“The Four Biggest Right-Wing Lies About Inequality”: Don’t Listen To All Those Right-Wing Lies
Even though French economist Thomas Piketty has made an air-tight case that we’re heading toward levels of inequality not seen since the days of the nineteenth-century robber barons, right-wing conservatives haven’t stopped lying about what’s happening and what to do about it.
Herewith, the four biggest right-wing lies about inequality, followed by the truth.
Lie number one: The rich and CEOs are America’s job creators. So we dare not tax them.
The truth is the middle class and poor are the job-creators through their purchases of goods and services. If they don’t have enough purchasing power because they’re not paid enough, companies won’t create more jobs and economy won’t grow.
We’ve endured the most anemic recovery on record because most Americans don’t have enough money to get the economy out of first gear. The economy is barely growing and real wages continue to drop.
We keep having false dawns. An average of 200,000 jobs were created in the United States over the last three months, but huge numbers of Americans continue to drop out of the labor force.
Lie number two: People are paid what they’re worth in the market. So we shouldn’t tamper with pay.
The facts contradict this. CEOs who got 30 times the pay of typical workers forty years ago now get 300 times their pay not because they’ve done such a great job but because they control their compensation committees and their stock options have ballooned.
Meanwhile, most American workers earn less today than they did forty years ago, adjusted for inflation, not because they’re working less hard now but because they don’t have strong unions bargaining for them.
More than a third of all workers in the private sector were unionized forty years ago; now, fewer than 7 percent belong to a union.
Lie number three: Anyone can make it in America with enough guts, gumption, and intelligence. So we don’t need to do anything for poor and lower-middle class kids.
The truth is we do less than nothing for poor and lower-middle class kids. Their schools don’t have enough teachers or staff, their textbooks are outdated, they lack science labs, their school buildings are falling apart.
We’re the only rich nation to spend less educating poor kids than we do educating kids from wealthy families.
All told, 42 percent of children born to poor families will still be in poverty as adults – a higher percent than in any other advanced nation.
Lie number four: Increasing the minimum wage will result in fewer jobs. So we shouldn’t raise it.
In fact, studies show that increases in the minimum wage put more money in the pockets of people who will spend it – resulting in more jobs, and counteracting any negative employment effects of an increase in the minimum.
Three of my colleagues here at the University of California at Berkeley — Arindrajit Dube, T. William Lester, and Michael Reich – have compared adjacent counties and communities across the United States, some with higher minimum wages than others but similar in every other way.
They found no loss of jobs in those with the higher minimums.
The truth is, America’s lurch toward widening inequality can be reversed. But doing so will require bold political steps.
At the least, the rich must pay higher taxes in order to pay for better-quality education for kids from poor and middle-class families. Labor unions must be strengthened, especially in lower-wage occupations, in order to give workers the bargaining power they need to get better pay. And the minimum wage must be raised.
Don’t listen to the right-wing lies about inequality. Know the truth, and act on it.
By: Robert Reich, The Robert Reich Blog, May 5, 2014
“The Return To The Roaring 20’s”: The Typical Member Of The 1 Percent Is An Old White Man
The rich are not like you and I.
It’s no secret that income inequality has been growing rapidly, with most the gains in earnings accruing to just the top one percent of Americans. But who are they? A new paper from Lisa A. Keister at Duke University looks at this question and finds that “members of the one percent are disproportionately male, white, and married.” The typical one percenter is 55, compared to about 50 for the bottom 90 percent. The one percent is about 91 percent white — just 1.8 percent of these households are Hispanic and merely 0.2 percent are black. More than half are married, versus about 30 percent for the bottom 90 percent. They are also much more likely to have a graduate degree: about 62 percent have one, compared to less than 10 percent of the bottom 90 percent.
Gender is a little harder to tease out, because the data looks at heads of households and classifies a family with a husband and wife where the husband is the head as male, so the fact that the one percent show up as about 98 percent male doesn’t mean that some rich women aren’t included. But it’s clear that few single mothers or female breadwinners are making it into this group. And we can also look at the job characteristics of the top earners to get a better sense of gender. As Mike Konczal has pointed out, the top one percent is mostly made up of executives, people who work on Wall Street, and managers. Women make up less than 15 percent of executives, while they represent 35 percent of investment banking employees and 40 percent of employees in the broader “Securities, Commodity Contracts and Other Financial Investments” category.
