As unrest continues in this broken and beaten down city, if we simply look at the events leading up to the Freddie Gray incident, we see a pattern – a pattern that is noticeable nationwide. A pattern of robbery, racism, injustice and inequality. Freddie Gray is the tip of the iceberg but this corruption runs deep – from TPP to FTP. #RiseUp
Tag Archives | income inequality
Maverick economist Joseph Stiglitz says there are three steps we need to take to remedy extreme income inequality. He sells his ideas via Yahoo News:
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It’s the hollowing out of the U.S. economy. The haves are getting more, the have nots are getting less. And the middle class is disappearing.
Between 2000 and 2013, every single state in the United States saw its share of middle-class families shrink, according to analysis from the Pew Charitable Trusts. In some states like Wisconsin and Ohio, that number fell by more than 5 percentage points; middle-income families now make up less than half of those states’ populations.
It’s not a new narrative but the modern story of inequality goes much deeper than stagnant wage growth. It’s inequality of opportunity as well. It’s something Nobel-prize winning economist Joseph Stiglitz has studied and written about a great deal. He talks with Yahoo Finance Editor-in-Chief Andy Serwer in the video above.
via The Atlantic:
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In 1899, Thorstein Veblen described a type of good that is more lusted after the more expensive it is (think Ferraris). And in 1968, the economist Gary S. Becker theorized that criminals perform cost-benefit analyses just like everyone else: What are the odds of getting caught, and what’s the potential payoff? These two frameworks have lived out vibrant lives in academic journals, high-school textbooks, and college lecture halls, but, as they’re ostensibly unrelated, they’ve rarely been put in conversation with one another.
A study put out this month in Oxford Economic Papers does just that, in an effort to come up with a more nuanced understanding of the relationship between inequality and violence. There’s a good amount of research from all over the world that suggests that places with pronounced income inequality are more likely to have high rates of violent crime, a finding that makes intuitive sense: the wider the socioeconomic gap, per Becker’s 1968 model, the more gains potential criminals perceive.
“What does it mean when the capitalist vanguard starts talking about inequality?” asks Chrystia Freeland at Politico:
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Earlier this year, the most reliable way for a billionaire to make the headlines was to compare suggested tax increases to Nazi Germany. Lately, though, the more interesting shift in the politics of the plutocracy has been more genteel.
There will be more Hitler analogies, of course, but another camp among the superrich is starting to tack in the opposite direction. Some plutocrats accept the evidence that capitalism is no longer working for the middle class, and are trying to figure out what to do about that.
It is not just George Soros, the hedge-fund billionaire, who cheerfully describes himself as a class traitor and has been worrying about the shortcomings of what he calls free-market fundamentalism for decades, anymore. Among the plutocrats, this once-radical perspective is going mainstream.You could see that in London in late May, at a conference on “Inclusive Capitalism.” In the graceful, gilded rooms of the Guildhall, the historic seat of the City, one of the world’s two centers of finance, international investors controlling $30 trillion worth of asset–one third of the global total—gathered to discuss, as Paul Polman, the CEO of Unilever, put it, “the capitalist threat to capitalism.”
Capitalism, Polman and Lynn Forester de Rothschild, the conference’s organizer, wrote in an introductory essay, “has often proved dysfunctional in important ways.
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As the Great Recession deepened and income inequality became more pronounced, county-by-county rates of child maltreatment — from sexual, physical and emotional abuse to traumatic brain injuries and death — worsened, according to a nationwide study by Cornell University.
The income inequality-child maltreatment study, to be published in the March 2014 edition of the peer-review journal Pediatrics, covers all 3,142 American counties from 2005-09, and is one of the most comprehensive of its kind and the first to target child abuse in places with the greatest gap between rich and poor.
“Our study is the first to demonstrate that increases in income inequality are associated with increases in child maltreatment,” said John J. Eckenrode, professor of human development and director of the Family Life Development Center in the College of Human Ecology. “More equal societies, states and communities have fewer health and social problems than less equal ones — that much was known.
