Republicans and Democrats Agree!

In a fascinating study, 5,522 folks were asked what an ideal distribution of wealth might look like, one which they deemed to be fair and just.  They were also asked to estimate today's distribution of wealth in the U.S., i.e., how much does each 20% have.

Their results are given (right) along with the actual distribution.

It's called the GAP between the rich and all the rest; economic inequality. The participants knew about the spread but not the extent.  Did you?  That the bottom 40% of Americans possess about 0.3% of the country's wealth?

The participants were asked to choose where they'd prefer to live if given the choice between these two hypothetical societies, A and B.

Of the study participants, 92% chose society B.  Interestingly, it matches their suggested ideal distribution rather nicely.  It's a common desire among all the participants and perhaps the rest of us as well.

Society A represents the U.S. as it was in 2012.  Society B is fictional but approximates Sweden's distribution of wealth.

Surprisingly, 93.5% of Democrats and 90.2% of Republicans prefer and approve of the more equal distribution.

Finally, they agree on something of substance.  Now all they need is to admit it and figure out how to make it happen.  When President Obama raised the issue in 2013, both parties in Congress shut him down.  Understandable, perhaps; they and their friends are all top 2 percent wealthy and maybe haven't really seen the rest of the country.  Trump's plan will expand the GAP even more.  Of course.

You can see the source published article here for all the scholarly details.
Michael I. Norton, Harvard Business School, Boston, MA; and Dan Ariely, Department of Psychology, Duke University, Durham, NC

Wait, wait; 93% of Democrats and 90% of Republicans would rather live in Sweden?  Okay, that's bizarre.

When does economic inequality become a problem?

An economic difference between households is perhaps normal and a necessary element of capitalism.  Everyone hopes to improve, and perhaps the difference in wealth we see helps us define our goal.  The motivating question we face, however, is not 'do I have enough' but 'can I get more'. That's the cultural context we live with in the western world.

The result of such thinking is broadly visible both in market and government policies, regulations, and favoritism.  The rich get richer without any particular impediment, and certainly not because they work harder.  Is that a problem?

The dilemma with such a self focus is that it is quite content to advance at the expense of others. All others.  It protests against the less fortunate, its victims, blaming them for not having stepped up.

What might be the motivation for having a hundred or thousand times more than you or your family could ever need?

Fishes live in the sea

Our noble intent is a fair world for all, equal opportunity, education, safety,  ...

Income inequality refers to the extent to which income is distributed in an uneven manner among
 a population. In the United States, income inequality, or the gap between the rich and everyone
 else, has been growing markedly, by every major statistical measure, for some 30 years.

'Getting ahead' was an early goal of western civilization, the chance for your children to have a better life than you. Today for much of the population, there are impediments to such hope.

Wages in the post-war years were based on a worker having a share in corporate productivity,
improvement, and success.  Beginning in the 70's, wages for the workforce became a liability
to be managed and minimized for the benefit of the bottom line.  

Despite the extraordinary rise in national productivity, it seems only the fortunate (in the U.S. and elsewhere) are benefiting.  Real wages are generally flat over the last four decades.




Among the world's nations, we see a similarly disproportionate benefit from globalization.  Wealth from resources and labor streams from the developing countries to the developed world at an accelerating rate.  In many countries, the inequality gap widens at an accelerating rate over the decades.

Despite the advances in productivity and average income by nations, the benefit is commonly to the upper income half of the economy.  Segments of

the population for each and every one of the advancing nations are unimproved in circumstance since 1980.  

The marketplace, whether fruit or flowers or finance, increasingly favors the wealthy with each passing year. Government policy and trade regulations are purchased by wealth and influence, it would appear, to the detriment of many.

From what we have seen, what might we expect from continuing the current path?

Below are campaigns we might consider supporting today:

• The Interfaith Worker Justice’s campaign, Paystubs for All Workers. This campaign aims to make it a federal requirement for employers to issue pay stubs to all workers as a deterrent against wage theft.  (Wage theft by employers exceeds all robbery, auto theft, burglary, and larceny, combined.)
• The National Employment Law Project’s campaign, Raise the Minimum Wage. This campaign puts pressure on federal, state, and municipal lawmakers to reasonably raise the minimum wage for all workers.
• The Institute for Policy Studies’ campaign, Close the Billionaire Loophole. This campaign aims to put the brakes on concentrated wealth by restoring the estate tax.
• Americans for Tax Fairness, a diverse campaign of national, state and local organizations united in support of a fair tax system that works for all Americans.
• Oxfam’s new campaign, Even It Up. This global campaign focuses on tax fairness, investing in public health and education, and establishing fair wages for all.
• The Robin Hood Tax campaign. This campaign aims to secure a Financial Transaction Tax on Wall Street transactions.
• The Jobs with Justice campaign, Change Walmart, Change the Economy. This campaign urges Walmart to reform its business practices to set the stage for changes across the retail sector.

• 
  
• 
  

- See more here. 

Fair Trade Practices?

From Der Spiegel - August 22, 2011
"... like a pack of wolves" that seeks to tear entire countries to
pieces, said Swedish Finance Minister Anders Borg. For that
reason, they should be fought "without mercy," French
 President Nicolas Sarkozy raged. Andrew Cuomo, the
 former attorney general and current governor of New York,
 once likened short-sellers to "looters after a hurricane."

Curious how the derivatives market works?  

"One might think of derivatives as a random game of online poker.

