Barney Frank's Grand Bargain

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Representative Barney Frank

A latter-day Lyndon? [dpanarelli / Flickr]

Barney Frank wants to make a deal. He’ll chair the Financial Services Committee in the House when the 110th Congress launches in January; like Charlie Rangel with his draft, Frank is using the news vacuum of a lame-duck Congress to make his intentions clear.

He’s been floating the idea of a Congressionally-mediated “Grand Bargain” between economic populists and free traders. The populists get federal subsidies for health care, an increase in the minimum wage, more freedom to create unions and better access to college loans. The free traders get, well, free trade.

Health care and free trade have long been debated as unrelated subjects, but like Lyndon Johnson — who in the fifties horse-traded Western dams for civil rights — Frank is attempting the impossible. He accepts that tariff-free borders are crucial to long-term economic growth, and that long-term economic growth is, in fact, good for everyone.

At the same time, he points out that economic dislocation is particularly hard on the ones being dislocated, and that perhaps a part of what voted the Democrats in this year is a general sense that even if the economy is doing well right now, we the people are not.

Is such a bargain even possible? Who has to give up what? Is there a such thing as a win-win in American politics?

Barney Frank

U.S. Representative, D-MA

Brad DeLong

Professor of Economics, University of California at Berkeley

Blogger, Brad DeLong’s Semi-Daily Journal

Jeff Faux

Founding President and Distinguished Fellow, The Economic Policy Institute

Jacob Hacker

Professor of Political Science, Yale University

Author, The Great Risk Shift: The Assault on American Jobs, Families, Health Care, and Retirement – And How You Can Fight Back

Extra Credit Reading

Steve Benen, Barney Frank envisions a ‘grand bargain’ with corporate America, The Carpetbagger Report, November 20, 2006: “‘I’m a capitalist, and that means I’m for inequality,’ Frank said. ‘But you reach a point where you get more inequality than is healthy, and I believe we’re at that point.’”

David Sirota, Top Dem Announces “Grand Bargain” to Undermine Election Mandate on Trade, November 10, 2006: “This doesn’t sound like a ‘grand bargain’ – it sounds like laying the groundwork for selling out just a few days after an election where a major mandate for change on trade was very clear.”

GeneH, Barney Frank’s “Grand Bargain”, Practical Machinist Manufacturing Forum, November 23, 2006: “One wonders what a self employed business person will get from Sarbanes-Oxley reform or special subsidies for trading abroad, especially if they have to chip in for “Universal Health Care” taxes?”

Michael Kranish and Ross Kerber, Rep. Frank offers business a ‘grand bargain’, The Boston Globe, November 19, 2006: “Frank proposes that if businesses support a minimum wage increase and provide protection for workers adversely affected by trade treaties, Democrats would be more willing to ease regulations and approve free-trade deals.”

Via valkyrie617: Joe Nocera, Talking Business; Resolving to Reimagine Health Costs, The New York Times (TimesSelect), November 18, 2006.


Comments

201 thoughts on “Barney Frank's Grand Bargain

  1. This is a superb topic and although I’ve listened to almost as many episodes as CL, I’ve never felt compelled to contribute until now. I think this has profound implications for (democratic theory and) the future of the US. It is very easy to imagine compromises between two people that take the shape of what the sublime Mr Frank proposes; I wonder how feasible they are between two dischordant parties. In my own field (property development) and city (San Francisco), the prototypic developer and the platonic leftist could actually resolve a number of gnawing disputes fairly easily if there were only two of them, but the political process produces a stream of atrocities that leave everyone worse off.

    I don’t think there are all that many truly masochistic free-traders, or luddite nostalgists for the factory town. Some combination of income security, educational opportunity, and trade liberalization is desirable to everyone. I was very heartened, for example, to hear Jim Webb describe protectionism as a “risk” that we face if we do not address the concerns of displaced workers, rather than a solution to their problems. He was absolutely right, and should be heeded by people who share my own preference for an integrated global economy.

    To avoid merely stating principles, I’ll put forward the idea of some bills combining an even more vigorous executive trade promotion authority, with lower student loans and more generous grants, and some properly incentivized unemployment guarantees; we should also look at early retirement programs, such as lowering federally backed reverse mortgage age requirements, redirecting industrial subsidies toward their workers, etc. I hope only that we don’t end this show with a consensus that is too obvious to be implementable.

  2. I’d like to see this discussion framed with a more global reach. It is hardly about just American have-to-littles getting a fairer share of the ever growing US pie, is it? I’m all for bringing back the long lost (at least for the past 30 years) goal of economic policy in the US, namely FAIR DISTRIBUTION. Though now with a global economy, this has to be done on a global level. It is not enough to talk of redistribution at home if the other pillar, growth, requires cold exploitation of workers and resources abroad.

    Governments in Latin America are already ahead of the game and taking back control of their resources, thus ending some of the welfare support they’ve provided wealthier countries. Rather than trying to undermine their democracies and calling their policies protectionism, US policymakers should look to them as a source of inspiration. Why sell off the people’s heritage and wealth cheaply to transnational companies. This may be unregulated “free” trade, but it is hardly a bargain for those who do not share in the profits but have to live with the consequences.

    The trickle-down model that only ever provided the vast majority of humanity with a trickle is a failure. Growth must now be measured against the real environmental and social costs of unequal economic development. If this is done, I wonder if we can even talk of long-term growth. Has there even been real growth over the past few decades? GNP, yes, but this is a highly suspicious indicator.

  3. “The populists get federal subsidies for health care, an increase in the minimum wage, more freedom to create unions and better access to college loans. The free traders get, well, free trade.”

    This is just political game-playing and it’s exactly what’s wrong with our democracy.

    These various issues have only the most tenuous relationship to each other. Trying to link them through quid-pro-quo log-rolling is intellectually dishonest because each of these issues need to be debated and considered on its own merits and costs. Linking them in this manner is sort of what the right-wingers do when they attach “defense of marriage” riders to defense appropriations bills.

    Personally I would love to see a way for everyone in the US to afford quality health care, and if Congressman Frank thinks he has a way to do it, and pay for it, great, let’s see it. If it’s any good it would stand on its own merits. Likewise, WRT the other issues.

    The technical term for what he’s doing is “log rolling” and, like pork-barrel spending, earmarks, and having flings with pages and interns, the mere fact that the practice is time-honored doesn’t make it honorable.

  4. “The trickle-down model that only ever provided the vast majority of humanity with a trickle is a failure”

    It is? I work with LOTS of Chinese and Indians and I think they would disagree with you. As disruptive as things are right now in China, with huge population displacement from the countryside to the cities and new roads and cities springing up overnight, most Chinese people are GIDDY with optimism and national pride! Standards of healthcare and life expectancy, education, and job opportunities for a poor country with a quarter of thr world’s population, have risen very dramatically in a generation.

    Likewise, India has seen the size of its middle class TRIPLE in the last 25 years, to 250 million people (almost the population of the US). Singapore, South Korea, Vietnam and Malaysia have also seen rapid improvements in healthcare, education, life expectancy and material standard of living.

    Also N.B. that China is making a HUGE push in Latin America, especially for buying and processing natural resources. In several countries they already are, or are about to become, bigger sources of FDI than the US. How does that fit into your demonization of the US?

    W enjoy the benefits of their low-cost highly-slkilled workers and designers in the goods we buy from them, while at the same time contributing to their huge improvements in living standards. How does that fit into your demonization of the US? Not only that, but with all of those economies growing at 6-10 % a year, they are also trading among themselves.

    Here’s a question – The US and Canada, Latin America, Asia, and Africa, were all colonized, conquered and/or controlled by the European powers. But there are HUGE differences in how they turned out. Canada, the US, and the east Asian countries all did well and have created prosperous, stable nations. latin America has always been mired in corruption, revolution, and poverty. Africa is a basket case. Where is Africa’s or Latin America’s Singapore, South Korea, Japan, or China, and why don’t they have one?

  5. PLN, I’m not sure how your argument relates to trickle-down economics. Can you elaborate?

    Huge improvements in education, life-expectancy, healthcare, and material living standards in countries with a combined population of over 2 billion people, plus the fact that literally hundreds of millions of people whose parents were dirt-poor peasants are now entering the middle class, shows that the benefits of liberalized trade policies and a globalized corporation-based trade and production model results in benefits that are broadly distributed in the society and not just benefitting the wealthy.

    You said the vast majoritry of the population did not benefit; I contend that capitalism and globalization are the greatest antidotes to mass poverty and enforced peasantry the world has ever seen.

  6. Wait, I didn’t say anything of the sort (that was sidewalker). I only asked how the stuff you cite relates to trickle-down AS OPPOSED TO liberalisation.

    I agree with you that liberalised trade is a good thing and bears much responsibility for development in India and China. But there’s a difference between liberalised trade (which is supported by the establishment wings of both major parties) and trickle-down, supply-side ecoonomics (which has little support in the Democratic party and maybe even in the Republican party). Liberalised trade and trickle-down economics are two different things and don’t necessarily flow from one another.

  7. Are capitalism and globalisation the greatest antidotes to mass poverty and peasantry that the world has ever seen?

    Perhaps, if we only have a pseudo-socialist experiment to contrast with them.

    I think it’s funny that Marx himself predicted a world where capitalism was fully triumphant–a fully globalised world, “flat” in the Thomas Friedman sense, in fact–that Marx predicted such a world would have to come about BEFORE communism’s ultimate triumph was possible.

    I always felt that huge nations like Russia and China and India were jumping the gun by trying to go socialist or communist. I gather Marx, to some extent, thought so as well; at least, it’s my understanding that he thought communism would not do well in a country as large as Russia. I would add that communism would not do well in a country with a social and cultural history like Russia’s. I mean, should anyone have been surprised that a country with a history of violent repression and a secret police should retain such atrocious elements when it is supposed to be improving itself? It seems to me that the same situation holds true now, in the post-communist era.

    I have few hopes that a Barney Frank-like compromise is possible in the US. Our people are far too conditioned to fear and loathe anything like socialised health care no matter how humane or necessary it is. American people, prove me wrong, by all means! But I doubt if you will. And certainly corporations and conglomerates won’t help us along the way to a humane culture.

    One of my favorite quotes of all time comes from Gandhi, questioned as to what he thought of Western civilization: “It’s a good idea.”

    One, though, whose time has not quite come yet.

    By the way, I’m with you, Sutter: the improvements (such as they are) to have come about in the globalised world have nothing to do with trickle-down economics. It surely did us no good in its heyday.

    At bottom, I think the whole concept of money, rather than providing a level playing field (as it was, perhaps, meant to do it when it was originally conceived back at the beginning of the agricultural revolution) merely provides for the cruelest of divisions: dividing people not by their intrinsic worth but by arbitrary, imaginary, and aesthetic means. That would not be so bad if people didn’t have to live day by day according to such divisions. As it is, it is still appalling, and a concept whose day, I pray, will soon be done.

    Maybe Marx’s predictions will still come true. Or better yet, maybe, in the not too distant future, a humane version of Marx will arise out of the glittering abattoir of globalised capitalism to provide socialism without loss of individualism (and isn’t it striking how defenders of individual liberties seem so often to shackle that concept to capitalism, as though money–arbitrary, imaginary, aesthetic–somehow equals liberty?). There is no reason why a world where we all care for and work for each other requires that we not do also what pleases us.

    “Do what thou wilt: that shall be the whole of the law.”

    –Aleister Crowley

    Amen.

  8. I have a simple request for not only politeness but for the aid of readers simply jumping onto the thread every so often to follow the conversation: PLEASE consider introducing a quote from another of us by writing, “Nick (or whoever) wrote:”

    That way we can keep track of who is replying to whom. And it’s nicer. Much more polite.

    Thanks! :-)

  9. Are capitalism and globalisation the greatest antidotes to mass poverty and peasantry that the world has ever seen?

    Perhaps, if we only have a pseudo-socialist experiment to contrast with them.

    If you think about what you just said, semantically, it was already implicit. Capitalism is the greatest antidote to poverty we have ever seen. It’s certainly possible that somene might demonstrate an even better system, but since that they haven’t, capitalism remains the best we have ever seen.

    and isn’t it striking how defenders of individual liberties seem so often to shackle that concept to capitalism, as though money–arbitrary, imaginary, aesthetic–somehow equals liberty?). There is no reason why a world where we all care for and work for each other requires that we not do also what pleases us

    I do think capitalism equates to liberty. In most cases capitalism does allow us do do what we please. First of all, if we do it well enough, or in a sufficiently original and creative way, people will pay us to do it. This was not true in all of the socialist experiments tried so far – inevitably you were only allowed to do things in ways that the state approved of. If you wanted to devote yourself to growing a vegetable your collective didn’t want to grow; too bad. If you had an idea for a car radically different from what the state car factory made, there was no way to raise money to build your own car factory.

    Second Because capitalism is good at genrating prosperity it gives us the resources to do what we like in our spare time.

    As for a world where we all care for and work for each other that’s a hypothetical concept. It’s certainly not a description of this world, and it’s not the least bit clear that it’s even theoretically possible with the human animal wired the way it is.

    There is an excellent book on the many many attempts to create utiopian societies during the 19th century by Mark Holloway – http://www.amazon.com/Heavens-Earth-Utopian-Communities-America/dp/0844622672

    Democracy and capitalism, for all their flaws and unevenness, have an empirical track record that beats any alternative way of organizing political and economic systems by a mile. The onus is on those who conceive of other ways of organizing modern human societies to empirically demonstrate the virtues of their schemes. I’ve had this debate wih socialists, anarchists, libertarians, and others, who describe how wonderful society would be under their system. But inevitably it’s like cars that run on magic- excellent mileage, low pollution, reliable and quiet. But for some reason they haven’t got one to demonstrate.

    It illuminates the way

  10. Barney Frank’s proposal may begin a dialog, but framing the proposal in terms of the economic populism and free trade polarizes the issue, oversimplifies the nature of the problem, and obscures possible solutions. A simple question will illustrate my point. How will trading off medical benefits for free trade solve global warming or end world hunger? Shouldn’t we be looking at the entire system to determine how best to use all of our resources to create a sustainable world society rather than simply trying to make a deal between political factions?

  11. PLN Said:

    “Capitalism is the greatest antidote to poverty we have ever seen. It’s certainly possible that someone might demonstrate an even better system, but since that they haven’t, capitalism remains the best we have ever seen.”

    This to me smacks not of free market logic but rather a form of free market theology. Although market economies produce tremendous growth and innovation when coupled with good public accounting practices, antitrust regulation, labor standards, trust worthy court systems that enforce contracts and punish corruption, and strict securities regulations, capitalism in the raw is pretty dysfunctional. It depends on government referee the scrum, or it turns quickly from regulated game to a corrupt brawl.

    It is this lack international standards and the rickety nature of the WTO our only real international enforcement body that makes the process of globalization concerning. The major International trade agreements lack even the most basic labor and environmental standards, or even a simple international minimum wage. Countries are left to their own devices when it comes to accounting regulation or anti trust rules. Frank’s solution of beefing up the social safety net to cushion the impact of letting our neat clean regulated and for the most part trustworthy market…Into the coal stained Dickensian swamp of the international marketplace is deeply insufficient.

    The question for the distinguished gentleman from Massachusetts is:

    Given that in the global marketplace as it stands now American business and labor must compete with business and labor that are in some cases very unregulated… and not burdened with the government generated overhead costs associated with the expansive social safety net he proposes. How does he expect them to compete? Might his efferts be better spent getting the Chinese and the Bangladeshis to improve government, or international, overhead and oversite to level the playing field?

  12. To plnelson; You say you would love to see a society where everyone could afford and have health insurance. ( I’m paraphrasing) and you would love to see Mr. Franks plans to make this all happen. So would I.

    His plan is quite simple. Tax the hard working American.

    Your other points on capitolism are all quite true. It always amazes me how so many people who benefit from capitolism enjoy criticizing it so much.

  13. Plnelson,

    First, capitalism only provides opportunity to those with capital. It certainly does not provide opportunity to those without it.

    You speak of those who oppose capitalism lacking empirical evidence for the superiority of their alternate systems. I agree. But I believe it is yet to be demonstrated that capitalism as a whole, as it functions in the real world, is actually as strong as you make it out to be.

    As for the question of spare time and the supposed abundance of resources to be used in that spare time: that doesn’t match up with the working lives of most of the people I know.

    The growing gap between have-somes and have-nots on one side and the have-mosts on the other suggests to me that the reward system that capitalism espouses is fundamentally flawed.

    If capitalism only really works well for a few, and works poorly (or not at all) for the rest of us, then it certainly deserves criticism from all possible realms.

    Oh yes, the human animal isn’t wired for altruism on a mass level. We are very selfish and bigoted at heart. That doesn’t mean that we ought to encourage selfishness; quite the opposite. To me, that’s what civilization is all about … and why it is still, in Gandhi’s words, “a good idea.”

  14. rc21,

    Those of us who criticize capitalism are not always benefitting from it quite as much as you seem to think. Maybe you are. But I, for one, would prefer a different organization to our society.

    Tax the hard working American?

    Boo hoo.

    In fact, if we really taxed citizens (and corporations) in a fair manner, those who really are working hard (as my wife did when she worked 30 hour weeks and 60 hour weekends) wouldn’t be taxed at all, while the rich, who after all don’t really need so much money to live on, would be taxed quite heavily.

    Tax tax tax; just so long as we spend it on the social good rather than pork and the military, I’m okay with taxation.

    Spending tax dollars on universal single-payer health care for all citizens?

    Now that would be taxation with representation!

  15. plnelsonHow does that fit into your demonization of the US?

    Free markets aren’t free and transnational corporations don’t act for the good of the people, everybody knows this or should, which is why anyone who suggests that the present US practice of skewed capitalism, that of promoting corporate welfare over public welfare, is not sustainable is shouted down as evil. What else can they say to defend an untenable position!

    At least they might just show their true colours and say “Greed is good Greed is right. Greed works,” and then go sell their pitch to a more gullible audience.

  16. “Frank’s solution of beefing up the social safety net to cushion the impact of letting our neat clean regulated and for the most part trustworthy market…Into the coal stained Dickensian swamp of the international marketplace is deeply insufficient.”

    But what else can he do? The world is fed up with US attempts to impose it’s standards on others.

  17. “First, capitalism only provides opportunity to those with capital. It certainly does not provide opportunity to those without it.”

    This is completely untrue!

    Try telling that to the millions of fresh-out-of-school young people in the US starting their first job iat a successful company. Someday they’ll have houses, cars families, nice vacations, etc. But they have no capital.

    Or try telling that to the HUNDREDS of millions of people in China and India who grew up as peasants and now have entered the middle classes. They didn’t have capital.

    Capitalism creates prosperity and opportunity that benefits all kinds of people, not just those with capital.

  18. To joshuahendrickson: Your arrogance astounds me. Tax the rich more they really dont need all their money. It’s their money who are you to decide if they need it or not. By the way the rich already pay the majority of taxes in this country.

    “”Tax tax tax; just so long as we spend it on social good, and not on pork and the milatary”. One of the few things our founding fathers stipulated was that the country was to have limited taxation. One of the few exceptions was the military. So your off base with that statement. We have actually wasted trillions on social programs that have failed. Lets keep spending.

    You say you would prefer a different organization to our society. As plnelson pointed out earlier capitalism is by far the best we have and he gave ample proof. It may not be perfect but it far exceeds anything else.

    ”Capitalism only provides oppertunity to those with capitol It certainly does not provide opportunitiy for those without it.” This is probably the silliest statement I have read in quite some time. Please where did you come up with this?

    I am going to give you several examples in my very small world. I can think of 3 guys who have no college education. Actually 2 were highschool dropouts. One black two white. We all worked for a landscaping company back in the 80.s pay was 5.00 an hour hard pick and shovel work. No breaks 15 min for lunch. These guys after several years of learning the trade and saving some money struck out on their own with little more than a shovel and rake. Over the years they slowly grew their customer base. By 2000 one was a multi millionaire. He had branched out his small landscaping company into house and realestate development. The other 2 have also done quite well. Their companies both employ well over 20 people. The first guy employs upwards of 300 people and subcontracts out to thousands more. They have done more to help employ people than any of your social welfare tax programs ever will. Also many of the people who have worked for these 3 have also gone on to start their own business, thus helping employ even more people. None of these guys had any capitol when they started.

    What they had was a desire to work hard and succeed. I could give you many other examples but I feel it would be useless to bother trying.

    The fact is that through capitalism any American be they black or white. Poor or rich. Educated or uneducated, can do anything they want in this country. On a side note My friend in development tells me the biggest drawbacks to him growing bigger (and by extension employing more people ) Is the high taxes and hidden fees he has to pay plus all the governmental red tape and restrictions he has to deal with. Many which are put in place as money making schemes to help pay for more unneeded government beaurocrats. He is thinking of relocating to New Hampshire.

    I would say if capitalism is not helping you, than perhaps you need to work a little harder. Or change careers.

  19. rc21, I’m not sure where to begin…so I’ll try this. You wrote:

    “…the rich already pay the majority of taxes in this country” – which might be true. Or not. Can you cite some evidence?

    I’d look myself if I knew where, but since I don’t, and since you apparently do:

    Can you give us Federal Income Tax revenue totals for, say, last year? Divided into ‘total taxes paid by income bracket’, and then give us the tax brackets arranged by the country’s population percentages?

    Thanks.

  20. Hello. Some results of a quick search:

    A study released in 2004 by the Institute on Taxation and Economic Policy finds that taxes on wages average about 23%, while taxes on income from investments average a little more than 9%. Of total personal income, wages make up about 77%, but make up 81% of federal tax revenue from personal taxes. Conversely, investment income provides 22% of personal income, while accounting for 11% of personal taxes. Summary at: http://www.ctj.org/pdf/earnpr.pdf

    This amounts to a big break for people with enough wealth to have investments.

    From an article in the National Review: “In a 2004 paper presented to the American Statistical Association, IRS economists Michael Strudler and Tom Petska calculated percentiles data that included both income taxes and Social Security taxes. In 1999, the top 1 percent paid 23.3 percent of combined payroll and income taxes, the top 10 percent paid 52.2 percent, and the top 20 percent paid 68.2 percent.”

    The article also points out that while tax rates on upper brackets have fallen since 1980, the percentage of taxes paid by those in these brackets has continued to increase. http://www.nationalreview.com/nrof_bartlett/bartlett200512070900.asp

    This is partly a result of rich folks getting richer, and the fact that there are more rich folks in general.

  21. Okay. My handle is valkyrie607. Or Val, if you prefer. I’m Solvei but not online. Dig?

    Anyhoo, I also saw an article in the NYtimes, sorry, no URL, about Bush’s meeting with the Big 3 automakers. One of their main concerns was health care, which they said was adding on average an extra $1,500 to the cost of each car.

    The author said that health care is an increasing concern of business leaders, large corporations and such. They are feeling increasingly hobbled by the American system of employer-provided health care, since other companies in countries where the citizens look to the government to provide it don’t have that expense. It is, he said, a burden on American companies, it makes it more difficult for them to compete. He said there were stirrings of activity in the business world, signs that people are starting to think about different ways to provide health care coverage.

    I believe this will be a necessary ingredient in any health care reform: getting employers to offer up their ideas and suggestions for something that works. After all, they’re the ones who’ve been stuck holding up the ends of this frayed net. They have something invested in the system. My question is, why haven’t we heard more about this?

  22. rc21,

    congrats to your friends for making it in our system. I, too, know people who became millionaires without starting off with a lot of money. Their methods were not dishonest, but I would argue that they were skewed–those with money can always more easily make it than those without.

    Of course, I wonder why, in the beginning, they had to work for five bucks an hour doing something that by its hard-laboring nature deserves quite a bit more?

    If we are going to have to put up with capitalism, then fair compensation ought to be its backbone. But the way the world is going, with downsizing and moving of production to ever lower wage scales, the spine is being broken.

    How long, in this metaphor, until capitalism is paralyzed–i.e., has returned us to a feudal and slavery society?

    rc21, what really disturbs me is your apparent hatred for social programs. If that isn’t what government is for–social safety nets, care for all citizens–then what do we need a government for?

    Oh, right … that’s what the neocons (I don’t know if you are one and don’t care much; you sound more like a libertarian to me) actually want … no government. Except when it concerns their precious military. That can never be too fat, huh?

    We could support both capitalism and social programs in this country. That’s what this whole Barney Frank discussion is about! But it is thanks to folks like you that we likely never will have such a system. The hateful and heartless, the greedy and selfish, always outnumber the altruistic. I suppose they always will. Your way is easier, after all.

    Go on, keep defending those who need no defending, and keep on spitting in the faces of those who are already defenseless. Go on, go on; your side has already won, after all. In fact, there’s never been a time in history where your side hasn’t been the winner. I may have hope for a socialist world, but I am no optimist, and I surely don’t believe in any divine plan. I’m an atheist, and as such I don’t believe that you or anyone else faces damnation for such ugliness … or arrogance, which you rightly accuse me of. Arrogance is a virtue, to me. After all, if you look at the great men of history, you don’t find shrinking violets. I am not a great man. But I am not going to pretend to modesty. And I am not going to stop fighting a system that for all its real benefits is deeply flawed and unstable at its core.

    Arrogance is something we share, isn’t it?

  23. Nick,

    nice Joan Jett quote.

    I’m remembering a passage from my favorite graphic novel, CEREBUS. The title character is asked, “If you could have any amount of money, how much would you want?” Cerebus answers, “All of it.” When asked to refine that answer through different hypothetical situations, he continues to say, “All of it.”

    At last, an honest capitalist!

  24. I believe this will be a necessary ingredient in any health care reform: getting employers to offer up their ideas and suggestions for something that works. After all, they’re the ones who’ve been stuck holding up the ends of this frayed net. They have something invested in the system. My question is, why haven’t we heard more about this?

    Maybe you need to look in more places.

    I subscribe to the Wall Street Journal and they did an excellent series a year or two ago on the problem having so many Americans without health insurance, and of the huge costs to businesses of providing it. The stories on the uninsured Americans in that series of articles were heartbreaking and would have been a real eye-opener for liberals who never read the WSJ because they have distorted stereotypes about capitalists.

    The US has less regulaion and less government involvement in health care than almost any other OECD nation (not that we don’t have a LOT, but we still have less than most places). And we also spend a higher percentage of our GDP on healthcare (15-17% depending on which numbers you use) than any other major country. But there are quite a few countries that have LOWER infant motality and LONGER lifespans than the US, which raises the question of WHY we’re spending so much.

