peristaltor | Entries tagged with widening the gap

Over two years ago, I read Thomas Geoghegan's Were You Born on the Wrong Continent?, a somewhat rambling collection of observations about the differences between the United States and Germany. In it, he noted that, quite unlike the American experience, German broadsheet newspapers were thriving. Yes, in a country that also has the intertubes, newspapers were being read. Of course, there were other differences in German life that led to that thriving newspaper business. The important question to ask is which differences should we in the States emulate?

( Don't care about news? Don't click. )

X-Posted to talk_politics.

When I last mentioned Lewis Powell's now-infamous memorandum, I did so in a fairly limited scope, in explaining the silliness that might be behind the IRS investigation. I also found and quoted excerpts from a book, Winner-Take-All Politics: How Washington Made the Rich Richer—And Turned Its Back on the Middle Class by Jacob S. Hacker & Paul Pierson. I've since read that book, and just in time for Money And Ethics In Politics month! If you want a good run-down on the real story of how money got into politics in such unprecedented amounts, start with Mr. Powell's Memo, then head over to Hacker and Pierson's book.

( I'll try to focus on a few salient points. )

X-posted to talk_politics.

I recently tripped on yet another rhetorical caltrop in an online discussion thread, a seemingly off-handed observation that sought to quiet the Sturm und Drang of yet another whiner (this whiner being myself); it was the notion that "advertising has . . . been the fuel for art and entertainment for decades, if not centuries." And while yes, this is technically true, there are reasons—some worth considering, others so powerful that not considering them puts people at peril—obviating the seeming simplicity of this observation.

In a nutshell, I am here proposing that there are good reasons to create ad-free multi-media space, and that those reasons have to do with the negative and deforming effect of advertising itself. This has been a hobby horse of mine for some time, and I thought it might be interesting to introduce this concept with those who might not have considered these issues before. ( So, riders, saddle up! )

X-Posted to talk_politics.

I'm not sure it's a farce or send-up or not, but head over to this site, a concoction created by Bloomberg. The have "amusing" little cards you can send to those of your children who, thanks probably to a shitty economy, are still living with you.

Really, imagine getting these gems from Mom & Dad.

( More shame! )

Just caught an episode of This American Life called "Unfit For Work: The Startling Rise Of Disability In America". It turns out those on disability don't get counted on the unemployment roles (since, of course, they are classed as unable to work). ( It gets interesting! )

X-posted to talk_politics.

The two words "investment" and "speculation" are to some synonymous, to others diametrically opposed. I find myself in the latter camp, though the confusions and conflations these two terms suffer makes it difficult to say the least even to articulate what about the differences should be emphasized. I guess I'll first let a supposed expert discuss the difference. Take it away, ( Albert Wiggin. )

Almost finished with an excellent wrap of Lewis Powell's famous 1971 memorandum to the United States Chamber of Commerce, My Class, Right or Wrong. Here's a good excerpt:

. . . Powell and Fortune [magazine] believe that prosecuting criminal CEOs is terrible for businesses, terrible for CEOs, and terrible for “free enterprise.” They conflate support for prosecuting criminal CEOs with “hatred” for “corporate power” and they conflate “corporate power” with “free enterprise.” Recall that this is their conclusion about Nader:

"The passion that rules in him -- and he is a passionate man -- is aimed at smashing utterly the target of his hatred, which is corporate power.

Powell and Fortune cite Nader’s call for criminal CEOs to be prosecuted as their proof of this conclusion. But why would prosecuting criminal CEOs be bad for “free enterprise?” Powell and Fortune don’t even attempt to explain why this would be true. It is self-evident to them that a world in which criminal CEOs do not enjoy impunity from the law is a world in which “corporate power” will have been ”smash[ed]” and that absent hegemonic “corporate power” “free enterprise” is impossible. Their “logic” and rhetoric are revealing, but absurd. Wanting to prosecute criminal CEOs is not hostile to “free enterprise,” but rather essential to the success and continued existence of “free enterprise.”

It's worth a read.

I recommend perusing Conrad Schmidt's ideas. He's the founder of the Work Less Party of British Columbia and author of the book Workers of the World Relax: The Simple Economics of Less Industrial Work. His argument; that though increased mechanization increases the amount of goods per worker, the increases fail to increase the buying power of those workers. The gap between worker buying power and increased production eventually leads to a recession/depression.

The solution? Work less, specifically at industrial production. Spend time doing other things, and buying less. He makes a convincing argument in his interview at The Extraenvironmentalist Podcast.

