Category Archives: Economics

Let the Pendulum Swing

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Two social scientists predicted that America was facing the Turbulent Twenties, based on their study of historical patterns. History shows how to calm things down and improve people’s lives. Here’s most of their article from Noema magazine: 

Almost three decades ago, one of us, Jack Goldstone, published a simple model to determine a country’s vulnerability to political crisis. The model was based on how population changes [affected] state, elite and popular behavior. Goldstone argued that, according to this Demographic-Structural Theory, in the 21st century, America was likely to get a populist, America-first leader who would sow a whirlwind of conflict.

Then ten years ago, the other of us, Peter Turchin, applied Goldstone’s model to U.S. history, using current data. What emerged was alarming: The U.S. was heading toward the highest level of vulnerability to political crisis seen in this country in over a hundred years. Even before Txxxx was elected, Turchin published his prediction that the U.S. was headed for the “Turbulent Twenties,” forecasting a period of growing instability in the United States and western Europe. . . .

Our model is based on the fact that across history, what creates the risk of political instability is the behavior of elites, who all too often react to long-term increases in population by committing three cardinal sins.

First, faced with a surge of labor that dampens growth in wages and productivity, elites seek to take a larger portion of economic gains for themselves, driving up inequality.

Second, facing greater competition for elite wealth and status, they tighten up the path to mobility to favor themselves and their progeny. For example, in an increasingly meritocratic society, elites could keep places at top universities limited and raise the entry requirements and costs in ways that favor the children of those who had already succeeded.

Third, anxious to hold on to their rising fortunes, they do all they can to resist taxation of their wealth and profits, even if that means starving the government of needed revenues, leading to decaying infrastructure, declining public services and fast-rising government debts.

Such selfish elites lead the way to revolutions. They create simmering conditions of greater inequality and declining effectiveness of, and respect for, government. But their actions alone are not sufficient. Urbanization and greater education are needed to create concentrations of aware and organized groups in the populace who can mobilize and act for change.

Top leadership matters. Leaders who aim to be inclusive and solve national problems can manage conflicts and defer a crisis. However, leaders who seek to benefit from and fan political divisions bring the final crisis closer. Typically, tensions build between elites who back a leader seeking to preserve their privileges and reforming elites who seek to rally popular support for major changes to bring a more open and inclusive social order. Each side works to paint the other as a fatal threat to society, creating such deep polarization that little of value can be accomplished, and problems grow worse until a crisis comes along that explodes the fragile social order.

These were the conditions that prevailed in the lead-up to the great upheavals in political history, from the French Revolution in the eighteenth century, to the revolutions of 1848 and the U.S. Civil War in the nineteenth century, the Russian and Chinese revolutions of the twentieth century and the many “color revolutions” that opened the twenty-first century. So, it is eye-opening that the data show very similar conditions now building up in the United States.

In applying our model to the U.S., we tracked a number of indicators of popular well-being, inequality and political polarization, all the way from 1800 to the present. These included the ratio of median workers’ wages to GDP per capita, life expectancy, the number of new millionaires and their influence on politics, the degree of strict party-line voting in Congress, and the incidence of deadly riots, terrorism and political assassinations. We found that all of these indicators pointed to two broad cycles in U.S. history.

In the decades following independence, despite growing party competition, elites in office often compromised and voted together, and rising national prosperity was broadly shared. But that wave of positive conditions peaked around 1820; from there, political polarization and economic inequality rose sharply in the years leading up to the Civil War. The crisis indicators peaked in the 1860s but . . . they remained high until 1920 (the years of Reconstruction, Jim Crow, the Gilded Age, violent labor unrest, and the anarchists).

Then, the tide shifted, and a second wave of greater unity and prosperity began to gather strength. Contrary to expectations, World War I and the Great Depression did not produce a rise in political instability indicators. Instead, the country pulled together. The reforms introduced during the Progressive Era and clinched in the New Deal reduced inequality and strengthened the economic share of workers; during and after World War II, the country agreed on new tax policies and increased spending on roads and schools.

