After books such as The Big Short, Money Ball
and Liars Poker, Boomerang
is a disappointment. More breezy travelogue and thumb nail sketches of
some of the players, (including a bike trip with Arnold
Schwarzenegger), Lewis describes four cultures which took the low
interest money floating around in the middle of the last decade--and
what they did with it.
Icelandic fisherman quickly became overconfident, financial "experts"
investing in stocks and property. Their 3 banks collapsed when the
bubbles burst (with $100b in banking loses) but rather than let them go
under, the government took on the debt, which amounted to over $300
grand per person not counting the personal and stock market losses.
Their debts amounted to 850% of GDP compared to the relatively
"prudent" 350% of GDP here.
Lewis traveled to Greece to dig into their culture of irresponsibility
which has captured world wide financial attention. It seems that the
society has lavishly indulged its public employees while letting tax
cheating become standard procedure and when its euro tied exports
became uncompetitive, borrowing to support the government became
necessary. Nevertheless, foolish bankers bought the cooked books and
lent without due diligence, ending up captured by the insolvent. The
European Central Bank and the IMF became involved but it is the German
government and its banks which are in the process of determining if the
imposed austerity will suffice. Lewis describes a totally immoral Greek
culture which doesn't want to pay its debts and one that is unlikely to
change anytime soon.
From there Lewis hops to Ireland to describe the land development
fiasco. Extreme overbuilding is in evidence as he drives around all the
half finished and deserted commercial and residential "ghost estates".
Oddly, this has started up a disaster tourist business. The small
property developers are stuck for the money but the big borrowers, who
own the lenders, are getting work outs. Despite the historic
indebtedness, almost no one complains.
Germany gets the next look. Apparently Germans were able to resist the
borrowing temptation but the banks lent outside the country like rural
hicks. Being honest, and believing others to be likewise, they fell
victims to scams and bad investments, including American, sub prime,
CDO packages. But Germany is still the strongest economy in Europe and
its government will determine whether the euro will survive and in what
form. Curiously, Lewis devotes attention to the German fascination with
the solid end products of the digestive system. Looks like more filler.
The story is brought back to the U.S., specifically California, where
debt is the worst. Federal cut backs to states get passed down to
cities and localities where the brunt is felt. In California, public
employee unions have played local governments for years, generating
expensive pension benefits which are crippling certain cities
particularly. Coupled with a destructively divided legislature and
spend but don't tax initiatives, the state is unable to untangle its
misallocations. The schools system has gone from best to about worst.
Public services have been cut into the bone. Financially, California
almost looks like Greece.
It seems that this country harbors pockets of divergent cultural
response to financial management, much like the euro union. However, we
have the world's reserve currency and aren't afraid to print our way
out of bankruptcy. Given instability elsewhere, America still seems
like a safe haven. That's not encouraging.
This book is only 213 pages long and has no index. For the financially
uninitiated, looking for light reading, it fits the bill. Cultural
reaction to the boom and bust times is a worthy subject but Lewis omits
countries like Spain and Italy and doesn't delve into the weeds enough
to satisfy those looking for more in-depth understanding.
November 30, 2011
JBM
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The Medicare Bind
Paul Starr
The American Prospect
November 2011
This is a long but really superlative article on the
convoluted
history, the benefits, the misallocations, the revenues, the future
possibilities and the politics of our government run health care system
for America's seniors. As you probably know, we generally pay more for
health care and get less benefit than any other developed country.
Medicare itself is an exception but it faces political, economic and
industry assaults.
Starr describes efforts to get universal
health care insurance during the Truman, Johnson and Clinton
administrations and how Republicans and the AMA thwarted those
attempts. Employers, looking to reduce wage increase demands, provided
some coverage but this has complicated the overall situation and driven
up costs due to excessive procedures. Over the years, in resulting
compromises, seniors were saved from penury and premature death with
the Medicare program abetted by Social Security. And it is these
seniors, along with Republicans, who have led the efforts to stop
President Obama from producing an efficacious plan to reduce the 50m
number of uninsured citizens. This has been done largely out of
ignorance and misinformation, amply supplied by corporate forces.
