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Tired Of Inequality? One Economist Says It'll Only Get Worse

48 points by 127001brewer 13y ago

127001brewer 13y ago
Economist Tyler Cowen has some advice for what to do about America's income inequality: Get used to it. ... In the interview, the economist basically says "give up" because that's the way things are going. The economist attributes (mostly) this to computers. "Computers will play a larger role and people who can work with computers can make a lot." But those who aren't in the "top 15%" will be okay, since: "... But I think people who are not rich can be extremely happy. And I think the chances to be happy in this new world, with many more opportunities to be creative, to be online, to educate yourself — there'll be a lot more chances to be happy. It's not to say everyone will take them or be equipped to take them, but there will be a lot of new paths to opportunity." I do not subscribe to this wishful thinking...
- loceng 13y ago
  I think it's lacking in scope of what's possible in the future. If you stick to the status quo of how things are, then yeah, the future will be shit for most people. The status quo will be different in the future though.
  - graeme 13y ago
    Maybe. It could always get worse though. The poor maintain their current standard of living in part thanks to laws and structures that protect this: minimum wage, food stamps, welfare, unions, Medicaid These tend to be in decline or under attack, sometimes with good reason. But there's no impetus to replace them with anything. Brazil may be our future. The low end goes very low there.
    - bernawil 13y ago
      Modern urban poverty as in Brazil is really rarely a matter of lack of resources. The poor in Brazil suffer from a poor organization rather than material poverty; people in favelas suffer the daily violence and rampant drug trade, but they don't really go hungry often.
- rokusho 13y ago
  Indeed, a lot of data suggests that a countries level of income equality and citizens happiness is negatively correlated. http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_inequality http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_...
  - marknutter 13y ago
    But very little data exists about the happiness levels of people in a country where despite income inequality the poor have a higher living standard than they did at any other time in history, as it is in the US. If the poor are doing better than ever, and the rich are doing better than ever, what's the problem, really?
    - cschwarm 13y ago
      There is, for instance, the problem that some "goods" cannot be produced although people care very much about them, namely partners to start a family with. Unfortunately, women tend to be attracted to relatively rich men, which can result in a lower "supply" for relatively poor men if a rich man can attract several women (for instance, by using serial monogamy). It's been suggested that this leads to a larger amount of violence in poor neighborhoods (due to increased competition among men). Which leads to another problem: Being relatively poor may not be a problem, provided the level of wealth is secure. Due to the lack and inefficiency of social safety nets in the US, however, being relatively poor can always turn into being poorer still. Since being relatively poor often means living in a relatively poor neighborhood with a higher prevalence of violence, there's a good reason for feeling insecure all the time. Your son may get killed in a drive-by shooting, while your daughter may get raped. Meanwhile, you may get robbed. Even if one's situation is not as critical, it's always possible to become critical. For instance, one may simply loose one's job, and thus the means to provide for a family. Or one becomes ill. The number one reason for declaring personal bankruptcy in the US are medical bills. A large percentage of these people were health insured, by the way. These are just a few examples on the top of my head.
- yummyfajitas 13y ago
  I do not subscribe to this wishful thinking... This isn't wishful thinking. It's simply recognition of the fact that feeling materially superior to others is only one of many routes to happiness. If income doubles for the poor and quadruples for the rich (Cowen's postulated mechanism of increasing inequality), the poor have many new sources of happiness. For example, currently only 38% of the poor have a Playstation or XBox [1]. If the income of the poor doubles, probably every poor person could gain some happiness from video games. [1] https://explore.data.gov/Energy-and-Utilities/Residential-Energy-Consumption-Survey-RECS-Files-A/eypy-jxs2 https://explore.data.gov/Energy-and-Utilities/Residential-En...
  - LekkoscPiwa 13y ago
    The problem lies elsewhere. The problem is that the system is so sick that the poor have to pay taxes for rich banksters bonuses. Hence, destoying all the credibility of the system. Rich paying to the poor is socialism. Poor paying to the rich is feudalism. Poor could care less about the toys they can get when they can afford less and less food, energy free time. Plus pay feud to the corrupt banksters on top of that. That's not capitalism, that's feudalism. Cowen is proposing neo-feudalism.
  - _delirium 13y ago
    Empirically, however, societies with higher income inequality have lower happiness (and this is fairly robust to confounding factors and different kinds of society, and even shows up internally when comparing different time periods of the same society, e.g. when you look at different U.S. decades). Perhaps in principle it's possible to have a happy and highly unequal society (in sci-fi this is commonly imagined as involving happiness drugs or VR), but we haven't seen one yet.
    - yummyfajitas 13y ago
      Empirically, however, societies with higher income inequality have lower happiness... Could you link to some data on this? Ideally something other than "The Spirit Level", which basically just observes that many negative traits are correlated and then puts inequality on the x-axis.
- talmand 13y ago
