I’d rather be talking about these great NBA Playoffs than Donald Sterling’s interview.
“On Inequality Denial”: Good Ideas Don’t Need To Be Sold On False Pretenses
A while back I published an article titled “The Rich, the Right, and the Facts,” in which I described politically motivated efforts to deny the obvious — the sharp rise in U.S. inequality, especially at the very top of the income scale. It probably won’t surprise you to hear that I found a lot of statistical malpractice in high places.
Nor will it surprise you to learn that nothing much has changed. Not only do the usual suspects continue to deny the obvious, but they keep rolling out the same discredited arguments: Inequality isn’t really rising; O.K., it’s rising, but it doesn’t matter because we have so much social mobility; anyway, it’s a good thing, and anyone who suggests that it’s a problem is a Marxist.
What may surprise you is the year in which I published that article: 1992.
Which brings me to the latest intellectual scuffle, set off by an article by Chris Giles, the economics editor of The Financial Times, attacking the credibility of Thomas Piketty’s best-selling “Capital in the Twenty-First Century.” Mr. Giles claimed that Mr. Piketty’s work made “a series of errors that skew his findings,” and that there is in fact no clear evidence of rising concentration of wealth. And like just about everyone who has followed such controversies over the years, I thought, “Here we go again.”
Sure enough, the subsequent discussion has not gone well for Mr. Giles. The alleged errors were actually the kinds of data adjustments that are normal in any research that relies on a variety of sources. And the crucial assertion that there is no clear trend toward increased concentration of wealth rested on a known fallacy, an apples-to-oranges comparison that experts have long warned about — and that I identified in that 1992 article.
At the risk of giving too much information, here’s the issue. We have two sources of evidence on both income and wealth: surveys, in which people are asked about their finances, and tax data. Survey data, while useful for tracking the poor and the middle class, notoriously understate top incomes and wealth — loosely speaking, because it’s hard to interview enough billionaires. So studies of the 1 percent, the 0.1 percent, and so on rely mainly on tax data. The Financial Times critique, however, compared older estimates of wealth concentration based on tax data with more recent estimates based on surveys; this produced an automatic bias against finding an upward trend.
In short, this latest attempt to debunk the notion that we’ve become a vastly more unequal society has itself been debunked. And you should have expected that. There are so many independent indicators pointing to sharply rising inequality, from the soaring prices of high-end real estate to the booming markets for luxury goods, that any claim that inequality isn’t rising almost has to be based on faulty data analysis.
Yet inequality denial persists, for pretty much the same reasons that climate change denial persists: there are powerful groups with a strong interest in rejecting the facts, or at least creating a fog of doubt. Indeed, you can be sure that the claim “The Piketty numbers are all wrong” will be endlessly repeated even though that claim quickly collapsed under scrutiny.
By the way, I’m not accusing Mr. Giles of being a hired gun for the plutocracy, although there are some self-proclaimed experts who fit that description. And nobody’s work should be considered above criticism. But on politically charged issues, critics of the consensus need to be self-aware; they need to ask whether they’re really seeking intellectual honesty, or are effectively acting as concern trolls, professional debunkers of liberal pieties. (Strange to say, there are no trolls on the right debunking conservative pieties. Funny how that works.)
So here’s what you need to know: Yes, the concentration of both income and wealth in the hands of a few people has increased greatly over the past few decades. No, the people receiving that income and owning that wealth aren’t an ever-shifting group: People move fairly often from the bottom of the 1 percent to the top of the next percentile and vice versa, but both rags to riches and riches to rags stories are rare — inequality in average incomes over multiple years isn’t much less than inequality in a given year. No, taxes and benefits don’t greatly change the picture — in fact, since the 1970s big tax cuts at the top have caused after-tax inequality to rise faster than inequality before taxes.
This picture makes some people uncomfortable, because it plays into populist demands for higher taxes on the rich. But good ideas don’t need to be sold on false pretenses. If the argument against populism rests on bogus claims about inequality, you should consider the possibility that the populists are right.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 1, 2014
“Koch Cadre Billionaire Defends Nazi Comments”: For The Continued Success Of The Richest Americans
Ken Langone, the billionaire Home Depot founder, GOP donor and an ally of Charles and David Koch, clumsily defended his March 2014 comments comparing populist criticism of the 1% with the rise of Nazi Germany, in an interview with Capital New York published this week.
