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Why we should care about income inequality

Pat Ryan Leave a comment

I don’t want to get into the argument of the 1% versus the 99% because I think the issue, unaddressed, will hurt 100% of us. The issue is income inequality in the United States, and the good news is I’m not asking anyone to trust my economic arguments. I’m a dope, after all—a journalism major from a state university in the South who never focused on economic theory much beyond the law of supply and demand. But I know what makes sense, and Timothy Noah’s series in Slate does.

The 10-part series on income inequality published in September 2010 has helped me understand the issues, and understand why they matter. It’s not a question of the vast majority of Americans being jealous of the terrific success of others, or of them trying to take away anything the rich have earned. In a current discussion of this subject on Slate, Noah says “Let me start by conceding a point that conservatives often make: Yes, a certain amount of income inequality is necessary in a capitalist system. You have to let the market reward effort and skill. But a system in which inequality of incomes constantly increases over time is worrisome.”

That’s what’s happening in America today: the inequality of incomes is constantly increasing (the series drills down deep into the numbers to prove that it’s more dramatic now than ever), and Noah argues that “creates alienation.”

Income earners at the median have not shared in America’s prosperity. They’ve actually seen their incomes go down (after inflation) during the past decade, and over the past three decades their increases seem pitiful compared both with people earning top incomes (and here I mean not just the top 1 percent but the top 10 and even 20 percent) and with people at the median during the postwar era. For a long time economists said: Wait until productivity rebounds. Then working families will get their share. But when productivity rebounded like crazy in the aughts, working families saw no reward.

What this means is that if you’re at the median you have no positive reason to care how the economy does. Your only motivation is fear—if the economy does really badly you may lose your job. But there’s no upside.

I think this situation has a lot to do with why there’s so much suspicion of institutions that knit the country together—Congress, the media, etc. Logically the suspicion should be directed at the rich, but nobody knows what Lloyd Blankfein looks like. Everybody knows what Barack Obama and John Boehner look like. So people rage against Washington, and government, and you get both the Tea Party and Occupy Wall Street. These groups are quite different in their political orientation, but both groups express contempt for democratic processes.

Read the series: Noah digs through the numbers that show the historical trends of income inequality, and explores the theories for what’s responsible for today’s situation–and he doesn’t just end up blaming Congress or presidents, or Republicans or Democrats, or Wall Street or the educational system, or trade policy or labor unions or immigrants.

Income distribution in the United States is more unequal than in Guyana, Nicaragua, and Venezuela, and roughly on par with Uruguay, Argentina, and Ecuador. Income inequality is actually declining in Latin America even as it continues to increase in the United States. Economically speaking, the richest nation on earth is starting to resemble a banana republic.

Noah’s current book “The Great Divergence” grew out of the research done for the 2010 Slate series, which you can read here for free.

This one guy says the evil super PACs are SAVING democracy, others are less charitable

Pat Ryan Leave a comment

I’m not sure if he’s right or not, but he makes an interesting argument.  Dave Weigel is an excellent political reporter who’s spent a lot of time chronicling the conservative movement.  Today at Slate he makes the provocative argument—it was to me, anyway—that the political action committees fostered by the U. S. Supreme Court’s Citizens United decisionare a good thing, that they have been a force to strengthen democracy and have made this year’s Republican presidential contest fairer.

Huh?  No, no, no, wait a minute: Citizens United is an evil thing, a twisted interpretation of dictionary English by the conservative members of the court so that now the godless, faceless corporations are considered “persons” for the purposes of political participation, and they can secretly donate as much of their giant piles of money as they like to PACs and buy elections and marginalize the little guy like me (I was going to say you and me, but I really shouldn’t presume to speak for you, should I?)…it’s already happened starting in Iowa this year, right?  I mean, that’s what we’ve all been told, right?

But Weigel argues that the super PACs have had a leveling effect: the big money from super PACs is all that’s kept Mitt Romney from outspending his opponents into submission, and essentially buying the GOP nomination.  And despite the concerns about the secretive nature of the super PACs, he notes that we seem to know more about the biggest of the big donors to super PACs than we do about the people making direct donations to the individual candidates’ campaigns. He writes, “The big fear about campaign money is that it corrupts the candidates who have to beg for it.”

But that worry applies better to the shadowy bundler than it does to the megabucks super PAC donor. Corruption can’t grow in the sunlight. The people giving big to super PACs are famous. I didn’t fully understand how famous until I tagged along with [Newt] Gingrich at a speech to Aloma Baptist Church in Florida, when a parishioner asked him to explain why he was taking dirty money from the gambling industry. Gingrich explained that he and [Sheldon] Adelson had a simpatico, guns-a-blazin’ view on Israel. Is it corruption if the candidate tells you what he’ll do for the donor?