Seniors like to think that they are only getting out what they put in
but in truth some of the funding comes out of general revenues. This
means that they are trying to deny coverage to those who are helping to
provide coverage for them.
/Republicans want to scrap Medicare and replace the defined benefits
with defined contributions (the Rep. Paul Ryan plan), a conversion that
corporate retirees can tell you has been detrimental to their
retirement benefits. When the contributions shrink compared to cost of
living increases, individuals are left to make up the difference. This
would be an estimated $6,000 a year average short fall disaster for
many. The right also wants to voucherize Medicaid (in other words,
reduce funding) for the poor, which many seniors would then need.
But while Medicare is more efficient than private plans because of less
overhead, the article also describes how it could and should reduce
costs in order to make it viable in the long run. This doesn't
necessarily involve raising premiums or the eligibility age as is
proposed. Going up to 67 or even instituting a Public Option may not be
as beneficial as supporters maintain.
However, too often Medicare has paid providers, no questions asked.
That has to stop. Aside from cracking down better on fraud, there are
doctor training subsidies which can be reduced, and payments for cost
effective outcomes rather than fee for services can be implemented.
Different parts of the country provide similar outcomes for different
costs. Medicare should only pay the lower costs, adjusted for regional
cost of living. Specialists are overpaid relative to GPs. Ending
payments for generic delays should be outlawed. A big saving would be
to allow Medicare to bargain down prescription prices as Medicaid and
the Veterans administration can do. Guess who is stopping that.
The conclusion is that for a health care system that can rival other
countries we have to fold Medicare into a simplified universal plan
which either is run by the government (single payer) or which fully
regulates private insurers and practices, or some combination of the 2.
This is a full 10 page article and a short review can't do it justice.
Get this back issue or photo copy the article from a library source
whether you are a senior or not, because if not, you may become one.
General ignorance about the particulars is hampering a viable solution
more than anything else.
November 2, 2011
JBM
There have been a plethora of books written about the
financial
manipulations that have so weakened the American economy over the last
30 years. Most of the machinations involved have been too complex and
obscure to have penetrated the conscious awareness of those few even
trying to understand what and how it happened. As Taibbi points out,
the major TV media has been almost no help and by it's neglegence has
acted as an enabler of ideologically based blindness, outright fraud
and bribery so ubiquitius that it throughly pervades the
Washington-Wall Street nexus. His (250 page, indexless) perspective,
added to others, helps a glimmer of illumination to widen and brighten.
Taibbi breaks down the draining of the middle class into about 5
segments. Former Federal Reserve Chairman Alan Greenspan is cited as
the most responsible for the bubble and bust economy through 2 decades
and the bait and switch Social Security scam which, under Reagan, hiked
contributions to fill the reserve, a reserve that was then used to
desguise the true added debt after the tax cuts. Basically Greenspan
bailed out foolish and greedy investors time and time again with cheap
money and low interest rates drove those with cash at hand into the
stock market and other bubbles. Taibbi cites a series of wrong
predictions from the man who was considered a financial wizzard,
somewhat because of his convoluted descriptions.
The sub-prime mortgage swindal gets considerable attention. Basically,
the Wall Street banking collapse came because the housing bubble burst
exposing the toxic, securitized mortgage tranches generated by firms
like Countrywide and passed through rating agencies and banks to
unsuspecting mutual and retirement fund managers. In order to protect
themselves banks took out swap protection but the insurers were not
required to maintain sufficient collateral to cover massive margin
calls. The whole thing unreaveled as if there was a run on the bank(s).
Only Treasury Secretary Paulson and later Tim Geithner and Ben Bernake
prevented a full lending lockdown by using massive infusions of
taxpayer money.
The commoditys (e.g. gas price) "pump and dump" runups are another way
inside speculators fleece the unwary. [It looks like food prices are
the latest target.] Not surprisingly, the Affordable Health Care Act
("Obamacare") gets a through going over. Perhaps the pin point here is
that neither congress nor Obama pushed to get the McCarran-Ferguson
insurance company anti-trust exemption legislation repealed which would
have begun actual price and coverage competition. The $46m in bribes
held that off and the workarounds and giveaways have made the AHCA a
tangled mess.
