Category: Equitablog

Should-Read: Frank Hyman: The Confederacy Was a Con Job on Whites. And Still Is.: “I’ve lived 55 years in the South, and I grew up liking the Confederate flag…

…I haven’t flown one for many decades, but for a reason that might surprise you…. As I grew up… I learned that for black folks the flutter of that flag felt like a poke in the eye with a sharp stick. And for the most prideful flag waivers, clearly that response was the point. I mean, come on. It’s a battle flag. What the flag symbolizes for blacks is enough reason to take it down. But there’s another reason…. The Confederacy =–and the slavery that spawned it–was also one big con job on the Southern, white, working class…. funded by some of the ante-bellum one-per-centers that continues today…. Forcing blacks–a third of the South’s laborers – to work without pay drove down wages for everyone else…. Thanks to the profitability of this no-wage/low-wage combination, a majority of American one-per-centers were southerners….

Most Southerners didn’t own slaves. But they were persuaded to risk their lives and limbs for the right of a few to get rich as Croesus from slavery. For their sacrifices and their votes, they earned two things before and after the Civil War. First, a very skinny slice of the immense Southern pie. And second… the shallow satisfaction of knowing that blacks had no slice at all….

The plantation owners… managed this con job partly with a propaganda technique… that falsely touted slave ownership as having benefits that would–in today’s lingo–trickle down to benefit non-slave owning whites and even blacks… [and the] notion that any gain by blacks in wages, schools or health care comes at the expense of the white working class. Today’s version of this con job… still works… the Cato Foundation, Reason magazine, Rush Limbaugh and Fox News… underwritten by pro trickle-down one-per-centers…

Should-Read: Bernie Sanders: Civil Discourse: “We face a very serious political problem… manifested… by Amber Phillips of The Washington Post…

…[who] criticizes me for lowering the state of our political discourse, because I accused the president of being a “liar.” What should a United States senator, or any citizen, do if the president is a liar? Does ignoring this reality benefit the American people? Do we make a bad situation worse by disrespecting the president of the United States? Or do we have an obligation to say that he is a liar to protect America’s standing in the world and people’s trust in our institutions?… How do we deal with a president who makes statements that reverberate around our country and the world that are not based on fact or evidence? What is the appropriate way to respond to that? And if the media and political leaders fail to call lies what they are, are they then guilty of misleading the public?

Briefing: Elise Gould: The State of American Wages 2016: “More broadly, shared wage growth from 2015 to 2016 does little to reverse decades of rising inequality…

…Wage inequality has been rising since the late 1970s—a trend that largely stems from intentional policy choices that have eroded ordinary workers’ leverage to secure higher pay (Bivens et al. 2014). These policy choices—made on behalf of those with the most economic power—include allowing the minimum wage to stagnate, eroding workers’ rights to bargain collectively, and prioritizing low inflation over low unemployment. Policies such as these have resulted in hourly pay for the vast majority of American workers stagnating despite growing economy-wide productivity, with economic gains highly concentrated at the top. Wage growth since the Great Recession has continued to follow this trend: slower growth for most and faster growth for those at the top.

Talking Points:

Since 2000 wage growth has been consistently stronger for high-wage workers, continuing the trend in rising wage inequality:

• Those with college or advanced degrees saw average wage growth of 8.5 percent and 6.9 percent, respectively, from 2000 to 2016
  • The bottom 50 percent of workers with a college degree still have lower wages than they did in 2000 or 2007.
  • The pulling away at the top of the wage distribution cannot be explained by the rising college wage premium.
• Wage growth since 2000 was faster for white and Hispanic workers than for black workers.
  • The bottom 60 percent of black workers have seen their real wages decline since 2007
  • Black–white wage gaps are larger today than in 2000
  • Black–white wage gaps by education were larger in 2016 than in 2000
• The gender wage gap at the median has narrowed: a typical woman now earns 83 cents on the male dollar:
  • The regression-adjusted gender wage gap is currently 22.0 percent.