  I believe the argument is: Today people without money are not happy because life itself requires resources, that many people do not have, to be happy and healthy. Tomorrow people without money could be happy and healthy because many of the things that make them so will require less resources to access. One example given in the interview I heard is that eventually you'll be able to get a good education for free from the Internet. Once people accept that premise, then spending big money on a college education isn't as necessary. But then, it's the future so who knows what will happen since the future doesn't exist yet.
Pxtl 13y ago
You can't have the Brooklyn Bohemian life without Brooklyn city planning. The modern suburban sprawl demands two-car households, and two-car households demand full-time middle-class employment.
- jacobbudin 13y ago
  Unless this Bohemian class anticipates living with roommates through old age, living in Brooklyn is considerably more expensive than living in suburbia.[1] Perhaps the economist meant Detroit. [1] The Council for Community and Economic Research: http://finance.yahoo.com/news/10-most-expensive-places-to-live-in-the-u-s--163648923.html http://finance.yahoo.com/news/10-most-expensive-places-to-li...
  - wahsd 13y ago
    These issues are the outcomes and culmination of corrupt and pernicious actions taken a long time ago in the USA. If you look at Europe and other places around the world, there are sufficient models to emulate to solve these problems; but the corrupt master class has no interest in solving the "problems" that serve their interests and they have no interest in letting us, as a people, realize that we are not exceptional and therefore could learn by looking outside of our own culture and borders. What America doesn't realize, even the supposed most intelligent and informed, is that we are no different than any other people living under a controlling regime, we just have more resources to burn that allow the margins for error to be humongous compared to other places. The controlled media, corrupt politics, the rationalized abuse of laws you are destroyed for not abiding by, the propaganda, the war mongering, the racist subjugation of certain groups. It's all there, we just don't see it, as a people, because as with the same form of national socialism that destroyed Germany in the early 20th century, the American version of national socialism has brain-washed people into doing, thinking, and saying things to and about others that they would never want happen to themselves.
  - Pxtl 13y ago
    I think they meant Brooklyn-like environments, not literally Brooklyn, NYC. There are plenty of them in semi-gentrified urban cores around the USA and Canada, but not enough to house the predicted boom of semi-employed bohemian upper-lower-middle-class.
devx 13y ago
Maybe this wouldn't be such a problem if those with the money wouldn't use it to pay Congress to help them make even more money to the detriment of others. I think that's really what bothers most Americans, and not necessarily the fact they can make more money on their own.
- ihsw 13y ago
  Who is worse, the one begging for the money, or the one supplying it? You're portraying Congress as some kind of passive conduit when in fact they're quite active in their own schemes.
  - mcv 13y ago
    I don't see him portraying Congress as anything like that at all. Those people use their money like that because Congress allows it. Congress allows it because voters aren't organized enough to vote them all out. Voters aren't organized for that because the media keep playing the tribal Reps vs Dems game. And I guess the media keep playing that game because there's profit in it for them. It's a vicious cycle that needs to be broken.
- deleted 13y ago
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rayiner 13y ago
So the future of America looks like San Francisco? A 0.1% - Capitalists: LP clients of VC firms, very successful founders and VCs A 10% - Service professionals: rank-and-file VCs, engineers, managers, lawyers, accountants, consultants A 90% - Unskilled service workers: baristas and waiters at trendy SF hotspots
- LekkoscPiwa 13y ago
  That's not capitalism, that's feudalism: A 0.1% - Aristocrats, Barons, Kings, etc. A 10% - service professionals: shoemakers, weapon makers, creditors (bankers), accountants and whoever else the 0.1% might need to run their empires A 90% - Peasants - born in debt, will die in debt. Wage slaves - get enough money to perform the work and nothing else. That's called neo-feudalism. At the top are private creditors of nations - central bankers. The rest owes feud to them from the moment they are born (i.e. the US newborn already has to pay off few hundred thousand in debt through their live-time) Please don't call it capitalism. And one more thing -- what really destroyed neo-feudal society was the French Revolution. We need Robespierre's and Danton's guillotining banksters and their whore neo-feudal political class. That's the only way to revert back to capitalism and liberalism.
  - wf 13y ago
    I was with you up to the part where you think chopping off people's heads is" the only way to revert back to capitalism and liberalism."
    - Karunamon 13y ago
      I guarantee the Wall Street shenanigans would be sorted out, post haste, with the careful application of separating certain greedy, conniving, overly-large heads from their bodies. But then maybe I'm just jaded.
    - LekkoscPiwa 13y ago
      That's the only way. Coffee without coffeine. Beer without alcohol. Sex, but in condom. War but without casaulties. The very core of the post-modern folk is that they want the thing but without the most crucial element of that thing. Revolution without a Revolution? That's why nowadays nothing changes. Because all that's left are empty words. "Terror without virtue is fatal; virtue without terror is impotent" You propose impotent solution. That won't work.
joseflavio 13y ago
IMO, there is some kind of correlation between efficiency in the economy and the inequality in the society. I believe that it is part of the government job to reduce the inequality... but the devil is on the details on how to do it.
- neolefty 13y ago
  Wouldn't inequality make efficiency worse? On an individual level, it would seem that poverty makes your life less efficient -- you end up treating your own time as less valuable, and so you do less productive things, such washing out your paper towels to reuse them, using more energy and water in the process than was used to manufacture them in the first place. When if you had more income, you could, hypothetically, do more productive things? Or would you just around watching Netflix more?
