Saturday, December 10, 2016

Falling Behind Your Parents

If you are a young person, you have every right to hope that by the time you are 30 you will be making more money than your parents did at age 30. If that's your hope, then a recent piece in The New York Times, "The American Dream, Quantified at Last" by David Leonhardt, is very bad news for you.

The American dream has always been that the next generation will do better than the previous. It hasn't always come true — witness the Great Depression of the 1930s — but in general it has.

But recent research now shows that the likelihood of the dream coming true has been going down in every decade-of-birth since 1940:

(Click to enlarge.)

So if you were born in 1980 and are now 36, you had at age 30 just a 50 percent of exceeding your parents' income when they were 30. If yours was a 1950 birth (mine was in 1947) the probability was 79 percent — down from 92 percent for those born in 1940. The figures for 1960 and 1970 were intermediate values. The decline in expectations has been steady and ongoing.

This next graph shows that in each of these five decade years, the higher the parents' age-30 income was, the less likely the children would surpass it:

(Click to enlarge.)

That is not surprising for those whose parents were exceptionally wealthy (i.e., those income percentiles at the right side of the graph). It's also not surprising that those born to quite poor parents (percentiles at the left end of the graph) would have fewer problems "moving on up" as decade followed decade, simply because in the later decades there were more federal and state income-support programs — and the research being cited takes those into account.

Look, though, at the vast stretch of the graph between the very poor and the very rich and you see the graph getting ever (downwardly) steeper as the decades roll on. In 1940, the whole graph is approximately level until about the 85th percentile of income. By 1980, there is no part of the graph that is even close to being level. That means that even if your parents were relatively comfortable at the 70th income percentile, your likelihood of surpassing them, if you were born in 1980, came to only about 4 chances in 10.

As the article cited above makes clear, the economy has grown quite over recent decades, and the graphs do not show this. The article says:

... the American economy is far larger and more productive than in 1980, even if it isn’t growing as rapidly. Per-capita G.D.P. is almost twice as high now. By itself, that increase should allow most children to live better than their parents.

"G.D.P." is "gross domestic product" — the total value of all goods and services the economy produces in a given year. It is a measure of the size of the economy. "Per-capita G.D.P." is that figure divided by the number of people in the population. If G.D.P. were divided equally among all the people in the population, per-capita G.D.P. would reflect each person's income in dollars.

During the Great Recession of 2008, our G.D.P. actually declined briefly. Since then, G.D.P. growth has been slower than it otherwise would have been. This failure of G.D.P. to grow at its accustomed pace has contributed to a worsening of the prospects of young people vis-à-vis their parents.

The article makes clear that we need to boost G.D.P. growth, if we want to resuscitate the American Dream. But even more needed is to reverse the rise of income inequality that has occurred in our society since 1970:

The researchers ran a clever simulation recreating the last several decades with the same G.D.P. growth but without the post-1970 rise in inequality. When they did, the share of 1980 babies who grew up to out-earn their parents jumped to 80 percent, from 50 percent. 

The main recommendation the article makes is accordingly to give tax cuts to the middle class ... not to the affluent! They would help level the income playing field, and they would leave more money in average folks' pockets that could be spent on goods and services, thereby boosting the total size of the American economy.









Wednesday, December 07, 2016

The Rich Get Richer ...

"A Bigger Economic Pie, but a Smaller Slice for Half of the U.S.," says an important article in today's New York Times. Patricia Cohen's article cites a just-published study by economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman that shows U.S. income inequality has risen apace since 1980:



The incomes of those in the bottom half of the economy have basically flatlined. Those of the top 1% concurrently ballooned:


Why this has happened is a contentious subject. Sure, wages for wage-earners have stagnated, jobs have disappeared. The top 1% get their incomes mostly from investment income, and the economy has grown in such a huge way, overall, as to generate a lot of that.

The economic growth has reflected successful entrepreneurship in Silicon valley and elsewhere. Entrepreneurship is the driving force behind investment income.

