Tag: Inequality

The Ethics of Responsibility

The Daily Escape:

John Muir Wilderness, CA -August 2019 photo by petey-pablo

Nobody in America should be rooting for a recession, and no political party should root for one either. Shame on those who are.

US economic policy is often driven by ideology, and those operating policies can change whenever the party in power changes. That seems to be more likely to occur in 2020 than it has at any time since Reagan. Like it or not, Bush I, Clinton, Bush II, and Obama all followed similar economic policies.

Trump has disrupted much of them, returning to a vigorous trickle-down policy, aggressive deregulation and the imposition of unilateral tariffs.

Max Weber, in his 1919 essay on “Politics as a Vocation”, made a distinction between politicians who live by the “ethics of responsibility” and those who follow the “ethics of conviction”. The ethic of responsibility is all about pragmatism; doing the right thing in order to keep the show on the road. But the ethic of conviction is all about moral (ideological) purity, about following the playbook despite the impacts.

An example is the Kansas Experiment, where Sam Brownback, following right-wing convictions, cut taxes to produce a “shot of adrenaline into the heart of the Kansas economy.” Economic growth was below average, state revenues crashed, and debt blew up. But, still a believer, Brownback vetoed the effort to repeal of his laws.

You don’t need more from Wrongo to paint the picture. We’re in a time of the ethics of conviction.

Let’s take a look at two recent articles about the economy. First, from the Economist, which is telegraphing the possibility of a US recession:

“Residential investment has been shrinking since the beginning of 2018. Employment in the housing sector has fallen since March….The Fed reduced its main interest rate in July and could cut again in September. If buyers respond quickly it could give builders and the economy a lift.”

But housing is not the only warning sign. The Economist points to this chart, showing the change in payrolls in the 2nd Quarter of 2019:

It’s clear that much of America is doing quite well. It is also clear that most of the 2020 battle ground states are not. Indiana lost over 100,000 manufacturing jobs in the last downturn, almost 4% of statewide employment. It is among a growing number of states experiencing falling employment: a list which also includes Ohio, Pennsylvania and Michigan.

In 2016, those last three states all delivered their electoral-college votes to Trump, and were decisive in his electoral victory. Trump’s trade war may still play well in these states, but if the decline in payrolls continues, it suggests a real opening for Democrats, assuming they are willing to hammer on pocketbook issues.

Second, the Wall Street Journal had an article about winners and losers in the 10 years since the Great Recession. It isn’t a secret that those left behind are in the bottom half of the economic strata, and there is little being done to help them:

“The bottom half of all U.S. households, as measured by wealth, have only recently regained the wealth lost in the 2007-2009 recession and still have 32% less wealth, adjusted for inflation, than in 2003, according to recent Federal Reserve figures. The top 1% of households have more than twice as much as they did in 2003.”

We also call wealth “net worth”. It is the value of assets such as houses, savings and stocks minus debt like mortgages and credit-card balances. In the US, wealth inequality has grown faster than income inequality in the past decade, making the current wealth gap the widest in the postwar period. Here is a devastating chart from the WSJ showing the net worth of the bottom 50% of Americans:

There’s a big difference between the 1% and the bottom 50%: More than 85% of the assets of the wealthiest 1% are in financial assets such as stocks and bonds. By contrast, more than half of all assets owned by the bottom 50% comes from real estate, such as the family home.

Economic and regulatory trends over the past decade have not only favored stock investments over housing, but they have also made it harder for the less affluent to even buy a home. The share of families in the bottom 50% who own a home has fallen to 37% in 2016, (the latest year for which data are available), from 43% in 2007. OTOH, homeownership among the overall American population is higher since 2016.

Weber’s ethics of conviction have driven our politics since well before the 2008 recession. We know what it caused: inequality, demonstrated by lower wages for the 90%, and a devastating decline in net worth for the bottom 50%.

Can we turn the car around? Can we elect politicians who will follow Weber’s ethics of responsibility at the local, state, federal and presidential levels in 2020?

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Monday Wake Up – December 1, 2014

Today’s Wake Up is for entrenched power in America.

Inequality and political polarization has progressed to the point that the “The Hunger Games” trilogy is being taken seriously as literature with an important message for our time.