The 1 percent are also different in how they get their money. For the bottom 90 percent, 70 percent of our incomes from wages or salaries. But for the top 1 percent, salary accounts for just half. On the other hand, more than 30 percent of their money comes from businesses, while just 6.1 percent of the money for the bottom 90 percent is from the same source. While the 1 percent holds most of its assets in businesses, for the rest of us our houses are the most commonly held asset. The 1 percent also dominates financial assets, owning nearly 44 percent of the total financial pie, while the bottom 90 percent gets 20 percent.
And while we know that the wealthiest have been gobbling up most of the country’s income — the top 5 percent got the biggest share of income ever recorded in 2012, and the top 1 percent saw a 278 percent increase in their incomes over the last three decades while the middle saw less than a 40 percent bump — wealth concentration may be even worse. Keister’s paper finds that the 1 percent in wealth has held more than one-third of total net worth since 2001 and by 2010 had 34 percent. The bottom 90 percent, on the other hand, is left with just over a quarter of wealth. Wealth inequality is now as bad as it was during the roaring 1920s.
By: Bryce Covert, Think Progress, May 2, 2014
“Poverty, Policy, And Paul Ryan”: The Emperor In The Empty Suit Has No Clothes
If it seems every few months brings us another installment in the “Paul Ryan cares about poor people” series, it’s not your imagination. In November, the Washington Post helped get the ball rolling with a front-page article on the House Budget Committee chairman, celebrating the congressman for his efforts “fighting poverty and winning minds.”
The gist of the piece was that the far-right congressman is entirely sincere about using conservative ideas to combat poverty.
In December, BuzzFeed’s McKay Coppins ran a related piece, and today Coppins published another: Ryan is “trying to challenge the notion that his party is out of touch with poor people the old-fashioned way: by talking to some.”
The men begin filing into the Emmanuel Missionary Baptist Church in Indianapolis around 5:30 a.m. They are ex-convicts and reformed drug dealers, recovering addicts and at-risk youth: a proud brotherhood of the city’s undesirables. Some of them like to joke that if he were around today, Jesus would hang out with reprobates like them. On this cold April morning, they’re getting Paul Ryan instead.
Ryan has been here once before, about a year ago, but most of the congregants rambling in through the front door don’t appear to recognize the wiry white guy loitering in the lobby of their church. He is sporting khakis and a new-haircut coif, clutching a coffee as he chats with three besuited associates. A few parishioners come up and introduce themselves to him, but most pass by, exchanging quizzical glances and indifferent shrugs.
After several minutes, a sturdy, smiling pastor named Darryl Webster arrives and greets their guest of honor. “I appreciate you coming,” Webster says as he clasps the congressman’s hand. “You know, when you get up this early in the morning, it’s intentional.”
“Usually when I get up this early, I get up to kill something,” Ryan cracks.
It was a hunting joke.
In any case, Coppins’ lengthy article reads quite nicely: the Wisconsin Republican really has invested considerable time and energy in going to inner cities, meeting with community leaders, and talking to people who’ve struggled with poverty. If someone who’s otherwise unfamiliar with Ryan reads the 7,000-word piece and nothing else, he or she would likely come away with the sense that his interest in helping poor communities is sincere.
The trouble, however, are the parts of Ryan’s vision and policy agenda that Coppins neglected to mention.
For example, just last month, Ryan published a lengthy audit of sorts, criticizing federal efforts to combat poverty. It generated some attention, though what was largely overlooked was the fact that the Republican congressman was soon accused of misrepresenting much of the academic research he cited in his report.
Soon after, Ryan suggested low-income children who rely on the school-lunch program aren’t treasured the way wealthier children are, relying on an anecdote that wasn’t true anyway.
Then earlier this month, Ryan released a new budget blueprint that cut spending $5.1 trillion, specifically targeting public services that benefit – you guessed it – those on the lowest end of the socio-economic scale. Most notably, the Republican’s plan focused on slashing investments in health coverage, food assistance, and college affordability.
My point is not to question Paul Ryan’s sincerity. I don’t know him personally and I have no reason to question whether he means what he says about trying to combat poverty his own way.
