LIFE ON THE PLANTATIONThoughts on Income InequalityJeoffry Gordon, MD, MPHparadocs2@hotmail.com

La Jolla Democratic ClubFebruary, 2014

Pope Francis called for renewal of the Roman Catholic Church and attacked unfettered capitalism as "a new tyranny", urging global leaders to fight poverty and growing inequality in the first major work he has authored alone as pontiff. The 84-page document, 'Evangelii Gaudium' known as an apostolic exhortation, amounted to an official platform for his papacy. Francis went further than previous comments criticizing the global economic system, attacking the "idolatry of money" and beseeching politicians to guarantee all citizens "dignified work, education and healthcare".He also called on rich people to share their wealth. "Just as the commandment 'Thou shalt not kill' sets a clear limit in order to safeguard the value of human life, today we also have to say 'thou shalt not' to an economy of exclusion and inequality. Such an economy kills," Francis wrote in the document issued on Tuesday. "How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses 2 points?"

Richest 85 boast same wealth as half the worldEighty-five people control the same amount of wealth as half the world's population. That is 85 people compared with 3.5 billion. A new report from Oxfam has been published in time for the World Economic Forum in Davos this week. It shows the world's ultra-wealthy have not only recovered from the global financial crisis, they have positively blossomed. The report shows the wealth of the 1 per cent richest people in the world is worth about $110 trillion, 65 times the total wealth of the bottom half of the world's population. It also shows the world's richest 85 people control about $1.7 trillion in wealth, equivalent to the bottom half of the world's population. And far from hindering the wealthy, the political response to the global financial crisis - including the actions of central banks and the austerity measures introduced by national governments - has made the rich fabulously richer.In the US, the wealthiest 1 per cent of the population grabbed 95 per cent of post-financial crisis growth between 2009 and 2012, while the bottom 90 per cent became poorer. But an Oxfam survey of six countries - the United States, UK, Spain, Brazil, India and South Africa - has found that the majority of people believe laws and regulations are skewed in favour of the rich, so people are noticing.

Nearly one in four San Diego County families is functionally poor, even though the federal governments official source on the topic the U.S. Census Bureau says only 14.9 percent of households live below the poverty line. A recent study by Public Policy Institute of California reconsidered the definition of poverty by accounting for two factors not included in the official measure: regional cost-of-living variations and the benefits of government-subsidy programs.

Americans have a distorted sense of the level of inequality in their societybut not in the direction one might expect. Associate professor of business Michael I. Norton has found that respondents to his surveys universally think that wealth is more evenly distributed in the United States than it actually isand whats more, respondents say they would prefer for the wealth to be still more evenly spread around. Norton and his coauthor, Dan Ariely (author of the popular title Predictably Irrational and a professor of behavioral economics at Duke), believe that one reason perceptions are so skewed is because the easy availability of credit masks peoples real financial situation.

An updated study by the prominent economists Emmanuel Saez and Thomas Piketty shows that the top 1 percent of earners took more than one-fifth of the countrys total income in 2012, one of the highest levels recorded in the century that the government has collected the relevant data.The top 10 percent of earners took more than half of all income. That is the highest recorded level ever. The income share of the top 1 percent of earners in 2012 returned to the same level as before both the Great Recession and the Great Depression: just above 20 percent, jumping to about22.5 percent in 2012 from 19.7 percent in 2011. The new data shows that incomes for the top 1 percent of earners declined about 36 percent during the recession, and rebounded about 31 percent in the recovery. The incomes of the other 99 percent plunged about 12 percent in the recession and have barely grown since then, on aggregate. Thus, the 1 percent have captured about 95 percent of the income gains since the recession ended. The figures underscore that even after the recession the country remains in a kind of new Gilded Age, with income as concentrated as it was in the years that preceded the Great Depression,

Here is a chart that could stoke class rage among the super-rich. It comes from the World Top Incomes Database, using tax data compiled by economists Facundo Alvaredo, Tony Atkinson, Thomas Piketty and Emmanuel Saez. As you can see from the chart, the average annual income of the top 0.01 percent of earners -- just 16,000 households -- is now more than $30 million. That's about 30 times as much as the top 1 percent.