Lastly, Taibbi goes back to his Rolling Stone
reporting on Goldman Sachs which has become the most unscrupolous
financial firm in the country in terms of damage done to America. From
a "greedy long" philosophy to a "make it now" mantra under Robert Rubin
and successors, the most fraudulant scemes have been pertetrated
virtually destroying trust and respect from those in the know. Still,
with government bailout and cover, they rip the unwary. No one is
indicted, no one goes to jail, no real regulation is passed as long as
the big bucks fill campaign coffers.
There are a load of insights in this book and Taibbi paints a picture
of overwhelming corruption of the power centers of the country. Even
tea partiers are silenced. Gratitous vulgarity doesn't help but that is
a small distraction. Read this book and then read it again.
February 4, 2011
JBM
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Third World America
Arianna Huffington
2010
Huffington's compact book uses 4 chapters to delineate
the
draining of our middle class, spotting the overall numbers and
realities with short portraits of how people's lives are being
adversely affected. This is a good primer for those who want to learn
about how Wall Street and corporate America combined with the
Washington policy makers to subvert our economic well being. There
aren't a lot of new insights or details but it is a worth while summary
and she names some names of those at fault. Several other works are
cited for ideas and statistics.
The bottom 20% of households in 2005 were making do with <$11,000 a
year. In 2007 the top 10% pocketed almost 1/2 of all earnings. Upward
mobility has almost come to a halt, even a college degree doesn't
assure a better life anymore. Americans on food stamps grew to 40m. The
housing collapse obliterated 13t of household wealth, an average of 1/4
of the total. This down draft has had an impact on children especially.
A Real Misery Index was created (including unemployment, inflation of
essentials, data on credit cards, housing prices and defaults, food
stamps etc.) and it shows a 16% rise between 2009 and 2010 despite a
stock market rally. Nevertheless, tax dodging corporations continue to
get government contracts while Wall Street banks, which drained our
treasury, continue to scam everyone who is indebted to them.
Huffington recites the list of infrastructure deterioration: roads,
bridges, railroads, dams, levees, the electric grid, sewers, water
supply and schools. The last doesn't just involve the physical
structures but how we are failing kids in the class room with a
combination of union demands protecting bad teachers to depleting and
underpaid staffs, not to mention unaffordable college tuition. That is
killing our future.
The next subject is corporate control of our governments, especially
congress. In 2009 there were 13,700 lobbyists who spent $3.5b to buy
congressional policy. So mine disasters, oil spills and Wall Street
fraud go unpunished. In fact we now have revolving culprits who
regularly enter the government, then return to the private sector to
take advantage of their malfeasance and back again. Robert Rubin is
offered as a prime example.
There are 2 institutionalized factors which make redress so difficult.
The sharks are well organized with plenty of financial backing and now
many of those in important posts actually believe in the unfettered,
free market ideology that they benefit from (think Alan Greenspan) as
professor Simon Johnson has pointed out.
Despite all the bad news, Huffington surprisingly lays out an upbeat
ending describing how empathy is spreading through the Internet and she
describes what individuals
can do to turn upward again. The battle must start from outside the
NY/DC nexus (fix congress, transparency, technology utilization, better
teachers and Wall Street reforms). The mainstream TV media will have to
be dragged along but Hope 2.0 can prevail. We'll see if a blow-back
tipping point can be reached. In any case, if you want an easy-to-read
book to start you off, this is a good choice.
March 14, 2011
JBM
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The Brain On Trial
David Eagleman
The Atlantic magazine
July/August 2011
We are beginning to emerge from the mists of
understanding human
behavior. Advances in brain science are eroding the concept of "free
will" and placing more responsibility on brain circuitry as we get more
detailed pictures and find more chemical causes and palliatives.
However, this article steps aside from the free will vs. determinism
debate per say and concentrates on the pragmatic consequences for our
system of justice.
Although our judicial system treats citizens as equally able to adhere
to acceptable cultural norms, in fact people are not equal at all but
are biologically arrayed on a multi spectrum of pre- frontal cortex
capabilities, if not other brain abnormalities like tumors. And as
scientific measurements and techniques are refined, punishment can be
customized, with more emphasis on rehabilitation.
