Tag Archives: inequality

Inequality of Wealth

Economics, Politics,

The Federal Reserve has released its 2016 Survey of Consumer Finances. The charts below were compiled by the People’s Policy Project. The takeaway is that in 2016 the top 10% owned 77% of the country’s wealth, and 38.5% is owned by the top 1%.

Not surprisingly, the gap between rich and poor is increasing. The top 1% owned “only” 29.9% of the nation’s wealth in 1989.

After declining slightly due to the great recession of 2008, the wealth gap between Blacks, Whites and Latinos is increasing again. Mean White family wealth is now greater than it was in 2007, but Blacks and Latinos have not yet recovered from the recession. (By the way, if these dollar amounts seem high, remember that they are means, which are skewed by the wealth of those at the top. The medians are much lower.)

This provides an interesting backdrop for the Republican Tax Plan, which cuts the top individual tax rate from 39.5% to 35%, and reduces the corporate tax rate from 35% to 20%. (Since capital-based income is concentrated among the rich, a corporate tax cut is simply another tax cut for the rich.) It also eliminates the estate tax. To partially pay for these giveaways, the President proposes cuts of $4.3 trillion to Social Security, Medicaid, public education and other non-military spending. The House Republican budget calls for a $5.8 trillion cut in these same programs.

Here are the results of an analysis by the Tax Policy Center of who benefits from Trump’s tax plan.

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On Obama’s Speech

Whose Opinion Matters?

Why the Minority Rules

Politics, , ,

As Donald Trump forms a right-wing government with its sights trained on health care and workers’ rights, Americans are about to experience important policy changes they didn’t vote for and don’t want. On the morning after Election Day, Michael Moore pointed out:

You live in a country where a majority of citizens have said they believe there’s climate change, they believe women should be paid the same as men, they want a debt-free college education, they don’t want us invading countries, they want a raise in the minimum wage and they want a single-payer true universal health care system. None of that has changed. We live in a country where the majority agree with the “liberal” position.

This year, 48% of voters belong to or lean toward the Democratic Party and 44% belong to or lean toward the Republicans. The Democratic candidate has won the popular vote for President in six of the last seven elections, but for the second time, has been denied the office. 42.5 millions Americans voted for a Democrat for the Senate in 2016, while 39.3 milllion voted for a Republican. In the House of Representatives, Republicans collected 49.7% of the votes to the Democrats’ 47.5%. Yet the Republicans will have a 52-48 advantage in the Senate and a 241-194 majority in the House. At all levels of government, Republicans typically wind up winning a percentage of elective offices that is greater than their percentage of the votes.

There are a variety of political and ideological reasons why the Republicans, the minority party for decades, do better than expected in elections, but this post will focus only on the structural reasons for minority rule. Our political system favors rural over urban areas, small states over larger ones, and conservatives over liberals, and this is by design. These structural biases have greater consequences now that rural and urban America have become more polarized.

The Senate

Of the branches of government, the Senate is the most structurally unequal. Every state gets two Senators regardless of its population. California has over 39 million residents, while Wyoming has just over 586,000, which means that a Wyoming resident’s Senate vote counts almost 67 times as much as a Californian’s. Today, states containing just 17% of the American population can theoretically elect a Senate majority. To make matters worse, even when the majority party controls the Senate, the filibuster rule requires a 60-vote majority to pass most legislation. Senators representing a very small percentage of the population can produce gridlock in the Senate.

The House of Representatives

In theory, House districts are approximately equal in population and are therefore “representative.” But there’s an exception, since every state gets at least one representative, and seven states have a smaller population than an average Congressional district—another small state advantage. There is also a built-in time lag, since redistricting occurs at the end of each decade’s census. Redistricting assumes the census is accurate, which of course it’s not. It is estimated that the census misses 2.1% of Black Americans and 1.5% of Hispanics. (Whites, not surprisingly, are overcounted.)

Two additional factors which account for most of the Republican advantage in the House.

Demography. Republican partisans are more evenly spread over the territories of most states, while Democratic partisans are concentrated in a smaller number of predominantly urban areas. This results in Democrats winning by large majorities in the districts they control, while Republicans win by smaller margins in a greater number of districts. This can be seen as unintentional gerrymandering.

