MetaFilter posts tagged with inequality

Do white people have a future in South Africa?

theweasel — Mon, 20 May 2013 14:02:09 -0800

"In the past inequality in South Africa was largely defined along race lines. It has become increasingly defined by inequality within population groups as the gap between rich and poor within each group has increased substantially." Is this what's led the BBC to report a growing sense of insecurity among poor (chiefly Afrikaans-speaking) whites? Or are they just blatantly misreading the statistics? The Australian Protectionist Party last year went so far as to call for the ree-stablishment of sanctions against the South African government for the "increasing disadvantage and persecution" of Afrikaans speakers and other white minorities, not only for the color of their skin but for their language - and the perceived persecution of Afrikaans culture and language has been the cause of past violence.

Income Inequality’s Relationship to Violence

eviemath — Sun, 05 May 2013 22:40:15 -0800

People are more likely to kill their fellow citizens as the gap between rich and poor increases. The same is not true of civil war — although you’d think people would be more likely to turn against the state rather than their neighbor as income inequality increased, this isn’t the case.

Inequality and the New York subway

nickyskye — Tue, 16 Apr 2013 13:41:43 -0800

Inequality and the New York subway. An infographic from the New Yorker: The United States has a problem with income inequality. And it’s particularly bad in New York City—according to recent data from the U.S. Census Bureau, if the borough of Manhattan were a country, the income gap between the richest twenty per cent and the poorest twenty per cent would be on par with countries like Sierra Leone, Namibia, and Lesotho.

Chliean student protests resume for 2013

eviemath — Thu, 11 Apr 2013 20:44:51 -0800

Students in Chile held one of their largest marches yet, continuing a campaign for greater public funding of education and in protest of Chile's significant economic inequality, particularly as it affects access to education. (Previously.)

But I Can't Reach the Ballot Box

seemoreglass — Wed, 13 Mar 2013 11:20:07 -0800

"Ours are aging, consumption-based societies, focused on today. We need to find a way to build for the future. Maybe enfranchising our children is the answer."

Hanging Ourselves By Our Bootstraps

erstwhile ungulate — Sun, 03 Mar 2013 18:35:43 -0800

A well-executed and terrifying visual representation of exactly how stratified wealth is in America. It's far worse than you could have imagined. [SLYT]

Is Culture the Key to College Success?

nikayla_luv — Wed, 26 Dec 2012 07:43:14 -0800

Education is becoming less and less of an equalizer, as it has gradually fortified class barriers. The NYTimes investigation uncovered that culture has increasingly become the best indicator of upward mobility. Likewise, lower-income students may find it difficult to remove themselves from the culture and mentality of poverty, cut off dysfunctional relationships, or stop contributing economically to the households they leave behind. In contrast, culture has led to the success of many Asian-American students.

Prime Time for Socialism

bookman117 — Tue, 20 Nov 2012 14:21:34 -0800

The US does not have a spending problem, we have a distribution problem "Forty years from now, America will be twice as rich on average as we are today. But most of that wealth will go to the very richest households. We only have a budget crisis if they refuse to pay higher taxes... So the real point isn't that we can't afford Social Security and Medicare. It's that some people don't want to pay the higher taxes necessary to maintain Social Security and Medicare. This is a question of distribution, pure and simple."

Money, Power and Politics

nowhere man — Tue, 13 Nov 2012 10:23:46 -0800

In last night's episode of Independent Lens on PBS, filmmaker Alex Gibney presented the case that America's richest citizens have "rigged the game in their favor," and created unprecedented inequality in the United States. "Park Avenue: Money, Power and the American Dream" [video, website]

"Distribution is the core of the problem we face."

kliuless — Tue, 04 Sep 2012 00:20:53 -0800

Trade-offs between inequality, productivity, and employment - "The poor do not employ one another, because the necessities they require are produced and sold so cheaply by the rich. The rich are glad to sell to the poor, as long as the poor can come up with property or debt claims or other forms of insurance to offer as payment..."

