Supply-side ideas led not only to deregulation and lower tax rates on top incomes, but also to cuts to social welfare programs and public investments. The results are now in: We cut top tax rates and repealed regulations, but the benefits didn’t “trickle down” to everyone else. These policies increased wealth for the largest corporations and the richest Americans, increased economic inequality, and failed to produce the economic growth that adherents promised. Read more at location 73
The evidence shows that markets do not exist in a vacuum: they are shaped by our legal system and our political institutions. Read more at location 78
This is good news. Inequality—at the level and of the type that we see today—is a choice. When the rules no longer work, it’s time to rewrite them. Read more at location 80
In traditional analyses based on models of perfect markets, we often assume away the rules of the game. It is as if markets existed in a vacuum, structured by some natural law, and all that the economist needs to do to understand changes in the economy is to study the shapes of the demand and supply curves and the forces determining their shifts over time. Read more at location 174
Note: Faulty assumptions
Rules include all the regulatory and legal frameworks and social norms that structure how the economy works. These include rules affecting property rights, the enforcement of contracts, the formation and behavior and responsibilities of businesses, relations between workers and their employers, and obligations and protections for borrowers and lenders and buyers and sellers in financial markets. They also include rules and institutions governing key aspects of public policymaking—taxes, public spending, and monetary policy. And they include the combination of written and unwritten rules that create a structural basis for discrimination that systematically excludes broad segments of the population—namely women and people of color—from social and economic opportunity. Read more at location 177
But few markets are perfectly competitive; therefore outcomes depend in part on market power, and rules affect this power. Bargaining power, for instance, determines who benefits the most from labor negotiations, and that power is affected by the strength of unions, the legal and economic environment, and how globalization is structured. In markets with imperfect competition, firms have their own form of market power: the power to set prices. Likewise, the political power of various groups determines their ability to have the rules of the market written and enforced in their favor. Read more at location 183
Since the late ’70s, we have seen a decline in our growth rate, four significant economic downturns—including the worst since the Great Depression—and an increasing share of the limited growth that has occurred going to the top, with stagnant incomes for many and a hollowing out of the middle class. Evidently, trickle-down economics—increasing incomes at the top in the hope that everyone will benefit—has not worked. The new view is that trickle-up economics—building out the economy from the middle—is more likely to bring success; in other words, equality and economic performance are complements, not substitutes. Read more at location 219
Historically, wage and productivity growth moved in tandem, but this has not been true for the last third of a century. Read more at location 244
Of course, inequality and how the overall gains from growth get distributed among individuals are complex phenomena caused by a number of factors. Technology, globalization, shifting demographics, and other major forces are important, and parsing out the relative contributions of different factors is not simple. But these forces are largely global in nature. If they are the primary drivers, all advanced countries should be similarly affected. But among advanced economy countries, the U.S. has the highest level of inequality, so the explanation for the outcomes we see cannot lie solely in global factors.11 Moreover, not even the effects of global forces are out of our control. Their impact can be changed significantly by the policy decisions we make. Given the failings of the older models, we have an alternative explanation for the extreme inequality we see today. Read more at location 245
Note: A way to articulate the shortcoming in attributing inequality to just hard work.
Our institutionalist approach is based on two simple economic observations: rules matter and power matters. This approach began with a set of insights from academic research. Over the past four decades, economists have increasingly drawn attention to the many ways that the standard model, which assumes perfect information, perfect competition, perfect risk markets, and perfect rationality, fails to provide an accurate description of how various markets in our economy really work. Researchers including myself, George Akerloff, Michael Spence, Jean Tirole, Daniel Kahneman, Oliver Williamson, Douglas North, John Harsanyi, John Nash, Richard Selten, Elinor Ostrom, Rob Shiller, and others have won Nobel prizes for work on information asymmetries and imperfections, bargaining theory and imperfections of competition, behavioral economics, and institutional analysis. These works provide a whole new perspective on the functioning of labor, product, and financial markets, and essentially show that institutions and rules are required to force markets to behave competitively, for the benefit of all. And even when markets are competitive, there can be “market failures,” important instances where government intervention is required to ensure efficient and socially desirable outcomes. Read more at location 253
Note: Good overall explanation to the effect of a state.
Much of the increase in wealth is attributable to the increase in the value of fixed assets and not the reflection of an increase in productive value. The most obvious and widespread example is the massive rise in real estate values. If the value of real estate increases thanks only to the rising price of the property it sits upon and not to physical improvements, this does not lead to a more productive economy; no workers have been hired, no wages paid, no investments made. In economic terms this gain is simply a “land rent.” Some of this increase in the property value is a natural consequence of urbanization, but much is due to the financialization of the economy, including the increased supply of credit—credit that typically goes to those that already have wealth. Land rents are the most obvious source of rents in the economy, but economists have identified many others, including monopoly profits, drug pricing, patents, and other forms of intellectual property. Read more at location 277
Note: Meritocracy, just desserts. Beautiful insight that tells us that a person can become more wealthy by doing no work, but from nothing more than lower interest rates, more amble credit, and thus more people with loans bidding up property prices. You haven’t hired anyone nor have you innovated, you just owned something that appreciated through exogenous factors. There can be many such examples that fit this description.
