Posts Tagged ‘poor’

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Back in 1939, John Steibeck wrote (in chapter 14 of The Grapes of Wrath):

One man, one family driven from the land; this rusty car creaking along the highway to the west. I lost my land, a single tractor took my land. I am alone and I am bewildered. And in the night one family camps in a ditch and another family pulls in and the tents come out. The two men squat on their hams and the women and children listen. Here is the node, you who hate change and fear revolution. Keep these two squatting men apart; make them hate, fear, suspect each other. Here is the anlage of the thing you fear. This is the zygote. For here “I lost my land” is changed; a cell is split and from its splitting grows the thing you hate—”We lost our land.” The danger is here, for two men are not as lonely and perplexed as one. And from this first “we” there grows a still more dangerous thing: “I have a little food” plus “I have none.” If from this problem the sum is “We have a little food,” the thing is on its way, the movement has direction. Only a little multiplication now, and this land, this tractor are ours. The two men squatting in a ditch, the little fire, the side-meat stewing in a single pot, the silent, stone-eyed women; behind, the children listening with their souls to words their minds do not understand. The night draws down. The baby has a cold. Here, take this blanket. It’s wool. It was my mother’s blanket—take it for the baby. This is the thing to bomb. This is the beginning—from “I” to “we.”

If you who own the things people must have could understand this, you might preserve yourself. If you could separate causes from results, if you could know that Paine, Marx, Jefferson, Lenin, were results, not causes, you might survive. But that you cannot know. For the quality of owning freezes you forever into “I,” and cuts you off forever from the “we.”

Today, we have the spectacle of a major U.S. political party that puts forward a series of budgetary proposals that couldn’t be more obvious in attempting to freeze the “I” and cut themselves (and, if the proposals pass, the rest of us) off from the “we.”

As Teresa Tritch explains,

This week, House and Senate Republicans will be working on a final budget plan. They are operating from templates that call for cuts of about 40 percent on average by 2025 in programs for low and moderate income households — things like food assistance, college aid and tax credits for the working poor.

The damage would be severe. For starters, sixteen million people would be pushed into poverty, or deeper into poverty, after 2017.

At the same time, the Republican plans leave untouched nearly $1 trillion worth of annual tax breaks that overwhelmingly benefit the top 20 percent of households.

If that’s not flabbergasting enough, there’s this:

Separate from the budget plans, nearly all House Republicans and seven Democrats passed a bill last week to repeal the federal estate tax on inherited wealth. Repeal would benefit the 5,500 wealthiest families in America each year and would do nothing for everyone else, because the estate tax applies only to those at the very top of the wealth ladder. For estates valued at $50 million and up, for example, repeal would save the heirs about $20 million per estate, on average, in 2016.

Update

For more on the estate tax, see this piece by Edward Rodrigue and Isabel V. Sawhill, in which they take up and challenge the usual claims for repeal. Their conclusion (against the “I” and in favor of the “we”):

The estate tax is one of the most progressive aspects of our tax system. In a time of increasing inequality, it provides a way to counteract the formation of a “permanent ownership class.” If anything, we should consider raising the rate and lowering the exemption to pay down debt and invest in opportunities for the unlucky children at the bottom of the wealth ladder.

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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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