Its symbols are appearing in protests around the world and have made it into opinion columns:

Some protesters in Ferguson, Missouri, have adopted Katniss’s revolutionary slogan, “If we burn, you burn with us.” In Thailand, students flashing District 12’s three-fingered salute — a symbol of protest in the film — have recently been arrested. (The salute has apparently been outlawed since spring.) In a few short years, “The Hunger Games” and its symbology have become a part of the cultural commons.

America’s upper middle class thinks that inequality is an issue because it means low GDP growth, solely because people can’t buy enough consumer products to create good jobs. However, there could be an inflection point ahead when having more consumer goods ceases to be the goal of the middle class, or the people in poverty.

Look back at the French and Russian monarchies for a lesson about what that transition might look like, and how fast it can come about.

Today’s wake up music isn’t designed to get you dancing. It is the political anthem, “We Can’t Make It Here” by James McMurtry. McMurtry is the son of the novelist Larry McMurtry. The song won the 2005 Americana Music Award for song of the year. Music critic Robert Christgau has ranked “We Can’t Make It Here” as the best song of the 2000s. Bob Lefsetz said that “We Can’t Make It Here” has stood the test of time because of its unmitigated truth. Listen, while thinking that this was written in 2005, not this year:

Sample lyrics:
Will I work for food, will I die for oil,
Will kill for power and to us the spoils,
The billionaires get to pay less tax,
The working poor get to fall through the cracks

Monday’s Links:

Millennials are having to choose between affordable housing and jobs. It has always been true that there are fewer jobs where housing is affordable, but today, those two halves of the American Dream are living farther apart. Jobs with high wages are in unaffordable cities. The affordable homes cluster in the cities with lower wages and less upwardly mobile families.

Governor Christie (R-NJ) gives early sign that he is running for President. Christie vetoed a bill that would have banned crating pigs. New Jersey has few pig farms, but they are widespread in Iowa.

You can unknowingly lease a dog in San Diego CA. People who thought they purchased a dog using time payments actually leased the pet. After 27 months of payments, they could pay a $93.52 fee to end the lease, or $187.04 to purchase the pet. Why not just get a rescue animal? Read the paperwork, people! This is probably the next Wall Street securitization scheme.

Pope raises eyebrows by saying:

When we read about Creation in Genesis, we run the risk of imagining God was a magician, with a magic wand able to do everything — but that is not so…

His point was that Catholics should believe in evolution and the big bang theory. Next, Kansas and Texas will probably try to excommunicate him. Clearly, he’s been confused by those science-y people.

News from Russia:

Are the sanctions working? Russian firms that are under sanctions by the West must refinance $20 billion by April-sanctions are making that difficult.

There is a serious nuclear waste problem in the Arctic, brought to you by Russia. According to a joint Russian-Norwegian report issued in 2012, there are 17,000 containers of nuclear waste, 19 rusting Soviet nuclear ships and 14 nuclear reactors cut out of atomic vessels sitting on the bottom of the Kara Sea. The worst case scenario is described as “an Arctic underwater Chernobyl, played out in slow motion.” Oh, great, and I was worried about Crimea.

Water thievery is growing in California along with the drought. Thieves are cutting pipes and taking water from fire hydrants, storage tanks, creeks and rivers to get their hands on the precious commodity.

Thought for the week:

I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong. –Katharine Graham (Owner of the Washington Post)

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The Big Picture – An Editorial

“To conquer fear is the beginning of wisdom” – Bertrand Russell

Today, we are going to take a short course in The Big Picture. For starters, here is a quote from Digby:

…we are a primitive country. We’ve got idiots on TV screaming about a religion of 1.6 billion people being the toxic cause of violence even as our All American, non-religious school-kids are taking the deadly weapons their parents give them as presents to shoot their schoolmates and themselves. And we have the most sophisticated city on earth acting like a bunch of authoritarian creeps toward people who are doing serious work to stop the spread of an outbreak of a deadly disease — for PR purposes.

Since the Great Recession in 2008-9, we have seen the Federal Reserve move the economy slowly forward while leaving most people behind. Yet, few complain about growing income inequality. People know it and feel it, but don’t vote, or try to do anything else to change things.