The 1950s were a golden age of worker progress and party cooperation; even in the 1960s and 1970s, despite serious racial conflicts, the country’s leaders were able to agree on remarkably far-reaching reforms to improve civil rights and environmental protection. However, the 1960s were a high point in our indicators of political resilience; in the 1970s and 1980s, things began to turn, and by the 1990s, a new wave of rising inequality and political divisions was well underway, exemplified by Newt Gingrich’s policies as speaker of the House. In the next two decades, the crisis indicators rose just as sharply as they had in the decades before the Civil War. It was not just that by the late 2010s, overall inequality was rising to the levels not seen since the Gilded Age; median wages in relation to GDP per capita also were falling to historically low levels.

Writing in the journal Nature in 2010, we pointed out that such trends were a reliable indicator of looming political instability and that they “look set to peak in the years around 2020.” In Ages of Discord, published early in 2016, we showed that America’s “political stress indicator” had turned up sharply in recent years and was on track to send us into the “Turbulent Twenties.”

The Political Stress Index (PSI) combines the three crisis indicators in the Goldstone-Turchin theory: declining living standards, increasing intra-elite competition/conflict and a weakening state. Growing PSI indicates increased likelihood of political violence. The Well-Being Index indicates greater equality, greater elite consensus and a more legitimate state.

This year, the COVID-19 pandemic and the death of George Floyd at the hands of the Minneapolis police have delivered a double-barreled crisis to U.S. politics. America has reacted with a nationwide, months-long series of urban protests. But this explosion of protest is not just the result of this year’s events. The U.S. has weathered epidemics and racial protests before and produced legislation that made the country better as a result.

What is different this decade is that these events are occurring at a time of extreme political polarization, after decades of falling worker’s share in national income, and with entrenched elite opposition to increased spending on public services. These trends have crippled the U.S. government’s ability to mount an effective response to the pandemic, hampered our ability to deliver an inclusive economic relief policy and exacerbated the tensions over racial injustice that boiled over in response to the video of Floyd’s death.

Is the U.S. likely headed for still greater protests and violence? In a word, yes. Inequality and polarization have not been this high since the nineteenth century. . . .

American exceptionalism was founded on cooperation — between the rich and the poor, between the governors and the governed. From the birth of the nation, the unity across economic classes and different regions was a marvel for European observers, such as St. John de Crèvecoeur and Alexis de Tocqueville. This cooperative spirit unraveled in the mid-nineteenth century, leading to the first “Age of Discord” in American history. It was reforged during the New Deal as an unwritten but very real social contract between government, business and workers, leading to another age of prosperity and cooperation in postwar America. But since the 1970s, that contract has unraveled, in favor of a contract between government and business that has underfunded public services but generously rewarded capital gains and corporate profits.

While this new neoliberal [i.e., conservaive, pro-corporate] contract has, in some periods, produced economic growth and gains in employment, growth has generally been slower and far more unequal than it was in the first three postwar decades. In the last twenty years, real median household income has stagnated, while the loss of high-paying blue-collar jobs to technology and globalization has meant a decline in real wages for many workers, especially less educated men.

As a result, American politics has fallen into a pattern that is characteristic of many developing countries, where one portion of the elite seeks to win support from the working classes not by sharing the wealth or by expanding public services and making sacrifices to increase the common good, but by persuading the working classes that they are beset by enemies who hate them (liberal elites, minorities, illegal immigrants) and want to take away what little they have. This pattern builds polarization and distrust and is strongly associated with civil conflict, violence and democratic decline.

At the same time, many liberal elites neglected or failed to remedy such problems as opiate addiction, declining social mobility, homelessness, urban decay, the collapse of unions and declining real wages, instead promising that globalization, environmental regulations and advocacy for neglected minorities would bring sufficient benefits. They thus contributed to growing distrust of government and “experts,” who were increasingly seen as corrupt or useless, thus perpetuating a cycle of deepening government dysfunction.

How can Americans end our current Age of Discord? What we need is a new social contract that will enable us to get past extreme polarization to find consensus, tip the shares of economic growth back toward workers and improve government funding for public health, education and infrastructure.

