Academia

Robert Reich Movie “Inequality for All”

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I saw the movie “Inequality for All” starring Robert Reich, the former labor secretary for Bill Clinton and a very short guy (he’s 4′ 11″) who is pretty personable and funny. Reich uses his day job as a university professor while teaching a class to illustrate his thoughts on inequality from the movie.

In the movie he attempts to link:
– decline in average wages, in “real” terms (adjusted for inflation)
– growth in the highest wages (the top 1%)
– with various factors, including globalization, automation, declines in unions, and the financial bubble
– income inequality with lower marginal tax rates on the rich

There are certainly some concepts in here than anyone can agree with. It would be good if more people in the USA earned a higher salary, had better educations, and were more productive.

In the movie he mentions Warren Buffett, who famously pays a lower marginal tax rate than everyone else in his office, which is due to the fact that he receives long term capital gains and dividend income which are taxed at a lower rate. This is grist for the “raise taxes on the wealthy” discussion, as Buffett plays the likable old man. However, what he fails to mention is that Warren Buffett is the very candidate that the ESTATE TAX is designed to catch… rather than nickel and dime him every year on his assets as they rise in value (and cause friction and force him to sell them off to meet the tax bill), the estate tax would be levied on the super rich and it would effectively make up for the lower marginal rate during his lifetime by taxing increases on his wealth at a rate of 40%, for all amounts greater than about $5M. However, Warren Buffett is choosing to “evade” these taxes by setting up trusts and / or giving it away to his favorite causes; if Warren couldn’t avoid his estate tax through these loopholes (the same way you or I can’t avoid the payroll or sales taxes) then 40% of his $60B estate ($24B) would go to the Federal government, to fund the “investments in people” that Robert Reich is so passionate about. Funny that Reich didn’t call that out (didn’t follow his narrative, apparently).

Another element he fails to mention is the growth in illegal immigration in the USA, and the havoc that this causes with unskilled labor (as they are willing to work for far less). It is funny because two professions he specifically mentions, meat packing and short order cooks, are magnets for immigrants and their arrival is a direct cause for falling wages in these fields. Not surprisingly, Reich didn’t want to alienate a core Democratic group.

There is a rich “pillow manufacturer” who makes $10M+ / year who also describes how ridiculous it is in his opinion that his marginal rate isn’t higher. That same entrepreneur says that he invests in “funds of funds” and due to this he makes money without creating any jobs. That is quite a statement – what do you think those hedge funds invest in? They invest in commodities, stocks, real estate and debt (I’m assuming). When you are an investor and you provide money for stock and debt you are supporting companies that, in turn, hire staff. I can’t believe that Reich let this comment slide, but since it was what Reich wanted to hear, why interject?

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David Ronfeldt’s In-Depth Review of America 3.0

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Cross-posted from zenpundit.com

 

 David Ronfeldt, RAND strategist and theorist has done a deep two-part  review of America 3.0 over at his Visions from Two Theories blog. Ronfeldt has been spending the last few years developing his TIMN analytic framework (Tribes, Institutions [hierarchical], Markets and Networks) which you can get a taste from here  and here or a full reading with  this RAND paper.

David regards the familial structure thesis put forward by James Bennett and Michael Lotus in America 3.0 as “captivating”  and “compelling” for  “illuminating the importance of the nuclear family for America’s evolution in ways that, in my view, help validate and reinforce TIMN”. Both reviews are detailed and should be read in their entirety, but I will have some excerpts below:

America 3.0 illuminates significance of nuclear families — in line with TIMN (Part 1 of 2)  

….Bennett and Lotus show at length (Chapter 2, pp. 29-45) that the nuclear family explains a lot about our distinctive culture and society:

“It has caused Americans to have a uniquely strong concept of each person as an individual self, with an identity that is not bound by family or tribal or social ties. … Our distinctive type [of] American nuclear family has made us what we are.” (p. 29)And “what we are” as a result is individualistic, liberty-loving, nonegalitarian (without being inegalitarian), competitive, enterprising, mobile, and voluntaristic. In addition, Americans tend to have middle-class values, an instrumental view of government, and a preference for suburban lifestyles.  

