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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.

In the spring a young man’s fancy also turns to baseball and cars; politics is getting in the way

Pat Ryan 1 Comment

Yep, another great day: sunny skies and highs in the low 80s in southeast Texas, got a ticket for my first game of the new baseball season tonight, made some good progress with a new swing thought out on the driving range yesterday, and I’m about a week away from trading in a serviceable but boxy and uninspiring VW for a very low mileage Honda two-seater—just the kind I’ve always loved and used to drive—while lowering my costs in the process!  With Rick Santorum’s exit from the GOP presidential primary, I’m hoping we can all enjoy a period of relative campaign quiet, too, but here’s something to roll around in your head before Mitt Romney and Barack Obama, and the permanent political class, use up all the oxygen.

It has looked like, from the vantage point of today, that come November we voters would face a choice between the radicalism that defines today’s Republican Party or another four years of divided government and damn little constructive effort on crucial economic issues.  Even the most moderate-seeming Republican candidate, Romney, was disavowing anything in own past that smelled of reasonableness and compromise, to appeal to the extremists who make up most of the GOP primary voters.  But the need for that should be over now, absent a mind-boggling resurgence from Newt Gingrich or Ron Paul or a last gasp charge to the convention from Sarah Palin or someone of that ilk to rally the “true conservatives.”

But even as Romney starts to redefine himself to appeal to the less ideological among us, Republicans will have a quite a slog in front of them if they wish to broaden their appeal beyond those who’ve already drunk the Kool-Aid.  Former White House speechwriter and senior policy adviser Michael Gerson says it’s not just a matter of trying to counter the Democrats’ “war on women” meme: “The GOP’s main problem is not the contraceptive issue; it is the perception that it has become too ideological on many issues.”

Women and independent voters have seen a party enthusiastically confirming its most damaging stereotypes. The composite Republican candidate—reflecting the party’s ideological mean—has been harsh on immigration, confrontational on social issues, simplistic in condemning government and silent on the struggles of the poor. How many women would find this profile appealing on eHarmony?

This is the hidden curse of the Republican congressional triumph of 2010. Republican activists came to believe that purity is all that is necessary for victory. But a presidential candidate, it turns out, requires a broader ideological attraction than your average tea party House freshman.

From an academic standpoint it will be interesting to see if and how Romney and the more traditional Republican elements work to sand the scary edges off of their primary campaign messages, to widen their appeal and entice the plurality of American voters who don’t ritualistically identify with the Republican or Democratic parties; those are the people who will decide this election.  (The Obama campaign isn’t going to make it easy, already working to reinforce Romney’s “severe” conservatism and other primary campaign highlights.)  Gerson argues that “Mainly, women and independents want some reassurance that Republicans give a damn about someone other than Republican primary voters. It is not a high bar. But Romney needs to start somewhere…”.  I’ll check back in after Memorial Day to see how he’s doing.

Milo, you’re no Hall of Famer and I can prove it

Pat Ryan Leave a comment

Listening to a baseball game on the radio is a special treat, but I haven’t been able to tune in to my Houston Astros since the mid-1980s because I cannot abide the play-by-play announcer.  So I was quite pleased recently when Milo Hamilton announced he was retiring from the broadcast booth after the 2012 season.  Appreciation of one broadcaster or another is to some degree a matter of taste, I grant you; in this case, I’m finally getting the bad taste out of my mouth after more than 30 years!

In the days of my first experience with cable television in Austin, Texas in the late 1970s, when all you got was a dozen or so channels in total including the local stations, the special offerings including the independent “super stations” WTBS (originally WTCG) in Atlanta and WGN in Chicago which carried a ton of syndicated programming plus all the games of the Atlanta Braves and Chicago Cubs baseball teams.  To a fledgling broadcaster and long-time baseball fan it was pretty cool to see how stations in other cities put on their broadcasts, and since the Cubs played all their home games in the afternoon back then I saw them a lot.  In a very short time I decided that I did not care for the style of either of the Cubs play-by-play men, Harry Caray and Milo Hamilton.

By 1985 I was back in Houston, and was disgusted at the news that the Astros hired Hamilton to be the second play-by-play guy behind long-time local favorite Gene Elston.  By 1987 Elston was unceremoniously dumped and Hamilton had the top spot in the radio broadcast.  He has some ardent fans—most notably Astros management, that hasn’t fired him in all these years—but Hamilton is the subject of high derision and ridicule, and it’s not just me: check out the comments forum at Houston’s Leading Information Source, or even the Astros’ own website,  when the news broke that Hamilton was going to announce his retirement.

Among the things I’ve always loathed, right after his increasing inability over the years to stay focused on the game playing out right in front of his damn eyes, has been Hamilton’s pomposity, his exuberant affection for all things Milo and his assumption that you love all things Milo too.  This includes the unbecoming habit of reminding the listener that he’s a Hall of Fame broadcaster, referring to the fact that he won the Ford C. Frick Award from the National Baseball Hall of Fame and Museum in 1992.  Well, during the big doings over the retirement announcement I saw a story in the Houston Press that gave me pause: John Royal asserted that Hamilton is not a member of the Hall of Fame, just the winner of an award the Hall gives.  I had to find out for myself:

HOF

There you have it boys and girls, the bar-bet-settling evidence straight from Cooperstown!  Milo Hamilton, no matter which halls of fame you claim, you are not a member of baseball’s hall.  Happy trails!  Oh, frabjous rapture!