Gerrymandering. Republicans control a greater number of state legislatures, especially after their victories in the 2010 (off-year, low turnout) election, and they have used this advantage to gerrymander Congressional districts. Gerrymandering refers to the manipulation of district boundaries for political advantage. With the aid of computer programs, it can produce legislative districts that resemble salamanders crawling across the state map. (I live in Pennsylvania’s notorious 12th district.)

Gerrymandering is most effective when the minority party engages in “packing”—that is, concentrating the majority party members in a small number of districts. This results in many “wasted votes.” Wasted votes are either votes for the losing candidate, or votes for the winning candidate that exceed the number need to win, as when a House candidate in an urban area receives 85% of the votes.

This chart shows how gerrymandering works. In the example, 60% of the voters favor blue. But if the red party controls redistricting, by packing two of the five districts, they can produce an outcome such as the one on the right where they control 60% of the seats. In Pennsylvania, Republicans controlled the 2010 redistricting. In 2012, Democrats received 51% of House votes, but won only 5 of 18 seats (28%).

Stephanopoulos and McGhee have proposed a mathematical formula for the efficiency gap, defined as the difference between the two parties’ wasted votes divided by the total votes cast. Ideally, it should be close to zero. When it’s not, it gives you a measure of a party’s undeserved vote share. This raises the possibility that the courts could rule that if the efficiency gap exceeds a certain percentage, the redistricting is unfair. A Wisconsin federal court recently struck down the Republicans’ 2010 redistricting, citing expert testimony about the state’s large efficiency gap.

The Electoral College

In the Electoral College, each state has a number of electors equal to its number of Senators plus Representatives—that is, a minimum of three. This produces a level of structural inequality that is intermediate between the more biased Senate and the (theoretically) less biased House. However, since the presidency is a winner-take-all event, it seems more unfair when Clinton, with 48.2% of the vote (as of this morning), loses to Trump, with 46.4%. Clinton’s large majorities in California and New York mean nothing in the Electoral College.

And it gets worse. In Wyoming there is an electoral vote for every 195,000 residents while in California there is one for every 711,000 residents. Merling and Baker point out that the states that are overrepresented are less diverse than the country as a whole. (Wyoming, for example, is 84% white; California, 38%.) Thus, the Electoral College amplifies the votes of White people. The chart below shows the underrepresentation of minorities in the Electoral College.

merling-baker-electoral-2016-11-fig-1

The States

These inequalities at the national level tend to be replicated in the states. As of January, Republicans will control both chambers of the state legislatures in 32 states, and the governor’s office as well as the legislature in either 24 or 25 states (depending on the outcome in North Carolina). Many states have geographically small urban areas that are traditionally outvoted by rural residents. (Lots of money for highways in rural areas, but little for mass transit.) When cities enact progressive changes, such as a minimum wage, they are sometimes preempted by more conservative state legislatures.

Why it is and won’t change

While some of our first political leaders, such as James Madison and Alexander Hamilton, favored proportional representation, the small-state, rural bias was an intentional policy choice deliberately built into the Constitution. The Senate and the Electoral College were a result of the Connecticut Compromise of 1787 designed to allay the fears of the smaller states that, if decisions were made by popular vote, their interests would be ignored by the larger states. Later, the small-state bias served to maintain slavery at a time when it probably would have been abolished by popular vote. (The analogy to our present situation is obvious.)

Equal state representation in the Senate is the only part of the Constitution that cannot be amended. The Electoral College, however, could be abolished by Constitutional amendment. Amending the Constitution, as specified in Article Five, is a two-step process. First, the proposed amendment must pass with a two-thirds majority in both the House and Senate. Then it must be ratified by the legislatures of three-fourths, or 38, of the 50 states. It is hard to imagine the smaller states agreeing to surrender so much power.

Conclusion

This post only begins to cover the many reasons for minority rule in this country. Here are some additional political and ideological reasons. To their credit, the Republicans have a higher turnout, especially in seemingly less important off-year elections, probably because Republicans are older than the average voter, and are more likely to see voting as a normative obligation. They have used their control of state legislatures to enact voter suppression laws that reduce turnout among traditional Democratic constituencies such as poor people and college students. 2016 was the first election in over 50 years without the protection of the Voting Rights Act, and 14 states celebrated by enacting new voter restrictions such as requiring voter I.D., and reducing the time people could vote and the number of polling places.