This sounds like commonplace leftist discourse and a weak response to such extreme conditions. Let us therefore drive home both the urgency of the crisis and the possibility of changing course by looking at two historical cases where countries teetered on the brink of calamity but managed to pull back and forge a new path to progress.

The United Kingdom in the 1820s was coming apart. After defeating Napoleon, the Duke of Wellington became the leader of an elite group that sought to maintain the dominance of the traditional landlord elites. As prime minister and then leader of the House of Lords, Wellington sought to ignore, rather than adjust to, the new realities of the booming cities of Birmingham, Manchester and other burgeoning cities of the fast-growing industrial economy. Meanwhile, the workers of these cities demanded political reforms that would give them a voice in Parliament.

These workers particularly objected to the infamous “Corn Laws,” which, by placing tariffs on imports of foreign grain, kept the costs of food (and hence the profits of English landlords) high and the real wages of workers low. Following a major workers’ protest in Manchester in 1819, which was dispersed with a cavalry charge into the crowd that left an estimated 10 to 20 dead and hundreds injured (the so-called Peterloo massacre), politics in Britain became even more sharply polarized. This became one of the first incidents widely reported by journalists, and indignation spread across the country.

Nonetheless, Wellington not only refused any legal changes, he sought to clamp down on the agitation for voting reforms. New laws were passed to expand police power and block public assemblies; newspapers were closed; protestors and journalists were jailed. Still, popular agitation continued, and there was even an attempt to assassinate several cabinet ministers. The rapid growth of the industrial workforce and the new manufacturing economy produced similar pressures for radical political change across Europe, leading to waves of revolutions in 1830 and 1848. Many in Britain expected a similar outcome, yet the country avoided revolution throughout these years.

The solution was for leaders to accept the Reform campaign, which sought voting reforms that would reduce the power of the landlords and support the new industrial working class. After the growing confrontations of the 1820s, in 1830, Wellington’s Tories lost control of Parliament, and a Whig leader who supported the Reform campaign, Lord Grey, became prime minister. Grey’s initial efforts to pass a Reform bill were frustrated, and Grey threatened to have the King create enough additional Whig peers to force the bill through. The Tories then relented, and in 1832, Parliament passed the first Reform bill, which expanded the franchise, undermined the clientage of the landed elite and gave representation to the residents of the factory cities. Additional Reform bills followed, allowing Britain, despite continued large-scale workers’ movements, to avoid the revolutions that wracked the continent and emerge as the leading economy of Europe.

A century later, it was the United States that was coming apart. In the early 1930s, democracy was retreating in Europe while the U.S. economy had fallen into a depression, with a dust bowl in the Great Plains and millions of industrial workers losing their jobs. Prohibition had heightened cultural conflict and crime, while nativist demagogues (such as radio personality Father Coughlin and Louisiana Governor Huey Long) stirred fear.

Then in 1932, Americans voted for change. Franklin Delano Roosevelt replaced Herbert Hoover as president and undertook a sweeping reform program to restore work and shared prosperity. Labor organizations were strengthened, and public works programs provided jobs for construction workers, craftsmen and artists. The resulting buildings were decorated with monuments to the dignity of labor. It took years to transition to an economy based on mechanization, skilled labor, strong unions and public education, but the result was a country strong enough to fight the rising tide of global fascism and emerge as the world’s leading economy.

The formula in both cases was clear and simple. First, the leader who was trying to preserve the past social order despite economic change and growing violence was replaced by a new leader who was willing to undertake much-needed reforms. Second, while the new leader leveraged his support to force opponents to give in to the necessary changes, there was no radical revolution; violence was eschewed and reforms were carried out within the existing institutional framework.

Third, the reforms were pragmatic. Various solutions were tried, and the new leaders sought to build broad support for reforms, recognizing that national strength depended on forging majority support for change, rather than forcing through measures that would provide narrow factional or ideologically-driven victories. The bottom line in both cases was that adapting to new social and technological realities required having the wealthy endure some sacrifices while the opportunities and fortunes of ordinary working people were supported and strengthened; the result was to raise each nation to unprecedented wealth and power.