...in a zero-sum contest for relative advantage among producers, abundance becomes a threat when it can no longer be sold for high quality claims. Any alternative basis of distribution would undermine the relationship between previously amassed financial claims and useful wealth, and thereby threaten the pecking order over which wealthier people devote their lives to stressing and striving. From the perspective of those near the top of the pecking order, it is better and it is fairer that potential abundance be withheld than that old claims be destroyed or devalued... As polities, we have to trade-off extra consumption by the poor against a loss of insurance for the rich. There are costs and benefits, winners and losers. We face trade-offs between unequal distribution and full employment. If we want to maximize total output, we have to compress the wealth distribution. If inequality continues to grow (and we don't reinvent some means of fudging unpayable claims), both real output and employment will continue to fall as the poor can serve one another only inefficiently, and the rich won't deploy their capital to efficiently produce for nothing. Distribution is the core of the problem we face. I'm tired of arguments about tools. Both monetary and fiscal policy can be used in ways that magnify or diminish existing dispersions of wealth. On the fiscal side, income tax rate reductions tend to magnify wealth and income dispersion while transfers or broadly targeted expenditures diminish it. On the monetary side, inflationary monetary policy diminishes dispersion by transferring wealth from creditors to debtors, while disinflationary policy has the opposite effect. Interventions that diminish wealth and income dispersion are the ones that contribute most directly to employment and total output. But they impose risks on current winners in the race for insurance.

Four Futures: "There are therefore four logical combinations of the two oppositions, resource abundance vs. scarcity and egalitarianism vs. hierarchy." more on 'fiscal' policy -A Conservative Defense of a Jobs Guarantee Program [1,2] -An Electronic National Market for Efficient and Variable Publicly Directed Spending

In this essay I propose that the central bank be freed from its role of using interest rate policy to support aggregate demand. Instead, a truly variable public spending program is suggested to regulate aggregate demand. The program should be running constantly in order to minimize the time delay of fiscal responses. The amount of spending is variable and can be automatically computed from the realized nominal GDP so as to target a fixed growth rate for the nominal GDP. In order to gain popular support and avoid the pitfalls of traditional Keynesian stimulus programs, I propose that an electronic national market be set up to give voters direct control over where such stimulus spending is applied.

more on 'monetary' policy -Bernanke on the defensive -How about quantitative easing for the people?

One such radical measure is too controversial for any policymaker to mention publicly, although some have discussed it in private: Instead of giving newly created money to bond traders, central banks could distribute it directly to the public. Technically such cash handouts could be described as tax rebates or citizens' dividends, and they would contribute to government deficits in national accounting. But these accounting deficits would not increase national debt burdens, since they would be financed by issuing new money, at zero cost to government or to future generations, instead of selling interest-bearing government bonds. Giving away free money may sound too good to be true or wildly irresponsible, but it is exactly what the Fed and the BoE have been doing for bond traders and bankers since 2009... Suppose the new money created since 2009, instead of propping up bond prices, had simply been added to the bank accounts of all U.S. and British households. In the U.S., $2 trillion of QE could have financed a cash windfall of $6,500 for every man, woman and child, or $26,000 for a family of four. Britain's QE of £375 billion is worth £6,000 per head or £24,000 per family. Even if only half the new money created were distributed in this way, these sums would be easily large enough to transform economic conditions, whether the people receiving these windfalls decided to spend them on extra consumption or save them and reduce debts.

Monetary Policy, Fiscal Policy and Inflation: "the absence of inflation is not just a matter of the market trusting the US government to take care of its long-term structural deficit problems – uncertainty and the 'safe asset' status of the USD greatly diminish the efficacy of the expectations channel" [1,2] more on (hyper)inflation -Great hyperinflation episodes in history — and what they tell us about the Fed -Hyperinflation and War -Why you won't find hyperinflation in democracies: "hyperinflation is caused by many things, such as losing a war, or regime collapse, or a massive drop in domestic production. But one thing is clear: it's not caused by technocrats going mad or bad" China, dollars, gold, and a theory of relativity

Imagine that the number of dollar liabilities circulating through the system is actually akin to a dollar rationing system. At any particular time, there are either enough dollar rations to match the number of goods, services and assets that can be consumed with those dollars in the system exactly, or too many rations, or too few. When there is a shortage of dollar "rations" (or dollar stores of value), there is a relative abundance of goods, services and assets. This creates a deflationary effect. When there is an abundance of dollar "rations", there is on the contrary a shortage of goods, services and assets, creating an inflationary impact instead. The same logic also applied to gold, when it represented the basis of the rationing system that the world used. While the rationing system can work very effectively when there is an intelligently matched amount of rations to goods and services, it starts to fail when rations misrepresent the goods and services truly available (because someone has over-issued or under-issued rations relative to goods and services). It's like having butter, bread and sugar rations over-issued relative to the amount of actual butter, bread and sugar that is out there. In this scenario, the rations lose value as people realise that owning rations doesn't necessarily guarantee access goods. Conversely, when rations are under issued relative to the amount of butter, bread and sugar — the rations themselves gain value and also become much more poorly distributed across society. Since it's only by owning a ration that you can guarantee access to goods (even if the goods are abundantly available), this scenario translates to a have or have-not society.