From 2015 to 2016, wage growth was more evenly distributed:

• Median wages–the 50th percentile–grew 3.1 percent.
• The 20th percentile–those poorer than 80% of the population—experienced a striking 6.4 percent increase

Must-Read: March 9, 2017, Thursday, at 2 PM, in the Blum Center Board Room at U.C. Berkeley:

Peter Temin: The Vanishing Middle Class: Prejudice and Power in a Dual Economy: “The middle class, defined as households earning from two-thirds to double the median American household income… <http://amzn.to/2mlKfpH>

…went from earning over three-fifths of total national income in 1970 to earning only just over two-fifths in 2014. The lines in gure 1 were horizontal before 1970, but they are continuing their movements after 2014…. The income share lost by the middle class went to people earning more than double the median income…. I employ an economic model that was created over sixty years ago… the Lewis model… the original model of a dual economy… two separate economic sectors within one country, divided by different levels of development, technology, and patterns of demand. This definition reflects the use of the Lewis model in the eld of economic development, and I adapt it in this book to describe current conditions in the United States, the richest large country in the world. This is less paradoxical than it sounds because the political policies that grow out of our dual economy have made the United States appear more and more like a developing country….

The politics that emerge from our dual economy prevent us from acting sensibly to reconstruct our ailing educational system. As we will see, we now have two systems of education, one for each sector of the dual economy. Schools for the richer sector vary in quality, and the best of them are well within the American historical experience. By contrast, schools for the poorer sector are failing. Attempts to x these schools have been known primarily for their spectacular failures. The legacy of slavery hangs over attempts to provide every child with an education. It was illegal to educate black people under slavery, and politicians today neglect education of the poor by implicitly invoking this racist history….

• American history and politics, particularly slavery and its aftermath, play an important part in the widening gap between rich and poor.
• A well-known, simple model of a dual economy
• Ways to work toward greater equality so that America will no longer have one economy for the rich and one for the poor.

Many poorer Americans live in conditions resembling those of a developing country — substandard education, dilapidated housing, and few stable employment opportunities. And although almost half of black Americans are poor, most poor people are not black. Conservative white politicians still appeal to the racism of poor white voters to get support for policies that harm low-income people as a whole, casting recipients of social programs as the Other — black, Latino, not like “us.” Politicians also use mass incarceration as a tool to keep black and Latino Americans from participating fully in society. Money goes to a vast entrenched prison system rather than to education. In the dual justice system, the rich pay fines and the poor go to jail.

Claudia Goldin: “The Vanishing Middle Class is a book for our unsettled times. We are a divided nation economically and politically, brought on by recent changes in the demand for and supply of skill layered on top of a long history of racial politics. Part social commentary, part history, part academic inquiry, Temin’s book tells us how the two parts of the modern dual economy can be glued back together.”

Gerald Jaynes: “Arguing that the high-wage sector promotes inequality and deterioration of the middle class through its disproportionate influence on political decision making in various areas such as criminal justice, education, and social welfare policy, The Vanishing Middle Class is a significant addition to the existing literature on inequality.”

Heather Boushey: “This is not the way the American Dream was expected to play out…. Temin argues that the distribution of gains from economic growth today make the United States look like a developing economy… build[ing] on the dual sector model developed in the 1950s by W. Arthur Lewis…. Temin[‘s]… dual sectors are finance, technology, and electronics, or FTE….Mem-bers of the FTE sector seek to keep their own taxes low and suppress the wages they pay so as to maximize their profits. Mass incarceration, housing segregation, and disenfranchisement all serve—among other things—to keep the low-skill sector in a subservient labor market position. These developments play out along racial lines set by the nation’s history of slavery. The bridge between these two sides of the economy is education….This is why Temin’s top policy recommendation is universal access to high-quality preschool and greater financial support for public universities. His second recommendation is to reverse policies that repress poor folk of any race…. Alas, neither of these recommendations is potent enough to overcome the fundamental problems…. If we want to revive our vanishing middle class… we’ll need to do more to undermine the dual economy structures he so accurately details.”

Should-Read: When Yale made the long overdue decision to dename the Residential College Formerly Named After the Odious John C. Calhoun, a bunch of alumni–who had never before remarked on how odious John C. Calhoun had been–came out of the woodwork to protest that we will be impoverished if we do not memorialize even the bad parts of our history.