Langone, a regular attendee of the twice-yearly secret strategy sessions for the mega rich organized by Charles and David Koch, has been speaking publicly of his concerns for the continued success of the richest Americans.
“We’re being strangled by regulation,” Langone told a conference of hedge fund managers in Las Vegas in mid May, as reported by CNN. “You’re in the 1%, there’s nothing wrong with that,” he continued. “You can do so much more with money than pay your taxes.”
The Top One Percent as Victims
Now, Langone has spoken to defend his past Nazi comparison, despite having somewhat backtracked just two months earlier.
From Huff Post:
Billionaire Kenneth Langone is still defending his comparison of income inequality talking points to rhetoric in Nazi Germany, after apologizing two months ago for the comments.
In a Capital New York interview published Monday morning, the Home Depot co-founder and Republican megadonor said it was a fair analogy to illustrate how democratic elections can yield results he finds terrifying.
“I simply said just because we’re a democracy doesn’t mean you can’t have bad results,” he said. “That’s all! I stand on what I said.”
Huff Post continued:
In a March interview with Politico, which owns Capital, Langone said a GOP pivot toward the economic populism championed by progressives and by such Tea Party candidates as Kentucky Sen. Rand Paul and Texas Sen. Ted Cruz would mirror the rise of Adolf Hitler.
“I hope it’s not working,” Langone said of the political appeals at the time. “Because if you go back to 1933, with different words, this is what Hitler was saying in Germany.”
Koch “Cadre”
The Kochs have been building their politcal network for more than forty years.
Nicholas Confessore, wrote about the history of the Koch brothers political activities in a front page New York Times story on May 18, 2014, detailing the origins of the present day Koch political operation.
According to Confessore, in a speech given to business leaders and others in 1974, Charles Koch outlined that vision saying: “The development of a well-financed cadre of sound proponents of the free enterprise philosophy is the most critical need facing us today.”
The Koch brothers are not the only billionaires using their wealth to push for radical deregulation. They now have a whole cadre.
By: Nick Surgey, The Center For Media and Democracy, May 19, 2014
“He’s Not Alone”: Florida’s Yoho Connects Voting Rights, Property Ownership
Rep. Ted Yoho (R-Fla.) has already made quite a name for himself after just 17 months in Congress, but yesterday, Right Wing Watch published arguably the most striking quote yet for the Tea Party congressman’s greatest-hits list.
Recently unearthed footage of Rep. Ted Yoho speaking at Berean Baptist Church in Ocala, Florida, during his candidacy for Congress in the 2012 election cycle shows the Republican politician suggesting that only property owners should have the right to vote.
“I’ve had some radical ideas about voting and it’s probably not a good time to tell them, but you used to have to be a property owner to vote,” he said to applause.
The part about the applause isn’t an exaggeration – there’s video showing exactly that.
A Yoho spokesperson told msnbc yesterday, “The congressman was making a reference to how voting was structured when America was in its infancy (from a historical perspective). He does not believe that this is the way it should be now.”
And while that’s reassuring, listening to Yoho in the 2012 video, his reference connecting property ownership and voting rights didn’t quite sound like criticism, either.
Zachary Roth added:
Yoho’s comments on voting are firmly within the tradition of conservative thinking on the franchise, which sees it less as a right and more as a tool to make an informed decision about government.
Versions of that notion were used to justify restricting the vote to property owners in the republic’s early days, as well as later voting restrictions like literacy requirements. Even in the 21st century, Yoho is far from alone among prominent conservatives in suggesting that voting should be made more difficult in order to produce a better-informed electorate.
In this case, the congressman isn’t even alone among conservatives suggesting voting rights be connected to wealth. In February, Tom Perkins, a very wealthy venture capitalist who compared contemporary American progressives to Nazis, gave a speech that argued along similar lines.