I will take exception with one tenet of his argument. I don't believe the increase in production was the only change that lead to the Great and Current Depressions. His theory leaves out the exacerbating factor of finance and the machinations thereto that banks, et al. can exert. After reading half of The Pecora Report of 1934 (aka Stock Exchange Practices. Hearings before the Committee on Banking and Currency Pursuant to S.Res. 84 and S.Res. 56 and S.Res. 97), it's apparent that banking practices covered up and thereby postponed the economic declines started by industrialization with leverage, continuing and accelerating the economic velocity beyond the level the actual economy could sustain. The result? Unlike a slowing of economic growth after an industrial increase (what one would expect following Schmidt's theory), the increases continued, inflating the money supply for years beyond a sustainable level.

Hyman Minsky seems to have articulated this phenomenon, pithily described as a "Minsky Moment." Sadly, thanks to the reign of the neo-classical economists who debate even the existence of "bubbles," not many know of Minsky's theory. It is, thankfully, gaining some traction after the most recent crisis, so hopefully you'll be hearing more about it, rather than the drivel that passes for economic commentary on the commercial noisy box media.

And this slowing of the worker hours is nothing new. Mr. Kellogg of cereal fame tried an experiment near the turn of the last century. One of his factories ran normally, while the other went to a seven-hour work day. The latter had the same productivity per worker as the former, but the town surrounding the shortened workday factory was more vibrant, with greater community cohesion and more economic activity. (From Daniel H. Pink's Drive: The Surprising Truth About What Motivates Us)

In the meantime, give Schmidt a listen or read. You can view a short movie at the web site.

Listen to him.

After listening, consider reading the book he wrote with Kate Pickett, The Spirit Level. Lots more info there.

Just had a nagging suspicion a few minutes ago( , which most of you will find too long to read. Go look at Jersey Shore updates and pictures of cute cats instead. )

And I find that downright frustrating.

Yet another Rand-ian rant on F#c%Book and my reaction against it has me wondering: What is so darned attractive about the extreme libertarian position currently in vogue?

I once asked my neighbor, a now-retired UW professor of psychology, if there had been any studies linking the rise in autistic spectrum disorders with libertarianism. I figured people who have trouble relating to other people would be drawn to a philosophy that clearly separates "mine" from "ours." She was unaware of any such studies, but was kind to indulge her crazy neighbor's ideas. ( And yes, I acknowledge that I may be crazy. )

Crazy or not, I don't have the money to promote what I see are logical antidotes to libertarian spew. And thus, no matter how much I may spew myself, I find my voice one of the small and dissenting in a well-funded and over-amplified chorus of crazy.

Yes, it gets me down.

Ah, well.

An interesting take on the situation, though lacking in one aspect: His App #3, Property Rights, needs to extend beyond mere real and personal property to intellectual property. This allows coupling the first two of his apps, Competition and Science, to economics, a coupling which incrementally increases the complexity of technology first by giving inventors domain over their inventions, and later by allowing improvements to those inventions either when the patent rights have expired or through licensing agreements. Author William Rosen called the patent system The Most Powerful Idea in the World, and traced its Western roots to the reign of Elizabeth I.

Ferguson mentions Smith, but Rosen goes one step farther and points out what Smith missed:

Smith's theorems did a spectacular job of explaining the self-regulating character of a free market, in which prices and profits are forced by competition to the lowest possible level. . . .

What they didn't do was explain how wealth, profit, and competition can all grow over time. In short, it didn't explain the two centuries of growth that were beginning just as Wealth of Nations was being published. It is in no way a criticism of the book to state that it covered everything except the reason the author's own nation was about to get wealthier than any other nation in the history of mankind. The failure is pretty much explained by what is not in the book. Despite living in the middle of the biggest explosion of inventive activity ever recorded, and even though his illustration of the advantages of specialization was a factory for making pins, Smith's book hardly mentions the role of the new machines then transforming his world. Next to nothing about waterpower, to say nothing of steam; nothing about the forging of iron, and his few paragraphs about the textile revolution are mostly an argument for restricting the export of spinning machines. His pin factory, it turns out, was only a metaphor; he never set foot inside one. . . .

The efficiencies of specialization are real, and the self-regulating "invisible hand" powerful, but it was the machines, and nothing else, that allowed Britain, and then the world, to finally produce food (or the wealth with which to buy food) faster than it produced mouths to consume it.

(William Rosen, The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention, Random House, 2010, pp. 250-251, I emphasized.)

Bottom line: While the development of engines was an offshoot of science, it took a formal recognition of patent rights to prod an inventor's desire to move creations beyond the laboratory and to invest enough in research to make these inventions economically viable.

Of course, there's another bottom line, that the machines need constant fueling . . . and without this fuel, growth — "to finally produce food (or the wealth with which to buy food) faster than it produced mouths to consume it" — would not be possible.

