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A New Report On American Economic Mobility

Inequality and mobility in America. We’ll look at the latest big report.

Maggie Barcellano helps her daughter, Zoe, 3, use a pepper grinder with dinner at Barcellano's father's house in Austin, Texas on Saturday, Jan. 25, 2014. Barcellano, who lives with her father, enrolled in the food stamps program to help save up for paramedic training while she works as a home health aide and raises her daughter. Working-age people now make up the majority in U.S. households that rely on food stamps, a switch from a few years ago when children and the elderly were the main recipients. (AP)

Maggie Barcellano helps her daughter, Zoe, 3, use a pepper grinder with dinner at Barcellano’s father’s house in Austin, Texas on Saturday, Jan. 25, 2014. Barcellano, who lives with her father, enrolled in the food stamps program to help save up for paramedic training while she works as a home health aide and raises her daughter. Working-age people now make up the majority in U.S. households that rely on food stamps, a switch from a few years ago when children and the elderly were the main recipients. (AP)

Movin’ on up in the world has long been understood as something like the heart of the American way.  Opportunity.  The chance to go for it.  The chance to rise.  But while income inequality has soared in this country, a big new study says American social mobility has not.  It’s the lowest in the developed world, and going nowhere.  Not worse, but not better as the rungs of the ladder grow farther apart.  Republicans and Democrats are talking about mobility now.  The President will in his State of the Union speech tonight.  This hour On Point:  measuring the real chance to rise in America.

– Tom Ashbrook

Guest

Nathan Hendren, professor of economics at Harvard University. Co-author of the recent studies, “Is the United States Still a Land of Opportunity? Recent Trends In Intergenerational Mobility?” and “Where is the Land of Opportunity? The Geography of Intergenerational Mobility In the United States.”

From Tom’s Reading List

Wall Street Journal: New Data Muddle Debate on Economic Mobility — “Politicians of both parties have asserted in recent months that it has become harder for a child from a low-income family to eventually be among the highest wage earners in the country. The parties also are blaming each other as they seek solutions. Democrats say Republicans are trying to dismantle safety-net programs that help the poor, and many Republicans say social-welfare programs are only making problems worse. President Barack Obama has called economic opportunity the defining challenge of our time and is expected to make it a focus of his State of the Union address this week.”

The Atlantic: Economists: Your Parents Are More Important Than Ever — “The income of your parents matters—not just as a strong predictor for your own income (given how weak social mobility is), but also as a nudge for your life path. The kids of rich parents are 80 percent more likely to attend college than those of low-income parents. Teenage daughters of the poorest parents are 37 percent more likely to have a child than girls born in the richest decile.”

New York Times: Raise the Minimum Wage to $12 an Hour – “A $12 minimum wage is hardly extreme or ridiculous. At the 1968 height of our post-war economic prosperity, the American minimum wage was over $10.50 in current dollars, and setting the rate at $12 today would represent a real rise of merely 11 percent over a 45-year period, which seems reasonable since worker productivity has grown by over 115 percent during the same period. ”

A Conservative Call For A Higher Minimum Wage

Ron Unz, chairman of The Higher Wages Alliance. Former publisher of The American Conservative. (@unzreview)

Tyler Cowen, chairman and general director of the Mercatus Center at George Mason University. Professor of economics and author of “Average is Over: Powering America Beyond the Age of Great Stagnation” and “An Economist Gets Lunch.” (@tylercowen)

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  • Tim from Durham, NC

    There are some interesting things you see if you divide the data up by ethnicity as well: http://www.nytimes.com/2014/01/26/opinion/sunday/what-drives-success.html?_r=0

    While socioeconomic status at birth is a big indicator of future economic success across the US population as a whole, certain groups buck this trend. Indian Americans households earn almost double the median household income despite the fact that the children of Indian immigrants tend come from disadvantaged economic backgrounds. Second generation Nigerians attain graduate degrees at twice the rate of American whites, and while, as the article points out, the effects of Chinese or Indian heritage on wealth tend to fade in third generation after immigration, certain groups, like Jews and Mormons, have been part of American society for quite a while and still continue to outperform their peers with similar levels of wealth.

    I think the explanations put forth in this article are worth taking note of, especially the part about insecurity being a driver of economic success. It does seem like the “culture of self-esteem,” that took over US schools in from the 80′s on might be having unseen consequences. As Amanda Ripley points out in her excellent book, “The Smartest Kids in the World,” Americans really do not take school as seriously as their counterparts in east-Asia. Education is not considered one of the more rigorous college majors, and school itself is not competitive.

    It does seem odd that we live in an incredibly competitive free market economy, where education is more and more important each year, and yet it’s almost unthinkable that students’ grades on tests would be read aloud in an American classroom, or that students would compete to be top in a class. I don’t think it does kids any favors to avoid making school competitive, and then shove them out into a very competitive workforce. But of course, education is only one small part of fixing the inequality problem. The diminishing economic and political power of the middle class is also an issue.

    • Human2013

      Almost half of Nigerians are illiterate and the Indian literacy rate still hovers around 75%. The United States has always benefited from the immigration of some of brightest and most motivated people around the world. Many refer to it as the “brain drain.” It would be no different if American took a downfall and China welcomed our most capable citizens.

      • Tim from Durham, NC

        Right, but if you read the article, it’s talking about 2nd generation immigrants from these groups. So it’s kids growing up in the US school system, in US cities, outperforming their American peers of similar socio-economic status.

        • Human2013

          Yes, because their parents are some of the world’s best and brightest.

          • Tim from Durham, NC

            That’s a common assertion, but the data doesn’t back it up. Most of these children are in lower to lower middle class families as they grow up. While it is true that “the best,” tend to be able to emigrate from poorer nations, those immigrants still tend to come with lower levels of education and less capital than even the poorer native US families.

  • John Cedar

    American economic mobility is alive and well thanks to democrat caused American economic morbidity. It is just the direction of the movement that is the issue.

    When observing starkly different rates of success across various groups, it becomes evident that the word “mobility” is not appropriate because it implies ability when choice and culture are clearly the dominate factor..

  • HonestDebate1

    There are 9 million fewer available jobs in America since Obama was elected. That doesn’t help mobility.

    • John Cedar

      It does if you know the true definition of mobility.

    • Shag_Wevera

      Romney would have fixed all these problems by now.

      • HonestDebate1

        Yer dern tootin’. It should have been a blip.

  • John Cedar

    When it comes to tinkering with minimum wage, I would like to see much less of a one size fits all. Something to force Jack Welch techniques. Such as, a company can only have 20% of its employees at min wage and the balance of employees must be paid 115% of min wage or higher. Requirement that employess are paid 115% min wage after they get 1000 hours in. But most importantly, a multi tier system so that service businesses are not priced out of existence in impoverished areas and low population areas. Government mandated expenses are a mandate for large scale business to have less competition.

    • TFRX

      Jack Welch?

      He’s been embarrassing himself greatly as of late. Hitch your wagon to another star.

  • HonestDebate1

    I have never seen the accusation that poor workers are moochers. If you don’t mooch then you are not a moocher and they have a job.

    How do the poor create jobs?

    • John Cedar

      How do the poor create jobs? Via the government entitlement programs that pay them not to work.

      I don’t know about anyone accusing the poor and workers of being moochers, but if you know any employees that spend MOST OF THE DAY at work texting and checking their facebook on their iphone, they be the min wage worker more often than not. My router logs do not lie.

      • HonestDebate1

        I think is was Nancy Pelosi who said paying people not to work was stimulative to the economy. She’s a genius. I suppose if not working is a salaried job, and it seems to be, then you have a good point.

      • northeaster17

        Tell that to those in the service industries and explain to them how much time they have for facebook etc during shifts. Wow.

    • http://tombstone001.blogspot.com/ tombstone001

      Back in 2007, before the United States were being ruled by a “Communist, Socialist, and mind you a Black ileagal thug”, I wrote to my white republican president, I also published that letter on my blog, http://tombstone001.blogspot.com/2007/06/war-on-poverty.html?m=0.
      The point is that time and again we are asked how many jobs do the poor people create, a simple answer, the only honest and truthful answere is all of them. You can read the ariticle.
      A short answer is, however, how many rich people shop at Walmart, buy cable service, eat at Wendy’s, pay court fines, etc, they are creating jobs, without these poor the rich won’t be getting richer. Every penny the government spends to help the poor, rent subsidies, food stamps, medicaid or free lunch, ends up in the pocket of the rich, leaving the government and the poor poorer still. Thank you!

  • John Cedar

    Is this topic intended to add fuel to the fire of the imminent one percenter holocaust?

    http://online.wsj.com/news/articles/SB10001424052702304549504579316913982034286

    • northeaster17

      Pitchforks and torches are being put to the ready.

      • harverdphd

        Never happen

    • Government_Banking_Serf

      The Socialist Roots of Naziism
      Nobel Laureate, Friedrich A. Hayek

      http://lamar.colostate.edu/~grjan/hayeknaziism.html

      Honest, open minded people should read it, and understand the social dynamics at play, and how they may relate.

      • nj_v2

        Brilliant! That explains the dictatorial tendencies of my librarian!

        • Government_Banking_Serf

          What historical observations by that contemporary of the time, and points did you disagree with?

          Besides the part where he talks about librarians.

    • Shag_Wevera

      One can always hope.

      • harverdphd

        You’d lose

      • John Cedar

        Your comment would be funnier if

        you had actually meant it as a joke.

  • wauch

    “Is the United States Still a Land of Opportunity? Recent Trends In Intergenerational Mobility?”
    Is this a trick question Tom? We have increased agribusiness subsidies, the defense budget hasn’t seen a haircut it would tolerate, Wall Street hasn’t seen a bailout it didn’t like, while simultaneously pillorying the socialists.
    We continue to redistribute wealth upward following every recession.
    Similar to a well known chemical reaction called “Gibbs Free Energy”. Every time we go from a steady to an excited state and back again that difference is transferred to the 1% via the above mechanisms.
    http://en.wikibooks.org/wiki/Structural_Biochemistry/Enzyme/Transition_state

  • Coastghost

    From the layout of the intro above, it looks as if Prof. Cowen will not be participating in the discussion with Prof. Hendren over mobility and inequality but will be brought in only for the discussion over increasing the minimum wage. Cowen’s “Marginal Revolution” featured this recent post concerning perceived inequality, though:

    http://marginalrevolution.com/marginalrevolution/2014/01/income-inequality-is-not-as-extreme-as-many-citizens-think.html

  • Coastghost
  • Government_Banking_Serf

    Well at least Obamacore will help to bring us all to lower achievement together.

    Hartford Courant article on Common Core
    http://touch.courant.com/#section/-1/article/p2p-78942160/

    What do you expect from another Nationalization effort?

    http://www.breitbart.com/Big-Government/2014/01/27/ObamaCore-The-Nationalization-of-K-12-Education

    • northeaster17

      Why don’t you just ask the 20 industrial nations with nationalized health care that spend less than we do with full acces for citizens and that do not allow citizens to be bankrupted by medical bills. They are also healthier than we are. What’s so tough about looking at that success? Oh wait Breitbart has a problem. Hold the press………

      • Government_Banking_Serf

        Did you read the first one, from CT, no shooting the messenger there.

        I’m talking about Common Core and doing to our children what the administration and its utopian central planners did to the ACA website.

        • northeaster17

          Sorry, a bit amped up this morning. Dam expresso beans.