  - yummyfajitas 13y ago
    Poverty != inequality, provided poverty refers to a fixed material standard of living (which is how you seem to be using it, since you are referring to specific material goods). To illustrate the point, consider India and the US. India has little inequality but lots of poverty (if we take the 5'th percentile of the US as the poverty line, then 95% of India is poor). The US has lots of inequality but little poverty. http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-the-have-nots/?_r=0 http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t...
    - JDShu 13y ago
      Does that graph take into account PPP at all? It doesn't sound like it from the description in the article.
      - yummyfajitas 13y ago
        From the article: "...the chart adjusts for the cost of living in different countries, so we are looking at consistent living standards worldwide."
jacobbudin 13y ago
Where's the guy who links to the Guaranteed Basic Income when you need him?
msluyter 13y ago
On the topic, there was a thought provoking article in the NY Times recently entitled "Can the Government Actually Do Anything About Inequality." The answer is unclear: http://opinionator.blogs.nytimes.com/2013/09/10/can-the-government-actually-do-anything-about-inequality/?src=me&ref=general&_r=0 http://opinionator.blogs.nytimes.com/2013/09/10/can-the-gove...
- clavalle 13y ago
  Of course they can. Possessing things is as fragile as a human life. It would take a tectonic shift in how policy is crafted and implemented but if the US government decided to turn on a dime tomorrow and redistribute wealth who could stop them?
Zarkonnen 13y ago
So "There will be a certain fragility to this existence." but "They may have lives that are quite happy and rewarding" - how? If you are constantly one minor incident away from doom, you are not happy, you are stressed. Welcome to the precariate. "I think for a lot of people, upward mobility will be much easier." This does not follow. In a more unequal society, upwards mobility falters as the wealthy form an exclusive layer of society. The best you can hope for in this scenario is to be useful enough that you will be kept compensated. But without the right connections, you will not be permitted to tryly rise. And this theoretical upwards mobility will be dangled in front of you to prevent you from feeling solidarity with everyone who isn't so "useful". Sound familiar?
- graeme 13y ago
  Precariate - I like that. We need such a word. Upward mobility might be easier though, even as poverty and precarity increases. Elites would have to shutdown Internet wealth generation somehow to prevent upward mobility. Right now it's never been easier to start a business and generate income for yourself. We're seeing easier upward mobility for those equipped to take advantage of this, even as others see their opportunities shrink.
  - talmand 13y ago
    I think Zarkonnen was trying to say that as the inequality increases then it becomes more and more difficult to rise above a certain threshold. As the inequality increases then that threshold becomes more difficult due to standard economic situations and due to interference from the elite that likely would eventually want to control access. Today it may be easy to raise your economic standing, but that doesn't mean that will continue into tomorrow.
  - jorgem 13y ago
    It's a word. Just mispelled: precariat.
- deleted 13y ago
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marknutter 13y ago
No, I'm tired of moaning about income inequality. If every person in the US had their income doubled we would have even greater income inequality than we do now, but everyone would be better off. Everyone benefits from technological advances. The poor can buy better goods for a cheaper price and the rich can maximize their profits.
- zanny 13y ago
  But this is exactly the problem that perpetuates growing economic inequality. You have 99% of people that are interested in things, and 1% that are interested in profits. We are all playing the capitalist game from birth, and to opt out is to isolate oneself from the market. But very few people acknowledge they are in a gambit with those seeking profits over who gets better value in a transaction, so they end up siphoning their wealth into means of production owners pockets but that money will never come back because the wealthy only need a very limited subset of goods and services, and after that they will invest that revenue to make more money by robbing others of their productive gains.
  - marknutter 13y ago
    And when the wealthy make more money does it sit in big Scrooge McDuck style money bins, or is it reinvested into the markets or spent? If you don't want to "siphon wealth into the means of production owners pockets" then get your own means of production. Start a company and spread the stock out to your employees as evenly as you see fit. It is easier now than it ever has been to start and grow a company.
    - zanny 13y ago
      They don't evenly reintroduce their money into the market across the board (a consumer does much better at that) and they are not reintroducing money for the purposes of goods exchange but they are exchanging money now for money future. And they actively try to avoid risk (such as bank bailouts, golden parachutes, guaranteed dividends, etc) so you either make a little or a lot, and rarely lose your shirt. That means inevitably you have more money than you started with, just siphoning more and more off of the populace. Even if you keep cycling the money back in and people get to use it in a theoretically good way, you still concentrate ownership of resources, businesses, and workers as your reinvestments give you ownership of all these things that make you more money to own more things in perpetuity.
nahname 13y ago
>The low paying jobs today are in the service industry - largely retail and fast food chains. These jobs are dead end without paying anyone enough to live on. Friend of mine went to work at McDonalds during high school. By 22 he was a manager and making over 80k a year. It may be dead end, but that is more than enough to live on.
- rdtsc 13y ago