The Middle Class Is Steadily Eroding. Just Ask the Business World.By NELSON D. SCHWARTZ, THE NEW YORK TIMES, FEB. 2, 2014

In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmanns, whose Chelsea store closes in a few weeks. Loehmanns, where generations of middle-class shoppers hunted for marked-down designer labels in the famed Back Room, is now being liquidated after three trips to bankruptcy court since 1999.Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models. Avon sales were down 10% last year.As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away. If there is any doubt, the speed at which companies are adapting to the new consumer landscape serves as very convincing evidence.New research by the economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, backs up what is already apparent in the marketplace. the In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995.Even more striking, the current recovery has been driven almost entirely by the upper crust. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income.At street level, the divide is even more stark.Sears and J. C. Penney, retailers whose wares are aimed squarely at middle-class Americans, are both in dire straits. Last month, Sears said it would shutter its flagship store on State Street in downtown Chicago, and J. C. Penney announced the closings of 33 stores and 2,000 layoffs. Shares of Sears and J. C. Penney have fallen more than 50 percent since the end of 2009, even as upper-end stores like Nordstrom and bargain-basement chains like Dollar Tree and Family Dollar Stores have more than doubled in value over the same period.

THERES BEEN A COUP DETAT IN THE UNITED STATES AND GOLDMAN SACHS WON George Soros harshly criticizes true believers in the wonders of unregulated free markets, an ideology he calls "market fundamentalism. Soros attacks market ideology on several grounds, ranging from amorality to its role in fostering financial instability.

On ethics, he said: "Market values express what one participant is willing to pay another in a free exchange. They do not reflect social values, nor do they express many of the intrinsic values that people hold dear..." Soros disputes the fundamental claim of American textbook economics, that the "invisible hand" of selfish individual behavior will be good for everyone: "Market fundamentalists... [claim] that the common interest is best served by everybody looking out for his own interests. This claim is false... There are many political and social objectives which are not properly served by the market mechanism... These include the preservation of competition and of stability in financial markets, not to mention issues like the environment and social justice." Soros further argues that free-market ideology threatens political democracy:

"By promoting market values into a governing principle, market fundamentalism has undermined our society. Representative democracy presupposes moral values, such as honesty and integrity, particularly in our representatives. When success takes precedence over integrity, and politics is dominated by money, the political process deteriorates."

In January, 2014 the Center for American Progress and Half in Ten commissioned a poll to ask 2000 Americans what they really think about poverty in the United States. One-quarter to one-third of Americansand even higher percentages of Millennials and people of colorcontinue to experience direct economic hardship. Sixty-one percent of Americans say their familys income is falling behind the cost of living, compared to just 8 percent who feel they are getting ahead and 29 percent who feel they are staying even.

The Wrecking Crew by Thomas Frank Holt Paperbacks, August 2009

Princeton professor Larry M. Bartels most significant finding is that there is a partisan pattern to the size of the gap between the rich and the poor. Over the past half-century, he concludes, Republican presidents have allowed income inequality to expand, while Democratic presidents generally have not. Bartels goes to great pains in his introduction to preempt the counterattack he expects from critics on the right. "I began the project as an unusually apolitical political scientist," he writes, noting that the last time he voted was in 1984, "and that was for Ronald Reagan." He adds that in doing this work, "I was quite surprised to discover how often and how profoundly partisan differences in ideologies and values have shaped key policy decisions and economic outcomes. I have done my best to follow my evidence where it led me." UNEQUAL DEMOCRACY :The Political Economy of the New Gilded Age, By Larry M. Bartels, Princeton Univ. 325 pp. 2013

The very rich, and those on Wall Street in particular, are in fact doing worse under Mr. Obama. Between the partial rollback of the Bush tax cuts and the tax hike that partly pays for health reform, tax rates on the 1 percent have gone more or less back to pre-Reagan levels. Also, financial reformers have won some surprising victories over the past year, and this is bad news for wheeler-dealers whose wealth comes largely from exploiting weak regulation. So you can make the case that the 1 percent have lost some important policy battles.

Last summer Obama presented the National Humanities Award to Robert Putnam, a Harvard political scientist who became famous for a book he wrote on social atomization, Bowling Alone. More and more, Putnam found the crucial issue is class.You have an economy, Obama said, (The New Yorker, Jan. 27, 2014) that is ruthlessly squeezing workers and imposing efficiencies that makes (goods) really cheap, but also puts enormous downward pressure on wages and salaries. Thats making it more difficultfor everybody large majorities of people to get a foothold in the middle class or to feel secure there. Youve got folks like Bob Putnamindicating the degree to which some of those pathologies that used to be attributed to the African-American community in particular single parent households, and drug use, and men dropping out of the labor force, and an underground economy youre now starting to see in larger numbers in white working-class communities as well.

How a New Jobless Era Will Transform Americaby Don Peck THE ATLANTIC, March 2010

The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come One recent survey showed that 44 percent of families had experienced a job loss, a reduction in hours, or a pay cut in the past year. We are in a very deep hole, and weve been in it for a relatively long time already.We are living through a slow-motion social catastrophe, one that could stain our culture and weaken our nation for many, many years to come. We have a civicand indeed a moralresponsibility to do everything in our power to stop it now, before it gets even worse.