Eagleman points out that many criminals share the same genes, 98% on
death row. We know that conventional talk therapy, appealing to our
rational selves is less efficient than the right medication. We know
that our prisons are substitutes for mental wards in many cases. More
and more sentencing guide lines are the result of using a composite of
statistical variables rather than personal evaluations. The author does
suggest that a more sophisticated form of bio-feedback can produce
positive results. Through repetition it enables the deviant, whether
criminal or just one with unhealthy impulse control (like bad eating
habits or gambling addiction) to strengthen the prefrontal cortex for
long term management. Typical teens lack a fully developed prefrontal
region and indulge in dangerous behavior, and some, because of genetic
and/or environmental factors (including in the womb) don't ever fully
develop the necessary discipline. Mental health courts could tailor
sentences to rehab the convicted, reducing the overburdened prison
system while keeping likely repeat offenders behind bars. A new system
would be forward looking, turning upside down the way we look at
personal responsibility and past infractions.
The concept of free will has been with us since civilized man
developed. It seems that we make rational choices each waking minute,
so we believe others do too. Civilization has depended on the concept
to provide safety and order. Now that is being called into question
leaving the reason for much of religion in doubt. After all, heaven and
hell were designed to coerce acceptable behavior owing to rational
choice. This thesis opens Pandora's box, although Eagleman only
concentrates on our judicial system exploring his premise more widely
will be a shocking game changer. It brings a whole new slant on how we
operate. Any thoughtful person has to come to terms with this revised
understanding.
This is must read and internalized material.
August 29, 2011
JBM
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Can the Middle Class Be Saved?
Don Peck
The Atlantic magazine
9/2011
If you want a background context for your concerns over
America's
progression into plutocracy and the depletion of the middle class, this
10 page article supplies it. The first part of the essay discusses the
reality and portends for the country while the second suggests
remedies. Citing Ajay Kapur, Peck writes that in the previous American
"plutonomys", the Gilded Age and the Roaring 20s, wealth concentration
resulted from rapid technological change, global integration, laissez
faire government policy and "creative financial innovation". The Great
Recession follows suit.
As even the major media is belatedly
telling us, the rich are pulling further and further away from the rest
of the citizenry, especially in our country. The astonishing, purported
facts are that the top 1% earns as much as the bottom 60% and they
possess as much wealth as the bottom 90%! Between 2002-2007 the top 1%
got 2 out of every 3 dollars in national income growth. Despite
Republican efforts to convince us that it is well deserved (the rich
work harder and smarter) and for the best, Peck notes that those at the
top of the income earners benefited from lax regulation, tax benefits,
global markets and public bailouts which rewarded excessive risk. The
well off have quickly come out of the 2008+ recession but those making
<$100,000 a year have stagnated or fallen back. The author cites
many works along the way which gives the reader the opportunity to
delve further into the subject--including his own book Pinched.
Much of this class difference is due to educational attainment. The
high school grad now usually finds jobs on or near the bottom rung
while those with some college or with bachelor degrees find little
upward mobility. However, those with advanced degrees, the professional
class and the innovators barely noticed the economic down turn. The
figures are quoted. When the housing bubble burst those in the middle
class lost the most compared to the top percent who had wider
investments. Union decline and overseas competition for repetitive task
jobs have driven down wages for those able to find work. Even service
sector jobs have migrated off shore. The recession has just accelerated
shifts that have been going on for decades.
There have been social consequences. Male workers have been hit hard
and find it increasingly difficult to support a family. Women are
relatively gaining in independence and marriage is delayed, divorces
increase and single moms proliferate, breaking down stable social
connections and child welfare.
Some areas of the country are doing well because they house the
innovative class and working professionals. NY, Boston, Silicon Valley,
D.C. and Seattle are prospering, leaving the rest of the country
behind.
Peck offers some prescriptions for restoring a healthier middle class.
Certainly a more progressive income tax needs to be enacted. Enlarging
the Earned Income Tax Credit would also help subsidize the middle
quintiles. Legislating fair trade policies and addressing China's
undervalued currency would help our exports. Spend more on investment
and relatively less on consumption. We must prevent the current
situation from becoming the "new normal".
