Distributional National Accounts: Trading Places
December 12, 2016 6:32 AM   Subscribe

Economic growth in the United States: A tale of two countries - "An economy that fails to deliver growth for half of its people for an entire generation is bound to generate discontent with the status quo and a rejection of establishment politics."

also btw...
posted by kliuless (20 comments total) 41 users marked this as a favorite
 
America's corrosive lack of accountability - "Trump gets away with it. But he's not the only one."

Just read through this and cannot honestly see a difference between the issues laid out here and the ones being protested in traditionally corrupt locations in sub Saharan Africa
posted by infini at 6:49 AM on December 12, 2016 [1 favorite]


From the first article:

"In 1980, adults in the top 1 percent earned on average 27 times more than bottom 50 percent of adults. Today they earn 81 times more. This ratio of 1 to 81 is similar to the gap between the average income in the United States and the average income in the world’s poorest countries, among them the war-torn Democratic Republic of Congo, Central African Republic, and Burundi. "
posted by mareli at 6:50 AM on December 12, 2016 [12 favorites]


An economy that fails to deliver growth for half of its people for an entire generation is bound to generate discontent with the status quo and a rejection of establishment politics.

Except in the real world, it somehow only managed to generate discontent and rejection with the white people in that half and not the nonwhites. Somehow. In some inexplicable way. Why, it's almost like the thing that actually generated the discontent and rejection wasn't economics at all, but white people who don't like seeing nonwhite and queer people on their teevee or hearing "para espanol oprima la estrella."
posted by ROU_Xenophobe at 7:44 AM on December 12, 2016 [17 favorites]


I am going to keep referencing Robert Reich's Inequality for All because the contraction of wealth is a cycle.
posted by lazycomputerkids at 8:00 AM on December 12, 2016 [2 favorites]


Economic inequality and systemic racism are both real problems, and it's disingenuous to present either as the actually real problem in an artificial all-or-nothing dichotomy, especially since they are so entwined in US society.

(Yes, "economic anxiety" in currently ascendant fascists is mostly a fig leaf for racism, but the links are about actual economic disparities, which do exist and look quite stark. Sowing yet more classist seeds will likely not help liberals in any long, medium or short term strategy.)
posted by byanyothername at 8:02 AM on December 12, 2016 [26 favorites]


It's also worth pointing out that there are also economic complaints coming from the black community. It's not the case that only white people are claiming the system is failing them. It's bogus to frame these issues as sour grapes from bitter whites. There are plenty of black communities like Ferguson being devastated by economic exploitation and public policy that penalizes poverty.
posted by saulgoodman at 8:20 AM on December 12, 2016 [28 favorites]


Except in the real world, it somehow only managed to generate discontent and rejection with the white people in that half and not the nonwhites.

Cite, please? A majority of both Blacks and Latinx were unsatisfied with the way things are going in the US in July, albeit much more narrowly than whites. I think it's both politically foolish and pretty morally bankrupt to assume that everyone who didn't support a racist fascist misogynist did so not because they oppose racism and fascism and misogyny but because they think the distribution of wealth, income, and jobs in the US is just peachy as-is.
posted by enn at 8:21 AM on December 12, 2016 [10 favorites]


The reality is that for an increasing percentage of Americans they are selling their labor within a global market that is increasingly competitive and/or automated. And for a large number of Americans they are no longer economically competitive in the global market.

Unfortunately we've followed some variation of trickle-down economics for the bulk of the last 40 years and the data shows it doesn't work but we continue to create public policy that doubles down on it. At the same time we've largely been rolling back the social safety net in the US because of fear of "Welfare Queens" while simultaneously locking an increasing percentage of Americans into a permanent underclass due to our drug policies.

Assuming that we aren't going to abandon capitalism anytime soon we need to quit buying into the mythology around it. Capitalism is great at generating the maximum return on investment but it's awful about making sure that those returns on investment are distributed in an equitable manner. If we want an more equitable society (and it's not clear that we do) then we we need to realize our political systems need to intervene to correct the imbalances in our economic system both with things like pump-priming when there are economic downturns but also redistributive policies that transfer wealth from the wealthiest Americans to the rest of America in the form of goods and services and direct payments.