The capitalized value of rents gives rise to wealth, and so if rents increase, so will wealth. If monopoly power increases, monopoly profits will increase, and so too will the value of the monopolies—the measured wealth of the economy. But the productivity of the economy will decrease, and so too will the value of wages adjusted for inflation. Inequality will also increase. Read more at location 284
Financialization noun 1. The growth of the financial sector and its increased power over the real economy, including the ways the values and practices of the financial sector have shaped the rest of society. Read more at location 287
In this analysis, we make a distinction between capital and wealth. Only an increase in the former necessarily encourages growth; because wealth may increase simply because there has been an increase in rents, the productive capacity of the economy may not be increasing in tandem with measured wealth. In fact, productive capacity may be falling even as wealth is increasing. Read more at location 295
Rent-seeking noun 1. The practice of obtaining wealth not through economically valuable activity but by extracting it from others, often through exploitation. Examples include a monopoly overcharging for its products (monopoly rents) or the drug companies getting Congress to pass a law that allows them to charge the government very high prices and supply fewer goods, services, and real innovation to the marketplace. Read more at location 298
To right the economic imbalance, to reduce inequality and promote healthy growth in the real economy, we must attack the sources of those rents. This is not about the politics of envy. The evidence of the last 35 years and the lessons of stagnation and low-wage recovery since the 2008 financial crisis show that we cannot prosper if our economic system does not create shared prosperity. Read more at location 303
In this golden age of capitalism the country’s economy grew faster than in any other era, and while incomes grew at the top, middle, and bottom, those at the bottom saw their incomes grow faster than those at the top. Read more at location 325
Note: This specifically is what we need to look up with data in order to verify and demonstrate.
In the 1980s, under the influence of supply-side economic theories developed during the previous decade, and driven by conservative ideology and special interests, American policymakers began to deregulate the economy.17 The country also lowered taxes on top earners and on the returns to capital. Then, in the 1990s, the tax on capital gains was lowered still further. Further reductions in top rates, capital gains, and dividends occurred in the beginning of this century. All of this was allegedly to encourage more work and savings. The premise was that lowering taxes would increase growth and all would benefit. Reagan argued that growth would increase so much that tax revenues would increase. The results were disappointing: the hoped-for supply-side responses were not forthcoming, tax revenues fell, and we experienced lower growth and more instability. Read more at location 332
Note: The crux. A good project would be to find wages by year, and make a graph to demonstrate median and average wages, growth, and overly by president and by the times of deregulation.
Short-termism noun 1. The post-1980s model of corporate governance that focuses on short-term profits and returns to shareholders as opposed to the long term, including long-term investments in people and research that lead to sustainability, innovation, and growth. Read more at location 357
This means that we can best improve economic security and opportunity by tackling the technocratic realms of labor law, corporate governance, financial regulation, trade agreements, codified discrimination, monetary policy, and taxation. Read more at location 392
As we said earlier, markets don’t exist in a vacuum; it is government that structures markets and sets the rules and regulations under which they operate. Rules and institutions are the backdrop of the economy, and the ways we set these rules, and keep them up to date and enforce them, have consequences for everyone. Read more at location 396
Note: Fundamental to anti libertarianism and the emerging field of anarchism. How are these “free markets” supposed to be created and enforced without government.
Inequality has been a choice. Beginning in the 1970s, a wave of deliberate ideological, institutional, and legal changes began to reconfigure the marketplace. At the vanguard was deregulation, which, according to adherents, would loosen the constraints on the economy and free it to thrive. Next were much lower tax rates on top incomes so that money could flow to private savings and investment instead of the government. Third were cuts in spending on social welfare, to spur people to work. Get government out of the way, it was argued, and the creativity of the marketplace—and the ingenuity of the financial sector—would revitalize society. Things didn’t work out that way. First, tax revenues plummeted and deficits soared. Then we saw glimmers of the instability that would lie ahead—the financial crisis of 1989, which led to the economic recession in the early 1990s. Today, we can look back and see the toll of these “reforms”: the worst economic crisis in 80 years, slower growth than in the preceding 30 years, and an unbridled increase in inequality. 1 We also now know that “deregulation” is, in fact, “reregulation”—that is, a new set of rules for governing the economy that favors a specific set of actors. Read more at location 422
Investment has been weak. 4 American corporations are sitting on trillions of dollars of cash, eschewing investment even though the effective corporate tax rate—the rate they actually pay on average—has fallen. 5 All of this helps explain why the promised growth did not occur: the promised supply-side effects weren’t real. The economic model was wrong. Read more at location 435
Note: I thought low tax rates were supposed to result in hiring and investment. Nope they are hoarding the money and giving CEOs larger bonuses.
