capitol investment

We’ve been presenting Jacob Hacker and Paul Pierson’s argument about “politics as organized combat” in their 2010 book, Winner-Take-All Politics, in our Tale of Two Depressions course.

Lee Drutman explains that, while the Citizens United decision opened the door for corporations to spend unlimited amounts of money on elections (as a form of free speech), they’ve actually declined the offer. Instead, they continue to spend their money the old-fashioned way: on corporate lobbying.

From 1998 onward, as far back as there is good data, corporations have consistently spent about 13 times more on lobbying than they have on campaign contributions. That’s not to say they don’t spend on campaigns. In the 2013-14 cycle, corporations, trade associations and business associations spent a combined $381 million through their political action committees. But that’s small potatoes compared with the giant $5.2 billion pot roast of reported corporate lobbying expenses over this period. And about half of lobbying doesn’t even get reported.

Lobbying offers a much better return than election spending because real power lies in influencing how policymakers think about the world, not in getting them elected. Lawmakers’ staffers, who are the key policymakers in most offices, are smart but young. They are often inexperienced and stretched far too thin, trying to understand many complicated subjects with limited time. Large corporations that hire many lobbyists can overwhelm offices by “helping” them make sense of the issues.

Staffers may know that the information is biased, but they just don’t have the time do additional homework. And besides, if there were another view out there, wouldn’t those advocates send in their lobbyists, too? On many issues, though, there is no other side — or at least no other side with anywhere near the same resources as big corporations. By my count, corporations and their associations spend $34 on lobbying for every $1 that labor unions and groups representing diffuse interests, such as citizens and consumers, spend combined. That ratio is up from 22 to 1 in 1998.

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Readers will remember that, in Evangelii Gaudium, Pope Francis developed a scathing critique of trickle-down economics and of the existing economy of inequality and exclusion.

How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

But, in that exhortation, the pope didn’t really address the issue of alternatives to contemporary capitalism. Now, he has—in the form of cooperatives.

In a recent audience [ht: db] with members of the Confederazione Cooperative Italiane,* Francis offered a practical alternative to the “throw-away culture created by the powers that control the economic and financial policies of the globalized world”: to establish new cooperatives and to strengthen existing cooperatives.

he spoke of the economy and its relationship with social justice and human dignity. Speaking of the need to “globalize solidarity,” he urged the confederation to bring co-operatives to the “existential peripheries” and to continue to be “prophetic” by “inventing new forms of co-operation.”

The Pope spoke of “a certain liberalism,” which “believes it is first necessary to produce wealth—and it does not matter how—to then promote some state redistribution policy.”

Others think it is up to a company to “bestow the crumbs of accumulated wealth” to those in need to then, in turn, “absolve themselves” of “their so-called ‘social responsibility’,” the Pope said.

“You run the risk of deluding yourself that you are doing good while, unfortunately, you continue only to do marketing,” without ever escaping the “fatal loop” of egoism, “which has the god of money at the centre,” he said.

Instead, the co-operative creates a “new type of economy” that allows “people to grow in all their potential,” socially and professionally, as well as in responsibility, hope and co-operation, he said. The Pope clarified that while he was not saying income growth is not important, it certainly “is not enough.”

 

*The Confederation of Italian Cooperatives is one of three cooperative organizations in Italy (the other two being the Associazione Generale Cooperative Italiane and the Federazione Nazionale delle Cooperative). Catholic-inspired cooperatives were originally part of the Federazione, which was founded in 1886, but then then they left to form a separate organization in 1919. In the 1920s, the fascist government disposed of all cooperatives and unions and the various cooperative organizations at the time were disbanded. After World War II, the cooperative organizations were formed once again.

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The United States does not collect health data by class.*

However, the recently released report from the County Health Rankings and Roadmaps project (which for the first time this year include a measure of county-level inequality, depicted in the map above), conducted by the University of Wisconsin Population Health Institute, does give us some sense of the relationship between class and health outcomes in the United States.