To be sure, the path back to a strong, united and inclusive America will not be easy or short. But a clear pathway does exist, involving a shift of leadership, a focus on compromise and responding to the world as it is, rather than trying desperately to hang on to or restore a bygone era.

This has already been, and will continue to be, a violent year in America. . . . It will take heroic efforts to rebuild the political center, to join businesses and workers in partnership and consensus, and to restore fairness in both taxation and public spending. Only if all sides can again recover a stake in our government, no matter which party controls it, can we avoid sliding into a crisis that will undermine our Constitution and pit Americans against each other in a way we have not seen for generations.

Unquote.

Yes, if more of us vote this year, the pendulum can swing and we can set this country on a progressive path.

At Least We Know Death Is a Certainty

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Despite being on a news vacation, I heard that The New York Times got copies of some of Txxxx’s tax returns. I read the Times article, but will let a few other Times readers comment.

Ralph from Nebraska:

This stunning report takes some time to read and digest and we will all find numbers that amaze and annoy us. I was once a bankruptcy lawyer and I often had to explain this scenario to clients: If you borrow money and don’t repay the money the IRS sees the money that you didn’t repay as income on which you need to pay taxes. Here’s the number that jumped screaming off of my I Pad: $287,000,000. During the last ten years our President has stiffed his creditors to the tune of $287 million. 

STSI from Chicago:

There is something rotten in our tax system that allows someone like Dxxxx Txxxx to spend years litigating the IRS so that he can pay little or no taxes owed. Dxxxx Txxxx is the poster child for how the US tax code has been exploited and scammed by individuals who use taxpayer money to fund their legal battles with the IRS. Congress needs to address this issue and level the playing field so that every American pays his or her fair share of taxes due.

Ron S. from Los Angeles:

I run two small, moderately profitable businesses. I deduct legitimate business expenses, but I also make monthly estimated tax payments to the IRS, knowing full well if I claim losses year after year I will be audited. That Dxxxx Txxxx cheats the system is not only no surprise, it also shows how the U.S. tax system is set up one way for the rich and another way for everybody else.

B. Reed from Washington DC:

Txxxx is a crook who deserves to be prosecuted. But I wish this was an anomaly because it isn’t. . . . How people can see this stuff and not be radicalized and demand dramatic change is beyond me. . . . 

It’s beyond me too.

By the way, we have an election 36 days from now, in which Dxxxx Txxxx and lots of his Republican enablers are candidates for high office.

Why Indeed?

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Another in what has turned into a series of selections from Charles Lindblom’s Politics and Markets: The World’s Political-Economic Systems (1976):

A set of unifying beliefs that assert the virtues of the fundamentals of social organization will be found in any stable society. . . . In the market-oriented polyarchies [where there is “rule by the many”], the beliefs show a distinctive character. They are greatly influenced by inequality of wealth and by the existence of a dual set of leaders who enjoy a privileged position in politico-economic organization [that is, government leaders and business leaders]. Many of the unifying beliefs of the society are those beliefs communicated by a favored class to all other classes, with enormous advantage in a grossly unequal competition of ideas.

. . . Deep-seated beliefs and attitudes that persist over time, some people will say, have to be understood as the product of random “spontaneous” social forces. What does that mean? It cannot mean that they arise without cause. Perhaps, then, it means that they arise without deliberate intent. No person or group or government plans them. They are unintended consequences of mutual influences of persons on each other.

Granted. Yet we know that, although people do indeed influence each other’s attitudes in countless unintended ways, they also intend a great deal of control over attitudes, beliefs and volitions. Parents and teachers, for example, teach children — explicitly and through their own behavior as example — the virtues of obedience to authority. In most societies, they also teach children that improvement in their position in life will and ought to depend on their own personal qualities (rather than on an alteration in social structure).