• You don't know who your opponents are [your counterparty], 
• you do not know if you will be paid [counterparty risk], 
• you do not know if the game is legitimate, [lack of regulation], and 
• your opponents are probably able to see what cards you are holding,  [market domination by large banks]. 
• As well, you are making bets that in many instances neither you nor your opponents fully grasp [complexity of the market]. 
• With each wager you are potentially risking not only your current assets, but your future assets as well. [leverage]. 
• In some cases you do not know how much you are betting. 
• Imagine as well, that you play this game every day with trillions of dollars that you do not have. 

This is the global derivatives market."

 ~ David Hague, 2014

"..., we know that the use of derivative securities played a pivotal role in the ... the financial collapse in The 2007-08 Financial Crisis."    ~  Kristina Zucchi, CFA 

Nothing of substance has been done to mitigate the risks inherent in this unregulated industry.  Bank balance sheets, British central banker Andrew Haldane said caustically, are still "the blackest of boxes."

You might appreciate: The Zombie System: How Capitalism Has Gone Off the Rails

Los Angeles vs the Comet

The European Space Agency's Rosetta mission landed on a comet, and we all heard the news.  An interesting note not obvious in the photos from the mission is the size of the comet.  It's illustrated here, actual size, compared to the city of Los Angeles.

The Rosetta spacecraft traveled some 4 billion miles on the way to the intercept.  That's way more than forty times the distance from here to the sun.

It's hard to grasp such numbers in our mind picture of the mission. Maybe it would help if we visualized the earth at about the size of a VW Beetle; then you'd only have to drive 3 million miles to get to the comet.  Okay, still too much, huh.

So if Earth were the size of a grape and hanging on a vine in real-size Florida, the comet would be about the size of a white blood cell floating over real-size Sydney, Australia. Now visualize people living on that grape trying to launch a pair of molecules off to Australia to land on that white blood cell that is so unimaginably far away.  Never mind; I give up. And don't get me started on how far the Voyager mission has traveled.

Space missions are bizarre.

Get a job!

I'd pay a lot to see this uninformed fellow work alongside my friends
in the real world.  He'd lose a little weight and a lot of attitude.

“Some people are self-starters, and some people are born lazy.  Some people are born victims.  Some people are just born to be slaves.”

~ Rush Limbaugh, on economic inequality, a poorly worded but generally consistent expression of current conservative opinion; 60% say the poor are lazy, more than 80% think the poor have it easy.

It's perhaps easy to think we know what's best for others. Does our own success place us somehow above with a comprehensive perspective?  Such thinking is always inaccurate; no exceptions.

Living and working in several countries began to open our understanding on how persistent poverty happens.  It's not from unwillingness to work in any of the venues we've observed.  In the U.S. and elsewhere, poverty seems to persist for a very short list of reasons.

The decline of two-parent families is greatest in the lower

economic demographics.  Cause and effect are controversial.

Lack of opportunity is first and largest on the list.  There are few viable exits from poverty.  Most make the attempt; few succeed.  For the poor, completing their education and getting a job with upward prospects are more difficult than one might expect.

For nations, well intentioned policy efforts are perhaps second. Effects can be destructive.  Unintended consequences of assistance programs in the U.S. include the decline of lower-quintiles' economic mobility, family unity, and a generation of children with absent fathers.

Those are the top-level categories; there are subordinate causal elements from environment and culture.  Regional economic inequality is a useful indicator.

Read 'poverty level' as 'survival level'.  Survival is basic, just food and shelter perhaps.  Getting a quality education, staying healthy, eating well, having a stable home in which to do homework, those are unlikely at the survival level.

The poverty level (survival level) is a threshold, not the income level for all the households in the category.  In the U.S., the number of households with children living in extreme poverty (at $2/person/day) is about 1.7 million; more if you include the elderly and others without kids.

The U.S. suicide rate among African American men stems pointedly from their inability to find a place where they can join the mainstream, be productive, provide for a family, and get ahead.  Similar distress spans the globe.

In Africa, a father wept in shame and despair because he could not provide for his wife and children no matter how hard he tried.  His lament was not that he had no money but that he had no opportunity, no voice, no significance.

We put a young fellow through trade school and internship only to find that employment was available but not to him.  He's from the wrong tribe, Africa's equivalent to the good old boy network of influence and discrimination we're familiar with in the west.

In Africa as in the rest of the world, it's not the land that brings people to poverty, nor is it an unwillingness to work.  It's a wealth-focused economy (and government and culture) that marginalizes the lower economic segment of the population. Inequality is a weapon by which the few profit at the expense of others.  We in the west who claim the moral high-ground of equality, of law and justice, will perhaps eventually see that such a position is bent by self-interest and that what we have collectively become is in many ways unhelpful, sometimes even harmful.

No one chooses to be poor, to have their children be malnourished or undereducated, homeless or trapped in extreme poverty.  Such circumstances are imposed, not chosen.

As individuals, what options are available to us for a meaningful way forward?  And how do we avoid wrong thinking?

An interesting side note: a technical military career (particularly non-infantry) is a viable path upward for many.  Technical and leadership training, certifications, and years of performance are quite marketable and easily built upon.  Know why?  Recruits show up from everywhere, get groomed and clothed as equals, get trained according to interests and ability, and advance based on effort and skill.  It's an accessible opportunity for some.  A good educational foundation is the prerequisite, of course.  What might we deduce from that proven scenario?