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According to the St. Louis Post-Dispatch [ht: sm],

JEFFERSON CITY • Spence Jackson, spokesman for the late state Auditor Tom Schweich, apparently believed he would face unemployment in the wake of his boss’ suicide last month. And that, according to a note Jackson left, was the reason he took his own life Friday.

Jackson left a suicide note saying he couldn’t take “being unemployed again,” before shooting and killing himself Friday, Jefferson City police said Tuesday.

Travel days

Posted: 1 April 2015 in Uncategorized
Tags: , ,

MissionInn-01

Off to a conference. No posts, then, until I return. . .

 

In a now-famous study (and video-gone-viral presentation by Colin Gordon), Dan Ariely and Michael I. Norton showed both that Americans underestimate the current level of wealth inequality in the United States and that they prefer a much more equal distribution than exists right now.

In a more recent study, Shai Davidai and Thomas Gilovich [pdf] used a similar approach to assess perceptions of economic mobility within the United States. Their work is important because, as they explain, “a core tenet of the American ethos is that there is considerable economic mobility.” In other words, even as various forms of inequality have grown over time, Americans can still argue the situation is not so bad if people can move up the ladder, making the transition “from rags to riches.”*

However, what Davidai and Gilovich found is that (1) people believe there is more upward mobility than downward mobility, (2) people overestimate the amount of upward mobility and underestimate the amount of downward mobility, (3) poorer individuals believe there is more mobility than richer individuals, and (4) political affiliation influences perceptions of economic mobility, with conservatives believing that the economic system is more dynamic—with more people moving both up and down the income distribution—than liberals do.

Their findings are important because the belief that upward mobility is more prevalent that downward mobility serves to justify the existing economic system. It reinforces the idea that capitalism is fair, legitimate, and just—that is, one can “make it” with appropriate effort. If they can’t, then existing inequalities look even harsher and more unfair.

If, however, the actual story is rags to rags and riches to rags—that is, it’s highly unlikely to move from the bottom to the top, and also unlikely to be able to stay at the top—it becomes much more difficult to justify the growing disparities between the top and the bottom. To put it differently, if the rungs of the ladder have grown further and further apart and people understand their misperceptions of actual rates of upward and downward mobility, they’re going to be less prone to accept the empty promises of increased opportunity offered by academics and politicians. What that means is they may become more open to the possibility of imagining and creating alternative economic institutions, in which the ladder of inequality is rendered less important.

 

*Although, as I often explain to students, even if workers can become capitalists, it is still the case that, qua capitalists, they find themselves in the position of exploiting others who occupy the position of workers.

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Special mention

Clay Bennett editorial cartoon 161874_600

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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 mostly 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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Special mention

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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.