The High Cost of Inequality
Epidemiologists link inequality to disease, crime, and social polarization.
Yes Magazine writer and editor Brooke Jarvis reports on research linking inequality to a broad set of social ills: higher crime, higher drug use, dropout rates, disease, stress, and social division in nations that have wide income gaps.
According to Richard Wilkinson, the amount of income is not nearly as important as the relative gap between rich and poor when it comes to fueling social resentments between the social classes. An excerpt from Jarvis’s interview:
Brooke (Jarvis): What psychological impact does living in an unequal society have on people who are at the top of the scale?
Richard (Wilkinson): Status competition causes problems all the way up; we’re all very sensitive to how we’re judged. Think about Robert Frank’s books Luxury Fever or Falling Behind, or the great French sociologist Bourdieu—they show how much of consumption is about status competition. People spend thousands of pounds on a handbag with the right labels to make statements about themselves. In more unequal countries, people are more likely to get into debt. They save less of their income and spend more. They work much longer hours—the most unequal countries work perhaps nine weeks longer in a year.
It’s time for conversations about the hidden impacts of the stuff we consume—how does our culture and economy drives such massive waste generation and make it seem tolerable?
If you grow up in an unequal society, your actual experience of human relationships is different. Your idea of human nature changes. If you grow up in a consumerist society, you think of human beings as self-interested. In fact, consumerism is so powerful because we’re so highly social. It’s not that we actually have an overwhelming desire to accumulate property, it’s that we’re concerned with how we’re seen all the time. So actually, we’re misunderstanding consumerism. It’s not material self-interest, it’s that we’re so sensitive. We experience ourselves through each other’s eyes—and that’s the reason for the labels and the clothes and the cars.Brooke: What’s the effect of inequality on the way we perceive our communities—and how does that perception affect how they function?
Richard: Inequality affects our ability to trust and our sense that we are part of a community. In a way, that is the fundamental mediator between inequality and most of these outcomes, through the damage it does to social relations. For instance, in more equal countries or more equal states, two-thirds of the population may feel they can trust others in general, whereas in the more unequal countries or states, it may drop as low as 15 percent or 25 percent.
As the pundits, politicians and think tanks puzzle over the reasons Americans are so divided, they’d do well to consider the rising Gini Coefficient, which is a statistical measure of inequality. America’s Gini has been rising for at least thirty years, corresponding to loss of union membership, loss of manufacturing jobs, and the rise of the financialization of the economy (think banks, insurance, and investment firms).
Richard Wilkinson’s latest book is titled
The Spirit Level: Why Greater Equality Makes Societies Stronger
Thanks to Al Weisel
Al Weisel, a 46 year-old blogger who wrote under the pen name of Jon Swift due to a “misunderstanding with some creditors” died last week of an aneurism. His mom broke the news to the blogosphere and told us his real name.
Al was a “reasonable conservative” who had a “liberal blogroll policy”, which included a link to this blog. He was a satirist and a good one. He knew how to write, pose complex questions, irritate, and make us think without being boring.
He was always pulling for the underdog and highlighting some of the more talented bloggers who write and publish in obscurity, knowing their own stuff may not find many readers – if any.
From his writing, he seemed to be an interested, generous man with a boyish sense of mischief. He’ll be missed and he will be remembered.
Leaked: RNC Marketing Plan
Fear and Privilege to Motivate Donors
Politico.com has this news of a leaked powerpoint presentation called “Tools for Success” recently delivered to a $2,500 per head Republican National Committee (RNC) fundraising function at a Florida resort.
The 72-page document was provided to POLITICO by a Democrat, who said a hard copy had been left in the hotel hosting the $2,500-a-head retreat, the Gasparilla Inn & Club. Sources at the event said the presentation was delivered by Bickhart and by the RNC Finance Chairman, Peter Terpeluk, a former ambassador to Luxembourg under President George W. Bush.
As one of the slides shown above states, the fundraising strategy has two prongs to lure voters with less than the noblest of motives: the visceral and the calculated.
The visceral voters will be stoked with “fear,” “extreme negative feelings toward the administration” and “reactionary” themes. For the less emotional calculated crowd, they’ll be enticed with “access” and “Networking Opportunities.” It is, after all, about who you know, having friends in the right places.
That’s one hell of a script for running the greatest country on earth: calculating profiteers and their bilious, visceral little minions. No thanks, we’ve seen that movie.