Which might explain this debt situation he mentions near the end of his talk. No cheap fuel, no economic growth. No economic growth, no ability to pay the existing loans still outstanding. Sound familiar?

That seems to be the mood over at the Occupy Wall Street protests. Strangely, the lame-asses in the mainstream media wonder what they're upset about, or worse, why they have no specific demands. Jim Kunstler noted just this today:

The Boomer-owned-and-operated media was complaining about them all week. They were "coddled trust-funders" (an odd accusation made by people whose college enrollment status got them a draft deferment, back when college cost $500 a year). Then there was the persistent nagging over the "lack of an agenda," as if the US Department of Energy, or the Senate Committee on Banking, Housing, and Urban Affairs was doing a whole lot better.

This is the funniest part to me: that leaders of a nation incapable of constructing a coherent consensus about reality can accuse its youth of not having a clear program. If the OWS movement stands for anything, it's a dire protest against the country's leaders' lack of a clear program.

I would diverge from Mr. Kunstler's assessment, though, that the country's leaders lack a "clear program." Programs can be summed up nicely as those things enacted into law by the leaders themselves. For me, simply examining the raft of programs enacted since the crisis in 2008 — and, for that matter, the programs whose enactment led to the crisis — shows very clearly a program and what that program is designed to do. The problem, the issue at which the OWS protesters are venting their frustration, is simply that these programs are either not working as intended or are working toward an intended aim so diabolical that common people have no recourse but to squat in public spaces until someone else notices that something is amiss. ( I've chosen an example that might not be obvious, just for kicks. )

Long, but worth a read.

Busy now building things, but I may revisit his thoughts later.

( Time for me to stump for votes again. Hypothetically. )

Bad Astronomer Phil Plait debunked the notion of an approaching ice age recently, a spurious theory based on misconceptions regarding the sun's magnetic cycle:

The Sun has a magnetic cycle, its magnetic field waxing and waning in strength roughly every 11 years. The strength and complexity of the solar field governs a lot of the surface activity, including sunspots, solar flares, prominences, and coronal mass ejections.

Right now, in 2011, we’ve just left a period of an extended minimum, and the next max is due in late 2013 and early 2014. . . .

At this point you may be asking, so what? If the Sun has fewer sunspots and no flares, what difference does that make here on Earth? And how could it possibly trigger an ice age?

Yes, a good question. ( Plait goes on to explain. )

Mike Kimel writes:

Many of them are misfits or eccentrics. Others simply can't reason out that there are two sides to every equation. . . . Some like to view themselves as lone wolves, in no way beholden to the rest of society. Some find they can be more successful in business if they don't pay taxes and/or find export their costs onto third parties. And of course, there are the thugs. Guess which group will take over if libertarians ever get their way.

It all comes down to externalities.

Okay, we need to define our terms. When people are described, either by themselves or by others, as being "middle class," that means they earn an about average wage.

"Average" in this case could mean something like the graph above. The median income in the US is $42,327/year, that is half of the households earn more than that and half earn less. I would be curious to know the modal average, that is, what amount the greatest number of people earn per year. It should be right around that median amount, but I cannot either confirm or deny that. It could be higher, it could be lower.

My point in this little rant is in response to very wealthy people who feel downright poor. Really, there are people out there earning over a million a year who declare themselves middle class. Why? According to the NY Times:

So when the 95th-percentilers think of their incomes in the context of what their richer neighbors are earning, this cohort doesn’t feel very rich. (Indeed, the gap between the rich and the very rich has been growing in the last few decades. . . .)

It is perhaps no wonder, then, that so many people who are statistically rich call themselves “upper middle” or even “middle class.” They are much, much richer than lots of poor people, but also much, much poorer than some very visibly rich people. From their perspective, they truly are in the middle.

I excerpted a bit from the parentheses, though: "Exactly why the gap has been growing is unclear, but has likely been influenced by a combination of tax policy, deregulation and technological advances that allow people to control more capital."

So, shouldn't we revert to the tax policies and regulations of the past, say, the 1950s? This way, the country as a whole will feel more prosperous and those earning in the 95th percentile will actually be able to recognize that they're stinking rich mother fuckers without harboring delusions of relative poverty. The additional tax money would be very helpful as well.

Back in August of last year, I ended the last episode of Swatting the Swarm with this paragraph:

Alan Greenspan may not have been in charge of the Fed during the most severe and obvious part of the collapse, but his actions -- or rather, his ideological inaction -- sowed the seeds for the impending disaster. To understand what happened, we need to note how systems work in general, how our economic system works in particular, and how we individuals within the systems can have more control over system outcomes than the leaders supposedly guiding the system with their authoritarian control.