  I knew a guy too, therefore many studies showing growing inequality and inability to find work are flawed. Yes I have heard this argument before when it comes to inner city youth and helping single mothers. It is always a sample of N, someone's friend of a friend. "Well so and so went to college and was able to not get into trouble, and raised 2 kids, and owns a house now, so I don't know why these other ones need help".
- clavalle 13y ago
  $80K as a manager at McDonalds? Wow. I really thought it would be around $45K, $55K tops.
  - nahname 13y ago
    It may actually have been closer to 100k. They have a pretty good bonus structure. I don't remember for certain though and know it was over 80.
DanI-S 13y ago
One way to deal with income inequality is to shrug your shoulders and pretend it's okay - "let them drink latte" - which is what this guy is recommending. Another way is to claw back some of the financial regulation that once protected America's middle class from the full force of market instability. Take a look at this chart comparing income inequality and bank failures over the previous century: http://www.tobinproject.org/sites/tobinproject.org/files/assets/BankFailures_ChartwithComments_Moss.pdf http://www.tobinproject.org/sites/tobinproject.org/files/ass... There's not some magic force of technology driving growing inequality. In fact, even in this writer's argument, technological aptitude provides one of the only routes out of the lower classes. Inequality is growing because of financial deregulation since the 1980s.
Aqueous 13y ago
In the future, there won't be enough work for everybody to do. Technology won't just produce cars. Technology won't just produce our food and our clothing. Technology will do everything. Technology will make the allocation of resources very, very efficient, including the allocation of wealth. Technology will take electrical energy and convert it into wealth. In the middle-distant future, the wealth that technology produces will be enough for a whole society of humans to subsist on without doing much work. However, in the beginning this wealth will be concentrated with the people who write the software, make the robots, and otherwise are technologically proficient. The inescapable conclusion that I'm coming to is that this technology has the possibility of transforming society economically. It has the capacity to lift everyone out of poverty. But we need to adjust our fiscal policy so that the wealth doesn't become so concentrated with so few people. In the future we will be able to afford a safety net for everyone, where everyone is guaranteed a minimum quality of life, without much effort. We need to go about setting up a Rawlsian framework where inequality is accepted, just as long as the least well off person is still reasonably well off. We can do this by paying for people's health care, paying for their food, paying for their housing. Self-interest and capitalism will still be the paradigm, but it won't be so brutal. If we do it right.
- ajuc 13y ago
  If you go back in time to 1913, and told someone about all the machines we have in 2013, he would say "surely there are no jobs for even 5% of your society". Even not counting that in 2013 bigger percentage of women work than in 1913. But then, how could he predict that there will be these billion-dollar industries that do things not even invented in 1913. Huge majority of what people do in 2013 just didn't needed to be done in 1913. I don't doubt people will invent something to waste our time on ever greater scale.
  - Aqueous 13y ago
    I'm not sure I agree. The technological revolution hadn't happened yet in 1913. We saw an increase in new types of jobs over the course of the 20th century because any innovation that occurred still required a significant amount of human labor. I believe we will see a slow acceptance that we are not going to see a high level of full time, high paying, high skill jobs. After the recession, employment has slowly creeped up again but you can see that the types of jobs that people are working now are different than they were in the early 2000s. More jobs might have been created, but they are of a lower quality in terms of hours, pay, benefits, and the amount of skill they require. We are at a point with technology where any conceivable manual task that we do will almost certainly be automated away at some point, and many tasks requiring high degrees of skill - including intelligence tasks - will also be automated away. It will be increasingly hard for us to find pockets of value in areas that we can offer the marketplace that it hasn't already seen. I do believe the decline won't be rapid - our expectation for full employment will slowly but steadily fade away - but over the course of decades I think we will come to the idea that we are all entitled to a minimum quality of life, regardless of our ability to hold a job, and that we will have to be guaranteed such in order to maintain a stable society.
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Symmetry 13y ago
It's worth remembering that while inequality in first world countries has been going up and will continue to do so, global inequality has been going down. China is growing especially fast, but India and Africa and pretty much the whole third world has been growing quickly this last decade.
gexla 13y ago
In other words, much of the U.S. is going to start looking more like a 3rd world country like the Philippines, though probably a richer version (less grinding poverty.) You don't travel much.Your possessions are likely your smart phone, maybe a family computer and clothes. Because there isn't as much money to go around, families tend to stick together more rather than every generation scattering at age 18. This trend expands into the community. So, perhaps you are closer to your neighbors and certainly to your family. I wonder how much longer the car culture is going to last. It seems that you have to be rich to justify buying a car these days. Maybe we will be driving scooters like people in Asia instead of cars?
- talmand 13y ago
  I would hope that would finally trigger the acceptance of working from home, or even satellite offices, instead of large groups of people converging in the same set of buildings on a daily basis in a specific area of the city for little benefit. It would probably even save the city itself large amounts of moneys not having to maintain such an inefficient infrastructure.
circlefavshape 13y ago
Why are we taking economists seriously again?

