5 Quick Political Facts for Today (2/25/15)

A little bit of good news and a lot of bad…

  • Nearly 80% of the voters in Chicago supported publicly financed campaignsWhen put to a public vote, this issue leaves little doubt where many stand on the idea that speech is money and where it belongs in our political campaigns.  Most of us want it out and want the corruption that comes along with it gone as well.  A Gallup poll showed half of the country was in favor of this in 2013, a number very likely to continue growing as the explosion in spending by outside groups who can hide their donors also continues.  Of course, Congress would have to bite the hand that feeds their family members 6-figure salaries to run their campaigns in order for this to change, which means it certainly won’t in the foreseeable future. 
  • Worker productivity grew 74% in the past 40 years while wages only grew 9%.  Because that is totally fair.  It’s true that part of the increase is due to technology but the disparity is still startling.  Considering the incredible increase in income inequality over the same period, it’s pretty obvious the average American is getting the shaft.  It’s also obvious which political party’s ideology is most responsible for this outcome.  But hey, voting against gay marriage, climate change, and abortion has worked out really well, hasn’t it?
  • The sea level north of New York City rose over 5 inches in 2009-2010.  The article states it was a “1-850 year event” and it’s likely we’ll see this type of thing more often.  And, since it’s an article from an international media source, it doesn’t bother digging up a climate change denier paid by the fossil fuel industry to refute the reality.  So refreshing when media accepts scientific consensus and doesn’t play to the least knowledgeable among us.
  • If you live in the U.S. then no, you shouldn’t be very afraid of terroristsAn excellent op-ed in The Guardian by a couple of academics noting the recent change in political discourse about terrorism in the U.S. by mostly the Obama administration.  In short, if you live here and aren’t traveling to dangerous locales, you are almost certainly not going to die at the hands of a terrorist.  And you probably shouldn’t hand over your freedoms and privacy at home in the name of fighting the so-called “War on Terror”.

It is astounding that these utterances – “blindingly obvious” as security specialist Bruce Schneier puts it – appear to mark the first time any officials in the United States have had the notion and the courage to say so in public.

Speaking of terrorism…

  • A Palestinian mosque was torched by an Israeli terrorist groupNot that there will be much outrage in the American media over nefarious Israeli actions, such as the shooting death of a 19-year old college student by the Israeli military the day before, as noted in the article.  And it’s not like these Israeli terrorist groups have just started up or are carrying out their first attack on Palestinians:

Hebrew graffiti was scrawled on the walls, including “Revenge for the Land of Zion” and “Price Tag,” a phrase used by Israeli nationalists linked to hundreds of attacks on Palestinian targets since 2008. Some attacks have also targeted Israeli military posts. (Emphasis added)

Which begs the question, will the Israeli military kill over 2,000 people, mostly civilians and children, to get back at these groups like they did to Gaza last summer?  I mean, these groups are attacking the Israeli military and “hiding behind civilian targets”, aren’t they?  And that clearly doesn’t matter when it comes to bombing populations as they’ve shown in the past, right?  What’s the difference?  Amazing how the double-standards look when they are revealed.

Countering the Right: Robert J. Samuelson on Entitlement and the Washington Post on Defense Cuts

Two articles appeared recently in the Washington Post that deserve rebuttals as to their slanted positions on certain issues.  The first is an op-ed by Robert J. Samuelson titled “The End of Entitlement”.  He argues we have reached a point where we are no longer entitled to the things in life we previously believed we deserved if we worked hard for them, such as a peace of mind about job security and retirement.  He sums the idea up in one sentence:

We’re not entitled to many things: not to a dynamic economy; not to secure jobs; not to homeownership; not to ever-more protective government; not to fixed tax burdens; not to a college education.

It’s not that he is wrong about this current reality of life.  It’s that his attempt at trying to decipher why this is the now case is weak and misleading.

He gives four points that we assumed would work but failed us.  The first:

economists knew enough to moderate the business cycle, guaranteeing jobs for most people who wanted them…The Great Recession revealed the limits of economic management. (Emphasis added.)

Working as intended!

This is an incredibly misleading statement.  If the Great Recession revealed anything it was that there was (and is) far too little oversight of the financial sector and, when it is allowed to run wild and commit fraud without consequences to the people committing the crimes, most of us get hurt in the end.  This isn’t to suggest a communistic approach to the economy but a check and balance on the financial sector’s power (similar to our system of government’s checks on each branch) is clearly what was missing in the housing sector and the derivatives market and what got us to where we are now.

And before anyone tries to make the case Fannie Mae and Freddie Mac were government-run programs that were policing the industry, they were not.  Here’s how you figure that out.  If it has a person called its CEO, kind of like Freddie and Fannie, it’s not government run.  Period.  They made their decisions without enough oversight and they screwed us in the interest of making a short term profit with painful long term consequences, just like other corporations.

His second point is that the “safety net” provided by large corporations has “shrunk” and does not provide what they once promised.  One of the factors he strangely blames considering his first point: “deregulation”.  In other words, economists failed at “managing” the economy but the economy failed because of deregulation.  Samuelson counters himself here and apparently doesn’t notice it.  If deregulation occurs at a level where it becomes problematic, then economists and the government are not actually “managing” anything.  They are just observing what is happening without intervening where needed, which is what caused the crash.