Because they represent the interests of corporations and rich individuals, Republicans are able to raise more money to influence political campaigns and to lobby Congress. In recent decades, they have carefully developed a strategy of using religion and racial prejudice to persuade working class Americans to vote contrary to their economic self-interest. And so on.

But the structural advantages that favor the rural minority require Democrats to win by a landslide in order to have any real influence on social policy.

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Looking For an Exit

Counterfactual

Framing the Debates

Invisible Inequality

Economics, Health, War and peace, ,

The people who benefit least from American capitalism are mostly likely to be killed or maimed defending it, according to a new paper entitled “Invisible Inequality: The Two Americas of Military Sacrifice” by political scientist Douglas Kriner and law professor Francis Shen. And it wasn’t always that way.

The centerpiece of their investigation is a study of the socioeconomic status of American soldiers killed or wounded in World War II, Korea, Vietnam, and the Iraq/Afghanistan wars. Of course, the Pentagon does not provide such data, but they do list the home towns of the dead and wounded. The authors determined the median family incomes in the home counties of each casualty. Obviously, this introduces “rounding error” into the data, but it gives valuable information about whether the dead and wounded come from richer or poorer parts of the country. Here are the data for fatalities, with the median incomes adjusted to reflect dollars from the year 2000.

study

Clearly, as the U.S. has come to rely less on the draft and more on other forms of recruitment, what was once shared sacrifice has become more unequal. The results for non-fatal casualties are quite similar.

The authors attribute these results to two processes. The selection mechanism refers to differential selection into the armed forces of young people whose economic opportunities are limited, making them responsive to financial incentives the military offers. The sorting mechanism refers to the assignment of lower socioeconomic status soldiers to higher risk positions in the military, since they lack the education or job skills that would make them more useful away from the front lines.

It has been noted that soldiers injured in Iraq and Afghanistan have a higher survival rate than in previous wars, but return home with more serious injuries. This means that inequality continues long after the war. The authors note several studies showing that social class is an important factor affecting the health outcomes of veterans. Veterans from poorer counties return to communities with fewer resources to help in their readjustment, and their injuries place an additional financial burden on those communities.

Kriner and Shen did a national survey showing that only about half of the public is aware of these inequalities. They asked the following question of a national sample: “Thinking about the American soldiers who have died fighting in Iraq and Afghanistan, what parts of the United States do you think they are coming from?” The alternatives were more from richer communities, more from poorer communities, or equally from richer and poorer communities. Forty-five percent believed that the sacrifice was shared equally, while 44% realized that poorer communities carried a larger part of the burden.

Finally, they did two web-based experiments measuring how Americans react to correct information about military inequality. In one of these, half the respondents were told that many more of the Iraq and Afghanistan fatalities came from socioeconomically disadvantaged communities, while those in the control group were not given this information. Fifty-six percent of those in the control group said the invasion of Iraq was a mistake, compared to 62% given information about inequality of sacrifice. A similar result was obtained in a second study measuring willingness to engage in future wars. As the authors state, “The invisibility of casaulty inequality artificially inflates public support for war and the leaders who wage it.”

We know from attribution theory that if the public believes that people in the armed forces freely chose to serve out of personal motives such as patriotism, rather than being driven by environmental forces such as economic necessity, they are more likely to be held responsible for the outcomes of their decisions. Thus, the invisibility of military inequality may contribute to tendencies to blame these vicitims for their deaths or injuries, since they “freely chose” to enlist.

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On Obama’s Speech

Whose Opinion Matters?

On Obama’s Speech

Economics, Health, , ,

So far, we have no evidence that the killers were directed by a terrorist organization overseas or that they were part of a broader conspiracy here at home. But it is clear that the two of them had gone down the dark path of radicalization, embracing a perverted interpretation of Islam that calls for war against America and the West.