    One problem with lack of access to health insurance no one has mentioned is that we are an economy built on entrepeneurship. Most of the growth and new jobs in our economy comes from entrepeneurs. But there is growing concern in the business community that this is inhibiting the growth on new ventures because people with god ideas who want to start their own companies are reluctant to do so because they can’t afford to give up their employers’ health plan, and because it’s so incredibly expensive for for small-start ups to offer health insurance to employees.

    So it’s a real problem. But it’s also a bit like Iraq – there are no good, obvious solutions. Countries that spend 8% of GDP of health care can afford to offer national health insurance. But because heathcare is twice that expensive here we’d go broke trying to do what the French or the Swedes do.

  25. plnelson,

    I don’t hate the Wall Street Journal; it has a generally high standard for reporting, as newspapers go. Of course, as a liberal, you can imagine what I think of WSJ’s editorials, but that’s beside the point.

    If putting the impetus on business for health care is really impeding growth of new ventures (I might look askance at the claim that entrepreneurs really are the basis of our economy, but not in this post), then it seems to me that taking it out of business’s hands and putting it into the hands of the government is the only solution. I would argue that business should never have been responsible for health care in the first place.

    Of course, I would argue that the real problem is the insurance industry, which is ultimately unnecessary. Why do we need middle men whose sole purpose is to get fat off of the needs and expenditures of doctors and patients?

    Would we really go broke trying a national socialised health care system? Maybe. But it seems to me that we’ve already gone broke throwing our money away on everything but the general welfare of our citizens. So I agree–there are no good, obvious solutions. There are, however, solutions we haven’t tried … and until we try them, we’ll never really know whether they work or not.

  26. If putting the impetus on business for health care is really impeding growth of new ventures (I might look askance at the claim that entrepreneurs really are the basis of our economy, but not in this post), then it seems to me that taking it out of business’s hands and putting it into the hands of the government is the only solution. I would argue that business should never have been responsible for health care in the first place.

    Most people who discuss this topic, on both sides of it, have never done the math. When they do, they stagger backwards in horror! Since I work in an allied field and many of my friends are doctors or healthcare providers I’ve looked at the issue more closely than most people, which is why I compared it to Iraq.

    Not only do we spend about twice as much per capita as most other advanced nations, but the numbers have been going up WAY faster than inflation. And with the graying of our population that’s going to get worse.

    Run the numbers and it quickly becomes clear that the tax consequences of trying to socialize a system this expensive would be unsalable to the American public. Period. On the other hand, with costs going up as fast as they are, and with so many people uninsured or inadequately insured the indirect costs (e.g., $5 aspirin) or paying for the uninsured, and the huge burdens the current system places on companies, are becoming unsustainable.

    Free-market advocates keep touting “choice” as a panacea but there’s no empirical evidence that it works for healthcare. American consumers already have more choice than people in other countries and yet our costs are dramatically higher, and going up faster. And for the really big expensive things, like heart disaease and cancer, people are not usually in any position to shop around, and the choices are usually dictated by clinical concerns or expert opinion – it’s not like buying an iPod.

    The administrative costs of having so many disparate insurance companies probably does contribute to the high prices here but it’s not clear that this is a significant part of the problem.

    Of course, I would argue that the real problem is the insurance industry, which is ultimately unnecessary. Why do we need middle men whose sole purpose is to get fat off of the needs and expenditures of doctors and patients?

  27. I accidentally left a paragraph from Joshua’s post at the end of mine

    BRENDAN – I asked before why this site doesn’t have an editing feature like most other web forums do!!

  28. Joshua, Yes I am a libertarian, more than a neocon, But I used to be a liberal Democrat. I am in favor of safety net programs for the mentaly and phisically handicapped. I also am in favor of programs that help the elderly. Also I have no problems with programs that help victims of natural disasters. Although even there we are seeing tremendous waste and corruption taking place.

    I am not a mean old conservative. I want all people do have a good and successful life. I have just come to the realization that unabated capitalism coupled with enormous tax relief is the best way to go about this. It is also the nearest form of social structure our founding fathers envisioned for us. What do you have against total economic freedom? As plnelson said earlier, it is the best way for us to gain personal freedom. Why would you be adverse to this?

    Let me keep the thousands of dollars in taxes I pay every year.(all of which is my money that I earned) And I will provide for my childs education, my own insurance, and just about everything else the govt thinks they can do better than me.

    Why are you so in favor of government control of everything? Dont you trust yourself to make good decisions with your life. Do you need to be coddled from cradle to grave?

    As to working for 5 dollars an hour, that was the going pay for a pick and shovel laborer back then. the company was not forcing anyone to work there. We earned every penny of it.

    I guess I to am arrogant about the belief that the USA was founded on the principle that more freedom and less govt restrictions,and fewer taxes is what this country was all about. That is why we fought the revolution. You would have us surrender to the big govt corruption and waste that we see today from both the republicans and democrats. So actually it is you who is winning. Taxes keep rising. We keep spending more on useless social programs. government corruption continues without interruption. What more could you ask for?

    You claim to be an atheist but you sure worship big govt as if it was your God as do so many other liberals. All power to the state.

    To solvei blue: Thanks for printing those tax stats. Hopefully nick will read them.

  29. One key question economists and other policy makers must address is why there is a growing income gap within and between nations despite all the global economic growth. Why is trickle down policy just that?

    The obvious answer is that the policies needed to reduce income inequality, provide for dignified work and a fair income are too few or too ineffective. In fact, in the wealthier nations, the old welfare policies have been drastically reformed at the same time that corporate welfare has increased. This has yet to be accounted for.

    How can it be that in a supposed democracy such as that of the US you can have the top 1% of households account for one third of household net worth, which is greater than that of the bottom 90%? Is this a sign that the economy is healthy? Sure there is continued growth, despite increased fuel costs driving inflation higher. This is surely a sign of broad-based stability. Not really. The 2003 Consumer Expenditure Survey showed that the total expenditures of the top 20% of households is greater than the bottom 60%. What this means is that those with less are having less and less impact on economic growth than in the past. Those with much higher incomes are not substantially affected by a bump in oil prices, for example.

    It is interesting that in a report in the journal Constitution by no less a capitalist than Ajay Kapur, who heads the Global Equity Strategy Group for Smith Barney Citigroup, he calls the present divide a “plutonomy,” which he describes as a system where you have a wealthy few and the rest. He says that the US, the UK and Canada are now plutonomies.

    Is it surprising that these three economies follow most closely a Milton Fiedman model introduced by Regan, Thatcher and Mulroney?

    Kapur goes on to say, “What are the common drivers of plutonomy? Technology driven productivity gains, financial innovation, capitalist friendly and cooperative governments, an internal dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law and the patenting of inventions. Often these wealth waves involved great complexity, exploited best by the rich and educated of their time. We project that the plutonomies, the US, Uk, and Canada will likely see even more income inequality disproportionally feeding off capitalist friendly government and globalization.” Finally, he concludes, “Buy shares in the companies that make the toys that the plutonomists enjoy.” BIG SURPRISE.

    It is clear that this model isn’t working for the majority of the world’s people, who cannot afford to even dream of those toys and who still live on less than $2 a day while a trillion dollars in corporate welfare is spent on military, half of it in the US!!!

    Economic growth, measured narrowly as GDP, cannot be the sole end-goal of economic policy if social justice is at all an issue.But it is sad to think that the only way to bring back policies of economic equality is to make some “Grand Bargain” to appease those who have been hogging the public wealth troughs too long.

  30. If what we have is in fact a plutonomy,(this is debateable) Than I would submit that more countries need to follow our role.

    It seems this system helps poor people more than anything else out there.We really dont need to try and disect and analyze numbers. All we have to do is look at reality. Poor people from 3rd world and even 2nd world countries are literally defying death just for the chance to be part of this plutonomy.

    Long live plutonomy!

  31. rc21, I read Val’s stats, but have taken from them a different lesson than I expect you have: there’s an obscene concentration of wealth at the top of the American class pyramid.

    I’m politically aligned with Joshua’s preferences, although, in our not-very-democratic republic whose political spectrum (as tacitly constituted) allows only “a Property Party with two right wings” (G. Vidal), I have no realistic expectations for the advent of economic equality, decency, or sanity in this lifetime or next, or even within the next three.

    I agree with the new progressive frame-name for taxes: membership fees for your society. If you live in a republic whose structures and rules are designed to facilitate the accumulation of wealth into the hands of a few, and from the hands of the many, then why not pay more for the privilege that republic affords you?

    And I would like to repeat: the accumulation of wealth into the hands of a few, and from the hands of the many, because wealth isn’t “magically conjured into existence by the brilliant rich”, it is mined from the commons. Somebody does the work that the owners of businesses harvest. Right wing mythology might want to obscure that simple truth, but that obfuscation doesn’t make it legitimate. They just have the money necessary to dominate the propaganda available to the republic’s citizenry.

    If most of the country’s wealth is concentrated into the hands of but 20% of the people, then they damn well should pay the bulk of the membership fees.

    And like Joshua says: they should be made to pay more. Because their money has come from the other 80% already. Taxing the other 80% isn’t all that far from a subtle act of double jeopardy.

    Up the Revolution!

  32. One key question economists and other policy makers must address is why there is a growing income gap within and between nations despite all the global economic growth.

    I think in both cases the answer is similar. Success in the modern world requires a great deal organization, long-term planning, discipline, etc. Those nations that are successful have an educated workforce, a reliable physical infrastructure (roads, communication, etc), a legal system the supports modern business, political stability (i.e., no tanks in the street every few years), and a culture that’s flexible enough to deal with modernity and change. And obviously success begets success.

    Likewise with individuals – those who get left behind – for the most part – are people who drop out of school, don’t study, don’t take an interest in the world around them, get involved in drugs or crime or having babies, etc.

    I’m an engineer “of a certain age” and I work my butt off to stay current – learning and using the latest sw development tools, new programming languages, new technical standards for interfacing portable and consumer devices, etc. (luckily I enjoy it) Awhile back I knew a guy my age in my field who got laid off. He had been doing Unix system work for years. I asked him whether he’d used any open-source software, or ever worked in Linux, or bothered to set up a system at home to experiment on, or learned any new programming languages, or taken any classes or workshops, etc. No, no, and no. I’m not optimistic about his future.

    Success begets success among both nations and individuals, and in a world moving this fast, with as much money sloshing around, and companies going in and out of business as quickly as they are, karma really IS instant – those differences widen very quickly .

    I really DO believe that America is the land of opportunity and the number of immigrants who come here seeking a better life – and achieving it is testimony to this fact.

    But anyway, all this hand-wringing over income inequality begs the question – what is a demonstrably workable alternative for a nation as large and diverse as ours? I agree that GDP is not the be-all-and-and-all if “social justice” is the goal – I would suggest unemployment rate and new job creation would be a better metric. But – whoops! – we seem to excel at that too! The more redistributionist economies like France and Germany do a TERRIBLE job generating jobs so they have an angry, restive class of young people who see no future for themselves.

  33. “In fact, in the wealthier nations, the old welfare policies have been drastically reformed at the same time that corporate welfare has increased.”

    This depends on your definition of corporate welfare. I agree that protectionist policies protecting US steel makers and preventing Brazilian ethanol coming in and competing with more expesive US ethanol ARE corporate welfare and should be scrapped. But wait! – It’s the traditional liberal groups such as labor that supports those examples of corporate welfare!

    In plenty of other areas in recent decades we’ve seen the elimination of government protected fat-cat welfare. For example, the airline industry used to operate in an environment protecting airlines from competition and ensuring high profits. No more. Telecoms were a monopoly! Remember Ma Bell? – she’s retired. How about banking? Remember Glass Steagall? It was repealed in 1999 so bankers had to compete on the merits of their services and price and could no longer look to government to protect their territory.

    Now we have liberals demanding the government pay Ford and GM’s healthcare costs! If that’s not corporate welfare I don’t know WHAT is!

  34. rc21,

    As far as right-wing philosophies go, I have fewer disputes with libertarians than with others. After all, libertarians pretty much by definition are not social conservatives. As I like to say, if a person is a fiscal conservative, then although I may strongly disagree with that person, I don’t have anything against them. So allow me to apologize if my previous posting got a little ugly. When, however, a person is a social conservative, well, that’s what really makes my blood boil. I believe that America was founded with both economic and social freedom in mind (if not, initially, in practice, in either case; blue laws, though dwindling, still exist in too great a profusion, and regardless of what freedom there was for landowners in the early days, the existence of slavery pretty well negated any concept of economic freedom in a honest sense). I am not so much against economic freedom; I only think that a more level playing field would benefit the many (and sorry, greater taxation on the wealthy would not hurt them).

    I’m glad that we can agree on our both being arrogant. As I said before, I consider it more a virtue than a vice.

    Yes, I’m an atheist. But do I really worship big government, as you claim? I personally don’t need to have decisions made for me by the state; I’m not a Leninist or any such thing. What I want is for the state to have the means to take care of me if I cannot (or, yes, frankly, will not) do it for myself. I think most people want to be able to decide for themselves; I also think many people are sheep who want big decisions to be made for them (as an atheist I could hardly have come to any other conclusion). I simply believe that a fair government ought to be able to provide for both. Really, it seems to me that most arguments against social safety nets (and I am not trying to imply that this is your argument, necessarily) come down to a kind of twisted puritan ethic: if people are poor or unhealthy or unlucky, then they are sinners who deserve it, while if people are rich and healthy and lucky, then they are blessed and deserve that. To me, that kind of thinking isn’t just wrong, it’s evil (a word I don’t choose to use very often).

    Alas, this is very much a puritan country, and although what benefits there are in America come from the rejection of puritanism, it still defines the thoughts of the majority. I love America; never has there been a nation with such potential. But to me, the major source of that potential is social, not economic.

  35. Up the Revolution!

    The problem with this left-wing economic theory where the fat cats exploit the slaving masses is twofold:

    1 . If the US is such an exploitive society why do people continue to STREAM into here from all over the world? And all KINDS of people from all KINDS of different economies and socioeconomic systems! We have peasants coming here from Latin America, scholars coming here from Europe and the mideast; we have doctors, engineers, and scientists, coming here from China and India. People compare the fence on the Mexican border to the Berlin Wall, but the irony is that the berlin Wall was designed to keep people from LEAVING, and the fence is designed to slow down the rate at which people are trying to get IN!

    2. Demonstrate an empirically better way to economically structure a large modern economy. The US system generates jobs and opportunity at a prodigious rate. Other large economies with more redistributionist structures stagnate in that department.

    As a stockholder I am not convinced that paying the CEO’s of the companies I own $90 million, instead of, say, $50 million actually results in my EPS being any higher. But I just chalk it up to US culture – not some plutocratic conspiracy. For example, did you see how much money the Boston Red Sox just paid just to TALK to Daisuke Matsuzaka?? But the fans are OK with that as long as it nets them a Championship. That’s America. I don’t think most Americans really CARE about how much the people at the top get paid.

  36. “What I want is for the state to have the means to take care of me if I cannot (or, yes, frankly, will not) “

    Why “yes, frankly, will not”? Why should someone who will not take care of themselves expect the taxpayers to do it for them. I’m all in favor of a social safety net for people who cannot take care of themselves, but “WILL not”? That seems bizarre.

  37. I’ve been watching this conversation unfold, trying to figure out a way to disagree with everyone, and I think I’ve found it. (Just kidding, of course…)

    One problem with debates like these is that they wind up becoming defined by the polar extremes, with some version of Dickensian lessez-faire capitalism placed in opposition to late-stage socialism. But that’s not the debate in this country. The debate here — and the conversation Mr. Frank is initiating — takes place on far more circumscribed terrain, and centers on different degrees to which American capitalism’s rough edges should be smoothed over. The strict libertarian regime isn’t part of the debate in this country, or in any: we need roads and militaries and other “public goods” that individuals won’t pay for or require a state to coordinate, and even the most libertarian economists recognize that markets fail under certain conditions. And Mr. Frank certainly isn’t suggesting a shift to socialism: His plans presume corporations with private property investing capital to earn returns, etc. We’re playing within the 45 yeard lines here, and while arguments about what things would be like on the 10 yard lines is illuminating but ultimately of little relevance.

    So the question (for this show, anyway) is not whether capitalism works. It’s how to best calibrate capitalism. And those who claim that “calibration” is definitionally incompatible with capitalism are being disingenuous. Our economic policy has always been managed in one form or another: trade policy, labor laws, corporate tax incentives, fiscal and monetary policy, and so forth.

    Given all this, it’s my hope that we can talk turkey about the real costs and benefits of Mr. Frank’s hope of forging a new social compact between large corporations and private citizens. The ROS folks likened Frank to Johnson (by virtue of the horse-trading implicit in the proposal), but the real parallels here are Teddy Roosevelt and Woodrow Wilson, who recognized a century ago that large accumulations of corporate power demanded a new type of government. They had different responses: TR looked to counterbalance corporate power against that of the state, and Wilson looked to smash the accumulations to ensure a fair fight. Is Frank’s proposal analogous to either of these? Or is he looking at a third path altogether? And what are the real costs and benefits?

  38. Why “will not”?

    (I knew that assertion would raise some eyebrows.)

    First of all, to a large part of the conservative mindset, ALL of the poor or homeless fall into the category of “will not”; they refuse to believe that some people cannot pull themselves up out of poverty, or perhaps they believe that the poor deserve it; please refer to my tirade against the puritan ethic in my post above.

    However, you don’t seem to fall under that category of conservative, plnelson, and I will presume for the sake of argument that rc21 doesn’t either.

    Let me be plain: not all people are temperamentally suited to work. Or, in some cases, they are suited to work but not of the laboring variety. I’m thinking of artists, here. Not all people are artists, and not all of those who are really ought to be, but for some of those people who are artists, they are wasting their time and talent doing anything but creating. Every minute spent toiling for their daily bread is a minute wasted, for them. They do work, of course; but not all work is with the goal of making money.

    Now, I am an artist (a novelist, to be precise) and I personally have no problem with working in order to support myself and my family. But I am keenly aware of the hours wasted lugging boxes or flipping burgers. I am no fool; barring the most incredible kind of luck, upon which I do not count, I will never make anything more from my novels than I could doing ordinary work. But of course, I don’t write novels for the money. Nor, really, should I. Writing novels is hard work; very hard work indeed. But I would never give it up, or make it anything less than my number one priority.

    What are a person’s hobbies? How many people have accounting for a hobby? How many people would sell insurance for a hobby, or lug boxes, or flip burgers? You see, I think people ought to live their lives doing what they love. We pursue money in this society only because we have to, not because it makes us happy or fulfilled. Do you pursue money for your own fulfillment? Or because it is what you are expected to do? Does your job afford you the time for your hobbies? Or are you that happiest of individuals, who actually makes a living doing what you would do even if it didn’t make you money?

    By focusing on artists I may have skipped the issue of lazy layabouts without the urge to do anything but be couch potatoes. In all honesty, none of us love that sort of person. But you know what? None of us ask to be born. None of us ask to be the people we are. There’s no reason that a decent society can’t take care of all kinds of people. No reason but that people are mean enough not to want to. And if you would argue that economically such an arrangement is impossible, allow me to remind you that money is illusory, material is not. All arrangements are possible if human beings make them so.

    Yes, it’s still bizarre. But only to our minds as they are presently conditioned. Society is changing, and more rapidly than ever before. Who is to say what kind of society is to come in the future?

  39. PLN, I’m increasingly disinclined to engage you since I feel (perhaps only subjectively, and wrongly) that the way you quote without attribution is a bit demeaning in its impersonalness. However, I must make an exception now to respond to this oversimplification: “The problem with this left-wing economic theory where the fat cats exploit the slaving masses is twofold”…

    First, I’m not anti-capitalist—I’m anti-rapacious-capitalist. I’ve an admitted preference for Social Democracy. Social Democracy is not Stalinism or anything of that ilk. It simply prioritizes the needs of people over the needs of economic entities like corporations. It is not hostile to capitalism—it sees capitalism as the best economic means to its ends, but it doesn’t fear regulating the economy.

    The question in our republic is ‘whether’ the economy should be regulated. Social Democracies instead debate, ‘How much?’

    That’s a debate we’re mostly unaware of, or, if aware, mistranslate through our American-centric lens.

    I am appalled and incensed by this:

    “In 2001, the average annual pay of U.S. CEOs topped $11 million—some 350 times as much as the U.S. factory worker, who earned on average $31,260.” http://www.worldwatch.org/node/4289

    Please have a look at the table on that page. In Sweden, instead of the 350-times gap, it’s 14 times. That’s reasonable.

    If you’ve ever worked blue collar jobs (I have, plenty), you’ll know that although they do not require the same educational investment, most such occupations can be very, very demanding: physically, mentally (stress), and/or emotionally. I’ve watched waitresses perform near miracles of memory, dexterity, grace, and efficiency under the most stressful circumstances. Perhaps this seems a trivial example, but the way we value the labor of our society’s members isn’t ‘natural’ but a matter of social convention. It’s arbitrary, and it’s arbitrated by those with the wealth necessary to entice laborers. (I can’t answer the question you posed about would-be workers streaming into our country in this post, but if I find time, I’ll try to tackle as best I can later.)

    I want to return to the little known example of Sweden, not because it’s a perfect utopia, but because Americans are mostly unaware of how good life in Sweden is, relatively speaking, despite its having selected Social Democrats to run the place for most of the past few decades.

    In Social Democracies like Sweden, the question isn’t ‘whether’ the economy should be regulated but ‘how much?’ The Social Democrats in Sweden recently lost their majority in the Riksdag not because Swedes are beaten down by their welfare state, but over the sheer size of the welfare state. Swedes, in the main, like their welfare state. It has, without reliance on precious natural resources (like oil in Venezuela) afforded them an enviable ‘First World’ standard of living, including trilingual education for all. In the recent elections, a coalition of smaller parties out-polled the Social Democrats, who are still the country’s biggest party (35% to the nearest competitor, the Moderates, at 26%). But my (unfortunately limited) understanding of the situation implies that if the Moderates and their allies attempt to do more than merely trim the state, they will suffer the same fate as in the early ’90’s, when the Social Democrats were voted out before being swept back in but two years later! Why? Because Sweden’s national ethics, cultured for decades by the Social Democrats, expect and demand relative economic equity, like the mere 14-times gap in earnings between CEO’s and workers.

    In Sweden you’ll find no filthy rich, and, most importantly, no poor. It’s decent, not obscene.

    Sweden’s international rankings are instructive:

    — CIA World Factbook – GDP – PPP per capita

    o 2005: 19th of 232 countries [2]

    — Save the Children: State of the World’s Mothers (2004) Report (PDF file)

    o Mothers’ index rank: 1st of 119 countries

    o Women’s index rank: 1st of 119 countries

    o Children’s index rank: 10th of 119 countries

    o Infant mortality rate: 2nd lowest

    o % seats in the national government held by women: 50% (highest)

    — UN Human Development Index (2006)

    o 5th of 177 countries

    — World Economic Forum Global Competitiveness Report [3] (2006-2007)

    o 3rd of 125 countries

    — Reporters Without Borders world-wide press freedom index 2005:

    o 12th of 167 countries

    — The Economist Intelligence Unit’s worldwide quality-of-life index 2005:

    o 5th of 111 countries

    — Nation Master’s list by economic importance:

    o 19th of 25 countries

    — Nation Master’s list by technological achievement:

    o 4th of 68 countries

    Can Social Democracy work in the USA? We’ll never know without a constitutional change allowing the emergence and evolution of a vibrant multi-party political debate. But I’m willing to wager that we could do just as well, if not better, if we simply accepted that human beings are more important than their society’s economic entities – i.e., that corporations should be made to serve the commonwealth, not the commonwealth the corporations.

    I’ve got to run, PLN, but I’ll try, from this same little-understood angle, to answer your other questions.

    One short final reminder: Americans (even me) are much too unaware of the rest of the world: of the national ethics of others, and of the socio-economic-governmental systems these ethics culture within their societies.

  40. I wrote and posted my previous before seeing Sutter’s excellent December 2nd, 2006 at 3:37 pm, in which I find much to laud.

    Gotta differ here though: “We’re playing within the 45 yard lines” – we’re certainly playing within a ten-yard frame, but, from my perspective, the play is between the five and fifteen yard lines, and on the right half of the field.

    Thus, yes: we do in America debate some minutia of economic policy, but not our society’s basic economic ethics; or this: what is the best purpose of our economy?

    Generating wealth for those whose talents favor capitalism?

    Or generating a robust standard of living for all of our citizens?

    That latter question is the European debate. Is it imperfect? Of course: it’s a work in progress, not a utopia. That imperfection doesn’t however render it a debate we can’t learn from and adapt to our society – if only we had a political spectrum broad enough to “play between the two 20 yards lines”!

  41. Let me be plain: not all people are temperamentally suited to work. Or, in some cases, they are suited to work but not of the laboring variety. I’m thinking of artists, here. Not all people are artists, and not all of those who are really ought to be, but for some of those people who are artists, they are wasting their time and talent doing anything but creating. Every minute spent toiling for their daily bread is a minute wasted, for them. They do work, of course; but not all work is with the goal of making money.

    OK Let’s talk about ART.

    I’m an artist. I’m an oil painter and photographer whose work has been displayed in various galleries here in Massachusetts. I’m also a published poet who has given numerous public readings. I’m a member of various artists’ associations and organizations. So I think I can speak with some authority on this topic.

    I know PLENTY of artists who support themselves with their art. I know plenty of others who support themselves doing art-related jobs, such as teaching or working in art-supply stores (in fact I know a couple who OWN such stores). And I know plenty of other artists such as myself who have day jobs.

    in some cases, they are suited to work but not of the laboring variety. I’m thinking of artists, here. To suggest that art does not consist of labor is an insult to artists everywhere! Not only is art hard work, but as a creative endeavor it is not unique – engineering, which is my day job is just as creative and just as much a “passion” as art is. To suggest that artists are, somehow, a “different” kind of creature with some strange sensitive temperment is a stereotype that has no basis in fact or history. Most artists are workaday people. Both da Vinci and Michelangelo worked as engineers!

    Good grief.

  42. PNelson asks why, if America is so exploitative, are all these people trying to live here?

    USA is a great place to live, no doubt about it. Of course, without the resources we’ve mined from other countries in the world, it wouldn’t be so nice. We need our Middle Eastern oil, African metals, our Argentinian apples, to maintain our quality of life. I say “mined” in the sense that when one extracts resources at a rate faster than they can be replaced, one is mining that resource. People in the Southwest are currently mining their water.

    We really don’t pay full price for most of our goods, and folks who live where the materials for these goods come from usually make up the difference, whether it’s in substandard wages or environmental pollution.