Moreover, many of the unintended influences of people on each other reinforce the intended indoctrinations, as when someone who repeatedly challenges authority makes his friends so uncomfortable that they gradually drop [them]. Much unintended mutual influence among persons is therefore patterned control rather than random, because it reflects a pattern in intended influence, which is itself not random.

Why the particular pattern of intentions that we perceive? Why the emphasis on such a theme as obedience to authority (rather than a skeptical, only conditional, and selective acceptance of it)? Why deference toward the wealthy (that does not even discriminate between earned and inherited wealth)? Why individual responsibility for improvement in the quality of life (rather than social cooperation to improve polity and economy)? Why genialized privilege for the wealthy and powerful (rather than offsetting constraints and responsibilities to balance their advantages in wealth or power)? Why so profound a respect for property as to lead many people to think it immoral to steal a loaf of bread to save one’s family from hunger?

These are not random themes. They confer advantages on persons in the favored social class. How do they come to be “spontaneous”? How do they come to be near universally taught? They have been endlessly communicated to the population — explicitly and through behavior as example — through the church, the media, the schools, the family and the pronouncements of business and government leaders. Since they have been in this way communicated for centuries, they have passed into folklore and common morality, with the result that almost everyone joins in the intended and unintended or “spontaneous” processes by which they are passed on to the young and reinforced for the old [230-231].

Unquote.

Maybe there’s more skepticism about our common beliefs than there was in 1976. If so, such skepticism hasn’t translated into very many progressive government policies. In the US, at least, with a few exceptions, it’s been the reverse. But as skepticism justifiably grows, will our politics lean toward the alternatives Lindblom put in parentheses? I sure hope so.

(A giant blue wave 40 days from now would help.)

Bad News (a Long Read)

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Looking out the window in a pleasant neighborhood, you don’t see the problems. But they’re very real.

This is the headline of an article in Time written by a businessman and a former labor leader: “The Top 1% of Americans Have Taken 50 Trillion Dollars from the Bottom 90%”:

Like many of the virus’s hardest hit victims, the United States went into the COVID-19 pandemic wracked by preexisting conditions. A fraying public health infrastructure, inadequate medical supplies, an employer-based health insurance system perversely unsuited to the moment—these and other afflictions are surely contributing to the death toll. But in addressing the causes and consequences of this pandemic—and its cruelly uneven impact—the elephant in the room is extreme income inequality.

How big is this elephant? A staggering $50 trillion. That is how much the upward redistribution of income has cost American workers over the past several decades.

This is not some back-of-the-napkin approximation. According to a groundbreaking new working paper by Carter C. Price and Kathryn Edwards of the RAND Corporation, had the more equitable income distributions of the three decades following World War II (1945 through 1974) merely held steady, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in the year 2018 alone. That is an amount equal to nearly 12 percent of [Gross Domestic Product] —enough to more than double median income—enough to pay every single working American in the bottom [90%] an additional $1,144 a month. Every month. Every single year.

Price and Edwards calculate that the cumulative tab for our four-decade-long experiment in radical inequality had grown to over $47 trillion from 1975 through 2018. At a recent pace of about $2.5 trillion a year, that number we estimate crossed the $50 trillion mark by early 2020. That’s $50 trillion that would have gone into the paychecks of working Americans had inequality held constant—$50 trillion that would have built a far larger and more prosperous economy—$50 trillion that would have enabled the vast majority of Americans to enter this pandemic far more healthy, resilient, and financially secure. . .

At every income level up to the 90th percentile, wage earners are now being paid a fraction of what they would have had inequality held constant. . . .On average, extreme inequality is costing the median income full-time worker about $42,000 a year. Adjusted for inflation using the [Consumer Price Index], the numbers are even worse: half of all full-time workers (those at or below the median income of $50,000 a year) now earn less than half what they would have [if] incomes . . . continued to keep pace with economic growth. And that’s per worker, not per household.

