Archive for October, 2011

What’s going on?

First, the Art Institute of Chicago hosts an exhibition of Soviet TASS posters. Now, London’s Royal Academy of Arts is hosting a new show, “Building the Revolution: Soviet Art and Architecture 1915-35.”

The word “revolution” has become discredited, and this show thoroughly re-energises its meaning in art and architecture. The key fragments of Russian revolutionary creativity still glow like radium, living on in its remaining art and buildings, and hard-wired into the imaginations of some of the 20th and 21st century’s most influential architects.

Could it be that, now that the Cold War is over and in the midst of the Second Great Depression, the revolution that was all but dead and buried is now being rehabilitated?

Sandeep Baliga rediscovers Keynes’s distinction between risk and uncertainty.

Of course, he wouldn’t have to rediscover it once again if mainstream economists actually took seriously the notion of uncertainty—the idea that “we simply do not know”—instead of attempting to domesticate and contain it.

The fact is, we don’t know what the world would be like if mainstream economists had taken uncertainty and other such disruptive ideas seriously. . .

Special mention


What the hell do city officials and the policy think they’re doing in Oakland and Atlanta?

Here’s Matt Taibbi on the issue of the relationship between Occupy Wall Street and banking:

I was at an event on the Upper East Side last Friday night when I got to talking with a salesman in the media business. The subject turned to Zucotti Park and Occupy Wall Street, and he was chuckling about something he’d heard on the news.

“I hear [Occupy Wall Street] has a CFO” he said. “I think that’s funny.”

“Okay, I’ll bite,” I said. “Why is that funny?”

“Well, I heard they’re trying to decide what bank to put their money in,” he said, munching on hors d’oeuvres. “It’s just kind of ironic.”

Oh, Christ, I thought. He’s saying the protesters are hypocrites because they’re using banks. I sighed.

“Listen,” I said, “where else are you going to put three hundred thousand dollars? A shopping bag?”

“Well,” he said, “it’s just, they’re protests are all about … You know …”

“Dude,” I said. “These people aren’t protesting money. They’re not protesting banking. They’re protesting corruption on Wall Street.”

“Whatever,” he said, shrugging.

As it turns out, OWS has chosen a bank for the donations it’s received: Amalgamated Bank.

Established in 1923 by the Amalgamated Clothing Workers of America, Amalgamated Bank continues the progressive traditions of its founders as the only 100 percent union-owned bank in the United States. Chartered by New York State, Amalgamated Bank is an FDIC insured commercial bank with $4.5 billion in assets. The Bank’s corporate divisions also include Commercial Banking and Real Estate Finance. Through its Institutional Asset Management and Custody Division, the Bank is also one of the leading providers of investment and trust services to Taft-Hartley plans in the United States.

Chart of the day

Posted: 26 October 2011 in Uncategorized
Tags: , ,



If it wasn’t clear before it should be now: the distribution of income in the United States has become increasingly unequal over the course of the past three decades.

It is increasingly unequal based on “market incomes,” and it is only slightly less increasingly unequal after taking consideration transfers and taxes. The result in both cases is that the distribution of income in the United States has become grotesquely unequal.

That’s the conclusion of the new study by the nonpartisan Congressional Budget Office [summary here and pdf here]. The study includes a set of basic facts and figures that should figure in every discussion of the origins of the current crisis as well as the current political debates concerning taxes, deficits, and much else.

It’s also a challenge to economists to either stop ignoring the conditions and consequences of the unequal distribution of income or to go beyond the facile invoking of “technology and globalization” as its causes—and to come up with a real analysis of how this increasingly unequal distribution of income created the conditions for the  crisis of 2007-08 as well as of the changing patterns of U.S. capitalism starting in the mid-1970s that led to concentration of income at the top.

Here, in short, is what we know.

First, for the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007 while, for others, income grew much less: 40 percent for the 60 percent of the population in the middle of the income scale, only 20 percent of the population with the lowest income. The result was that, between 2005 and 2007, the after-tax income received by the 20 percent of the population with the highest income exceeded the after-tax income of the remaining 80 percent.

Second, a large part of the explanation of why incomes became so unequally distributed between 1979 and 2007 was because of the increase in the concentration of “market income” (income measured before government transfers and taxes) in favor of higher-income households. In other words, such households’ share of market income was greater in 2007 than in 1979. Specifically, over that period, the highest income quintile’s share of market income increased from 50 percent to 60 percent. The share of market income for every other quintile declined.

Finally, while income transfers and taxes make the distribution of income slightly less unequal, the fact is, the equalizing effect of transfers and taxes on household income was smaller in 2007 than it had been in 1979. That’s in part because the distribution of transfers shifted, moving away from households in the lower part of the income scale, and because the overall average federal tax rate fell by a small amount and the composition of federal revenues shifted away from progressive income taxes to less-progressive payroll taxes. As a result of those changes, the share of household income after transfers and federal taxes going to the highest income quintile grew from 43 percent in 1979 to 53 percent in 2007. The share of after-tax household income for the 1 percent of the population with the highest income more than doubled, climbing from nearly 8 percent in 1979 to 17 percent in 2007.

Those are the basic facts and figures about the increasingly unequal distribution of income—before and after taxes—in the United States between 1979 and 2007.

The next step is to analyze why the distribution of income became increasingly unequal and what its consequences are. I’ll be investigating and writing about those issues in the days and weeks ahead. I hope others will, too. . .