Second, rents create incentives for allocating resources to unproductive rent-seeking activities like excessive marketing and sales expenditures and lobbying; the bigger the rent, the greater the incentives for such activities.18 For example, in 2010 the health care industry spent $102.4 million lobbying against the Affordable Care Act, while the finance and real estate industries have spent billions lobbying against passage and implementation of the Dodd-Frank financial reform law.19 Lastly, to the degree that firms engage in lobbying or some other political activity in order to create or preserve rents, it impacts our political system—and increases the number of adverse outcomes in the economy and in other spheres of society. Read more at location 568
Note: So much for the idea that the more money and profit that companies make, the more we will benefit. Tax breaks for the wealthy and profit fir large corperations makung more money we are told, well by god they are gonna create jobs. Who the hell says? Jobs are input costs and tbey want to minimize this. That money ususlly goes to additional coffers for lobbying to keep their own entrenched position, advantageous rules, or lobbying efforts to repeal laws that help millions like the ACA, so they can sell more overpriced drugs and continue the profit.
Financial market regulation aims to minimize discrimination and exploitation, but in the deregulated system we’ve seen significant evidence of systemic predatory lending, fraud, and discrimination, aimed at taking advantage of lower-income borrowers.32 Borrowers with low financial literacy are more likely to have costly mortgages and not to understand or remember the terms of their mortgage contracts.33 Read more at location 638
Note: Now yes, we know. “Its your own fault.” The ever present rebuke used as justification for exploitation and dishonest behavior. Data and philosophy aside, what does it tell you when someone says “Its your own fault” after they take advantage of someone. It means they know they haven’t provided value but have instead knowingly ripped someone off in spirit, and engaged in one sided dishonest opportunism. Isn’t it Republicans and Libertarians that always say earn your money by providing value? Then why are we always hearing “Its your own fault” from them. Its because in reality they care nothing of providing value or beneficial exchanges. They care only for greedily lining their own pockets by any means necessary, including exploitative punitive and dishonest behavior, ready to backwards rationalize anything they do through blaming those who they rip off. Here is the thing. If you’re providing value or engaging in a mutually beneficial exchange your not saying “Its your own fault.” The other person is just happy about the exchange. But the right doesn’t care. They create the world where we need regulation, where we always have to worry about dishonesty. And that’s what greed is, opportunism without concern for who is harmed or how it is acquired. Self interest is working and providing for yourself. People who say “Its your own fault” make the world a worse place.
It is remarkable that for all the growth in income, profits, and size of the financial sector, we cannot see any improvement in the performance of the economy. The sector may have demonstrated innovation, but the technological advances chased a greater ability to exploit others rather than improving economic performance. And many are concerned that as the financial sector has grown too large, and paid excessive compensation to its top employees, it has drawn talented people and energy away from more productive enterprises. Read more at location 678
The shareholder revolution transformed the incentives faced by CEOs, prodding them to generate ever-higher share prices in the short run by tying executive compensation to those share prices. Read more at location 694
A closer look at CEO compensation shows that there is little relationship between pay and performance. Compensation goes up when firm performance goes up, but it also goes up when performance goes down. CEOs are often compensated simply for luck, such as when oil company executives get paid more when global oil prices increase. The effect is stronger in more weakly governed firms. Read more at location 760
Rather than showing economic benefits from lower tax rates at the top, the evidence shows rather that progressivity can have a net economic benefit. Economist Jonathan Ostry and co-authors at the International Monetary Fund tested how the degree of progressivity of tax and transfers affects long-run economic growth when accounting for a range of other explanatory factors commonly seen as associated with economic growth.84 Their results find that, across countries, redistribution, outside of some extremes, has no relationship with economic growth. If anything, a number of redistributive policies can lower net inequality and drive more durable growth. Read more at location 863
The right to freely associate and bargain collectively is universally recognized as a basic human right, but in the United States the ability of workers to organize has been greatly diminished by a decades-long campaign to erect barriers to unionization, place restrictions on union activity, and weaken labor laws across the board.106 It is not just the migration of manufacturing from the more unionized North, first to the American South and then offshore, that led to deunionization. Organizing efforts have been stymied in nonmanufacturing industries, too, as well as in resurgent manufacturing bases.107 Consequently, union participation in the United States fell from over 30 percent in 1960 to 20 percent in 1984 and 11.1 percent in 2014. Read more at location 959
The decoupling of labor productivity and hourly compensation is perhaps the clearest sign that something has gone wrong. Over the 40 years between 1973 and 2013, productivity grew 161 percent while compensation rose only 19 percent.109 The dissolving strength, number, and effectiveness of unions has perpetuated inequality as a diminished role for unions leads to a system in which corporate interests drown out the voice of labor, forcing workers to accept weak wage growth and an eroding standard of living. Read more at location 965
Increased corporate influence at the cost of workers’ rights The overall decline of collective bargaining was not inevitable. Despite facing similar evolutions in technology and globalization, other developed countries have recorded far less union decline. In Canada, for example, unionization rates are not much changed from their 1960s level.110 Among all OECD countries, an average of 54 percent of the workforce is covered by union collective bargaining agreements, 4.5 times more than in the U.S.111 While the decline of the U.S. manufacturing industry has contributed to the decline of collective bargaining, a host of legislative, judicial, and regulatory policies have combined to make America a hostile environment for worker organizing. For example, weaknesses in the National Labor Rights Act (NLRA) make it difficult for workers to place employers under sufficient stress—through demonstrations and strikes—to elicit a conciliatory response. Additionally, workers receive minimal protection under NLRA. For example, though they cannot be fired for participating in a legal strike, they can be replaced indefinitely and reinstated only at the employer’s discretion—a strike deterrent equivalent to direct retribution.112 These weaknesses are the result of deliberate political campaigns aimed at weakening workers’ rights. Increasing corporate political influence intensified union political struggles. Following a series of legislative and judicial defeats, corporations amplified their lobbying efforts between the late 1960s and early 1980s. The number of corporate political action committees quadrupled, while the number of firms with registered lobbyists leapt from 175 to 2,445.113 The impact of this mobilization on labor interests was manifest in the defeat of the Labor Reform Act of 1977, which was intended to address some of the inadequacies of the NLRA that still plague unions today. Read more at location 970