An Empire at RiskWe won the cold war and weathered 9/11. But now economic weakness is endangering our global power. By Niall Ferguson | NEWSWEEK Published Nov28, 2009 From magazine issue dated Dec 7, 2009

if the United States succumbs to a fiscal crisis, as an increasing number of economic experts fear it may, then the entire balance of global economic power could shift. Military experts talk as if the president's decision about whether to send an additional 40,000 troops to Afghanistan is a make-or-break moment. In reality, his indecision about the deficit could matter much more for the country's long-term national security. Call the United States what you likesuperpower, hegemon, or empirebut its ability to manage its finances is closely tied to its ability to remain the predominant global military power.

In the 2012 election, 28 percent of all disclosed political contributions came from just 31,385 people. In a nation of 313.85 million, these donors represent the 1% of the 1%, an elite class that increasingly serves as the gatekeepers of public office in the United States.More than a quarter of the nearly $6 billion in contributions from identifiable sources in the last campaign cycle came from just 31,385 individuals, a number equal to one ten-thousandth of the U.S. population.In the first presidential election cycle since the Supreme Court's decision in Citizens United v. FEC, candidates got more money from a smaller percentage of the population than any year for which we have data, a new analysis of 2012 campaign finance giving by the Sunlight Foundation shows.

Koch Brothers Fund Tea PartyCharles and David Koch are owners of a primary funders for the tea party and other extreme conservative groups. They are worth $34.5 billion each making them the 8th and 9th richest people in the world and controlling stockholders for Koch Industries Inc. They are a private global conglomerate located in over 60 countries, including interests in oil, refining, pipelines, paper products, chemicals, fertilizer and commodities trading with annual revenues around $100 billion.A review of documents and tax records for frequently connected interconnected web of corporate front groups, supported by the Koch brothers, shows how dangerous these groups espousing free markets and liberty have become to society.The Koch brothers decision to create a nonprofit network dates back to 1977 when Charles Koch founded the Cato Institute, an organization the Koch foundations continue to fund. According to Catos web site, David Koch continues to sit on its board along with Kevin Gentry, Vice President for Strategic Development at the Charles G. Koch Charitable Foundation and chief honcho of the secret, annual strategy meetings of the Kochtopi.

The mission of the American Legislative Exchange Council (ALEC) isto advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty, through a nonpartisan public-private partnership of Americas state legislators, members of the private sector, the federal government, and general public. to promote these principles by developing policies that ensure the powers of government are derived from, and assigned to, first the People, then the States, and finally, the Federal Government. to enlist state legislators from all parties and members of the private sector who share ALECs mission.

National Media Blackout Of Saturday's Huge Moral March In RaleighFebruary 8, 2014A crowd estimated exceed 80,000 showed up to march to protest Republican policiesin Raleigh, N.C. Saturday. But you wouldn't know it if you live outside the area. There were few reports in any national news outlets. (USA Today did carry a report, saying there was "a crowd of between 80,000 and 100,000 people.") Demonstrations called Moral Mondays began last spring in Raleigh in response to legislation passed by the Republican-led General Assembly. The protests are designed to keep a spotlight on what organizers view as regressive policies, particularly on Medicaid, unemployment benefits, abortion, voting and education. March organizers issued five demands or state government that reflect the broad concerns of its coalitionand the targets of right-wing leaders: 1. Secure pro-labor, anti-poverty policies that insure economic sustainability. 2. Provide well-funded, quality public education for all. 3. Promote health care for all, including affordable access, the expansion of Medicaid, womens health, and environmental justice in every community. 4. Address the continuing disparities in the criminal justice system on the basis of race and class. 5. Defend and expand voting rights, womens rights, immigrants rights, LGBT rights, and the fundamental principle of equality under the law for all people.

Rev. Dr. William J. Barber II, president of the N.C. NAACP said at the march, "We are black, white, Latino, Native American. We are Democrat, Republican, independent. We are people of all faiths, and people not of faith but who believe in a moral universe. We are natives and immigrants, business leaders and workers and unemployed, doctors and the uninsured, gay and straight, students and parents and retirees. We stand here a quilt of many colors, faiths, and creeds."