(snip)

We know more about those guys than we know about the bundlers, who’ve been passing money under the table for years. So which of those systems is worse for our democracy?

I know what’s good for our democracy: satire and ridicule, and in the case of Citizens United it’s been coming most effectively from Stephen Colbert.  The Comedy Central comedian started his own super PAC and has been using it to expose the ridiculous reality resulting from the court’s ruling.

The line between entertainment and the court blurred even further late last month when Colbert had former Justice John Paul Stevens on his show to discuss his dissent in Citizens United. When a 91-year-old former justice is patiently explaining to a comedian that corporations are not people, it’s clear that everything about the majority opinion has been reduced to a punch line.

The court fights aren’t over, and perhaps the coolest one is in Montana where the state supreme court has told the one in Washington to pound sand.  The court voted 5-2 to uphold the constitutionality of Montana’s ban on corporate campaign contributions, finding justification for the ban that Citizens United does not consider.  Beyond that, Justice James Nelson unloaded: “Corporations are not persons.  Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental, natural rights with soulless creatures of government.”   And that from one of the two dissenters in the ruling!

More fundamentally, the majority and one dissenter seem to understand perfectly how much the American people resent being lied to about the burning need for courts to step in to protect the oppressed voices of powerless corporate interests. As Judge Nelson wrote in dissent, “the notion that corporations are disadvantaged in the political realm is unbelievable. Indeed, it has astounded most Americans. The truth is that corporations wield enormous power in Congress and in state legislatures. It is hard to tell where government ends and corporate America begins: the transition is seamless and overlapping.”

You wouldn’t mind if we just arrested you a little bit, would you, since you look like you might hate America?

Pat Ryan Leave a comment

Did you ever run across something that’s so bizarre, so out there, so freakin’ weird, that you think you must have heard it or read it wrong?  I did recently, when I read the story that the Congress of These United States was ready to pass a law making it perfectly legal for the government to use the Army to arrest American citizens here in America and hold them in custody, indefinitely, without charges or trial, if in the government’s wisdom that person was a terrorist threat.

Wait, what?

Yes.  Apparently still shivering with fear over the possibility of another September 11-type attack, Congress was ready to pass an amendment to the National Defense Authorization Act that would authorize the use of the military as a domestic police force and give clearance to arrest and detain citizens on the mere suspicion of terrorist complicity; there would be no messy and time-consuming need for formal charges to be filed, or for due process or habeas corpus to be respected.  Congress seemed confident that the American sheeple either wouldn’t notice or were so scared of terrorists that they would happily line up to trade in some of their Constitutionally-protected liberties for an unkeepable promise of safety in the future and the warm confidence that comes from thoughtlessly submitting to government authority over their lives.

(When, please, are we going to stop being scared of terrorists?  I’m not saying we should ignore threats, or even that we should demand to keep our shoes on at the airport, but living our lives in quaking fear of possible terrorism isn’t much different from looking over your shoulder all day every day just in case there’s a tornado following you.)

But Congress didn’t pass that law, because enough people saw what was coming and made enough noise to shame the members into backing off.  They approved an additional amendment that specifically disallows the arresting-American-citizens-here-in-America-without-charges part.

What in the wide, wide world of sports were they thinking?  Seriously: what drives the thought process of supposedly mature and rational adults to think it’d be OK to do this, even though the Constitution expressly forbids using the military as a domestic police force and forbids indefinite detention without charges?

One of the richly ironic results of this misadventure is that it caused political enemies and philosophical opposites to unite: the “Say what?” reaction came from liberals and conservatives and moderates, who all recognized a ham-handed attempt to take a big bite out of the personal liberties that America promises to all of its citizens.  And they rose together—as Americans—to emulate Buckley and yell “Stop!”.

The lesson?  Keep your eyes and your ears open, because someone will try something like this again; they always do.  It’s up to us—all of us—to see that they don’t get away with it.

OK, now that you’ve eaten all your vegetables, here’s dessert:

3338df600dac012f2fc600163e41dd5b Thanks to Tom the Dancing Bug and his friend Ruben Bolling.

Fool me once, shame on you; fool me twice…

Pat Ryan Leave a comment

The “supercommittee” admitted defeat; it won’t have a blueprint for reducing the nation’s deficit (stories here, here and here).  Is this a bad thing?

