Friday, April 22, 2016

The secret shame of middle-class americans

The Secret Shame of Middle-Class Americans by Neal Gabler

Since 2013, the federal reserve board has conducted a survey to “monitor the financial and economic status of American consumers.” Most of the data in the latest survey, frankly, are less than earth-shattering: 49 percent of part-time workers would prefer to work more hours at their current wage; 29 percent of Americans expect to earn a higher income in the coming year; 43 percent of homeowners who have owned their home for at least a year believe its value has increased. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?

Well, I knew. I knew because I am in that 47 percent.

A spoonful of stupidity

The first problem with Saurabh Jha's essay, "A Spoonful of Inequality Helps the Medicine Go Down," is the title. If we really had a spoonful of inequality, he might be talking about something meaningful; however, we presently face inequality in industrial quantities. And the comparison is deeply confused: the original metaphor is "a spoonful of sugar..." Inequality is sugar? Economic growth is the bitter medicine? Jha's title makes no sense.

Jha begins his essay by blatantly poisoning the well: people worried about inequality are "pro-Hillary, morally conscious, happy bunnies who pretend to specially enjoy French wine, and opera"; they treat economists as religious figures" "Pope St. John Paul Piketty" and "Bishop Paul Krugman." Clearly, anyone thinking about inequality must be shallow and irrational, right? We don't have to engage their arguments, just show that the whole concept of worrying about inequality

Jha attempts to rebut worries about inequality by masterfully demolishing an obvious straw man, using a "thought experiment" of breathtaking inanity. In his eople starving during the Bengali famine were all equal — equally starving — but Capitalism (and presumably only capitalism), personified by Mukesh Ambani (presumably referring to this man) will swoop in and save the day. Never mind that India, including Bengal, was already capitalist, a possession of the arch-capitalist British Empire, hardly the epitome of egalitarianism. And never mind that Ambani's company, Reliance Industries Limited, has a Wikipedia page devoted to the company's corruption and The Economist calls Reliance "a rotten role model for corporate India . . . not a national champion but an embarrassment." No, the real problem is that no one argues for equality of starvation. No one argues for a Harrison Bergeron caricature of equality. No one argues that we want absolute equality of everything, and that a world of equal suffering is preferable to a world with the smallest inequality but abundance and prosperity. The (left capitalist) argument is that we have too much inequality, and we have the wrong kind of inequality. But Jha cannot be bothered to engage to know even what the argument actually is. No, to Jha, all arguments about inequality are just the vacuous religious platitudes of latte-sipping moochers.

Jha tries to enlist science to his argument, citing The Association Between Income and Life Expectancy in the United States, 2001-2014* (2016) by Raj Chetty et al. According to Jha, the authors "found that the life expectancy of the poor depended on where the poor lived, not the degree of income inequality per se." Well, no. Jha cannot employ basic logic. The first part is correct: Chetty et al. (2016) do find that poor people who live in high income areas (e.g. New York) live longer than poor people in low income areas (e.g. Detroit). But the second part is not correct: holding income constant (comparing poor people against poor people) means that we are ignoring variation in income; it absolutely does not mean that the authors find variation in income is not correlated with variation in mortality, holding location constant. According to Chetty et al. (2016), there is, for example, a 4.5 to 5.0 difference in mean life expectancy between the richest and poorest quartiles in New York, the wealthiest area in the study. Yes, where you live affects how long you live, but it is also true that even holding location constant, how much income you have affects how long you live. Indeed Jha actually admits this fact: "he richest 1 % men live, on average, 15 years longer than the poorest 1 %" but there is a "difference in life expectancy for men of 5 years" between the richest and poorest areas. Fifteen minus five is ten, which is not zero.

*What an awesome study. 1.5 billion tax records? I would kill for that kind of data.

Jha claims that the study "finds that life expectancy doesn’t correlate with amount of medical care. Which means that the poor aren’t dying sooner, en masse, because they can’t access the emergency rooms on time, or because they lack insurance. Sorry Obamacare." Even the first part is suspect, because the primary data that makes

Technically correct, but Jha overstates this conclusions. First, the "Sorry Obamacare" dig is utterly specious: The PPACA has been in effect only since 2010; it is far to early to asses its impact.

Second, there's a huge problem with the external validity of the study: it is probably an accurate picture of the United States from the mid-twentieth century to the early twenty-first, but the United States is a highly developed nation, and there are differences between the United States and other countries that affect the relationship between access to medical care and mortality rates. This study (awesome and valuable as it is) tells us literally nothing at all about the impact of and means to alleviate global inequality. Jha is clearly talking about global inequality — otherwise why mention Bengal — but Chetty et al. (2016) are talking about inequality in the United States.

Jha lists "a few things which won’t help the poor: hospitals, bicycle helmets, screening, millennials fretting about names associated with historical wrongdoing, and occupying Wall Street. Sorry social justice warriors – all of that righteous rage may be for naught." Jha does not even try to justify this statement; it certainly doesn't follow at all from Chetty et al. (2016). And really nothing on Jha's list except occupying Wall Street has anything to do with inequality. These items are (to take the quotation egregiously out of context) just Jha's "personal prejudice[s]."

I kind of agree with Jha on one point: the poor need "schools with top quality teachers who care. They need public parks. They need the government to invest in public works to revive jobs." Fair enough. Who is going to provide those things? The rich? Well, we've been waiting, a long time. Indeed, we've been waiting too long. The rich are not going to provide schools, parks, public works, jobs out of charity or altruism. The rich are "segregated in enclaves where they self-flagellate about inequality drinking Dom Perignon" for a reason: they don't want to actually help the poor, or even see them, but they don't want to feel bad about not helping them. And that's just the few rich people who will hang out with a religious apologist propagandist like Jha. Most of the rich are just "segregated in enclaves . . . drinking Dom Perignon," without the self-flagellation: they don't care about the poor at all. Why should they? They're not poor. No, we don't want to wait on the capitalist class to grow a heart. If we want to stop dying young, being oppressed and exploited, so that the rich can drink their Dom Perignon and spit on us, the working class will have to take back what the rich have stolen. I nominate Jha for first donor.

Sunday, April 17, 2016

Against the universal basic income

I am not in favor of the universal basic income as advocated by Philippe van Parijs in Basic Income And Social Democracy. Within a couple of years, a universal basic income will just be sucked up in land rent and profit, and, since it will be offset by taxes on middle-income workers, it will result in a net upwards redistribution of real spending power, as rents and profits will come from the middle deciles to the top 10 percent of landlords, stockholders, and CEOs. (Much is true also of the $15 minimum wage.)

To have any lasting effect, a universal basic income must be complemented by public ownership of most housing (with some owner-occupied housing) as well as public ownership of basic necessities: electricity generation, water distribution, food, and education.

More importantly, as charity (and charity it will be) from the bourgeoisie, a universal basic income should be morally repugnant to the working class: it is the working class, those who make what money buys, who should be in a position to be charitable (or uncharitable) to the parasitic bourgeoisie.

The only way we're going to have a reasonable standard of living for the working class is to take political and economic power. The bourgeoisie will not, and indeed because of the structure of capitalism, cannot do otherwise than to exploit the working class to the maximum extent politically possible, and to always try to make as politically possible as much exploitation as is materially possible. There is no middle ground.

I'm pleased, however, that bourgeois intellectuals are starting to talk about things like universal basic income and a higher minimum wage. This means they're scared, and the bourgeoisie is nothing if not cowardly. If the bourgeoisie offers a universal basic income, a $15 minimum wage, the working people should take it and demand more. And when the bourgeoisie offers more, take it and demand yet more. And more again, until the working class has it all.