. Maybe it’s how many conservative talk radio shows are sponsored by gold companies who stand to benefit from inflation hysteria. Maybe it’s a belief that every single economic metric must be a nightmare under President Obama.
But whatever the reason, the GOP’s preoccupation with phantom price increases is distracting it from the actual problems afflicting the U.S. economy — such as low social mobility, stagnant wages, and the decline of middle-class work. The price of not addressing those issues is rising every year. And that is the kind of inflation worth obsessing over.
By: James Pethokoukis, DeWitt Wallace Fellow at the American Enterprise Institute: The Week, July 23, 2014
“Boehner’s Imaginary Allegations”: Speaker Still Struggling To Explain Anti-Obama Lawsuit
No one seems quite as happy about House Speaker John Boehner’s (R-Ohio) anti-Obama lawsuit as President Obama himself. For the West Wing, the Republican litigation helps prove to the public, in a rather definitive way, that Obama’s governing while GOP lawmakers in Congress sit around and complain. Indeed, the frivolous case is effectively a bold announcement that the Republican-led House wants the federal government to be paralyzed indefinitely – which is hardly a winning message in an election year.
And so the president has ended up talking more about Boehner’s prospective lawsuit than Boehner has. “I told [the House Speaker], ‘I’d rather do things with you, pass some laws, make sure the Highway Trust Fund is funded so we don’t lay off hundreds of thousands of workers.’ It’s not that hard,” Obama said last week. “Middle-class families can’t wait for Republicans in Congress to do stuff. So sue me. As long as they’re doing nothing, I’m not going to apologize for trying to do something.”
Yesterday, Boehner responded with a CNN op-ed, defending the litigation he has not yet filed. It’s worth scrutinizing in detail.
[T]oo often over the past five years, the President has circumvented the American people and their elected representatives through executive action, changing and creating his own laws.
First, the Speaker needs to understand, in a “Schoolhouse Rock” sort of way, that the White House cannot create its own laws. That’s gibberish. Obama can create policies through executive orders and executive actions, but those aren’t literally new laws. Second, to help bolster his case about Obama abuses, Boehner referenced exactly zero specific examples.
What’s disappointing is the President’s flippant dismissal of the Constitution we are both sworn to defend.
No, holding the debt ceiling hostage, vowing to crash the global economy on purpose while ignoring the “Full Faith and Credit” of the United States is a “flippant dismissal of the Constitution.” Obama’s use of executive authority, on the other hand, is fairly routine.
I know the President is frustrated. I’m frustrated. The American people are frustrated, too. After years of slow economic growth and high unemployment under President Obama, they are still asking, ‘where are the jobs?’
Boehner may not remember this – 2008 seems like a long time ago – but Obama inherited the worst economic conditions since the Great Depression. The president proceeded to turn the economy around, no thanks to Boehner, who demanded a five-year spending freeze at the height of the crisis, and has fought ever since for fewer investments, less capital, less demand, and higher unemployment through laid off public-sector workers.
As for where the jobs are, the United States is currently on track for the best year for job creation since the 1990s and June was the 52nd consecutive month in which we’ve seen private-sector job growth – the longest streak on record. Why didn’t Boehner read the jobs report?
The House has passed more than 40 jobs bills that would help.
No, not really.
Washington taxes and regulations always make it harder for private sector employers to meet payrolls, invest in new initiatives and create jobs – but how can those employers plan, invest and grow when the laws are changing on the President’s whim at any moment?
First, if presidential whims periodically change American law outside the constitutional system, then Congress would have a responsibility to impeach the president. Since this allegation is imaginary, however, there’s no need. Second, if Boehner is concerned about employers’ confidence in economic stability, the Speaker can approve resources for the Highway Trust Fund and stop playing games with the economy (again).
If House Republicans have a legitimate complaint, shouldn’t it be easier for Boehner to make his case?