The next article I read was written for the Times Literary Supplement by a Columbia University researcher. “The Rich and the Rest” is a review of three books. The first book describes how corporate America and the rich have waged a successful war on science for the past seventy years:

A succession of administrations have frayed the social safety net and dismantled regulatory controls. Corporate money has bought unprecedented influence in electoral campaigns and reaped unprecedented political power in return. In The Triumph of Doubt: Dark Money and the Science of Deception, the epidemiologist David Michaels details many of the victories these corporate interests have won. Michaels, the former head of the Occupational Safety and Health Administration under the Barack Obama administration, spent years weighing the survival of workers and citizens against the short-term profits of corporations. In his book, he documents not only a shocking disregard for human welfare on the part of big business, but also a co-ordinated effort to compromise the culture of knowledge itself.

Michaels painstakingly explains the way medical researchers have documented the dangers of certain consumer products and industrial processes, beginning with smoking. . . . One early study “found that heavy smokers were fifty times as likely as non-smokers to contract lung cancer”. This was terrible news for the tobacco industry, which had burgeoned with the wartime practice (in both world wars) of issuing cigarettes to soldiers as standard rations. And so the industry responded by commissioning a public relations expert to set up a “research committee” to contest the findings. Unfortunately, the findings were solid, so the mission became the manufacture of doubt. Did tobacco use cause lung cancer? The evidence suggested that it did. Was tobacco the only cause of lung cancer? Of course not. So carcinogens like asbestos and radon became excuses for quashing public health measures concerning tobacco. Over time, an army of publicists, lawyers and corrupt scientists was assembled to prolong the public agony in the interest of squeezing every last nickel from the trade.

. . . Chapter by chapter, case by case, Michaels marches through the many ways corporate greed has co-opted science, law and government, in each case following the model set by Big Tobacco. . . .

Michaels’s book follows in the distinguished footsteps of the historians of science Naomi Oreskes and Erik M. Conway, whose Merchants of Doubt (2010) described how Big Tobacco’s proxies segued into climate change denial. Once again, even when the science was near unanimous, the purveyors of fossil fuels and industrial contaminants saturated the public sphere with specious arguments and outright falsehoods. In recent years oil companies have busily diversified and invested in alternative energy, but they have simultaneously waged war against environmental regulations to maximize every bit of profit from the existing industry before they abandon it, regardless of the human cost.

The second book tells the story of the fabulously wealthy Koch family. It was Fred Koch, a chemical engineer, who saw a great opportunity during the Texas oil boom in the early 20th century:

Fred cleverly predicted that subsidiary industries such as refineries and pipelines would pave the way to great fortunes. He was more concerned with profits than with politics – he built refineries for both Stalin and Hitler – and, while a highly successful businessman, he remained a fairly ordinary oil magnate: it took his sons to transform the company into a political and economic powerhouse. As Christopher Leonard writes in Kochland: The Secret History of Koch Industries and Corporate Power in America, Charles Koch, who was made company president in 1966, despised New Deal America.

His response was to create “a political influence network that is arguably the most powerful and far-reaching operation ever run out of an American CEO’s office … Charles Koch’s political vision represents one extreme pole in the ongoing debate about the role of government in markets; a view that government should essentially protect private property and do little else”. . . .

[Charles] turned the full beam of his method to politics in 2008, when the Obama administration and the Democratic Congress began to draft policies to respond to the climate crisis, endangering fossil fuel profits.

Koch and his associates have created a political assembly line to fund, organize and publicize an opposition. His donors’ gatherings . . . have collected millions of dollars, which have then funded organizations such as the American Legislative Exchange Council (ALEC), which in turn have leveraged influence-peddling among state legislators, and funded faux “grassroots” (or “astroturf”) organizations, such as Americans for Prosperity. These have orchestrated demonstrations and door-to-door canvassing during elections. Koch-funded groups have subverted language with Orwellian flair: Americans for Prosperity promotes regressive tax policies and wage suppression; the Heartland Institute promotes the despoliation of the American landscape by sowing doubt about climate and environmental hazards.