Krauthammer and the “Detroit Bailout”
Seems every time I tune in a political news/commentary program, there’s Charles Krauthammer. Despite paralysis from a diving accident long ago, Krauthammer, a trained psychiatrist, makes the rounds on Fox, ABC, and PBS. In 2006, Economist magazine called him “the most influential commentator in America.” If that’s the case we might be in trouble.
Krauthammer is savvy enough to understand the power of words and context. He likes to refer to the GM and Chrysler bailouts as “the Detroit bailout,” as in the article, Beware a Detroit Bailout. Why the “Detroit bailout?” GM is headquartered in Detroit but has only one small factory remaining there. It’s facilities are found all over the world. Chrysler is headquartered in Auburn Hills, an affluent suburb 40-miles from Detroit. The GM-Chrysler bailout is further complicated by the role of smaller supply companies found all over the United States, and around the world, which were likewise helped by the bailouts.
Krauthammer’s choice of terms is significant. “Detroit” has connotations. What comes to mind when people hear “Detroit?” First, it’s a predominantly African-American city with a high crime rate. “Deetroit City.” It’s probably the “poster child” for blighted nothern “Rust Belt” cities.
A “Detroit bailout” fits well with a common white-rural suspicion that Obama will look out for “his people” at the expense of whites, ignoring the fact that 60-percent of Obama voters were white. Conservative pundit Pat Buchanan has argued that Obama’s health care agenda “is seen by white voters as benefiting minorities and immigrants”.
Detroit’s been ravaged by riots, drugs, crime, and loss of manufacturing jobs – good jobs lost or sent elsewhere without any apparent thought as to how they would be replaced or what workers would do after the factories shut down. Detroit’s infrastructure needs a lot of work. Deep in debt, Detroit could use a bailout, but it got no such thing.
Detroit’s had problems with its government. Former mayor Kwamme Kilpatrick was involved in a scandal and cover-up that landed him in jail. The public schools are a mess. Who could blame someone for thinking Detroit is a lousy investment of taxpayer money?
Here’s Krauthammer comparing the bank bailout to the “Detroit bailout”
Underlying the policy differences is a philosophical divide. The Bush administration sees the $700 billion rescue as an emergency measure to save the financial sector on the grounds that finance is a utility. No government would let the electric companies go under and leave the country without power. By the same token, government must save the financial sector lest credit dry up and strangle the rest of the economy.
“Democrats are suggesting, however, an even more ambitious reason to nationalize. Once the government owns Detroit, it can remake it. The euphemism here is “retool” Detroit to make cars for the coming green economy.”
“Republican minimalism — saving the credit-issuing utilities — certainly risks not doing enough. But the Democratic drift toward massive industrial policy threatens to grow into the guaranteed inefficiencies of command-economy maximalism.”
The federal government has provided the auto industry with $86 Billion in assistance, including $50 billion for GM and $12 billion for Chrysler. The bank-AIG bailout cost something like $700 billion. I’ll leave it to the reader to decide which is “minimalist.” But let’s think about the people who benefited from the huge bank bailout and the much smaller GM-Chryser bailouts. What do they look like? What do they drive? Where and how do they live?
For Krauthammer to put the focus on Detroit is factually errant and intellectually dishonest. He should and does know better. His real purpose may be to keep Americans divided along racial and class lines, along a rural and urban divide, in hopes of pealing away the millions of white voters who backed Obama. His real goal may be to make sure those with privilege hang onto their preferred status.
Related articles:
Lemon of a Bailout
The Bailout’s Faultlines
What Happens if The Bailout Goes to Far?
Health Care Reform: A Cry for Help
The Politics of Gas Guzzling
Red States Burn It Up
The Bureau of Transportation Statistics is out with this data describing transportation petroleum usage, per capita, by state. The United States is not monolithic in its gasoline (and diesel) use, rather, per capita use is strongly correlated to political orientation. The latest available data from 2006 suggest we should question the validity of the term “conservative.”
Top Ten Gas-Guzzling States (million Btu per capita)
1. Alaska 388.9
2. Wyoming 211.5
3. Louisiana 170.3
4. Hawaii 142.4
5. Mississippi 122.6
6. North Dakota 122.1
7. Montana 120.3
8. Texas 118.7
9. Oklahoma 117.2
10. New Jersey 113.1
Eight of these ten states voted for McCain-Palin in 2009. At the other end of the scale:
Top Ten States for Saving Gas
1. New York 54.2
2. Rhode Island 60.4
3. Connecticut 72.5
4. Massachusetts 73.6
5. Michigan 76.9
6. Wisconsin 78.7
7. New Hampshire 79.8
8. Pennsylvania 80.2
9. Illinois 81.5
10. Maryland 81.6
All ten of these states voted Obama-Biden in 2008.