    Although I love America in many ways, and the desire to emigrate here certainly points up the educational and economic opportunities available to those living WITHIN the States, I also see the fact that so many would like to emigrate doesn’t say that much about how awesome America is. Rather, it is an indicator of how desperate life has become in wherever it is these emigrants are coming from. After all, most people don’t really want to leave their family, community, culture and language behind. It’s only when these things are breaking down anyway that leaving is a real option. Although there are many factors in the breakdown of communities around the world, I would argue that economic exploitation motivated by the thirst for cheap goods (upon which our economy depends in many ways) plays a large role.

    -valkyrie

  43. Nick’s Sweden example . . .

    I follow Sweden quite closely because I’m part Swedish. (My American name “Nelson” is a corruption of Nielsen). I used to subscribe to Dagens Nyheter.

    I knew someone would bring up Sweden which is why I was careful to say in all my above posts “large modern economies”.

    Sweden is a tiny, culturally homogeneous country. And Nick is right – they like their social democracy.

    But whether they have anything to teach large heterogeneous nations like the US (or France, Germany, etc) is questionable. France and Germany are also essentially social-democratic systems and they have been disasterous at job or new business creation, and they are going broke trying to maintain their social welfare systems. It’s just not clear that the Swedish model scales well.

    To use an analogy, conservatives are fond of citing New Hampshire as some kind libertarian/conservative archetype. No state income tax or sales tax, low-per-pupil school spending (compared to bordering Massachusetts), etc, but extremely high graduation rates, low crime, low rates of drug abuse or unwed pregnancy, etc. But the problem is that New Hampshire is a mostly rural, mostly lilly-white, tiny state bordering the boisterous industrial economy of Massachusetts and benefitting from all those Massachusetts consumers and jobs. It’s not clear how much New Hampshire can teach, say, California.

  44. I also see the fact that so many would like to emigrate doesn’t say that much about how awesome America is. Rather, it is an indicator of how desperate life has become in wherever it is these emigrants are coming from.

    People come here from all over the world and I think you’d be hard-pressed to demonstrate that in general life has become any more desperate in most of the places they’ve come from.

    In fact, in MOST places things are better than they used to be. Even in Latin America, where a lot of US immigrants come from, standards of living, life-expectancy, levels of education, etc, are HIGHER than they were a generation or two ago. Here in Massachusetts we have MANY Chinese and Indians and conditions in those countries have improved dramatically in recent decades. We also continue to get immigrants from Europe.

    Of course there are a few places where things really have gotten worse, but that’s not what’s driving immigration. What’s driving immigration to the US is that we have a vibrant economy overflowing with opportunity. The anti-Americanism on this forum is so thick that people can’t see that.

  45. Thanks, PLN. :-) You wrote,

    “But whether (Sweden has) anything to teach large heterogeneous nations like the US (or France, Germany, etc) is questionable. France and Germany are also essentially social-democratic systems and they have been disastrous at job or new business creation, and they are going broke trying to maintain their social welfare systems. It’s just not clear that the Swedish model scales well.”

    And you might be right. The operative word is ‘might’. How do we know with any certainty that France and Germany’s problems are systemic instead of parochial? How do we know that their problems don’t stem from faulty oversight and a lack of anticipation of eventual problems, rather than from a fatal flaw in the ideal of using government to mold the economy towards the goal of generating a robust standard of living for all citizens?

    How do we know an American adaptation of Social Democracy can’t work?

    Hell, right now, in this arid political environment whose only viable megafauna are the Elephant and the Donkey (the two right wings of the Property Party), we can’t even begin to discuss it.

    The Dems, without having to work hard for it, or having to do anything more than mouth faintly progressive platitudes, want to claim the votes of folks like me, who would rather have a legitimate Social Democratic Party to support.

    I’m sick of it.

    Look, you’re right about different conditions in different countries: we wouldn’t be able to mimic Sweden, or France, or Germany. Nor should we want to. And yet even if my speculative American Social Democrats never won a majority of seats in a new national legislature, simply having such a party in the national debate (garnering perhaps a minimum of 20% of the national vote) would do wonders to nudge the ‘center’ back to the more natural international center, instead of keeping it artificially well on the right.

    And that, methinks, would do wonders to reduce the extremes of obscene wealth and appalling poverty in our national commonwealth.

    What’s the ideal purpose of our economy? Generating a robust standard of living for all of our citizens? Or merely generating wealth for those whose talents favor the development of runaway capitalism?

    Shouldn’t that latter be controlled in favor of the former?

    Have we no national ethics? Or shame?

  46. PLN wrote, “The anti-Americanism on this forum is so thick that people can’t see that.”

    I beg to differ: I sense not anti-Americanism, but anti-status quo-ism.

    I came into political awareness as a youth of the late 1960’s: too young to be a hippie, but not too young to misunderstand the anti-status quo-ism of the era’s tumult.

    The kids who wore American flags in patches on their jeans weren’t anti-patriotic as the Right characterized them to be. They wanted a better, more egalitarian country and society. A fairer world. That’s what’s “so thick on this forum.”

    I grew up wanting a country to be proud of, and despaired at the Reagan reactionary “revolution”. (And I’m still trying to recover even now in the waning of the Bush Madhouse Era.)

    I would suggest that dissidents, not jingoists, are the real patriots. The question implicit in any thoughtful criticism of your country is: “How has the country’s evolution from its origins corrupted, lost, or ignored the principles, ideals, and promises it was founded upon? And what can we do to redress this?”

    Thomas Jefferson advocated periodic repair of the Constitution.

    He was right. The still-in-use 18th century construction-of-body-politic is, well, 18th century.

    Are we patriotic to cling to it? Or just intellectually timid and vapid?

    My 50th birthday isn’t so terribly far away. In 1969, I couldn’t imagine we’d still be stuck in the unpaved muck of the 18th century six years into the 21st. I dare not raise my hopes, but I’d like to think it possible that, if Sanford Levinson’s proposal for a new Constitutional Convention is taken seriously, I just might finally be living in a country I can be proud of as my 60th birthday nears.

    I won’t hold my breath, but I’ll agitate for it – patriotically.

  47. The Dems, without having to work hard for it, or having to do anything more than mouth faintly progressive platitudes, want to claim the votes of folks like me, who would rather have a legitimate Social Democratic Party to support.

    I’m sick of it.

    I’m lucky that I didn’t have to soil my conscience by voting for the Democrats. I live in the People’s Republic of Massachusetts where every single significant office was held by, or won by, Democrats.. The US Congressman from my district ran unopposed. At least in the old USSR you could vote “da” or “nyet” – if you’re a voter in this part of the PRM you don’t even get that choice. What a country!

  48. PLN wrote, “The anti-Americanism on this forum is so thick that people can’t see that.”

    I beg to differ: I sense not anti-Americanism, but anti-status quo-ism.

    No, I think it’s anti-Americanism. I was specifically responding to Valkyrie’s implication that people only come here because things have declined so badly in their countries. I work with and know lots of immigrants from many different countries (I’m an engineer for a large foreign multinational). Most people are not driven out of their countries because they are such hell-holes. They are attracted to our country because we offer so much opportunity.

    I know TWO people from Korea. Korea is a strong, growing, dynamic economy. Things are good there. But the US offers them even more opportunities.

    We have a lot of problems in the US, and we have an idiotic administration that has destroyed the US’ position in the world. But we should at least recognize the things that are good about our system. And one of those things is that this is STILL the best place in the world if you are serious about becoming prosperous, starting a company, or making something of yourself. And that is what attracts people to the US. I challenge anyone here to name a place in the world that’s better than the US for a person starting from nothing to become prosperous.

  49. Ok I have to address the fallacies of the assumptions of this statement seeing as I live in NH:

    “To use an analogy, conservatives are fond of citing New Hampshire as some kind libertarian/conservative archetype. No state income tax or sales tax, low-per-pupil school spending (compared to bordering Massachusetts), etc, but extremely high graduation rates, low crime, low rates of drug abuse or unwed pregnancy, etc. But the problem is that New Hampshire is a mostly rural, mostly lilly-white, tiny state bordering the boisterous industrial economy of Massachusetts and benefitting from all those Massachusetts consumers and jobs. It’s not clear how much New Hampshire can teach, say, California.”

    - NH spends between $6K and $15K per pupil.

    - We are NOT mostly rural, mostly lily white!

    - We have our own economy that is healthier than any of the others states around it.

    - We have done this in spite of having the lowest tax burden (http:///www.cnht.org/images/tax_chart.jpg)

    - We are the healthiest and most liveable state. We are the first state to offer HPV vaccine to all girls..

    We are the cleanest state in the nation. The people who come up here from Mass are now trying to spoil it with their socialistic programs and control freak legislation. They want an income tax because they are never happy with the money spent on education.

    We can teach California to give some of that money back to the taxpayers and let them be more self reliant!

  50. He is an interesting and little known counter intuitive fact about how well globalization is working for the wealthy nations: according to UNCTAD (United Nations Conference on Trade and Development) there has been 9 years of a negative net transfer of financial capital from the poorer Southern hemisphere to the wealthy Northern one. Just last year this was about 200 billion dollars.

    This means that all the aid, investment and trade moving south is 200 billion less than the foreign exchange, debt repayments, interest going north. By 2004, the accumulated total was 350 billion.

    Some will see in this a confirmation of Darwin’s theory of the most fitted. They will want to wave their flag and shout down anyone who suggests something is imbalanced here or they might fall back on victimization rhetoric. Why are they so anti our way of life and our great culture (of greed) they may ask?

    But these figures rather confirm the argument that there is something inherently flawed about regulating capitalism for the benefit of those already with great sums of wealth. It is not enough that the wealthiest nation spends billions on the world’s greatest army in order to guarantee access to other’s resources, but it uses institutions such as the World Bank and the IMF to help make sure the playing field remains tipped to one end. Sad is it not that a bunch of rock stars must go around begging global leaders to forgive crippling debt and interest payments?

    With these finances come a flow of relatively well-off immigrants who are able to leave. Does this flow confirm the “greatness” of the recipient nation? In a sense, yes. Then again, there was an inflow of migrants to all great imperial centres. The thing is, empires are conquerors, not liberators. Why don’t the apologists just call it like it is and not spin it in order to feel good about their tribe?

  51. Violet says to Charlie Brown, “My father has more money and great athletic ability.” Charlie say, “Come,” and he leads her towards his father’s barber shop. Then he says, “My father loves me and always gives me a big smile.”

    My son is learning English in his Japanese high school and this conversation appeared in his text, or something close to it. He asked me what was interesting about Charlie Brown. A good question for someone immersed in dramatic and aggressive Japanese manga. As I explained to him about Charlie’s compassion for the baseball losers and the weaker people in society or items in nature (that limp Xmas tree, for example) I thought about the ongoing conversation here between the unabashed free-marketers and more hesitant souls.

    Probably some would like to accuse me because of my criticism of anti-Americanism, but the opposite is actually the case and the reason I post here. Yet it is not today’s America that I love–Violets’ boastful America. Rather, it is Charlie Brown’s America. It is the America represented by the Statute of Liberty and those beautiful words

    “Give me your tired, your poor,

    Your huddled masses yearning to breathe free,

    The wretched refuse of your teeming shore.

    Send these, the homeless, tempest-tost to me,

    I lift my lamp beside the golden door!”

    In a sense the real message of 9/11 should have been that this important symbol of the American ethos, the New Colossus, should not be overshadowed by symbols of a newer hunger to dominate the earth. The fall of the towers should be seen as a break from the shackles of excess and a chance to rediscover America the beautiful–Charlie Brown’s America.

  52. Great post webgurl. You also failed to note New Hampshires state legislature gets this done on almost zero pay. I think they are basically given a stipend of less than a few thousand a year. (This may have changed) But compare it to Mass where the Legislature almost all liberal Dems continually rape the tax payer , by paying themselves upwards of 75 thousand or more. Especially when one throws in the perks of special commitees..

    N.H. Is changing the more Mass dems who move to N.H. The more you will see your taxes go up. Of course crime and welfare will also rise as will spending on social programs that the mean gop have under funded for so long.

  53. To plnelson; You are correct their is a strong anti-American sentiment among many on the left. I should say far-left. This is one of the reasons I left the party. It is one thing to criticize Bush or certain policies of this country. But it is quite another thing to negate everything positive that this country does for it’s people as well as people in other countries.

    I was very liberal well into my 30′s and I know and have friends to this day (some are in my own family) who just seem to dislike America, I was like this myself at one time. Maybe it is as simple as the rooting for the underdog phenomena that we see in sports. We all like to see the undermanned less talented team knock of the big stong powerhouse. Who knows. I can’t really figure it out. But it is out there and I know radical leftists will deny it but they are being disingenous.

    Before the bashers attack, I’m not saying all liberals,just the hard core left. M. Moore. G. Soros. Daily Kos. etc But these groups have tremendous sway in the Dem Party. Ok go ahead let me have it.

    One more small point. I read many times what an awful pres and warmonger R.Reagan was. But the funny thing is he brought down the single most repressive and brutal regime the world has ever seen without fireing a single shot. You would have thought the left would have made him a patron saint. Can you imagine if Carter or Clinton had done this. They would have insisted that the nobel peace prize have it’s name changed to the Carter or Clinton peace prize.

  54. I won’t “let you have it,” RC, but I will respectfully disagree. Michael Moore is far, far to my left (as, I suspect, is Mr. Hendrickson), but criticism and anti-Americanism are very different things. Our nation was founded on the value of dissent, and dissenters – even vociferous dissenters who find much to criticize — are patriots every bit as much as those who defend this country’s policies.

    PLN’s comment referred to this forum. All I can say about that is this: In my view, anyone who spends a good deal of time on a Saturday debating the best economic policy for the nation can hardly be said to hate America. I’m presuming that all of us here care a great deal about the country, and love the country, even if we don’t always love its policies. Otherwise, why would we be wasting our time?

    I also want to push back on one theme that emerged earlier in the thread. Anecdotal stories about people who succeeded under capitalism prove little to me, because they tend to be framed tautologically. That is, success is used as EVIDENCE of hard work, when really the question demands that hard work be demonstrated INDEPENDENT of hard work (else there is no proof of causality, only of correlation). The truth is that we all are affected a great deal by luck and circumstance, and you can tell different stories depending on how you focus your inquiry. This is a bit abstract, so I will explain with concrete examples. Here are two stories:

    Person X was raised by parents who never graduated from colelge. He studied extremely hard, never messed with drugs, and wound up at one of the best law schools in the land. In the course of doing so, he accumulated great debt. After graduating, he worked hard at large national law firms, plowing his salary back into the loans. He made consistently “responsible” choices: drove an older car, resisted the fancy life of many of his peers, etc. He’s now a partner at a law firm that is one of the leaders in its field.

    Person Y was raised in a middle-class neighborhood with parents who did ok but grandparents and other relatives who had done very well for themselves. When it came time for college, many of his friends wound up at state schools, but because his (extended) family had resources, he went off to an elite private school. There, the advisor he was randomly assigned wound up to be an active mentor, who consistently challenged him and looked out for him. He wound up at a great law school. After graduating, he started off doing work that didn’t interest him much, and languished a bit. Luckily, he got onto a case that involved a particularly specialty, and realized that he enjoyed and was well suited for that specialty. He moved over to that specialty full time (at a different firm) and thrived. When the time was right, he was lucky to be recruited by a former colleague to work in the government agency that regulated that field, and was fortunate to be assiged to some high-profile matters and to make a lot of contacts. When he left that agency, he was recruited to be a partner at a law firm that was a leader in the field.

    So, two stories: One characterized by hard work, the other by fortuity. But as you’ve probably surmised, Person X and Person Y are the same person: Me. Now, if one wanted to tell the “capitalism solves all” story, one would focus on the former story. But that story overlooks the luck in my life: A loving family that was willing and able to help, the luck of finding a mentor (which cannot be overestimated), the luck of having a well-placed former colleague, and so forth. Stories about the magic of capitalism, however, tend to stow away the luck, and pretend that all that mattered was the work. We hear about the people who turn out well, but not about the people who worked just as hard but just never got the breaks I got.

    I’m a big fan of capitalism. That probably puts me to the right of Joshua H and Young-at-Heart Nick. But I also recognize that luck matters a lot in our society, and I think it should matter a little bit less. Some people work like dogs and fail. That’s the way it is, and probably is the way it has to be, but it does NOT mean we should turn our backs and pretend that their failure is just proof that they really didn’t try hard enough. Very often, it’s not. Luck matters, and in some cases the deck is stacked against people. For every anecdote about success (and I agree, capitalism is the best system for people like me, who are ambitious and want to do really well), there is at least one anecdote about failure (because capitalism is NOT the best system for ensuring that everyone who tries hard gets some baseline level of subsistence). When we look at those who have succeeded, we have to see the extent to which they endeavored to succeed, but also the luck they have enjoyed. The same is true for those who have failed.

    Which gets us back to the topic at hand: I agree with Nick that our society as currently structured tends too much toward neoliberalism. We are willing to ascribe too much to work, and not enough to chance and luck. And as a result, I am intrigued by Frank’s interest in forging a new, slightly modified social compact. Capitalism is decent as economic theory. It is terrible as dogma. We should resist “Capitalism as dogma,” and should be willing to tinker.

  55. plnelson I am trying to read this thread and you quote extensively from other posters here without saying who you are quoting. Nick already asked you to kindly attibute your quotes so we can follow the discussion. I am echoing that. Thanks.

  56. To rc21:

    Not a few thousand, but LESS THAN $100 — in fact about $80 after taxes!

    That is all someone in the citizens legislature gets paid for being a Representative.

    So you are right – ZERO pay when it comes down to it. OH yeah you get your tolls paid and a little mileage for gas since some drive 2 hours to attend sessions.

    Mass is corrupt and now they have a corrupt lawyer for a governor.

    I left Mass in ’89 because I could not stand it any longer.

  57. Webgurl says: Not a few thousand, but LESS THAN $100 — in fact about $80 after taxes!

    That is all someone in the citizens legislature gets paid for being a Representative.

    The pay must be lower across the board in New Hampshire.

    Apparently New Hampshire has very high property taxes (yes no sales tax and no income tax). Yet many people live in NH and work in MA! The good high-paying jobs are in MA! So those who work and live NH on NH wages and pay NH property taxes are not as well off as those who live in NH and are able to work in MA (even after they pay MA income tax). Apparently the discrepancy in taxes still makes it worthwhile financially to live in one state and work ( or shop) in another. New Hampshire businesses take advantage of this discrepancy as well.

  58. plNelson says: I know PLENTY of artists who support themselves with their art. I know plenty of others who support themselves doing art-related jobs, such as teaching or working in art-supply stores (in fact I know a couple who OWN such stores). And I know plenty of other artists such as myself who have day jobs…….. Both da Vinci and Michelangelo worked as engineers!

    Good grief.

    I don’t know of plenty of artists who support themselves well with the art they really would like to create without a struggle and compromises. This is true now and through history unless they are the relatively few who made it during their lifetimes (Picasso). Van Gogh is an example of an artist who sacrificed everything and made nothing. That example stands out but how many others whose stories are unknown are there? Nevermind as well all that is lost in terms of human talent and creativity from those who had to make a hard choice (about eating, supporting family, taking care of health issues, etc.) to spend their best hours ( or give up altogether because of the steep climb) at other jobs or looking for work they did not really want to do or were unsuited for ( art-related or not). Art-related jobs as well, when available, are usually very low paying some very unsatisfying.

    Michaelangelo and Leonardo were extraordinary artists, recognized as such in their time. They had patrons (where btw did that wealth come from?) who were willing to pay them to be free creatively within limits that meshed with their talents. These artists only wanted to work at their art and they were so extraordinary that finding a patron was not an issue.

    Say what you will about France, they support the arts. That is why so many go there; it permeates the culture. France is ( last I checked) no.1 tourist destination.

  59. Revisiting the Immigration issue.

    A big part of our national mythology is symbolized by the Statue of Liberty: America, beacon of hope for a better life, Land of Liberty and Prosperity.

    Is it true?

    Well, sure, but it’s vastly overly simplistic. Val covered some of the immigration dynamic; Sutter meanwhile reminds us of the luck factor. Both are correct; and I’ll try to offer a bit more detail: immigration doesn’t happen in a vacuum – people who came here and ‘swam’ in the sink-or-swim American economic piranha pond had luck on their side.

    My paternal grandparents both came from the same Aegean island. They were part of a migration, over the span of a generation, that virtually denuded the island’s population: as much as 80% (or more) of the inhabitants ended up in the USA. How did it happen?

    A century ago, the wealthiest islanders were the priests, followed by a few fisherman. “Wealthy”, however, is a relative concept here, since the island had virtually none of what we almost consider a ‘natural resource’: money. The remainder of the islanders grew (or husbanded, via goats and sheep) their own food and made their clothes from wool. (One set of clothing per person was the norm.) Almost nobody was literate – who had the time?

    The most adventurous of the islanders were sailors, and some ended up working on ships in the Aegean and Mediterranean. These fellows began the first trickle of remittances from abroad back to their families on the island – the first influx of money. Money! Money could buy clothes, from the insanely rich city of Athens (it wasn’t rich by American standards – not at all).

    Money could help to repair the stone and mortar houses – some of which were half a millennium old. Not half a century – half a millennium.

    The initial monetary trickle – not from America but from the seas nearby – bred a desire for more. More lads enlisted in the local merchant marine, and eventually, some of these guys landed in New York. A few of that some discovered better pay on shore in New York than on their ships, and stayed: sending back bigger remittances to their families on the island. And, crucially, sending enough money and information to bring others across the Atlantic.

    Mind you, the original immigrants weren’t planning to live in America permanently – they merely wanted to make enough money to return to their beautiful, unpolluted island and live out their lives with their families in relative ease. Of course, we know instead that few ever managed to return. The wives and children usually made the Atlantic crossing a few years after the men.

    What’s the ‘luck’ here? Connections. And remittances.

    I would hypothesize that this is true for most immigrants even to this day. Immigration doesn’t happen in a vacuum: most folks around the world are aware that the USA is a cutthroat environment. And the stories we almost never hear are those of immigrant failure. It doesn’t fit into our myth. We don’t want to acknowledge it.

    My paternal grandparents and their immigrant generation were aided by their family connections: tight bonds that helped to ameliorate the many potential catastrophes threatening immigrants. The importance of this support network ought not be underestimated.

    We don’t simply suck folks from abroad over here enthralled by our mythological “American Dream”. Our immigrants tend to come in the footsteps of pioneers from their original peoples who might well have only come here by accident. Many succeed, and we add their individual tales to our collective national mythos.

    Others, uncounted others, fail. And to them we pay little or no attention.

  60. To Sutter; Good post. I think I agree with most of what you say. I think my posts don’t really differ to much from your last post. I did not talk about luckand good fortune. Yes you are correct it plays a part in everyones life. Both good and bad. But I don’t think it is really relevent to the conversation as to which form of economy is better. Socialism or capitalism as fortune plays a part in both.

    I never said capitalism is the answer to everyones problems I just think it has proven to be better then all the other choices. I’m all for safetynets. I stated this earlier and I want everyone to succeed. Capitalism has just given more people that opportunity. It really seems quite obvious. Look at the people risking death just for a chance to be in America. Why? because they know that jobs are here. Who creates the jobs? For the most part it is independent private citizens who have started companies and now are looking to employ workers.

    But even failures as you put it can still work and have success, maybe not get rich but live and be moderately happy. In life their are no guarantees. capitalism just gives you better odds than communism,socialism,marxism,etc. I will take those odds every day.

    Right now in the USA there is a job for every able bodied man and women. We have zero unemployment. Yes their are those who refuse to work or won’t take jobs that they percieve to be beneath them. To those I have no sympathy.

  61. To webgurl; You are so right about Mass, probably the politically most corrupt state in the union,with the possible exception of NewJersey.

    I have no doubt my taxes will soon be rising in one form or another. The pols down here like to use the word fees sometimes user-fees. That way they think you will think your really getting something for your money.

    My guess is that I will soon be paying for some political hack to administer some new worthless program that will be staffed by other useless political hacks.Deval owes alot of people.

  62. RC21, thanks for the kind words. I would like to take a minute to explain why I think luck is more significant an issue in this discussion than you may be giving it credit for. It is certainly true, as you point out, that luck will affect people’s lives in all types of economies. The worst cancers will kill a capitalist as quickly (or almost as quickly) as a socialist, and trucks hit just as hard in Beijing as in New York. The difference, though, is that social democracies do more to ensure a robust safety net for those whose luck has failed them. There are admittedly costs to those systems — I suspect that you, PLN, and others wil recognize quickly that the safety nets will also save those who just aren’t trying hard enough, and I think those of us who support thicker social safety nets have to admit that that will be one consequnce. But once we recognize that luck is a significant factor, I think it’s hard to deny that the importance of ensuring that those who are downtrodden through no fault of their own deserve our help — that it really could be us in their place, because their situation is borne not of laziness but of ill-tempered fates. And for me, once we think about that, the cost of the

    “thick” sagety net — the fact that we’ll also wind up helping out some free-riders — is worth enduring.

    I read a wonderful quote today from the judge Learned Hand, which I think is relevant here. Hand wrote that “the spirit of liberty is that spirit which is not too sure that it is right.” When we design policies, we should incorporate the possibility that we might be wrong. If the strict libertarian’s program is implemented (and I recognize that you, RC, are not the strict libertarian, given your support for some social safety net) but the strict libertarian is wrong (in believing that our success always bears a more or less direct relation to our efforts), the consequence is that men, women and children will starve on the basis of luck, because society mistakenly treats that luck as if it were malingering (and thus had moral relevance). On the other hand, if the “thick” social safety net is implemented, and its advocates are wrong (in believing that those in need are trying their best and have been frustrated by factors out of their control), the cost is that there is some unnecessary redistribution from the better-off to those who really could be working harder but are instead living (in part) off the efforts of others. I’m not saying that’s a good thing — I’m not a “soak the rich” type (though I certainly believe our tax code should be tilted in a far more progressive manner than it is tilted today). But as between the two risks, I think the latter risk (excessive redistribution away from those who will still be able to support themselves and their families just fine) is far less benign than the fomer risk (starvation and deprivation based on luck, a morally irrelevant factor).

  63. To Potter:

    You are dead wrong. NH’s economy grew the fastest and was healthier than Mass, Maine or Vermont. It had the most job growth as well. It is the most business friendly. Mass is losing businesses to NH, as noted by Mitt Romney, form er governor of that state.

    NH’s combined taxes are FAR LESS than any other NE state.

    http://www.cnht.org/images/tax_chart.jpg

    If you work in Mass chances are it’s only because you live very near the border.

    NH is very high tech and not the rural quiet place you picture it.

    NH is Beverly Hills North.

    But perhaps you have not been here a while.

    Compared to NH, Mass is a dirty slum.

    But as I said earlier if we don’t stop the Democrat voter fraud and thuggery, this will change.