more on inequality -It's Inequality, Stupid -Majority of New Jobs Pay Low Wages, Study Finds -Big Income Losses for Those Near Retirement -Study: Middle class poorer, earned less in 2000s - "For the first time since at least World War II, middle-class families finished the first decade of the 21st century poorer and with lower incomes than they had 10 years earlier." more on productivity -Manufacturing Productivity -Time to resurrect the 'missing variable'? -3D Printing: Rise of the machines -Will the Unemployed Really Find Jobs Making Robots? [1,2] also btw, more robots... -Cheap Four-fingered Robot Hand Edges Closer To Human Dexterity -New Wave of Adept Robots Is Changing Global Industry -Here's the Robot that Foxconn Will Use to Build Their Million-strong "Robot Kingdom" -Industrial Automation: "China has hit its 'Lewis Turning Point,' in that the supply of rural surplus labor is diminishing rapidly. This, combined with demographic shifts and government efforts to push up wages, will drive elevated levels of automation investment." more on employment -Occupations with the highest job gains and losses -Corporations are saving more and paying less -What's keeping unemployment up? It's the demand, stupid -How the Great Recession Proved, Beyond a Doubt, the Value of a College Degree -What's the Single Best Explanation for Middle-Class Decline? "As economics went global, job creation went local." The Globalization Paradox: Democracy and the Future of the World Economy: "Rodrik presenting his ideas on global political economy to a popular audience. Basically, he argues, there is a trilemma, where we have to drop at least one of 'deep' globalization, democracy, and national sovereignty. This is convincing; and he is further persuasive that the obstacles to serious global governance, let alone democratic global governance, are still too big to overcome. This leaves trying to tame globalization, and keep it 'superficial' enough to let different countries preserve their own policies and institutional arrangements. Faltering Innovation: "future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades" [1,2] The Theory of Everything: "Basically the question is what will low skill/intelligence folks do for income? Throughout history there have been manual labor jobs available, of course there has been a fairly big change from agriculture to manufacturing. It does seem to me that continued automation can be highly deflationary, but are there other possibilities for the economy to distribute the gains? Capital and government seem to be obvious channels."

Taxes and inequality

mattn — Mon, 13 Aug 2012 09:52:42 -0800

The comparative experience thus suggests that for inequality reduction, it is the quantity of taxes rather than the progressivity of the tax system that matters most. Affluent countries that achieve substantial inequality reduction do so with tax systems that are large but no more progressive than ours [America's]. As The Economist's Democracy in America blogger argues, the question that this raises is as follows: "if, as a matter of fact, high American inequality is a consequence not so much of rigged rules that benefit the rich, but because of a general failure to tax the middle-class at a level sufficient to finance significantly equalising progressive transfers, then ultra-rich rule-rigging would seem to be orthogonal to the real question: why the middle-class median voter won't support higher taxes to fund a more egalitarian welfare state. I think part of the answer is that huge numbers of middle-class Americans think downward redistribution from the middle to lower class is unfair precisely because the relatively poor are not perceived to be pulling their weight in the collaborative endeavour of American society."

Greenbacks

infini — Fri, 01 Jun 2012 00:13:37 -0800

Last week, I wrote about how urban trees—or the lack thereof—can reveal income inequality. After writing that article, I was curious, could I actually see income inequality from space? It turned out to be easier than I expected.

why teaching equality hurts men

flex — Fri, 18 May 2012 15:28:18 -0800

Why Teaching Equality Hurts Men: "It hurts them by making them unconsciously perpetrate biases they’ve been actively taught to despise. It hurts them by making them complicit in the distress of others. It hurts them by shoehorning them into a restrictive definition masculinity from which any and all deviation is harshly punished... It hurts them through a process of indoctrination so subtle and pervasive that they never even knew it was happening, and when you’ve been raised to hate inequality, discovering that you’ve actually been its primary beneficiary is horrifying – like learning that the family fortune comes from blood money." (via nooneyouknow)

TED: Yes to "Drying your Hands," No to "Income Inequality."

blazingunicorn — Wed, 16 May 2012 21:43:15 -0800

"I can say with confidence that rich people don't create jobs, nor do businesses, large or small," said über-rich venture capitalist Nick Hanauer in a March 1st TEDx talk, which TED is refusing to put on its website. When asked why, TED curator Chris Anderson stated that "We have a general policy to avoid talks that are overtly partisan, and to avoid talks that have received mediocre audience ratings." Was it overly partisan or mediocre? When Geekwire asked, Hanauer stated that he got a standing ovation. In a discussion on Reddit, user TEDChris, reportedly the TED curator Chris Anderson, states that "The trouble with this talk is that it tackled the issue in a way that was explicitly partisan, framing it as a critique of "an article of faith" for Republicans. TED is avowedly non-partisan. We want to share ideas in a way that brings people together, doesn't throw sand in their faces." The National Journal has posted the full text of the speech here.