48 points by 127001brewer 13y ago

Economist Tyler Cowen has some advice for what to do about America's income inequality: Get used to it. ... In the interview, the economist basically says "give up" because that's the way things are going. The economist attributes (mostly) this to computers. "Computers will play a larger role and people who can work with computers can make a lot." But those who aren't in the "top 15%" will be okay, since: "... But I think people who are not rich can be extremely happy. And I think the chances to be happy in this new world, with many more opportunities to be creative, to be online, to educate yourself — there'll be a lot more chances to be happy. It's not to say everyone will take them or be equipped to take them, but there will be a lot of new paths to opportunity." I do not subscribe to this wishful thinking...

loceng 13y ago
I think it's lacking in scope of what's possible in the future. If you stick to the status quo of how things are, then yeah, the future will be shit for most people. The status quo will be different in the future though.
- graeme 13y ago
  Maybe. It could always get worse though. The poor maintain their current standard of living in part thanks to laws and structures that protect this: minimum wage, food stamps, welfare, unions, Medicaid These tend to be in decline or under attack, sometimes with good reason. But there's no impetus to replace them with anything. Brazil may be our future. The low end goes very low there.
  - bernawil 13y ago
    Modern urban poverty as in Brazil is really rarely a matter of lack of resources. The poor in Brazil suffer from a poor organization rather than material poverty; people in favelas suffer the daily violence and rampant drug trade, but they don't really go hungry often.
rokusho 13y ago
Indeed, a lot of data suggests that a countries level of income equality and citizens happiness is negatively correlated. http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_inequality http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_...
- marknutter 13y ago
  But very little data exists about the happiness levels of people in a country where despite income inequality the poor have a higher living standard than they did at any other time in history, as it is in the US. If the poor are doing better than ever, and the rich are doing better than ever, what's the problem, really?
  - cschwarm 13y ago
    There is, for instance, the problem that some "goods" cannot be produced although people care very much about them, namely partners to start a family with. Unfortunately, women tend to be attracted to relatively rich men, which can result in a lower "supply" for relatively poor men if a rich man can attract several women (for instance, by using serial monogamy). It's been suggested that this leads to a larger amount of violence in poor neighborhoods (due to increased competition among men). Which leads to another problem: Being relatively poor may not be a problem, provided the level of wealth is secure. Due to the lack and inefficiency of social safety nets in the US, however, being relatively poor can always turn into being poorer still. Since being relatively poor often means living in a relatively poor neighborhood with a higher prevalence of violence, there's a good reason for feeling insecure all the time. Your son may get killed in a drive-by shooting, while your daughter may get raped. Meanwhile, you may get robbed. Even if one's situation is not as critical, it's always possible to become critical. For instance, one may simply loose one's job, and thus the means to provide for a family. Or one becomes ill. The number one reason for declaring personal bankruptcy in the US are medical bills. A large percentage of these people were health insured, by the way. These are just a few examples on the top of my head.
yummyfajitas 13y ago
I do not subscribe to this wishful thinking... This isn't wishful thinking. It's simply recognition of the fact that feeling materially superior to others is only one of many routes to happiness. If income doubles for the poor and quadruples for the rich (Cowen's postulated mechanism of increasing inequality), the poor have many new sources of happiness. For example, currently only 38% of the poor have a Playstation or XBox [1]. If the income of the poor doubles, probably every poor person could gain some happiness from video games. [1] https://explore.data.gov/Energy-and-Utilities/Residential-Energy-Consumption-Survey-RECS-Files-A/eypy-jxs2 https://explore.data.gov/Energy-and-Utilities/Residential-En...
- LekkoscPiwa 13y ago
  The problem lies elsewhere. The problem is that the system is so sick that the poor have to pay taxes for rich banksters bonuses. Hence, destoying all the credibility of the system. Rich paying to the poor is socialism. Poor paying to the rich is feudalism. Poor could care less about the toys they can get when they can afford less and less food, energy free time. Plus pay feud to the corrupt banksters on top of that. That's not capitalism, that's feudalism. Cowen is proposing neo-feudalism.
- _delirium 13y ago
  Empirically, however, societies with higher income inequality have lower happiness (and this is fairly robust to confounding factors and different kinds of society, and even shows up internally when comparing different time periods of the same society, e.g. when you look at different U.S. decades). Perhaps in principle it's possible to have a happy and highly unequal society (in sci-fi this is commonly imagined as involving happiness drugs or VR), but we haven't seen one yet.
  - yummyfajitas 13y ago
    Empirically, however, societies with higher income inequality have lower happiness... Could you link to some data on this? Ideally something other than "The Spirit Level", which basically just observes that many negative traits are correlated and then puts inequality on the x-axis.
talmand 13y ago
I believe the argument is: Today people without money are not happy because life itself requires resources, that many people do not have, to be happy and healthy. Tomorrow people without money could be happy and healthy because many of the things that make them so will require less resources to access. One example given in the interview I heard is that eventually you'll be able to get a good education for free from the Internet. Once people accept that premise, then spending big money on a college education isn't as necessary. But then, it's the future so who knows what will happen since the future doesn't exist yet.