In an earlier era, the growth would have been shared by those in the lower half. That hasn't been happening for quite a long time.

Why not? Cohen writes:

N. Gregory Mankiw, an economist at Harvard who is familiar with the new research ... argues that large disparities in income more often than not accurately reflect widely varying economic contributions.

The entrepreneurs and their investors, in other words, now contribute a lot more to economic growth than do the ordinary folks in the bottom 50 percent. "That is a switch from the 1980s and 1990s," writes Cohen, "when gains in income were primarily generated by working."

In short, working at ordinary jobs isn't paying off as much as it used to.

The new study, unlike earlier ones about income inequality, takes into account the value of public benefits like Medicaid and the Affordable Care Act ("Obamacare"). People in the lower half of the economy (see here) pay tiny amounts of income tax ... if any at all. So various governmental programs combine with the progressiveness of income taxes to redistribute income downward. Still, the bottom half have been flatlining.

This is one of the defining issues of our time.


* * *

My question is — and it's an irreverent one for a liberal — how can this be happening, given the capaciousness of the safety net?

The bottom graph above suggests the flatlining began as early as 1960, before the arrival of the Great Society of President Lyndon Johnson. True, the share taken by the top 1% also remained about the same from 1960 to 1980. Only after the Reagan Revolution which began in 1980 did the take of the top percentile begin to soar. So one might contend that massive income inequality began with Reagan.

But copious income redistribution downward began with the Kennedy-Johnson era. Why hasn't it offset the immense gains at the top better than it has?

The redistributive government policies of the past 50-plus years have kept the ordinary folks below the midline from losing ground in terms of their real average pre-tax income. But neither have they gained. Is the widening disparity entirely explained, then, by trends that have boosted the fortunes of the wealthiest among us?

Clearly, there have been such trends, and we liberals are right to decry them. But are they the whole of the story?

Conservatives say no, that the various forms of government aid and "welfare" make for a disincentive to work. Cohen:

[Republican House Speaker Paul] Ryan argues that aid to the poor is ultimately counterproductive because it undermines the incentive to work.

One reads the same thought in the words of J.D. Vance in the bestselling book Hillbilly Elegy. He writes (italics mine):

Mamaw [Vance's grandmother, who mainly raised him] listened intently to my experiences at Dillman’s [grocery store]. We began to view much of our fellow working class with mistrust. Most of us were struggling to get by, but we made do, worked hard, and hoped for a better life. But a large minority was content to live off the dole. Every two weeks, I’d get a small paycheck and notice the line where federal and state income taxes were deducted from my wages. At least as often, our drug-addict neighbor would buy T-bone steaks, which I was too poor to buy for myself but was forced by Uncle Sam to buy for someone else. This was my mind-set when I was seventeen, and though I’m far less angry today than I was then, it was my first indication that the policies of Mamaw’s “party of the working man”— the Democrats— weren’t all they were cracked up to be.

Vance is writing about his life and upbringing as a "hillbilly" transplant from the coal-mining area of Kentucky to a city in Ohio where his family had moved to get work. He tells of much dysfunctional behavior, but also of the less frequently found opposite. Many of the so-called "hillbillies" of whose community he was part were decent and hardworking, while some were "content to live off the dole."

So to what extent is it true that "the dole" actually hurts those in the bottom half of the economy? What would be the result if we phased out most income-redistribution policies? Would things get better rather than worse?






Thursday, December 01, 2016

Up Next: Civil War Among Us Democrats?

Liberal Democratic columnist E.J. Dionne Jr. writes in today's Washington Post:

A panicky abandonment of their core commitments is the last thing Democrats need ... An effort to reach out to the white working class cannot be seen as a strategy for abandoning people of color, Muslims or immigrants, or for stepping back from commitments to gender equality, or for withdrawing support for long-excluded groups.

On the other hand, he asks:

... whether it’s time for “the end of identity liberalism."