But as joyous as the news is, as wonderful the feeling of smacking down a hated asshole can be, it’s raised an issue.  My friend Mark Sterling, a product of Detroit who shares my distaste for Hamilton’s on-air style, and who is a lover of the late long-time Tigers broadcaster who also won the Frick, had this response to the notice heralding my achievement:

A fine piece of investigative work, indeed; certainly adding proper perspective to Milo’s body of work.  However, in the case of fellow “award winner” Ernie Harwell, Red and I will stand like the house by the side of the road, and watch that one [Craig’s assessment] go by…

Oh crap, what I have I done?  (Milo, what have you done?  You’ve gone and screwed it up for everybody.)

And then it hit me: this is only a problem for creeps like Hamilton who’ve overreached and taken credit for something they’re not entitled to.  We’ve all heard other Frick Award winners referred to as Hall of Famers by others, but the mikemen don’t bear the responsibility for that error.  They’re all in the Hall, in the exhibit in the Museum, and we who appreciate their work aren’t wrong to think of them as being in the Hall.  (Donna Stell, another friend who read the Hall’s response to my question, wondered if that makes Hamilton an exhibitionist; yes, I believe it does.)

So, I was relatively proud of myself for coming up with information that like-minded baseball lovers can appreciate.  I shared it among a group of friends, and made the parenthetical aside that “this may be the most worthwhile thing I have done this week;” my friend Tom Adolph, no doubt voicing the sentiment shared by many others, replied “This may be the best thing you have ever done.”  If so, I can live with that.

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

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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.

I’ve got some great news, and I’ve got some less than great news

Pat Ryan Leave a comment

The great news is that the sale of the Houston Astros was approved by the Major League Baseball owners at their quarterly meeting today.  The Dreaded Drayton McLane Era in Houston Astros history is expected to finally be smothered with a pillow by the middle of next week; this will do nothing to immediately get us any better players, but it will make a lot of people feel better.

This past May when the sale agreement with an investment group led by Houston businessman Jim Crane was announced, I unburdened myself on the subject of McLane’s star-crossed stewardship of my hometown team.  In retrospect, the only thing I’d change would be to include better examples of how splurging on big name free agents made McLane feel like he was building a champion but really only reinforced his legacy of misguided priorities:

Kaz Matsui.  Woody Williams.  Vinny Castilla.  Sid Fernandez.  Dwight Gooden.  Mike Hampton.  Jason Jennings.  Pat Listach.  Brett Myers.  Russ Ortiz.

I’ve been a baseball fan since I was a kid and been lucky enough to always live in cities with big league teams, except for a few years as a small boy and then in college, so going to games regularly and seeing all the best players in person has been a big part of my life.  I’ve seen a few really good Houston teams, and I’ve seen quite a few really terrible ones since I first walked into the Astrodome in 1966, but since then the Astros have been my team.  Baseball fans are, among many things, loyal to their team.

But, I got so tired of sitting through season after season of McLane and his minions oh-so-earnestly soldiering on, unable to stop meddling in the baseball stuff they didn’t know about, from scouting to farm system to broadcasting and more, while conniving to get taxpayers to pick up most of the tab for a (beautiful) new playpen and then raising prices on everything we buy when we’re there.  And now to top it all off, the team on the field has turned from a prince into a frog.

So, I’ve got nothing but positive feelings about the old ownership hitting the bricks (not the ones they’re selling for $100).  The new guys could be worse, but I’m willing to take the chance that they’re not.  I’m not so positive about the upcoming opponents.

The less than great news is that this sale turned out, as suspected, to be contingent on moving the Astros out of the National League and into the American League’s West Division.  Probably starting in 2013—the season after next—after more than 50 years with a National League team and before that minor league teams that were associated with National League clubs dating back to the 1920s—Houston will become an American League city.  This bites.

Since the expansions and realignments leading up to the 1998 season, there have been three divisions in each league with five teams in most of those divisions, but the NL Central has had six teams and the AL West only four (I can’t remember why).  In the past few years it seems to have become important to even that out.  The rules won’t let any team owner be forced to change leagues, but the commissioner’s office took advantage of this opportunity and made the league change a requirement for approval of this sale.  The Astros’ new owner had to agree, or walk away from the whole deal.

Now the Astros will be in the same division with the Texas Rangers, Seattle Mariners, Oakland A’s and Los Angeles Angels of Anaheim and play a larger percentage of their games against them instead of against their current NL Central rivals.  Three of the AL West teams are in the Pacific time zone, which means the Astros will play a larger number of road games that won’t start until 9 p.m. Houston time and won’t end until midnight or more.  That will cut into the size of the TV and radio audiences in Houston, hurt ratings and hurt the team and the broadcasters financially.

It will mean a big change in which teams we see come to Houston.  Instead of three visits a year from the Cardinals and Cubs and other NL Central teams, and once a year from the Giants and Phillies and other National League teams, we may see all of them once a year at most. Instead, we’ll get a therapeutic dose of our new AL West buddies and annual drop-ins from not only the Yankees and Red Sox but the Twins and Orioles and Royals, too.  Oh boy.

And as for the idea that the Astros will have a wonderful rivalry with the Rangers…well, that may come to be, but it’s far from certain.  Notwithstanding all the balloon juice emanating from Major League Baseball about the “natural rivalry” between the two teams from Texas, let me presume to speak on behalf of Houston fans when I say, we don’t care about the Rangers.  Don’t hate ’em, just don’t care about ’em.  Never have.  I think Rangers fans feel the same way about the Astros, but I’ll stand to be corrected on that.

And yes, I believe watching a team that plays all of its games with the designated hitter will be annoying.  It won’t be the end of the world, but it won’t add to my enjoyment and excitement, either.  I’m just not a DH kind of guy.  Now it turns out that that will be part of the price I have to pay to get the Old Grocer out of my life and out from that seat behind home plate in the centerfield shot on my TV screen.

Well, things have been worse…did I mention Kaz Matsui?