I also think that it's important to note that economic protectionism such as removing the US from the world trading markets is a bad idea. It might bring back some jobs but it would probably result in a lot of disruption to our economic system in all sorts of negative ways. Furthermore why is it that a US worker deserves a job more than a Bangladeshi worker?

Rather than assume that we can achieve full employment I think it's probably smarter to look at some sort of system of direct payments to US citizens that makes sure that the basic needs of all Americans are met. UBI, Public housing or subsidized housing, increased food programs, expanded education access, universal health care, etc.

Basically we need to decide as a society that we are going to provide a basic standard of living for all Americans in much the same way that many Western European nations have because it's not entirely clear that we can ever create an economic system where every American is able to succeed.

But unfortunately we have a society where your the bulk of your value to society is your economic production and consumption. If you are no longer producing or consuming at the minimum rates you are economically expendable. I personally think that any social or economic system which makes people redundant or expendable to be immoral and in need of reformation.
posted by vuron at 8:24 AM on December 12, 2016 [11 favorites]


It's been pretty much the recipe for fascism and its kin forever: make things shitty for people, either deliberately or through incompetence, give them someone to blame for it that isn't the people fucking up (it's the Jews, the Tutsi, the Mexicans) and pretty reliably the general population will vote for kicking the people who aren't like them.
posted by tavella at 8:25 AM on December 12, 2016 [5 favorites]


Sen.Warren mentioned this survey "An Economy Doing Half Its Job" (40 page pdf) the other day.

The U.S. Economy Is Doing Only Half Its Job (short article by one of the survey authors (from Harvard Business Review which has an article viewing limit (but has some graphs that aren't in the pdf))).
posted by phoque at 8:38 AM on December 12, 2016


To be clear, I think what Piketty & Co. mean by discontent and rejection of establishment politics is that Trump should be unsurprising because economics, which is a silly and indefensible thing to think.

Cite, please?

Consistent voting patterns throughout the primaries and general election. Nonwhites overwhelmingly rejected both the Democratic and Republican "anti-establishment" candidates.
posted by ROU_Xenophobe at 8:41 AM on December 12, 2016


Thanks for posting this. I didn't read every link, so maybe it was explored, but the way that inequality is linked to race, at least in racially diverse regions of the county, is a dimension of this that is particularly heinous.

It is sickening in the SF Bay Area to see how extreme the racial segregation is - where there is such incredible wealth and such depraved poverty and the lines between the two are so starkly racial.

I just looked up this one metric: In Alameda County last year, only 57% of African American students graduated high school on time. In Santa Clara County, 92% of white and 94% of Asian-American students graduated. Compare being a black kid who happened to be born in East Oakland to being a white or Chinese-American immigrant kid who happened to be born in Morgan Hill.

Comparing the overall grad rates of Alameda County to Santa Clara county show that there is an economic disparity that impacts educational outcomes. Compare graduation rates by race within each county, and you see a racial disparity. But put both race and economics on the scale together and the destructive impact of bias and lack of access etc compound each other to extremes that show a moral crisis.

references here
posted by latkes at 8:45 AM on December 12, 2016 [3 favorites]


I don't buy any arguments related to globalization. The US economy hasn't stopped growing, and there's no reason that service jobs shouldn't pay as well as traditional manufacturing jobs. That's a choice that has been made.

I think the racism argument is more along the lines that now we're more equal than we were, everything appears to be equally crappy for more people regardless of skin color. If you're black, you're pretty used to things being terrible. Working and middle class white people have simply joined the club and have been given a convenient scapegoat.
posted by idb at 8:49 AM on December 12, 2016 [7 favorites]


Well a liberal "anti-establishment" candidate has to present a vision that addresses both economic concerns of minority voters and the social-cultural values of minority voters. The simple fact of the matter is that the good old days of high rates of shared economic growth (50s-70s) specifically excluded large groups of minorities in order to maintain a Democratic coalition that had both middle-class industrial workers in the North and poor farmers in the South. Economic policies that benefited the poor and working class were supported as long as they still maintained the racial class system that was omnipresent in the south.