The review’s third book deals with America’s “compound epidemic of addiction, alcoholism and suicide”, an epidemic that obviously predated Covid-19:

The Princeton economists Anne Case and Angus Deaton survey this tragic landscape in Deaths of Despair and the Future of Capitalism. Case and Deaton call this situation the dark side of meritocracy, in which “the less educated are devalued and disrespected”. In this view, the collapse of social constructs, including marriage, institutional religion and trade unions, leaves people unmoored and their interests undefended. And while the elites of the past often regarded noblesse oblige and charity as the obligations of privilege and faith, modern American meritocracy, rooted in the founding religion of Calvinism, suggests that the happy “elect” are deserving of their good fortune, and that the “losers” are simply reaping what they sow. To help them is throwing good money after bad. Better to spend it on a sports arena.

The upshot is dire. The US has the highest infant mortality rate and the lowest life expectancy among industrialized nations – a situation that the Covid-19 crisis has cast into sharp relief. The US accounts for 4 per cent of the world’s population but more than 25 per cent of global deaths from the pandemic. . . .

Nowhere are the flaws of unfettered capitalism better illustrated than in the opioid crisis (here as in Michaels’s book). It is a tragically familiar tale: a powerful pharmaceutical company creates a new market for addictive painkillers by encouraging and incentivizing doctors to record pain levels as the fifth vital sign (after temperature, pulse, respiration and blood pressure). Once this subjective symptom is recorded, the drug can be prescribed, having been falsely advertised as unlikely to lead to addiction. Billions of dollars in profit are then realized, at a dire cost: to this day millions remain addicted; more than 67,000 Americans died from overdoses in 2018 alone. In this cycle of immiseration, a dysfunctional society breeds pain, then creates a revenue stream from a treatment that infinitely compounds it.

Yet millions of voters, in particular struggling White men with high school educations, support the Republican Party, the party of big business. They have their reasons, despite the fact — revealed by the study described in that Time article — that “by far the single largest driver of rising inequality these past forty years has been the dramatic rise in inequality  between white men”. Again from the Time article:

The $50 trillion transfer of wealth the RAND report documents has occurred entirely within the American economy, not between it and its trading partners. . . . [This] upward redistribution of income, wealth, and power wasn’t inevitable; it was a choice—a direct result of the trickle-down policies we chose to implement since 1975.

We chose to cut taxes on billionaires and to deregulate the financial industry. We chose to allow CEOs to manipulate share prices through stock buybacks, and to lavishly reward themselves with the proceeds. We chose to permit giant corporations, through mergers and acquisitions, to accumulate the vast monopoly power necessary to dictate both prices charged and wages paid. We chose to erode the minimum wage and the overtime threshold and the bargaining power of labor. For four decades, we chose to elect political leaders who put the material interests of the rich and powerful above those of the American people.

I’ll conclude this avalanche of dysfunction with a passage from a densely-written classic, Politics and Markets, by Charles Lindblom (I’m going to finish it this time). It was published, coincidentally or not, in 1976:

One obstruction to polyarchy [rule by the many] is the privileged position of businessmen [by which Lindblom means their tremendous control over the functioning of a nation’s economy]. It is a rival . . . to the polyarchal control of government [since government must induce businessmen to keep the economy going]. Another obstruction is the disproportionate influence of businessmen in interest-group, party and electoral politics. It permits businessmen to win . . . disproportionately in their many polyarchal struggles. . . But now suppose that the business influence strikes even deeper in a particular way. Consider the possibility that businessmen achieve an indoctrination of citizens so that citizens’ volitions serve not their own interests but the interests of businessmen. The privileged position of business comes to be widely accepted. In electoral politics, no great struggle need be fought [202] . . . 

. . . Despite universal suffrage, income distribution in the polyarchies [like the US and UK] has not changed greatly. . . In few of the polyarchies is there serious discussion, even among the politically active, of major alterations of the distribution of wealth and income. And citizens are extraordinarily ignorant on the issue. . . [208].

Two recent studies of British working-class attitudes and opinions agree in finding both a narrow range of opinion and widespread deference of working class to upper class — this in a society many of whose nineteenth-century leaders feared that universal suffrage would bring about demands for a more equal sharing of income and wealth, so obviously advantageous did they see such policies for the mass of voters. It is one of the world’s most extraordinary social phenomena that masses of voters vote very much like their elites. They demand very little for themselves [208-209].