The disappearance of unions not only has had a significant impact on inequality but also threatens the health and security of a number of society’s most vulnerable groups. For example, in one analysis of 15 low-wage occupations, economists at the Center for Economic and Policy Research found that unionized workers were 25 percent more likely to have health insurance and pension coverage than their non-union counterparts. Read more at location 1008
The Sinking Floor of Labor Standards Stagnating workplace protections and weak enforcement have undermined middle-class workers and imperiled vulnerable low-wage workers. Trapped at the bottom of the income distribution, an increasing number of people are working full time but not earning enough to provide even a basic standard of living. Poor labor standards and enforcement have left millions of workers in poverty, generating large public social welfare costs and slowing demand. Read more at location 1017
Our labor standards do not include health and retirement benefits, and as a result barely a third of the bottom quartile of workers receive paid sick days and only 41 percent have access to retirement benefits of any kind.121 With no public health care option and no mandate for employers to provide it, the United States has the lowest health care coverage rate of all OECD nations although the Affordable Care Act has led to some improvement. Read more at location 1034
Beyond minimum wage earners themselves, the minimum wage appears to set the wage structure for other workers at the low end of the wage distribution. Econometric evidence indicates that changes to the minimum wage can push up or drag down wages for those just above the bottom, particularly those in the bottom 10 percent of wage earners. Read more at location 1066
The minimum wage also reduces poverty, with one estimate showing that a 10 percent increase in the minimum wage would reduce poverty by 2.4 percent. Read more at location 1068
The minimum wage is one of the main determinants of inequality between those at the bottom of the distribution and those in the middle, often measured as the ratio of those at the 50th percentile to those at the 10th. Because the level of the minimum wage impacts wages slightly higher up the wage scale, the weakening minimum wage is one of the major reasons that inequality at the bottom has deepened in the past several decades, particularly for women and people of color.133 Researchers at the University of California Berkeley Labor Center estimate that, because the jobs of workers at the bottom do not pay enough to meet a basic needs budget, the federal government along with taxpayers spent nearly $153 billion per year from 2009 to 2011 on Medicaid, the Children’s Health Insurance Program, food stamps, and Temporary Assistance for Needy Families. Read more at location 1070
Note: Fine, bitch about the min wage, but without it you are paying for them through taxes, so pick one. You want Ronald Mcdonald to pay, or you pay through taxes? Get rid of all assistence? Its not going to happen, so dont worry about it. You can bitch, but most people aren’t sociopaths so fuck you.
During the middle of the 20th century, the United States made huge public investments—in education, social services, and infrastructure—that laid the foundation for growth. The G.I. Bill, perhaps the most famous example, devoted $95 billion to help 16 million veterans returning from World War II get a college education, get job training, and purchase a home. Read more at location 1104
Note: Post war boom
Research suggests discriminatory hiring practices are in part to blame for the situation—not just lack of education.152 In a recent field study, researchers sent similar resumes with a variety of names that sound white, African-American, or Latino to apply for entry-level, low-wage jobs in New York City. Not only were African-American applicants half as likely as equally qualified whites to get a callback or job offer, but also whites with recent prison records actually fared as well as African-American and Latino applicants with clean backgrounds and similar credentials. Read more at location 1137
Reproductive health care is a matter of economic security. In one study that asked women why they use birth control, the majority reported that doing so allowed them to take better care of themselves or their families, support themselves financially, get or keep a job, or complete their education.180 Research has shown that women’s ability to plan and space their pregnancies (through access to birth control) improves educational attainment and lifetime earnings.181 Other studies have shown the multigenerational impacts of family planning access: When mothers have access to birth control, their children are more likely to have higher family incomes and college completion rates.182 Even though the Affordable Care Act has dramatically improved the standard of care guaranteed to women who have insurance coverage, recent restrictions on abortion and family planning have made it more difficult for all women to access comprehensive health care.183 These restrictions lead not only to a series of devastating health consequences, but contribute to the economic insecurity of women and their entire families and communities. Read more at location 1241
Unanticipated inflation hurts bondholders—who are predominately wealthy. However, wages of workers often lag behind increases in prices, so they too suffer from inflation. Econometric studies looking across countries at the effects of inflation (which typically show an association between inflation and inequality) can, however, be misleading. The major episodes of inflation were associated with increases in oil prices, and with governments that seemed unable to respond effectively. Read more at location 1269
The growth of the top 1 percent was enabled by specific policy decisions. It occurred when we removed safeguards that protected consumers and taxpayers from excesses in the financial industry and failed to update other common-sense regulations. It occurred when corporations cast aside their own long-term interests in favor of short-term stock gains for shareholders and distortionary CEO pay packages. It occurred when we restructured the tax code in ways that led to more leverage and higher executive pay, as opposed to more investment in productive assets. Addressing these issues doesn’t just address inequality; doing so will also build a solid foundation for the economy of the 21st century. Read more at location 1305
Better balance is possible. For instance, in the United States, we balanced the need for innovation and access to life-saving drugs with the Hatch-Waxman Act of 1984, making lower-cost generic drugs leap to 86 percent of all drugs dispensed in pharmacies and health care facilities from 19 percent at the time of the bill.1 Without competition from generics, drug prices would be even higher than they are today. Read more at location 1338
Note: An example of good regulation.