          • Government_Banking_Serf

            no prob, pot can’t call kettle black!

      • Government_Banking_Serf

        Problem is that you have faith in our well intentioned elites, who are corrupt, crony-minded politicians and political appointees and naive starry eyed utopians, to ACTUALLY EXECUTE their well intentioned plans.

        This is sociology/politics/economics 101.

        People STILL have unfounded faith in Central Planning and Command and Control approaches to organizing society.

        • Shag_Wevera

          That is because if left to their own devices, men tend to exploit and abuse one another.

          • Government_Banking_Serf

            Exactly. Hence a Constitution and Rule of law to punish cheaters and thieves. We should try it.

          • Shag_Wevera

            The constitution allows for all these things you don’t like.

      • Shag_Wevera

        I think it might be more than 20. It might be ALL of them.

  • sufferingsuccatash

    The Harvard study compares children born in the early 90′s with children born in the early 70′s. However, the big shift in income distribution occurred in the 80′s when neither group in the study entered the workforce. During the 80′s huge income gains were made by the top 5% of the workforce. So naturally, the study would show that people who entered the work force in the 1990 and 2010 would reflect little difference in mobility. The 80′s was the watershed moment in income distribution. The Dallas Fed did a much more interesting and realistic study which showed that mobility had been definitely compromised by income distribution.

    • Human2013

      I completely agree. This study’s time frame contributes nothing to the modern situation.

  • Government_Banking_Serf

    Hmmmmm. Crony Captilism and the Washington-Wall St. nexus has us paying off inflated tuition student loans, inflated home price mortgages, and mandated and inflated health care premiums, and we wonder why we feel less mobile?

    Government, Banking, Serfs. Just play along and be the cog you always wanted to be.

    And Common Core will help be sure you are qualified to occupy a mediocre position in the Plan.

  • Government_Banking_Serf

    Stay sober, work, save, invest in yourself, and slowly advance. That is no longer a valid model.

    Now we are reduced to accepting what the state declares is a fair standard of living.

    If you’re a regular, honest person.

    If you want to become a Wall St./Washington Crony or be rewarded for sycophancy, your future is much brighter.

    • HonestDebate1

      “If you want to become a Wall St./Washington Crony or be rewarded for sycophancy, your future is much brighter.’

      I agree and the key word is “want”. Income is a choice.

      • nj_v2

        Yep, the poor are poor because they are (choose one of more): lazy, shifty, unmotivated, dependent on gubmint “handouts”…

        Poor DisHonestMisDebatorGreggg. He’ll likely live out his life actually believing the tired, self-serving, bogus memes of his right-wing media and political idols.

        • TFRX

          And it’s amazing how the Poors got so much more lazy to this point in the
          econonmic cycle than they were in, say, the postware boom, much of the 89s, and much of the 90s.

          • Government_Banking_Serf

            Have you thanked Clinton Bush Greenspan Rubin Summers Paulson for your “economic cycle” lately?

            Or do you enjoy the demagoguery afforded by the aftermath too much?

            Those scumbags erected the house of cards that collapsed and left the regular people you claim to care about left to suffer the consequences.

      • lobstahbisque

        “Income is a choice”. Just like being gay.

        • Fiscally_Responsible

          You are correct regarding the second item that you mentioned being a choice.

          • lobstahbisque

            Is being an ignorant bigot a choice? You tell us, mastermind.

  • Human2013

    When Freidrich Engels went to England in the early 19th century he was appalled at the working and living conditions of the working poor prompting his critiques of capitalism. We need a
    new round of thoughtful economists and social philosophers to examine this economic system that has now been with us for several hundred years and that has always resulted in shameful inequality.

    It’s capitalism, stupid!

    • Government_Banking_Serf

      Ok, lets go the Mao, Stalin, Castro, Mussolini, Hitler route.

      Their disdain for freedom, choice, opportunity and consequences worked out so much better.

      Class warfare and demonization of success free choices (within a Constitutional Rule of Law level playing field) has inevitably led to propaganda, hyperbole, demagoguery and war.

      • nj_v2

        Right, the alternative to capitalism as we know it is fascism.

        Leather Dave/G_B_S continues to re-arrange Libertarian, boilerplate jargon and talking points into ever-shifting, slightly different constellations, no less tedious or fanciful.

        • Government_Banking_Serf

          Thanks nj.

          Feel free to spend more time talking about how your alternative to both capitalism and socialism works, and how it will be peaceably implemented.

          I sincerely believe it would be an interesting topic and discussion.

          My snarky remarks against knee-jerk leftist utopian visions that end badly in the long run, and those against GOP or Dem Crony capitalists, Wall St/Fed Reserve elite vampires and game riggers should not apply.

      • Human2013

        Why do you point to these extremes? We need are Capitalsim sprinkled with a litte socialism. By the way, Castro’s people are happy according to all survey’s of human happiness. As far as Success, it is only based on the a collective human intelligence that builds upon itself. Just as Obama said, “If you’ve got a business, you didn’t build that. Somebody else made that happen”
        Yes, your workers participated in the labor. The roads and bridges your raw materials cross were built by hard laborers. The copper in your telephone line mined by hard labor. Your business computer based on thousands of years of study. Should I continue…..

    • nj_v2

      We have them (the new round of economists)!

      One would hardly know it, though, from the preponderance of status-quo chatter and narrow, trapped-in-the-box thinking proffered in the corporate (state-serving and state-apologist) media.

      For example…

      http://billmoyers.com/segment/richard-wolff-on-capitalisms-destructive-power/

      [[ Richard Wolff’s smart, blunt talk about the crisis of capitalism on his firstMoyers & Company appearance was so compelling and provocative, we asked him to return. This time, the economics expert answers questions sent in by our viewers, diving further into economic inequality, the limitations of industry regulation, and the widening gap between a booming stock market and a population that increasingly lives in poverty.

      “We ought to have much more democratic enterprise,” Wolff tells Bill, in response to a question from a viewer in Oklahoma. “We ought to have stores, factories and offices in which all the people who have to live with the results of what happens to that enterprise participate in deciding how it works.”

      Addressing a question about capitalism and climate change, Wolff says, “Capitalism is a system geared up to doing three things on the part of business: get more profits, grow your company and get a larger market share… If along the way they have to sacrifice either the well-being of their workers or the well-being of the planet or the environmental conditions, they may feel very bad about it — and I know plenty who do — but they have no choice.” ]]

      (excerpt)

    • Shag_Wevera

      I’m glad you didn’t mention Marx. To do that in America automatically invalidates your point.

    • SteveTheTeacher

      Thank you Human.

      Capitalist democracy is an oxymoron. Capitalism is inherently unmeritoratic, undemocratic, and leads to resource depletion. Assuming equal distribution of intellectual potential, artistic talent, etc., wealth is more likely to build wealth. Given the connections between money and power in the US, our system is more plutocratic than democratic.

      Still the mainstream media neglects to acknowledge alternatives to capitalism such as models of fair trade, participatory economics, Human Scale
      Development (Max Neef et. al), green/sustainable economics, democratic
      socialism, etc?

      How about prioritizing societal systems focusing human development and quality of life?

      • TFRX

        Still the mainstream media neglects to acknowledge alternatives to capitalism

        Baby steps: Should the US’ mainstream media stop equating any two of: capitalism, self-determined government, and God, I’ll take it as a win.

  • Human2013

    Tom, please don’t let your guests raise the “skills” argument. It has nothing to do with skills and everything to do with the Pie. How will the pie be divided? The most “skilled” wokers in America still don’t make a fraction of our investment bankers. We need to keep our eyes on the pie!

    • Government_Banking_Serf

      Do you really view the Economic world as a pie?

      No wonder you are so upset.

      Being productive grows the pie. Does it use energy? yes. Resources? yes. That’s life. We are animals living in an entropic world, who, like any organism must consume to live. Bummer, but reality.

      Wake me when the perpetual motion machine is for sale and we can all take a break.

    • OnPointComments

      Why not make your own pie, instead of asking for a slice of someone else’s?

      • Shag_Wevera

        If I don’t know how to cook, have no pans or untensils, no flour or butter, it is much easier to take your whole pie and stick a fork in your ribs while I’m at it.

        • OnPointComments

          Here’s a nearly sure-fire way to get everything you need to make your own pie:

          1. Finish school and graduate from the highest level of school.
          2. Upon graduation take whatever job is available, work hard, and keep working.
          3. Marry after you have finished your education.
          4. Don’t have children until you are 21 years old and married.

          • Shag_Wevera

            And to those who don’t follow your blueprint, suffering and DEATH!

          • Government_Banking_Serf

            ….or natural consequences.

      • Human2013

        If my company goes public and I go to Goldman Sachs to help me with this endeavor….how does Goldman end up being the richest entity in the equation…he is the middle man — niether the lender or borrower.

      • Human2013

        Because i helped make the pie!

        • OnPointComments

          And you were paid for your services.

          • Human2013

            We would not be having this conversation if people were paid appropriately for their services.

  • Shag_Wevera

    I don’t care about mobility. Those desperately driven to succeed probably will. I care about every human having food, clothing, shelter, and education. Tax enough to make these things a certainty, then hoard money and material to you capitalist heart’s content. I call it “the brotherhood of humanity”. At birth you are promised food, clothing, shelter and education. Want Nikes or a Porsche? You are on your own.

    • TFRX

      Good thought about “desperately driven” individuals. But you’re selling us short by whatever definition of “succeed” you use. Is your best friend going to set up a Ponzi scheme to go from a $50k income to a $80k income?

      For many, just staying in the middle class, generation upon generation, is what “the American dream” is. And it needn’t be fought against those using the safety net.

      Since the start of the Bush II recovery the numeric differences between lower middle class and working class have been lessening.

  • Shag_Wevera

    There also fooled into thinking that they have a good chance of getting rich themselves.

  • Government_Banking_Serf

    Instead of the minimum wage debate (just do it, but it won’t solve anything) perhaps we could discuss the guaranteed income/negative tax rate concept?

    http://reason.com/archives/2013/11/26/scrap-the-welfare-state-give-people-free

  • Shag_Wevera

    Just index the min wage to some economic indicator so it moves up, and we don’t have to argue about it every 5-10 years.

    • TFRX

      Useful idea, but don’t hold your breath waiting for some moderate R to reach across the aisle on that.

      • Shag_Wevera

        Agreed, sadly.

  • Jasoturner

    An interesting topic. I find it striking how, in modern America, quality of life is virtually always synonymous with income. Perhaps if we emphasized and honored the life of the mind more than the almighty buck, people would be better able to reach their potential, with the concomitant benefits to society (including our business community.)

    The question may not be whether you can move up a “class” in life. It may be whether we learn to appreciate the opportunities and pleasure of life for the brief time we are here.

    Sometimes it feels like we think of ourselves as nothing but employees of America, Inc.

    • TFRX

      That’s a useful concept, depending on who’s telling it.

      The right uses the “be happy you’re not them” as a cudgel to make plenty of people vote against their interests.

  • Labropotes

    Everyone in this discussion will attribute growing inequality to whatever issue they have always thought held back America: education, religion, personal responsibility, patriotism, foreign wars, immigration, divine castigation, arts funding, etc., etc. Pick your unfalsifiable cause. Then call everyone else an idiot.

    • DeJay79

      I choose foreign wars!

      am i right??

      also I would choose Global Capitalism in general but that was not on your list.