  64. plnelson,

    please forgive the lateness of my reply.

    I certainly didn’t mean to suggest that the creation of art does not require the artist to labor at that creation. I said plainly that my own artistic endeavors are very hard work. Of course I understand that. But that was not what I meant by labor. As I also made clear, lugging boxes and flipping burgers are the kinds of activities I meant by labor, not struggling to perfect that sentence or bring that picture to life.

    But you know, I feel a little strange explaining myself here, because, honestly, I think you knew perfectly well what I meant. Perhaps I ought to have just left artists out of my reply, but I did want to address the issue by means of the non-layabout type of person, and artists just seemed a natural to me in that regard. By the way, using Da Vinci and Michelangelo as examples of “workaday” people is a tad unfair, given the times they lived in. I mean, they are literally Renaissance men. Not all artists have such temperaments–or talents.

    Congrats on your own artistic successes, and I wish you luck with your future endeavors.

  65. sutter,

    you suspect that I am far, far to your left.

    Quite so.

    But on the issue of dissent providing the foundation for this GREAT nation, we are as one.

    And that, frankly, means more to me than any specific sticky details about this program or that philosophy.

  66. Hello Webgurl:

    The growth of NH economy is not only relative to MA and other states, it’s relative to how (un)developed it has been and indicative. I would suggest it’s being pushed by proximity to Boston, MA.

    Mind you that you speak of (eastern) MA as a “dirty slum” and that it may be in comparison to ( no doubt) beautiful New Hampshire-I traveled through to Maine a couple of weeks ago. But NO need to dis MA. Just come further west from Boston for extraordinary beauty ( Central MA- where I live- to the western border) For sure the east is crowded. But Boston and the area functions importantly as a regional capital; it holds Logan Airport ( where to do f you fly out of?) as well as the Boston Museum of Fine Arts, many of the great colleges and universities of the world ( attracting all sorts of talent), Route 128 high tech, bio tech, the notable financial district, a big port where your goods pass through and your fresh fish arrives, Plus it’s historic and a big tourist attraction, bigger than NH leaves in the Fall. This is, I don’t have to tell you, where the Revolution began in part against taxation without representation ( and not against the idea of taxation as RC21 incorrectly says).

    Eastern MA holds a huge population, 5.8 million, the whole state of MA holds about 6.5 million (!) versus about 1.4 million for the whole state of NH ( ’05 stats both).

    That NH taxes are less is a function also of less need of those taxes dollars at the moment, less development, less growth ( not the same as the growth rate). As businesses move and people follow to NH, things will have to change and so NH may very well become a suburb of MA with higher taxes. Metropolitan Boston is reaching to southern New Hampshire.

  67. (I forgot the Boston Symphony Orchestra and New England Conservatory of Music)

    William Greider “throwing a little dirt on the icon” after the eulogies of the influential Milton Friedman. From this week’s The Nation, “Friedman’s Cruel Legacy” ( my bold):

    (Quote)His most profound damage, however, was as a moral philosopher. He championed an ethic of unrelenting, unapologetic self-interest that effectively pushed aside human sympathy. In fact, humans’ responsibility to one another has been delegitimized–portrayed as an obstacle to the hardheaded analysis that maximizes returns. Friedman explained: “So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no, they do not.”

    Pay no attention to the collateral consequences. Your only obligation is to the bottom line. Friedman’s message was highly appealing–he promised people a path to freedom–but it triumphed, ultimately, because it served the powerful forces of capital over labor, economic wealth over social concerns. Government was indeed failing on many fronts, especially inflation, and liberalism had no answer. Friedman’s answer was alluringly simple. Get rid of government.

    People everywhere now understand what Friedman’s kind of “freedom” means. America has been brutally coarsened by his success at popularizing this dictum–millions of innocents injured, mutual trust gravely weakened, society demoralized by the hardening terms of life. Most people know in their gut this is wrong but see no easy way to resist it. Friedman’s utopia is also drenched in personal corruption. The proliferating scandals in business, finance and government flow directly from his teaching people to go for it and disregard moral qualms. When you tell people in power that their highest purpose in life is to maximize their own returns, there is no limit to how much “good” they will do for the rest of us. I don’t recall hearing Friedman express any discomfort. Perhaps he regarded looting and stealing as natural features of capitalism that market forces would eventually correct.

    This is what the memorials left out: the cruel quality of Friedman’s obliviousness. Art Hilgart, a retired industrial economist, recalls hearing Friedman lecture in 1991 and recommend the destruction of Medicare, welfare, the postal system, Social Security and public education. The audience was dumbfounded.

    Finally, a brave young woman asked what this would mean for poverty. “There is no poverty in America,” Friedman instructed. A clear voice arose from the back of hall: “Bullshit!” The audience cheered wildly. (end quote)

  68. Sutter, Your desire for a better society is the same as mine. We only disagree on which is the best road to get there.

    This is my take on it. First I am probably more libertarian,but I dont adhere to all their beliefs. I really am my own political party. The libertarians have good ideas and are the closest thing to what America was first envisioned to be. But they sometimes become a bit unrealistic and dogmatic.

    Now on to our society. The problem with vey strong safety nets, as you put it is this. They create more damage than good over the long haul.

    I first started to realize this when I started working with poor minorities from the cities. Social programs however good intentioned they may have been had left these kids and whatever broken families they came from virtually clueless as to how to survive in society. Almost none had ever held a job , Most of their family members had only worked sporatically. Many had been involved with the crimminal justice system.Their education was poor. They had very poor social skills. They lacked respect for anything and everyone. They basically felt that they were owed everything.

    As the years went by we started working with more innercity minorities but these kids were originally from Africa, Jamaica, all the Caribbean countries, also Cambodia and parts of South America. These kids were much different although very poor. (Some also did not speak english very well.) They all did well in school (The same schools as the other kids) They were hard workers very respectful and appreciative of the chance to further them selves. They were not looking for hand outs, They wanted to succeed so they could escape the city and all the crime and negativity that occurs on a daily basis.

    You see if you tell a kid or anyone that if you work hard and study you won’t need the govt to help you. You can do it yourself.

    These kids didnt seem to think they couldn’t make it without govt programs. They knew they could make it because they believed in their own self worth ,and their own skills and knowledge. It has been several years since these groups of kids have gone through our program and all are now college grads out in the world working earning a paycheck,(most make more than me) Some are married and raising families. None are on welfare.

    When I talk to the parents of kids in the city now, their fear is that their children will end up like the black American kids. They will do anything to stop this from happening. Govt social safty net programs have ruined the innercitiies of America and destroyed much of black America. It is not racism, discrimination, lack of money or anything like this. It is one group of people telling another,” Your not good enough to make it on your own”. You need a supperior race to help you along.What happens next? They believe it and start taking the handouts and begin thinking that they really cant’t make it without help.

    The sooner we realize what a great country this is,with incredible oppertunities for all, and start letting people make their own way. The sooner we will end the cycle of poverty,crime,and failure in many of our cities. Unfortunately I dont see this happening to soon. Nowadays everyone wants to be a victim and see if they can qualify for some govt program.There is a whole cottage industry growing up around this idea.

    Their are many white liberals living in the suburbs who believe in all these welfare programs and safety net programs. The problem is they don’t see the damage that they are doing like I do. Because they don’t ever interact or have daily contact with the people who are affected.

    Now am I generalizinga bit? Of course . When you deal with huge segments of society it is impossible not to generalize. But I think you get my point.

  69. RC21, I think there’s a difference between the kind of safety nets I am talking about and what you are talking about, which seems to be welfare. I’m a white liberal of the sort you describe (more on that later) but when I talk “safety net,” I’m talking about things like social insurance, job training programs, greater funding for secondary education, backup health insurance, and SHORT-TERM welfare subsidies, except in cases of disability, where longer-term subsidies are essential. I am not talking about prolonging the culture of dependency. Those who can work should work so long as there is a job out there for them (we disagree about 100% employment; there is some structural unemployment in our economy, and we need to account for that). So I’m not sure there’s a fundamental disagreement between us on this point.

    On your “white liberal” comment, I want to point out a little trick that conservatives wind up playing in discussions like these (unintentially other otherwise — I’m not accusing you of bad faith here). On the one hand, if their partner in the discussion is economically unsuccessful (or might be), they say “Well, you have no right to criticize our system, because you’re just not doing well, so it’s essentially sour grapes.” (This is akin to the comment you made to Joshua H. above.) On the other hand, if the partner does fairly well, they are told “Well, you have no right to criticize the system, because you’re doing well and don’t bear the cost of social programs — you’re just a limousine liberal.” This is akin to the “white liberals” comment you make immediately above.

    Needless to say, I reject both these claims. As noted above, we all have a right and a duty to criticize the system, and while our personal circumstances of course inform our arguments, they do not disqualify anyone from the debate.

  70. To return to the topic at hand: Above, I’ve mentioned several times the prospect for a “new social compact.” This, I think, is one way of conceiving what Frank has in mind. I don’t know who tonight’s guests will be, but I’d be interested in hearing their views on (1) whether Americans are ready for such a compact, (2) whether the election results are best viewed as a mandate for such a compact (as opposed to, say, a mere rejection of Bush-style Republicanism), (3) how such a broad compact might look in an increasingly globalized age, and (4) how, if at all, the new compact would draw from the early-20th-century Progressive tradition I mentioned above.

  71. RC21 says Nowadays everyone wants to be a victim and see if they can qualify for some govt program.

    So what was the program that worked so well that you spoke of? Wasn’t that a social program?

    There are good social programs and bad ones. This is what I think Sutter is saying and I agree. To say everyone wants to be a victim is just plain wrong. RC21, you have indicated the opposite by telling of your own social work.

    I believe most people prefer to work, if they are able, especially if they have worked and know the feeling this brings.

    RC21 says: It is not racism, discrimination, lack of money or anything like this. It is one group of people telling another,” Your not good enough to make it on your own”.

    That’s all the same thing. Social programs and anti-discrimination laws are necessary to help correct that.

    Social programs need to be enlightened, not eliminated.

    Anyway- if you all want to cross your eyes check this chart out: Death and Taxes (click “view the graph” and then use the legend at the bottom to enlarge and navigate)

    Are people complaining most about where the most money goes? For 2007. $633 billion (64%) is going to the military and security related expenses while $350 billion going to all the rest.

  72. More taxes in NH will just create poverty. Retirees such as myself will have to sell and move. Why should I pay more taxes on top of the taxes I already paid for which I am not getting one thing back? I cannot collect SS either, another scam.

  73. Once again those (conservatives) who want to maintain the status quo or hark back to the former “glory days” when we pulled ourselves up by our own bootstraps and were self sufficient (which is a canard – because no one is an island unto themselves) and to whom the idea of progressive or socialist politics is an anathema, are manifesting FEAR. Fear that they will be taxed; fear that some people will abuse the generosity that the government wrested from their grudging tax contributions. Fear that somebody will get something that they didn’t (by their lights) earn. Fear that the only thing between them and destitution is the Puritan Protestant (Portosan) work ethic and luck (a concept to which I don’t subscribe) You’d think with all that fear they’d welcome a safety net.

    ALL of the humanitarian and social strides made by humankind throughout history have been fostered by the progressive and liberal activists of the day. All conservatives can claim is to act as a governor to runaway idealism. The 18th century American conservatives (Tories) were afraid to cut the apron strings of the Mother England. The conservative slaveholders in the mid 19th century wanted the status quo – they were afraid without slave labor they wouldn’t be able to run their plantations. Many of today’s business oriented conservatives are afraid that without illegal immigrant labor they won’t be able to survive. The others are afraid that they’ll take $5/hour (many times much less) jobs from the out of work Americans who would love to take those jobs. There is nothing to fear but how you yourself responds to challenges. Conquer that fear and you won’t have concern yourself with anything but improving the lot for ALL humankind and in so doing benefit you and yours.

    Peace to ALL (and NO FEAR),

    Jazzman

  74. Whoa, so much to read and consider. I did a quick search for energy which is a major factor in creating the market which many people intuitively recognize as broken.

    The truth is that energy is too cheap when we consider the long term price of energy and the uneven nature of winners and losers in our economy.

    If you can afford the energy to avoid the need to buy labor from among your neighbors, you are able to impoverish your less well off neighbor, and given the market price of goods from China produced with cheap energy in the cheaper labor market there, and then transported around the world, with all the goods used to make also transiting the globe.

    It would be just unfair if some fraction of people have cheap energy and others don’t, but what is extremely disheartening is to consider the fact that the cheap energy is coming at the expense of the unborn. While some benefit from cheap energy today and others don’t, there is no question but that the unborn will suffer from expensive energy, and that energy might be significantly more expensive because of the actions of their parents.

    In my view, at some point in the future, oil will begin costing $100 a barrel or more, and that price will extend into infinity, so for oil to be priced below that long term price is just simply unfair to everyone. The higher the price of oil, the cheaper labor becomes, because oil is just “labor in a bottle.”

    We can think of those fruits and vegetables from South America as being priced at the cost of labor in SA plus a down payment on the cost of the energy to move it a thousand miles or more. Perhaps 10 cents of the current dollar a pound is the down payment for energy with the balance of 90 cents coming due to your children or grand children.

  75. To sutter; I’m not sure we are far apart on much. I think you are in favor of more social programs than I am. We have gone over the reasons. You know there is also private charities to help out and they always played a big part in our society. I’d really have to look into the programs you are espousing It may be I would favor some albeit in a trimmed down version I’m sure.

    I’m not quite sure what you meant in response to my rich liberal comment. But I will say this .I really don’t think anyone should seriously criticize our capitalistic form of economy, because there is nothing out there better and I really believe it works well for the 300 million residents of this country. Is it perfect? No it has flaws,and yes rich dishonest people do take advantage of many things. But I wouldn’t put the blame on the system as much as I would the unscrupulous people who take advantage of it.

  76. To Potter The program I work for is not a social welfare program. The kids work for everything they recieve. I just help them along.

    As to your other subject I’m all for spending on the military. Remember it is one of the very few items the original framers believed was important enough to warrant the collection of taxes.

    I may be wrong but I think it was article 1 section 8. It’s been awhile but I think thats where you will find it.

  77. The problem America faces is the globalization of the workforce by improvements in communication technology (a la Friedman’s “flat earth”).

    When improvements in shipping globalized the supply of workers for manufacturing jobs, America’s response was to retool it’s labor force for service sector jobs.

    Now the labor market for the service sector is quickly opening to the entire world, as well. What will American workers do next?

    The United States government needs to come up with an answer to this question. At a minimum, it should be investing in education and other programs that will give American workers an edge in the global labor market. Otherwise, many middle class service sector jobs will be lost, and the subsequent increase in American unemployment will drive up competition and drive down wages for even those service sector jobs that require a physical presence.

    While some government-administered redistribution of wealth is laudable, it will not enable the country to avoid a complete collapse of the middle class. What we need is a strategy and investment to make American workers more competitive.

  78. While I like the sound of the Barney Frank bargain particularly with healthcare, I’m generally bothered by the whole “populist” thing – to me it’s actually a negative thing, associated with anti-immigration, conservative social/cultural issues, and whipping up hysteria against one group or another (indeed, the true “fascists” leading up to WWII).

    I’m hoping *somebody* will stick up for liberalism in the new Congress.

  79. bronsfeld sez Now the labor market for the service sector is quickly opening to the entire world, as well. What will American workers do next?

    The United States government needs to come up with an answer to this question.

    Good grief! Why is it the job of the government to answer this question?

    What are YOU doing to make sure YOU are competitive with Chinese and Indians who can do just as good a job as you can for a fraction of the price?

    You’re right about one thing – the best, most interesting, creative, well paying jobs in our economy involve the analysis and manipulation and design of INFORMATION and KNOWLEDGE – engineering, finance, business management, science, medicine, etc. And those can be done anywhere on the planet where there’s a computer and network access. And China and India are turning out millions of skilled engineers, doctors, scientists, and business and financial experts. Already many US hospitals are having x-rays and ultrasound exams read by radiologists in other countries. Keep in mind that a radiologist is a board-certified MD – as high as you can go in our educational system. Also more and more US law firms farm out legal research to India. And as an engineer I regularly work with colleagues in India.

    But SO WHAT?. I’m tired of hearing Americans complin that “they” are taking “our” jobs. These are not “our” jobs; they’re just jobs. What right do I have to demand that some Indian or Chinese be denied a job just to protect my cushy salary and lifestyle? On a worldwide basis maybe Americans are overpaid.

  80. Exactly. We don’t as a society/culture put nearly enough premium on education. And (to return to my original point) populism doesn’t help here. Those who scorn the educated “elite” are reaping the economy they deserve.

  81. Mulp,

    great post! That’s something that’s on my mind a lot.

    To be clear about the immigration thing: Pnelson was asking why people would want to come to the States. Obviously, because the States is so awesome, right? Well, yeah. It is pretty awesome.

    It’s funny that he says I’m anti-American, though, because when I read his post, I thought to myself, “Huh. He’s really not looking at this from the perspective of an immigrant, is he?” So I wanted to offer an alternate explanation. It’s really addressing the question of “Why do people leave their home countries in the first place?” not the question of why they choose the USA, of all places, once they do decide to leave.

    Economic activity has increased in most countries recently, and many developing nations have seen their economies blow way up, with middle classes getting bigger. All of this economic development has been accompanied by a lot of social upheaval, though, with people leaving ancestral homes that can no longer support them to learn an entirely new way of life. The past decade has seen the biggest migration of rural folks to cities ever–you think that isn’t traumatic? Folks who advocate free market solutions to problems of poverty and development often SEEM (I say “seem” because I assume they really aren’t; they just come off that way) to be cold-hearted about this. Which is not to say that free-market solutions are unworkable.

    Anyway, what were we talking about? Oh right. Health care. Barney Frank. Free trade.

    Under what conditions is an unhealthy population a drag on productivity? If I had health care, maybe I would miss less days of work. (When I get sick I just stay home and sleep.) Does anybody think Frank’s deal might lay the groundwork for future agreements about international environmental and labor protections?

    “Free trade” isn’t free. Not really. Capital can go wherever it wants, but people can’t. And if it weren’t for this fact, “free trade” would be out in the cold. Companies move overseas because it is more profitable to do business there. Why is is more profitable? Because in places where environmental and health protections are not in place, they are able to externalize more of their costs of doing business. They are able to extract resources and let the next generation worry about the consequences. They can neagtively impact the health of their workers but not worry about the health care costs. (This goes back to Mulp’s post.) So free trade is not free in two senses: first, in that it imposes costs that others will have to deal with, and two, in that it relies on some faily stringent restrictions (and some natural, geographical ones) on people’s ability to move freely around the world.

  82. Hi

    There are so many issues in this topic.

    Politics: the highly partisan behaviour of the republican party has been primarily the result of influence (some might go so far as to call it intimidation) by a certain hardcore group of repulican conservatives who took it upon themselves through the 80′s and 90′s to destroy whatever bridges existed between the two parties. My opinion is that this almost fascist behaviour is primarily a reaction to Watergate and Vietnam, yet this group has been successful in splitting the parties, and the nation, on issues which bear less and less relevance to the real problems that this nations faces: the debt, the deficit and the environment.

    These people need to be identified, villified, and voted out.

    Corporate: corporations have far too much influence on the political process, and people have far too little – public funding of election campaigns is a necessity for democracy to re-assert itself in this country.

    Media: the mainstream press has taken upon itself to remain silent in the face of extremely irresponsible tabloic press assertions – this must be reversed.

    Crime: how many corporations exist which use offshore tax havens to avoid paying tax on their profits?

    Most important of all:

    Finance: this country is victim to a debt which is artificial, yet we are required to pay real money as interest on it – this is money taken directly ; the federal reserve is a private bank which is out of government control, yet has more power than government, because it is the lender. It, and the corporations which have grown up around it, must be brought back under control by act of congress, the point of which would be to:

    a) eliminate fractional reserve lending, and

    b) eliminate debt-based money from USA

  83. But SO WHAT?. I’m tired of hearing Americans complin that “they” are taking “our” jobs. These are not “our” jobs; they’re just jobs. What right do I have to demand that some Indian or Chinese be denied a job just to protect my cushy salary and lifestyle? On a worldwide basis maybe Americans are overpaid.

    Right on, Pnelson! I am totally with you on this one. I believe Americans are overpaid. Unfortunately, we’ve chosen to take our pay in tchochkes and HDTVs.

    What are YOU doing to make sure YOU are competitive with Chinese and Indians who can do just as good a job as you can for a fraction of the price?

    I’m doing what I gotta do. My question is, are the Chinese and the Indians paying for their competitiveness by damaging their environment, their health, or that of their children? Is this a concern of ours? What right do we have to tell them what to do? On the other hand, what right do we have to stand idly by?

  84. To valkyrie607: The USA had tremendous economic growth right up through the end of this centutry. During this time their was no govt health plan for private sector workers.As a matter of fact during the 1800′s When there was little if any health insurance available to the common worker the US economy saw unprecedented growth.

    I think your argument that state mandated health care is a necessity for a strong economy doesn’t bare up when we look at the history of our country.

    Besides I think the debate really is more about govt funded health care. Meaning me paying my hard earned money to the govt so they can pick out some health plan that I may or may not want. Or letting me Keep my money and use it to shop for a plan that best fits my needs.

  85. “my money”

    Tax money is not your money even though Bush says it is. You owe taxes for living in this society. And you have to abide by collective judgements and decisions about what is done with that money as I do. We can protest all we like.

    RC21: To Potter The program I work for is not a social welfare program. The kids work for everything they recieve. I just help them along.

    Yes but my point is that you work for a social program and that it is needed and effective. A social program does not have to be “welfare” as we knew it for years. But social progams should be subsidized, even in part, not left solely to “a thousand points of light” or what happens to catch the attention of the very wealthy. That is not to say that these programs should not be subject to oversight and reevaluation.

    RC21 says : As to your other subject I’m all for spending on the military. Remember it is one of the very few items the original framers believed was important enough to warrant the collection of taxes.

    I may be wrong but I think it was article 1 section 8. It’s been awhile but I think thats where you will find it.

    from the Preamble: We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare,…….

    From Article 1 sec. 8 The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States……

  86. Potter, Sorry But It is my money. I earned it and the Govt is taking it. They would not be able to take it if I did not earn it, You can split hairs all you want. But without me earning money. The govt could never tax me.

    I take it you read the part about The common defense of our country. That means the military. The welfare of the country is made possible by having a strong military.

  87. Without the government ensuring that you are not enslaved or otherwise screwed out of the fruits of your labor, you might not be earning money.

  88. …or building the roads, or enforcing property rights, or ensuring that others have enough to live on so that you (hopefully) don’t get robbed on the way to work, or maintaining open markets abroad for the import of materials and the export of finished goods, or the million other things the state does…

  89. To take the point up a level, markets are constructs — they don’t exist in a vacuum. They are constituted by the web of rights and obligations surrounding the goods and services being sold, and the value of the thing being sold varies accordingly. Thus, to me it’s just wrong to say “I earned $10 doing X, and it’s all mine.” That $10 presumes a lot of social structure, and is meaningless on its own. My work is “worth” $10 only given circumstances X, Y, and Z — there’s no INHERENT worth. If the social structure necessary to maintain the system costs $3 of those ten dollars, then that’s the price of living in society, and there’s no basis to claim some natural right to all ten of them, or even to eight of them.

  90. Thanks Sutter and Val- that issue has been bothering me on this thread.

    The welfare of this country may or may not be made possible by having a strong military. And it may be said today that having a strong military is NOT making us more secure but tempting us into unwise action which weakens us ( as well as our military- our trust in leaders, our will to fight). But even if the welfare of this country WAS insured by a strong military ( not one that is helping to bankrupt us ) it would still not be true that our welfare is ONLY secured by that. The common welfare is not only about being willing to fight.

  91. OK, all the greed-is-good apologists, can you explain away a new study by the UN that shows that the richest 2% own HALF of all household wealth.

    Or that 90% is concentrated in North America, some European countries as well as Japan and Australia.

    Also, many people in wealthy countries are actually only keeping up consumption wise by going heavily into debt. So on the surface they look to have a good life, but have little security. This parallels Mulp’s point about overexploitation of natural resources and the burden placed on future generations.

    Go figure…

  92. Such facts would suggest that rather than a Grand Bargain, a Grand Redistribution is in order since a few are hording the common wealth.

    Wasn’t privatization promoted as a way to solve the tragedy of the commons?

  93. Valkyrie607; I’m not sure what you meant by your last post, But if i’m to be enslaved I’m sure it will be your beloved big govt that does the enslaving.

  94. Indeed. Well, sort of. If you were enslaved, it would be the government upholding and enforcing the laws that allowed others to enslave you. Likewise, if you OWNED slaves, it would be the government enforcing the laws that allowed you to hold another being as chattel.

    And suppose, one day, the government said to slave-owners, “Sorry. We’ve decided that you can’t own slaves anymore. Time to compensate your people for the work they do.” A slave-owner might very well say, “The hell! This is a free market! Your interference is about to ruin my business. This will be the downfall of our economy!”

  95. Sutter sez – To return to the topic at hand: Above, I’ve mentioned several times the prospect for a “new social compact.” This, I think, is one way of conceiving what Frank has in mind.

    As I said at the beginning, it looks like good old-fashioned log-rolling to me. “I’ll support (or not oppose) your legislation and you’ll support (or not oppose) my legislation.” It’s a practice as old as Washington.

    And it’s intellectually dishonest and represents the same sort of quid-pro-quo politcs the GOP hs been practicing for years! Every issue and every piece of legislation should be considered on its OWN merits or lack thereof. Otherwise this results in Congressmen votng FOR things they know in their heart-of-hearts are WRONG just to make some deal-with-the-devil. Congressmen voting for things they knew were wrong is how we got into the Iraq War, among other things.

  96. Sutter says To take the point up a level, markets are constructs — they don’t exist in a vacuum.

    I agree that markets are constructs, just like everything else in society. And it’s perfectly legitimate to ask how much of what kind of social infrastructure and scaffolding is necessary to maintain them.

    BUT what I’m contending above is tht the only good way to ask that question is with real-world empirical examples, because we don’t have a good enough theoretical framework of human social behavior to ask it on paper.

    And I’ve contended that the examples we’ve been given so far, like Sweden and New Hampshire are so far outside of the statistical mainstream that their lessons have no reliable applicability to a large, diverse, urban, multiethnic industrial economy like the US.

    Especially when it comes to “health education and welfare” the biggest stumbling blocks in most societies have to do with they way different subgroups in the society respond the value systems that are inevitably implicit in policies about jobs, education, having babies and child-rearing, violence, healthy-living, and so forth. From France to China to Australia, it’s “health education and welfare” policies, not the more mundane things that governments do, that tends to be problematic. We are a very diverse society and we need to see an example of how proposed policies pan out in large, diverse societies.