By: Steve Benen, The Maddow Blog, July 7, 2014
“President Obama Is No Bush”: Obama Has Accomplished Far Too Much In The Face Of Far Too Much Adversity
If anyone had said five years ago that President Obama’s popularity rating would nosedive to the dreadful level of George W. Bush’s ratings the last years of his presidency, they’d be fitted for a strait-jacket. Obama’s popularity ratings at that point had soared past 70 percent and there was the firm consensus that his numbers would stay comfortably high and that no matter how rocky things got during his tenure, they could never bottom out to Bush’s abysmal numbers.
The recent CNN/ORC International poll seems to show that the worst has happened and that Obama’s popularity rating now is virtually identical with Bush’s low rating. The added insult is that Bush seems to be getting more popular with his numbers on the uptick. There are two ways to look at this. One is that Bush had sunk so low in popularity ratings by the time he left office that he had nowhere to go but up and that it’s easy for the public to wax nostalgically about and to even find a few good things to say and think about an ex-president years removed from office than a president who sits in the office. This is made even easier by the constant barrage from the GOP’s inveterate Obama bashers playing up Bush’s alleged accomplishments while relentlessly pile driving Obama’s supposed failures.
That’s the other way to look at Obama’s drop. In the backwash of now defrocked former House Majority leader Eric Cantor’s ouster from Congress, it’s worth remembering Cantor was a prime ringleader of the now infamous dinner meeting the night of Obama’s first inauguration in January 2009. Their sole goal was to figure out everything they could do to dither, delay and flat out obstruct any and every initiative and piece of legislation, as well as key nominees, that Obama pushed, while savagely harassing and defaming his key appointees, most notably Attorney General Eric Holder and former HHS Secretary Kathleen Sibelius.
This was the front door assault plan. The GOP’s backdoor strategy was to wink and nod at the dirty smear campaign from the coterie of right wing talk show hosts, bloggers and web sites that lambasted Obama with an avalanche of subtle and outright racist digs, barbs, taunts and harangues. The dual strategy had one aim and that was to make him a failed one term president, and failing that, a failed presidency. The added key to making that work was to play up to the hilt any and every real or perceived stumble. The NSA spy debacle, the lingering anger over Benghazi, the AP leaks, the worry over the Affordable Health Care Act website glitches, and the Bergdahl-Taliban prisoner swap, and now the militant Islamist insurgency in Iraq are prime examples.
The GOP gloat that Obama is now no better than Bush in the public’s eye still falls appalling flat. Bush’s miserable record on the two greatest issues that matter the most to Americans are glaring proof of that. They are the economy and war. Bush hit the skids the second go round because of public souring on a failed, flawed and financially and human-draining war, and a financial collapse that had much to do with his disastrous two tax cuts that gave away the company store to corporations and the rich and sent the budget deficit skyrocketing. In glaring contrast, Obama’s fiscal and budgetary record shows steady joblessness drops, a deficit drop, and an unprecedented surge in the markets that ironically has made more millions for many of the corporate rich that pile onto the assault against Obama.
His wind down of the Iraq and Afghan war has been a special sore point for GOP hawks who never tire of telling all who’ll listen that this supposedly puts Americans at horrible risk from terrorism and war. It’s bunk. Obama simply fulfilled commitments that were already in place to disengage the American military in both countries — commitments that are supported by the overwhelming majority of Americans.
Bush can lay claim to none of these achievements.
But laying aside for a moment the silly notion that Obama is as bad as Bush, the brutal political reality is that past presidents have certainly had their share of second term woes. This was the case with Eisenhower, Nixon, of course, Reagan, George H.W. Bush, and Clinton. This shouldn’t surprise. They were in office for a relatively long time. They run a big sprawling government with thousands of appointees and personnel. It is simply beyond the pale of one person to control every facet and decision their appointees and personnel make. Just as time can work for a second term president, it can also work against him, too. The longer he’s in office, it’s almost assured that some issue, event or catastrophe will happen that can mar a president’s image, and that he may or may not have any real control over.
Obama has accomplished far too much in the face of far too much adversity. To spin his plunging popularity numbers as if he’s a complete failure is to horribly mangle the comparison with the president who clearly was a failure.
By: Earl Ofari Hutchinson, The Huffington Post Blog, June 14, 2014
“The Three Biggest Right-Wing Lies About Poverty”: So Why Do So Many Right-Wing Republicans Tell These Lies?