      • Labropotes

        Global Capitalism counts for extra credit.

  • RolloMartins

    Poverty and opportunity comes from power. Those who have too little power to participate in this so-called representative gov’t cannot and will not have enough opportunity to rise economically.

    • Coastghost

      So what explains the generous salary packages put together for sports figures, actors/actresses, musicians who make it big?

      • Shag_Wevera

        A hearty share of the population, indeed.

      • http://neilblanchard.blogspot.com/ Neil Blanchard

        Bread & Circus.

  • Fiscally_Responsible

    Wouldn’t it be nice if all of those rich Democrats who speak for equality would send their children to the public schools that they foist upon us instead of the private schools that they use? I guess equality has its limits.

  • anamaria23

    The republicans decry entitlements but offer no creative solutions to lift people out of generational impoverishment which fosters hopelessness and diminishes initiative.
    Two new endeavors offer hope. One, the five Promise Zones(including East Kentucky) targeting severely economically depleted areas with joint government and private investment. Also, the undertaking by private corporations to recruit disadvantaged high school grads into the corporate world by paid apprenticeships is doing well. This was featured on Sunday’s 60 minutes.

    Senator Mitch McConnell, Kentuckey Senator for 30 years, a time in which the poverty has persisted for too many, has no greater ,input than to blame the current President despite decades of his state’s pockets of destitution.
    We need solutions that uplift and offer hope, Condemnation and denial of basic needs is cruel and perpetrates further decline of the human spirit.

  • Gary_Disqus

    There has been a lot written about the recent study showing movement between the lowest quintile and the highest. I would be more interested in seeing the following;
    What’s the probability that someone born into X quintile 30 years ago will now be in either a higher quintile or a lower quintile now? In other words, what is the movement up or down, not just movement from lowest to highest.
    Second, what is the change in each quintile level adjusted for inflation. Being stuck at the 19th percentile looks different depending on how real income at the 19th percentile has changed.

  • alsordi

    What I find peculiar during this economic decline (for most people), that the US media-masters are pushing all this Hill-Billy trailer-park, junk trading.culture on the peeps. Its almost as if the Media is grooming the populous for their ultimate destiny…poor whites and poor blacks.

    But even worse, I believe the elites are recreating the civil war to keep the poor busy hating each other, while they protect their mansions with more taxpayer funded security.

    The Trailer Park vs. The Hood.

    Just like they are doing to Shiites and Sunnis while they steal their water and oil.

  • Coastghost

    23 January 2014, Prof. Tyler Cowen: “Confusing issues of equality and mobility remains rife in current discourse.”

  • http://www.highfashionaveragewoman.com/ Tish Grier

    There is more to true social mobility than a rise in income. There are also social gestures, customs, etc. How one rises, where one goes, also depends on how much one has “good manners” or can assimilate into a particular kind of White American Culture. We talk mostly about money, but never about what it is that really separates the moneyed from non-moneyed, and those things are not just economic advantages but social skills advantages. It’s easier to move down than it is to truly move up.

  • Coastghost

    My ears are quick, but Prof. Hendren is speaking faster than his microphone is able to transduce his voice. (Lots of glibness can be concealed by briskness.)

  • hellokitty0580

    I dunno if the American dream was ever really universal. I think it’s a fallacy to believe so. I think it existed for some and that was largely based on the color of your skin. Yes, I’m bringing race into this. I don’t think we can talk about social and economic immobility without talking about race. The American economic system, which pretty much determines social mobility, was created based upon an institutionalized racism… indentured servitude, slavery, segregation. This obviously stunted mobility for dark skinned Americans on the whole but we haven’t talked about this in our country. And I hate to say it, but ultimately immobility is becoming a huge issue because now it’s affecting white and black/Latinos/Asians/Native Americans alike. I’m not trying to instigate, but I think that you absolutely cannot talk about inequality without talking about race. They are inexplicably intertwined because of the racism in our history.

    • brettearle

      Technology has also abetted social immobility, throughout all races and classes–i.e., those strata that are below upper-middle and upper classes.

      • hellokitty0580

        Oh sure. I totally agree with that. I just think that race is a huge factor as well. I think there are lots of factors that all intertwine and play off of each other in a huge knot. I don’t believe there’s one silver bullet reason that must be targeted. I was just pointing out that race is a huge factor that I hope they speak to on the show.

        • brettearle

          Oh, I agree as well.

          Hidden racism is likely one of THE biggest factors in this Mess.

    • William

      Don’t you think many people defeat themselves when trying to move up the economic ladder? Lack of a desire to get a good education, drug abuse, or just a lack of ambition to work hard.

      • hellokitty0580

        Sure, it’s possible as many things are possible. But I don’t really understand what point you’re trying to make.

        • William

          The first barrier for most people to overcome is themselves. I live in a county where 50 percent of the 10th graders failed the statewide reading test. How can we help these people if they just don’t want to take the time and effort to do something so basic as being able to read. This is in a county where the library will deliver books to you home for free.

          • hellokitty0580

            Yes, there is personal responsibility. But I sense their might be something about your community which is failing these 10th graders. And I’m sorry, but 10th graders responsible for their own motivation???? Yea, sure they are, but they’re still KIDS! They need supportive parents, communities, and mentors to push them when they can’t seem to push themselves. I believe that there are also communal responsibilities that we have to each other. I don’t tend to follow Ayn Rand train of thought.

          • William

            I would think the 10th grader and their parents are responsible. It is an odd situation where so many people defeat themselves.

          • brettearle

            Your simplification of the problem is the typical one-dimensional thinking of the Right Wing.

            It is a SERIOUS misreading of the many intractable issues.

            The more the Right Wing thinks in this way, the worse it will be to have any real opportunity to solve the myriad problems, that we are facing in this country.

            Congratulations.

          • William

            Most problems in life are not difficult to solve. You want a good career you have to get a good education. That was true in the past and is true now.

          • hellokitty0580

            So I’ll place myself on the chopping block. Based on your logic I would be in a “good career” right now. I have my master’s degree from a very reputable school, but I am severely unemployed because of the uneven percentage of educated job seekers and well-paying, high skilled jobs. I am very thankful for my job. It helps me pay my bills and save a bit of money, but in no way am I utilizing my skills to the best of my ability. And that is a disservice to our country. You’re are oversimplifying a very serious problem in our country. I would suggest you stop drinking the kool-aid, Sir. What you are calling “true” is simply too black and white to be realistic.

          • William

            My brother and sister both faced the same problem you have but they did not ponder on it much and moved to a different part of the USA to take a job that did not pay very well, but was a job. Both of them worked back up the economic ladder and while they are not working for companies they like they do make a good living.

            You need to put aside you bitterness and realize that you are not alone.

          • hellokitty0580

            You know, I had a something thoughtful typed up. But it’s just not worth arguing with someone who’s in a completely different reality. It’s just not.

          • brettearle

            You literally don’t know what you’re talking about.

            Millions of people are aware of the same issues that you are aware of.

            And they see the complexity for what it is.

            Your narrow-mindedness is nearly sickening.

            You are part of the problem.

            [Although it doesn't mean that what you say doesn't have some truth to it. It simply has MUCH less Truth to it, than you think.]

          • William

            The subject is why can’t people move up the economic chain. The problem is a lack of education. Why? No motivation or self-defeating attitude by so many people. Why? Difficult to determine.

            The rest of what you said is rather childish.

          • TFRX

            Your simple stupidity in needing to go from “some” to “most” is hilarious.

          • brettearle

            What you describe as fact is only one aspect of the fact.

            There are many qualified candidates, for many qualified jobs, who never get ahead, for many reasons.

            Too much competition is only one part of it.

            The roads of ambition and hope and dreams are littered with casualties, along the way, that have less to do with skill, talent, or ability than you want to believe.

            Drink your beer and enjoy the SuperBowl.

            And don’t forget to wear your red hunting hat, when you watch.

        • TFRX

          Hellokitty, he’s not trying to make a point. He’s JAQing it, inserting some stupid crap here with a mild manner and then saying “I was Just Asking Questions!”

          Note that William went straight to “many people are self-selectedly ignorant. Or durggies. Or just lazy.”

          Evidence of hours worked, or worker productivity, etc, don’t back up his predictable “wondering”.

          To put it another way, by that reckoning, it’s amazing how when the unemployemtn is low and wages are going up, how less lazy the Poors are than during recession (by some folks judgment).

          • hellokitty0580

            Oh, I know his game. I just figured I’d be fair and let him make his point and then quash it later.

          • William

            You still have not made much of a point. My point is how do you get people to stop defeating themselves. There are public schools, libraries, etc…available for people to use to improve their education and make themselves an asset to a potential employer. But, there seems to be a big problem with so many people giving up. They defeat themselves before even trying to move up the economic ladder.

          • William

            You always make a fool of yourself.

          • hellokitty0580

            Jigga what?????????????? Are you serious?

      • brettearle

        What you say may be part of the problem.

        But it would be a typical knee-jerk reaction,on the part of Right Wing mentality, to isolate these matters as part of the hackneyed belief in the US of A of Rugged Individualism.

        The problems and the issues are much, much more complex.

      • nj_v2

        The right-wing drone meme, again. It’s always the individual’s fault.

      • anamaria23

        It is a chicken and egg question.

    • nj_v2

      Selling the fantasy of “opportunity” to the masses while maintaining the institutional elements that favor the rich and powerful has always been one of the primary ways of keeping the common folk docile and striving. If only I work a little more, try a little harder…

      • hellokitty0580

        Absolutely. And then we keep people uneducated by not investing in public education so that they never figure out how the system is screwing them. Also, let’s keep people plugged in as greedy consumers so they’re anesthetized to any type of policy mobilization that might be going on in their communities.

      • Government_Banking_Serf

        The problem is while that may be true in our Crony system, particularly the more we stray from Rule of Law, Honest Market Competition, and Accountability, it doesn’t make

        “If only I work a little more, try a little harder…”

        any less of a truism for humans. To pretend that we will find a perpetual motion machine that makes us no longer need to “work a little more, try a little harder” doesn’t really help.

        I guess we could exterminate half the global population so there would be more for whoever is less, but otherwise, competition and scarcity are real.

  • nj_v2

    Stunning but not surprising to hear Oily Bomber talking about “economic opportunity for everyone” while negotiating the Trans Pacific Partnership in secrecy.

  • SteveTheTeacher

    The National Bureau of Economic Research show that
    entrenched nature of US class divide has persisted despite
    increased levels of higher education among those of low and middle incomes and people from Black and Hispanic communities.

    (Some sources: http://gini-research.org/syste… and http://www.nationaljournal.com… and http://chronicle.com/article/N

    Focusing on increasing access to quality education is not enough. The dangerous divide in the US can not be reduced without broader and significant structural change.

  • PithHelmut

    Oh boy, there are so many factors that keep people immobile because of the ridiculous policy of funneling our wealth into military adventures. But in my opinion the greatest factor that keeps people stuck is the housing market. The legal system still sanctions improper and illegal foreclosures and the situation is still dire. There is no genuine will to fix it. From the blood, sweat and tears of our forebears, politicians are incompetent and squander our heritage. They are so far to the right even Democrats are essentially Republican. There is no creativity because private enterprise has taken hold of our public systems. Education is stagnant, it too has been infiltrated by private enterprise, public radio and television as well, health care, you name it. Nothing is dedicated solely to the public or common good. With 21st century technology, we are using 18th century political structures.