Pxtl 13y ago

You can't have the Brooklyn Bohemian life without Brooklyn city planning. The modern suburban sprawl demands two-car households, and two-car households demand full-time middle-class employment.

jacobbudin 13y ago
Unless this Bohemian class anticipates living with roommates through old age, living in Brooklyn is considerably more expensive than living in suburbia.[1] Perhaps the economist meant Detroit. [1] The Council for Community and Economic Research: http://finance.yahoo.com/news/10-most-expensive-places-to-live-in-the-u-s--163648923.html http://finance.yahoo.com/news/10-most-expensive-places-to-li...
- wahsd 13y ago
  These issues are the outcomes and culmination of corrupt and pernicious actions taken a long time ago in the USA. If you look at Europe and other places around the world, there are sufficient models to emulate to solve these problems; but the corrupt master class has no interest in solving the "problems" that serve their interests and they have no interest in letting us, as a people, realize that we are not exceptional and therefore could learn by looking outside of our own culture and borders. What America doesn't realize, even the supposed most intelligent and informed, is that we are no different than any other people living under a controlling regime, we just have more resources to burn that allow the margins for error to be humongous compared to other places. The controlled media, corrupt politics, the rationalized abuse of laws you are destroyed for not abiding by, the propaganda, the war mongering, the racist subjugation of certain groups. It's all there, we just don't see it, as a people, because as with the same form of national socialism that destroyed Germany in the early 20th century, the American version of national socialism has brain-washed people into doing, thinking, and saying things to and about others that they would never want happen to themselves.
- Pxtl 13y ago
  I think they meant Brooklyn-like environments, not literally Brooklyn, NYC. There are plenty of them in semi-gentrified urban cores around the USA and Canada, but not enough to house the predicted boom of semi-employed bohemian upper-lower-middle-class.

devx 13y ago

Maybe this wouldn't be such a problem if those with the money wouldn't use it to pay Congress to help them make even more money to the detriment of others. I think that's really what bothers most Americans, and not necessarily the fact they can make more money on their own.

ihsw 13y ago
Who is worse, the one begging for the money, or the one supplying it? You're portraying Congress as some kind of passive conduit when in fact they're quite active in their own schemes.
- mcv 13y ago
  I don't see him portraying Congress as anything like that at all. Those people use their money like that because Congress allows it. Congress allows it because voters aren't organized enough to vote them all out. Voters aren't organized for that because the media keep playing the tribal Reps vs Dems game. And I guess the media keep playing that game because there's profit in it for them. It's a vicious cycle that needs to be broken.
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rayiner 13y ago

So the future of America looks like San Francisco? A 0.1% - Capitalists: LP clients of VC firms, very successful founders and VCs A 10% - Service professionals: rank-and-file VCs, engineers, managers, lawyers, accountants, consultants A 90% - Unskilled service workers: baristas and waiters at trendy SF hotspots

LekkoscPiwa 13y ago
That's not capitalism, that's feudalism: A 0.1% - Aristocrats, Barons, Kings, etc. A 10% - service professionals: shoemakers, weapon makers, creditors (bankers), accountants and whoever else the 0.1% might need to run their empires A 90% - Peasants - born in debt, will die in debt. Wage slaves - get enough money to perform the work and nothing else. That's called neo-feudalism. At the top are private creditors of nations - central bankers. The rest owes feud to them from the moment they are born (i.e. the US newborn already has to pay off few hundred thousand in debt through their live-time) Please don't call it capitalism. And one more thing -- what really destroyed neo-feudal society was the French Revolution. We need Robespierre's and Danton's guillotining banksters and their whore neo-feudal political class. That's the only way to revert back to capitalism and liberalism.
- wf 13y ago
  I was with you up to the part where you think chopping off people's heads is" the only way to revert back to capitalism and liberalism."
  - Karunamon 13y ago
    I guarantee the Wall Street shenanigans would be sorted out, post haste, with the careful application of separating certain greedy, conniving, overly-large heads from their bodies. But then maybe I'm just jaded.
  - LekkoscPiwa 13y ago
    That's the only way. Coffee without coffeine. Beer without alcohol. Sex, but in condom. War but without casaulties. The very core of the post-modern folk is that they want the thing but without the most crucial element of that thing. Revolution without a Revolution? That's why nowadays nothing changes. Because all that's left are empty words. "Terror without virtue is fatal; virtue without terror is impotent" You propose impotent solution. That won't work.

joseflavio 13y ago

IMO, there is some kind of correlation between efficiency in the economy and the inequality in the society. I believe that it is part of the government job to reduce the inequality... but the devil is on the details on how to do it.