Though it’s not a state, District of Columbia per capita petroleum use was a thrifty 29.7 million Btu. Urban living, with available public transportation, appears to correlate to fuel efficiency.
The national average transportation petroleum usage in 2006 was 94.2 million Btu per person. If the whole nation could get around like the folks do in the state of New York, we could cut petroleum usage by about 42-percent (54.2/94.2).
Given that the United States imports about 60-perent of its petroleum, the nation could reduce its transportation oil imports by around two-thirds. That translates to a lot of money that could be available to invest right here in the U.S.
We need to redefine what it means to be a conservative, and what it means to be a true patriot.
Health Care Bill Needs to Include Malpractice Liability Reform
In the current health care reform bills passed by the House and Senate, an individual mandate was included to bring everybody into the insurance payment pool to help cover the cost of covering 31 million more uninsured. It was also necessary to get insurance companies from denying coverage to those with pre-existing conditions.
Traditionally, Republicans have called for tort reform to reign in frivolous lawsuits and jackpot settlements. Obstetricians practicing here in the U.S. pay upwards of $100,000 per year on malpractice insurance. Democrats tend to downplay the effects of malpractice insurance and litigation on overall health care costs.
Proponents of universal health insurance, like me, point to other modern nations that provide medical care to everyone for a lot less cost than we do to cover most, but not all, citizens. How does a modern European nation handle medical malpractice?
In Germany, claims against medical providers seldom make it to court. According to the Library of Congress, only 8 percent of claims are litigated.
Furthermore,
“German awards for pain and suffering are low because of several features of the legal system: there are no juries in civil cases and a plaintiff who claims a higher award than the court adjudicates must bear part of the litigation cost. Moreover, in determining damages for pain and suffering, the judges are guided by standardized tables that compile the going rates for various types of injuries.”
“Due to the extensive safety net provided by the German social security system, a German personal injury victim has fewer out of pocket losses than his American counterpart. The benefits that mitigate the losses of the German victim include health care as provided by the social or private insurer, unlimited paid sick leave as provided either by the employer or the health insurer, generous disability pensions from the social pension insurance scheme, and, if applicable, welfare benefits.”
The German system for dealing with medical malpractice claims appears to be a good arrangement for patients, but not so much for lawyers. As the United States struggles to reform health care, it needs to include standard practices and reasonable limits in order to settle claims against medical providers.
Wisconsin Clean Energy Jobs Act
Wisconsin bill would promote small-scale distributed renewable power generation.
Wisconsin’s Clean Energy Jobs Act (AB 649/SB 450) was introduced January 7, 2010. It proposes major energy reforms recommended by Governor Doyle’s Global Warming Task Force. The bill isn’t just about climate change mitigation, though. If enacted the bill would:
1. Raise the renewable energy standard to 25% by 2025.
2. Establish renewable energy buy-back rates.
3. Include renewable biogas from Dairy operations
4. Requires 10% of energy production from in-state renewables by 2025.
5. Recommendation for zero-net energy usage in new construction by 2030.
According to a summary prepared by RENEW Wisconsin:
“The legislation would require the PSC to order electric utilities to purchase renewable energy, under certain terms and conditions, from renewable energy facilities that are constructed after the effective date of the PSC’s order. Such ART orders must include the following:
* The price to be paid for the renewable energy, taking into account production cost, rates of return, and existing state and federal financial incentives;
* A schedule of payments over a sufficient period of time to allow for recovery of the construction and operation costs associated with the facility; and
* A maximum limit on the generating capacity for qualifying facilities.
In ordering ARTs, the Commission is charged with meeting the purpose of “maximizing the development of small-scale, distributed, renewable generation technologies without unreasonable impacts on electric utility rates.”
The bill, if passed would be one of the most aggressive renewable energy packages found in the United States and mean building hundreds or even thousands of wind turbines by 2025.
Will it Go Round in Circles?
Billy Preston and Eric Clapton
Public Service or Socialism?
I don’t know, call me a “socialist” if you like, but I think speed limits and mandatory brake lights on cars are good ideas. Not everyone agrees. I’m glad the voltage of the electricity coming into our house is regulated so the appliances don’t burst into flames. I’m glad there’s a fire hydrant on the street in case one of the houses catches fire. Our village Fire Department is first rate.