When challenged to say, in 60 seconds, how he would change the world, Perkins made a playfully controversial response. He suggested that, in the tradition of Thomas Jefferson’s voting land owners and Margaret Thatcher’s idea of only allowing taxpayers to vote, “The Tom Perkins system is: You don’t get the vote if you don’t pay a dollar in taxes. But what I really think is it should be like a corporation. You pay a million dollars, you get a million votes. How’s that?” To which the audience responded with laughter.
It wasn’t long ago that those who expect to be taken seriously in modern American life would avoid rhetoric like this.
By: Steve Benen, The Maddow Blog, May 21, 2014
“It’s Now The Canadian Dream”: It’s Time To Bring The American Dream Home From Exile
It was in 1931 that the historian James Truslow Adams coined the phrase “the American dream.”
The American dream is not just a yearning for affluence, Adams said, but also for the chance to overcome barriers and social class, to become the best that we can be. Adams acknowledged that the United States didn’t fully live up to that ideal, but he argued that America came closer than anywhere else.
Adams was right at the time, and for decades. When my father, an eastern European refugee, reached France after World War II, he was determined to continue to the United States because it was less class bound, more meritocratic and offered more opportunity.
Yet today the American dream has derailed, partly because of growing inequality. Or maybe the American dream has just swapped citizenship, for now it is more likely to be found in Canada or Europe — and a central issue in this year’s political campaigns should be how to repatriate it.
A report last month in The Times by David Leonhardt and Kevin Quealy noted that the American middle class is no longer the richest in the world, with Canada apparently pulling ahead in median after-tax income. Other countries in Europe are poised to overtake us as well.
In fact, the discrepancy is arguably even greater. Canadians receive essentially free health care, while Americans pay for part of their health care costs with after-tax dollars. Meanwhile, the American worker toils, on average, 4.6 percent more hours than a Canadian worker, 21 percent more hours than a French worker and an astonishing 28 percent more hours than a German worker, according to data from the Organization for Economic Cooperation and Development.
Canadians and Europeans also live longer, on average, than Americans do. Their children are less likely to die than ours. American women are twice as likely to die as a result of pregnancy or childbirth as Canadian women. And, while our universities are still the best in the world, children in other industrialized countries, on average, get a better education than ours. Most sobering of all: A recent O.E.C.D. report found that for people aged 16 to 24, Americans ranked last among rich countries in numeracy and technological proficiency.
Economic mobility is tricky to measure, but several studies show that a child born in the bottom 20 percent economically is less likely to rise to the top in America than in Europe. A Danish child is twice as likely to rise as an American child.
When our futures are determined to a significant extent at birth, we’ve reverted to the feudalism that our ancestors fled.
“Equality of opportunity — the ‘American dream’ — has always been a cherished American ideal,” Joseph Stiglitz, the Nobel-winning economist at Columbia University, noted in a recent speech. “But data now show that this is a myth: America has become the advanced country not only with the highest level of inequality, but one of those with the least equality of opportunity.”
Consider that the American economy has, over all, grown more quickly than France’s. But so much of the growth has gone to the top 1 percent that the bottom 99 percent of French people have done better than the bottom 99 percent of Americans.
Three data points:
• The top 1 percent in America now own assets worth more than those held by the entire bottom 90 percent.
• The six Walmart heirs are worth as much as the bottom 41 percent of American households put together.
• The top six hedge fund managers and traders averaged more than $2 billion each in earnings last year, partly because of the egregious “carried interest” tax break. President Obama has been unable to get financing for universal prekindergarten; this year’s proposed federal budget for pre-K for all, so important to our nation’s future, would be a bit more than a single month’s earnings for those six tycoons.
Inequality has become a hot topic, propelling Bill de Blasio to become mayor of New York City, turning Senator Elizabeth Warren into a star, and elevating the economist Thomas Piketty into such a demigod that my teenage daughter asked me the other day for his 696-page tome. All this growing awareness is a hopeful sign, because there are policy steps that we could take that would create opportunity and dampen inequality.
We could stop subsidizing private jets and too-big-to-fail banks, and direct those funds to early education programs that help break the cycle of poverty. We can invest less in prisons and more in schools.
