“Look both ways before crossing”

 

You have to look both ways before crossing—because, if the driver is rich, they’re more likely to run you over.

That’s one of the results of the research project directed by Dacher Keltner, which I wrote about back in 2011. The video above [ht: ke] presents other results of their project on the behavioral effects of inequality.

The key, it seems to me, is not that rich people per se display behavioral pathologies—or, for that matter, that poor people are noble. It’s that, within the context of the grotesque inequalities created by current economic arrangements, the rich person is “just as enslaved. . .as is his opposite pole,” the poor person, “albeit in a quite different manner.”*

 

*The full quotation, one of my favorites from volume 1 of Capital, in the section on the “Results of the Immediate Process of Production” (p. 990), is as follows:

The self-valorization of capital—the creation of surplus-value—is therefore the determining, dominating, and overriding purpose of the capitalist; it is the absolute motive and content of his activity. And in fact it is no more than the rationalized motive and aim of the hoarder—a highly impoverished and abstract content which makes it plain that the capitalist is just as enslaved by the relationships of capitalism as is his opposite pole, the worker, albeit in a quite different manner.

Cartoon of the day

Special mention

Map of the day

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Yes, it’s pretty clear, as Thomas Edsall argues, when it came to the Democratic mayoral primary in New York City, class trumped most other identities. Bloomberg’s chosen successor, Christine Quinn, won big over all other challengers, including Bill de Blasio, in areas where household incomes surpassed $214,876.

But I was wrong: having just spent a long weekend in Manhattan, I had the distinct impression I was walking around the inner sanctum of the 1 percent. As it turns out, it’s more like the top 10 percent, as the map below shows:

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$100K may be “zilch in Manhattan” but, as is clear in the map below, most New Yorkers are struggling to get by on less than that—and they voted overwhelmingly for de Blasio in the Democratic primary.

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In the end, that’s the choice that will have to be faced by de Blasio: after he wins the mayoral election next Tuesday, is he going to represent the top 10 percent or the other 90 percent?

Inflation and distribution

Yes, it is true, Binyamin Appelbaum’s original article on inflation is a bit of a mess—combining quotations from clown Alan Greenspan and golfer Kenneth Rogoff with an attempt to assess the distributional consequences of increasing prices. (The follow-up column starts out a bit better, since he makes it clear that wage incomes may not keep pace with higher prices, but then he ends with a statement that—somehow—”a little more inflation” will solve the “profound and enduring unemployment, slow growth, rising income inequality.”)

It’s even worse, though, to attempt to correct Appelbaum by arguing that the only distributional effect of inflation “has been and always will be between net lenders and net creditors.” Yes, wages are prices and nominal incomes, by definition, rise with prices. But that doesn’t mean all incomes—especially wage incomes—move hand in hand with prices.

The chart above is a perfect illustration. Hourly wages (the blue line) and consumer prices (the red line) are not particularly correlated, especially since the crash of 2007-08. And given the continued existence of a large Reserve Army of the Unemployed and Underemployed, it’s quite likely that higher inflation will be accompanied by falling real wages. That’s one reason why corporations would be quite happy with a more accomodationist monetary policy, which would push inflation above the current 1.5-percent rate and 2-percent target. Their profit margins would rise (as output prices increase) while real unit labor costs would fall (as real wages decline).

Workers have already paid the bulk of the costs of the crisis (as a result of massive unemployment, slow growth, and rising income inequality). And now they’re being asked to pay the costs for the recovery (by decreasing, in real terms, what little they receive in nominal wages).

The corporations they work for would like to lower their nominal wages (and there’s an army of neoclassical economists who are willing to make that case for them, in the name of labor-market “flexibility”). The next-best alternative is to lower their real wages (and there’s an army of other economists standing by to make that case, too).

Cartoon of the day

Special mention

Lou Reed and Arthur Danto RIP

 

Lou Reed and Arthur Danto couldn’t have been more different. One used music to make us feel the contradictions occasioned by the desperate situations people find themselves in, while the other used philosophical language to make us think about what constitutes a work of art.

But they were also connected, at the very start: The Velvet Underground & Nico was produced by Andy Warhol (in 1967), while Warhol’s Brillo Box was the object that led Danto (in 1967, pdf) to argue that art is whatever the artworld says it is.

I can’t say I was ever fully satisfied by the answers Reed and Danto offered but my encounters with the work of both of them led me to feel and think about life, music, and art in new, unexpected ways. And the world is now a less interesting place without them.

Chart of the day

This past Thursday was the 75th anniversary of the minimum wage in the United States.

What does it look like today, especially in comparison to the portion of the surplus received by CEOs in the restaurant industry? As the Economic Policy Institute explains:

Chief executive officers at the largest firms in the restaurant and hospitality industry have done extremely well financially, even as many of their employees have struggled to get by.  Compared to the minimum wage—$15,080 if earned full-time, full-year—the $11,884,000 average pay of these restaurant CEOs in 2012 is astronomical—788 times higher. These corporate CEOs earn more on the first morning of the year than a minimum wage worker will earn over the course of a full year.

The trade association that represents these CEOs, the National Restaurant Association, has vehemently opposed any increase in the minimum wage.  The figure below [above] raises the question: Who in the restaurant industry needs and deserves a raise?

Cartoon of the day

Special mention

Cartoon of the day

Special mention

Chart of the day

Wage Theft Comics: Crime and Justice [ht: sm]