It seemed to me it would have been much better–shame on you, Financial Times–to mark the event by reprinting Hofstadter’s Calhoun chapter on “The Marx of the Master Class”, or the “Young Calhoun” chapter from Sidney Blumenthal’s A Self-Made Man–the first volume of his in-progress series: The Political Life of Abraham Lincoln. So I wrote to Sidney asking permission to reprint the “Young Calhoun” chapter on my weblog. He passed it along to Simon & Schuster. Silence…

But the galleys of Blumenthal’s second volume: Wrestling with His Angel showed up in my mailbox. It is excellent:

Sidney Blumenthal (2017): Wrestling with His Angel, 1849-1856 <http://amzn.to/2mgAPd9>: “Lincoln had no expectation that restoring the Missouri Compromise would ever occur…

…In my humble sphere, I shall advocate the restoration of the Missouri Compromise, so long as Kansas remains a territory; and when, by all these foul means, it seeks to come into the Union as a Slave-state, I shall oppose it. I am very loath, in any case, to wishhold my assent to the enjoyment of property acquired, or located, in good faith; but I do not admit that* good faith, in taking a negro to Kansas, to be held in slavery, is a *possibility with any man. Any man who has sense enough to be controller of his own property, has too much sense to misunderstand the outrageous character of this whole Nebraska business. But I digress.

Bad faith, according to Lincoln, was not restricted to the pro-slavery invaders of Kansas, but infected the entire matter from beginning to end, and the beginning was located with Douglas. Far from being a principled act, Douglas’s bill was the product of bribery and coercion. It came from politics, and it was only through politics that Lincoln believed its corrosive effects could be countered.

In my opposition to the admission to Kansas I shall have some company; but we may be beaten. If we are, I shall not, on that account, attempt to dissolve the Union. On the contrary, if we succeed, there will be enough of us to take care of the Union. I think it probable, however, we shall be beaten. Standing as a unit among yourselves, you can, directly and indirectly, bribe enough of our men to carry the day–as you could on an open proposition to establish monarchy Get hold fo some man in the North, whose position and ability is such, that he can make support of your measure–whatever it may be–a Democratic Party necessity, and the thing is done.

Apropos of this, let me tell you an anecdote. Douglas introduce the Nebraska bill in January. In February afterwards, there was a call session of the Illinois Legislature. Of the one hundred members comping the two branches of that body, about seventy were Democrats. These latter held a caucus, in which the Nebraska bill was talked of, if not formally discussed It was thereby discovered that just three, and no more, were in favor of the measure.

In a day or two Douglas’s orders came on to have resolutions passed approving the bill; and they were passed by large majorities!!! The truth of this is vouched for by a bolting Democratic member. The masses too, Democratic as well as Whig, were even nearer unanimous against it ;but as soon as the party necessity of supporting it became apparent the way the Democracy began to see the wisdom and justice of it was perfectly astonishing….

Amid the chaos, where did Lincoln pace himself? In short, who did he think he was? And what was he? That was the central question Speed had asked him six months earlier:

You enquire where I now stand. That is a disputed point I think I am a Whig; but others say there are no Whigs, and that I am an abolitionist. When I was at Washington I voted for the Wilmot Proviso as good as forty times, and I never heard of anyone attempting to unwhig me for that. I now do no more than oppose the extension of slavery.

Lincoln was not really arguing with Speed, but with the velocity of events…. Not least in the forefront of his thinking was the threat of the Know-Nothings, attracting many of “my old political and personal friends”, as he had told Lovejoy, and absorbing the Whig Party itself:

I am not a Know-Nothing. That is certain. How could I be? How can anyone who abhors the oppression of negroes, be in favor of degrading classes of white people? Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began be declaring that ‘all men are created equal’. We now practically read it ‘all men are created equal, except negroes‘. When the Know-Nothings get control, it will read ‘all men are created equal, except negroes, and foreigners, and Catholics….

Within two years of shedding the husk of the Whig Party and assuming the identity of a Republican, Lincoln sounded his own Emersonian note about destiny, but edged with a resonant biblical tone… his “House Divided” speech of June 16, 1858. His sense of time and timing had become acute. “The fight must go on”, he would write to a friend two weeks after his defeat to Douglas in the 1858 Senate race:

The cause of civil liberty must not be surrendered at the end of one or even one hundred defeats. Douglas had the ingenuity to be supported in the late contest both as the best means to break down and to uphold the Slave interest. No ingenuity can keep those antagonist elements in harmony long. Another explosion will soon come….