Rather than confront poverty by extending jobless benefits to the long-term unemployed, endorsing a higher minimum wage, or supporting jobs programs, conservative Republicans are taking a different tack.
They’re peddling three big lies about poverty. To wit:
Lie #1: Economic growth reduces poverty.
“The best anti-poverty program,” wrote Paul Ryan, the House Budget Committee chairman, in the Wall Street Journal, “is economic growth.”
Wrong. Since the late 1970s, the economy has grown 147 percent per capita but almost nothing has trickled down. The typical American worker is earning just about what he or she earned three decades ago, adjusted for inflation.
Meanwhile, the share of Americans in poverty remains around 15 percent. That’s even higher than it was in the early 1970s.
How can the economy have grown so much while most people’s wages go nowhere and the poor remain poor? Because almost all the gains have gone to the top.
Research by Immanuel Saez and Thomas Piketty shows that forty years ago the richest 1 percent of Americans got 9 percent of total income. Today they get over 20 percent.
It’s true that redistributing income to the needy is politically easier in a growing economy than in a stagnant one. One reason so many in today’s middle class are reluctant to pay taxes to help the poor is their own incomes are dropping.
But the lesson we should have learned from the past three decades is economic growth by itself doesn’t reduce poverty.
Lie #2: Jobs reduce poverty.
Senator Marco Rubio said poverty is best addressed not by raising the minimum wage or giving the poor more assistance but with “reforms that encourage and reward work.”
This has been the standard Republican line ever since Ronald Reagan declared that the best social program is a job. A number of Democrats have adopted it as well. But it’s wrong.
Surely it’s better to be poor and working than to be poor and unemployed. Evidence suggests jobs are crucial not only to economic well-being but also to self-esteem. Long-term unemployment can even shorten life expectancy.
But simply having a job is no bulwark against poverty. In fact, across America the ranks of the working poor have been growing. Around one-fourth of all American workers are now in jobs paying below what a full-time, full-year worker needs in order to live above the federally defined poverty line for a family of four.
Why are more people working but still poor? First of all, more jobs pay lousy wages.
While low-paying industries such as retail and fast food accounted for 22 percent of the jobs lost in the Great Recession, they’ve generated 44 percent of the jobs added since then, according to a recent report from the National Employment Law Project.
Second, the real value of the minimum wage continues to drop. This has affected female workers more than men because more women are at the minimum wage.
Third, government assistance now typically requires recipients to be working. This hasn’t meant fewer poor people. It’s just meant more poor people have jobs.
Bill Clinton’s welfare reform of 1996 pushed the poor into jobs, but they’ve been mostly low-wage jobs without ladders into the middle class. The Earned Income Tax Credit, a wage subsidy, has been expanded, but you have to be working in order to qualify.
Work requirements haven’t reduced the number or percent of Americans in poverty. They’ve merely increased the number of working poor — a term that should be an oxymoron.
Lie #3: Ambition cures poverty.
Most Republicans, unlike Democrats and independents, believe people are poor mainly because of a lack of effort, according to a Pew Research Center/USA Today survey. It’s a standard riff of the right: If the poor were more ambitious they wouldn’t be poor.
Obviously, personal responsibility is important. But there’s no evidence that people who are poor are less ambitious than anyone else. In fact, many work long hours at backbreaking jobs.
What they really lack is opportunity. It begins with lousy schools.
America is one of only three advanced countries that spends less on the education of poorer children than richer ones, according to a study by the Organization for Economic Cooperation and Development.
Among the 34 O.E.C.D. nations, only in the United States, Israel and Turkey do schools serving poor neighborhoods have fewer teachers and crowd students into larger classrooms than do schools serving more privileged students. In most countries, it’s just the reverse: Poor neighborhoods get more teachers per student.
And unlike most OECD countries, America doesn’t put better teachers in poorly performing schools,
So why do so many right-wing Republicans tell these three lies? Because they make it almost impossible to focus on what the poor really need – good-paying jobs, adequate safety nets, and excellent schools.
These things cost money. Lies are cheaper.
By: Robert Reich, The Robert Reich Blog, June 13, 2 014
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