"A strict academic caste system."

edheil — Sat, 28 Apr 2012 11:29:16 -0800

"Sixteen years ago, Patricia (P.J.) Johnston of Des Moines made the front page of this paper for collecting her diploma from Drake University at just 19. “I think I’m probably meant to be an academic,” Johnston was quoted as saying. And she has been, getting a master’s in one institution, going to seminary at another, doing field research in India in her area of interest — Indian Catholicism — and currently working toward a Ph.D in religious studies at the University of Iowa....As it is, she sleeps on her office floor on the days she has to be in Iowa City, riding the Greyhound bus in from Des Moines."

She helps support her mother with the approximately $16,000 she earns as a teaching assistant. But she is in danger of dropping out before getting her doctorate because she has hit her limit on loans, and most likely won’t be able to get a teaching assistant position next year because of cuts in undergraduate programs. If that happens, she wrote me, she would be this far along, “facing the job market in my mid-30s with no marketable job skills of any kind.”.... The statistics bear out what Johnston describes as “a strict academic caste system.” According to a recent New York Times blog, 74 percent of students at the most competitive colleges have families earning in the top 25 percent. Only 3 percent come from families earning in the bottom quarter, which means higher education is reinforcing rather than negating class divisions. Disproportionate numbers of kids from working-class families who could, based on their test scores and grade-point averages, be getting a college degree, are either not going to college or not finishing — “relegating them to a life of stagnant or declining wages,” wrote Thomas B. Edsall on March 12 in the New York Times blog.

Evening the Odds

davidjmcgee — Tue, 24 Apr 2012 07:31:58 -0800

Evening the Odds: Is there a politics of inequality? (Nicholas Lemann in New Yorker)

Get Rid of Employment and Education Directive

falameufilho — Fri, 13 Apr 2012 14:55:34 -0800

A modest proposal to get rid of income inequality in America: just give every household a $10 million dollar loan.

Executive Compensation

kliuless — Tue, 03 Apr 2012 04:32:10 -0800

The Incentive Bubble (ungated pdf) - "The fraying of the compact of American capitalism by rising income inequality and repeated governance crises is disturbing. But misallocations of financial, real, and human capital arising from the financial-incentive bubble are much more worrisome to those concerned with the competitiveness of the American economy."

An economy can be only as strong as the allocation mechanisms that ensure that capital of all types moves toward its highest social use. When risk is repeatedly mispriced because investors enjoy skewed incentive schemes, financial capital is being misallocated. When managers undertake unwise investments or mergers in order to meet expectations that will trigger large compensation packages, real capital is being misallocated. And when relative compensation is as distorted as it has been by the financial-incentive bubble over the past several decades, one can only assume that human capital is being misallocated, to a disturbing degree. Awakening our monitors to their responsibilities and to the flaws of market-based compensation provides the best hope for correcting these misallocations and strengthening the U.S. economy for the challenges of this century.

Satyajit Das: ~~Pravda~~ The Economist's Take on Financial Innovation - "There is no acknowledgement that much of what is called financial innovation is economic rent extraction, exploiting lack of transparency as well as information and knowledge asymmetries. There is no discussion of the destructive bonus culture which encourages certain behaviours in financial institutions... The unpalatable reality that few, self interested industry participants and their cheerleaders are prepared to admit is that much of what passes for financial innovation is specifically designed to conceal risk, obfuscate investors and reduce transparency. The process is entirely deliberate. Efficiency and transparency is not consistent with the high profit margins on Wall Street and the City. Financial products need to be opaque and priced inefficiently to produce excessive profits." Wall Street's Broken Windows - "James Q. Wilson was a political scientist who often studied the government response to blue collar crime. The public knows him best for his theory called 'broken windows...' Wilson took social norms, community, and ethics seriously. He argued that as community broke down fewer honest citizens were active in monitoring and policing behavior. The breakdown in community was criminogenic – it led to widespread serious blue collar crime. He urged us to take even minor blue collar crimes and breaches of civility seriously and to demand that they be contained through social pressure and policing... Similarly, corruption that is excused and tolerated by elites is unlikely to remain at the level of 'a few deals.' Corruption is likely to spread in incidence and severity precisely because it undermines community and the rule of law and it is likely to grow more pervasive and harmful the more we tolerate it."