  97. Sidewalker says : OK, all the greed-is-good apologists, can you explain away a new study by the UN that shows that the richest 2% own HALF of all household wealth.

    Or that 90% is concentrated in North America, some European countries as well as Japan and Australia.

    Why is it necessary to explain it “away”? These same wealthy people are the ones that create the drugs, do the scientific research, design the computers and other technology, and even grow the food, for much of the world.

    As for the poor, are they poorer than they were 100 years ago? Do they have a shorter life expectancy, less education, or less access to material goods than they did 100 years ago?

    And what are the causes of this? Is it BECAUSE we are rich? Or is it because they have violent, corrupt leaders or because they spend their time fighting with neighbors who or from different ethnic or religious groups from them?

    Historically nothing has shown to be as powerful an antidote to poverty as capitalism. Nothing. South Korea, Japan, Singapore, Taiwan, and now India and China are the latest examples of this. If the Asians can do it why not the Africans?

  98. Sidewalker says . . . Also, many people in wealthy countries are actually only keeping up consumption wise by going heavily into debt. So on the surface they look to have a good life, but have little security.

    But this is their CHOICE. No one holds a gun to their head and makes them do that. My wife and I have never had any consumer debt (credit cards, car loans, etc) in 21 years of marriage! We have a tiny mortgage of less than 20% of the value of our house (we could pay it off anytime except that the interest rate is so low our money can be better invested elsewhere).

    So what is your point about the debt?

  99. Like wise plnelson: I’m no wallstreet trader, but I understood early on that the only person I could depend on to take care of me financially is me. I have almost no debt. My car is paid for I have 1 credit card that I payoff in full every month. My mortgage is less than the money I put up for a down payment. And I have been investing in mutual funds and my own retirement plan for over 10 years.

    Now I know I could do better. Especially with my investment’s I need to learn more about this form of economic self help. I also could have done better with some realestate opportunities,but I didn’t have enough self motivation to take advantage of things I knew could be good money makers. This is my own fault as are all my lost opportunities to be more succsesfull than I am. I do ok,because I dont depend on others and I stay away from debt. If I can’t afford it I don’t buy it.

    Your other points on capitalism are all spot on.

  100. plnelson: As for the poor, are they poorer than they were 100 years ago? Do they have a shorter life expectancy, less education, or less access to material goods than they did 100 years ago?

    It’s not a comparison to 100 years ago that matters, it the comparison between rich (the super-rich) and the poor today.

  101. The NYTimes recently ran an article: The Rise of the Super-Rich

    On the The Growing Divide:

    Thomas Piketty, of the École Normale Supérieure in Paris, and Emmanuel Saez of the University of California at Berkeley recently updated their groundbreaking study on income inequality (pdf), and their findings are striking.

    The new figures show that from 2003 to 2004, the latest year for which there is data, the richest Americans pulled far ahead of everyone else. In the space of that one year, real average income for the top 1 percent of households – those making more than $315,000 in 2004 – grew by nearly 17 percent. For the remaining 99 percent, the average gain was less than 3 percent, and that probably makes things look better than they really are, since other data, most notably from the Census Bureau, indicate that the average is bolstered by large gains among the top 20 percent of households. In all, the top 1 percent of households enjoyed 36 percent of all income gains in 2004, on top of an already stunning 30 percent in 2003.

    Some of the gains at the top reflect capitalism’s robust reward for the founders of companies like Microsoft, Google and Dell. But most of it is due to the unprecedented largesse being heaped on executives and professionals, in the form of salary, bonuses and stock options. A recent study done for the Business Roundtable (pdf), a lobbying group for chief executives, shows that median executive pay at 350 large public companies was $6.8 million in 2005. According to the Wall Street Journal, that’s 179 times the pay of the average American worker. The study is intended to rebut much higher estimates made by other researchers, but it does little to quell the sense that executive pay is out of whack. As the Journal’s Alan Murray pointed out recently, the study’s calculation of executive pay is widely criticized as an understatement because, as a measurement of the median, it is largely unaffected by the eight or nine-digit pay packages that have dominated the headlines of late.

    Rich people are also being made richer, recent government data shows, by strong returns on investment income. In 2003, the latest year for which figures are available, the top 1 percent of households owned 57.5 percent of corporate wealth, generally dividends and capital gains, up from 53.4 percent a year earlier.

    So money makes money ( as my Dad used to say).

  102. From the article linked above- please read A brief History of Income Inequality

    from III. Inequality During the Bush Years

    For the last few years, the tide has been rising again, but most boats have been staying where they are, or sinking. One key reason is that the link between rising productivity and broad economic prosperity has been severed. Take another look at this graph. During the years that George W. Bush has been in the White House, productivity growth has been stronger than ever. But the real compensation of all but the top 20 percent of income earners has been flat or falling. Gains in wages, salaries and benefits have been increasingly concentrated at the uppermost rungs of the income ladder.

    How does government policy promote this inequality?

    Read about “the Tax Wedge” ( how the richest benefited further from recent tax cuts), and the”Assault on Programs for the Poor and Middle Class”

    from the article re: the Future of Inequality (growing):

    At issue, in economic terms, is the tradeoff between equality and efficiency: It can be difficult to divide the economic pie more equally without reducing the size of the pie. But it’s not impossible, and doing so is crucial for widespread prosperity. A fair and well-functioning economy will always involve some inequality, which acts a motivator and can be explained by differences in risk-taking, ability and work intensity. But inequality is generally deemed to be dangerous – socially, economically, (and, perhaps, politically) – when it becomes so extreme as to be self-reinforcing, as many researchers suggest is currently the case.

  103. Potter sez: “plnelson: ‘As for the poor, are they poorer than they were 100 years ago? Do they have a shorter life expectancy, less education, or less access to material goods than they did 100 years ago?’

    It’s not a comparison to 100 years ago that matters, it the comparison between rich (the super-rich) and the poor today. ”

    Why?

    Plenty of economic research has shown that for modern industrial economies icome disparity tracks growth, i.e., growth is higher in economies with greater inequality. The New York Times had an article (available only to subscribers) on Nov 19 : “ ECONOMIC VIEW; If All the Slices Are Equal, Will the Pie Shrink? where they point out that economists gnerally agree that this is true but they don’t know what the “optimal” level of inequality is. Do we have “too much” inequality in the US? If you think that’s the case then prove it operationally, instead of just trying to appeal to an emotional, subjective judgement of “too much”. Your definition of “too much” is like defining “indecent” – you know it when you see it.

    Economic growth is what drives jobs. As I pointed out above, BILLIONS of people in Asia and eleswhere have better lives today than their ancestors had because Americans are buying cellphones and videogames and Nike’s, etc. We are doing more to help the poor in other countries simply by being successful than the French are doing by being redistributionist. Because I am successful I have a cellphone made by LG in South Korea. Thanks to people like me South Koreans today can live in good houses and have nice office jobs and can afford cellphones of their own, instead of farming in the dirt like their ancestors did.

  104. Read about “the Tax Wedge” ( how the richest benefited further from recent tax cuts),

    Keep in mind that poor whites have overwhelmingly supported Bush. Please let’s not gear up for another one of those “we, the intellectual elite, know better what’s good for those poor, misguided peasants than they do, so they should let us do their thinking for them”.

    Most Americans don’t care how rich Bill Gates or Warren Buffet are.

  105. So money makes money ( as my Dad used to say).

    But that’s not the ONLY way to make money.

    As was pointed out, above, MILLIONS of people come here from all over the world, because, even though they have no money, they have ambition, and America offers the ambitious opportunity. We create new companies and jobs at all levels of skill and income better than anyplace on earth. The challenge to to those who think we have too much inequality is to demonstrate that schemes to reduce inequality won’t also reduce opportunity. Examples of other large diverse industrial economies like France and Germany don’t offer much encouragement.

  106. plnelson: Keep in mind that poor whites have overwhelmingly supported Bush.

    I don’t know if this is actually true. I do know that Bush’s appeal was anti-intellectual, emotional, religous, and simple to simplistic. If I may generalize: the poor tend to be less educated. They work hard, have less leisure time which means less access to information (of the more nuanced kind). GWBush’s appeal was to those folks. So if that is true, I am not surprised. There are probably enough of those people now to make that kind of appeal all that is necessary to win.

    To say ( or intimate) that the poor voted for Bush because he will give tax cuts to the rich and send their kids to war so they can get a higher education is a bigger leap of faith than I have.

  107. plnelson: The challenge to to those who think we have too much inequality is to demonstrate that schemes to reduce inequality won’t also reduce opportunity.

    My first reaction was “let’s try it and see”, but then didn’t Clinton do just that?

    Again from that article I linked:

    The trend toward increasing inequality was interrupted, briefly, in the late 1990′s. Productivity growth rebounded, and for a half decade, all income groups participated in the prosperity. Even then, the richest Americans had the best run, propelled largely by stock market gains. In fact, when the stock market hit its all time high in 2000, post-war income concentration also peaked.

    But government policies of the day helped to ensure that the lower rungs also had a boost. Clinton-era welfare reforms are often cast as a success story of market-based incentives. But in fact, they were supported by a big increase in the earned income tax credit to help solidify the transition from welfare to work. At the same time, budget deficits were conquered by shared sacrifice – a mix of tax increases and spending cuts affecting all groups. The combination of economic growth and fiscal discipline spurred robust hiring and, if it had endured, could also have strengthened the Social Security safety net by allowing the government to pay down its debts.

  108. Pnelson, you have a very negative opinion of farming in the dirt. I have a couple of things to say about this.

    One is that farming in the dirt is not such a bad way to live. Our ancestors did it, and people are doing it right now, in the millions. To equate farming in the dirt with misery and poverty is to say that humans have lived in misery and poverty for thousands and thousands of years, up until the last few hundred years. This is just silly.

    Subsistence farmers can generally count on being able to feed themselves and their families. Such is not the case for millions of migrants from the country to the world’s great cities, whose populations are growing at an unprecedented rate. Population pressures, for example, have forced people off their ancestral land and into big cities to look for jobs. Sometimes they find them; sometimes they don’t. In either case, they go from a situation where their safety net is their extended family and their community to a situation where there is more safety net at all. Sure, they weren’t earning any money before–but they could count on having enough calories to get by day to day. If they got sick they knew someone would take care of them. Now, they don’t have that safety net. And they certainly don’t have health insurance. BUT they’re earning money. Since they weren’t before, this makes the GDP go up, and statisticians say, ah, this is good for the economy. Meanwhile, our former farmers are working in conditions with poor health protections, breathing in all manner of toxic or carcinogenic pollutants. They are paid just enough to keep them at a subsistence level. If they try to organize, they are fired: there are hundreds of other uneducated, displaced rural migrants who would love to have their job. Tell me this is not a traumatic transition to make.

    Certainly there have been wonderful improvements in living standards in a great many places. Literacy is on the uptick, disease kills fewer people, infant mortality rates are generally declining–but these in turn contribute to the population pressures that force people into poverty, whether it’s picking through garbage dumps in Bombay or trying to make one acre of farmland feed 17 people in Kenya. I’m not saying I want to stop the whole process–I just want us to look at it honestly. These countries are still making the demographic transition we made 100 years ago. There’s always upheaval and difficulty associated with major change.

    Your refusal to consider the possibility that the transition from a farming subsistence economy to a globalized cash economy be having an adverse affect on people’s lives baffles me. After all, it certainly had an adverse affect on people’s lives in America around the turn of the century, when we had child labor, young women burning to death in textile factories where the doors were chained shut, and miners with a life expectancy of 37 years or less. This was a decline, a bump down at the time which eventually sorted itself out–mostly, I should say, due to the heroic efforts of organizers and ordinary people who had to fight like hell and sometimes die for things as simple as an 8-hour work day! The transition to an industrialized economy had a negative effect on many people at the time. So why is it so unthinkable that some (not all!) people are suffering now as a result of similar economic processes?

    And if we can imagine the possibility that some people are suffering as a result of this, can we not imagine the possibility of taking action to ameliorate the situation?

  109. Examples of other large diverse industrial economies like France and Germany don’t offer much encouragement. …sez pnelson.

    And yet immigrants flock to those nations as well. I wonder why?

  110. Examples of other large diverse industrial economies like France and Germany don’t offer much encouragement. …sez pnelson.

    And yet immigrants flock to those nations as well. I wonder why?

    Two reasons (according to the Economist Magazine)

    1. They are the first stop to other places. Once immigrants make it into the EU they have a lot more freedom of movement. The UK has had huge problems with people sneaking from France, for example, to the UK. the UK has been struggling with French authorities to get them to close the sprawilng Sangatte campe at the French Chunnel entrance, for example.

    2. Very generous welfare benefits. Look at the unemployment rates in the French banlieus – 20% or more! So they are certainly not going there for the jobs!

  111. Pnelson, you have a very negative opinion of farming in the dirt. I have a couple of things to say about this.

    One is that farming in the dirt is not such a bad way to live. Our ancestors did it, and people are doing it right now, in the millions. To equate farming in the dirt with misery and poverty is to say that humans have lived in misery and poverty for thousands and thousands of years, up until the last few hundred years. This is just silly.

    It’s not silly at all. For most of human history people have lived livs of poverty and desperation characterized by short life spans, disease, and starvation. I’m an organix garderner – I farm in the dirt for fun but I wouldn’t want to have to make a living at it.

    The simple test of this is where people go if they have a choice. They stream into the cities! The reasons they go into the cities are more complex than simply being forced there by population pressure. Cities offer jobs with better pay, indoor work, educational opportunities, and excitement. One of my hobbies is collecting diaries and letters of Americans in the 19th century and it’s clear that cities had a great allure for people. Read Farm to Factory; Women’s Letters, 1830-1860; Edited by Thomas Dublin , Columbia University Press which is a collection of letters by girls and young women who worked in the Lowell (MA) mills.

    China is the latest example, but all major industrial societies including the US have gone through the same process. Given the choice most people would rather work indoors for predictible pay and benefits at an income level that provides them with creature comforts and a chance to visit the countryside and get their hands dirty when they feel like it, not when they have to.

    I have no objection to taking practical measures to make life easier for people in newly industrializing economies. But if ou think that’s straightforward then read the cover stor in BusinessWeek a couple of weeks ago where they talk about all the clever ways Chinese factory managers have to hide their workers’ poor conditions from western monitors. Basically, it’s like Iraq – our meddling will not help – if the workers there want a better deal they’ll have to fight for it themselves the way US and UK workers did.

  112. Choice? People arrive in the cities ( of say France and Germany, China as well as the US) because that’s where the jobs are. They arrive especially in France and Germany from the neighboring countries. We talk of poverty not immigration. Once people are allowed to stay all countries must have programs to alleviate ( especially growing) inequities of society, or suffer from problems in governance leading to social unrest.

    We have gone through this process in the past (plnelson’s letters) but we have evolved. No?

    Inequality, growing inequality, is not healthy, not in the interest of society, and in my mind immoral. It’s not par for the course.

    It boils down to compassion.

  113. The current (Dec 11) issue of Fortune magazine has an article about Vietnam’s rapidly industrializing economy and their upcoming entrance into the WTO. The article has a sub-article on a young woman whose name translates in English to “Baby Six” (because she was the sixth child born to her parents, who were poor rice farmers) . She makes between $75 and $95 a month – the minimum wage there is $55/month. Her job is sewing Disney toys – specifically she sews the red bows on Minnie’s head. When she thinks back to the backbreaking labor of being a rice farmer in the village where she comes from the’s thrilled to have such a good job. The Minnie dolls she helps make sell for $13 in US malls.

    Half of Vietnam’s population is under 25 and they are very excited about the economic growth of their country (8.4%) and the fact that they are about to be playing on the big stage in the WTO. They are also worried about being able to compete with China. The US just lowered import tariffs from Vietnam from 40% to 4%, but then they slapped new “antidumping” tariffs on many products.

    By American standards “Baby Six” is desperately poor; by her standards she’s doing quite well and is grateful to be out of the rice paddies, regardless of what romantic notions some people here might have about subsistence farming. If we are too overzealous about trying to impose our standards on developing nations we could end up sending her right back there.

  114. Potter says “We have gone through this process in the past (plnelson’s letters) but we have evolved. No?

    Inequality, growing inequality, is not healthy, not in the interest of society, and in my mind immoral. It’s not par for the course.

    It boils down to compassion.

    This all sounds good in a kind of warm and fuzzy let’s-hold-hands-and-sing-Kumbayaa way. But what does it mean in practice? Using “Baby Six”, from the above example, what concrete steps can be taken to ensure that they have better lives? Also read the cover article in Businessweek from three weeks back about how Chinese factory managers hide abuses from western monitors.

    In economic terms the 8-10% annual growth that countries like China and Vietnam enjoy is incredible, almost unheard of, amazing growth! In a good year the US might manage 3 or 4%, France and Germany struggle to achieve 1%. But Vietnam and China are so poor that even if they can sustain 8-10% growth and even if most people there share in it fairly equally, they will still be very VERY poor by western standards for a VERY long time.

    In the end it does not boil down to compassion; it boils down to practical on-the-ground concrete results. If you think you have a way to turn your compassion into positive results let’s hear it. Because right now the shoppers at the Disney stores in the malls are doing more for Baby Six than most compassionate hand-wringing liberals are.

  115. plnelson- I was waiting for “bleeding heart liberal” but I got the “Kumbayaa”. Compare apples to apples, not to oranges.You are comparing the people of Viet nam to the less well off here I believe and our poor look good to you. You don’t have to feel any compassion against that measure. But you fail to measure the growing gap, the growing insurmountable inequality between rich, now super-rich, and barely making it to poor in this society. You do not mention that to live, to survive in this society it takes more income relatively speaking than it does in Viet Nam.

    I am not complaining about globalization, nor do I begrudge the high growth rates in less developed countries. If a country has been less developed and is now playing catch-up, it’s developing at a faster rate now. The growth rate is important for portfolio managers.

    I am talking about the growing inequality here. Barney Frank should not have to sweat to get his bargain. He should not even have to trade. It’s in everyone’s interest for the government to try to help fill the gaps between rich and poor, to provide for the general welfare ( well-being) of society. This is what it means to be civilized . It’s not okay for me to live in a society where only the very rich can afford the best medical care, where the poor, the uninsured, don’t have any medical care ( beyond emergency rooms), where only the rich have easy access to a good education and higher education, do not have to worry about discrimination, or getting by in old age, or indeed good nutrition.

    The minimum wage has not increased since 1997, and Medicaid and food stamps have been cut. At the same time there has been steady decline in the progressive income tax since (“it’s your money”). As well on the other end there has been “unprecedented largesse being heaped on executives and professionals, in the form of salary, bonuses and stock options” and “strong returns on investment income”

    In 2003, the latest year for which figures are available, the top 1 percent of households owned 57.5 percent of corporate wealth, generally dividends and capital gains, up from 53.4 percent a year earlier.”

    • The top 10 percent of households had 46 percent of the nation’s income, their biggest share in all but two of the last 70 years.

    • The top 1 percent of households had 19.5 percent (see graph).

    • The top one-tenth of 1 percent of households actually received nearly half of the increased share going to the top 1 percent.

    These disparaties seem large, and they are. (Though the latest availabe data is from 2004, there are virtually no signs that the basic trend has changed since then.) The top 1 percent held a bigger share of total income than at any time since 1929, except for 1999 and 2000 during the tech stock bubble. But what makes today’s disparities particularly brutal is that unlike the last bull market of the late 1990′s — when a proverbial rising tide was lifting all boats — the rich have been the only winners lately. According to an analysis by Goldman Sachs, for most American households — the bottom 60 percent — average income grew by less than 20 percent from 1979 to 2004, with virtually all of those gains occurring from the mid- to late 1990′s. Before and since, real incomes for that group have basically flatlined.

    The best-off Americans are not only winning by an extraordinary margin right now. They are the only ones who are winning at all.

    (All quotes from the article I linked above)

    I’m hearing “I got mine-I’m all set, I was smart, what’s the matter with all the rest of you”.

    This argument is characterized below by the maybe too cute acronyms YOYO’s( You’re On Your Own) versus the WITT’s ( We’re in this Together), but it’s true enough.

    In his book “All Together Now: Common Sense for a Fair Economy,” Jared Bernstein traces the origins and evolution of “you’re on your own,” (YOYO) economics and articulates an alternative approach , “we’re in this together,” (WITT).

    Excerpts From ‘All Together Now: Common Sense for a Fair Economy’ by Jared Bernstein

    (maybe you need a NYTimes Select subscription for this)

  116. [i]I am talking about the growing inequality here. [/i]

    But you’re talking about it in subjective, emotional, Unitarian-church-basement terms. You keep saying that YOU don’t like it; that it offends your emotional sensitivities. But why should we care about that? That doesn’t add up to a convincing argument.

    If you want to make a convincing argument you have to [b]rigorously[/b] show that that cost it is imposing on society (higher crime, lost productivity, whatever) is higher than the cost of [b]fixing[/b] it, and you have to use hard numbers and facts.

    Arguing about it from a [b]values[/b] perspective (compassion, human suffering, etc) is like the conservatives trying to ban gay marriage because that offends [b]their[/b] emotional sensitivities. We live in a very large DIVERSE society and values-based arguments are a hard sell because there are so many different value systems.

  117. valkyrie607 Inequality does impose costs on society, but how to measure the impact of a degraded environment on future generations?

    Saying so doesn’t make it so. Poverty MAY impose a cost on society but it’s not clear whether inequality does. Moreover there is good economic evidence that inequality might also have benefits – nations with higher inequality seem to have higher GDP growth rates (see the New York Times article I referenced, above).

    If there is a cost to inequality, per se, then, to convince us, you have to tally up that cost in a way that distinguishes it from mere poverty, and tally up the cost of addressing it so as to convince us that the cure isn’t worse than the disease.

  118. The more rich people in the USA the better. Why would anyone begrudge someone who is successful. Rich people spend money ,and need services provided to them. This is where capitalism steps up and provides jobs for people. Rich people want bigger houses. Builders build. Electricians, roofers,landscapers,paving companies,sprinkler companies,plumbers,all gain work along with many others. The more rich people we have the better off the economy is.

    There is way to much envy and jealousy of the rich. The flip side is, no rich people, No demand for goods and services.That equals a stagnent economy and more poor people.

  119. The problem with GDP is every time you cut down a forest, the GDP goes up. Now your GDP is higher, but your forest is gone, your hillsides are eroding, there is no more hunting, etc., etc. Its like measuring the money you spend at the doctor’s office when you get sick as a net plus for the economy, but not taking into account the days of work you’ve missed. I am very skeptical of GDP as an accurate measure of the health of an economy. Developing nations are prone to resource mining–taking resources out of the environment faster than they can be replaced, whereas developed nations have moved past that point, have enacted environmental protections, or have already reached the point where the remaining resources are inaccessible. So yeah, often the growth rate in these less developed nations is higher.

    Sorry, it’s finals week, I’ll have to read that article next Saturday.

    cheers–

    –Valkyrie

  120. Why would anyone begrudge someone who is successful.

    In America they don’t. Poll after poll has shown that in America people want to emulate the rich. Av few lefties are trying to stir up resentment but I don’t think it will work in US culture.

    Just after the collapse of the USSR I was having dinner with an American who had done business (selling bookbinding equipment) in the USSR for decades, so he was familiar with their culture. He didn’t think that capitalism as we understand it would ever catch on there because, as he put it, in America when people see a rich m,an drive by in a big car they want to BE him; in Russia they want to KILL him. (I know that observation has become a cliche since then but that’s where I heard it first).

  121. valkyrie607 opines So yeah, often the growth rate in these less developed nations is higher.

    Talk to some Chinese. I’ve talked to PLENTY who are not the least bit skeptical that the growth in their economy is a Good Thing.

  122. plnelson; Here is another positive story about capitalism, I have several friends who are from N. Ireland. We were talking about the disarmament of the IRA. They told me that political mediation and bargaining had very little if anything to do with the end of the violence. The real answer was that the economy finally started to pick up after years of stagnation. Now all these would be bomb throwers and thugs had jobs.

    It seems they all had to go to work and could not afford the free time to partake in their extracurricular activities.

    The wonders of capitalism never cease.

  123. plNelson: If you want to make a convincing argument you have to [b]rigorously[/b] show that that cost it is imposing on society (higher crime, lost productivity, whatever) is higher than the cost of [b]fixing[/b] it, and you have to use hard numbers and facts.

    This conclusion from the report The State of Working America 2006 2007, Chapter 5 “Unrelenting Disparities” ( with all the charts and graphs and stats you crave):

    

    The data presented here establish that the distribution of wealth is very unequal, much

    more so than the distribution of wages or incomes. The top 10% earned 42.5% of all house-

    hold income but held 71.2% of all net worth in 2004. Recent changes in the tax codes, such

    as the reduction in the marginal income rates for the highest earners, and reduced rates on

    dividends and capital gains have exacerbated wealth concentration. A huge variation in

    levels of wealth held exists by wealth class. Average wealth held by the top 1% is close to

    $15 million while it is $81,000 for households in the middle-fifth of the wealth distribution.

    Strikingly, approximately 30% of households have a net worth of less than $10,000.

    As the wealthiest continue to thrive, many households are left behind with little or

    nothing in the way of assets and often have significant debt. Approximately one in six

    households had zero or negative net wealth. These findings, like most economic statistics,

    vary by race—13.0% of white households compared to 29.4% of black households have

    zero or negative net wealth.

    Median wealth of white households is 10 times that of African American households.

    Home ownership, an important asset and milestone of middle-class life in the United States,

    is out of reach for half of black and Hispanic households. Comparatively, 72.7% of white

    households are homeowners. Hence, race and other socioeconomic characteristics continue

    to be critical factors that exacerbate the skewed distribution of wealth in the United States.

    SWA06 – Book File.indb 276 8/18/2006 3:47:39 PM

    WeaLTh

    A common misperception left over from the frenzied run up in stocks that occurred from

    the mid-1990s into 2000 is that most Americans are invested in the stock market. This is not,

    nor has it ever been, the case. More households are invested now than ever before, but it is

    still the case that just over half of all households are not invested in the stock market. As with

    other assets, the distribution of stock market holdings is concentrated at the upper end of

    wealth holders. The vast majority of stocks—approximately 80%—are held by the top 10%

    of wealth holders, while the bottom 40% of wealth holders own just 0.6% of all stocks.