  • Scott B

    I get incensed when I hear conservative politicians and pundits disparage a higher minimum wage, or a minimum wage at all, and they always seem to follow it with something like, “Remember when I was working for $2.11 and hour for minimum wage back in 197X.” They ignore that the minimum wage they got was because the gov’t required it, but moreover, that that two-something they made was equal to over $10@hour.

    • Scott B

      “The problem with the Republican party is they deny fact, history, science, and experience” – Norm Ornstein (Republican, and member of the conservative think tank, The American Enterprise Institute)

      • OnPointComments

        “It isn’t so much that liberals are ignorant. It’s just that they know so many things that aren’t so.” –Ronald Reagan

        • TFRX

          Reagan, consummate liar and fakir, as the arbiter of someone else “knowing things that aren’t”?

          Submitted without comment.

        • Scott B

          That would be the same Reagan, who thought his voodoo and trickle-down economics would work, then had to raise taxes 11 times when it came to a quick realization that it didn’t, which seems to be a fact that Republicans “forget”.

  • TFRX

    “Many champions of charter schools say they’re doing it because public schools are failing lower-class students.”

    Tom, there’s many a slip between what charter school boosters say, and what they’ve done. Caller Ron has it right. Don’t you know better than to try this particular devil’s advocacy?

  • Coastghost

    I hope Prof. Hendren gets a job today as Obama’s diction coach: tonight’s State of the Union address will be over in seven minutes.

  • Valerie

    we should look at the last time when the income inequality at the lowest in this country (from the 40s to 70s). The rich was then taxed at 91% and there were unions to ensure working class people’s bargaining power. I think these two factors play a very important role in the income equality issue.

    • TFRX

      In literal terms I think it should at least be a threat, be on the table. Because sometimes the only way to negotiate is when one has a threat to deploy.

      The accepted left-wing limit in our mainstream media, what words or ideas gets one called a Communist, is laughable.

    • jimino

      An under-appreciated consequence of extremely high income taxation was that businesses made the obvious rational choice of simply not paying anyone at a rate that would virtually all be paid in taxes. And the deductions that were allowed during and encouraged by that period of high taxation actually added to demand, which further stimulated our economy.

  • skelly74

    I think Nathan imbibed in one too many “red eyes” from Starbucks before the show.

    Someone get this man an arm cuff.

  • Jeff

    So is increasing the minimum wage really going to do much to improve life for those earning minimum wage? Aren’t there going to be fewer minimum wage jobs AND there would be a larger incentive for employers to use automation to get rid of those jobs. I don’t have a problem with keeping the minimum wage set at the current level and then adjust it for inflation (using chained CPI) but we cannot look at a minimum wage increase as a solution to anything.

    • http://neilblanchard.blogspot.com/ Neil Blanchard

      Increasing the minimum wage reduces the cost we all pay to subsidize people who struggle to survive. And the entire economy improves because demand increases because people can afford what they need.

      • warryer

        Those businesses who have to suddenly increase the amount they pay their workers will have to make up that loss somehow.

        Likely a combination of increased pricing and layoffs.

        Any gains those workers see in the short term will be corrected for in the long term. IE the purchasing power of $12 will be adjusted by the markets to equate to the same $7.25 today.

        • http://neilblanchard.blogspot.com/ Neil Blanchard

          You didn’t listen to the broadcast, did you? The cost of labor is a very small percentage of the cost of the business’s products. For Walmart, it would raise the prices ~1% and for a pizza or burger, it is about 10-12¢ per …

          The employer will get better productivity, better loyalty, and have much lower employee turnover. Do it right, and their costs *go down*.

          And all their employees will be happier and healthier.

          • hennorama

            Not to mention that those working at or below Federal Minimum Wage are a small percentage of the overall populace, and their spending represents a small percentage of overall Consumer Spending.

            Any pricing increases would be spread to all consumers, and not limited to those earning at or below FMW.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Who is a typical minimum wage worker?

          • warryer

            If someone is going to be handed “more” money for doing the same amount of work do you really think they are going to be more productive?

            Getting paid more is the incentive to work harder and be more productive not the other way around.

            The employer only gets better loyalty and productivity if they pay better than the competition otherwise where is the incentive? Federally mandated minimum wage removes this competition thereby removing any incentive to remain loyal to the company.

            50.6% of all min wage workers are age 16-24. How many of these people are doing this for a career I wonder?

            http://www.bls.gov/cps/minwage2012tbls.htm#7

          • hennorama

            warryer — and the same source shows that more than 29 percent of all those working at or below FMW in 2012 were aged 35 and over, with nearly 8 percent of the total aged 55 and over.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            “If someone is going to be handed “more” money for doing the same amount
            of work do you really think they are going to be more productive?”

            Yes. Think about it, and be honest with yourself.

          • warryer

            A no questions asked blanket raise is not going to incentivize anybody to work harder.

            If I am just handed free money regardless of how hard i work. Why should i work harder?

            I am being honest with my self. Respectfully, it is you who is wearing the rose tinted glasses.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            If you want to keep your job – now that it pays enough for you to survive – then you will be willing to help your manager with suggestions, and to work more flexible hours, and not work when you are sick. And you can stick with it longer, saving your company money in training a replacement.

            Why is this so hard for you to understand?

          • warryer

            I understand it plenty. People behave out of self interest. There is no REASON to work harder when the same level of work is suddenly rewarded with more money.

            Everything you are saying is dependent on the character of the person. Realistically a person who is over 26 and working a min wage job doesn’t really have career ambitions or the desire to obtain the skills that can demand more pay. Otherwise they would work harder and/or made better choices for themselves.

            Bottom line; you either see people and hope for the best or you see people and think what is realistic.

  • Shag_Wevera

    If I grant you that capitalism is the most successful form of government created thus far, will you grant that something even better might be created now or in the future?

    • warryer

      Capitalism is not a form of government. It is an economic model.

      • http://neilblanchard.blogspot.com/ Neil Blanchard

        Are capitalism and democracy compatible, or at odds with each other? Why were corporations special and temporary at the beginning of our democracy?

        • SteveTheTeacher

          “Are capitalism and democracy compatible, or at odds with each other”

          Capitalist democracy <– oxymoron

          Wealth gives individuals greater access to policy makers, greater relativity credibility among those in power, greater ability to spread one's opinions, greater ability to mobilize resources to promote one's interests, and more time.

          • warryer

            Yet that wealth does not give voting numbers. Should the people stay informed and turn out to vote that wealth would have no sway.

          • SteveTheTeacher

            True, for those who are not wealthy, our strength is in our numbers.

            However, it is difficult to stay informed given the mainstream media domination by the wealthy.

            Public engagement is essential, but as Ralph Nader has pointed out:

            “The only difference between the Republican and Democratic parties is the velocities with which their knees hit the floor when corporations knock on their door.”

            At present, voting is not enough.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            This might change if we call giving money away what it actually is: an action.

            Money |=| Speech

          • SteveTheTeacher

            How do we get the domination of the wealth over the media / entertainment industry?

            What about the disproportionate ability the wealthy have to develop and litigate policy?

        • warryer

          Competition is bad how?

      • Shag_Wevera

        I think you get my meaning. I would argue at this point they are indistinguishable.

  • PithHelmut

    Why is the economy stagnant? It is policy. Therefore those in charge of the economy (politicians) is due to their incompetence and ill will. It’s not physics, it is the result of policy. We see the results of policies that any one could tell would yield dysfunctional results eg: bloating the military and bloating the already wealthy. But it doesn’t have to be this way. However we need different people, not the same old male fossils.

  • James

    I love how Tom is desperately trying to make this into a bigger crisis then Professor Hendren

  • Jeff

    In the end, this is all pushing us towards a new education system…very few can afford the current cost of college, mid-career professionals cannot take 4 years off from working (while supporting a family) to get a BA or BS. We need a new system where you can gain in demand skills within 6 months to a year and jump strait into the workforce…let’s at least admit that most of the things you learn for a job you learn on the job not in school.

    • J__o__h__n

      not that companies have any interest in providing training

    • hennorama

      Jeff — we might want to consider the German system.

      In the U.S., neither companies nor government consider worker training to be a key responsibility until there is a crisis. Companies will train if they experience a lack of properly trained workers to meet demand, and government will train/retrain workers during periods of high unemployment. This is an enormous waste of resources and talents.

      The way it generally works now, prospective workers here have to speculate and make the investment of time and money (college or vocational schooling) without any certainty of employment in the chosen field.

      Contrast this with the German system of Dual Vocational Training. After the German equivalent of high school, students apply to a private company for a two or three year training contract. If accepted, the government supplements the trainee’s on-the-job learning with more broad-based education in his or her field of choice at a publicly funded vocational school. Usually, trainees spend three to four days at work and one to two in the classroom. At the end, the theory goes, they come out with both practical and technical skills to compete in a global market, along with a good overall perspective on the nature of their profession. They also receive a state certificate for passing company exams, a credential that allows them to transfer to similar businesses if the training company doesn’t keep them beyond the initial contract.

      Keep in mind that the students are being paid during this time by the training company.

      Also, this prevents students from entering school without job prospects, since they aren’t admitted unless an employer has offered a training contract.

      Both business and government recognize the value of training workers, and the partnership is very successful.

      • James

        Seems like it would be so much more efficient method of doing things.

        • J__o__h__n

          Of course, it is German.

        • hennorama

          James — thank you for your response.

          Indeed. Of course, it’s not exactly a surprise that a German system would be efficient.

  • Emily311

    Health care is the most important. Keeping healthier is easier if you have money. And if you do get sick having money is incredibly important. Obamacare has helped a bit, but of course it has had problems; also, a lot of it has not taken effect. We need a good health care system to fix inequality.

  • Ed

    The man is keeping us down, and by man I mean corporations since they are now people too.

  • Dab200

    How come every single item costs more today in comparison to 20 years ago but the minimum wage remains the same? BTW how much the salary of Congress was increased during that time?

  • Scott B

    Companies seems to think that their workers aren’t aware that the record profits the company touts are born on the backs of those workers, with employees having to pay for more and more for insurance and higher co-pays, IRAs and 401Ks, stagnant wages, and ever lower wage caps.

    How much would we save as a country if so many hard-working people didn’t have to be on food stamps, Medicaid, et al.

    Single-payer heath care would help. Big Biz talks about the thousands they have to spend per employee for insurance. So why not split it 3 ways? Business keeps a good chunk of change, social safety net programs have a steady budget, and more money in the pockets of workers.

    • TFRX

      Do you put any stock in the idea that “higher unemployment is a useful device to keep workers scared”?

      (Disclaimer: I do. And none of our beltway Inbreds are talking about it.)

      • Scott B

        I do. Look at Boeing, threatening to move jobs, if not the company, if union members didn’t cave. I see it in my wife’s job, where the company demands more be done with less people, and an ever-lowering wage caps and fewer raises, while they make local headlines about winning huge contracts and record profits. It even shows in the Xmas bonuses, where full-time laborers get one-fifth the bonus of even the newest receptionist. I got a bigger bonus at my part time job at a very small business (boss, me, and a co-worker) than my wife did, and the business isn’t that much above breaking even.