And says:
... liberalism needs to root its devotion to [the principle of] inclusion in larger principles and should not allow itself to be cast (or parodied) as simply about the summing up of group claims ... Democrats, who gave us the New Deal and empowered the labor movement, should be alarmed by the flight of the white working class.

Dionne quotes New York Times opinion writer Mark Lilla:

“If you are going to mention groups in America, you had better mention all of them. If you don’t, those left out will notice and feel excluded.”

At stake here for us Democrats is our self-definition going forward — nothing less. It's not going to be easy to re-establish our onetime rapport with the white working class while not seeming to abandon people of color, immigrants, women, gays, and so forth.

Not only would many in those long-excluded groups be offended, many Democrats who have made group rights Job Number One can be expected to push back quite vigorously.

*****

I myself am torn. I feel a kinship with the white working class, though I am not of that class.They have been left out of the economic and political equation. As a simple matter of justice, they ought to have their needs attended to.

Trump has played to their needs. Hillary Clinton did not. I don't think she tried hard enough to show the white working class why Trump's agenda won't really help them economically. She didn't find a way to bridge between traditional Democratic identity politics and an economic approach that would ease the white working class's wounds. She failed to adequately address their "identity anger."

Yet it's extremely hard to find either a rhetorical or a policy approach that can put the Democrats back on top. It may be like putting Humpty Dumpty together again ...

New York Times columnist David Brooks wrote recently ("The View From Trump Tower") that we need a third party:

The job for the rest of us is to rebind the fabric of society, community by community, and to construct a political movement for the post-Trump era. I suspect the coming political movements will be identified on two axes: open and closed and individual and social. 
Those who believe in open trade, relatively open immigration, an active foreign policy and racial integration. Those who believe in closed believe in protective trade, closed borders, a withdrawn foreign policy and ethnic separatism. 
Those who favor individual believe in individual initiative, designing programs to incentivize enterprise and removing regulatory barriers. Those who believe in social believe that social mobility happens within rich communities — that people can undertake daring adventures when they have a secure social and emotional base. 
Donald Trump is probably going to make the G.O.P. the party of individual/closed. He’s going to start with the traditional Republican agenda of getting government out of the way, and he’s going to add walls, protectionism and xenophobia. That will leave people isolated in the face of the challenges of the information age economy, and it will close off the dynamism and diversity that always marked this crossroads of the nation. 
The Democrats are probably going to be the party of social/closed. The coming Sanders-Warren party will advocate proposals that help communities with early education programs and the like, but that party will close off trade, withdraw from the world, close off integration with hyper-race-conscious categories and close off debate with political correctness. 
Which is why I’ve been thinking we need a third party that is social/open.

I believe in "social." And in "open" — as it applies to relations among people and to relations (including trade relations) among nations. When Brooks says, "... close off integration with hyper-race-conscious categories and close off debate with political correctness," I'm with him. The "hyper-race-conscious categories" he refers to are "identity politics" by another name. Political correctness and limiting debate on university campuses offend my 1960s ideals of what college is for in the first place.

So is a third party a good idea? I'm not sure. It might backfire by helping Trump ...







Monday, November 28, 2016

Two More Views of the Democrats' Dilemma

In today's Washington Post columnist Paul Kane writes that "Senate Democrats lost by doing nothing to separate themselves from Hillary Clinton." In states where she lost to Donald Trump, Democrats running for Senate seats tended to lost by comparable margins. Where she won, they won. It's no wonder. The Senate candidates' campaign strategy had been to hitch themselves to Clinton's coattails.

Kane adds:

“The problem is they [Democratic candidates] talk to people in segments,” Rep. Tim Ryan (D-Ohio), who is challenging House Minority Leader Nancy Pelosi (D-Calif.), told The Washington Post’s Daily 202 last weekend. “Here’s our LGBT community. Here’s our labor guy. That doesn’t work. You stop becoming a national party. That’s what happened.”

