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I continue to teach Michael Moore’s Roger & Me (along with other classics, including Charlie Chaplin’s Modern Times, Barbara Kopple’s Harlan County, U.S.A., and Charles Ferguson’s Inside Job) in my Topics in Political Economy course.

Apparently, Moore’s film inspired François Ruffin’s new film, Merci Patron! (“Thanks, Boss!”).

In the film, Mr. Ruffin stages a number of slapstick efforts to reach Bernard Arnault, the chairman and chief executive of LVMH, similar to the ways Mr. Moore tried to chase down Roger B. Smith of General Motors. . .

“Merci Patron!” follows Mr. Ruffin’s efforts on behalf of Jocelyne and Serge Klur, a couple in the northern town of Forest-en-Cambrésis who lost their jobs in 2007 with the closing of a factory that had been subcontracted to make suits for LVMH brands. Production was moved to Eastern Europe.

Mr. Ruffin coaches the Klurs, who are now destitute and whose home is threatened with foreclosure. Posing as their son, with dyed blond hair, he guides them on a quest to demand 35,000 euros, about $40,000, to settle their debts and to win a minimum-wage job for Mr. Klur from LVMH and Mr. Arnault.


John Komlos has completed a new study, in which he attempts to improve upon the Congressional Budget Office’s (post-tax, post-transfer) estimates of the growth of U.S. income for the 1979-2011 period. The results are for quintiles and, within the top fifth, for percentiles. (The high estimates are based on using the personal consumption expenditures price index to deflate the modified CBO data, while the low estimates use the consumer price index).

The high estimates of the growth of median income are not changed markedly from the original CBO estimates. But the results are dramatic:

Growth rates varied considerably across the income distribution. The lowest quintile grew well enough at 1.0% per annum, although the dollar value of its average income was still a meager $17,900, which was barely the poverty threshold for a family of three. Moreover, their income grew at a much slower rate than that of the 5th quintile during this 32-year period. Hence, the income of the 1st quintile declined from 15% of the income of the upper quintile to just 10%. In addition, the growth in income of the lower-middle class (2nd quintile) and that of the middle class (3rd quintile) was the slowest, growing at a modest rate of 0.6% to 0.7% per annum, thereby reinforcing the general impression of a floundering middle class even with these high estimates. However, the upper-middle class (quintile 4) did better, growing at 1.1% per annum, but it also fell behind the 5th quintile which grew almost twice as rapidly, at a rate of 2.1%. Moreover, there were noteworthy differences even within the 5th quintile, insofar as the income of the top 1% grew at an “astronomical” pace of 3.9% per annum, so that in the course of this period it grew from 7 times to 14 times the value of the median income. Only the income of the 5th quintile grew faster than the median income. In addition to the growth in median income which was between 0.9% and 1.4% per annum one can also use the average of the five growth rates across the five quintiles as a measure of central tendency for the whole population. Such an average would lower the estimated growth rates of income for the whole population to between 0.6% and 1.1% per annum. (references omitted)

The differences are even more stark in the case of the low estimates:

The low growth rate estimates were 0.5% less than the high ones and, therefore, were quite subdued across the board with the exception of the 5th quintile which grew at a reasonable rate of 1.6% per annum. The estimated growth rates of the 2nd and 3rd quintiles were hardly distinguishable from (0.1%-0.2%). They differed the most from the high estimates in percentage terms. In fact, only quintile 5 registered an exceptional performance of 1.6% and within it the income of the top 1% grew at the stellar rate of 3.4%. In the main, all three middle class quintiles were left very far behind with only quintile 4 advancing slightly at a rate of 0.6% per annum. (references omitted)

We have, then, two major results from Komlos’s analysis: First, the “hollowing out” of the middle-class (as we can see from the fact that the incomes of the second and third quintiles consistently lagged behind those of the other quintiles). And, second, the only real growth occurred at the very top (since the incomes of the top 1 percent increased between 188 and 240 percent). The result was that the ratio between the top 1 percent and the bottom quintile rose dramatically, from 20.9 in 1979 to 51.2 in 2011 (an increase of 144 percent).

Is there any more stark indicator of the spectacular growth of inequality in the United States?


Special mention



All but three of Detroit’s 97 schools stayed closed again today, the second day of teacher protests over their pay and the conditions for students in the city’s financially ailing school district.

The protests began on Monday, on Teacher Appreciation Day [ht: sm],

after Detroit Public Schools’ emergency manager Steven Rhodes announced in an email to teachers Friday that the city’s finances were so bad that it wouldn’t be able to make payroll after more than $48 million in state emergency aid runs out on June 30.