        Big Biz keeps trying to wring more profit out with less. Take the tech industry’s push for increasing special work visas for tech people, Microsoft being a stand-out here, looking for engineers . There are PLENTY of out of work US citizens that would fit their needs already here; but they’re over 50, and/or long term unemployed and seen as having lapsed skills (which is untrue). But the truth of the matter is they know what those jobs should pay, and immigrant workers would work for much less. I am not against immigration, but I am against bullsh!t.

      • hennorama

        TFRX — yes, and it’s fairly obvious from the data.

        See the chart I posted above, displaying both Corporate Profits After Tax, and Wages and Salaries of Employees, both as a percentage of GDP. Wages and Salaries as a percentage of GDP drop during each period of Recession and rarely recover to their prior level.

  • Coastghost

    Truth be told: how helpful, how accurate is it or can it be to compare US performance in ANY category with the corresponding performance of ANY European nation? The Scandinavian countries (Denmark was widely cited in the past half hour) each have entire populations as large as select American cities or states! Are these differences in scale commonly accounted for? (Many if not most European nations also boast much more closely homogeneous populations than the US will ever attain: those differences I am persuaded are NEVER commonly accounted for.)

  • disqus_76C0PFpw8x

    What really gets me about the min. wage argument is that we as the taxpayers are essentially subsidizing the profits of big corporations. Min. wage workers are able to perform at work because they receive benefits from the government–they are fed with SNAP, they are housed with section 8 or public housing. What if we didn’t have those programs? Corporations would have to pay more because they wouldn’t have nourished and housed workers showing up to perform their jobs. Corporations are taking advantage of the fact that these workers will be supplied without having to pay them a wage that allows them to be productive workers. This is a huge way that the money is being funneled to the top.

    • MrNutso

      We would return to company towns and company stores.

    • Government_Banking_Serf

      It is a form of Crony Capitalism. The corporations and Big entitlement State go hand in hand as you describe. If there was no or lower entitlements, there would be riots or at least mass sympathy which the corporations would feel, and have to respond to.

      As is, the entitlements protect the corporations from natural market/social consequences.

      Interesting conundrum, but not surprising considering how the Crony Capitalist-Washington-Federal Reserve bankrolling works.

      Politicians get to hide behind their compassionate image, satisfying short sighted liberals, while they pad the bank accounts of the corporatist masters they serve.

  • TFRX

    I like Ron Unz’ phrase of “bailing out” when it comes to the taxpayer money socializing the expenses that (say) a Walmart gets. That’s freeloading and should be called out as such.

    And if it’s “don’t raise the minimum wage, but raising the EITC or giving them cash”, how hard is the right going to go to the mat for that?

  • alsordi

    Even with all this Quantitative Easing, money printing to Wall Street, the Feds managed to keep inflation to a minimum, but when minimum wage goes up, so does Walmart prices, and the excuse for monetizing the national debt with inflation. Then they can blame it on the poor and not the rich.

  • MrNutso

    I wish On Point would avoid guests that only result in “i’m right, no I’m right” discussions.

  • nj_v2

    Mr. Cowen: The best research shows that raising the minimum wage will put millions out of work.

    Utter nonsense. What “research”?

    Economic activity has always increased in periods following minimum wage increases.

    The positive results of increased economic activity greatly outweigh any temporary dip in hiring.

  • tncanoeguy

    Dude shilling for big Corps who want to continue to shift costs to taxpayer? Haven’t employers already cut their staffing to the bone? They’ll employ people or automate things regardless of the costs of employing people.

    • TFRX

      They’ll employ people or automate things regardless of the costs of employing people.

      No more calls, please. We have a winner.

    • Scott B

      The average American is taxed just under $40 @ year on paying for social programs (Food Stamps, Medicare, Medicaid, et al). That same American is taxed around $800 @ year for corporate welfare programs.

  • MrNutso

    Tom, get this guy to cite sources. Your letting him talk as if everyone accepts his arguments.

  • Kat

    Many reports relate to the increase of the fast food costs. However, the minimum wage is typically set for unskilled work; I would expect that would increase the starting salary of skilled work outside of minimum waged companies. In respect to raising minimum wage, will the increase of minimum wage increase inflation?

  • MrNutso

    Right on Ron. I would prefer to have a job in landscaping working outside, but there’s now way I could achieve my current salary doing it.

    • James

      I think lots of people would like a job in Landscaping. And I’m sure most people who employ landscapers know that if you don’t like the wage there are 10 people behind you who will.

  • Government_Banking_Serf

    Supply and Demand? Scarcity? Gravity? What are you talking about, we have progressive dreams!

  • Government_Banking_Serf

    “Make it easier to hire.”

    Why is that such a bad thing to explore?

    • tbphkm33

      ??? How is it difficult to hire or fire in the USA? Its a country of economic slaves – workers with fewer and fewer rights. Power held all by corporations.

      • Government_Banking_Serf

        I guess you view reality, scarcity, the laws of thermodynamics, as Slavery.

        I wish I could sleep all day, and have nice meals served when I wake up. I can’t. I have to do something for it. Does that make me a slave?

        Although I will grant that I think our system is so corrupted and rigged by the politicians and corporatists and Madison Avers and Keynesians who feed them money, that a lot of our “jobs” are crap that we have been conned into doing, when in reality we could be leading much simpler lives toward feeding, clothing, housing, and spending time with friends and family.

        Since all that runaround to keep free Fed money flowing into the corporatist coffers is made possible by corrupt politicians, phony technocrats and Wall St/Fed bankers, we are in that sense…..

        Government Banking Serfs.

    • J__o__h__n

      You aren’t going to explore it beyond the slogan level.

  • Scott B

    To Cowen: Yeah, right… Because America is just full of success stories, of workers being raised up by having the floor being pulled out from under them. I haven’t heard one yet.

    • TFRX

      Funny how we’ve gotten to a mediascape with the background noise that the only thing which motivates the Poors is the threat of greater penury, and the only thing which motivates our well-off is the promise of greater reward.

  • Jim

    i just find this Tyler Cowen to be a mean and inconsiderate person. yes, he and those republicans will make me rich.. but i wish i can see our society to be on an more even playing field.

    • James

      your not listening to what he’s saying, your hearing what you want to hear.

      • Jim

        Please be specific. Otherrwise, your words are repleted with cheap and worthless air coming out of my buttock.

  • jimino

    The stats would look better if we counted corporations as the real people so-called conservatives claim them to be. Just look how well those “folks” are doing:

    • hennorama

      jimino – here’s another chart using FRED data.

      Corporate Profits After Tax as a percentage of GDP are at or near an all-time high of just under 11%. Since 1970, corporate profit’s share of GDP has more than doubled (from 5% to almost 11%).

      Wages and Salaries (Compensation of Employees: Wages & Salary Accruals in FRED-speak) as a percentage of GDP are at or near an all-time low of just over 44%. Since 1970, Wages and Salaries’ share of GDP has declined by nearly one fifth (from 54% to 44%).

      Coincident to the above, since 1970, union membership as a share of the U.S. workforce has declined by more than half (from about 25% to a bit over 11%).

      This chart shows Wages as a percentage of GDP (in red) and Corporate Profits After Tax as a percentage of GDP (in blue) using Federal Reserve Economic Data (FRED). The timeframe is Jan 1, 1970 through July 1, 2013.

      Note how Wages and Salaries as a percentage of GDP drop during each period of Recession (indicated by the shaded areas), and rarely recover to their prior level.

      It appears that Employers use recessions and the associated employment insecurity to increase their profitability.

      It also appears that reduced union representation and collective bargaining may be related to the inexorable decline of Wages and Salaries as a percentage of GDP.

  • jimino

    Mr. Cowen and the entire Mercatus Center is a perfect example of Upton Sinclair’s quote that:

    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

    • tbphkm33

      So true.

  • Government_Banking_Serf

    Democrats declare war on gravity! “Its just not fair to not be able to go up without using energy!” “Humanity has suffered the indignity of gravity for too long” politician claims. “Through low interest loans backed by the Federal Reserve, we can now ensure that every child has the opportunity to levitate, at affordable rates.” “Somebody else can pay the bill later…, the intentions of this bill make it right” the politician concluded.

    Maybe yogic flying will make a comeback.

  • tbphkm33

    Inequality is just the tip of the long-term structural economic difficulties the US finds itself in. The US of 2014 has more in common with the papa doc economies of 1980s Latin America than the contemporary 1st world economies. Overall, today the Empire really is the richest 2nd world nation. The US has devolved into a patchwork of the super rich, the deniers living in a fantasy world, and the poor masses. Many are poorer than what they realize – owning houses, but enslaved to the banks and not realizing how little or negative liquidity they have.

    It is not a question of transforming economies and a lack of new technological skills. That has been abused as an excuse for the present system for too long. Placing the blame on the poor and enshrining the rich.

    I work with companies from medium-size $300 million to multi billion dollar corporations. What I see time again, from the people making the most money ($125K+), is not a superior skill or intellect – many are actually rather dumb and memorized their way to a degree. What I see is organizational structures built upon cronyism. People in their positions not because they can advance the organization, but because they are dependable in propping up the incompetence ahead of them. It is a completely different story when I work with European companies. There, the system is based on skills and abilities, not the US ass-kissing motif.

    Nopublican’s exhort the 1950s as an ideal time in US history – well, wake up, top tax rates then was over 75%. Today Nopublican’s are nothing more than underlings of the corporate/super rich oligarchy that has gotten its claws into the halls of power in D.C. and the overall economy. Nopublican’s offer no hope for the future, only the same old tired and proven untrue propaganda. Such as trickle down economics… 30+ years evidence that voodoo economics does not work.

    No, the US will change, but it will no longer be a smooth procedural change like after the Great Depression. There is progressive enlightenment, but the evil forces of conservatism stand in the way of returning this a nation “of The People and for The People”. Few foresaw the uprisings of the past few years in the Middle East and Ukraine. These same social forces are stewing within the Empire US today. Like the political arguments of the 1840s to 1861 about the sustainability of the Union; I for one, believe the USA of 2014 is not that far away from open civil strife.

  • DeJay79

    “The best way to help the poor is to keep high profits going up the social ladder while leaving the rest to fight over the scraps”
    -Tyler Cowen

    I don’t buy the argument that if it becomes “to hard” for the wealthy to use their money to make more money that they will stop doing it and not want any more money. If anything they will work even harder to continue generating profits. If there is a business that can’t afford to make a profit for the sole reason of paying its employees a fair living wage, then that business is being subsidized by social programs and should be closed for being an unsustainable business model.

    If you are liberal you should be for higher wages because of the strengthening of the middle class and if you are conservative you should be for higher wages because less would need government provided social services.

    I am aware of the Global marketplace in which we now live that is why I strongly support raising tariff rates even more then equal to the increase in minimum wage.

    • Government_Banking_Serf

      Higher wages should be a natural feature of a competitive free marketplace. Too bad we don’t have one. We have micro and micromanaged, Crony Capitalized, and Fed policy malinvested ourselves in so deep, we will likely never benefit from one.

      Ironic how most here will instead actually blame a competitive free and accountable marketplace, when we’ve never even had it!

      But Too Big to Fail? Fed Window loans to Wall St? Keep it up!

      • DeJay79

        I want to understand what your point is but it is a bit rambling with a bunch of buzz words.

        “a natural feature” meaning that everybody would a naturally agree on the minimum amount that we all would except for the same work. however if there is only on job and two men want it, is it not also natural that both guys would continue lowering their minimum until one is doing the work for poverty pay and the other guy starves?

        is that what you mean?