Notably, when Hillary Clinton uttered her unfortunate "basket of deplorables" comment about half of Donald Trump's constituents, she was speaking before an LGBT audience.

So is the answer for Democrats to stop "talking to people in segments" — relying on "identity politics"?

*****

Also in today's Post is a column by economics expert Robert J. Samuelson, "Jobless by choice — or pain?" About 1 in 8 men 25 to 54 years of age — in their prime working years — have no job, says Samuelson, "and, unlike the officially unemployed, aren't looking for one." These men are classed as "dropouts" from the labor force. Back in the mid-1960s, the dropout rate was just 1 in 29. The rate of dropping out began rising as far back as then.

Samuelson lists several possible reasons why there are so many dropouts now. Experts tend to divide about this, with some calling the dropouts "shirkers" and others calling them "victims."


*****

Whatever the reasons for the high rate of dropping out, it seems clear that here we have yet another segment of the populace who — mainly in the person of Donald Trump — are looking for political leverage. Identity politics boosted the GOP more than it helped the Democrats this year. That was unexpected. But is the Democrats' answer, if they want to restore their status as a national party, to cater to the jobless-and-no-longer-looking? If so, given that so many of this segment are white working-class men, how would they go about doing that without alienating other segments of the erstwhile "Obama coalition"?

It's all well and good to say "stop talking to people in segments," but how?








Thursday, November 24, 2016

The Democrats' Dilemma

Columnist Charles Lane writes incisively in the Thanksgiving 2016 issue of The Washington Post that we Democrats face a dilemma if we want to make any appeal to white working-class voters. As I've written before, we lost the election to Donald Trump because of "identity politics," defined Mr. Lane writes, as "messaging aimed not at voters broadly, but at Latinos, women, African Americans and the LGBT community as groups."

Voters in the white working-class who voted heavily for Trump did so not so much because of economic woes. Rather, they hanker after the cultural homogeneity they feel slipping away from them:

In rural areas, or small towns, where everyone speaks the same language, or practices the same customs, life can be simpler, more predictable, less frictional. Economists call these “compositional amenities,” and many people value them above the benefits of diversity — even above economic gains. ... Trump just got himself elected president with overwhelming support from non-college-educated whites in smaller cities and rural counties by telling them he would build a wall on the Mexican border, impose “extreme vetting” on would-be immigrants and deport large numbers of the undocumented.

That's a big problem for Democrats:

The Democrats’ dilemma, then, is this: They can make only limited political gains with an economic pitch to the white working class, unless they adjust on immigration and other issues of identity too, probably.
Yet this would require compromising on what the party defined as matters of basic justice and tolerance, and turn off voters from their racially and ethnically diverse “coalition of the ascendant.” 

Some Democrats warn that "conceding on identity politics would be a capitulation to 'white supremacy'," but not making any concessions might doom the party in future elections. What is the right answer here?




Sunday, November 20, 2016

Recalibrating Liberalism?

Author Mark Lilla (The Shipwrecked Mind: On Political Reaction) writes in an opinion piece for The New York Times, "The End of Identity Liberalism":

... the fixation on diversity in our schools and in the press has produced a generation of liberals and progressives narcissistically unaware of conditions outside their self-defined groups, and indifferent to the task of reaching out to Americans in every walk of life.

"Diversity": it's a mantra of the political left today. Synonyms: "multiculturalism," "political correctness," "identity liberalism."

Lilla argues that staunchly honoring the mantra of identity diversity put paid to Hillary Clinton's electoral chances this year, letting Donald Trump win. After all, Clinton's tactless "basket of deplorables" utterance came while she was speaking before an audience of LGBT partisans.