How about health care and bank regulation? What if we “socialized” them like the water department? Would it be the end of life in America as we know it?
Here’s a joke, related to Efficient Market Theory found in Raj Patel’s book The Value of Nothing:
Q: How many Chicago Economists does it take to change a light bulb?
A: None. If the light bulb needed changing, the market would have already done it.
Here’s some perspective, courtesy of YouTube, on “socialism” in our daily lives.
Coastal Geologists Point to Abundant Evidence of Global Warming
“the sea still rises.”
American coastal geologists Orin Pilkey and Rob Young have published this article on global warming in today’s Philadelphia Inquirer. Their position: “plain evidence of global warming abounds.”
The article, in the literary sense, takes the reader on a flight beginning with the North Carolina Outer Banks to observe dead trees along a drowning Albemarle Sound and an eroding stretch of barrier islands.
The flight then heads northwest, across the Canadian Rockies to look at shrinking alpine glaciers. Then, on to Alaska and a coastal community built on permafrost. Melting permafrost coupled with coastal erosion, worse now since the sea remains ice-free more months of the year, threatens to take out the village. From Pilkey and Young:
“Clearly, the Earth has revealed undeniable evidence of rising sea levels – drowning shorelines, shrinking arctic sea ice, warming oceans, and melting permafrost and ice sheets. It’s all there for anyone to see.”
Would Americans shut down all the medical schools, hospitals, and clinics if they found out a few doctors were guilty of malpractice? As ridiculous as that may sound, the global warming deniers frothing over bad behavior on the part of some IPCC and University of East Anglia climate researchers seem to be suggesting a comparable purge of global warming research.
Sea Ice Update
Loss of Arctic sea ice area is larger than France and Spain combined.
In regulating global climate, sea ice plays an important role by reflecting solar radiation back out to space. Satellites are monitoring sea ice on a daily basis and data are compiled by research groups such as the National Sea Ice Data Center (NSIDC) and the Polar Research Group (PRG) at the University of Illinois.
The NSIDC has this map dated 31 January 2010 showing the current Arctic ice cover compared to the 1979-2000 median area coverage. The current situation reveals over 1 million square kilometers of ice-free Arctic compared ti the median, an area roughly the size of France and Spain.
The PRG presents this graph, which indicates Antarctic sea ice cover slightly greater than the 1979-2008 mean area coverage.
The net change in global sea ice, adding the Arctic and Antarctic components is still more than 1 million square kilometers below the 1979-2008 mean.
As some point to climate science, which is flawed like most other human endeavors, and cry “hoax!”, the satellites, our eyes in the sky above, may be telling a truer story.
Stagflation Index for 2009
The Stagflation Index (SFI) finished 2009 with a +6 gain for December as wage gains barely stayed ahead of the cost of living.
The key December data from the Bureau of Labor Statistics pertains to non-managerial workers in the private sector, those of us who make up about 80% of the American workforce. The key data:
Consumer Price Index (CPI) +0.1%
Average Hourly Earnings (AHE) +$0.03 or +0.16%
Average Hourly Wage $18.79/hour
Calculating the December increase in wages adjusted for inflation:
(AHE – CPI) = (0.16 – 0.10) = 0.06
December SFI = 0.06 X 100 = 6.
For 2009, the cumulative SFI was -62. Real average hourly earnings, i.e., growth in wages adjusted for inflation was -0.62%. This represents a loss in consumer buying power.
I’m a bit more optimistic about the current economic “recovery,” due to increased manufacturing exports. The last time unemployment was this high was the early 1980s. The recovery that followed that recession happened despite shipping manufacturing jobs overseas. The 1980s recovery was supported by three major factors:
1. The Baby-Boomers” were in their peak earning years, buying houses, minivans, and lots of stuff for the family. They were great consumers. Now they are downsizing.
2. Cheap oil. The Alaskan oil pipeline was completed, North Sea oil wells came on line, and Pemex (Mexican national oil company) pumped at a frenetic pace. Oil prices plummeted to around $10 per barrel. That is not happening now. With the rise of India and China, a sharp drop in oil prices is unlikely. As the economy improves ever so slightly, oil prices are going up, making it tough for the recovery to gain momentum.
3. Growth in defense industries, computer technologies, and financial services during the 1980s put a lot of people to work and earned a lot of money. The financial crises of 2008 caused a lot of layoffs in that sector. It’s hard to see many of them coming back soon.
Now, the Baby-Boomers, faced with plundered 401Ks and badly under-funded retirements, are hanging on to their jobs. Young workers can’t find jobs. High unemployment will keep wages low. Low wages will keep consumer spending low.