In Sunday night’s televised address, President Barack Obama claimed that the threat of terrorism “has evolved into a new phase”—that of home-grown terrorists inspired by ISIS, but not acting at the direction of the ISIS leadership. Although the U.S. military and law enforcement have grown more successful at preventing “complex and multi-faceted attacks like 9/11,” terrorists are turning the “less complicated acts of violence,” such as mass killings. However, when Obama spoke about the steps we are going to take to fight this new threat—more bombing of Syria and Iraq, tighter security, etc.—they turned out to be more of the same policies we have already implemented to fight the old form of terrorism. Maybe that’s why Obama describes desribed this home-grown terrorism—in what may be the most memorable line of the speech—as “a cancer that has no immediate cure.”

The future of Muslim terrorism in this country will depend not only on whether we abandon our seemingly endless war to control Middle Eastern energy resources, but also on social and economic conditions here at home. Home-grown Muslim terrorism has many of the same causes as non-Muslim domestic terrorism. Since 9/11, 48 people have been killed by right wing extremists and 28 by Muslim extremists. Our success in preventing both types of murder will depend on our being able to maintain the loyalty of working class Americans at a time of increasing inequality.

I’ve previously discussed Thomas Piketty’s claim that economic inequality is an important cause of Middle Eastern terrorism. Alvaredo and Piketty attempted to measure the extent of inequality in the Middle East, a task made more difficult by the lack of accurate data. They estimate that the top 10% controls over 60% of Middle East income, while the top 1% controls over 25%. Although the average income in the United States is much higher, income inequality in the U.S. is almost as high as in the Middle East. (In the U.S., the top 1% takes in 23% of the income.) A large body of evidence shows a positive relationship between income inequality and violence. For example, the homicide rate is higher in more unequal countries, and income inequality also predicts differences in the homicide rates of U.S. states. It now appears that our bleak economic conditions are starting to influence the overall death rate.

There has been a long-term decline in U.S. mortality rates, making our lives longer and better. However, Princeton economists Anne Case and Angus Deaton report that between 1999 and 2013, there was a reversal of this trend for non-Hispanic whites aged 45-54. While from 1978 to 1998, the mortality rate for this group declined by about 2% per year, since 1999, it has been increasing by about .5% per year. This translates into 96,000 more deaths than if the mortality rate were flat, and almost 500,000 more deaths than if it had continued its 2% per year decline. Described by the authors as a surprise, this startling increase in deaths has received little attention from the corporate media (although I suspect life insurance companies are on red alert). The closest recent parallel is the increase in deaths in Russia after the fall of the Soviet Union. As Joe Biden might say, “This is a big f***ing deal!”

The reversal is specific to this middle-aged whites. Mortality rates for blacks, Hispanics, and older whites continued to decline. The mortality rate for Hispanics aged 45-54 (262 per 100,000) is lower than that of middle-aged whites (262 v. 415 per 100,000) and declined by 1.8% over the 14 year period. The mortality rate for middle-aged blacks is higher (582 per 100,000), and declined at a rate of 2.6% per year. (To put this in perspective, middle-aged whites now die 71% as often as middle-aged blacks, compared to 56% as often 14 years ago.)

The increase in mortality among middle-aged people is also specific to this country. The graph below compares U.S. whites to the same age group among U.S. Hispanics and the residents of six other industrialized countries. (Both the authors of the study and the New York Times chose to include U.S. Hispanics in this table, but not U.S. blacks. If they had included blacks, of course, they would have needed a much larger graph.)

white-American-deaths

This is largely a story about social class. Since they didn’t have income data, the authors used education as a substitute. The change was most pronounced among those with a high school education or less. Mortality in this subgroup rose by 22% over the 14-year period, while it remained stable among those with some college and declined for those with a college degree.

The immediate cause seems to be an increase in self-destructive behavior. The change is explained almost exclusively by increases in three causes of death—suicide (up 78%), accidental drug and alcohol poisoning (up 400%), and cirrhosis and other chronic liver diseases caused by alcoholism (up 46%). These folks are committing either rapid or slow suicide.

There was also an increase in morbidity, or poor health, in this subgroup. The percentage reporting themselves in good health declined, and more people reported chronic pain, serious psychological distress, and difficulty in carrying out the activities of daily life, such as walking or socializing with friends. This is consistent with reports of increases in white, middle class drug overdoses caused by overuse of pain medication. (Ironically, the increase in opiate addiction among whites may lead to a more humane drug policy.) Self-reported alcohol consumption also increased. The increased mortality is not explained by obesity, since it occurred at about equal rates for obese and non-obese people.