"Political incorrectness" of any variety serves today as a sure rallying point for liberal anger. During the 1960s the ur-source for political anger was the Black Power movement. That movement's tendencies toward incendiary protest primed the then-ongoing anti-Vietnam war protests to incite police violence in Chicago in 1968. Women's liberationists who supposedly (but not actually) began burning their bras in 1969 were expressing anger akin to that of blacks about their oppression. The gay rights movement, for its part, had its origins in the Stonewall riots of that same year.

The unified response to all these developments was that "identity anger" in general became embedded in liberal politics. Fast forward to today, and we have liberals dutifully echoing identity anger at the oppression that keeps transgender people from using the bathroom of their choice.

All those versions of identity liberalism further alienated two other groups of Americans who have long felt ignored and oppressed, says Lilla: "the white working class and those with strong religious convictions. Fully two-thirds of white voters without college degrees voted for Donald Trump, as did over 80 percent of white evangelicals."

What are liberals to do in response to white-working-class anger? Jettison their own embedded identity anger? Mr. Lilla recommends:

We need a post-identity liberalism, and it should draw from the past successes of pre-identity liberalism. Such a liberalism would concentrate on widening its base by appealing to Americans as Americans and emphasizing the issues that affect a vast majority of them. It would speak to the nation as a nation of citizens who are in this together and must help one another. As for narrower issues that are highly charged symbolically and can drive potential allies away, especially those touching on sexuality and religion, such a liberalism would work quietly, sensitively and with a proper sense of scale. (To paraphrase Bernie Sanders, America is sick and tired of hearing about liberals’ damn bathrooms.)

But what exactly does "work quietly, sensitively and with a proper sense of scale" mean? And, importantly, how would it affect the liberal ur-commitment to racial equality?

Thomas B. Edsall writes in "The Not-So-Silent White Majority" in The New York Times that it has long been the case that

“Blacks constitute the explanation [for white working-class voters] of [their] vulnerability and for almost everything that has gone wrong in their lives.”

Tapping in to this white-working-class version of identity politics goes back at least as far as Richard Nixon's successful appeal to the "Silent Majority" in the 1968 presidential election. The idea of white victimhood has since had its electoral ups and downs, but it is what propelled Donald Trump to victory this year.

Slavery, it is said, was our country's "original sin." Its spawn have included the Ku Klux Klan, Jim Crow laws, and racial discrimination in general. If we liberals follow Mark Lilla's advice, do we have to soft-pedal our anti-racism commitment? And if we do that, what of the other matters of identity justice that so many of us liberals are committed to fostering? Do they have to go by the boards, too?

These are tough questions for tough times.











Wednesday, November 16, 2016

Anti-elitism in today's world

I'm basically an anti-elitist, which I guess makes me a populist.

Although I voted for Hillary Clinton in the general election, I voted for Bernie Sanders in the primary. I recognized early on that Hillary was plugged firmly into a network of elite Democratic leaders and donors, and that was one of the reasons I supported Bernie. I nonetheless think Hillary's honest intentions as a candidate were to use the power of her intended office, the presidency, to help those who lack power. But I feel there's something adverse to that intention in the very notion of powerful elites.

This attitude of mine is upheld in a book I'm reading, Nick Spencer's The Evolution of the West: How Christianity Has Shaped Our Values. Mr. Spencer's book has it that Christian core values have underpinned all of Western thought and belief following the decline of the Roman Empire. Though I'm a Catholic Christian, it surprises me to learn that such values as ...

  • women’s rights
  • care for the poor
  • opposition to slavery
  • legal equality of all individuals,
  • an appeal to personal conscience rather than "trial by ordeal"
  • and even how liberating it was to women to insist the sexual renunciation of libertine practices rife in the Roman Empire
... all come directly from core Christian principles. (Never mind that the church hierarchy in medieval times typically observed those values in the breach.)

But the core value in interested in here is that of Christian opposition to the very notion of hierarchy:


[Saint] Paul’s message [was that] ‘the Christ reveals a God who is potentially present in every believer.’ Through an act of faith in the Christ, human agency, which is no longer simply a plaything of stars, gods or fate, can become a medium for God’s love. Such an understanding of reality deprived rationality of its aristocratic connotations. Thinking was no longer the privilege of the social elite and became associated not with status but with humility, itself a virtue entirely alien in the ancient world.