        • Government_Banking_Serf

          I mean why is there only 1 job? Who has there hand on the job spigot?

          Is it easy to create jobs or hard to create jobs?

          Is it easy for smaller business to hire and retain qualified people or harder?

          Why?

          The basic laws of economics, supply and demand, pricing, are not rocket science.

          I’m sure you understand the basic idea/reality of once you start micromanaging a complex system (humanity), you end up chasing your tail trying to manage all the unintended consequences of your prior actions, always seeking that “perfect”management; i.e. Utopia.

          The results of freedom, and the collective direction of peoples free choices and consequences are NOT perfect.

          But history demonstrates they are BETTER than the results of utopian central planners and manipulators.

          Constitution, Basic Rules against violence, theft and corruption, BASIC safety net or Negative income tax, and then just let the People make their choices and adjust to their consequences.

          • jimino

            “But history demonstrates . . . ”

            What history are you referring to?

          • Government_Banking_Serf

            Oh boy. Ok. Soviet Union, Maoist China, Stalinist Russia, Nazi Germany, Fascist Italy….. You name any society that tried to impose an abstract master plan on its people, with whatever initial intentions.

            Should we throw in Jonestown?

            You do realize revolutions and wars and exterminating those who resist coercion are NOT things we really want.

            But go ahead, throw the American Experiment in maximizing freedom and trying keep power as close to the people as possible, under the bus.

            The American principles are not wrong, they have been corrupted. And most of todays Dem and Repub elite sucking up to financial backers and utopia promising technocrats are the big problem.

          • DeJay79

            I agree simpler is better, less complexity could equal more prosperity.

            However, I am human and I know myself. We are capable of great atrocities for self gain and we know how to find any loop hole in simple laws.

            Not to be a naysayer, but to get this level of true Free market as a society we would have to remove one freedom. The freedom of Companies and corporations to engage in the political process. I can only imagine the outrage that would cause.

          • Government_Banking_Serf

            Death penalty for corporate/political corruption if that is what it takes to save the country.

          • Government_Banking_Serf

            The problem is that those you would entrust to control your dark side, have just the same dark side. And if they have more power, there darkness will be more difficult to avoid. If there is only one great power, we will have no alternatives except warfare.

            We have the goal of Rule of Law, to be equally applied for a reason. The fact that it is a challenge should not make us abandon it.

          • Government_Banking_Serf

            The benevolent dictator fallacy is a fallacy.

            Constitutional Republic and Rule of Law is not perfect, nothing is, but is very arguably the best we have seen.

            IMO, we are drifting to far toward irrational hopes that this time benevolent dictatorship will work, due the fear and insecurity following both 9/11 and the Financial Swindle.

            We were outraged at the Iraq war. That is good. We are outraged about the NSA power now, that’s good. When everyone is equally outraged at the Fed-Wall St-political elite power and its inner workings, and understands how that centrally-planned concentrated power over our lives is stripping us of dignity and freedom, we might be getting somewhere.

  • Scott B

    The average American is taxed just under $40 @ year on paying for social
    programs (Food Stamps, Medicare, Medicaid, et al). That same American
    is taxed around $800 @ year for corporate welfare.

    • tbphkm33

      That is really sad.

      • Scott B

        Just for one example of indirect corp welfare: Ethanol. First we paid to have corn turned into fuel to be added to gasoline. But, in turn, It costs us at the pump because ethanol rob us of MPG,and it costs us at the garage as it corrodes engines and parts not made to handle ethanol. It makes our table food and livestock feed pricier because a very large percentage of corn (+40% or all corn grown) isn’t being used as food for us or the things we eat (chicken, cows, pigs), and other crops aren’t being planted because more corn is need to make ethanol – because the ethanol industry wanted higher ethanol content mandated by federal law.

        • tbphkm33

          Thank you – this sums it up rather well. I’m copying it to my database of quotes.

        • StilllHere

          Blame Obama, Durbin, the corn state cabal and environmentalists.

          • Scott B

            Obama had nothing to do with it, as ethanol became a requirement during Dubya’s shift.

    • DeJay79

      If its true, Then it is the saddest thing I have heard in awhile.

      source??

      • OnPointComments

        I suspect that you’ll have a long wait for his sources since his comment is not true.

        • nj_v2

          For the right-wing drones, if it doesn’t appear in their dissembling media sources, it doesn’t exist.

          You lose again.

          http://thefederalist.com/2013/09/30/calculating-the-real-cost-of-corporate-welfare/

          $870 for Direct Subsidies and Grants to Companies. The Cato Institute estimates that the U.S. federal government spends $100 billion a year on corporate welfare. That’s an average of $870 for each one of America’s 115 million families.

          $696 for Business Incentives at the State, County, and City Levels. A New York Times investigation found that states, counties and cities give up over $80 billion each year to companies… $696 for every U.S. family.

          If you add these altogether, you see that federal, state and local governments force American families to give, on average, $2436 per year to companies that certainly don’t need the handouts (or shouldn’t be in business if they do). That $2436 could go a long, long way for most families, whether it was spent on food and clothing, vacation, a college fund, or whatever mom, dad and the kids most need. Indeed, considering that the average American family spends around $6500 per year on food, eliminating these corporate subsidies and returning the savings to taxpayers could pay for about 4.5 months-worth of groceries.

          (excerpts)

          • OnPointComments

            Each one of America’s 115 million families doesn’t pay federal income tax.

          • Scott B

            But they do pay a proportionately higher percentage of their income in other taxes and fees, from paychecks to property to school, than the 1%.

          • jimino

            They just don’t understand how lucky they are to be that poor.

          • OnPointComments

            They’re not lucky to be poor, but they don’t pay any net federal tax. It isn’t until the fourth and fifth income quintiles that federal taxes paid exceeds the amount of government transfers received.

          • William

            And yet, nobody in either party or the President care to cut off the pork to companies.

          • harverdphd

            Glad you like the Federalist so much..how ’bout the articles that point out the speech tonight is bogus?

    • Shag_Wevera

      Bravo!

    • Jeff

      Wait a second, the employer is trying to produce a product (or service) and be competitive…the employer is not a social welfare provider…that is purely the government paying out that money. To suggest otherwise is dishonest at best.

  • tbphkm33

    I completely agree. I too travel between the US and Europe a lot. American’s live in complete ignorance of how their lives compare to that of people in the 1st world. Empire USA is starting to look a lot like empire USSR, where people lived in an altered reality propped up by propaganda. Nopublican’s are like the die hard communist, completely incapable of looking beyond their own blinders.

    • brettearle

      Thanks much for your critical comments.

      Right Wing denial, in this matter, is absolutely Self-Destructive.

      And, if the Right Wing does not wake up–and, unfortunately, they likely won’t–its constutency will help to ultimately destroy the country.

      • Government_Banking_Serf

        When folks like you can respectfully find common ground with those you would call Tea Baggers for example, the country will be safe. Until then, you will fuel the divide with your partisan purity and self-assured righteousness. Wouldn’t it be easier if you could just eliminate the 49%?

        Of course same goes for GOP die hards.

        I think there is enough overlap between progressive personal values and conservative/libertarian governance values in the libertarian populist strain of thought, to move forward.

        The DNC/RNC days are over and its status quo defenders are dragging us down.

        • brettearle

          You have done, what “Folks Like You” do:

          You execute knee-jerk reactions to what you THINK are my views:

          You ascribe positions to me and then attack them.

          I happen to think that, for example, some of the issues that the Right Wing argues on this subject are valid (self-reliance, hard work, motivation, goals, discipline, self-belief, etc.)–but only to a certain extant.

          What’s more, many here on the Right, in this Forum, see me, sometimes, as somewhat objective–or, at least, Fair.

          You, especially and ironically, don’t know what you are talking about.

          You have blindly leaped to false conclusions, simply because I harshly criticize the Right for their ignorant belief in American Exeptionalism.

          To see America as the greatest–no matter what–is to be ignorant, blind, and self-destructively arrogant.

          Pride goeth before the Fall.

          Your irresponsible bias did nothing but knee-jerk an ignorant reaction–where you decided that if I criticize the Right on Exceptionalism, then I must do it, in every way possible in all other categories, against the Right.

          The VERY thing that you are accusing me of, is the VERY think that you are guilty of, in SO accusing me.

          How sickeningly Ironic.

          • Government_Banking_Serf

            I knew that was coming when I hit return, and I accept the criticism of hypocrisy. I over-ascribed thoughts to your post, and apologize. I should have taken out the “like you”. There are plenty who do fit the bill.

            Its just that the knee-jerking, over-generalizing, partisan lumping, happens so much here it is hard to keep track. So many posts and responses have no logical ideas in them, just empty partisan-defending vitriol, instead of honestly sharing the logic of views.

            My only excuse in general is that am often trying to point out the hypocrisy, whichever side its on, from a more libertarianish perspective. As most here seem Dem leaning, I’m posting more on that, but I often point it out for the Repubs.
            Having been a good, self-righteous liberal myself, its just so hard to sit back now that I don’t think I was so right.

            One criticism I think is weak, is that of saying that offering libertarian or more freedom + accountability Rule of Law solutions, is “imposing an ideology” equivalent to more Central Planning style ideas. Suggesting a “lack” of a central plan in lieu of more free choices, within a basic framework of law, should hardly be considered equivalent to supporting a coerced central plan.

          • brettearle

            I salute your response, strongly–and I can only wish that others can accept responsibility when they have either misunderstood or are wrong.

            I certainly try to do that.

            I look forward to having more discussions with you–as I can see that you are more easily informed in areas where I am not….

            My rather broad and somewhat-too-generalized view of our country’s problems is that these problems are, indeed, far-reaching.

            I see the complex issues as, ultimately, psychological.

            I will explain below.

            The complex issues, in a way, crept up on us–even though we sort of SAW THEM COMING….

            We were in denial, even as we watched them come to our shores.

            And so, now, we see these matters as being overwhelming–inducing fear, anger, and anxiety. And these emotional states are infecting many, many areas of our culture and society.

            It is, in a way, a systemic virus.

            It’s Deja Vu all over again, vis a vis other great countries and civilizations.

            But I know that you are more sanguine about these matters.

            So, please expound….

    • Government_Banking_Serf

      I think there is no greater denial than that of our insolvency. Europe may have a bit of an issue there too BTW.

      But hey, lets dump our currencies, come up with one new one, the Globo, put the Fed and EB banking elite in charge, finally do away with any semblance of sovereignty and power of the people, and happily occupy our cog in the wheel!

      If your nice to them, you might get invited to parties!

  • Government_Banking_Serf

    Politicians use the Federal Reserve and Debt to simultaneously provide welfare to the people and guaranteed profits to Corporatist and Wall St. backers.

    Wouldn’t be a bad gig for us if it wasn’t unsustainable.

    Most Americans would rather work and sustain themselves in a fair and open system.

    Who has there hand on the helm?

    2-party political and financial elites

    or

    a self governing people and their representatives

    Keep blaming the pissed off grass roots people.

    Look forward to more of the same with Clinton II

  • brettearle

    Thank you for your especially important comments.

    [Although, admittedly, I'm biased: I'm an Anglophile.]