We can impose a financial transactions tax and use the proceeds to broaden jobs programs like the earned-income tax credit and career academies. And, as Alan S. Blinder of Princeton University has outlined, we can give companies tax credits for creating new jobs.
It’s time to bring the American dream home from exile.
By: Nicholas Kristof, Op-Ed Columnist, The New York Times, May 14, 2014
“Donald Sterling’s Interview Disaster”: Rich Old Racist Self-Destructs To Anderson Cooper
Donald Sterling, in all his reprehensible anti-glory, is officially representative of only one person, Donald Sterling. But it was hard not to think about the insularity and cossetting the super-wealthy enjoy, once they get super-wealthy, watching the maligned Los Angeles Clippers owner self-destruct with Anderson Cooper Monday night.
Sterling is a man who is obviously used to holding forth on his mind-blowingly prejudiced views without challenge. He wants us to think V. Stiviano entrapped him with her magic lady parts — “I don’t know why the girl had me say those things,” he told Cooper — and got him to launch a paranoid racist rant out of lust. But clearly that is not true, unless he’s lusting after Anderson Cooper.
“I’m not a racist,” Sterling told Cooper. “I made a terrible, terrible mistake. And I’m here with you today to apologize and to ask for forgiveness for all the people that I’ve hurt. When I listen to that tape, I don’t even know how I can say words like that…. I mean, that’s not the way I talk.” Actually, it seems to be exactly the way Sterling talks.
It’s hard to know where to start with the NBA franchise owner’s outrageous remarks. He called Stiviano “a street person” and said Magic Johnson “ought to be ashamed of himself.” No, that doesn’t do Sterling justice. This is what he said about Johnson:
Here is a man, he acts so holy. He made love to every girl in America in every city and he had AIDS. When he had those AIDS, I went to my synagogue and I prayed for him.
“Those AIDS”? (For the record, Johnson has HIV, not AIDS). But it got worse:
What has Magic Johnson done? He’s got AIDS. Did he do any business? Did he help anybody in south L.A.? I think he should be ashamed of himself. What does he do for the black people? I’m telling you he does nothing. It’s all talk.
I spent millions on giving away and helping minorities. Does he do that? That’s one problem I have. Jews, when they get successful, they will help their people.
And some of the African-Americans, maybe I’ll get in trouble again. They don’t want to help anybody. What has Magic Johnson really done for Children’s Hospital which kids are lying in the hallways. They are sick. They need a bed. What has he done for any hospital? What has he done for any group?
For the record, Magic Johnson has a foundation that gives away almost $2 million a year and got a four-star rating by Charity Navigator last year. A recent Los Angeles Times investigation found little evidence of the Donald Sterling Foundation’s good work. He does reportedly give a lot of money to women he’s trying to bed.
For his part, Johnson replied an hour after the interview aired: (on Twitter)
Maybe Sterling thought his sit-down with Cooper would help him rehabilitate himself, but at one point he even turned on Cooper. When the CNN anchor suggested that Sterling’s paternalistic comments about his players, that “I support them and give them food, and clothes, and cars, and houses,” had been criticized as reflecting a plantation mentality, Sterling turned on his host: “I think you have more of a plantation mentality than I do. And I think you’re more of a racist than I am. Because I’m not a racist, and I’ve never been a racist.”
“I know you are but what am I” rarely turns out well on national television.
It’s said that Sterling’s sit-down with Cooper was a message to other NBA owners, some of whom he claimed support his crusade to keep his team. (Oh, and he said his players “love” him too.) If Sterling was sending the owners a message in the interview, it had to be: “I want to sell my team right now. Help me.”
NBA commissioner Adam Silver was unimpressed. He apologized to Magic Johnson “that he continues to be dragged into this situation and be degraded by such a malicious and personal attack.” The NBA Board of Governors — Sterling’s fellow owners — “is continuing with its process to remove Mr. Sterling as expeditiously as possible.” It can’t happen soon enough.
By: Joan Walsh, Editor at Large, Salon, May 13, 2014
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