Some have argued, no: the first direct result of getting no plan from this committee is that the law which authorized it will now automatically cut $1.2 trillion from defense and non-defense spending over ten years starting in 2013, and that may end up giving us more deficit reduction than we’d have gotten otherwise.  No way to know for sure, of course, but it makes sense.

I mean, there’s no reason to believe that the same members of Congress who thought nothing of threatening government default for political gain this past summer were likely to come to any agreement now, not when the party that controls the House (and virtually controls the Senate with the threat of filibuster) is still holding its breath threatening to turn blue rather than be responsible and discuss the best ways to increase revenue as part of the answer (along with spending cuts and overall economic growth) to getting the federal budget on a healthy path.  None at all.

To believe otherwise would mean, first of all, believing that the sheep people lined up behind Speakers Boehner and Limbaugh have any goal more important that the defeat of President Obama.  They don’t, unless it is the personal destruction of Obama, and anyone unlike themselves.  Second, it means they would have to have the backbone to say no to the no-tax extremists and the campaign contributors.

I read an interesting article making the point that we’re foolish to think that our elected representatives will do anything that makes sense for us, because they’re in place to serve their bosses: namely, the minority of the population who actually vote in the primaries, and the even smaller percentage of the people who pay the bills through campaign contributions both above and below board.  (By the way, read Michael Moran’s piece setting the stage for his blog The Reckoning.)

The other thing to watch out for right now, though, is the cowardly Congress finding a way to back out of the deal it made with itself!  No Congress can pass a law that would prevent a future Congress from unpassing that law; just because it set itself this deadline and mandated future budget cuts as a penalty for failing to meet that deadline can’t prevent the next Congress from overriding all or some part of the threatened budget reductions, and that’s entirely possible for a group that already can’t say no to anyone (which is a big part of what got our budget in this mess to begin with).

Give some thought to Moran’s suggestion: in times of crisis, what if we take control away from politicians and give it to people who know what they’re doing?

A real super-committee – a real committee not only empowered to take the steps necessary to right the American economy, but competent to do so – would include 12 serious thinkers. They might include policymakers like former Fed Chairmen Paul Volker or (the suitably contrite) Alan Greenspan, economists of left and right like Stanford’s John B. Taylor, Yale’s Robert Schiller, NYU-Stern’s Nouriel Roubini, plus a few representatives of labor, small business and capital – let’s say Robert Reich, Joseph Schneider of Lacrosse Footwear, and Warren Buffett, just for kicks. No investment bank chairman, please, and no one facing reelection.

Can you imagine this group failing to come up with a solution? Can you imagine any of them worrying more about the next election than the future of the world’s largest economy? Certainly, they would clash – perhaps over the same tax v. spending cut issues. The difference: they would understand better than any member of Congress that no solution is far worse than a less-than-perfect solution.

The man says media bias isn’t a problem, it’s a solution; thoughts?

Pat Ryan Leave a comment

Are you like me, do you just love the press criticism?  (Of course you are; of course you do.)  Well, I correspond today with news of the new location for Jack Shafer, who was laid off last month by Slate, where as editor at large he wrote the Press Box column (and other things).  In fact, Shafer’s first column at Reuters is dated one week ago so I’m a couple of days late to the party, but there’s not as much to catch up on if you start right away.

If you’re new to Shafer’s brand of criticism, jump in with a look at the latest column: he’s arguing against self-described centrist journalism.

If not for media bias, I’m certain that my news diet would taste so strongly of sawdust and talc that I would abandon news consumption completely. As long as I’m eating news, give me the saffron smoothness of New York Times liberalism and the hallelujah hot sauce excitement of Fox News Channel conservatism. Anything but a menu of balance, moderation, and fairness!

Read the column—he’s not against “balance, moderation and fairness,” he’s against bland; he’s against lazy news consumers who are insufficiently critical of what they read, see and hear, and recommends we all expand our menu of news providers.

The recommendation comes from my prejudice that liberals are better at sniffing out corporate corruption and national security shenanigans and conservatives better at blowing the whistle on waste and overreach by governments. Centrist news outlets, or at least self-defined centrist journalists, don’t strike me as possessed or deranged enough to battle their way to the end of a good investigation.

I also call upon readers to learn how to hit both lefties and righties—and whatever ambidextrous centrist journalists take the mound. Media bias isn’t a journalistic problem. It’s a solution.

Shafer’s new spot at Reuters is now on my blogroll over there, for your future reference.