I figured it only fitting to do some reading on the economy and how it works before laying out my damning indictment of Greenspan. I'm still reading, of course, but have still found enough hard informed commentary to all but dismiss that group of economic thinkers and theorists to which Greenspan belonged as a starry-eyed gaggle of dogmatic optimists sometimes led by (in some cases) out-right con artists. Sadly, this group wields an enormous amount of power and influence today, all but dictating policy in defiance of the democratic process and skewing toward their conclusions far too many aspects of our everyday lives.

Economics purports to be, you see, a science, and as such should rely on supporting its claims with empirical evidence. That's what other branches of science do, after all. Much of the following 150+ years of biology and paleontology have, for example, supported Charles Darwin's 1959 Origin of Species and his theory of natural selection found therein. That same year brought us one of the most important foundation observations supporting today's science of climatology.

As the two examples of science provided suggest, though, is that a lot of damage can be done to the reputation and understanding of good and well-supported theories if enough people with money find it in their best future interest to distort and obfuscate the official record. Believe it or not, even given the massive distortions climate change deniers and creationists have wrought on those other disciplines, economics has suffered an even greater attack and for a far more extended time. The Neoclassical and Neoliberal branches of economic theory prove far less supported in their tenets or their conclusions than either climate change denial or intelligent design, yet very few in the media even question the veracity of these assertions. As a result, we get a never-ending blast of neoclassical nonsense regurgitated by pundits, noise that effectively deafens the populace clamoring for real information they can use at the ballot box and with their checkbooks. Until that clamor is stanched, few will hold the qualifications to make informed decisions governing their very lives.

With this in mind, the following Too Long; Don't Read post addresses some of the tenets of neoclassical economic theory with explanations where I am able to provide them and dissenting opinions discussing why said tenets are theoretical at best and delusional at worst, backed by some of the books in which my nose has recently been buried. ( Click onward to view the Mythos. )

Addendum, May 3, 2011: In my haste, I forgot contributions from Pink and Hertz (which sounds like an S&M porn, I know). They were included today.

Just came across this disturbing but hardly surprising article about a religious effort to politicize evangelical pastors:

WEST DES MOINES, Iowa — Hundreds of conservative pastors in Iowa received the enticing invitation. Signed by Mike Huckabee, a former Arkansas governor and 2008 presidential contender, it invited the pastors and their spouses to an expenses-paid, two-day Pastors’ Policy Briefing at a Sheraton hotel.

Nearly 400 Iowa ministers and many of their spouses accepted, filling a ballroom here on March 24 and 25. Through an evening banquet and long sessions, they heard speakers deplore a secular assault on evangelical Christian verities like the sanctity of male-female marriage, the humanity of the unborn and the divine right to limited government.

That last sentence, of course, is rife with irony, perhaps even an irony intended by the reporter. How can the "limited government" to which we seem to have a right enforce both sanctity on marriage standards and unborn humanity? Wouldn't such a limited government avoid such personal life meddling?

What got me, though, was not the standard tropes trotted out by the un-Christian right (as judged by comparing their message to the actual teachings of Jesus Christ in the New Testament). No, I found a little detail buried near the end far more disturbing:

The audience heard how to push their flocks to register and vote along “biblical principles” without running afoul of tax laws against endorsing candidates from the pulpit.

(I testified boldly.)

This, folks, is how Dubya got to be president for two terms. (The probable election shenanigans and the Supreme Court didn't help, I know.) I remember flipping through the channels and seeing mega-church pastors imploring their flock to avoid the sins of the homos and the baby killers by electing the "right" candidates. Not a word about giving your money to the poor. No mention of the Good Samaritan or how to treat the least amongst you.

And since these seminars are all-expense paid, this single example points out the danger of letting money coagulate in high places where it can be used as it is here, to perpetuate the further future coagulation of wealth far from where Jesus himself would recommended it should go.

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Entries tagged with widening the gap

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This Is Your Brain At Work . . . Any Questions?

The Powell Legacy, As It Continues

Shaping Media/Consumers, One Ad at a Time

The Unsubtle

The Story That Everyone Missed—The Disability Industrial Complex

Speculating on Investment, Or Investing in Speculation?

Happy B-Day to Powell's Memo!

Workers of the World Relax!

Richard Wilkinson Is Absolutely Right.

Oil and Banking: A Connection, or a Coincidence?

Capitalism Verses Collectivism, The Failed Comparison

On The Coming Re-Convergence

Something Is Wrong, But Exactly What?

Another Apostate Leaves the GOP

What Path Taxation?

The Profitability of Obfuscation

On Libertarians

Middle Means What?

The Neoclassical Mythos

The Spirit of the Law