There is much more to ingest in this article. It will give you a Cliff
Notes version of our economic troubles. Remember, a better
understanding of our crisis is essential for avoiding the individual,
economic IEDs and resolving the national dilemma.
September 5, 2011
JBM
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Age of Greed
Jeff Madrick
2011
The subtitle of this work, The Triumph of Finance
and the Decline of America, 1970 to the Present,
encapsulates Madrick's theme. Coming along after a spate of books on
the collapse of America's financial sector such as Michael Lewis'
(I> The Big Short and works such as Free Fall, 13 Bankers,
Griftopia, Inflated
etc., this 400+ page tome distinctively traces the root causes of the
collapse and isn't afraid to name names of the most indictable.
The book tells the story through mini biographies, some contributors
more prominent than others, perhaps partially depending on material
access. Few have heard of Lewis Uhler. More vaguely remember the name
of National City banker Walter Wriston who spent his career campaigning
to eliminate regulation. Then there is the economist Milton Freidman
who kept expounding on the benefits of a free and unfettered
marketplace which would always cure its own instabilities and benefit
the consumer and general public. President Reagan ran with that mantra
and did so much to demonize government that it still hasn't recovered.
Joe Flom led the corporate takeover way during the '70's. He helped
open the door for the Ivan Boeskys of the world, buying up companies
and "streamlining" them then selling off the pieces.
Although Reagan deserves much of the blame, facilitating deregulation
started under President Carter who may deserve some slack for not
seeing the down-the-road consequences at the time. And let's not forget
Michael Milken and his junk bonds which enabled more financial
transactions and more risk. Fed. Chairman Alan Greenspan facilitated
bubbles and busts with his interest rate decisions and deserves a lot
of the discredit. John Meriwether of LTCM almost brought down the
system when it ran out of cash. George Soros made a killing by betting
on Britain's currency depreciation and opened up the currencies avenue
for further exploitation.
But much of the story is about Sandy Weill who merged and dealt
companies, getting bigger and bigger with Shearson, Lehman, Travelers,
American Express and finally Citicorp. At retirement he was the biggest
market maker on the Street. Meanwhile, with abundant capital coming in
from all over to work with and with the removal of the Glass-Steagall
regulatory road block (under Clinton) which allowed traders to use bank
deposit money (and the implied government back stop) for excessive risk
and profit, mortgage securitization devolved into a mess of derivatives
and swaps which bilked unwary mutual funders etc.. The short sellers
walked away with millions as did those who cost Americans enough to
cover this country's federal debt.
/In the last chapters, Madrick recounts the events near the end of the
GW Bush presidency. Goldman-Treasury Secretary Paulson, Geithner, Stan
O'Neal, Dick Fuld, Rubin, Ranieri, Cox, Cassano and others are all
given their due.
For those who don't want to dig into the weeds, Lewis' book is probably
a better read. But the takeaway here is that our financial houses have,
over the recent decades, led us through boom and bust cycles (remember
the savings and loan debacle and Enron?) which have rewarded them while
misallocating trillions of our dollars; dollars that could have been
better spent on rebuilding our physical and social infrastructure,
energy independence, R&D and improving the quality of life for the
bottom 80%. Now these houses own Washington. That is why present
underregulation leaves the door open for more risk implosions, bailouts
and profit taking. That is why America is in decline.
July 29, 2011
JBM
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Winner Take-All-Politics
Jacob S. Hacker & Paul Pierson
2010
If you want to know how we got to the present
political/economically conflicted, dysfunctional miasma in Washington
(and the consequences for the country), this is the book you want to
read. It takes us back to the beginning of the turn to plutocracy in
1978 and lays out the reasons and the players who have crippled the
middle class and funneled America's income and wealth to an ever
smaller fraction at the top. Since the outcome will affect us
measurably, this is core knowledge. The fact that Republicans made
gains in last November's election (as the authors predicted)
demonstrates how that lack of understanding continues to further our
decline. In essence, Republicans have gotten really destructive and
Democrats have moved further to the right as well.