Rather, my point is put aside his rhetoric and question the efficacy of his policy proposals. And on this, Jared Bernstein recently said of Ryan, “the emperor in the empty suit has no clothes,” adding:
Ryan Poverty Plan
1. Cut spending on the poor, cut taxes on the wealthy
2. Shred safety net through block granting federal programs
3. Encourage entrepreneurism, sprinkle around some vouchers and tax credits
4. ???
5. Poverty falls
Matt Yglesias added this morning, “I admit that this way of looking at things is a bit less colorful than following Ryan around a bunch of visits to low-income neighborhoods. But to the extent that you want to know how an increase in political power for Ryan and his allies is likely to impact the lives of American citizens, it’s worth looking at these things. His big job in politics is to write budgets. And his big budget idea is that rich people should pay lower taxes, middle class and working class people should pay more taxes, and poor people should get less food, medicine, and college tuition.”
By: Steve Benen, The Maddow Blog, April 28, 2014
“The Piketty Panic”: Out Of Ideas, Conservatives Are Terrified
“Capital in the Twenty-First Century,” the new book by the French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”
Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue.
I’ll come back to the name-calling in a moment. First, let’s talk about why “Capital” is having such an impact.
Mr. Piketty is hardly the first economist to point out that we are experiencing a sharp rise in inequality, or even to emphasize the contrast between slow income growth for most of the population and soaring incomes at the top. It’s true that Mr. Piketty and his colleagues have added a great deal of historical depth to our knowledge, demonstrating that we really are living in a new Gilded Age. But we’ve known that for a while.
No, what’s really new about “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.
For the past couple of decades, the conservative response to attempts to make soaring incomes at the top into a political issue has involved two lines of defense: first, denial that the rich are actually doing as well and the rest as badly as they are, but when denial fails, claims that those soaring incomes at the top are a justified reward for services rendered. Don’t call them the 1 percent, or the wealthy; call them “job creators.”
But how do you make that defense if the rich derive much of their income not from the work they do but from the assets they own? And what if great wealth comes increasingly not from enterprise but from inheritance?
What Mr. Piketty shows is that these are not idle questions. Western societies before World War I were indeed dominated by an oligarchy of inherited wealth — and his book makes a compelling case that we’re well on our way back toward that state.
So what’s a conservative, fearing that this diagnosis might be used to justify higher taxes on the wealthy, to do? He could try to refute Mr. Piketty in a substantive way, but, so far, I’ve seen no sign of that happening. Instead, as I said, it has been all about name-calling.
I guess this shouldn’t be surprising. I’ve been involved in debates over inequality for more than two decades, and have yet to see conservative “experts” manage to dispute the numbers without tripping over their own intellectual shoelaces. Why, it’s almost as if the facts are fundamentally not on their side. At the same time, red-baiting anyone who questions any aspect of free-market dogma has been standard right-wing operating procedure ever since the likes of William F. Buckley tried to block the teaching of Keynesian economics, not by showing that it was wrong, but by denouncing it as “collectivist.”
Still, it has been amazing to watch conservatives, one after another, denounce Mr. Piketty as a Marxist. Even Mr. Pethokoukis, who is more sophisticated than the rest, calls “Capital” a work of “soft Marxism,” which only makes sense if the mere mention of unequal wealth makes you a Marxist. (And maybe that’s how they see it: recently former Senator Rick Santorum denounced the term “middle class” as “Marxism talk,” because, you see, we don’t have classes in America.)
And The Wall Street Journal’s review, predictably, goes the whole distance, somehow segueing from Mr. Piketty’s call for progressive taxation as a way to limit the concentration of wealth — a remedy as American as apple pie, once advocated not just by leading economists but by mainstream politicians, up to and including Teddy Roosevelt — to the evils of Stalinism. Is that really the best The Journal can do? The answer, apparently, is yes.
Now, the fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t mean that they are on the run politically. Money still talks — indeed, thanks in part to the Roberts court, it talks louder than ever. Still, ideas matter too, shaping both how we talk about society and, eventually, what we do. And the Piketty panic shows that the right has run out of ideas.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 24, 2014
“End College Legacy Preferences”: The Deck Is Stacked At Every Level In Favor Of The Rich
Someone reading about the Supreme Court’s decision upholding Michigan’s ban on affirmative action — and by extension similar measures passed by voters in California, Texas, Florida and Washington — might develop the misimpression that affirmative action is on the wane. In fact, it’s alive and well: Public and private colleges routinely give preferential treatment to children of alumni.