The Extractive Institutions in US

kliuless — Thu, 15 Mar 2012 06:54:25 -0800

Why Nations Fail - In a nutshell: "Proximately, prosperity is generated by investment and innovation, but these are acts of faith: investors and innovators must have credible reasons to think that, if successful, they will not be plundered by the powerful. For the polity to provide such reassurance, two conditions have to hold: power has to be centralised and the institutions of power have to be inclusive."

Their explanation is that if the institutions of power enable the elite to serve its own interest – a structure they term "extractive institutions" – the interests of the elite come to collide with, and prevail over, those of the mass of the population. So, if inclusive institutions are necessary, how do they come about? Again, Acemoglu and Robinson are radical. They argue that there is no natural process... Rather, it is only in the interest of the elite to cede power to inclusive institutions if confronted by something even worse, namely the prospect of revolution. The foundations of prosperity are political struggle against privilege.

also see... Daron Acemoglu on Inequality - "When political power is very unequally distributed, it will inevitably be the case that those who have the political power will start using it to create a non-level playing field for themselves... money has started becoming much more important in politics. Politicians have become much more responsive to the wishes and the views and the voice of the very wealthy... by getting rid of regulation, by reducing their tax rates, by getting subsidies for their businesses and so on. That's the big picture. The finance industry is the best exhibit for that story... What's to blame are the institutions. We have let our institutions fail." Francis Fukuyama on Governance - "I would argue that the quality of governance in the U.S. tends to be low precisely because of a continuing tradition of Jacksonian populism. Americans with their democratic roots generally do not trust elite bureaucrats to the extent that the French, Germans, British, or Japanese have in years past. This distrust leads to micromanagement by Congress through proliferating rules and complex, self-contradictory legislative mandates which make poor quality governance a self-fulfilling prophecy. The U.S. is thus caught in a low-level equilibrium trap, in which a hobbled bureaucracy validates everyone's view that the government can't do anything competently." Matthew Yglesias on Rents - "I've come to think that we're more broadly transitioning into a rentier economy in which metaphorical intellectual property rents, literal land rents (which though not relevant for the purposes of the book also involve natural resources like oil and gas), and the quasi-rents associated with air pollution and too big to fail banking are immiserating both capital and labor."

if I can do it, so can you!

changeling — Tue, 06 Mar 2012 11:10:50 -0800

6 Things Rich People Need to Stop Saying. (SLCracked by David Wong) "So when I say "We're all in this together," I'm not stating a philosophy. I'm stating a fact about the way human life works. No, you never asked for anything to be handed to you. You didn't have to, because billions of humans who lived and died before you had already created a lavish support system where the streets are all but paved with gold. Everyone reading this -- all of us living in a society advanced enough to have Internet access -- was born one inch away from the finish line, plopped here at birth, by other people."

The Failure of Judges and the Rise of Regulators

kliuless — Thu, 23 Feb 2012 06:54:39 -0800

The Control Revolution And Its Discontents - "the long process of algorithmisation over the last 150 years has also, wherever possible, replaced implicit rules/contracts and principal-agent relationships with explicit processes and rules."

Inequality highest in thirty years across most of the developed world.

wilful — Mon, 05 Dec 2011 19:33:52 -0800

Divided We Stand: Why Inequality Keeps Rising is the latest report from the OECD Directorate for Employment, Labour and Social Affairs. It finds:

In the three decades prior to the recent economic downturn, wage gaps widened and household income inequality increased in a large majority of OECD countries. [...]Launching the report in Paris, OECD Secretary-General Angel Gurría said “The social contract is starting to unravel in many countries. This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility. Without a comprehensive strategy for inclusive growth, inequality will continue to rise.”

Links to Overview [.pdf]; press release; notes [.pdf format] for Australia, Canada, the UK, the USA; data link (excel format).

The Stealthy Wealthy

acb — Tue, 29 Nov 2011 11:03:26 -0800

As the Occupy protests spread, the latest phenomenon to emerge is the Stealthy Wealthy. Sensitive to negative perceptions of extreme wealth inequality in hard times, and concerned about the possibility of history repeating itself, the super-rich have been swapping their limousines for nondescript-looking yet luxuriously outfitted cargo vans.

the bonds (and bounds) of trust

kliuless — Wed, 26 Oct 2011 06:54:25 -0800

Richard Wilkinson: How economic inequality harms societies (ted/yt) - "We feel instinctively that societies with huge income gaps are somehow going wrong. Richard Wilkinson charts the hard data on economic inequality, and shows what gets worse when rich and poor are too far apart: real effects on health, lifespan, even such basic values as trust." (previously)

Fertile ground for demagogues

knave — Thu, 01 Sep 2011 21:39:50 -0800

Robert Reich talks at Google about the biggest problem facing the US economy. [SLYT, 57min]