I take this to mean that our modern "aristocracy" — the power network that Hillary Clinton was plugged into — violates Christian core principles.

For many of Hillary's supporters who aren't necessarily in the country's power loop, this idea will nonetheless seem problematic. Here we had a choice between Trump, who despite his wealth came across as a populist, and Clinton, whose heart was in the right place despite her associations with Wall Street. Trump's rhetoric was racist, sexist, Islamophobic, and so on. His personal behavior was execrable. If Hillary had won, she would have used her power base to help those with little power. The choice was clear. Right?

Well, yes ... and no.

As I say, I voted for Hillary, but my heart wasn't hugely in it. I'm an anti-elitist to the core.

But I am great friends with Catholics who are stronger that I was for Hillary. My best friend is one of them. He voted for Hillary in the primary partly because (in my opinion, based on our long friendship) he is drawn to elite personages and their power networks. As a political pragmatist, he felt that Hillary could leverage her powerful connections into policies that would advantage the powerless. In fact, it must seem to a lot of people that such a pragmatic approach embodies our requisite Christian support for the poor.

In fact, that seems logical, no? But Christian teaching often turns ordinary logic on its head: the last will be first and the first shall be last.

And admittedly, my anti-elitism is more an aspect of my personal psychology than it is a grudging acquiescence in Christian teaching. My friend's personal psychology is the opposite of mine on this point, but we are both responding to the interior organization of our respective psyches.

As are, I assume, the voting habits of most people in our electorate. It is difficult for any of us, Christian or not, to go against our own deeply held attitudes and beliefs.









Anger in the body politic

I woke up on the wrong side of the bed this morning — an euphemism for feeling quick to anger.

My own anger on this day is more of the free-floating, non-political kind, but it occurs to me that there is a huge amount of political anger in the air as well.

In the political arena, we Democrats on the progressive left are currently expressing great anger at President-elect Donald Trump's appointment of Stephen K. Bannon as his chief White House strategist. Mr. Bannon is the executive chairman of Breitbart News. He once declared the site "the platform for the alt-right." The alt-right has been said to be associated with white supremacism, xenophobia, Islamophobia, misogyny, homophobia, and anti-Semitism.

Let's pretend for the moment that I am in that group of Donald Trump supporters that gravitate to the alt-right. I expect I would be motivated by anger at all the things that have made me feel marginalized and powerless. There are many such things, and many have nothing to do with people who do not look and act like me. Washington, New York, and the other big cities have lost sight of my needs, as the bigwigs who live there fly over my little towns and rural abodes on their way to yet another distant power luncheon. I don't feel I have economic security any more. Our universities are teaching our youngsters — the ones who are lucky enough to attend them — to, again, be insensitive to the beliefs and needs of folks like me. It all makes me angrier than I can remember being at any point in my life.

So, what about all those folks who don't act and look like me? The power elites coddle them, so I believe, while I get ignored. Accordingly, my anger spills over onto them.

OK, now I'll stop pretending I'm an alt-right enthusiast and go back to being me ...

Many of the commentators I read on the left are livid because Trump, whose rhetoric during the campaign was often hateful, appointed Bannon. Again, anger rears its ugly head in the political arena. And I have to wonder if many of those angry pundits on the left also have a storehouse of non-political anger built up in their system. My guess is they do.

Anger seems endemic to our society and culture today. At some point I think we have to admit that we've become addicted to anger. And a lot of that anger is free-floating and non-political.

My thought here is that political/free-floating anger in the society and culture are bound to spill over into racial hatred, xenophobia, Islamophobia, misogyny, homophobia, anti-Semitism, etc. So if we on the left want to end such bigotries, we need to figure out a strategy that can damp down America's anger.