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In addition, teachers have tweeted photos of stained ceilings, disgusting bathrooms, and inadequate student lunches.



No doubt, author Neal Gabler [ht: ja] has a pretty nice pot to piss in. But he doesn’t have enough money to pay for a $400 emergency.

That puts him in the same situation as 47 percent of Americans who, according to the most recent Board of Governors of the Federal Reserve System’s “Report on the Economic Well-Being of U.S. Households” (pdf), “say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.”

And there’s more:

  • Thirty-one percent of respondents report going without some form of medical care in the 12 months before the survey because they could not afford it.
  • Just under one-quarter of respondents indicate that they or a family member living with them experienced some form of financial hardship in the year prior to the survey.

It’s not that Gabler and almost half of all Americans are poor. But they’re stretched to (and, for many, beyond) the limit and find themselves in a situation of financial fragility.

They wouldn’t be able to cover an emergency expense costing $400! That’s a car repair, a new appliance, or a minor medical procedure. Or a trip to see an ailing relative.

In fact, according to a recent study by Payoff [ht: db], a financial wellness company, 23 percent of Americans—and 36 percent of Millennials—have experienced “a debilitating degree of stress surrounding their finances, resulting in pathological effects on their thoughts, feelings and behaviors that are most commonly associated with post-traumatic stress disorder.”

What the hell is going on?

Mainstream economists aren’t going to be a lot of help since, as Gabler notes, they’ve mostly ignored the situation.

They had unemployment statistics and income differentials and data on net worth, but none of these captured what was happening in households trying to make a go of it week to week, paycheck to paycheck, expense to expense.

What about psychologists? Here’s the best Brad Klontz, a financial psychologist (whatever that is) can come up with: “If you want to have financial security, it is 100 percent on you.”*

So, we’re back to real people like Gabler:

Life happens, and it happens to cost a lot—sometimes more than we can pay.

Yet even that is not the whole story. Life happens, yes, but shit happens, too—those unexpected expenses that are an unavoidable feature of life. Four-hundred-dollar emergencies are not mere hypotheticals, nor are $2,000 emergencies, nor are … well, pick a number. The fact is that emergencies always arise; they are an intrinsic part of our existence. Financial advisers suggest that we save at least 10 to 15 percent of our income for retirement and against such eventualities. But the primary reason many of us can’t save for a rainy day is that we live in an ongoing storm. Every day, it seems, there is some new, unanticipated expense—a stove that won’t light, a car that won’t start, a dog that limps, a faucet that leaks. And those are only the small things.

And when those financial emergencies arise, many of us don’t have the wherewithal to cover them.

As we know, those at the top are doing just fine. They continue to get their cut of the surplus—and to spend it on luxury cars and boats, apartments and houses, baubles and art. And put the rest in offshore accounts.

But many of the rest of are stretched by a combination of stagnant wages and salaries (going back decades now), escalating expenses (especially for healthcare and education), and barely regulated debt mechanisms (like credit cards). So, we live paycheck to paycheck, with barely any savings for eventualities (much less retirement), trying our best to keep it all together. . .

And then shit happens.


*Kontz is “co-founder of Your Mental Wealth™ and the Financial Psychology Institute, and a Partner of Occidental Asset Management, LLC.”



The folks at the Center on Budget and Policy Priorities have analyzed the distributional effects of the tax-cut plans proposed by Republican candidates Donald Trump and Ted Cruz.

Here’s what they found (for 2025, when their plans would be fully implemented):

  • Just 0.8 percent of the population would live in households with incomes exceeding $1 million, but such households would receive 38 percent of the Trump tax cuts. This would be greater than the share of the tax cuts (32 percent) that the bottom 80 percent of the population would receive.
  • Millionaires would receive 47 percent of the Cruz tax cuts, or more than double the share of the tax cuts (19 percent) the bottom 80 percent of the population would receive. In fact, under the Cruz plan, millionaires would receive a larger share of the tax cuts than the bottom 95 percent of the population.

Even more:

  • The richest 0.1 percent of the population (those with annual incomes exceeding $5.2 million in 2016 dollars) would receive tax cuts averaging $1.4 million under Trump and $1.8 million under Cruz. Under both plans, this segment of the population would receive significantly larger percentage increases in after-tax income (18 percent and 23 percent, respectively) than any other group.
  • These households would receive 18 percent of the tax cuts under the Trump plan—more than the plan’s combined tax cuts for the bottom 60 percent of the population. Under the Cruz plan, these multi-millionaires would receive 23 percent of the tax cuts, a larger share of the tax cuts than the bottom 80 percent of the population would receive.



Special mention

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