If you have kids, or plan on having them someday, you know that acceptance rates at elite colleges are at historic lows. Stanford led the stingy pack, admitting but 5 percent of applicants, with Harvard and Yale trailing close behind at 5.9 percent and 6.3 percent respectively.
For “legacies,” the picture isn’t nearly so bleak. Reviewing admission data from 30 top colleges in the Economics of Education Review, the researcher Michael Hurwitz concluded that children of alumni had a 45 percent greater chance of admission. A Princeton team found the advantage to be worth the equivalent of 160 additional points on an applicant’s SAT, nearly as much as being a star athlete or African-American or Hispanic.
At Harvard, my alma mater, the legacy acceptance rate is 30 percent, which is not an unusual number at elite colleges. That’s roughly five times the overall rate.
The disparity is so great it makes the most sense to conceptualize college applications to elite colleges as two separate competitions: one for children whose parents are legacies, the other for children whose parents aren’t.
Admissions officers will hasten to tell you that in a meritocracy many legacies would get in anyway. Let’s pause to consider the usefulness of the term “meritocracy” in a system where the deck is stacked at every level in favor of rich, white students before conceding the premise. It’s surely true that many children of alumni are brilliant, hard-working and deserving of a seat at a top college. That’s quite different from saying the system is fair. In 2003, Harvard’s admissions dean said that the SAT scores of legacy admits were “just two points below the school’s overall average.” These are students who have enjoyed a lifetime of advantage. We’d expect them to have outperformed nonlegacies, at least by a bit, and yet they’ve done slightly worse.
Reasonable minds can differ on the morality and wisdom of race-based affirmative action. Where I teach, at John Jay College of Criminal Justice, which is about as egalitarian as institutions come, I’ve seen firsthand what the data show: College is a ticket out of poverty, and exposing young men and women to diverse classmates and role models raises the ceiling on what they believe is possible for themselves. That said, I acknowledge the desire for a colorblind, meritocratic society as an honorable position. But how can anyone defend making an exception for children of alumni?
One needn’t have a dog in this hunt to be troubled by legacy. It’s disastrous public policy. Because of legacy admissions, elite colleges look almost nothing like America. Consider these facts: To be a 1 percenter, a family needs an annual income of approximately $390,000. When the Harvard Crimson surveyed this year’s freshman class, 14 percent of respondents reported annual family income above $500,000. Another 15 percent came from families making more than $250,000 per year. Only 20 percent reported incomes less than $65,000. This is the amount below which Harvard will allow a student to go free of charge. It’s also just above the national median family income. So, at least as many Harvard students come from families in the top 1 percent as the bottom 50 percent. Of course this says nothing of middle-class families, for whom private college is now essentially unaffordable.
These facts will trouble any parent of modest means, but it’s time to recognize this as an American problem. Together with environmental destruction, social inequality is the defining failure of our generation. The richest .01 percent of American families possess 11.1 percent of the national wealth, but 22 percent of American children live in poverty.
There are only two ways this gets better. One is a huge reformation of the tax structure. The other is improved access to higher education. Few investments yield a greater return than a college degree. Education has great potential to combat inequality, but progress simply isn’t possible if legacy persists.
To justify this practice there would need to be, in lawyer language, a compelling justification. There is none. Elite colleges defend legacy as necessary to fund-raising. It isn’t. Neither Oxford nor Cambridge nor M.I.T. considers legacy. Their prestige is intact, they attract great students, and they have ample endowments. Moreover, technology has transformed fund-raising. Presidential candidates raise money through grass-roots campaigns; colleges can, too.
Legacy evolved largely as a doctrine to legitimize the exclusion of Jews from elite schools. It endures today as a mechanism for reinforcing inequality, with particularly harsh consequences for Asians, and fundamentally contradicts the rhetoric of access in which elite colleges routinely engage.
Harvard, Yale, Stanford, Princeton and Columbia collectively have endowments of about $100 billion. They have the means to end this abhorrent practice with a stroke of a pen and the financial resources to endure whatever uncertainty ensues. Just a hunch, but I think the economically diverse students admitted to these great colleges would be successful and generous to their alma maters, not in the hope of securing their child a place in a class, but out of genuine appreciation of a legacy of equal access.
By: Evan J. Mandery, Professor at John Jay College of Criminal Justice; Op-Ed Contributor, The New york Times, April 24, 2014
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 