The stark economic realities are laid out early. 17% have 0 or negative
net worth, 40% have <$2500 and 80% have <$85,000 while the top
has nearly $15m each. That was in 2004 (the last year of available
figures), before the housing bubble burst and unemployment formally
escalated to almost 10%. The authors argue that this was not an
economic inevitability, it was because of political decisions,
decisions promoted and influenced by the growth of right wing
organizations, starting in the middle of President Carter's term and
whose agenda was legitimized by the advent of the Reagan ascendancy
which promoted greed and deregulation. And as each of the last 3
decades have proceeded, the race to the extreme edge of Conservatism
has speeded up. One only need look at the pronouncements by Republican
President Dwight Eisenhower or read how former Supreme Court Justice
John Paul Stevens has been regarded-from beginning to end of term-to
realize this fact.
Although many are to blame, such as Irving Kristol, Newt Gingrich and
Phil Gramm, Presidents Reagan and Bush 43 were most obvious in favoring
the rich ("my base") and most hostile to programs like Medicare,
Medicaid and even Social Security (which actually is an insurance plan)
which have shored up the middle class. The idea has been to overspend
(including tax cuts favoring the rich) on the big campaign contributors
and let Democrats "tidy up" the deficits and gather up the pain blame.
As Clinton and Obama have tried to appeal to the middle ground, that
ground has been constantly shifting to the right. The more they try to
reach Independents, the more they emulate previous Republicans and
alienate progressives. Much, if not most of the public responds to the
right wing propaganda and TV sound bites because they don't pay
in-depth attention, and the major media isn't going to wake them up.
Republicans have abused the filibuster to stalemate needed reforms in
health, education, finance, job producing investment, immigration,
carbon dioxide emissions etc. and then blame Dems for getting nothing
done. And Dems let things drift as a passive way to placate their
patrons.
Remedies are offered but nothing stands out. Along with distracting
early analogies, this is the weakest part of the book. Then again,
perhaps there is no real treatment because the patient is too far gone.
You need to know.
January 28, 2011
JBM
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The Spirit Level
Richard Wilkinson & Kate Pickett
2009
Most of us consider America as the leading nation in
the world.
That assessment is accurate but not in the ways most want to admit to.
As described in this book, which has compiled the statistics, the
comparisons and the scientific studies, the USA generally leads all
other developed nations violence, incarceration rates, drug abuse,
obesity, poor education outcomes, teen pregnancy, socio/economic
immobility, reduced longevity, social isolation, reported
anxiety/depression, unhappiness and mistrust, and of course, record
setting private and public debt. Joined by Portugal and the UK, we
contrast most sharply with Japan and the Scandinavian countries. And
the contrasts have been measured between American states with Mn, ND,
NH and Vt most opposite to the deep southern states La, Ms and Al. In
general, the south is more unequal with more social problems. NY seems
to be an outlier with very high inequality but it is below the trend
line in poor circumstances. [Oregon is generally slightly less unequal
than average on almost all scales with just slightly less serious
problems than average.]
To greater or lesser degrees we try to tackle these problems
individually, masking attempts at understanding and dealing with a, if
not the, foundational cause for our decaying civilization: our
extreme and growing inequality.
The authors stress that this hurts everyone from top to bottom.
Happiness levels off after early stage success (around $25,000 per
capita in today's dollars). In affluent societies there are long term
rates of anxiety and depression. Just improving economic growth isn't
the answer. Social acceptance that comes with diminished hierarchy is.
The thesis is relatively simple. We all are continually aware of our
status relative to those around us. After securing our basic needs,
which is usually assured in developed nations, we seek approval,
respect and even admiration from our contemporaries. As the status
levels spread out and media promotes authority and material success,
ostentatious materialism increasingly substitutes for closer relations
based on more commonly shared experience. And it is those closer
personal relationships that engender trust and acceptance and make us
happier than isolated materialism does.
When confident in ourselves, as supported by the judgement of others,
ladder climbing stress is reduced and the positive brain chemicals
dopamine, serotonin and oxytocin are induced and cortisol suppressed so
we perform better. When insecure, adrenaline, prevalent over a long
period of time, is debilitating. Under these circumstances people look
for escape into mind altering substances. Genes are changed and belly
fat is produced. Many of these malicious circuits are hard wired into
the brains of the young exposed to such trauma. A skill set based on
suspicion and fighting for perceived survival involves a skill set
quite different than one based on empathy, reciprocity and
co-operation. Indeed, low social status, lack of real friends coupled
with childhood stress reduce health and longevity.