His third point is that productivity gains did not translate into expected tax receipts and greater income inequality has compounded the problem of paying for government programs.  This ignores two important factors causing this outcome.  One, that the attack by the right on workers rights and unions has led to lower wage growth and more money going to the top earners, which is not in any way regulated but could be as Europe is doing.  Two, that tax cuts, such as the Bush era cuts that went heavily to the top earners who are earning more of the money, have made tax revenues lower than previously expected when these programs were created.  In other words, it was a boosting of right wing economic legislation that made this problem what it is now.

His last point is that broken families and children raised by single parents have helped take away the idea of entitlement.  This idea is so ludicrous it’s hardly worth addressing.  In other words, his argument is that a child in a household with two parents that fight all the time (or worse) and no longer want to be together is healthier for the child.  Argue away on that point.  Also, this ignores the fact stagnant wages have led to more hours worked for less pay which will have an obvious effect on the parent rearing the child, whether single or not.

The other article in the Post was a piece by Zachary Goldfarb about “liberals” (as if the government is filled with them) now dealing with the fact the defense cuts they called for are hurting the economy.  The article focuses on military spending and is presented as if there is virtually no other alternative in how the government could use its funds.  This suggests liberals only want cuts in defense spending and do not want the money diverted to shore up or improve other programs, such as Social Security or education.

He does spend some time on the idea money could go toward other expenditures.  2 whole paragraphs…out of 27.  If this article was even a remote presentation of more liberal beliefs about where the government could spend its money, it would give far more time to this aspect and show how the defense budget dwarfs other areas that could produce jobs and help the economy like infrastructure and education.  Pointing out that the federal defense budget is roughly $850 billion while federal education spending is just below $100 billion would be a start.

The reality of distorting data in “The myth of the disappearing middle class”

The myth of the disappearing middle class – The Washington Post.

Reading this article might have given someone the impression the middle class has been doing just splendid in recent decades and no one should be complaining about the pre-Depression-like levels of income inequality in the U.S.  But a closer look at how this data is presented might tell a completely different story.  In fact, it might even suggest a reality that would look like the complete opposite of what the author, Ron Haskins, is trying to argue.

Initially, some figures with little supportive data are given that show the top 20 percent did better than everyone else since 1979 but everyone did well overall (a 50 percent gain in income for the top 20, a 40 percent gain for most others).  Then comes a common point made by people trying to fend off this debate: “Households in the top 1 percent pay about 40 percent of federal income taxes, and the top 10 percent pays nearly 75 percent.”  This then gets turned into social services.  Let’s examine this nugget of info a little further.

A quick Google search finds this article from Haskins’ employer which states the top 1 percent paid 15 percent of the taxes in 1979.  They now account for 40 percent.  This increase in their share has occurred despite the fact their tax rate, as everyone knows, has dropped dramatically.  So less money is coming out of their checks for taxes yet they are accounting for much more of the total dollars going to the government.  Long story short, these people did not do well.  They did really, really, really (times a lot) well.

Then comes the blatantly obvious distortion of data.  Haskins essentially states two married people, with no out-of-wedlock children, and both having jobs have only a 2 percent chance of living a life of poverty.  He adds, “if the same share of adults were married today as in 1970, poverty would be reduced by more than a quarter.”  Let’s examine a couple of aspects here a little closer.

Picking 1970 is, of course, somewhat brilliant but really a sneaky and almost dishonest option.  This year would be toward the beginning of a larger portion of the female population entering the workforce.  Which would mean two things relating to this data.  One, families in the past were able to be middle class with likely only one person (typically the male) in the household having a job.  Now, both need to have jobs in order to ensure they stave off poverty.  In other words, someone in 1970 might say, “My spouse can work but it isn’t necessary for us to stay out of poverty.”  Nowadays, “My spouse has to work for us to stay out of poverty.”

The second factor here is that women no longer need to get married to have someone financially take care of their needs as they would have in the past because of workplace discrimination.  A woman can choose to fend for herself more easily now than before so the option to live the single life is more available for both sexes instead of just one.  Perfect equality has not been reached but that is for another discussion.  Haskins is letting his personal views get in the way of his argument here stating people must be married to avoid the bottom of the economic barrel.  Marriage should be mostly irrelevant in a discussion of how workers are faring from the 1970s to now.

One last distortion is the following: “Consider also that children of parents whose income was in the bottom 20 percent have a 45 percent chance of remaining in the bottom themselves. But if they get a college degree, they cut those odds by nearly two-thirds and quadruple their chances of earning more than $100,000.”  A final closer look.

To begin, no statistic is given as to what the chances are of earning $100k without a degree so the quadruple effect could be not as bountiful as it sounds.  Suppose this stat is say, 1 percent.  The college degree now ups it to 4 percent.  Doesn’t sound quite as good when stated that way and I’m guessing that’s why the stat was omitted.  In fact, I would assume it might even be less than 1 percent which would make showing the number even less impressive.

The two-thirds cut in the chances someone in the bottom stays there when they get a college degree sounds great but hold on.  That still gives a roughly 20 percent chance of staying in the bottom even after getting the education that is supposed to get you out.  Shouldn’t that be far less?  Shouldn’t cracking the middle class with that degree hanging on the wall be almost a given?  Unless, of course, working on your own without getting married doesn’t get you out of the bottom.

I wonder what the chances are for kids of people in the top 1 percent to end up in the bottom 20 with only a high school diploma and no college education?  I’m guessing far lower than 20 percent.  But then again, asking that question is class warfare and we aren’t allowed to have that in our countries’ economic debates.