Lincoln’s political education was long, but the moment of Lincoln’s awakening from his political slumber was sudden. In early 1855, traveling the county court circuit, staying overnight in a boardinghouse, his discussion with a former judge and a fellow lawyer, T. Lyle Dickey, a conservative Old Whig, went on deep into the night. “Judge Dickey contended that slavery was an institution, which the Constitution recognized, and which could not be disturbed. Lincoln argued that ultimately slavery must become extinct”, recalled another Illinois lawyer, William Pitt Kellogg. “After a while”, said Dickey, “we went upstairs to bed. There were two beds in our room, and I remember that Lincoln sat up in his nightshirt on the edge of the bed, arguing the pint with me. At last, we went to sleep. Easy in the morning I woke up, and there was Lincoln half sitting up in bed”.

“Dickey”, said Lincoln, “I tell you this nation cannot exist half slave and half free”.

“Oh, Lincoln”, replied Dickey, “go to sleep”.

If a kingdom is divided against itself, that kingdom cannot stand. And if a house is divided against itself, that house will not be able to stand–Mark 3:24-5

Every kingdom divided against itself is laid waste, and a divided household falls–Luke 11:17

Should-Read: Angus Deaton: Rent Seeking: “What is not OK is for rent-seekers to get rich…

…All that talent is devoted to stealing things, instead of making things….I, who do not believe in socialized health-care, would advocate a single-payment system… because it will get this monster that we’ve created out of the economy and allow the rest of capitalism to flourish without the awful things that healthcare is doing to us…. The key is to somehow find a way of tackling rent-seeking, crony capitalism, and corruption legal and illegal and build fairer, more equal society without compromising innovation or entrepreneurship,

Should-Read: Chait is right: this makes absolutely no sense at all. People who won’t go to the doctor don’t cost Medicaid anything…

Jonathan Chait: Obamacare-Repealer Explains Poor Don’t Want to be Healthy: “Representative Roger Marshall is a Kansas Republican…

…a former obstetrician, and a first-year member of Congress, and opponent of the Affordable Care Act. In an interview with Stat, Marshall draws upon his medical experience to explain why the law’s expansion of Medicaid is a bad thing. It is quite an interesting explanation:

“Just like Jesus said, ‘The poor will always be with us,’” he said. “There is a group of people that just don’t want health care and aren’t going to take care of themselves.… Just, like, homeless people.… I think just morally, spiritually, socially, [some people] just don’t want health care,” he said. “The Medicaid population, which is [on] a free credit card, as a group, do probably the least preventive medicine and taking care of themselves and eating healthy and exercising. And I’m not judging, I’m just saying socially that’s where they are. So there’s a group of people that even with unlimited access to health care are only going to use the emergency room when their arm is chopped off or when their pneumonia is so bad they get brought [into] the ER.”

There are a few points to make here:

1. Measuring the impact of any medical treatment is usually hard. But the overwhelming weight of studies suggests eligibility for Medicaid makes people physically, mentally, and financially better off.

2. If Marshall thinks poor people need to do more preventative care, there are programs that can encourage it. Eliminating their access to regular medical care is the opposite of that. Indeed, he is complaining that Medicaid-eligible people only use health care when their arm is chopped off or they get pneumonia and visit the emergency room, and his solution is to deny them access to medical care other than the emergency room (which by law has to treat anybody who comes in).

3. Note that Marshall is not merely proposing to identify those poor people who refuse to take care of themselves and to cut off their insurance. He has decided this applies to Medicaid-eligible people as a group, and the punishment should be meted out to all of them. Medicaid doesn’t force anybody to go to the doctor, so if Marshall is sure the poor don’t want health care, he can let them stay on the program, and then only the poor people who do want health care will use it to visit the doctor. Taking away people’s right to choose something on the grounds that they don’t want it anyway is a proposal suffering from a basic conceptual problem.

4. While I am not a theologian, I feel confident in asserting that Jesus’ message about the poor is not most accurately summarized as “Let them suffer, they’re animals anyway.”