That's why so many minority voters are somewhat concerned about economic populism, especially economic populism directed at the WWC because been there done that.
posted by vuron at 8:54 AM on December 12, 2016 [3 favorites]


The US has a more firmly entrenched two party system than Canada, but federally, at least, Canada only has two competitive parties. What I notice in both countries is that the leftmost of the two main parties pays lip service to inequality but doesn't really address it. The rich still get richer and the poor still get poorer under their watch, it's just slower and not as blatant.
posted by rocket88 at 9:01 AM on December 12, 2016 [3 favorites]


The left can address both inequality and racism at the same time. We can, and should, talk about how the two issues intersect. Saying we can only do one or the other is a false choice that has been forced upon us by our opponents. Look, I'll start:

"Racism has made income inequality worse, and income inequality has made racism worse. The poor and middle class of all races and ethnicities need to look beyond their surface differences and realize that the rich, predomenently white, patriarchy are the real enemy, not each other. Racial and economic justice for all!"

See? Easy and compelling.
posted by vibrotronica at 10:08 AM on December 12, 2016 [21 favorites]


With the added benefit of being true!
posted by saulgoodman at 10:21 AM on December 12, 2016 [3 favorites]


Poorer non-whites may be dissatisfied with the present state of affairs (and justifiably so), but they appear to believe that the solution is to improve the state's policies. Poorer whites refuse to acknowledge the current degree to which they already receive government help (many of their states are actual failed states wholly incapable of maintaining a decent standard of life for their citizens which are propped up by the federal dollars feeding their children breakfast and lunch, paying for the care of their sick, and maintaining their infrastructure) and are uninterested in improving government policies if it means that the government helps non-whites, too. They don't want benefits unless they come garnished with the dividends of white supremacy. This means that they are not going to listen to promises of economic improvement unless it is very clear that nonwhites will be excluded from that bounty. (Hillary had an actual detailed program. Trump had none.) I am not sure that these people are reachable by any form of Democratic policy, because the Democrats can't (and shouldn't) abandon their support for what now are minority rights but in 20 years won't be. Down deep, I expect many of the poorer whites think that things are never going to get better whatever is done, so they just want someone within reach to kick.
posted by praemunire at 2:01 PM on December 12, 2016 [6 favorites]


I don't buy any arguments related to globalization.
Yeah, me either. The US makes more stuff than it ever has. But it takes a fraction of people to run the robots that actually complete the production of goods and certain production lines have disappeared almost entirely. Textiles, for example.
posted by xyzzy at 3:04 PM on December 12, 2016


The US economy hasn't stopped growing, and there's no reason that service jobs shouldn't pay as well as traditional manufacturing jobs.

The part of the elephant I've got a hand on seems like the haves are taking all this growth from the poors via successful rent-seeking in rental housing (euphemistically called "income properties"), health care and other high-cost, "moated" professional services, and ownership of corporate equities, bonds etc.

https://fred.stlouisfed.org/graph/?g=c8b8 is real corporate profits since Truman, 1949 = 100.

This shows profits available to shareholders had doubled in the 40 years to the end of the Reagan admin, doubled again during the late 90s earnings plateau, doubled again during the Bush Boom, and are nearly halfway to doubling again now.

These net revenues aren't coming from the Mines of Zanzibar, they're coming out of the backs of working America (and wage earners everywhere since up to half of these profits are from overseas operations).

As for your specific point, wealth accretion comes from creating more than you consume, on all levels, from personal to household, to neighborhood, to locality, etc.

Manufacturing provides a beautiful thing -- exportable, value-added wealth.

Services are much more make-work than our rather ignored primary and secondary sectors, which are the foundation of all wealth, even though they are much smaller than the superstructure of our service economy.
posted by Heywood Mogroot III at 9:15 PM on December 12, 2016 [5 favorites]


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