While it is essential that the United States work with global partners to establish rules for international trade and investment, the kinds of rules that we’ve been making through trade agreements increasingly set the terms of trade in favor of businesses and against workers and the public interest in both the United States and among our economic partners. These rules determine who will benefit from an increasingly globalized world, but trade agreements—written behind closed doors, with the active participation of firms but no other stakeholders—are failing to deliver the rules we need for managing globalization in a way that benefits all. One set of provisions that increasingly balances the odds against ordinary Americans is the protections for investors that U.S. negotiators insist other countries must adopt in the so-called investor-state dispute settlement mechanisms. These provisions create private international arbitration panels in which investors can sue governments, and parties have no recourse to legal review and appeal. While investors should be protected against rogue governments seizing their assets or formulating policies that discriminate against specific firms, this is not what these provisions are about; investors can already buy insurance against such outcomes from the World Bank’s Multilateral Investment Guarantee Agency as well as some U.S. government programs for insuring investment. Rather, the real intent of these provisions is to impede health, environmental, consumer safety, and even financial regulations meant to protect the public interest from egregious business practices. That’s why U.S. negotiators insisted on including such investor protections in an agreement with the European Union—where the rule of law and protections against expropriation are already on par with the United States. Read more at location 1342
Changing the rules to favor creditors—as we did in the so-called Bankruptcy Abuse Prevention and Consumer Protection Act of 2005—provides a clear example of how the legal and institutional framework shapes the economy and increases inequality. Read more at location 1382
Note: Perfect example of how market returns are a product of policy, and how Republicans favor the powerful and blame the poor, while Democrats help those with less.
At the same time we made student debt more difficult to discharge than loans taken to buy a yacht. Read more at location 1388
Of course, a large fraction of personal bankruptcies in recent years has been a result of a medical emergency, an extended period of unemployment, and especially a combination of the two. Read more at location 1392
Note: Two ways a family who played by the rules and did it right can wind up fucked. And no its not your own fault for not saving enough or for having kids. These things are UNKNOWN. You can build a buffer but you cant know the extent of the crisis until it occurs.
A recurrent theme of this report is that the financial sector has not been performing the tasks that it is supposed to: managing risk, allocating capital efficiently, intermediating between savers and investors, providing funds for investments and job creation, and running an efficient 21st century payments mechanism. Rather, it has mismanaged risk, misallocated capital, prioritized exploitation and market manipulation, and created an extraordinarily expensive payments mechanism, out of tune with the advances afforded by modern technology. A well-functioning economy needs to have a well-functioning financial market. Financial markets are important. Unfortunately, our financial market, while not performing the critical tasks of providing capital to worthy endeavors, has given rise to enormous inequalities and has resulted in poorer economic performance—lower growth and more instability. Read more at location 1398
The shadow banking sector continues to grow while remaining insufficiently regulated.7 In fact, much of the activity in the shadow banking system is motivated not by its greater efficiency but simply to circumvent regulations designed to ensure the stability and efficiency of the financial system. Read more at location 1448
Further, at the highest incomes, many pay much less than they otherwise would due to provisions of the tax code that favor the rich. The current tax policy gives favorable treatment to the forms of income received by the wealthiest Americans. Other taxes like sales and payroll taxes are regressive. Finally, many tax deductions, like the mortgage deduction on second or third homes, favor the rich. Read more at location 1602
To put this in perspective: for an extra $50,000 taxed on every $1 million of a wealthy individual’s income, the United States could make all public college education free and fund universal pre-K. Read more at location 1608
Note: So much for “We can’t afford it.”