Status anxiety and competition, a perceived reflection of value and
capability, cause us to work harder and longer for material reward.
Coupled with the need for entertaining escape from our realities, we
have less time to pay attention to the important matters of societal
direction and policies. Increased prosperity necessitates increased
specialization and trust in others but empathy and trust diminish
(60%>40% since 1960) with inequality. Studies have shown that people
comply with their status expectations, producing unnecessarily poorer
outcomes as you go down the elongated ladder. This holds true for
parents too.
Status (most important for men) insecurity breeds false pride and
violence when the threat of shame, humiliation or "loss of face" are
encountered (females rely on attractiveness for approval and are more
likely to mate with high status males). Our more obvious status
disparity enhances antisocial reaction. Homicides are more common in
Manhattan and Rio than in Canada. Lack of empathy promotes US prison
cruelty. Former inmates must cope with the psychological damage and the
wrong lessons learned. Recidivism rates are high. Incarceration
expenses are surpassing education budgets. More unequal status = more
legal authorities.
Social mobility increased from 1950-1980 but has been declining rapidly
since then. Canada is well ahead in this regard. In Norway, the most
equal country measured, almost all educational spending is public
expenditure. Only about 2/3s in the US. Uneven distribution of those
funds expands inequality. Selfishness, snobbery, prejudice,
discrimination, rejection and scapegoating are a consequence.
Causality flows from inequality to the low marks mentioned as human
studies such as the "blue eyes" one suggests. Animal studies also
support the contentions. Much of this is old news as Tom Paine, de
Tocqueville, Emile Durkheim and Thorstein Veblen have remarked. But in
this country, since, if not before President Reagan (and UK PM Margaret
Thatcher) we have blatantly ignored the relatively equitable income and
wealth distribution that built this country up after WWII.
Growing environmental constraints are going dictate compression of
unnecessary consumption. Luxury goods are going to have to have less
status value. Efficiency will have to gain value. Civic involvement and
association will tend to reduce materialism. The authors posit that
there are 2 ways to reduce disparity as exemplified by neighboring NH
and Vt. In the former, the private business sector voluntarily reduces
wage disparities while in Vt progressive tax policies reduce
inequality. Either can work but both must be continually monitored. An
important component in an American effort to reduce our social
distances would be to enable workers to buy out their companies and run
them. Outside stockholders are all about maximizing their earnings from
short term corporate profitability regardless of damage to
stakeholders. That principle of our capitalistic system has to be
minimized. Corporations, the chief source of our disparities, must be
tasked to do good to do well or their managers must pay the criminal
and civil price. This is heresy but it is required if America is to
stop slipping down further toward backward nation status.
The Spirit Level isn't an enjoyable read. It is dry as it pertains to
studies, statistics and abstractions. However, it is replete with
graphs which help visualization and a few cartoons are sprinkled in.
But the important thing is understanding the content. It points the way
to policy perscriptions to recover the America we want to envision.
However, the work has garnered criticism (almost all right wing). Some
have questioned the methodology of the authors; even inspiring The
Spirit Level Delusion (Snowden). Still, the premise of the book makes a
lot of sense. And, if nothing else, it provides a lot of solid food for
thought.
April 13, 2011
JBM
Business Is Booming
Harold Meyerson
The American Prospect magazine
March 2011
All the Devils Are Here
Bethany McLean & Joe Nocera
2010
The Big Splat
Dana Mackenzie
2003
Pakistan's Fatal Shore
Robert D. Kaplan
The Atlantic May/2009
Made In the USA
Richard McCormack,
Robert Kuttner,
Jeff Faux,
Carolyn Bartholomew,
Harold Meyerson,
Joan Fitzgerald,
Leo Hindery Jr., Edward G. Rendell, Leo L. Gerard, Donald W. Riegle
Jr., R. Thomas Buffenbarger
The American Prospect Jan/Feb 2010