    Debt is on the increase, and since the new millennium, growth in the rate of debt has

    soared. In 2005, debt exceeded disposable personal income by over 30%. The ability to

    keep up with financial obligations is becoming harder—burdens have always been relative-

    ly high for renters, and they have consistently trended upwards for homeowners. If there is

    a significant downturn in house prices, as forecasted by many analysts, many homeowners

    may feel the pinch.

    Also see other chapters from the report (Family Income: “New economy” drives a wedge between productivity and living standard, International Comparisons,)

  124. Potter sez This conclusion from the report The State of Working America 2006 2007, Chapter 5 “Unrelenting Disparities” ( with all the charts and graphs and stats you crave):

    NO IT DOESN’T because it doesn’t compare the cost of fixing it to the cost of the problem.

    It doesn’t matter how bad the situation is – you have to show that the cost of fixing it won’t make things worse. Remember: I said “If you want to make a convincing argument you have to rigorously show that that cost it is imposing on society (higher crime, lost productivity, whatever) is higher than the cost of fixing it

  125. To plNelson who says: If you want to make a convincing argument you have to [b]rigorously[/b] show that that cost it is imposing on society (higher crime, lost productivity, whatever) is higher than the cost of [b]fixing[/b] it, and you have to use hard numbers and facts.

    How about proving that growing income inequality in this country ( and there should be no doubt) is improving our society? What metric/s would you use? And what evidence? Hard numbers and facts please.

  126. Potter sez How about proving that growing income inequality in this country ( and there should be no doubt) is improving our society? What metric/s would you use? And what evidence? Hard numbers and facts please.

    I have no obligation to prove that because I’m not proposing any changes to it.

    I believe that companies should be free to set compensation levels as they see fit to meet their business objectives or philosophies, and that redistributionist legislation in large diverse industrial societies causes more problems than it solves.

    YOU are the one proposing that something should be done about this so YOU have the obligation to demonstrate the efficacy of your proposal.

  127. Potter, if you want proof that income disparity is improving our society,I suggest you take a trip to our southern border. Millions of foreigners are risking their lives, just to have a chance to be on the bottom end of this income disparity index that you begrudge so much..

    If the USA was not the best society for the poor and downtrodden,we would not see this tremendous influx of immigants both legal and illegal. The proof is right in front of you, just open up your eyes.

  128. pInelson: I have no obligation to prove that because I’m not proposing any changes to it.

    You have an obligation to prove ( as you ask me to do) your claim that rising incomes of the rich, and the super-rich , of which you are so tolerant, help to raise everyone’s boat and not just the yachts (the current joke).

    Moreover growing income inequality is moving, not a status quo. There are more super wealthy proportionally than there ever have been. Is this benefiting society as you claim? How so?

    Contrary to that view, economists are warning that it is not good when unbalanced by government policy. So never mind the morality of the situation. And obviously some inequality is healthy. But too much inequality, and we are moving in that direction- there are differing opinions about where that line is-brings an almost feudal situation where the rich keep growing richer ( money attracting money), the less well off not benefiting but stagnating or sinking and increasingly serving the rich. Fact: The most growth has been at the top. The middle class is getting squeezed. The poor may be lifted a bit ( flipping hamburgers?) but not much.

    So plNeslon do you have some contrary facts that this is not so? Do you have some facts that all boats are lifting in THIS country?

    Inequality is an old story. It risks bringing social unrest, destroys social cohesion. That relates to crime rates on one end, creating an alienated and insulated class that lives in a bubble on the other end.

    Those at the lower end of the socioeconomic scale have a higher mortality rate, poorer health, less education. This affects the whole by diminishing human potential and thus competitiveness. As problems arise within society, the people look to government for solutions through policy and programs. Cutting taxes on the wealthy compounds the matter forcing either cuts in social programs (especially squeezed during a time of increased military spending) and increasing national debt. The evidence would be on the streets in the form of homeless, in the over-burdened emergency rooms. As well we will have, increasingly, a less able, less educated, harder working, less content work force.

    Consider too that the wealthy buy power and influence through lobbyists and campaign donations. The less wealth you have, the less influence you have in political matters these days. This is against the ideals of this country. Our democracy has been affected by concentrated wealth. Do we not talk about the minimum wage and universal government sponsored health care for instance because the wealthy do not care about that or that they stand to lose something? Instead the inheritance tax is renamed the “death tax” and it becomes a focus to repeal it even though it does not apply to the vast majority.

    So it’s not good enough to sit in your padded chair and say “it’s not up to me to prove anything because I like it the way it is, and I got mine, and that is all I care about”.

    And to RC21. I am not talking about Mexico. That shifts the discussion to the disparity between standard of living in Mexico vs the US. Those that come here to stay eventually wind up in the same situation. The way to deflect the conversation from the situation of the disadvantaged here is to point elsewhere where it is worse.

  129. Potter, lets add Kenya, Ghana, Liberia,Somalia,Haiti,Jamaica, Trinidad,Lebanon, Russia, Ireland,Poland,India, Pakistan, Brazil, Columbia,The Dominican Republic, Cuba,Cambodia,Laos,and just about any other country you want to throw in. The fact and it is as plin as day, is that people from other countries are flocking to the USA because it gives them the best chance to improve their lives. And the reason for this is capitalism pure and simple.

    Our poorest people live better than people of moderate incomes in Europe. As far as 3rd world countries go our poor would live like kings.

    Capitalism has freed more people then any govt program you can come up with

    You state in your post ”that as problems arise in society,the people look to the govt for help through policy and programs”. This is a big part of the problem. The govt wants to control the average citizen by making him a slave to govt programs. How does this lead to independence and initiative on the part of the average man. No this is the wrong way to set up a society. We have seen this fail time and time again. Unless you are in favor of a Orwellian type society where the govt runs your life from cradle to grave.

  130. You have an obligation to prove ( as you ask me to do) your claim that rising incomes of the rich, and the super-rich , of which you are so tolerant, help to raise everyone’s boat and not just the yachts (the current joke).

    I never made any such claim.

    I said that the US has a very strong record of job creation at all income and skill levels. We attract foreign workers here by their MILLIONS – everyone from illiterate manual laborers from Mexico to scientists and engineers from China and India. We creat so many jobs here that we cannot fill them all!

    I have no claim that all boats are rising equally, nor do I care. I only care that this is a land of unrivaled opportunity for anyone who truly wants to make something of themselves, and I am satisfied with that state of affairs. Could it be made better? I have never seen any evidence that it could. No one (least of all, you) has made a proposal that provides any evidence that it wouldn’t make things worse.

    YOU on the other hand are unhappy with it and propose that something should be done about it. So, I’m saying WHAT do you propose to do and what’s your evidence that it wouldn’t make things worse?

  131. Those at the lower end of the socioeconomic scale have a higher mortality rate, poorer health, less education. This affects the whole by diminishing human potential and thus competitiveness.

    What is your evidence that this is the case, or that the remedy wouldn’t reduce competiteveness even more? European nations have a lot more social programs. How competitive are they? They have lower GDP growth and higher unemplyment – that doesn’t sound very competitive to me. How many major modern industries are the Europeans out-competing the Americans, Japanese, or Chinese?

    This is why I say your arguments lack rigor – you make these statements but they seem like nonsequiturs.

    Consider too that the wealthy buy power and influence through lobbyists and campaign donations.

    That’s a CHOICE the VOTERS make. Money can’t buy votes – only publicity and glitzy ads. So if the voters didn’t RESPOND to those things then all those campaign contributions would count for nothing.

    I have never voted for a candidate because of his ads (mainly because I never even see the ads since I don’t watch TV and I always deposit all my junk mail in the recycle bin before I get in the house). Do ads buy your votes?

    So in other words, it’s not the MONEY that’s distorting the political process; it’s the VOTERS who FORCE the candidates to put themselves in the pockets of rich contributors who are responsible for this state of affairs. If they didn’t respond to glitzy ads you wouldn’t have this problem.

  132. Potter: Actually the Middle class in America is doing quite well. As a matter of fact they are moving beyond middle class. The poor are also moving up.

    You see liberal columnists like Paul Kruegman and others in the media Have all but brainwashed many into believing the middle class is disappearing. They use faulty, and misleading statistics to make their case and people like you fall for it.

    For example lets look at a Democratic talking point “The vanishing middle class”

    In 2004 the liberal Washington Post wrote an article called ”The Vanishing Middle Class Job” In this article they pointed out that in 1967 nearly a quarter(22.3) of households made between 35 thousand and 50 thousand dollars a year in inflation -adjusted terms,but that share was down to 15 percent by 2003. This sounds quite ominous if we don’t do a little investigating.

    It turns out the Post forgot to mention That by 2003 the percentage of families with income less than 35 thousand had fell from 52% to 40.9%. Moreover families with income over 50 thousand a year had risen from24.9 percent in 1967 to 44.1 percent by 2003.

    So yes the middle class is shrinking as the Post wants us to know, but not because of problems in our capitalistic system.The real reason for the shrinking middle class was because more families were doing better and moving beyond the middle class. But the liberal Post did not want the reader to get the real story, so they quite conveniently left out the statistics that did not fit their agenda. The real title of the story should have been ” Americas Families are Getting Wealthier”

    The left has been attacking capitalism for years and they use the Post and others to distort facts so that mainstream America will buy into there agenda.

    Which is more taxation, more govt programs,more wealth redistribution, and last but not least they (the govt) telling you how to lead your life.

  133. plNelson I have no claim that all boats are rising equally, nor do I care.

    I am very sorry. You never actually said that. I thought that is what you meant. I also thought you cared.

    IMO, and for most woking people I would dare say ( with no evidence to cite) boats do not have to rise equally, but I do care about gross inequality: one end those wallowing in wealth, on the other those just barely making it, if at all. As I have said over and over, and as my links above show, this is where government policy should enter, has entered towards those ends in the not too distant past. Since GWB gov’t. policy has entered but on behalf of the most wealthy.

    plNelsonWhat is your evidence ……

    You have either not followed the links and read any of it, loads of evidence. Yet you cry no evidence! Read the conclusion of the State of Working America Report 2006/7 I posted just above. Do you dispute the conclusions? If so read the report itself I linked which includes all the charts and graphs.

    Show me how we are all ( as a whole- not in comparison to Haiti) more well off with this disparity? What is your metric?

    You say we are creating millions of jobs? What is your evidence? What kind of Jobs? Is that all you care about, the numbers of jobs? How many of those coming here, through the Mexican border say, are coming to fill low paying jobs?

    My metric is whether most people are sharing in the wealth of this country as they help to create it for the richest at the top. Are they are able to afford shelter, food, clothing, education, healthcare; can they afford to actually go to work, raise a family, improve their lives?

    This report, with footnotes to check the EVIDENCE claims that

    1.Profits are up, but the wages and incomes of average Americans are down.

    2.More and more people are deeper and deeper in debt.

    3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.

    4. Poverty is on the rise.

    5.Rising health care costs are eroding families’ already declining income.

  134. RC21- It turns out the Post forgot to mention That by 2003 the percentage of families with income less than 35 thousand had fell from 52% to 40.9%. Moreover families with income over 50 thousand a year had risen from24.9 percent in 1967 to 44.1 percent by 2003.

    Fallen from what year to 2003 ( 52% to 40%) ?? Inflation?

    From 1967 to 2003 is a looong time. Of course there should be a rise in % of income over $50K. What does that income buy in ’03 and what did it buy in ’67? (in terms of food shelter clothing, necessities-and what % is left over for non-essentials). Apples to apples comparison please.

  135. Potter says: Consider too that the wealthy buy power and influence through lobbyists and campaign donations.

    plNelson says:That’s a CHOICE the VOTERS make. Money can’t buy votes – only publicity and glitzy ads. So if the voters didn’t RESPOND to those things then all those campaign contributions would count for nothing.

    I have never voted for a candidate because of his ads (mainly because I never even see the ads since I don’t watch TV and I always deposit all my junk mail in the recycle bin before I get in the house). Do ads buy your votes? So in other words, it’s not the MONEY that’s distorting the political process; it’s the VOTERS who FORCE the candidates to put themselves in the pockets of rich contributors who are responsible for this state of affairs. If they didn’t respond to glitzy ads you wouldn’t have this problem.

    If only human nature were different… perhaps like you? We have to build our systems around what human nature really is. Hard-working people don’t spend their working hours investigating the issues deeply. When they come home they are tired. They don’t have the time or the means or even the education on certain matters. It takes a long time for facts to seep in past the demagoguing and the political ads, maybe long after an election.

    The fact is wealth buys power in this country, like it or not; it brings candidates to the fore, and gets candidates elected. Once in power, money is necessary to stay in power.

    Candidates are all too tempted to adopt philosophies that benefit the rich and to vote in their interest. The public discussion is hijacked from issues and problems that are important to the majority- economic issues- and towards emotional issues like gay marriage, abortion, the “death tax” and war, terror. The polls bear this out. The economy was the most important issue on people’s minds prior to 9/11 and even after.

    The combination of wealth/corporate interests and religious interests in the Republican party changed the discussion and the agenda.

  136. RC21- In 1967 how many of those households were one income and in 2003 how many were two or more earners?

    With two earners now does inflation adjustment alone account for money needed for child care, saving for college, health care ( the last two have skyrocketed) and retirement ( for instance)?

    The 2005 economic survey also found that households in the top two income quintiles, those with an annual household income exceeding $55,331, had a mean of two income earners while those in the lower quintiles (2nd and middle quintile) had mean of only one income earner per household. Due to high unemployment among those in the lowest quintile the mean number of income earners for this particular group was determined to be zero. Overall the United States followed the trend of other industrialized countries with a relatively large population of relatively affluent households outnumbering the poor. Among those in-between the relative extremes of the income strata a large and quite powerful section of households with moderately high middle class incomes and an even larger number of households with moderately low incomes. While the median household income has increased 44% since 1990 it has decreased very slightly when considering inflation. In 1990, the median household income was determined to be $30,056; $44,603 in 2003 dollars. In 2003, the median household income was, however, only $43,389, showing a slight decrease.

    So not only are household incomes decreasing on the moderately low level, but it takes two wager earners now to keep a family going today.

    However contrary to what you say this graph shows you family income ( regardless of how many are earning or not earning in the family). You can see that the lower incomes are flat to not moving between 1967-2003 (inflation adjusted) whereas the higher you go in income, the more gain over time. In other words, all income levels are not rising, only the top levels.

    Overall all households in the United States earned roughly $4,286,391 million in 2005 (4.3 trillion). Roughly one third, 32.5%, of all income in the US was earned by those households with an income over $150,000, approximately the top five percent. Approximately one fifth, 20.58%, of all income was earned by the top 2.67%, those households earning more than $200,000 a year. Overall the aggregate income distributing tilts toward the top, despite the fact that households with middle-range annual incomes ranging from $50,000 to $75,000 earned roughly one fourth, 25.11% of all income. As the percentage of middle-range income households is roughly one-fourth of the population, this particular income group’s share of income is roughly equal to their representation in the general population. The bottom 6.37%, however only earned 0.27% of all income.

    So while the top 5% earned 1/3 of all household income, the bottom 6.37% earned 0.27%.

    Together with the next quintile ( up to $50K household income) this makes up about 25% of households. These are the households that are struggling… with saving, saving for their kids education, saving for retirement, mortgages or rent, and hoping not to have a health care problem or catastrophic illness.

    All quotes in this post are from here: http://en.wikipedia.org/wiki/Household_income_in_the_United_States. (Lots of graphs and charts- double click to enlarge.)

  137. Potter, having two wage earners in a household would be good news, I would think. This shows there are plenty of jobs out there. It also shows for the many feminists out there that women are diving into the job market in record numbers. Wasn’t this a big part of the feminist movement.

    Also one must remember that more people are homeowners now,thus creating great amounts of net worth for themselves. My home alone has gone up over 125 thousand dollars in the last 7 years. Also more people have invested in mutual funds and stocks. I have close to 100 thousand now. Iv’e been slowly investing since 97,and i’m no wall street guru. I’m in the middle class avg salary about 50k. But most of my value has come from investments. My home and my mutual funds.

    I guess we can manipulate statistics all we want to prove whatever point we want. But the simple truth is America provides the best opportunity for people to become successful. This is why people flock here as opposed to Cuba ,South Africa, Zimbabwe,or other socialist countries. The individual knows capitalism works best. wheather you want to admit it or not.

  138. PLN decided that my argument was “not rigorous” ( as my facts and charts did not make a dent against proclamations and therefore proclaimed I was using “non-sequitors” ( as in it does not follow that gross inequality leads to various troubles in a society). RC21 says now that stats can be manipulated which means to me “if I don’t want to accept them, they must be manipulated”.True enough facts can be manipulated, or, better put, interpreted differently, but you cannot change the numbers not can you change history that leads to certain conclusions and therefore warnings.

    Yes it’s good women are “moving up” and that discrimination in the workplace is down. It’s also good that home “ownership” is so high here.

    RC21-I don’t know what you still owe on your house, whether you have an adjustable rate mortagage, have taken an equity loan out, whether you have two incomes in your household, kids education to save for etc. It does sound like you are prudent and not in financial trouble. The dollar amount of household earning vis a vis financial well-being depends on the particular situation. Your 50K may make you feel wealthy if it only has to take care of you for instance. 50K taking care of a family, with 2 kids say, would be hard.

    Many homeowners can be “owners” but have a big debt. It is amazing how many people own homes in this country- almost 70% according to the stats, very slowly rising to include minorities. If you manage to arrive at a point where you can own a home you have to pay an inflated price for it today too remember. Your equity in your home depends on others willingness and ability to pay you that 125 thousand dollars more. So people have been taking low rate ,little down, adjustable mortgages to move into ownership. But if housing prices drop and mortgage rates and payments go up, a lot of people are in trouble. Look at household debt. Tonight on the news there was a story about “holiday loans” some that go up to %300! There must be enough people w/o money during the holiday season to being this product to market and make this profitable ( taking advantage of the requirement to give gifts this time of year).

    BTW I understand most middle income investments are through 401K plans. At the lower end, people are unable to save much if at all, I hear some people saying they will never be able to retire.

    Once people get to the USA from wherever, regardless of what they think, they have to get into the rat race to “get ahead”, they still need shelter, health care etc. They are tempted to buy into our definition of “success”. (Your choice of socialist countries is interesting–only the unappealing.). Immigrants usually arrive in the big cities (New York, California) where the safety nets and services, of necessity, are stronger, and taxes are higher. People used to really think that our streets were lined with gold… growing up in NYC I actually heard this from immigrants who had to get over their disappointment.

  139. Potter sez “If only human nature were different… perhaps like you? We have to build our systems around what human nature really is. Hard-working people don’t spend their working hours investigating the issues deeply. When they come home they are tired. They don’t have the time or the means or even the education on certain matters. It takes a long time for facts to seep in past the demagoguing and the political ads, maybe long after an election.

    I don’t know if this is more insulting to me or to the hard-working people Potter is describing!

    I often work past dinnertime, and on the days that I don’t I often have evening activities that get me home late and I do half the cooking, laundry, kitchen-cleanup, shopping, etc, in our home. If I can do it anyone with a conventional job can. The US used to have a much longer work week, and people also went to work on Saturdays and work in the past was much harder than today and we didn’t have all the labor-saving devices at home we have today. Yet every study has shown that civic participation was higher in the past.

    So I reiterate: whether or not people invest themselves in their patriotic duty to be good citizens is a CHOICE they make: an hour of reading a newspaper or news magazine, or an hour of watching “Survivor” on TV. Whether or not our democracy is a “survivor” may depend on their choice.

  140. Potter sez:You can see that the lower incomes are flat to not moving between 1967-2003 (inflation adjusted) whereas the higher you go in income, the more gain over time. In other words, all income levels are not rising, only the top levels.

    But what is your POINT about this?

    Look, the top-paying jobs are inevitably going to be jobs involving education and advanced technical skills. Obviously, those jobs will benefit from a modern, post-industrial globalized economy. On the other hand the lower-quintile jobs will be those requiring manual labor and little or no skill, so, given the movement of manufacturing jobs offshore, and the increased automation of those that remain, it makes sense that income for those jobs would stagnate.

    The CORRECT solution is for people to respond by advancing their skill level. Instead we see the OPPOSITE. I’m an engineer for a major high-tech company and we hire lots of Indians and Chinese engineers and scientists because we CAN’T FIND ENOUGH AMERICANS with the right skills. At the last ACM Intercollegiate Programming Contest the Russians, Indians, and Chinese walked away with all the prizes – this would have been unheard of some years back.

    The government can’t fix this – people make choices. In school you can choose to study math and science; in college you can choose to major in science or engineering, where there are lots of good, interesting, high-paying jobs, or be an art or political “science” major and get a job involving having to ask “…you want fries with that?”

    My wife and I recently got cell phones for the first time. We are a couple of “a certain age” and the phones we got were the kind that do EVERYTHING, because that’s what came with our plan. They were cheap. Within a couple of weeks we had learned how to use every feature of our phones. We had even downloaded software so we could hack into our phones to do stuff the phone company doesn’t want you to know about. We play MP3′s and TXT each other like kids now.

    I’ve been amazed, talking to people 10,20,30 years younger than us that they don’t know how to do half that stuff with their phones and they think you have to be a rocket scientist to do it. They have no curiosity. People with no curiosity and no interest in the world around them WILL fall behind economically. The world is changing very rapidly and we all have to change with it.

  141. I said: Look, the top-paying jobs are inevitably going to be jobs involving education and advanced technical skills.

    Let’s elaborate on this a bit. Say I design web sites for a living. That’s a job that requires advanced technical skill and a constant investment in learning new skills. BUT modern software design tools allow me to be more productive than I was a few years ago, so of course I will make more money than I did then! On the other hand, because anyone in Russia or India can design web pages just as good as mine for far less, I have to find a competitive strategy. One strategy is to develop a personal relationship with local customers so I can better understand their business and design web sites that better meet their needs or solve their unique problems. But as long as I do that, I can ride the technology wave to ever-higher income.

    Contast this with a house cleaner. There’s not much she can do to improve her productivity. There haven’t been any major technological advances in housecleaning in the last few decades, nor can she develop new skills to be more productive. Also, her foreign competition comes right to her neighborhood, so she can’t strategize around it like I could as a web-designer.

    So, from an economic standpoint it makes sense that high-skill workers would see a greater increase in their earnings than low skill ones. But does this represent some kind of social injustice, or just the basic laws of economics at work? Is it a problem that needs to be “fixed” or just an imbalance in supply and demand for skills that will be self-correcting like similar ones that have occured countless times in US history? Buggy whip makers, elevator operators, train conductors, coal-shovelers, and the ladies in the office typing pool have all seen their jobs decline or disappear over the last century.

  142. Potter: “If only human nature were different… perhaps like you? We have to build our systems around what human nature really is. Hard-working people don’t spend their working hours investigating the issues deeply.

    PLN: I don’t know if this is more insulting to me or to the hard-working people Potter is describing! I often work past dinnertime, and on the days that I don’t I often have evening activities that get me home late and I do half the cooking, laundry, kitchen-cleanup, shopping, etc, in our home. If I can do it anyone with a conventional job can. The US used to have a much longer work week, and people also went to work on Saturdays…..

    I am sorry I don’t mean to insult you but I don’t think you can judge everyone by yourself ( what I meant by the need for compassion or empathy) or by the way things used to be. We live in a much more complicated and materialistic,consumer-oriented economy, a globalized world, with much more information to ingest and understand. People tend to be specialists in their fields, not generalists. And one hour a day to catch the news headlines is not nearly enough. It takes a lot more to undewtand issues, each one.

    There used to be unions… there used to be cheap oil…there used to be essentially FREE higher education, most kids used to grow up in a home where one parent was around….

    PLN: So I reiterate: whether or not people invest themselves in their patriotic duty to be good citizens is a CHOICE they make: an hour of reading a newspaper or news magazine, or an hour of watching “Survivor” on TV. Whether or not our democracy is a “survivor” may depend on their choice.

    Sitting in an ergonomic padded swivel chair all day thinking abstractly is not the same as working on your feet all day or at a job that requires harder labor or a lot of interaction with people all day. Those are tiring jobs that one just cannot work at for extended periods and then come home to more work/chores. This can be true of a doctor, a nurse, a cook, teacher or a utility repair man, a construction worker. You apparently have enough energy and good health to go on into the night plus post here. I don’t sense that you have young kids, especially tiring and demanding, especially after a day away from their parents. So I don’t mean to insult you or others but to say that you judge others by what you are able to accomplish with your education, your choice of occupation, your health and stamina, your emotional well- being.

    As well, you can look to the quality of the education we as a society are giving our kids- whether their skills are developed (thinking, reading, math, creative), their sense of citizenship/responsibility. Also perhaps more important to consider, whether their health, nutrition, emotional problems are in check so that kids can learn. Beyond that look to how we value our teachers. The best and most qualified and even the most inspired and inspiring have to earn a decent living.

    So I agree about citizenship, but I disagree that it is all up to the individual. Society as a whole has to elevate these values. Regarding the vacuity on TV, that’s your free market. That’s what people want after a day of frying their brains elsewise.

  143. Potter. Since Aug of 2003 the US economy has created over 7.3 million jobs. Our stock market is hitting alltime high marks.

    You would almost have to deliberately try and fail in this country in order reach some of your conclusions on capitalism and the US economy.

    You still fail to realize that more people are rising above the middle class and fewer people are remaining poor. This is a good thing not a bad thing.

    As to home ownership I have a fixed Mortgage 5.8% for 30 years I put down over 50% of the total cost of the home. Most of this was profit from selling my old home. I do not have a business degree,or a realestate liscence. All I did was some simple realestate research and some crunching of numbers. Really very simple stuff. How other people approach their financial situation is up to them. If people want to go into debt, If they want to buy and spend above their means that is their fault not the fault of American capitalism.

    One common theme that I read in many of your posts is this constant blaming of capitalism,racism discrimination or some other type of victimization by the rich establishment that is keeping the working man down theme. You rarely if ever address personal accountability or responsibility in any of your thoughts.

    This is what freedom and choice is and should be all about. You seem to think the American citizen is either to stupid or weak and thus a total victim so as not to be able to make one sensible choice for themselves.

  144. PLNOn the other hand the lower-quintile jobs will be those requiring manual labor and little or no skill, so, given the movement of manufacturing jobs offshore, and the increased automation of those that remain, it makes sense that income for those jobs would stagnate.Regarding stagnation The CORRECT solution is for people to respond by advancing their skill level. Instead we see the OPPOSITE.

    Why do we see the opposite? Do we see the opposite? Substantiate that claim.