  • Grove

    This is all so ludicrous.
    Our whole economic structure is a house of cards, based on the assumption that our system of survival of the fittest, locked in mortal competition is a system that must be protected.
    It is a barbaric concept.
    Our hope for the future will come from cooperation, NOT competition. If we continue to believe that there is some sort of success that will come from competing with each other – we will continue to pay the price in pain and suffering.
    A system of selfishness, greed, and survival of the fittest is not worth defending.

    • brettearle

      Early versions of capitalism worked more effectively, and fairly, in our country.

      For many reasons–even beyond the influences of Technology and our blinkered economy–the dysfunctional system you describe is much more germane to the last 25 to 30 years….around the time of the–funny thing–dot.Com revolution.

    • StilllHere

      You mean like the cooperation between public employee unions and Democrat politicians which is bankrupting American cities and states?

    • HonestDebate1

      Competition in the marketplace benefits everyone. Looking out for your own best interest is the best thing you can do for society for two reasons: 1) you are not a burden to society, and 2) you put yourself in a position to have the means to help others.

    • methos1999

      Are you a college freshman? You’re statement is all passion with no facts or rational argument behind it. Currently there is lots of cooperation, as divided into parties with similar interests. For example, employees of successful companies all cooperate to make products which the public buys.

  • tbphkm33

    On a side note: I wish OnPoint, and NPR in general, would branch beyond guests from George Mason University. It is a two-bit University on the edges of Washington, D.C. Of all the higher education institutions in D.C., George Mason ranks toward the bottom.

    If OnPoint and NPR are going to restrict themselves to academic guests from the D.C. area, there are top ranked institutions like Georgetown University, that offers a much higher caliber faculty.

    – No offense to Mr. Cowen, mostly a reflection of past OnPoint shows relying too much on George Mason guests.

    • sufferingsuccatash

      You are absolutely right tbphkm—-George Mason’s economics dept is financed by the Koch Bros. in exchange for the dept following a tea party agenda. It is a propaganda agency masquerading as academics. But NPR has become a conservative shill since Bush II appointed the NPR ombudsman. Take the economic shows anywhere on NPR with a grain of salt.

    • Coastghost

      Did you miss the first forty minutes of the show? “Breathless” Hendren from HARVARD had the floor to himself, apart from Tom’s questions and comments.

      • tbphkm33

        Actually, have to admit, I was listening to last weeks show “Tech Companies and American Privacy” while waiting for a flight – when it hit me that there are way too many “experts” from George Mason being paraded on OnPoint.

        • Coastghost

          “On Point” never fails to regularly bring in Ivy League “experts”, never ever. Never. Ever.

      • JGC

        Cowan got his PhD from Harvard as well. Maybe there should be a moratorium on Harvard and George Mason University scholars. Maybe Tom should shop for the academic point of view from, let’s say, Slippery Rock State University…

        *EDIT* I was just sort of kidding, but what do you know, Larry Reed is a Slippery Rock alum, now at the head of the Foundation for Economic Education, described as the “granddaddy of libertarian think tanks.” Go for it, Tom!

        • Coastghost

          Frankly, I’m glad he and the producers don’t rely exclusively on Ivy League academic perspectives. (We mere provincials are ever suspicious of “cosmopolitan provincialism”.)

          • Government_Banking_Serf

            I would like to see, at least on Friday’s roundtable, an avowed, admitted leftist, a DNC, an RNC and a libertarian FEE type, for each discussion.

            The beltway/DNC/RNC incestual panels don’t offer much critical thinking to the listener IMO.

          • JGC

            But do you think Cowan, for example, who actually first earned his bachelor’s degree from George Mason, (when it was a back-water small college) felt compelled to get his PhD from an Ivy League to get the “imprimatur” of (what?) respectability – knowledge -authenticity-connectability- skull&bones-ability – The Ivy League stamp gives a certain gravitas that makes certain people sit up and pay attention (unfortunately).

            Maybe On Point could engage more people from land grant and small colleges, especially from outside the Beltway diaspora, if only because Diane Rehm already has that DC community well represented..

    • Labropotes

      It would be more productive to critique what the guests actually say, or the ideas some guests have in common, than to put down a whole class of people with “two-bit.” The comment only conveys that you noticed something.

    • Peter Lorenzoni

      I think the guests are of high caliber. What matters is that their CONTENT is high caliber.

  • StilllHere

    What do the EU v. US immigration data suggest? My guess is people vote with their feet, and they vote in favor of America.

    • tbphkm33

      If you look at immigration data (both legal and illegal) in terms of educational level, the US attracts a lot of low skilled immigrants. The US actually has a brain drain in a number of fields/industries.

      • StilllHere

        The US attracts a lot of people at all skill levels. There is no brain drain to Europe. H1-B visa apps are up hugely.

    • hennorama

      CIA World Factbook estimates indicate that 25 of the 28 EU nations had net immigration in 2013, with Italy, Spain, and Switzerland, having estimated rates greater than that of the U.S.

      (Latvia, Lithuania, and Poland had net emigration, per the same source)

      And, according to a 2012 forbes.com piece that used OECD data, when one looks at immigrants as a percent of the population, 7 EU nations have a higher percentage than the U.S., and another 11 EU nations have a percentage of immigrants in their populations that’s at least half of that of the U.S.

      See:
      https://www.cia.gov/library/publications/the-world-factbook/rankorder/2112rank.html

      http://www.forbes.com/sites/modeledbehavior/2012/11/18/is-the-u-s-the-most-immigrant-friendly-country-in-the-world/

      http://en.wikipedia.org/wiki/File:Countries_by_immigrant_population.svg

      • StilllHere

        Interesting, but not On Point. We’re looking for net immigration of Europeans to the US v. Americans to Europe. Those actively making a choice between these two systems of healthcare, education … Let us know what you find.

        • hennorama

          StilllHere — if “we” are interested in anything but guesswork, then “we” can do the homework.

          The data “we’re looking for” are available.

    • Sue Rushfirth

      In response to StillHere – I really cannot comment on the actual immigration figures of the two entities but I would guess that, as everywhere, the general population shift is from poorer nations to more wealthy ones. Just as here most of our immigrants come from Mexico, Central and South America, in Europe there is a general shift from both North and Sub Saharan Africa and, in the case of the UK, the old “colonies” of Bangladesh, Pakistan, Sri Lanka etc. My point is further illustrated by the fact that within Europe itself many folks in countries such as Rumania are taking advantage of the joining of the EU by travelling westwards.
      The fact that people’s feet take them over borders is not necessarily a vote of confidence in anything other than the fact that the country to which they travel is wealthier than the one from which they come.
      I think it is part of our problem that there is this general sense that people come here for our superior opportunities and freedoms. I would suggest that opportunities abound in every strong economy and that we are no more free here in the US than I was in other country in which I have lived

  • JGC

    Everyone will demand maximum wage.

  • tbphkm33

    Some 1st world countries in northern Europe, and I believe Japan, have laws on how many more times the average wage of the company’s workforce top managers can make. Hence why European CEO’s make 4 or 5 times the average worker’s wage, whereas in Empire USA, CEO’s make over 400 times the average wage of their employees.

  • Peter Lorenzoni

    Once again, I believe the US is suffering a cultural problem. We are a very individualistic society and we have slowly(but surely) come to this crossroad where we are seeing the affects of this pursuit. We demonize the Public while other nations don’t. We are also hyper obsessed with Silicon Valley, Facebook, Apple. I would argue that we have lost a sense of reality with our obsession with shopping (70% or so of our economy) Perhaps we need to get back to making things that matter (Boeing, Caterpillar, Whirlpool…) Perhaps we need to promote VOCATIONAL SCHOOLS and Community Colleges more. I think this obsession that college is the only way to success is a disservice. This is encouraging to see researchers looking beyond our borders for statistics. It’s time to value other culture’s approach.

  • rootspiano

    Rather than dreams being more difficult to achieve in the US, the study could also imply that people in the US are dreaming less.

  • http://tombstone001.blogspot.com/ tombstone001

    I was going to reply directly to “HonestDebate1″ but thought others like him may be looking for an honest answer. Back in 2007, before the United States were being ruled by a “Communist, Socialist, and mind you a Black ileagal thug”, I wrote to my white republican president, I also published that letter on my blog, http://tombstone001.blogspot.com/2007/06/war-on-poverty.html?m=0.
    The point is that time and again we are asked how many jobs do the poor people create, a simple answer, the only honest and truthful answere is all of them. You can read the ariticle.
    A short answer is, however, how many rich people shop at Walmart, buy cable service, eat at Wendy’s, pay court fines, etc, they are creating jobs, without these poor the rich won’t be getting richer. Every penny the government spends to help the poor, rent subsidies, food stamps, medicaid or free lunch, ends up in the pocket of the rich, leaving the government and the poor poorer still. Thank you!

    • HonestDebate1

      “Every penny the government spends to help the poor, rent subsidies, food stamps, medicaid or free lunch, ends up in the pocket of the rich, leaving the government and the poor poorer still.”

      What pennies? Where do they come from?

      • JGC

        Maybe we should ask Tyler Cowen where the pennies come from. I was treated to the Alice-in-Wonderland moment in this On Point conversation where Ron Unz of the American Conservative was demanding a higher minimum wage so that hardworking Americans could have a decent basic living standard without depending on government largesse like food stamps, etc., while Libertarian/Koch-mouthpiece Cowan was demanding just give them the money, do not make it contingent on a work ethic contribution, just give them the damn money.

        • HonestDebate1

          I am always amused by the various uses of the line, “..a higher minimum wage so that hardworking Americans could have a decent basic living standard without depending on government largesse like food stamps, etc.”

          IMO it is completely disconnected with reality. That is not what happens.

          But my question was rhetorical, we know where the money comes from, the rich.

  • Peter Lorenzoni

    Sue,
    Thanks for reminding fellow Americans of this. I believe those that have lived in other countries bring a very important perspective to any conversation. I totally agree with what you say and I find this “sense of exceptionalism” to be one of the most threatening aspects to our progress as a society. It may be just a defense mechanism but it seems to always hinder an otherwise productive dialogue. Thank you.

  • pete18

    Do you think the problem here is that poorer people aren’t making enough or that if there is great disparity between earners it causes envy, which is bad for society?

  • pete18

    So obviously what people who are complaining about income inequality want is a return to BOTH Bush administrations.

    “The president under whom the poorest quintile enjoyed the largest increase in after-tax household income was George W. Bush. And the two administrations under whom the richest quintile and richest 1 percent fared the worst were the two Presidents Bush. Among Barack Obama’s four
    immediate predecessors, the two biggest income equalizers were George H.W. Bush and George W. Bush.”

    http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/01/28/if-we-want-more-income-equality-should-we-return-to-the-economy-of-george-w-bush/

    • Peter Lorenzoni

      and it goes on to say…”It is probably not an accident that the two presidents in whose administrations the GDP grew the most were the two presidents whose time in office coincided with worsening income equality.”

    • brettearle

      If you want to weaken your argument–so that it moves closer towards propaganda–then please ignore the following:

      In the same article, that you link, it is reported that the incomes of the richest 1
      percent rose 91 percent under Reagan.

      If I’m not mistaken, that President was supposed to have reactivated the American Conservative Movement.

      With that sort of monstrous income rise, in 8 years, one figures that the ceiling is going to slow, in subsequent Administrations.

      Not only that, but Reagan fared poorly in other indices, in the article.

      If you wish to edit the article to suit your dogma, you do nothing but a grand disservice to your own cause.

