184049_600

Special mention

1303ckcomic-view-from-trump-tower

mecamut_nov09_1_u_1000

Here’s the link to Adam Morton’s generous—and, in my view, perceptive—review of my book, Development and Globalization: A Marxian Class Analysis.

The main point I want to articulate is that the book is indispensable reading for class in the twofold sense that this phrase can be read. First, as indispensable reading for class in that key chapters in the book shape my classrooms on political economy across the span of undergraduate and postgraduate teaching and research. Second, as indispensable reading for class in delivering a Marxist social class analysis of planning, development and globalisation at a time when many in and beyond the academy are consciously engaged in expunging class as an aspect of radical political economy.

epi-a

Two findings stand out in a new study from the Economic Policy Institute (pdf) on black-white wage gaps in the United States:

First, since 1979, the gap between all workers’ wages—black and white, women and men—and productivity has increased dramatically. Thus, while productivity increased by over 60 percent, wages for white workers rose by only 22.2 percent and black wages by even less, 13.1 percent.

Second, wages for African American have grown more slowly (or, in the case of men, fallen by a greater amount) than those of their white counterparts. As a result, pay disparities by race and ethnicity have expanded since 1979. For example, white women’s wages increased by 30.2 percent and black women’s wages by only 12.8 percent. And while men’s wages actually declined, they fell by 3.1 percent for white men and even more, by 7.2 percent, for black men. Thus, the overall black-white wage gap increased from 18.1 percent in 1979 to 26.7 percent in 2015.

It is pretty clear from the report that overall wage stagnation (especially for the majority of workers, i.e., those below the 90th percentile), in conjunction with lax enforcement of anti-discrimination laws, led to higher wage disparities by race and ethnicity.

But, and this goes beyond the report, we also need to consider the other side of that relationship—that increased racial and ethnic disparities reinforce the growing gap between productivity and the wages of all workers. Black workers are paid less than their white counterparts (of both genders), and all workers’ wages are as a result less than they otherwise would be.

In the end, then, wealthy individuals and large corporations, who capture the resulting surplus, are the only ones who benefit from racial and ethnic wage disparities.

 

160912_a20267-1000

“Why does it always have to represent something?”

Special mention

wf 185065_600

ar-306059983

More than 400 thousand Philadelphians live in poverty. The United States, even after the latest decline, still has more than 43 million men, women, and children below the poverty line. And nearly one half of the world’s population—more than 3 billion people—are poor (more than 1.3 billion of them in extreme poverty).

And yet the policy debate remains the same: how do we get poor people to get themselves out of the “culture of poverty”?

Not how do eliminate poverty? Or, alternatively, how do we create the economic and social institutions that don’t, on a regular and sustained basis, drive millions of people into and keep many of them in poverty?

Instead, what we get from Steve Volk [ht: ja] on Philadelphia, just like from Abhijit Banerjee and Esther Duflo (in their book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty) for the Third World, is a focus on the pathologies of the poor and the strategies that can be tested and implemented so that poor people can find their way out of poverty.

Now, I’ll admit, Volk writes (of Mattie McQueen and other poor Philadelphians) with more heart than Banerjee and Duflo seem to be able to muster. But it’s the same basic idea—that there’s something enduring about poverty, which pertains to poor people and “their” culture and which needs to be disrupted with the right sort of economic interventions.

In Volk’s case, the problem is “generational poverty”—such that poverty is passed down through two or more generations. And the solution is the “two-gen” strategy, such as the HIPPY (Home Instruction for Parents of Preschool Youngsters) program Bill Clinton celebrated at the Democratic National Convention.

In practical terms, the strategy means providing educational support to kids while offering the full range of housing, social, mental-health and economic services to their parents. “In hindsight, this way of approaching generational poverty looks kind of obvious,” says Susan Landry, director and founder of the Children’s Learning Institute in Houston, Texas. “Everyone wants to help children. What the two-gen strategy recognizes is that children exist in families.”

Educating children without stabilizing the home, says Landry, puts kids in an impossible position — requiring them to lead their parents. Making a child’s home safer and less stressful yields huge benefits in the child’s ability to learn. And two-gen strategies are gaining support among conservatives and progressives alike. Republican governors like Bill Haslam of Tennessee and Gary Herbert of Utah champion the two-gen approach for imparting a sense of responsibility to parents and streamlining government — parking disparate social agencies under one roof. Paul Ryan, Republican Speaker of the House, recently told NPR that helping children requires helping their families — a truism of two-gen thinking.

What is true of all such programs—the ones Volk writes about as well as those that are tested through randomized control trials by Banerjee and Duflo—is they focus on improving individual decisions and household environments, not on the history and dynamics of larger economic and social structures that create and perpetuate mass poverty. In other words, it’s all about individual, not social, responsibility and outcomes. The goal, it seems, is to change individual decisions and promote the mobility of a select few up and out of poverty—and, by the same token, to avoid an analysis of the kinds of changes that need to be made in the economy in order to end existing poverty and prevent its recurrence in the future.*

The problem, as I see it, is not a culture of poverty. It’s a culture of poor economics.

 

*I am reminded of an early World Development Report (unfortunately, I don’t remember the exact year) in which it was shown that a redistribution of productive assets (such as land reform) was much more likely to end poverty than other reforms (such as universal schooling). However, the authors of the report argued, land reform often faces social and political opposition, especially from landlords, and therefore needs to be set aside since it is an unrealistic strategy.

tax-plan

All eyes right now are on the U.S. presidential campaign (especially the narrowing gap between Hillary Clinton and Donald Trump).

What that means is Americans’ attention is diverted away from other politics and policies, such as the House GOP’s tax plan—the so-called “Better Way”—which would overwhelmingly benefit the richest 1 percent. It would allow the tiny group at the top to keep, via tax cuts, more of the surplus they manage to capture.

The plan would reduce the top individual income tax rate to 33 percent, reduce the corporate rate to 20 percent, and cap at 25 percent the rate on profits of pass-through businesses (such as sole proprietorships and partnerships) that are taxed under the individual income tax. Individuals could deduct half of their capital gains, dividends, and interest, reducing the top rate on such income to 16.5 percent.

According to the Tax Policy Center,

Overall, the plan would cut the average tax bill in 2017 by $1,810, increasing after-tax income by 2.5 percent. Three-quarters of the tax cuts would benefit the top 1 percent of taxpayers and the highest-income taxpayers (0.1 percent of the population, or those with incomes over $3.7 million in 2015 dollars) would experience an average tax cut of about $1.3 million, 16.9 percent of after-tax income. Households in the middle fifth of the income distribution would receive an average tax cut of almost $260, or 0.5 percent of after-tax income, while the poorest fifth of households would see their taxes go down an average of about $50, or 0.4 percent of their after-tax income. In 2025, the top 1 percent of households would receive nearly 100 percent of the total tax reduction. Households in some upper-middle income groups would have tax increases on average, and households at other income levels would have smaller average cuts, relative to after-tax income, than in 2017.

And, since the plan would reduce total federal revenues (by $3.1 trillion over the first decade of implementation and by an additional $2.2 trillion in the second decade), it implies massive cuts to federal programs, many of which benefit working-class households, thus making the plan even more regressive.

The better way, it turns out, is just another version of conservative trickledown economics.

185069_600

Special mention

185050 download