ST_2015-12-09_middle-class-03

Case and Deaton attribute these changes to the decline in the standard of living and increasing economic insecurity among middle-aged whites. Deaton suggested in an interview that whites have “lost the narrative of their lives”—that is, they must face the reality that they are unlikely to have a financially secure retirement. A non-college graduate who was 50 in 2013 was born in 1963, and entered the work force around 1981, just about the time that the American corporate class began its relentless assault on the living standards of middle class Americans. The real median hourly wage for white men with no more than a high school diploma declined from $19.76 in 1979 to $17.50 in 2014. The Pew Research Center reports that the percentage of Americans in the middle class, defined as an income between two-thirds and double the national median ($42,000 to $126,000 for a family of three), has declined from 61% in 1971 to 50% in 2015.

Of course, some of these economic trends have occurred in other developed countries as well, but the U.S. has a less adequate social safety net and has neglected its infrastructure. Case and Deaton note that most workers in the U.S. have been forced into defined-contribution retirement plans, while in other industrialized countries, defined-benefit plans are the norm. Defined contribution 401(k) plans shift all of the risk of stock market losses onto the employee. The average wealth of middle-income families declined from $161,000 in 2007 to $98,000 in 2010, where it still stands today.

I realize Case and Deaton have documented distress among middle-aged whites, while terrorists, both white Christian and Muslim, are usually (but not always) younger. My argument assumes that increasing mortality among 45-to-54-year-olds is a cumulative result of economic stress that began at an earlier age, and that anxiety about the future is spreading to younger generations. For example, a poll by Harvard’s Instiute of Politics found that 48% of 18-to-29-year-olds believe that the “American dream” is “dead,” while 49% think it’s “alive.”

Needless to say, terrorism is not the only way inequality contributes to a more dysfunctional society. Research is badly needed on the relationship between economic stress and acceptance of the appeals of fascist demagogues. As Harold Meyerson points out, the increase in the death rate and the rise of Donald Trump “share some common roots: a sense of abandonment, betrayal and misdirected rage.”

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Deep Background

Deep Background

Foreign policy, Social psychology, , ,

Theories of causal attribution in social psychology distinguish between proximal and distal causes of events. Proximal causes are close to the event in time and space while distal causes are further removed from it. Proximal causes usually include the intentional acts of persons as well as immediate situational influences on them. Distal causes include the institutions, social structure and physical environment within which behavior is embedded. Distal and proximal causes combine to form a causal chain in which the more distal causes lead to the more proximal ones.

Distal causes are sometimes called ultimate causes. This reflects more than simply a judgment that they are important. It implies that distal causes are more permanent, while proximal causes are to some extent substitutable for one another. For example, a person who is under chronic economic stress due to poverty (a distal cause) may respond aggressively to a variety of frustrating situations (proximal causes). Eliminating some of these frustrations may do little to reduce overall aggression.

Research on causal attribution suggests than proximal causes are more easily recognized and rated by participants as more important than distal causes, and that voluntary acts of individuals are regarded as the most causally significant. This preference for intentional acts follows from the fundamental attribution error—the tendency to give greater weight to personal causes of behavior and to minimize the importance of situational or environmental causes.

Given this research, it is not surprising that the public blames terrorist acts primarily on their perpetrators and places a high priority on detecting and eliminating potential terrorists. However, if distal causes of terrorism are not addressed, we face the possibility of an inexhaustible supply of terrorists, as new recruits volunteer to take the places of those who are captured or killed. Fortunately, researchers are exploring some of the more distal causes of terrorism.

Politics, or Why They Hate Us

Robert Pape, a political scientist at the University of Chicago, author of Dying to Win: The Strategic Logic of Suicide Terrorism studied all of the 4600 suicidal terrorist attacks that have occurred in the world since 1980. His information comes from interviews with relatives and colleagues of the perpetrators, news reports, and the data bases of other groups that study terrorism. He reports that almost all terrorist attacks are part of a campaign directed by a militant secular organization whose goal is to compel other countries to withdraw their military forces from territory they regard as their homeland.