Lindblom was calling attention to economic inequality before America became vastly more unequal. Now the public is more aware of inequality, but that’s because inequality is so much worse. Nevertheless, “masses of voters [continue to] vote very much like their elites”. What would the professor make of our situation in the year 2020? (I bet he’d recommend voting.)

Science, Schmience

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From Paul Krugman’s newsletter:

Untitled

. . .  I’ve sometimes regretted having gone into economics, a field in which getting the story right all too often offends powerful players, who in turn intervene to prop up zombie ideas that should have died long ago.
 
But I also realized some time back that politics can and will intrude into any area of scholarly research where some people have strong motivations for getting the story wrong. This has obviously been the case for climate research, where an overwhelming scientific consensus has had to struggle against a whole industry of climate denial, which is almost entirely supported by fossil-fuel interests and has effectively taken over the Republican Party.
 
In fact, in some ways the climate scientists have had it worse than the economists; mainstream Keynesian economists (which is pretty much what I am) get a lot of abuse, but as far as I know none of us has had politicians trying to criminalize our work, the way Ken Cuccinelli, now a top official at the Department of Homeland Security, did to climatologist Michael E. Mann [ten years ago].
 
I used to think, however, that climate change was a subject uniquely vulnerable to anti-science propaganda and intimidation. After all, the effects of greenhouse gas emissions are invisible and gradual, taking decades to unfold; it’s always possible to mock the science because it happens to be snowing today, while accusing the scientists of taking jobs away from salt-of-the-earth coal miners.
 
Surely, I thought, it wouldn’t be that easy to politicize a science, to claim that all the experts were part of a vast conspiracy, in an area in which experts’ predictions could be validated and the conspiracy theorists revealed as phonies in a matter of weeks.
 
But I was wrong.
 
Epidemiology, like climatology — or for that matter economics — involves trying to model complex systems, so that no prediction ends up being exactly right. And the chains of cause and effect are long enough that the consequences of bad policy take some time to become completely apparent: Florida began reopening in early May, but Covid-19 deaths didn’t spike until July.
 
But we’re talking about weeks, not decades, and the story of the coronavirus is as clear as such things ever get.
 
Experts warned that a rush to resume business as usual, without social distancing and widespread use of face masks, would lead to a surge in new cases. The usual suspects on the right dismissed these concerns, insisting either that Covid-19 was a hoax or that its dangers were being greatly exaggerated by scientists who wanted to bring down Dxxxx Txxxx. Sunbelt states decided to believe the skeptics, not the scientists — and the result was a huge, deadly viral surge.
 
So that put an end to the politicization, right? Wrong. Not only are Txxxx officials still pressuring health experts to minimize the dangers, the top communications official at the Department of Health and Human Services accused his own agency’s scientists of “sedition.”
 
The moral here is that there’s no such thing as a safe subject when you’re dealing with people who have a totalitarian mind-set — and that is, in fact, what we’re dealing with. I suspect that in the early days of the Soviet Union plant geneticists imagined that they were working in a low-risk field; I mean, who would politicize that? In the end, however, thousands of them were sent to labor camps or executed for questioning the theories of Trofim Lysenko, a quack who somehow became one of Stalin’s favorites.
 
The fact of the matter is that we’re now struggling over where there’s even such a thing as objective truth. And staying out of politics is no longer an option for anyone.
 
Unquote.
 
I wouldn’t say we’re struggling over whether there’s objective truth. It’s real. What we’re struggling with are people who don’t respect it (like the chairman of the Republican Party who claimed that Biden’s record on the virus is worse than Txxxx’s). But Prof. Krugman is right about not staying out of politics. Voting — and supporting candidates in other ways — matters.
 
Which reminds me. Has anybody seen my Biden/Harris lawn sign? It still hasn’t been delivered. Maybe the crooked Postmaster General arranged for it to be confiscated?