As the authors carefully note, these are generally positive traits, but they have both bright and dark sides, noticeable for example in the ways they make America a “high-risk, high-return culture” (p. 38) — much to the bane of some individuals. The traits also interact in interesting ways, such that Americans tend to be loners as individuals and families, but also joiners “who form an incomprehensibly dense network of voluntary associations” — much to the benefit of civil society (p. 39).  

In sum, the American-style nuclear family is the major cause of “American exceptionalism” — the basis of our freedom and prosperity, our “amazing powers of assimilation” (p. 53), and our unique institutions:

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Mobilization for WW2 — A Revisionist History Triple Book Review

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Most histories of the American World War 2 (WW2) military mobilization are firmly based in Keynesian economics. There is now a new emerging counterpoint evaluation of that era, using the “Regime Uncertainty” school of political economy. The following is a review of three works in that school that provide both a cultural/political context and a nuts and bolts view of how the American military mobilization of 1940-43 was paid for.

See the following book titles/Amazon.com Links:

1) Depression, War, and Cold War: Challenging the Myths of Conflict and Prosperity (Independent Studies in Political Economy) by Robert Higgs,

2) The Forgotten Man: A New History of the Great Depression by Amity Shlaes , and

3) The previously mentioned “Keep From All Thoughtful Men: How U.S. Economists Won World War II,” by Jim Lacey

All three books subscribe to the “Regime Uncertainty” school of political economy in evaluating the Great Depression and the World War Two economic rebound. This school challenges the gross domestic product (GDP) measurements of World War Two as highly flawed and contends that while actual consumer GDP increased through out the war, much is what the Federal government counts as GDP — ammunition for instance — was a flat economic loss.

This school of thought also contends the late 1940s post-war economic recovery in America was very much a matter of the dismantlement of FDR New Deal regulatory structure — and removing “Regime Uncertainty” from “Rule of Men” regulatory fiat — as the major factor in the post World War Two private sector economic boom.

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A Stark Choice

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Apropos of nothing – although since the Zimmerman jury has begun deliberations, this selection might be seen as a comment – today I am thinking on a certain 19th century hymn. Which my mother always disliked since a certain pastor liked to bring it out, incessantly with regard to particularly mid-20th century political concerns. Yes, I was raised religious, in one of the more flintily intellectual Protestant religious traditions, and today I believe this particular hymn to be especially relevant, in light of David’s post about Saint Alexander of Munich. There are choices one makes – sometimes momentous ones, on the spur of an instant, which turn out to be the choices which define your life … and now and again, your death.

Once to every man and nation
Comes the moment to decide,
In the strife of truth with falsehood,
For the good or evil side;
Some great cause, God’s new Messiah,
Offering each the bloom or blight,
And the choice goes by for ever
‘Twixt that darkness and that light.

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Teaching in a black majority high school

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This essay has been around for a while but I saw it for the first time today. It is powerful but depressing. I wonder how applicable it is to the Chicago school system? I have a nephew who has a step daughter in a public school that is about half black. Her mother has to go to the school about once a week to complain about bullying. Catholic schools’ tuition is far higher than it was when I lived there.

Here it is.

A few excerpts: Until recently I taught at a predominantly black high school in a southeastern state.

The mainstream press gives a hint of what conditions are like in black schools, but only a hint. Expressions journalists use like “chaotic” or “poor learning environment” or “lack of discipline” do not capture what really happens. There is nothing like the day-to-day experience of teaching black children and that is what I will try to convey.

Most whites simply do not know what black people are like in large numbers, and the first encounter can be a shock.

One of the most immediately striking things about my students was that they were loud. They had little conception of ordinary decorum. It was not unusual for five blacks to be screaming at me at once. Instead of calming down and waiting for a lull in the din to make their point — something that occurs to even the dimmest white students — blacks just tried to yell over each other.

This must be an impossible place to try to teach. Are there any kids who want to learn?

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