neolefty 13y ago
Wouldn't inequality make efficiency worse? On an individual level, it would seem that poverty makes your life less efficient -- you end up treating your own time as less valuable, and so you do less productive things, such washing out your paper towels to reuse them, using more energy and water in the process than was used to manufacture them in the first place. When if you had more income, you could, hypothetically, do more productive things? Or would you just around watching Netflix more?
- yummyfajitas 13y ago
  Poverty != inequality, provided poverty refers to a fixed material standard of living (which is how you seem to be using it, since you are referring to specific material goods). To illustrate the point, consider India and the US. India has little inequality but lots of poverty (if we take the 5'th percentile of the US as the poverty line, then 95% of India is poor). The US has lots of inequality but little poverty. http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-the-have-nots/?_r=0 http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t...
  - JDShu 13y ago
    Does that graph take into account PPP at all? It doesn't sound like it from the description in the article.
    - yummyfajitas 13y ago
      From the article: "...the chart adjusts for the cost of living in different countries, so we are looking at consistent living standards worldwide."

jacobbudin 13y ago

Where's the guy who links to the Guaranteed Basic Income when you need him?

msluyter 13y ago

On the topic, there was a thought provoking article in the NY Times recently entitled "Can the Government Actually Do Anything About Inequality." The answer is unclear: http://opinionator.blogs.nytimes.com/2013/09/10/can-the-government-actually-do-anything-about-inequality/?src=me&ref=general&_r=0 http://opinionator.blogs.nytimes.com/2013/09/10/can-the-gove...

clavalle 13y ago
Of course they can. Possessing things is as fragile as a human life. It would take a tectonic shift in how policy is crafted and implemented but if the US government decided to turn on a dime tomorrow and redistribute wealth who could stop them?

Zarkonnen 13y ago

So "There will be a certain fragility to this existence." but "They may have lives that are quite happy and rewarding" - how? If you are constantly one minor incident away from doom, you are not happy, you are stressed. Welcome to the precariate. "I think for a lot of people, upward mobility will be much easier." This does not follow. In a more unequal society, upwards mobility falters as the wealthy form an exclusive layer of society. The best you can hope for in this scenario is to be useful enough that you will be kept compensated. But without the right connections, you will not be permitted to tryly rise. And this theoretical upwards mobility will be dangled in front of you to prevent you from feeling solidarity with everyone who isn't so "useful". Sound familiar?

graeme 13y ago
Precariate - I like that. We need such a word. Upward mobility might be easier though, even as poverty and precarity increases. Elites would have to shutdown Internet wealth generation somehow to prevent upward mobility. Right now it's never been easier to start a business and generate income for yourself. We're seeing easier upward mobility for those equipped to take advantage of this, even as others see their opportunities shrink.
- talmand 13y ago
  I think Zarkonnen was trying to say that as the inequality increases then it becomes more and more difficult to rise above a certain threshold. As the inequality increases then that threshold becomes more difficult due to standard economic situations and due to interference from the elite that likely would eventually want to control access. Today it may be easy to raise your economic standing, but that doesn't mean that will continue into tomorrow.
- jorgem 13y ago
  It's a word. Just mispelled: precariat.
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marknutter 13y ago

No, I'm tired of moaning about income inequality. If every person in the US had their income doubled we would have even greater income inequality than we do now, but everyone would be better off. Everyone benefits from technological advances. The poor can buy better goods for a cheaper price and the rich can maximize their profits.

zanny 13y ago
But this is exactly the problem that perpetuates growing economic inequality. You have 99% of people that are interested in things, and 1% that are interested in profits. We are all playing the capitalist game from birth, and to opt out is to isolate oneself from the market. But very few people acknowledge they are in a gambit with those seeking profits over who gets better value in a transaction, so they end up siphoning their wealth into means of production owners pockets but that money will never come back because the wealthy only need a very limited subset of goods and services, and after that they will invest that revenue to make more money by robbing others of their productive gains.
- marknutter 13y ago
  And when the wealthy make more money does it sit in big Scrooge McDuck style money bins, or is it reinvested into the markets or spent? If you don't want to "siphon wealth into the means of production owners pockets" then get your own means of production. Start a company and spread the stock out to your employees as evenly as you see fit. It is easier now than it ever has been to start and grow a company.
  - zanny 13y ago
    They don't evenly reintroduce their money into the market across the board (a consumer does much better at that) and they are not reintroducing money for the purposes of goods exchange but they are exchanging money now for money future. And they actively try to avoid risk (such as bank bailouts, golden parachutes, guaranteed dividends, etc) so you either make a little or a lot, and rarely lose your shirt. That means inevitably you have more money than you started with, just siphoning more and more off of the populace. Even if you keep cycling the money back in and people get to use it in a theoretically good way, you still concentrate ownership of resources, businesses, and workers as your reinvestments give you ownership of all these things that make you more money to own more things in perpetuity.

nahname 13y ago

>The low paying jobs today are in the service industry - largely retail and fast food chains. These jobs are dead end without paying anyone enough to live on. Friend of mine went to work at McDonalds during high school. By 22 he was a manager and making over 80k a year. It may be dead end, but that is more than enough to live on.

rdtsc 13y ago
I knew a guy too, therefore many studies showing growing inequality and inability to find work are flawed. Yes I have heard this argument before when it comes to inner city youth and helping single mothers. It is always a sample of N, someone's friend of a friend. "Well so and so went to college and was able to not get into trouble, and raised 2 kids, and owns a house now, so I don't know why these other ones need help".
clavalle 13y ago
$80K as a manager at McDonalds? Wow. I really thought it would be around $45K, $55K tops.
- nahname 13y ago
  It may actually have been closer to 100k. They have a pretty good bonus structure. I don't remember for certain though and know it was over 80.