The U.S. could also establish a complementary minimum tax on all global income—for example, requiring U.S. corporations to pay 10–15 percent on global profits, with a tax cr for taxes paid to other jurisdictions. In doing so, the corporate tax should eliminate differences in marginal effective tax rates between domestic and offshore investment, and be set above a revenue-neutral level. The resulting tax structure would virtually eliminate incentives to move production abroad for tax purposes. Read more at location 1639
A crumbling public transit system is a clear outgrowth of the decision to use tax policy to reward the richest Americans rather than stimulate investment and growth. Decades of disinvestment in U.S. infrastructure have resulted in high commuting costs that fall disproportionately on low- and middle-income families and decrease access to jobs. Read more at location 1736
Our existing public transit system is hugely inadequate. Only a little over 50 percent of Americans have any access to public transit at all.37 Investing in public transit is a matter of equal access to jobs and opportunity, and also a driver of economic performance. If more people can get more access to jobs with which they can live up to their potential, and if they can waste less of their time commuting, then productivity will increase and lives will improve. According to a Federal Highway Administration report, the total necessary investment in mass transit tops out at $24.5 billion over the next 10 years.38 This includes the cost of meeting the capital backlog, as well as rehabilitating and expanding transit fleets, facilities, and mass transit rail networks to support projected growth in demand. We should prioritize investment in communities that most require improved access to business centers and job opportunities. Read more at location 1738
Note: So there is a direct refutation of Chris’s horseshit that everuone can “just take the bus” besides the commin sense fact for rural areas
Our goal is not just a one-time wage increase, but aiding workers in building long-term power to balance the power that corporations have to determine wages, schedules, and employment conditions. We can reinvigorate worker voice, restore balance to the workplace, and give workers a fairer share of the rewards of work and a better chance to contribute to a high-performing workplace. Read more at location 1750
Note: Now to republicans and Libertarians, is this something you just flat out wouldnt want? You want less money, bargaining power, and flexibility? I mean, youd just not like that? You want it the otger way? You feel more “free” with less money, time, vacation, bargaining power, and flexibility.
Following in the footsteps of Los Angeles, federal, state, local, and municipal governments should grant public contracts only to corporations that meet high labor standards and possess strong antidiscrimination/pro-inclusionary hiring practices. Under this practice, contracting agencies would be required to provide a living wage, safe working conditions, and opportunity for advancement, and they would have to submit to regular inspections to ensure compliance. This would not only improve conditions within contracting firms, but—through competition for workers and contracts—across entire industries. Read more at location 1777
The United States incarcerates a higher percentage of its population than any other nation in the world at a huge cost to individuals and families as well as to economic performance. Read more at location 1822
Note: Isnt throwing someone in prison the antipidal polar opposite of freedom? How can we call ourselves the most free country if you have the highest chance per capita of going to jail?
In addition to the high price of running the world’s largest prison system, mass incarceration reduces employment opportunities and wages, and increases dependency on public assistance for a large share of the population. A study by the Vera Institute for Justice found that the total public cost of incarceration was more than $31,000 per inmate in 2010. Incarceration is costly, too, for those who have been locked up and end up facing lower hourly wages, annual employment, and annual earnings. That burden falls disproportionately on men of color. Read more at location 1828
Note: You are worried about “welfare?” A prisoner costs more. Do you want to pay 31k a year to throw someone in a cage for weed?
A robust and effective childcare regime would provide a menu of supports to families all along the income spectrum, from birth to kindergarten. For lower-income families, early childhood learning, whether it’s home visiting or Head Start, helps close the achievement gap for children and improve maternal earnings. For middle-class families, broad access to childcare would help boost women’s workforce participation and provide much-needed relief for families that face high childcare costs without the benefits of government subsidies. With the long-term goal of providing affordable childcare to all American families, Congress should start by expanding the most effective existing state and federal programs. Scaling up the current childcare policies and programs would give parents needed supports in raising their children, and would also allow them to get and hang on to jobs, benefitting their families and the economy more broadly. Read more at location 1888
Much of the insecurity felt by Americans today stems from the fact that the essentials to a middle-class life are increasingly out of reach. The price of a good life—one that allows a family to educate its children, provide a stable home, save something in case of emergency, and retire at a reasonable age—is more than most can afford. Read more at location 1909
Note: Alright dumbasses. This is “middle class” that you fucking goddamn idiots like Chris and other Republicans deny even exists. When you plsy semantic games like “what’s reasonable” or “what’s middle class” or “whete is the line?” Well hete it is you intransigent jackasses. This is the baseline we should work toward
The health care system is rife with the kinds of market failures that economists have studied extensively, including information asymmetries and imperfections in competition. Hospitals, physician networks, and health care insurers increasingly operate in conditions approaching monopolies.74 Patients largely have neither the medical expertise to perform the cost-benefit analyses necessary for making optimizing choices about the care they need, nor the access to price information for comparison shopping, leaving providers to determine both the demand and supply of health care. The result of our market-driven health care system is that people in the United States pay higher prices for virtually every aspect of health care than those in other advanced economies, and even with the big steps forward in the Affordable Care Act, 12 percent of Americans are still left without health coverage.75 In spite of our high expenditures, health outcomes are poorer. Read more at location 1970
Having access to the payment system is a necessary condition of living and working in the modern economy, and far too many people can only access it on the most predatory terms. They simply don’t know whether hidden somewhere in the complicated contracts will be terms to their detriment. Read more at location 1991
Our system of public retirement savings, in the form of Social Security, remains strong and effective. Administrative costs are but a fraction of those in the private sector, and recipients of Social Security are protected against fluctuations in stock prices and inflation. The main concern with our public Social Security program is budgetary: there is a worry that it is not self-sustaining. Whether it is or is not depends on a large number of variables that will inevitably change over the relevant time horizon—the next half-century. What is clear is that we may need to make adjustments as time goes on. And there are many ways that we can make such adjustments. Read more at location 2043
Inadequate incomes are not due to a lack of effort—compared to 1979 the average middle class family worked an additional 14 full-time weeks per year in 2007, before the Great Recession impacted employment levels. Read more at location 2103
Note: Thus “work harder” is debunked. We are. Its just netting less wealth. How can that be our fault?