A group that could easily fit on a single subway car. Via the Guardian:
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The extent to which so much global wealth has become corralled by a virtual handful of the so-called ‘global elite’ is exposed in a new report from Oxfam on Monday. It warned that those richest 85 people across the globe share a combined wealth of £1tn, as much as the poorest 3.5 billion of the world’s population.
The development charity fears this concentration of economic resources is threatening political stability and driving up social tensions.
The report found that over the past few decades, the rich have successfully wielded political influence to skew policies in their favor on issues ranging from financial deregulation, tax havens, to lower tax rates on high incomes and cuts in public services for the majority. Since the late 1970s, tax rates for the richest have fallen in 29 out of 30 countries for which data are available, said the report.
It is taken for granted in conservative circles at that lower taxes on the rich will lead to greater investment in the economy, and therefore jobs—but the data tell a very different story. This analysis comes from Gerald Friedman of Dollars & Sense:
“The share of national income going to investment (net of depreciation of existing plant and machinery) has been declining since the beginning of the “neoliberal” era, around 1980. Since the start of the Great Recession, net investment as a share of GDP has plummeted to its lowest level since the 1930s. This sharp drop in investment comes despite sharply rising profits.”
Monetary Policy Isn’t Working: The Federal Reserve has helped to shorten past recessions by driving down interest rates to lower the cost of borrowing and so spur investment. During the current crisis, the Fed has conducted an aggressive monetary policy, raising the money supply to lower interest rates.… Read the rest
Via the Weekly Standard, Charlotte Allen writes that the tech bastion offers a preview of where society as a whole is headed:
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Master and servant. Cornucopian wealth for a few tech oligarchs plus relatively steady but relatively low-paying work for their lucky retainers. No middle class, unless the top 5 percent U.S. income bracket counts as middle class. Silicon Valley is a tableau vivant of what many economists and professional futurologists say is the coming fate of America itself, a fate to which Americans, if they can’t embrace it as some futurologists hope, should at least resign themselves.
The increasing ability of computers to perform ordinary tasks will inexorably transform America into an income oligarchy in which the top 15 percent of people—with skills “that are a complement to the computer”—will enjoy “cheery” labor-market prospects and soaring incomes, while the bottom 85 percent, that is to say, 267 million out of America’s 315 million people, will be lucky to find Walmart-level jobs or scrape together marginal “freelance” livings running $25-a-pop errands for their betters via TaskRabbit (say, picking up and delivering a pair of designer shoes).
Most likely with fists clenched and all the blood drained from its face, the Wall Street Journal reports:
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Switzerland is expected to vote later this year on a proposal to place further limits on executive pay, the latest effort to govern corporate compensation in a country that recently approved some of the world’s strictest say-on-pay rules.
The Young Socialists have collected more than 100,000 signatures—the threshold needed to call a vote—in support of a referendum to limit executive salaries to 12 times those of a company’s lowest-paid employee.
The campaign, dubbed the 1:12 Initiative for Fair Pay, is named for the organizers’ belief that no one in a company should earn more in one month than the lowest-paid employee makes in a year.
The Swiss Federal Council, the country’s cabinet, has advised the parliament to recommend that voters reject the proposal. However a poll earlier this month showed 49.5% of respondents were in favor of the 1:12 Initiative, 40.5% against and 10% undecided.
Including three attempting to deliver a petition to a Wal-Mart executive’s Manhattan office. Imagine how awkward that would have been! Buzzfeed reports:
100 Walmart workers protesting low wages and illegal retaliation against strikers were arrested in 11 cities on Thursday. In response to Walmart’s inaction, workers announced widespread, massive strikes and protests will take place on Black Friday in 2013.
The New York Police Department arrested three Walmart strikers who wanted to meet with an executive. The protesters planned to deliver a petition directly to company board member Christopher Williams’ Fifth Avenue office. The petition demands Walmart provide employees with a livable, annual wage of $25,000, and stop punishing workers who stand up for their rights. Walmart fired or disciplined at least 60 strikers who protested in June.
Walmart spokesperson Kory Lundberg said that these demonstrations are “just a show.”