    Jobs on the lower level of the economic scale may also require skill, contrary to what you say. As a potter I know well that manual work can be art and is not unskilled and not without dignity. Have you ever watched a bricklayer? A stonemason? A chimneysweep? A garage mechanic? Okay, a surgeon. Driving a subway train or bus, cleaning houses, is not unskilled work either in my view. Certainly teaching or day care is not unskilled. Maybe flipping burgers, delivering the paper, yardwork, street cleaning, stocking supermarket shelves is. Maybe. In any case, people I know and know of do those things for extra cash and to make ends meet in addition to other work or as a first job. I don’t correlate pay with skill necessarily. And you need people to do all of those jobs; they support you as you work in the globalized economy; and they prepare the next generation as well: as day care workers, teachers and guidance counselors. Everyone can’t work in high tech jobs, on Wall Street, or for the “health industry”(as in drug company rep for instance- which I suspect is unskilled and highly paid). If people only went after the very highest paying jobs,if they were so motivated, we would be in trouble as a society. On the other hand, since plumbers and electricians and appliance repairmen can make a decent living these days, I suspect this is also because fewer people are wanting to do these things as well. I understand the Poles are coming here to fill those jobs.

    So if there is a lack of a certain skill in your neck of the woods, fine if it is being filled by others from elsewhere who are so inclined. It still does not address the issue that there will always be a need for certain skills and labor that cannot be outsourced abroad or undercut easily by new immigrants. And people find those jobs and fill them often with dignity because either this is what they want to do or can do given their base line. The fact is that too many, those in the lower quintiles are not gaining ground, not sharing in the material wealth of this country, not able to take care of basic needs. They are stuck there. These are people who, I bet, can also figure out their cell phones if they can afford them.

    Speaking of insults, You insult a whole group based on their material wealth by assuming that they are either too stupid or incurious to figure out a cell phone. I have yet to figure out my (also new) cell phone’s bells and whistles, but I am not interested either… and I am not an incurious person. I have no immediate need for this form of entertainment other than to make a call on the go that is necessary. And to say that these lower quintile folks should have been science and math majors and not art majors (or English majors) leads me to harsher conclusions about your mindset that I would rather not be so.

  145. RC21 notes: “This is what freedom and choice is and should be all about. You seem to think the American citizen is either to stupid or weak and thus a total victim so as not to be able to make one sensible choice for themselves. “

    Exactly

    Notice Potter’s response when I said that I work hard too – I must have a cushy chair and spend all day thinking abstractly. Infact I spend all day arguing with marketing people and solving maddenly complex real-world engineering problems. It’s VERY hard work.

    There is an intrinsic elitism in the philosophy of the Potters of the world: they cannot conceive that ordinary people are capable of making rational decisions in their own self-interests. If people DO happen to choose to use their time for their own betterment or that of their community, it must be because they have some special advantage such as an ergonomically designed chair or a uniquely good school system. (I went to an ordinary public school and infact two years that I was there the school was on probation from the state accreditation council for various deficiencies.)

    The whole point about living in a free society is FREEDOM – we are free to make good choices or bad ones and experience the consequencs of those choices.

  146. PLN says: Contast this with a house cleaner. There’s not much she can do to improve her productivity. There haven’t been any major technological advances in housecleaning in the last few decades, nor can she develop new skills to be more productive. Also, her foreign competition comes right to her neighborhood, so she can’t strategize around it like I could as a web-designer.

    Wrong and yes she/he can. For the housecleaner, as for you it’s about service, doing a job well. As well of course it’s about knowing your tools and the products available for the job and how and what to use on what. It’s also about working efficiently, and perhaps running a small business; cultivating relationships of trust.

    The same issues remain for everyone, new immigrant or not.

    PLNSo, from an economic standpoint it makes sense that high-skill workers would see a greater increase in their earnings than low skill ones. But does this represent some kind of social injustice, or just the basic laws of economics at work? Is it a problem that needs to be “fixed” or just an imbalance in supply and demand for skills that will be self-correcting like similar ones that have occured countless times in US history.

    The basic laws of economics result in inequities. Skill (not just the skill of making money) or may not have something to do with it. When the rich are grossly rich and growing richer and growing in numbers and the poor and lower middle income groups are going nowhere and having a hard time making ends meet it’s time to take notice, not to wish that it will all straighten out.

    When has it self-corrected?

    To the contrary Government policy in the last several years has been adding to a widening gap.

    In today’s NYTimes there is a frontpage article about how the University of Florida a state institution)is going to increase it’s tuition to attract more professors and the more affluent students in order to pursue “academic rank”.

    Like Florida, more leading public universities are striving for national status and drawing increasingly impressive and increasingly affluent students, sometimes using financial aid to lure them. In the process, critics say, many are losing force as engines of social mobility, shortchanging low-income and minority students, who are seriously underrepresented on their campuses.

    “Public universities were created to make excellence available to all qualified students,” said Kati Haycock, director of the Education Trust, an advocacy group, “but that commitment appears to have diminished over time, as they choose to use their resources to try to push up their rankings. It’s all about reputation, selectivity and ranking, instead of about the mission of finding and educating future leaders from their state.”

    …. universities face a tough balancing act: should they push for higher status and higher tuition revenue by accepting more top-achieving, out-of-state students, or should they worry about broadening access for low-income, in-state students? Is their primary goal to serve the people of their state or to compete nationally with private research universities? Can they leave the less prestigious state colleges to serve the bulk of in-state students?

  147. Potter says Jobs on the lower level of the economic scale may also require skill, contrary to what you say. As a potter I know well that manual work can be art and is not unskilled and not without dignity. Have you ever watched a bricklayer? A stonemason? A chimneysweep? A garage mechanic?

    Many stonemasons and bricklayers and mechanics make pretty good money. But ultimately the wage for any job is set by supply and demand. So I’m not sure what your point is about skills. You could be the second-most skilled potter in your community, but if there is only enough business to support ONE potter then you’re out of luck and will have to find other work unless the most skilled one is too expensive or is bad at business planning.

    I never said that low-income people are invariably unskilled; I said that if their productivity doesn’t go up then how can you expect their wages to go up? (unless some other factor changes like in an increase in demand or reduction in supply.).

    You seem to think that just because MY income goes up, for reasons that are unique to my industry, that OTHER people’s income in different businesses with different business dynamics should also go up. That doesn’t seem to make any economic sense. How do you set the prices for your pottery? Presumably you set it for what the market will bear. If you set them too high you won’t sell enough to live on; if you set them too low you can sell pottery all day and not make enough to live on. If the market gets flooded with Chinese pottery better than yours for half the price you’ll have to innovate to compete; if a bunch of good new potters enter your community, same thing. In any line of work we survive by being productive, innovative, and competitive.

    Speaking of chimney sweeps; I DO regularly hire a chimney sweep, and I DO watch them work, but I still don’t know what your point is.

  148. I don’t sense that you have young kids, especially tiring and demanding, especially after a day away from their parents.

    But having kids is ALSO a choice! Moreover, thousands of people who made that choice are watching their kids come home in boxes these days because they DIDN’T love their country enough to invest some of their time in thinking through the proposal to invade Iraq a few years ago. WHAT will it take to get these people to take their patriotic duty to ride herd on politicians seriously?

  149. PLN says: Contast this with a house cleaner. There’s not much she can do to improve her productivity. There haven’t been any major technological advances in housecleaning in the last few decades, nor can she develop new skills to be more productive. Also, her foreign competition comes right to her neighborhood, so she can’t strategize around it like I could as a web-designer.

    Wrong and yes she/he can. For the housecleaner, as for you it’s about service, doing a job well.

    Obviously, but she can’t do that any better than she could have 10 years ago, so there’s no reason why she should expect higher real income than 10 years ago.

    Whereas I can design web pages more productively than I could 10 years ago thanks to improvements in the technology AND the whole web business is bigger and more flush than it was 10 years ago, so I have potential clients who can afford, or need, more elaborate services.

    The point is that the people in the upper quintiles typically have jobs and skills that benefit from technological advances and globalization more than people in the lower quintiles do.

    WRT Public Universities Chase Excellence at a Price. note that these are state government institutions. So you’ll have to ask the voters in Florida and other states where they are doing this why they think this is so good for their state, since ultimately it will be their kids (or them) paying the higher tuition!

    Health care and education are both going up faster than inflation and are both astronomically expensive. But solving those problems is HARD and requires serious engagement by voters. If voters can’t be bothered studying these important family issues because they’re too busy watching “Family Guy” on TV then they have only themselves to blame.

  150. Potter, as to education if you are poor the easier it is to get an education.

    I work in this field, and I love having kids with EFC’s of 0000. This means that their expected family contribution is zero. Most schools will meet your aid. Especially if you are a minority.

    The rise in costs and the recruitment of out of state kids will feed the coffers of Floridas state U thus providing more money for financial aid for the poor.

  151. PLN: Speaking of chimney sweeps; I DO regularly hire a chimney sweep, and I DO watch them work, but I still don’t know what your point is.

    That was to illistrate that low to middle income does not mean unskilled which I inferred from your post above.

    Regarding people watching their kids come home in boxes b/c they did not invest time in thinking through “the proposal” , what hooey! First to assume that parents can tell kids old enough to go not to, and then AS IF anyone had a say!!!. This admin was hell bent on it and manipulating the information in that direction. What 20/20 hindsight and blame-shifting away from the criminals to the victims!

  152. RC21 says: The rise in costs and the recruitment of out of state kids will feed the coffers of Floridas state U thus providing more money for financial aid for the poor.

    Hey wait a minute! The rise in costs for students, feeds coffers to hire more professors and attract wealthy students. On top of that public institutions are going to give more money to the “less attractive” students? In fact that article says that money is going to subsidize the more affluent students to attract them. The U of F, the article says, wants to raise it’s rank to compete with Harvard, Yale etc. Apparently the news magazine US News &World Report’s rankings count for a lot, more than the mission of educating the less well off perhaps.

    “We need a top-10 university, so our kids can get the same education they would get at Harvard or Yale,” said J. Bernard Machen, the university president.

    To upgrade the university, Dr. Machen is seeking a $1,000 tuition surcharge that would be used mostly to hire more professors and lower the student-faculty ratio, not coincidentally one of the factors in the much-watched college rankings published annually by U.S. News & World Report. This year, that list ranked Florida 13th among public universities in the United States.

    …At some of the best public universities, selectivity is up: at the University of Florida, the average student high school grade point average now exceeds 4.0, a feat achievable only with high grades in honors or Advanced Placement classes. And student interest in these institutions is soaring. At the University of Vermont, where three quarters of the freshmen come from other states, applications have more than doubled since 2001.

    The demands on such universities are growing, too, particularly with many states questioning their spending on higher education. Increasingly, these colleges are expected to bolster their states’ economies by attracting research grants and jobs. To do that, they say, they must compete with elite private universities.

    This funding BTW comes from your tax dollars, from the National Institutes of health, for instance.

    …In certain respects, flagship public universities have become more like private institutions. Public universities are still far less expensive, but with their tuition rising rapidly, enrolling low-income students has become as much an issue for them as it is for private universities.

    From 1995 to 2003, flagship and leading public research universities quadrupled their aid to students from families with incomes over $100,000, while aid to students from the poorest families declined, according to the Education Trust. The best public universities, the group said, have come to resemble “gated communities of higher education.”

    And their aid policies are paramount, because aid given by the universities dwarfs what students get from the federal government.

    The article goes on to talk about ways they are now trying to help poorer students who can’t afford even the loans for some “diversity” on what appears to be a campus that is more and more for the affluent.

    This is how the less well off get shut out. Anyone who wants to go to college, should be able to regardless of how rich or poor, as long as they meet the entrance requirements or are close enough. This is how then the government comes along and says if you want to go to college, then sign up, put on a uniform and fight.

  153. Potter, I’m not an expert on Floridas state U system, But what I was trying to say is this. Out of state tutition is much more expensive than instate tuition. So by recruiting more out of state kids they will raise more money this should off set some of the costs that you speak of. Income has nothing to do with admittance to state schools. If you have the Required grades and sat’s you will be accepted.

    I do agree with you on many of your points. The whole keeping up with the jones mindset of universities is silly. Set your admittance standards and be done with it. Those that want to attend weather they be instate or out of state should feel free to apply.

    The people of Florida need to look at their own situation and decide on the best road to take. It’s their tax dollars and their school. I could not care less as to how they run their state school system.

    Here in Mass our system runs off of a gpa and sat criteria with some leeway given to minorities and learning disabled students. Wealthy kids receive far less aid than the poor. Almost all aid is based off of the FAFSA form. There are special scholarship awards for people with special talents in academics as well as Athletics,and other arts and science programs.

    Anyone can apply and if you are accepted you are welcome to attend. Instate costs are about 16 K at Amherst that is with room and board. The other state U ‘s Lowell, and Dartmouth are slightly cheaper. Out of state cost is about 27K,and going up. Lowell will meet all aid requirements of instate students. So the poor go for free. In most cases they receive more aid than the actual cost of school. So a poor kid with an EFC of 00000 may recieve over 15k in aid even though the cost is only 13-14K

    On another note setting higher standards for admissions is a good thing not a bad thing. To many people in the past have been accepted into 4 year colleges only to fail out due to being under prepared for college work. You should not be in college if you can not do the work. This is a waste of the taxpayers money.

    That is why we have a community college sysem,and a junior college system as well as prep schools. Go there beef up on your studies then transfer. It is all rather easy to do. Plus it is less costly. J.C.’s and C.C.’s are much cheaper and also offer aid.

    Your last statement does not make sense.Anyone in the US can attend college regardless of economic class.As long as they do meet the academic standard.

    Why do you have a problem with people geting a college education through the military? That is what I did and it was damned cheap. Although I learned more from being in the military than I did in school. So in fact, I gained 2 educations. One was paid for and the other one the Govt payed me. Plus I got to see the world. Now that is what I call a bargain.

  154. Potter says: This is how the less well off get shut out. Anyone who wants to go to college, should be able to regardless of how rich or poor, as long as they meet the entrance requirements or are close enough.

    That’s easy to say but, as I’ve already pointed out, higher education is like health care – astronomically expensive and going up faster than inflation. So absent a rigorous devil-is-in-the-details proposal, based on an equally devil-is-in-the-details understanding of the underlying economics, such statements of philosophy don’t add much to the discussion.

    RC21 might be right – attracting top students, professors, and research money may benefit ALL the students at all income levels, both economicaly and by providing a more stimulating educational environment. I attended a state school (UMass Amherst) and benefitted tremendously by the presence of several nationally-recognized researchers. One of my professors went on to win a Nobel prize.

    This is sort of like the debates on having a nationally-ranked college sports program good enough to bring in money for the school. The good ones are successful enough to fund academics throughout the school.

    If you advocate free government-funded education for everyone who meets some basic academic standards then take at other large, modern postindustrial societies where this is done such as France or Germany and see if you like the results. Then try to sell the idea to the taxpayers. Obviously the taxpayers of Florida CHOSE to adopt the system you are objecting to.

  155. Jack Welch was a UMass grad. He hasn’t done to bad with his state school education. The same with congressman Marty Meehan (Lowell).

  156. RC21 Out of state tutition is much more expensive than instate tuition. So by recruiting more out of state kids they will raise more money this should off set some of the costs that you speak of. Income has nothing to do with admittance to state schools. If you have the Required grades and sat’s you will be accepted.

    That is not what the article said. Perhaps it’s so here and in a few other places. If you have the required grades, you should be accepted at a public university period and not be faced with having to decide about paying off big debts after graduatiuon either. The article says that poorer students are not being taken care of and that the campus is filled with affluent students making the less well off feel uncomfortable. The culture changes.

    If a college is going after the affluent and has x number of spaces, each space that the affluent student takes, is a space a less well off student cannot take. The article says the more affluent are being given financial aid as well. (!) But to give a lower student to teacher ratio, additonal fees are being added to hire more teachers! This is a busness decision. ( More affluent students, more money to attract more and higher paid teachers pushing the university rating up attracting more research dollars, attracting more affluent students , attracting more research dollars attracting more quality or big name professors etc etc. ). The primary focus of providing a quality higher education to those who are unable to afford it is this lost to other goals.

    I assume this is not true across the board in state and city schools, but it is a trend and it reflects a state of mind far from the mandate of these schools.

    BTW- I graduated HUnter College, City University of New York at a time when it was essentiall free and if you had the equivalent of a B average in High School ( 85 average) plus I forget what on your SAT’s you were in. The teachers were first rate. That formula changed after I left to accommodate those who needed some remedial classes to gain entrance. This was to further the mandate that the college system provide a way up for the less well off, those disadvanataged at home, many immigrants or children of immigrants.

    PLN: Obviously the taxpayers of Florida CHOSE to adopt the system you are objecting to.

    Where do you get that from? What DID the taxpayers of Florida choose when they set up the state higher education system? Do you know? Or did that morph to what various leaders like Jeb Bush wanted ( less affirmative action) and Bob Graham had to fight to gain back?

    from the NYT article: Like Florida, more leading public universities are striving for national status and drawing increasingly impressive and increasingly affluent students, sometimes using financial aid to lure them. In the process, critics say, many are losing force as engines of social mobility, shortchanging low-income and minority students, who are seriously underrepresented on their campuses.

    “Public universities were created to make excellence available to all qualified students,” said Kati Haycock, director of the Education Trust, an advocacy group, “but that commitment appears to have diminished over time, as they choose to use their resources to try to push up their rankings. It’s all about reputation, selectivity and ranking, instead of about the mission of finding and educating future leaders from their state.”

    I suspect what the taxpayers of Florida CHOSE was to set up a system available to all qualified students equally regardless of income, as long as they met the academic requirements. That’s what they needed, that is what they should have had. If the system is being used to try to attract research dollars, this relates to business interests and it corrupts the original purpose of a public university. To some extent of course a university has to be run as a business, but not at the expense of the primary mandate.

    Greed, money interests, are very POWERFUL.

  157. PLN says: But having kids is ALSO a choice!

    If only everyone were so completely rational. If they could predict all possible consequences of their actions, control their emotions, their deepest desires/urges, weighing it all advance…. That’s not human nature.

    Noone who has a child knows what they are getting into until they get into it. Regardless of the level of rationality employed in bringing new life, society has an interest in and a role to play in helping to provide for children.

  158. Potter, You said the article claims that wealthy out of state students are not paying higher tuition and fees than in state kids. This really raised a red flag with me. Also the fact that the article came from the NY Times a paper not known for their unbiased reporting.

    So I did a little research. It took me less than 1 MINUTE to find the cost of an instate vs an out of state student. Instate total cost = about 15,000. Out of state total cost= about 30,000. That is twice as much. I also looked into their financial aid info. It seems they follow the guide lines as most state U’s. They also use the FAFSA form. They also have several scholarship,and financial aid programs that are only for minorities and instate students. Much of a schools financial aid is awarded through the Federal govt.this is blind aid only given to those who qualify through the FAFSA program. You have to have financial need in order to recieve it. Giving federal aid to students not eligible is illegal. I am almost positive Florida U is not doing this

    The latest stats also show that of the 47,000 students over 40,000 are instate. I’m not sure but my guess is that is not out of line with many other states. Also remember more kids from out of state probably would like to attend a Florida state school as opposed to say a state school in Iowa, Michigan, or Maine. No offense but kids like sun and beaches more than snow and cold..

    I also looked at their student breakdown by race. Over 23 percent of the students are minorities. Whats the problem with that?

    So maybe Florida U is recruiting more out of state kids, but I don’t see the proof that this is hurting minorities or instate kids be they poor or wealthy. The writer of this article either lied or is a very poor journalist, that has some kind of hidden, or not so hidden agenda to promote. Maybe you should do some research on the author of this article. Dig intohis/ her background a little.

    I wont blame you for throwing out inaccurate data. But my advice is always be sceptical of the Times.

  159. RC21 Potter, You said the article claims that wealthy out of state students are not paying higher tuition and fees than in state kids.

    I did not.

    The article says that students from out of state coming from higher income families ( $100K) are being given more aid to attend public universities, while aid to the poorest declined:

    Again from the article- also not “according to the Education Trust” as the source:

    From 1995 to 2003, flagship and leading public research universities quadrupled their aid to students from families with incomes over $100,000, while aid to students from the poorest families declined, according to the Education Trust. The best public universities, the group said, have come to resemble “gated communities of higher education.”

    This does not refer to instate or out of state. This refers to poor versus affluent.

    So before you discredit the NYTimes, read the article ( did you?) and make sure you are not setting up a straw man arguments to prove your bias against the paper.

  160. Sorry I did not mean to italicize the last two sentences which were mine, not the quote from the NYT article.

    While I am here again- here is the link to the watchdog group Education Trust and their report.

  161. Sorry- I was wrong in my December 23rd, 2006 at 5:34 pm post about what I said. I did not say that students coming from out of state were being given more aid, I said the more affluent are being given more aid- this is what the article said as I quoted again just above in that same post.

  162. another correction my December 23rd, 2006 at 5:34 pm post:

    that should read: also note “according to the Education Trust”” [as the NYTimes source for that report on who is getting financial aid].

  163. From the Education Trust report, one of the sources of the NYTimes article.

    Between 1995 and 2003, flagship and other research-extensive public universities actually decreased grant aid by 13 percent for students from families with an annual income of $20,000 or less, while they increased aid to students from families who make more than $100,000 by 406 percent. In 2003, these institutions spent a combined $257 million to subsidize the tuition of students from families with annual incomes over $100,000 – a staggering increase from the $50 million they spent in 1995. At the same time, poor students were disproportionately bearing the brunt of increased college tuition and fees.

    These types of choices at the flagships have resulted in undergraduate populations that are less and less and reflective of the states these institutions were established to serve. For example, though minority students comprise more than 35 percent of Georgia’s high school graduates, they represent less than 7 percent of the entering 2004 freshmen at the University of Georgia. Even more alarming, this underrepresentation is actually getting worse at most flagship campuses. The report documents similar trends for low- and middle-income students, who are being displaced at the flagships by students from the most affluent families.

    see: Engines of Inequality:Diminishing Equity in the Nation’s Premier Public Universities

  164. Potter, I went back and read the whole article again and reread your posts. These are my issues .

    First you made it seem as if the article was just about Florida U, As I reread I found many of the statements that were infered were not even about florida u. This may be my fault.

    No where in the article did it say Florida U was giving more aid to out of state wealthy kids than they were to poor instate kids. This quote was about State U’S throughout the country. There may be several reasons for this. Other state U,s may be giving more scholarship money for academic acheivement. This is more likely the case. I see nothing wrong with this. School is about academic acheivement So awarding those who acheive only seems natural. Would you prefer money being given to those who are lazy and have acheived poorly?

    Also read on in the article: Florida U pays 75-100% of tution and fees for students with high grades and test scores,including more than 90% of incoming freshman. What could possibly be the problem with this?

    Now lets go further in the article; Florida U has started a new program that pays full cost of the school ,books, tuition, housing and fees for all kids from households with less than 40K income and wh,ose parents did not attend college. This has raised incoming frosh enrollment of blacks to 13% I’m sure Hispanic and Asian enrollment have also increased under this same program. By the way Mass has the exact same program. This is a great deal. One you forgot to mention,in your previous posts.

    A few other comments; Look further into the article It seems Florida U is doing some of this out of state recruitment and bringing in of more proffesors in order to lower the student to teacher ratio. This is good for the students not bad. Why would you have a problem with this? Also the president said ”Economic development is tied to research. The state is fired up when it sees our projects with Burnham institute for medical research and Scripps research institute”

    You see the more Florida U can show how well it does, the more investment will come. Thus more scientists, and researchers will be produced by Florida U. Some of these people will stay in Florida and start there own companies thus expanding the economy and adding new jobs. Many of wich will go to poor and and working class people.( Evil capitalism once again at work) This is actually great forsight , and will eventually help all Floridians.

    If you want an example just look at Mass we have tons of bio research companies springing up all over ,as well as computer companies. These employ thousands, Many of the ceo’s of these companies went to school right here in Mass.

    Another point; You use the quote by Education Trust pres Kati Haycock”Public universities were created to make excellence available to all qualified students” This is her opinion not fact. But she has shown no proof that the poor and minorites are not geting a chance. Looking at Florida U her and your focal point. It appears the poor and minorities are getting great opportunities and many are paying little or nothing.

    Another point one of the main themes of the article . Aid to families with incomes of over 100K have quadrupled while aid to the poor has declined. They said flagship schools but gave no names and gave no hard numbers, so I question some of their statements. But let’s assume this is true. Here are some of the reasons this may happen First if an incoming rich kid has to pay 30-40K to go out of state he may get 20k in aid. If a poor instate kid wants to go he may qualify for the whole cost of school,say 14K So yes the rich kid gets more aid but the poor kid pays zero.The more wealthy kids that go out of state the more aid is going to be given. Yet the school and by extension the state still makes out because the out of state kid ends up paying 20k to go to school. This is a net gain of 24k over 4 years. By the way schools use the bait and switch ruse just like car dealers. They may give a rich out of state kid a big financial award the first year but as each year goes by the award becomes smaller,and more loans are used as opposed to grants. So by the 3rd and 4th year the out of state kid is now paying most of the cost through his or more exactly his parents bank account. This is a common practice at all colleges. Now the state is really raking in the cash. This should in fact help the school and the instate student,by putting more money into the coffer. Also much of the aid is being given out for acheivement not for ones economic status as Haycock would lead us to believe. It also does not adress federal money that only is awarded on a need based criteria. Almost all of this money goes to poor and lower middle class kids.But the article doesnt mention this. Any half decent journalist would have mentioned it, as federal dollars makes up a substantial part of many poor kids financial aid packages. This is what I mean by biased journalism by the Times.

    Another point; Yes the Times is biased the group who put out the article has a vested interest in seeing more minorities in college this is one of their main goals. The author never used one person from another institute or study group to dispute or question her or her motives, or her numbers. Kati Haycock is a Democrat who used to be in charge of Californias affirmitive action program. She has a real interest in seeing more money (state and fed) being used on minority students. This is how she makes her living .Unbiased journalism would have revealed some of the things I brought up and i’m not even a jounalist.

    Maybe I will look up the author and see what her background is. Do you think she’s a conservative republican or a liberal Democrat. I’m pretty sure we both know the answer to that one. In fairness she does use quotes by Florida U’s president and she does speak of the programs that are helping minorities and poor (This basically shoots holes into Haycotts report).

    Finally when all is said and done the reality is minorities are doing quite well at Florida U. They are not under represented and many are paying little if anything at all to attend. I dont see what the big fuss is? The truth is, it is more about Haycock trying to gain more money and power for her,and her group. She manipulated data threw out some quotes and got a biased Times reporter to print her article and people like yourself who are allready predisposed to buy into this stuff, read it and say ”Yes another rich keeping down the poor example of what a racist, terrible class dominated society we live in”

    Always be sceptical of the Times. They have a track record.