Here are some of the key findings:

  • Rates of children in poverty are more than twice as high in the unhealthiest counties in each state as they are in the healthiest counties. (The top performing counties in the United States, the 10 percent with the lowest rates of child poverty, have child poverty rates of less than 13 percent. The worst performing counties, the 10 percent with the highest rates of child poverty, have child poverty rates of at least 38 percent.)
  • Across the nation, rates of unemployment are 1.5 times as high in the least healthy counties of each state as they are in the healthiest counties. (The top performing counties in the United States have unemployment rates of 4.1 percent or lower. The worst performing counties for unemployment have unemployment rates of 10.7 percent or higher.)
  • The top performing counties in the United States have income inequality ratios of less than 3.7, while the worst performing counties have income inequality ratios of 5.4 or higher. (Within counties in the United States, the average—median—income inequality ratio of the 80th to the 20th percentile is 4.4. The income-inequality ratio in U.S. counties ranges from 2.6 to 9.6.)

Thus, as Margot Sanger-Katz explains,

The researchers measured inequality by comparing the number of people in a given place who earned above the 80th percentile in the county with the number of people earning less than the 20th percentile. Then they measured life expectancy using a custom measurement they developed — it counts the “potential life years lost” in each community by measuring all those who died before the age of 75, and the age at which they died. So someone who died at age 70 would have five years of potential life lost. Then they adjusted the numbers according to how old people were in the county, so counties with more old people wouldn’t look sicker than counties that were younger. The study looked at only the average life span and not that of higher-income versus lower-income residents.

For every one-point increase in the ratio between high and low earners in a county, there were about five years lost for every 1,000 people. That’s about the same difference they observed when a community’s smoking rate increased by 4 percent or its obesity rate rose by 3 percent. Researchers said that inequality effect persisted even when they compared communities of similar average income and racial composition.

The question we all need to ask then is, how many potential life years have been lost to the grotesque levels of inequality (and the conditions and consequences of growing inequality, such as poverty and unemployment) we have seen emerging in recent decades in the United States?

 

*In contrast to other countries, such as the United Kingdom (which has issued a series of reports over the years on the relationship between health and class, including the Acheson Report, fully titled the Independent Inquiry into Inequalities in Health Report, in 1998).

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According to the Century Foundation’s analysis of the latest Occupational Employment Statistics report by the Bureau of Labor Statistics, about a quarter of U.S. workers are working full-time, year-round in occupations where they cannot expect to earn enough to keep a family of four above poverty.

The chart above shows median wages for the 30 lowest-paying occupations with over 250,000 employees, which collectively employ 31 million people nationally. All the occupations on the list have annual median wages that fall at or below the poverty level for a family of four ($24,250). At the very bottom are America’s 3.1 million food preparation workers, who earn just $18,410 annually. That’s $8.85 an hour.

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The occupations with the largest employment in May 2014 were retail salespersons and cashiers. These two occupations combined made up nearly 6 percent of total U.S. employment, with employment levels of 4.6 million and 3.4 million, respectively. Of the 10 largest occupations (which accounted for 21 percent of total employment in May 2014), only registered nurses, with an annual median wage of $66,640, had an average wage above the U.S. all-occupations median of $34,540.

As the Century Foundation reminds us,

Many of these jobs are simple, but that doesn’t mean they are easy. Many are commonplace, but that doesn’t make them dispensable. Rather, in our haste to dismiss basic as beneath us, we lose sight of the fact that what is basic is also fundamental, what is mundane is also essential. These jobs matter—they are the substance of simple pleasures, the foundation of daily joys—and they mean more to our interpersonal well-being than any amount of high-flying CEOs ever will. But by labeling its practitioners as “low skill,” we rationalize relegating them to near-poverty wages.

The stark facts collected by the BLS also remind us that, when large numbers of people are forced to have the freedom to sell their ability to work, the wages many U.S. workers receive force them and their families to live in or within striking distance of destitution.

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