• Why doesn’t income inequality upset the average American?
• Why are we more aware of how plastic surgery has changed the looks of an actress than we are about Gen. John Allen’s crazy ideas about winning the war against ISIS?
• How can more Americans be afraid of contracting Ebola than being killed in a car wreck?

What are we afraid will happen if we really dig deeply into an idea or a strategy that is proposed as a “solution” for some problem or other? Why can’t we resist re-tweeting some piece of snark that is the short version of something we believe, or thought we believed?

One visible trend is our increasing distrust of public institutions. We have seen how government, corporations, “charitable” organizations, media, and law-enforcement and the Justice system, all seem to exist for the benefit of those who manage them and not for the public.

This capturing of our institutions is a scary thing, but it is true everywhere in America. You might think that realizing this would spur interest in reform, but in fact, it has just increased our denial. People say in spite of it all, we’ll just soldier on as best as we can, making sure that we and our kids learn to navigate this rigged system.

This is why there is very little interest in politics by young voters.

Another trend is that America’s young know there is no possibility for real growth in personal income. They know that there are policies to promote and stimulate the economy, policies that might work. But, they have no faith in the ability of public officials to implement such policies, so they hang back, hoping somebody comes forward with a better answer. This, from the most connected, most media-savvy, most sophisticated generation in our history.

Voters show no interest in the 2014 mid-term elections. The media asks the same questions of the same Sabbath pundits each week: “Who will win the Senate?” But people don’t care. They watch the media whip up class warfare, cultural warfare and real warfare together into a big stew of propaganda that becomes mind-numbing. So they Facebook, and Tweet.

Most people are both stuck and scared–wanting things to change, but not knowing how. People might get upset, but big change requires commitment and action, and it is hard to get Millennials to change their minds, or to do much.

Political activism succeeds with a clear vision and a solid game plan. Neither Democrats nor Republicans have a list of good ideas about what will work to move us forward. It is possible to attribute political apathy to this lack of ideas, but the destruction of public trust in government is also a big problem.

Changing the future requires getting hold of the levers of government and then using them to do good. That is much more difficult when people don’t vote, and have no faith in their government. Trust in an institution takes a long time to build, but not to destroy. The first step is to take back our captured government.

A basic principle of martial arts is that you use your opponent’s strengths against them. In typical political contests, both sides work to out-raise and out-spend the other. And third parties try to get in the game using the same strategies as the legacy parties.

Today, each candidate is challenging the other’s strength using their own similar strength: It becomes a Sumo-style shoving match.

Conventional wisdom says that it’s expensive to run a campaign (even for local elections, much less national) and so everyone starts their campaign with a fundraising strategy and continues it incessantly even after Election Day. Conventional wisdom says you win with a charismatic candidate, so each party tries to find the best actor they can come up with. Conventional wisdom says candidates should “triangulate” their political views so that they are neither left nor right, just as Democrats are trying to do without success, in Red States this fall.

Instead, insurgent campaigns could be run on social media and the Internet, on as little money as possible—crowdsourcing both dollars and ideas from supporters. They should build constituencies for ideas and for a common future. They should select candidates who can tell the story of a united, desirable future, not some Ken or Barbie cypher for the moneyed interests who run our politics today.

The Big Picture is that we react more strongly to fear than to rationality. We used to fear Hitler. We feared the Communists. We feared al-Qaeda. We fear ISIS. We fear Ebola. We fear for our kids walking to school. We fear that America will let too many brown people across our borders. But we don’t fear climate change, or obesity, or a Congress that can’t enact an agenda to move the country forward.

There should be no mystery about how much corporate power and money drives the culture of fear. Think of it as a 4-step program:

1. Mass media hammers on events that builds general concern and possibly, panic from a few isolated incidents
2. Anecdotal evidence takes the place of hard scientific proof
3. Experts that the media trots out to make comments really don’t have the credentials to be considered experts
4. Entire categories of people (Muslims, West Africans) are labeled as “innately dangerous”

Can a cohesive group with a better way of dealing with the rest of us, gain traction in today’s connected world? Can they help America conquer the long laundry list of fears that constrict and in some cases, stop us from acting on much of anything?

It would take brains, ideas, commitment and energy.

Where are the leaders who have those qualities? How can we support them?

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