Ill Fares the Land, By Tony Judt, THE NEW YORK REVIEW OF BOOKS, APRIL 29, 2010

Something is profoundly wrong with the way we live today. For thirty years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth. We no longer ask of a judicial ruling or a legislative act: Is it good? Is it fair? Is it just? Is it right? Will it help bring about a better society or a better world? Those used to be the political questions, even if they invited no easy answers. We must learn once again to pose them.The materialistic and selfish quality of contemporary life is not inherent in the human condition. Much of what appears "natural" today dates from the 1980s: the obsession with wealth creation, the cult of privatization and the private sector, the growing disparities of rich and poor. And above all, the rhetoric that accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.

We cannot go on living like this.But if we do no more than pick up the pieces and carry on as before, we can look forward to greater upheavals in years to come.And yet we seem unable to conceive of alternatives. This too is something new.

Religious and Free-Market Fundamentalism Have More in Common Than Their Fans in the Tea Party

Because fundamentalists are ideologically driven, they tend to reject basic facts that do not comport with their ideology. Religious fundamentalists have unyielding faith in the literal veracity of the Bible and consequently dispute all conflicting science, such as the theory of evolution. By the same token, free-market fundamentalists dispute basic facts that call into question the efficiency and fairness of strict laissez-faire economics.Since the fundamentalists' extreme views usually do not square with the facts, they commonly proceed to make up their own facts, resorting to disinformation and conspiracy theories. As such, religious fundamentalists have claimed that the theory of evolution is a "fraud," that there is no consensus in the scientific community about its validity, and that creationism is accepted by many scientists. Free-market fundamentalists have likewise resorted to glaring misrepresentations in order to defend their ideology. Partisans of deregulation have notably challenged the Obama administration's health care reform byclaiming that America provides better and cheaper access to medical treatment than nations with universal health care, whose systems are less market-driven and more regulated. While fundamentalists are adamant that an unregulated market efficiently provides for everyone's health care, the opposite is true. America is the only developed country allowing insurance companies to profit from basic health coverage. Until the Democratic reform, it was also the only one that let insurance companies deny coverage to people with "pre-existing medical conditions," such as cardiac problems or lupus. These arguments have heavily shaped opposition to "Obamacare," plausibly even more than claims about its unconstitutionality, which the Supreme Court has now largely rejected, albeit by a narrow majority.

Indifference toward the plight of the uninsured illustrates a salient feature of fundamentalism: obliviousness towards the social costs of ideological purity. Religious fundamentalists have displayed an equivalent indifference to the social costs of their purist ideology.By Mugambi Jouet, Truthout Saturday, 21 July 2012

MICHAEL SANDELPROFESSOR OF GOVERNMENTHARVARD UNIVERSITY 2005www.justiceharvard.org

GEORGE LAKOFF

The moral of Katrina is mostly being missed.The cause was political through and through - a matter of values and principles. The progressive-liberal values are America's values, and we need to go back to them. The heart of progressive-liberal values is simple: empathy (caring about and for people) and responsibility (acting responsibly on that empathy). These values translate into a simple principle: Use the common wealth for the common good to better all our lives. In short, promoting the common good is the central role of government.

Thomas Pikettys new book, Capital in the Twenty-First Century, described by one French newspaper as a a political and theoretical bulldozer, defies left and right orthodoxy by arguing that worsening inequality is an inevitable outcome of free market capitalism.Piketty, a professor at the Paris School of Economics, does not stop there. He contends that capitalisms inherent dynamic propels powerful forces that threaten democratic societies.Capitalism, according to Piketty, confronts both modern and modernizing countries with a dilemma: entrepreneurs become increasingly dominant over those who own only their own labor. In Pikettys view, while emerging economies can defeat this logic in the near term, in the long run, when pay setters set their own pay, theres no limit, unless confiscatory tax rates are imposed.Pikettys book published four months ago in France and due out in English this March suggests that traditional liberal government policies on spending, taxation and regulation will fail to diminish inequality.

"Most Americans are on a downward escalator. Median household pay is dropping, adjusted for inflation. A smaller share of working-age Americans are in jobs than at any time in the last three decades. Only 113,000 jobs were added to the U.S. economy in January, on top of a paltry 75,000 in December.We need a new WPA to rebuild the nations crumbling infrastructure, a higher minimum wage, strong unions, investments in education, and extended unemployment benefits for those who still cant find a job. When 95% of the economic gains go to the top 1%, the middle class and poor dont have the purchasing power to keep it going.Yet too many still believe in trickle-down economics that the wealthy are the job creators, and tax cuts for big corporations and the rich will boost the economy. The real job creators are the vast middle class and the poor when they have enough money in their pockets. Thats the only way out of the vicious cycle were now in.

----Robert Reich is Chancellors Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration.

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way - in short, the period was so far like the present period.

Charles Dickens, A Tale of Two Cities English novelist (1812 - 1870)

****************