What 95% of all suicide attacks have in common . . . is not religion, but a specific strategic motivation to respond to a military intervention, often specifically a military occupation, of territory that the terrorists view as their homeland or prize greatly. From Lebanon and the West Bank in the 80s and 90s, to Iraq and Afghanistan, and up through the Paris suicide attacks we’ve just experienced in the last days, military intervention—and specifically when the military intervention is occupying territory—that’s what prompts suicide terrorism more than anything else.

Pape rules out religion as the ultimate cause since many suicide terrorists, such as those from the Tamil Tigers in Sri Lanka, were not religious. The leadership of ISIS consists of former Iraqi military leaders under Sadam Hussein. However, Islam is not irrelevant. Terrorist groups such as al Qaeda and ISIS use Islam as a recruitment tool and as a way to get recruits to overcome their fear of death.

The arguments that terrorist attacks such as the Paris massacre are intended to prompt France to increase its bombing of Syria, or to persuade the French people to persecute Muslims in France (thereby recruiting more local terrorists), are not inconsistent with Pape’s thesis. He refers to these as short-term goals which are intended to increase the costs of French intervention in the Middle East, and ultimately to persuade foreign governments to withdraw from the Persian Gulf.

Global Warming

Some climate scientists have suggested that there is a causal chain that runs from climate change, through drought, to migration from rural or urban areas, to political instability in the Middle East, particularly in Syria. A study published in March by Colin Kelley of the University of California at Santa Barbara and his colleagues addresses the first link in this causal chain. The authors argue that, although droughts are common in the Middle East, the drought that occurred in 2007-2010 was unprecedented in its severity in recent history. This drought matched computer simulations of the effects of increased greenhouse gas emissions on the region. The simulations predicted both hotter temperatures and a weakening of westerly winds bringing moisture from the Mediterranean, both of which occurred.

The method used in the study was to generate computer simulations of climate in the region both with and without climate change, and compare them to what actually happened. They conclude that climate change made the drought “two to three times more likely” than natural variability alone. While I can follow their argument, I don’t have the knowledge to evaluate it.

This thesis is similar to the arguments of some U. S. military analysts that climate change acts as a “threat multiplier” that increases instability in various regions of the world. However, Kelley sees climate change as an ultimate cause of the Syrian War, rather than just a catalyst. His paper is part of a larger scholarly literature linking global warming to interpersonal and political conflict.

Inequality

Frenchman Thomas Piketty, author of the best selling Capital in the Twenty-First Century, in a blog post published by Le Monde, proposed that income inequality is a major cause of Middle East terrorism. Since the interview is in French, I am relying on an article by Jim Tankersly of the Washington Post. He describes Piketty’s theory as “controversial,” since it explicitly blames the U. S. and Europe for their victimization by terrorists.

By Middle East, Piketty means the area between Egypt and Iran, which of couse includes Syria. This region contains six corrupt oil monarchies—Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates—all of which survive due to militarily support from the U. S. and Europe. Within those countries, a small minority controls most of the wealth, while the majority are kept in “semi-slavery.” Collectively, they control almost 60% of the wealth of the region, but only 16% of its population. The remaining Arab countries—Iran, Iraq, Syria, Jordan, Lebanon and Yemen—are much poorer. These countries, described by Piketty as a “powder keg” of terrorism, have a history of political instability.

In an 2014 paper, Alvaredo and Piketty attempted to estimate income inequality in the Middle East, a task made more difficult by the poor quality of their economic statistics. They estimated (“under reasonable assumptions”) that the top 10% controls over 60% of income in the region and the top 1% controls over 25%. This estimate is compared below to the income shares of the top 1% in five other countries for which more accurate statistics are available:

  • Sweden                                                          8.67%
  • France                                                            8.94%
  • Great Britain                                                12.4%
  • Germany                                                      13.13%
  • United States                                              22.83%
  • Middle East                                                  26.2%

Yes, folks, income inequality in the Middle East is even greater than in the United States! (Who would have thought, 35 years ago, that we would become the comparison group against which a dysfunctional level of inequality is measured?)

As you’ve no doubt noticed, all three of these analyses ultimately blame Middle Eastern terrorism and the war in Syria primarily on the United States and Europe. Removing or mitigating these three distal causes requires that we decide to leave the fossil fuels of the Middle East in the ground, withdraw our military forces from the region, and promote education and social development for the majority of the people in the Middle East.

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The Muslim Clock Strikes