      • pete18

        I’m not arguing for income equality, I think growth and income mobility are the more relevant and important goals. I’m just pointing out that income equality was far better under the hated “tax cuts for the rich” policies of George Bush than Barack Obama, or Bill Clinton for that matter.

  • OnPointComments

    The number of people who are capable of running a Fortune 500 company are few. Why would the board of directors of any company pay the CEO $20 million dollars a year if they could get someone just as good for $500,000? If a surgeon making $2 million dollars a year is limited to income of $500,000, do you think it’s likely that he’ll continue doing surgeries after three months, when he’s already earned his maximum of $500,000?

    • Amanda R

      Do you think a person’s impulse to achieve and excel is only attached to the amount of money they can make? If the maximum the board of directors can pay a CEO is $500,000, do you think they’d have fewer people vying for the job, or that the one person whose natural talent makes them suited for it would no longer be interested in doing it? I’ve worked with surgeons and I can assure you, they would be better, less stressed, fresher, if they were under less pressure and had fewer patients. What would happen if the $19.5 million the board of directors saved on that one CEO went toward the early childhood education and college of talented, but underprivileged youth? Perhaps we’d end up with enough extra surgeons in the workforce to let the current lot of them have a rest.

      • OnPointComments

        The $19.5 million the board of directors might save on the CEO is the property of the company, not society.

  • JGC

    I was being a cheeky monkey when I said that, Amanda R. : )

    But I do agree with much of the fairness aspect you address. The implementation would be another case, however. I also agree with OnPointComments in that respect as well. (And I always bellieved the day I agreed with OPC would be the day the South froze over. So there you go…) How could you cap a Steven Jobs (for an extreme example) at a half million?

    I’d like a more fair taxation policy: dealing with corporate welfare, claw back the rules that only benefit the unproductive rich, repatriate corporate profits to the U.S. where they can be justly taxed, etc. etc.

    • Amanda R

      Why not cap a Steve Jobs? The giants of history… artists, scientists, poets… didn’t do the work they did just for the sake of building a fortune. Passion is a greater motivator than money. Besides, $500,000 is no small amount of money to live on in one year’s time. The proposed minimum wage of $10.10/hr is equivalent to $21,000/yr for fulltime work. I’m proposing a max wage of more than 23 times that. Who could make the argument that $500k is not enough money to live comfortably when there are people out there arguing that $21k is not only a livable wage but is also a luxurious wage and more than many fulltime workers deserve?

  • pete18

    “The struggling average person with a mortgage and a car payment hands away most of the money they receive to the banks they owe.”

    So how does having a maximum income make the prices of a mortgage or a car lower?

    • Amanda R

      A company could give 1000 workers a raise of $20,000 per year for the same amount of money it might be over-paying the CEO. Or it could create 100 jobs that pay $200,000. I’m not saying it would lower the price of a mortgage or car. I’m suggesting that it could create an opportunity to distribute power and wealth into the hands of more people while simultaneously preventing the already obscenely rich from continuing their meteoric rise toward being the gods of Earth.

  • pilivesa

    Are we going toward what Carl Marx predicted over 100 years ago? As capitalism evolves the economic crisis will become more frequent and more severe and the capital will be concentrated in the hands of a few… According to all the data our time, the last 30 years have seen the rich becoming a lot richer and the ones at the bottom getting poorer. We are clearly loosing the middle class in USA. Perhaps this trend is inherent in the capitalist system and sooner or later we might see what nobody would like: the poor will reach to a point that they can’t take it anymore, they will get organized and they will try to change the situation using force as it was done in Europe 70 years ago. This is a dangerous path we are in and we must do something about this lack of economic mobility and inequality before it’s too late. We certainly don’t want Marx predictions to come true…

    • OnPointComments

      The US Treasury disagrees with your statement “According to all the data our time, the last 30 years have seen the rich becoming a lot richer and the ones at the bottom getting poorer.”

      From “Income Mobility in the U.S. from 1995 to 2005″ by the US Treasury
      http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

      • There was considerable income mobility of individuals in the U.S. economy during the 1996 through 2005 period as over half of taxpayers moved to a different income quintile over this period.
      • Roughly half of taxpayers who began in the bottom income quintile in 1996 moved up to a higher income group by 2005.
      • The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
      • Economic growth resulted in rising incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups.

    • brettearle

      You could write my position papers on this matter.

      Almost everything you said I completely agree with–albeit with one caveat.

      I suspect that while you think it will take a while for a revolution, your timetable is likely faster than my own.

      I think it will be QUITE a while, before there is a revolution–if there is one at all.

      A revolution, in about 30 years, can be thwarted if there are two or three attempts, beforehand.

      Unfortunately, these attempts will end in a great deal of bloodshed.

      Depending on the severity of the turmoil– at the time of the populist movement(s) of violence–will likely determine if an actual successful revolution would take place.

      The country, I think, would still be strong enough to withstand a radical overhaul.

      But the plutocracy is likely to grow. And a number of Economists claim that the Economy is not likely to recover from the 2007 swoon, for a long time–if ever.

      • tbphkm33

        I think the US has been on the edge since the late 1980′s – would not surprise me if revolution/civil strife/civil war does not break out in the next year or two.

        • brettearle

          Can’t agree with you there.

          I’m not trying to be contrary, in saying that.

          I agree that the system is losing its `Lockes’. I agree that a number of things are going wrong and that these things look like they’re imploding.

          But we have quite an entrenched system.

          I would argue that it might be more entrenched than the Soviet System–in that Empire’s later years

          I think the Plutocracy has to become even greater.

          And that there has to be more signs of chronic and endless sluggishness in the Economy–as it relates to the Middle Class.

          I don’t think we’re there yet.

          Why do you feel it’s imminent?

      • Human2013

        You’re right. “..The development of modern industry, therefore cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, are its own grave diggers….The other classes perish and disappear in the face of Modern industry. The lower middle-classes, the small manufacturers, the shopkeepers, the artisan, the peasant, all these fight against the bourgeoisie…”

        Marx, Das Kapital

    • Human2013

      You’re right. “..The development of modern industry, therefore cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, are its own grave diggers….The other classes perish and disappear in the face of Modern industry. The lower middle-classes, the small manufacturers, the shopkeepers, the artisan, the peasant, all these fight against the bourgeoisie…”

      Marx, Das Kapital…

  • HonestDebate1

    ..

    • pete18

      Why wait? Just read the transcript from his first state of the union.

      • StilllHere

        Exactly, the guy uses the same playbook every year. He makes his demands, refuses to negotiate and then complains that his stuff never gets done. Boring.

  • http://tombstone001.blogspot.com/ tombstone001

    I am glad you asked, since the Reagan revolution and his tax cuts follwed by further tax cuts by W., US is a broke nation, the pennies you are talking about come from the 17trillion dollar deficit, created of fake money from the FED.

    • OnPointComments

      10,626,877,048,913 – National debt on 1/20/09 the day President Obama was inaugurated
      17,338,906,000,000 – National debt now
      6,712,028,951,087 – Increase in national debt under President Obama

      • http://tombstone001.blogspot.com/ tombstone001

        May be you should explain some factors, declines in the markets reduced tax incomes, while the losses shown increased refunds or reduced current tax liabilities. The wars were included in the budgets as opposed to off budget items previously. Lower job numbers increased the payouts for welfare and unemployment, more?

      • Kent Green

        Actually, the glory or lack there of in our budget lies squarely on Congress’ shoulders, rather then whomever is in the White House: http://youtu.be/KIbkoop4AYE

  • Kevin Burber

    I believe the issue to be far worse than any of the studies indicate and here’s why. As we all know, it isn’t all about revenue – it has a lot to do with expenses. We know that wages have been flat or decreasing for decades now, but that’s not the full picture. In the 1970′s and 80′s:
    1. There were far fewer two household incomes (in 1970, 44% of women worked and in 2012, that number is 58%). We had similar household incomes with fewer workers/household. http://www.bls.gov/cps/wlf-databook-2012.pdf
    2. Because more women had to work, over that time, childcare expenses were an ever-increasing burden on households. Childcare/education expenses represented 2% of household expenses in 1960 vs 18% today. (education = primary and secondary, not college) http://www.cnpp.usda.gov/Publications/CRC/crc2011.pdf
    3. Higher education has become so prohibitively expensive that most adults are trying to save for their kids education while trying to pay off their own loans. The acceleration of educational inflation is outlined here: http://trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fee-and-room-and-board-charges-over-time-1973-74-through-2013-14-selected-years
    4. Between 1988 and 2006, health care premium increases for working adults far outstripped increases in wages, further deteriorating the average household’s buying power, http://www.cfeps.org/health/chapters/html/ch1.htm
    5. Retirement – For workers in the 1970′s and 1980′s, there was a much higher probability that they were a part of a defined benefit plan with no or little employee contribution. Today, you need to save at least 10-15% of your salary in a retirement account to have any hope of a comfortable retirement. This factor alone essentially decreases your salary compared to your 1970′s counterpart by 10-15%. If you are lucky, you might get a 3-5% match from your employer, but that is barely enough to take care of the fees assessed by the plan.

    For these reasons, the picture is far more dismal than it looks.Even if you make it into the so-called middle class, you are going to have a much harder time of it.

    It would be useful if instead of repeating these studies comparing inflation adjusted wages, someone took a look at what a middle class family can REALLY spend if they were to maintain a truly middle class lifestyle – including retirement, child care, health care and higher education. That is the REAL picture and is why so many people are having such a hard time of it. Wages is but one element that tells the whole story.

    • Human2013

      Thank you for those points. Please add to the list the ever decreasing home ownership rate. This is a major problem since most of the middle class wealth came form home equity. Renters will no longer be protected from inflation and the housing gains will continue to make the rich richer.

      This all points back to market capitalism.

  • DeJay79

    I find your principle false due to:

    “Some people think it’s a law that when productivity goes up, everybody benefits,” says Erik Brynjolfsson,
    an economics professor at the Massachusetts Institute of Technology.
    “There is no economic law that says technological progress has to
    benefit everybody or even most people. It’s possible that productivity
    can go up and the economic pie gets bigger, but the majority of people
    don’t share in that gain.”

    http://www.nytimes.com/2013/01/13/sunday-review/americas-productivity-climbs-but-wages-stagnate.html?_r=0

  • http://neilblanchard.blogspot.com/ Neil Blanchard

    What’s your point?

  • Alicia

    By definition, every happy move up the economic scale to another quintile for one person is balanced by a discouraging slide to a lower quintile for another. What are the characteristics of those who are, in fact, losing out? Are they older, less well-educated, substance abusers, ill, inhabitants of poor areas, big spenders, risk-takers or, perhaps, religious and happy minimalists? And who “should” these losers be, since there seems to be a foregone conclusion that the winners should be poor, young strivers.

  • MordecaiCarroll

    Like many libertarians, Tyler Cowen is more interested in the consistency of his philosophic world view than he is in actually trying to address complex issues in the real world. The fact that issues in the real world often don’t conform to the simplistic framework put forth by Ayn Rand et. al. doesn’t matter to him. He’s in love with his philosophy and determined to view the world through that lens, complexity be damned.

  • ExcellentNews

    Now you know why there is so much Europe-bashing on our corporate media. It would not do for the peons to realize that a place where everything was in ruin just 70 years ago has risen to a standard of living above that of the United States thanks to enlightened, progressive government policies.

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