Plutocracy vs. democracy
Bill Moyers on the need for a level playing field and real democracy:
In May, President Obama and I both spoke at the Rutgers University commencement ceremony. He was at his inspirational best as 50,000 people leaned into every word. He lifted the hearts of those young men and women heading out into our troubled world, but I cringed when he said, “Contrary to what we hear sometimes from both the left as well as the right, the system isn’t as rigged as you think…”
Wrong, Mr. President, just plain wrong. The people are way ahead of you on this. In a recent poll, 71% of Americans across lines of ethnicity, class, age, and gender said they believe the U.S. economy is rigged. People reported that they are working harder for financial security. One quarter of the respondents had not taken a vacation in more than five years. Seventy-one percent said that they are afraid of unexpected medical bills; 53% feared not being able to make a mortgage payment; and, among renters, 60% worried that they might not make the monthly rent.
Millions of Americans, in other words, are living on the edge. Yet the country has not confronted the question of how we will continue to prosper without a workforce that can pay for its goods and services….
The religion of inequality — of money and power — has failed us; its gods are false gods. There is something more essential — more profound — in the American experience than the hyena’s appetite. Once we recognize and nurture this, once we honor it, we can reboot democracy and get on with the work of liberating the country we carry in our hearts.
Read his powerful essay, “We, the Plutocrats vs. We, the People,” here.
The Unequal States of America
A new interactive website from the Economic Policy Institute compares the one percent and everyone else in the U.S. – by state and by county:
Check out the numbers for your state here.
Elite disconnect
A long history of elite disconnection from the economic realities faced by most Americans helped to set the stage for the nation’s current political turmoil:
For some time now most of the people in this country have been under economic pressure. Pay is not going up very much or at all, while living costs keep rising. One recent statistic stands out – 63 percent of Americans would have difficulty raising $500 to cover an emergency, like a sudden need for car repair so they can get to work. Around them the community’s roads and schools and services are in decline.
Most of the public can see this clearly, yet so many elites can’t see at all, and see it or not, they do little or nothing to make things better. This arrogance of our blind, well-fixed elites is helping drive the Donald Trump phenomenon.
Read more here.
Common wealth dividends
Peter Barnes explains how protecting the environment and sharing the fruits of our economy more broadly can – and should – go hand-in-hand:
The failure to charge for common wealth — for example, letting polluters dump freely into our atmosphere — leads to what economists call “negative externalities.” The costs of pollution aren’t paid by polluters; they are shifted to pollutees, nature and future generations. And this market failure persists because no living individuals or companies would financially benefit from fixing it.But imagine a system in which everyone benefits from fixing this tragic flaw. In this system, polluters would pay and all living citizens, as joint beneficiaries and trustees of nature’s gifts, would get dividends. The higher the price for using the commons, the larger the dividends and the lower the externalities. The health of nature’s gifts would be directly linked to greater income for everyone.
Read more here.
Where to invade next
Econ4 does not accept advertising dollars. And we don’t promote commercial ventures. But for the first time ever, we’re making this exception (free promotion – still no dollars) for Michael Moore’s latest film. It debuts in theaters on Feb. 12.
Let them drink pollution?
The drinking water crisis in Flint, Michigan, is a wake-up call, writes Econ4’s James Boyce:
The tragic crisis in Flint, Michigan, where residents have been poisoned by lead contamination, is not just about drinking water. And it’s not just about Flint. It’s about race and class, and the stark contradiction between the American dream of equal rights and opportunity for all and the American nightmare of metastasizing inequality of wealth and power.
Read his post for the Institute for New Economic Thinking here.
Where water flows to money
Engineers think water flows downhill. Economists think it flows to money. We think they’re right, and it’s wrong. Read what’s happening in California here:
APPLE VALLEY, Calif. — Outside her two-story tract home in this working-class town, Debbie Alberts, a part-time food service worker, has torn out most of the lawn. She has given up daily showers and cut her family’s water use nearly in half, to just 178 gallons per person each day.
A little more than 100 miles west, a resident of the fashionable Los Angeles hills has been labeled “the Wet Prince of Bel Air” after drinking up more than 30,000 gallons of water each day — the equivalent of 400 toilet flushes each hour with two showers running constantly, with enough water left over to keep the lawn perfectly green.
Only one of them has been fined for excessive water use: Ms. Alberts.
More here.
Death watch
A new study reveals rising mortality among whites in the United States:
Between 1978 to 1998, the mortality rate for U.S. whites aged 45 to 54 fell by 2 percent per year on average, which matched the average rate of decline in the six countries shown, and the average over all other industrialized countries. After 1998, other rich countries’ mortality rates continued to decline by 2 percent a year. In contrast, U.S. white non-Hispanic mortality rose by half a percent a year. No other rich country saw a similar turnaround.
That means “half a million people are dead who should not be dead,” Angus Deaton, the 2015 Nobel laureate in economics and co-author of the paper, told The Washington Post.
Read more here.
Lazy ideology
In his column in the business pages of the New York Times, Eduardo Porter writes that discredited notions still guide policy on aid to the poor:
Actual experience, from the richest country in the world to some of the poorest places on the planet, suggests that cash assistance can be of enormous help for the poor. And freeing them from what President Ronald Reagan memorably termed the “spider’s web of dependency” — also known as forcing the poor to swim or sink — is not the cure-all for social ills its supporters claim….
Abhijit Banerjee, a director of the Poverty Action Lab at the Massachusetts Institute of Technology, released a paper with three colleagues last week that carefully assessed the effects of seven cash-transfer programs in Mexico, Morocco, Honduras, Nicaragua, the Philippines and Indonesia. It found “no systematic evidence that cash transfer programs discourage work.”
A World Bank report from 2014 examined cash assistance programs in Africa, Asia and Latin America and found, contrary to popular stereotype, the money was not typically squandered on things like alcohol and tobacco.
Still, Professor Banerjee observed, in many countries, “we encounter the idea that handouts will make people lazy.”
Professor Banerjee suggests the spread of welfare aversion around the world might be an American confection. “Many governments have economic advisers with degrees from the United States who share the same ideology,” he said. “Ideology is much more pervasive than the facts.”
Read more here.
The facts of (political) life
Writing in the New Yorker, George Packer dissects America’s political conundrum:
[T]here’s a reason to look up as well as down the economic ladder, and it has nothing to do with envy or with punishing the rich. Economic stratification, and the rise of a super-wealthy class, threatens our democracy. Americans are growing increasingly separated from one another along lines of class, in every aspect of life: where they’re born and grow up, where they go to school, what they eat, how they travel, whom they marry, what their children do, how long they live, how they die. What kind of “national community” built on “mutual obligation” is possible when Americans have so little shared experience? The Princeton economist Alan Krueger has demonstrated that societies with higher levels of income inequality are societies with lower levels of social mobility. As America has grown less economically equal, a citizen’s ability to move upward has fallen behind that of citizens in other Western democracies. We are no longer the country where anyone can become anything.
Read his piece here.