DanI-S 13y ago

One way to deal with income inequality is to shrug your shoulders and pretend it's okay - "let them drink latte" - which is what this guy is recommending. Another way is to claw back some of the financial regulation that once protected America's middle class from the full force of market instability. Take a look at this chart comparing income inequality and bank failures over the previous century: http://www.tobinproject.org/sites/tobinproject.org/files/assets/BankFailures_ChartwithComments_Moss.pdf http://www.tobinproject.org/sites/tobinproject.org/files/ass... There's not some magic force of technology driving growing inequality. In fact, even in this writer's argument, technological aptitude provides one of the only routes out of the lower classes. Inequality is growing because of financial deregulation since the 1980s.

Aqueous 13y ago

In the future, there won't be enough work for everybody to do. Technology won't just produce cars. Technology won't just produce our food and our clothing. Technology will do everything. Technology will make the allocation of resources very, very efficient, including the allocation of wealth. Technology will take electrical energy and convert it into wealth. In the middle-distant future, the wealth that technology produces will be enough for a whole society of humans to subsist on without doing much work. However, in the beginning this wealth will be concentrated with the people who write the software, make the robots, and otherwise are technologically proficient. The inescapable conclusion that I'm coming to is that this technology has the possibility of transforming society economically. It has the capacity to lift everyone out of poverty. But we need to adjust our fiscal policy so that the wealth doesn't become so concentrated with so few people. In the future we will be able to afford a safety net for everyone, where everyone is guaranteed a minimum quality of life, without much effort. We need to go about setting up a Rawlsian framework where inequality is accepted, just as long as the least well off person is still reasonably well off. We can do this by paying for people's health care, paying for their food, paying for their housing. Self-interest and capitalism will still be the paradigm, but it won't be so brutal. If we do it right.

ajuc 13y ago
If you go back in time to 1913, and told someone about all the machines we have in 2013, he would say "surely there are no jobs for even 5% of your society". Even not counting that in 2013 bigger percentage of women work than in 1913. But then, how could he predict that there will be these billion-dollar industries that do things not even invented in 1913. Huge majority of what people do in 2013 just didn't needed to be done in 1913. I don't doubt people will invent something to waste our time on ever greater scale.
- Aqueous 13y ago
  I'm not sure I agree. The technological revolution hadn't happened yet in 1913. We saw an increase in new types of jobs over the course of the 20th century because any innovation that occurred still required a significant amount of human labor. I believe we will see a slow acceptance that we are not going to see a high level of full time, high paying, high skill jobs. After the recession, employment has slowly creeped up again but you can see that the types of jobs that people are working now are different than they were in the early 2000s. More jobs might have been created, but they are of a lower quality in terms of hours, pay, benefits, and the amount of skill they require. We are at a point with technology where any conceivable manual task that we do will almost certainly be automated away at some point, and many tasks requiring high degrees of skill - including intelligence tasks - will also be automated away. It will be increasingly hard for us to find pockets of value in areas that we can offer the marketplace that it hasn't already seen. I do believe the decline won't be rapid - our expectation for full employment will slowly but steadily fade away - but over the course of decades I think we will come to the idea that we are all entitled to a minimum quality of life, regardless of our ability to hold a job, and that we will have to be guaranteed such in order to maintain a stable society.

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Symmetry 13y ago

It's worth remembering that while inequality in first world countries has been going up and will continue to do so, global inequality has been going down. China is growing especially fast, but India and Africa and pretty much the whole third world has been growing quickly this last decade.

gexla 13y ago

In other words, much of the U.S. is going to start looking more like a 3rd world country like the Philippines, though probably a richer version (less grinding poverty.) You don't travel much.Your possessions are likely your smart phone, maybe a family computer and clothes. Because there isn't as much money to go around, families tend to stick together more rather than every generation scattering at age 18. This trend expands into the community. So, perhaps you are closer to your neighbors and certainly to your family. I wonder how much longer the car culture is going to last. It seems that you have to be rich to justify buying a car these days. Maybe we will be driving scooters like people in Asia instead of cars?

talmand 13y ago
I would hope that would finally trigger the acceptance of working from home, or even satellite offices, instead of large groups of people converging in the same set of buildings on a daily basis in a specific area of the city for little benefit. It would probably even save the city itself large amounts of moneys not having to maintain such an inefficient infrastructure.

circlefavshape 13y ago

Why are we taking economists seriously again?