The federal government has used fiscal (tax) policy to reward high-income earners rather than to make critical public investments that boost growth and compensation. Regulatory and legal changes have incentivized the private sector to prioritize short-term gains rather than the long-term investments in capital, research, or training that increase productivity. Read more at location 2124
Economist Nathaniel Hilger found sizable improvements in intergenerational mobility in cohorts born between 1940 and 1980—a period of significant gains for social justice, including the expansion of education and important civil rights victories. This is also the period that saw the strongest declines in inequality. Read more at location 2157
An overwhelming body of research in this area shows that quality early childcare is the most consistent predictor of a young child’s behavioral and developmental outcomes including language, interpersonal communication, and cognitive abilities. Read more at location 2177
Already, by the time children enter kindergarten, studies find significant impacts of early learning and environment. In one study, kindergarteners from low-income families exhibited weaker academic and attention skills.23 Children contending with hunger and inadequate nutrition also show impaired learning in school. Read more at location 2179
Note: You dont have to use dramic examples like poepke starving the death. Even low income families with modest deficiencies in food or resources can have profound effects on developmental and cognative abilities for children that can last a lifetime.
Unequal access to affordable, quality childcare and early learning opportunities are compounded by the increasing time strains placed on working parents.25 The secular trend over the past generation toward greater labor force participation by women and longer hours worked by everyone, especially single parents, leave little time or material resources left to invest in children’s human capital development. The problem is further compounded for people residing in segregated areas, which are traditionally underserved by public transportation and other services. People in segregated areas also disproportionately have precarious, uncertain schedules and must also spend long hours commuting and running errands instead of, for example, helping their children with their homework. Read more at location 2182
Note: Repiblicans dont care about adults, but an appeal to children might help.
There are three reasons to find the technology and globalization stories, as explanations for job loss and wage slowdown, at best only part of the story. First, as we have already mentioned, other countries around the world face the same global changes with respect to technology and international trade, yet have experienced nowhere near the rise of inequality seen in the United States. Many of these other countries have managed to shape their economies in ways that have produced more shared prosperity, with equivalent economic growth performance. With common exposure to technology and globalization, logic dictates some other variables must be the cause of America’s uniquely extreme level of inequality. Read more at location 2202
Second, these technology and globalization stories are really primarily about supply and demand for labor as the sole determinant of wages. They seek to interpret changes in inequality simply as the outcome of shifts in demand and supply curves, explained in turn by changes in technology and globalization. But institutions matter as well. One of the important advances in economic theory over the past several decades, for which Peter Diamond, Dale Mortensen, and Christopher Pissarides were awarded the Nobel Prize in 2010, is search theory, a large body of work modeling how people find and accept job offers. Search theory argues that supply and demand do not fully determine market wages. Instead, supply and demand for labor set bounds on wages. A host of factors determine where wages fall within those bounds: bargaining power, labor market institutions (including the strength of unions), and social conventions. So, search theory suggests that even explanations that make technology and globalization dominant must acknowledge that the rules matter. Read more at location 2207
Note: Very insightful. New information.
OECD. 2014. “Focus on Inequality and Growth.” Organisation for Economic Cooperation and Development. Retrieved May 5, 2015 (http://www.oecd.org/els/soc/Focus-Inequality-and-Growth-2014.pdf). Read more at location 2351
OECD. N.d. “Income Distribution and Poverty: By Country.” Organisation for Economic Cooperation and Development. Retrieved May 4, 2015 (http://stats.oecd.org/index.aspx?queryid=46189). Read more at location 2355
Stiglitz, Joseph. 2015. “New Theoretical Perspectives on the Distribution of Income and Wealth among Individuals: Part I. The Wealth Residual.” NBER Working Paper No. 21189 (http://www.nber.org/papers/w21189). Read more at location 2365
Jiang, Yang, Mercedes Ekono, and Curtis Skinner. 2015. “Basic Facts About Low-Income Children: Children Under 18 Years, 2013.” New York, NY: National Center for Children in Poverty. Retrieved May 5, 2015 (http://www.nccp.org/publications/pdf/text_1100.pdf). Read more at location 2368