  165. RC21Would you prefer money being given to those who are lazy and have acheived poorly?

    How do you know that those who have “achieved poorly” are lazy? I have a lot of problem with this assumption.

    RC21It seems Florida U is doing some of this out of state recruitment and bringing in of more proffesors in order to lower the student to teacher ratio. This is good for the students not bad. Why would you have a problem with this?

    More teachers is good but at what expense? And to attract who?

    To get the revenue from attracting affluent students who take spaces that those who cannot afford college might occupy is not good.

    Expanding Florida’s economy should not be the primary burden of the states higher education. It should be a byproduct. What drives what?

    RC21 It also does not adress federal money that only is awarded on a need based criteria. Almost all of this money goes to poor and lower middle class kids.But the article doesnt mention this. Any half decent journalist would have mentioned it, as federal dollars makes up a substantial part of many poor kids financial aid packages.

    The article says that federal money is, a very small part of the financial that these poorer students get. Where do you get your facts?

    RC21 This is what I mean by biased journalism by the Times…..Always be sceptical of the Times. They have a track record.

    You are blatantly biased against the Times especially when you broadbrush the whole paper for some points you disagree with ( and have not backed up with your own facts.. What track record? The one you cherrypick?). The article cites it’s source. If you quarrel with the source why do you blame the NYTimes?

    RC21 The author never used one person from another institute or study group to dispute or question her or her motives, or her numbers. Kati Haycock is a Democrat who used to be in charge of Californias affirmitive action program. She has a real interest in seeing more money (state and fed) being used on minority students. This is how she makes her living .Unbiased journalism would have revealed some of the things I brought up and i’m not even a jounalist.

    The facts are the facts, they are not Republican or Democratic. You write as though affirmative action is a bad thing. Maybe that is where we differ. State schools, above all others should be engaged in affirmative action. This notion is not the sole idea of one lady in charge of a watchdog group.

    RC21 Maybe I will look up the author and see what her background is. Do you think she’s a conservative republican or a liberal Democrat…

    You make this into a partisan argument when it is not.

  166. Engines of Inequality:Diminishing Equity in the Nation’s Premier Public Universities

    Regarding Kati Hancock, from edweek.org study: “Influence: A Study of the Factors Shaping Education Policy” regarding influential people ( she is pretty respected):

    “The top-ranked person, based on expert ratings, is Bill Gates. Billionaire, founder of Microsoft, and co-

    chair of the Bill & Melinda Gates Foundation, he has become a leading voice for educational reform.

    Many of Gates’ strongest statements have focused on the challenges facing the nation’s high schools

    and, more recently, the crucial role of education in America’s ability to remain competitive in an

    increasingly global economy.

    Gates is joined on the list by two other leaders of philanthropic institutions. Eighth-ranked Marshall (Mike)

    Smith has directed the education program at the William and Flora Hewlett Foundation since 2001.

    Rounding out the short list is Chester Finn, Jr., president of the Thomas B. Fordham Foundation (a

    leading organization), senior editor of Education Next, and weekly columnist in the foundation’s Education

    Gadfly. Kati Haycock, who receives the third-highest influence score, serves as director of the Education

    Trust, a Washington, DC-based non-profit that is itself a highly-influential organization. ”

    From the Education Trust website:

    “OF NOTE… The Education Trust is the #1 education advocacy organization of the decade, according to the Editorial Projects in Education (EPE) Research Center. The Ed Trust was also ranked as one of the most influential information sources in education policy, and our president, Kati Haycock, was ranked as one of the most influential people in education. The Education Trust’s work in teacher quality research was also listed as one of the most influential research studies in the education policy landscape. For more information on the rankings, and the Education Trust’s work…” [link to Edweek.org report quoted from above]

    RC21-Are you looking instead for information that you could use to discredit the facts in some way such as the phony issues of partisanship and NYTimes bias?

  167. From the Washington Post an editorial on the same ET report: Shrinking Opportunities

    It’s not the newspapers that need to be discredited nor the leader of the respected advocacy group. RC21 seems to have a different version or reading of the facts.

  168. Potter, I adressed all your points earlier and you have shown me nothing that would cange my opinion.

    Point 1 from your reply. Your right I don’t know if they are all lazy. Some just may not be mentally equipped to function in a college environment. This does not make them bad people, it’s just reality.Either way if they don’t perform they should not be admitted.

    Point2:Back to Florida U again. Did you not read all the information on the various programs set up for poor and minority students? It seems you only read and retain information that fits your belief system. Go back and reread the article. Poor and minority kids from families that have not had college graduates are attending Florida U for free. What else do you want?

    Point3: I work in this field so I have a good idea on how things work. You tell me Haycock insists federal aid is a very small part of poor kids financial aid packages, then you proceed to link several articles that focus on federal finacial aid, and the importance it has to poor students. So who is lying the Post , The WSJ, the Times, or Haycock and her group.

    Point 4; Of course I’m biased against the Times, but for good reason they have a well documented liberal bias. Their own ombudsman even admitted to this. There is even a websight that’s only function is to expose this bias. There is not a day that goes by where they don’t have something to report. If you cant admit to the Times having a liberal bias,I would submit that your sense of impartiality and fairness runs along the same path as the Times. Check out the sight ”timeswatch” if you would like to see what is meant by liberal bias.

    I gave you my reasons why I thought the writer of the article did not give the whole story and did not question Haycocks report. You have given me nothing to make think differently.

    Point5: Affirmitive action, Give me your definition of affirmitive action and I will tell you if we differ. If you think we should reach out to poor and minority communities and find decent hard working kids that meet admission standards, than yes I’m all for affirmitive action. It may suprise you but this is my line of work. But if you think we should fill some preconceived numerical quota system soley based on a persons skin color, disregarding academic standards for races deemed to be intellectually inferior, than no I am not in favor of affirmitive action. It has far outlived it’s usefullness, and I also feel it unconstitutional in that it discriminates on the basis of race. If you read further into one of Haycocks reports it claims minorities are graduating at a much lower rate than whites.These kids either are not doing the work once admitted to school or they should not have been admitted in the first place. Either way this is a tremendous waste of taxpayers money, I see this happen all the time. I don’t need a report to tell me this, although I’m sure Haycock and her group would blame others for minorities flunking out of school at higher rates. .

    Haycock’s group and the others you you speak of have vested financial and power agendas, This is their line of work. The more reports they write, the more money they can funnel into their projects, the more people they can influence with their lobbying, the longer they stay relevant and gain power. If you fail to understand this than I can’t help you.By the way this goes on in all walks of life. Advocacy groups advocate. Thats what they do. Can you imagine if Haycock wrote a report praising State U’s for increasing academic standards and admitting brighter students vs students with inferior grades and SAT’s. She would be out of work.

    Bottom line Many stat U’s are raising academic standards, this inturn leads to a more challenging academic atmosphere at colleges. This is a good thing. Our students need to be challenged ,not allowed to wallow in mediocrity . More aid is being given to students who have achieved at a high level academically. This is also a good thing. We should reward those who work hard and study.

    Public schools need to do a better job at prepairing their students. I also think minority communities need to do a better job at raising their children. In my state poor kids can go for free if they are qualified. The opportunities are unlimited. The report by Haycock is full of distortions and half truths weaved into a patchwork quilt that is intended to raise the sympathies of the public. This she hopes will lead to more taxpayer money being spent on her and her agenda.

  169. RC21 Here is one example of your own bias:

    if you read further into one of Haycocks reports it claims minorities are graduating at a much lower rate than whites.These kids either are not doing the work once admitted to school or they should not have been admitted in the first place. Either way this is a tremendous waste of taxpayers money

    You assume that those are the reasons, and not that these kids cannot afford to pay for college OR qualify for loans OR may be deterred by fears of getting into debts they cannot pay. You do not entertain other circumstances as well that may cause minorities to give up on college (ie the need to support or help their families). So you concluded this is a tremendous waste of taxpayer money. I assume that you are content that it is okay and that these people, for whatever reason, are lost causes.

    In fact the “edtrust” article summary (again linked here below) says that U of Florida is doing a better job than some of the others in making sure that minority students get through college with a degree and praises recent efforts of some other universities. Surely you would not trash that part of the report ( only the part that you are not prepared to accept for your own unsubstantiated reasons). This is not soley about the U of Florida remember. it’s about a trend that is worrisome in public universities. The report is to call attention to that.

    Another example of closedmindedness:

    Haycock’s group and the others you you speak of have vested financial and power agendas, This is their line of work. The more reports they write, the more money they can funnel into their projects, the more people they can influence with their lobbying, the longer they stay relevant and gain power. If you fail to understand this than I can’t help you.

    I don’t think you have proved anything or been fair from the beginning of this discussion when facts were presented that you simply don’t like.

    Did you read the summary?

    What you don’t address is the complaints in the original article that state universities are aiming to raise their ratings ( as in the US News and World Report list) so as to attract the more affluent, that more money is going to help those who are not in great need than the poor, a poor student with higher grades is less likely to get aid than a more affluent student with lower grades.

    You sidestepped that with a discussion about instate-out of state students.

    Raising academic standards is good and besides the point here as well. The title of one article I linked above is “Public Universities Chase Excellence at a Price” however. What price? For what? To attract the wealthy ( which you say is good)? To gain ranking in some listing that wealthy kids check before they apply?

    Finally RC21 says: The report by Haycock is full of distortions and half truths weaved into a patchwork quilt that is intended to raise the sympathies of the public. This she hopes will lead to more taxpayer money being spent on her and her agenda.

    Here is a link to the whole report. Tell me you read it before you trash it outright, making broad assumptions. If t this is your field, I expect more substance in your criticism and evidence to prove that the facts are wrong, not sidesteps of the issues:

    Engines of Inequality by Danette Gerald and Kati Haycock

  170. (sorry correction below)

    To RC21: What you don’t address is the complaints in the original article that state universities are aiming to raise their ratings ( as in the US News and World Report list) so as to attract the more affluent, that more money is going to help those who are not in great need than the poor, a poor student with higher grades is less likely to get aid than a more affluent student with lower grades.

    Raising academic standards is good and besides the point here. The title of one article I linked above is “Public Universities Chase Excellence at a Price” however what price? For what? To attract the wealthy ( which you say is good)? To gain ranking in some listing that wealthy kids check before they apply?

    Finally RC21 says: The report by Haycock is full of distortions and half truths weaved into a patchwork quilt that is intended to raise the sympathies of the public. This she hopes will lead to more taxpayer money being spent on her and her agenda.

    Here is a link to thewhole report. Read it before you trash outright and make broad assumptions to be credible. If t this is your field, I expect more substance in your criticism:

    Engines of Inequality by Danette Gerald and Kati Haycock

  171. Potter, It is hard to adress all your points, because you skip around from point to point ,and minitopic to minitopic. So I will just try to adress a few important items regarding the report that you finally linked to in full.

    I will show you how Haycock has manipulated and distorted numbers to fit her argument. This is from Pg4 Haycock says” We know for example 35% of American families with children under 18 earn less than 40k a year roughly the threshold for qualifying for a pell grant.

    While the data on the characteristics of students enrolled in flagship U’s are limited, we do know that 22% of these students receive pell grants.

    This figure not only puts the number of pell recipients enrolled in flagship U’s below what might be expected given the economic characteristics of society at large,but also well below the 35% of such students attending all colleges and universities.

    This is totally misleading. She is outright lying to make a point. Yes 35% of american families with children under 18 earn less than 40k but not all these families have kids in college as Haycock would have us believe. She is basing all her statistics and arguments on a lie. Do you see how she has just manipulated a simple true statement 35% of american families with children under 18 make less than 40k a year into, why are not 35% of college students recieving pell grants, as if the schools are witholding money from the poor. Not only do many of the 35% not have children that are of college age but of those families that do have kids of college age many dont attend school for several reasons, Work Military, Not qualified, etc. So this would bring the number of kids that should get pell grants to an even lower % of Haycocks original 35%

    After reading this I knew right away which way we were headed There are other half truths and manipulations in the report. If you would like I will show you.

    If you want to further the discussion I dont have a problem. Just give me one thing at a time. It is easier that way.

    I do agree with what I think is the crux of your feelings that public colleges are getting to expensive and they are trying to hard to keep up with elite private schools. I do not agree with the argument that they are trying to keep out poor minorities. As a matter of fact I see just the oppisite happening although at some state schools this may not be the case.

  172. RC21- Regarding what was said on page 4 of the report, I believe you were rephrasing from page 5 (the page numbers are on the bottom of the page)

    Regarding the substance of your criticism of from “A Closer Look at the Numbers” We know, for example, that 35 percent of American families with children under 18 earn less than $40,000 per year-roughly the threshold for

    qualifying for a federal Pell Grant.

    That statement refers back to the previous statement regarding incomes of families that have or will have students preparing for college. It’s not a lie as you are too quick to assume but your misreading of the point. Read in context you can see the report is saying that ( my bold where I feel the conclusions are entirely warranted by the facts presented):

    “As a group, however, the undergraduates who attend flagships don’t look

    much like either the high school graduating classes they came from, or college students more generally: they are likely to be more affluent and less racially

    and ethnically diverse than one might presume.

    But, as we show later in this report, there turn out

    to be far more top-achieving, low-income students

    who could succeed in these institutions than ever

    get a chance. Indeed, the highest achieving students

    from high-income families-those who earned

    top grades, completed the full battery of college

    prep courses, and took AP courses as well-are

    nearly four times more likely than low-income

    students with exactly the same level of academic

    accomplishment to end up in a highly selective

    university.

    Where are those talented, low-income students

    instead? Mostly either not in college at all, or in

    less selective schools to which these top achieving

    students could have been admitted if their

    achievement was only mediocre.

    Why? Because what has changed over the past

    decade in our most prestigious universities is how

    merit is defined. Now, in addition to academic merit,

    it appears to help a lot to be wealthy, too.

    As a group, the nation’s 50 flagship universities

    are failing to serve the full breadth of their state’s

    populations. They’re failing to provide sufficient

    access and they’re failing to focus sufficient energy

    on student success. That is clear both in their

    collective grade-point average in the summary

    sections of this report, and in the fact that “F” was

    the most common grade earned by the individual

    flagships on our institutional report card.

    But, as we show later in this report, there turn out

    to be far more top-achieving, low-income students

    who could succeed in these institutions than ever

    get a chance. Indeed, the highest achieving students

    from high-income families-those who earned

    top grades, completed the full battery of college

    prep courses, and took AP courses as well-are

    nearly four times more likely than low-income

    students with exactly the same level of academic

    accomplishment to end up in a highly selective

    university. 8

    Fortunately, however, there are also some “A’s”-

    exceptions that show that flagship universities can

    indeed do better at both access and success when

    they really focus. Exceptions that can teach us the

    way.

    Let’s take a closer look at the numbers.

    Access for Low-income and

    Minority Students

    In 2005, the nation’s 50 flagship universities

    collectively enrolled approximately 1.2 million

    undergraduate students-the majority of whom

    entered these institutions directly after graduating

    from high school. As a group, however, the

    undergraduates who attend flagships don’t look

    much like either the high school graduating classes

    they came from, or college students more generally:

    they are likely to be more affluent and less racially

    and ethnically diverse than one might presume.

    We know, for example, that 35 percent of American

    families with children under 18 earn less than

    $40,000 per year-roughly the threshold for

    qualifying for a federal Pell Grant.9 While the data

    on the income characteristics of students enrolled

    in flagship universities are limited, we do know that

    22 percent of these students receive Pell Grants. This

    figure not only puts the number of Pell recipients

    enrolled in flagships below what might be expected

    given the economic characteristics of society at

    large, but also well below the 35 percent of such

    students attending all colleges and universities.

    RC21- Did you read pages 16-19 and the tables and charts before that that lead to the conclusions?

  173. 35% of families with children younger than 18 years earning less than 40K have potentially at least one college applicant btw, if not more. The question is why would they not want to go to college? Let us not assume they are not worthy when the evidence is to the contrary.

    From the report: “This figure not only puts the number of Pell recipients enrolled in flagships below what might be expected given the economic characteristics of society at large, but also well below the 35 percent of such students attending all colleges and universities.”

    I interpret “such students” to mean of that income category.

  174. (Oh how I wish for the ability to correct)

    “Such students” in the quote above refers to the 35% of of students enrolled in ALL colleges and universities who have Pell grants as compared to the 22% of “such students” in flagship public institutions.

    See figure 1 page 5.

  175. Potter, yes pg 5 is correct. The part I quoted is absolutely a lie. I showed you how she manipulated the numbers. She stated 35% of American families with children under 18 that make 40k a year are eligible for a pell grant. This is true. No argument from me. But then what she does is project this number on to state U’s That are only giving pells to 22% of its students She actually expects us to believe that all these families have kids now in college. That is the only way her numbers can prove the disparity,

    But as we both know not every family with a child under 18 that makes 40k Has a child eligible for college. The 35% number she begins the statement with has to include families with very young children who are not even eligible to attend college. If your a young family with a couple of toddlers, there is no way you would qualify or even need a pell grant. It does not apply. Likewise with families that have kids that don’t go on to college. Many kids go right to the labor force, some go military some aren’t bright enough for college etc. You get my point. Haycock deliberatly leaves this out. She wants us to make the assumption that every family making 40k that has children also has a kid in college. This is absolutely absurd. I cannot make this any clearer read her own words It is right there in black and white.

    I really dont want to go further. If you can’t see what I’m showing you or don’t care to look at this honestly than there is no point in continuing.

    It is true that other smaller state schools and private U’s give more pell grants that is because they have more students that qualify.

    All students who are eligible for pell grants recieve them. They are strictly given on a financial need basis. They are also awarded by the fed Govt not state U’s. State U’s cannot and do not award pell grants to more affluent students leaving poorer students to go without. This is illegal.

    Now if we have finally settled this I will take your next question. please one thing at a time.

  176. RC21-But as we both know not every family with a child under 18 that makes 40k Has a child eligible for college.

    Of course not- and I assume that the authors realize this. Calling it a “lie” betrays, however, bias, not mere disagreement but an eagerness to dismiss the point. It doesn’t matter if every family earning 40K does not have a child under 18 ready for college at this moment. Some have, some don’t, some have two or more and I assume that MOST who have children will have children who will WANT to go to college ( rather than work or go into the military). The report SAYS that the data of incoming students is LIMITED on family income for this group so the next place to go is government census data. The HOLE is that we do not know how many families have SEVERAL children close to college age, ONE child close to college age, NO child close to college age, NO child interested in college. The ASSUMPTION for this 35% figure is that each family will have ONE eligible child, a modest assumption. The government number gives an idea of what percentage of people COULD have their kid/s in college. The theme of this report after all is not that we are doing well or even well enough, but that we could be and should be doing much better for lower incomes and minority kids who want to go to college AND the flapship state Universities should be leading the way.

    This government census figure is corroborated by the OVERALL figure of 35% of Pell grant studentsin ALL universities ( public and private). The COMPARISON then is with the 22% of these students that wind up going to public institutions. This leads to the conclusion that private universities are doing better than public universities assisting the lowest income students. (!) But remember we are talking about percentages not numbers. How many ( eligible, willing) are being left out, discouraged, leaving too soon?

    Saying Haycock (the report was written jointly BTW) is “deliberately” misleading ( when in fact the report says that the specific information was limited) betrays again your bias against what is presented overall. You just don’t want to swallow it seems, regardless of the facts, and are more interested in discrediting an author ( as you discredit Al Gore). And I am not going to attempt to force feed. The tables and charts and surveys are there. You decide. People believe what they want to believe.

    Nowhere did I say that the state’s give the Pell grants.

    You complain that I have several minitopics, but if you go through my posts, I have been saying ONE thing all along: that public universities are not fulfilling their mandate fully to provide higher education for minorities and lower income students and are instead becoming more interested in attracting the affluent, potential sports stars, raising their ratings on the “hot schools lists”, attracting research dollars. All of that is fine, but it should not be at the expense of giving space, giving attention to the disadvantaged and making sure they get through. The report says that the trend towards fulfilling the mandates is downward in too many of these universities,that too many kids are getting discouraged from achieving a full college degree. UMASS surprisingly trends downward.

    This comes at a time when federal money covers LESS as tuition increases and pressures to cut Federal aid persist as we spend money on the military, and pork barrels etc.

    As well it is not at all clear that the money state universities collect in the form of higher tuition is actually going to help lower income students. A critical report/analysis such as this one is very important. It shines a light on the problem. This country in order to be competitive, if you want to look at it that way, HAS to make sure that every child has an opportunity to go to college- a four year college.

    RC21- The report was felt to be important enough to be used as a source by at least three papers of reputation: The New York Times, The Washington Post and indirectly, The Wall Street Journal ( all linked above). I don’t want to go on and on about this picking apart the little stuff and arguing about Haycock’s integrity. The harsh criticism seems to me too misplaced, definitely unsubstantiated.

  177. Potter, I use Haycock(Another mini topic) only because it is a bit easier than typing out the foundation that she is associated with. It’s just let’s me type a little less.

    Secondly this is a report that as you say is being used by very important people So acuracy and integrity are very important. You dont seem to think honesty means much as long as a report supports your ideas.

    You nor Haycock and her group have any idea how many families that have children under 18 and who make 40k have children in college .There is a great percentage that don’t. I’ve gone over this with you twice and I gave you some of the examples. We NEED to know how many American families that have children under 18 and make 40k that DO have kids in college, Before we can use her numbers as a correct measuring stick in regards to moving forward with graphs and claims of discrimination. Her research techniques and data gathering are incredibilly flawed. Do you understand this?

    You seem to brush this off by saying ”Most who have children will have children who want to go to college.” Really! You know this for a fact. Show me your data. The fact is you have know idea. I know many families whose kids have no desire at all to go to college. For your information college is not the main desire of every child. Now I see how easy it is for you to have some of your beliefs. Just make things up out of thin air and claim them as fact. You also fail to realize that wanting to go to college does not mean you are going. If you dont meet the academic standards for admission you dont go. This is the main reason we see less minorities on flagship U campuses. Why none of this manipulation of numbers bothers you is beyond me.

    Once Haycock and her group use false data or have manipulated numbers in a dishonest way, the rest of her study becomes poisoned. I also found other parts of her study that were misleading. I’ll save those for later.

    2nd point Public schools not fulfilling their mandate to provide higher ed for minorities and lower income students. etc.etc.

    First who said it was their mandate to do this. second They are doing this, maybe not at the flagships but at the other state colleges this is being done. You see states have what is called a state U system in Mass we have Amherst and Lowell both pretty hard to get into sats avg about 1100 the other state colleges have lower academic standards. there is also a very good CC and JC system. I do agree that Lowell and Amherst have raised academic standards and it is harder to get in but this is not dicrimination. Unless we assume minorities are not as smart as whites. I guess you could say they are discriminating against kids who have achieved at a lower level. Because minorities Have lower sat scores on avg and also many come from the Boston city school system, wich is a complete joke. Graduating from one of these hell holes with A’s and B’s means almost nothing. These kids are mostly so unprepared for the rigors of college,that letting them into a flagship U is not only a disservice to the child but just sets them up for failure. I’ve seen this happen over and over. That is one of the reasons Mass state U’s raised admission standards.

    The reason you see many more pells at private schools and smaller state schools is because they need students. Here is a little secret.Many small private schools are dying for students, so they recruit and admit minorities. In return they have lowered there academic standards, and their curriculum has been watered down. Most stateU’s give kids a much better education than many small pvt schools. Especially the flagships, but you have to be academically qualified

    This is where I agree with you 1. State U’s are getting more expensive.2. Pell grants don’t cover the % of college tuition that they once did. 3. It is harder for some minority students to get admitted to state U’s due to increased academic standards.

    Did you notice how Haycock seperated Asian students from the minority data she used. Why is this? because it did not support the argument she was trying to make.( Another manipulation of statistics)

    Your final point The Times, Post and WSJ used this report so it must be important. I agree it is an important report. That is why it should be scrutinized more closely and as I’ve shown you it has many distortions and half truths.

    Just because a report strikes a theme that you are in tune with doesn’t make it a truthful or honest report.

    The thing that bothers me about this long conversaition we are having is not so much the debate about education, because it is a very complex issue and many people have important and valuable things to say, but how you so cavalierly brush off Haycock and her groups manipulation of data in order to support their position. This is dishonest and misleading and it doesn’t seem to bother you in the least. You actually seem to be in support of her twisting of the numbers in order to prove a broader point.

  178. In this long and verbose debatre several problems are being conflatd.

    The original issue raised was one of financial inequity. Potter alleged that the top state schools were harming poor local students by recruiting top students and professors from out of state.

    I suggested the opposite might be the case – recruiting top professors and students might create a more stimulating educational environment and bring in more money in the form of research grants and this would benefit everyone. I didn’t see where this was addressed. Furthermore I raised the point that the issue raised is a STATE policy matter and it’s unclear how this relates to the FEDERAL topic of Barney Frrank.

    We also seem to be talking about the state universities’ obligations to under-prepared minority students. Just for the record I don’t see why colleges and universities should regard it as their mission to make up for poor educations at the high-school level. Asian students are also minorities but we conveniently leave them out of the discussion because they come from communities and cultures that place a premium on education and academic achievement. To include them would force us to admit that it’s a cultural issue more than a public-policy one.

    But the MAIN topic here is COST, and quibbling over how to divide up the pie between poor students and middle-class students and rich students and in- and out- of state students is pointless. At best you might succeeed in shifting around a few thousand dollars in someone’s college expenses which are, today, the size of a decent house mortgage over a four-year degree program.

    College expenses, like medical expenses, are rising faster than inflation and the main reason for this is poor productivity. Until someone makes a serious and detailed proposal for a way to address the underlying structural factors producing this fundamentally flawed economic model of how these vital services are delivered, your debates here about how to shift around a little bit of money at the margins amount to rearranging the deck chairs on the Titanic.

  179. Mischaracterization abounds. PLN:Potter alleged that the top state schools were harming poor local students by recruiting top students and professors from out of state.

    Perhaps you can point out where I said that.

    It relates to Barney Frank in that Federal funds now mean less ( as tuitions rise) as at the same time budget constraint are threatening to lower the awards. It’s connected. And it’s connected to the rich gettin richer and the poor and the lower middle class having a harder time.

    Raising awareness that there is an iceberg is the first step in the process.

  180. One law that Barney Frank can think about is that no federal research money will go to any public school that has a failing grade with regard to admissions of minorities and the less financially able. Any other ideas?

    This example that happened to be in the news was to show how inequality manifests and is in cases promoted. It was also in response to those here arguing that the market takes care of things, even things out eventually and everything is basically fine.

    I think I am through here.

  181. I am sorry, I don’t mean to be snippy. I am just tired of this and I don’t seem to be making my case. I have put enough effort into it.

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