Demand for oil will keep prices high. “Drill baby drill” will not lower prices like in 1982. Demand for oil is higher now, supplies are lower. Oil companies don’t want lower prices, anyway.
The only potential technological saviour is green technology and infrastructure. As the oil companies and their surragates fight to maintain the status quo, nations less entrenched in old, dying technologies will develop, patent, and build the renewable energy systems they will eventually sell to the rest of the world that isn’t as “blessed” with vast coal supplies as the United States.
Howard Zinn
Howard Zinn died yesterday at the age of 87. His life had great purpose: pulling for the underdog. He rejected the “Great Person Theory” of history. He admitted his history writing was biased. History is the sum total of everything that has ever happened. The historian selects a tiny subset of people and events. That selection can’t help but be biased. Any honest historian would admit that.
Zinn had compassion for those who struggled and lived invisible lives. He told their story and brought them some respect and credit they deserved. He carried them shoulder high.
The following is a re-post from March 15, 2007, four years after the invasion of Iraq. Jim Lehrer interviewed four historians, including Howard Zinn, just before the first bombs exploded on Iraq. At the time, there was massive public support for the invasion. By July 2009, 58% of Americans believed the war was a mistake, according to a Gallup Poll.
On March 17, 2003, President Bush gave his now famous 48-hour ultimatum to Saddam Hussein. That night, Jim Lehrer interviewed four historians on this edition of Newshour regarding the decision to invade Iraq. The transcript reveals very different opinions, including serious doubt about the war. Below are brief exerpts from the four experts.
WALTER RUSSELL MEAD – Senior fellow at the Council on Foreign Relations
“I actually think that in a way just as the stock markets have been going up as it looks like the crisis is going to be resolved quickly that probably we took much more damage in the run-up to war than we’ll take in the war itself.”
DIANE KUNZ – Diplomatic historian, formerly at Yale
“I think what’s interesting to remember is that what President Bush is doing is building on Wilsonian principles. Woodrow Wilson taking the United States into war in 1917 said, “We are going to war, we will expend our blood and treasure in order to safeguard principles.”
ROBERT DALLEK – Boston University:
“I think people who support him (Bush) find confirmation in his language and in his words. And I think we’re going to see in this country and around the world an explosion of tension and division over what the United States is doing.”
HOWARD ZINN – Professor Emeritus, author of People’s History of the United States: 1492 to Present (P.S.)
“…the one thing that is missing in so much of the discussion is that we are going to kill a lot of people in this operation. It’s all well and good to talk about the promise of a different Iraq, a democratic and free Iraq, a promise which is very dubious considering the history of the United States.
It’s a history in which it has not been very good at creating democracy, a history in which it has rather supported dictatorships around the world, but we are going to kill — and think of it this way — we talk about Saddam Hussein and what he’s doing to the people of Iraq — we are going to kill the victims of Saddam Hussein. The civilians of Baghdad are going to be living under terrorism.”
Thanks again to Howard Zinn for his insight, wisdom, and humanity.
Middle Class Scorecard: McConnell Earns an “F”
TheMiddleClass.org (TMC), an advocacy group for issues it sees as helpful in growing and securing a strong, prosperous middle class, has a Congressional Scorecard out for 2009. Senate Minority Leader Mitch McConnell voted with TMC 36% of the time, earning him an “F.”
The Scorecard has a long list of bills and how McConnell voted.
Despite the massive national debt, McConnell voted for a bill to lower taxes on the wealthiest estates, increasing the tax exemption to the first $5 million. Someone inheriting $5 million dollars from a rich relative would not have to pay one penny in federal tax. Meanwhile, workers flipping burgers for $7 an hour pay federal taxes so that Mitch McConnell can have top-notch “government run healthcare” extended to members of Congress.
According to TMC:
“The estate tax, the most progressive component of the federal tax code, applies only to Americans lucky enough to inherit substantial fortunes. In fact, only 0.6% of deaths result in taxable estates. By taxing inherited wealth, the tax preserves the American tradition of rewarding hard work, not inherited privilege and wealth.”
The deficit is a big problem for the middle class, not so much for wealthy Americans. High deficits generally lead to high interest rates, making it difficult for ordinary people to finance homes, cars and college. An estate tax that is fair and reasonable would generate significant revenue to help pay down the national debt.
In voting to raise the tax exemption on inherited wealth, McConnell made it clear who he works for and it’s not the middle class.