Some aspects of deregulation, such as in airlines, actually began a little earlier. Airline deregulation did not bring about the kind of competitive market for which the deregulators had hoped, and therefore discred the theory of contestability underlying deregulation, but the really adverse effects of deregulation began with the deregulation of the financial system. Read more at location 2375
Piketty, Thomas, Emmanuel Saez, and Stefanie Stantcheva. 2014. “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities.” American Economic Journal: Economic Policy 6(1):230-71. Read more at location 2576
Hungerford, Thomas L. 2015. Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 (Updated). Congressional Research Service. Retrieved May 8, 2015 (https://fas.org/sgp/crs/misc/R42729.pdf). Read more at location 2582
Rothschild, Casey and Florian Scheuer. 2011. “Optimal Taxation with Rent-Seeking.” NBER Working Paper No. 17035. Retrieved May 8, 2015 (http://www.nber.org/papers/w17035.pdf). Lockwood, Benjamin B. and Charles G. Nathanson. Pending. “Taxation and the Allocation of Talent” Under revision at the request of the Journal of Political Economy as of June 2014. Read more at location 2585
Gittleman, Maury and Brooks Pierce. 2007. “New Estimates of Union Wage Effects in the US.” Economics Letters 95(2):198-202. Retrieved May 5, 2015 (http://econpapers.repec.org/article/eeeecolet/v_3a95_3ay_3a2007_3ai_3a2_3ap_3a198-202.htm).Buchmueller, Thomas C, John DiNardo and Robert G. Valletta. 2002. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55(4):610-627. Retrieved May 5, 2015 (http://www-personal.umich.edu/~jdinardo/Pubs/bdv2002.pdf). Read more at location 2686
DiNardo, John, Nicole M. Fortin, and Thomas Lemieux. 1996. “Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach.” Econometrica 64(5):1001-1044. Manning, Alan (2003). Monopsony in Motion: Imperfect Competition in Labor Markets. Princeton, NJ: Princeton University Press. Read more at location 2723
Dube, Arindrajit. 2013. “Minimum Wages and the Distribution of Family Incomes.” Working Paper. Retrieved May 9, 2015 (https://dl.dropboxusercontent.com/u/15038936/Dube_MinimumWagesFamilyIncomes.pdf). Read more at location 2726
Goldman, Dana P. and Elizabeth A. McGlynn. 2005. “U.S. Health Care: Facts About Cost, Access, and Quality.” Santa Monica, CA: RAND Corporation. Retrieved May 8, 2015 (https://www.rand.org/content/dam/rand/pubs/corporate_pubs/2005/RAND_CP484.1.pdf). Read more at location 2890
Organisation for Economic Co-Operation and Development. 2008. “Growing Unequal?: Income Distribution and Poverty in OECD Countries.” Retrieved May 8, 2015 (http://www.oecd.org/unitedstates/41528678.pdf). 22. Piketty, Thomas, Emmanuel Saez, Stefanie Stantcheva. 2011. “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities.” NBER Working Paper No. 17616. Cambridge, MA: National Bureau of Economic Research. Retrieved May 5, 2015 (http://www.nber.org/papers/w17616.pdf). 23. Stiglitz, Joseph E. 2014. “Reforming Taxation to Promote Growth and Equity.” New York, NY: Roosevelt Institute. Retrieved May 8, 2015 (http://www.rooseveltinstitute.org/reforming-taxation-promote-growth-and-equity). Read more at location 2940
Marr, Chuck and Chye-Ching Huang. 2015. “President’s Capital Gains Tax Proposals Would Make Tax Code More Efficient and Fair.” Washington, DC: Center on Budget and Policy Priorities. Retrieved May 9, 2015 (http://www.cbpp.org/cms/index.cfm?fa=view&id=5260). Read more at location 2958
Dagher, R. K., P. M. McGovern, and B. E. Down. 2013. “Maternity Leave Duration and Postpartum Mental and Physical Health: Implications for Leave Policies.” Journal of Health Politics, Policy and Law 39(2):369-416. Op. cit. National Partnership for Women & Families.Hegewisch, Ariane and Yuko Hara. 2013. “Maternity, Paternity, and Adoption Leave in the United States.” IWPR Working Paper #A143. Washington, DC: Institute for Women’s Policy Research. Retrieved May 5, 2015 (http://www.iwpr.org/publications/pubs/maternity-paternity-and-adoption-leave-in-the-united-states-1). Read more at location 3044
Blau, Francine D. and Lawrence M. Kahn. 2013. “Female Labor Supply: Why Is the US Falling Behind?” Discussion Paper No. 7140. Bonn, DE: Institute for the Study of Labor. Retrieved May 5, 2015 (http://ftp.iza.org/dp7140.pdf). Rossin-Slater, Maya, Christopher J. Ruhm and Jane Waldfogel. 2011. “The Effects of California’s Paid Family Leave Program on Mothers’ Leave-Taking and Subsequent Labor Market Outcomes.” NBER Working Paper No. 11715. Cambridge, MA: National Bureau of Economic Research. Retrieved May 5, 2015 (http://www.nber.org/papers/w17715.pdf). Read more at location 3049
Bassanini, Andrea. 2008. “The Impact of Labour Market Policies on Productivity in OECD Countries.” International Productivity Monitor 17(2008):3-15. Retrieved May 8, 2015 (http://www.csls.ca/ipm/17/IPM-17-bassanini.pdf). Read more at location 3054
Diamond, Peter A. 2010. “Unemployment, Vacancies, Wages.” Nobel Prize Lecture, December 8, 2010. Retrieved May 9, 2015 (http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2010/diamond-lecture.pdf). Atkinson, Anthony B. 2015. Inequality: What Can Be Done? Pp 90-93. Cambridge, MA: Harvard University Press.