1 Boring Old Man

I’ve been following the series in Slate called The United States of Inequality. There are 10 installments and I’ve already tried to pull out representative quotes from the first 6. The whole series is based on this graph showing the growing wealth inequity in the US in the last thirty years:

Here are my previous comments [in red] and the original installments [in dark]:

1. Introducing the Great Divergence
2. The Usual Suspects Are Innocent
3. Importing Inequality
4. Computer Exceptionalism
wealth inequity revisited…

5. Too Many Republicans

6. The Great Divergence and the Death of Organized Labor

7. Trade Didn’t Create Inequality, and Then It Did
^{In this installment, he looks at the galance of trade and the ‘outsourcing’ of manufacturing to other countries, particularly China. He quotes economists who have studied this and concludes that it’s not so big a factor as most of us think, but it is in the mix.}

8. The Stinking Rich and the Great Divergence
^{.Noah points to the work of Emmanual Saez at Berkley who has shown that the bulk of the concentration of wealth has been among the Super-Rich [top 0.1%] – the Corporate CEO’s and top Financial poeople – the Corporatocracy...}
 

9. How the Decline in K-12 Education Enriches College Graduates
^{"The abrupt halt and subsequent slowdown of gains in educational attainment began at about the same time as the Great Divergence. Before the Great Divergence, the country enjoyed at least three decades of growing income equality, an epoch that Goldin and Boston University economist Robert Margo have termed "The Great Compression." Between 1900 and the mid-1970s, U.S. incomes became dramatically more equal while educational attainment climbed. But starting in the mid-1970s and continuing to today, incomes became dramatically less equal while educational attainment stagnated. Katz and Goldin believe this is not a coincidence." He sees failings in the educational system as a much bigger contributor than I would have thought.}

We have now reviewed all possible causes of the Great Divergence—all, at least, that have thus far attracted most experts’ attention. What are their relative contributions? Here is a back-of-the-envelope calculation, an admittedly crude composite of my discussions with and reading of the various economists and political scientists cited thus far:

1. Race and gender are responsible for none of it, and single parenthood is responsible for virtually none of it.
2. Immigration is responsible for 5 percent.
3. The imagined uniqueness of computers as a transformative technology is responsible for none of it.
4. Tax policy is responsible for 5 percent.
5. The decline of labor is responsible for 20 percent.
6. Trade is responsible for 10 percent.
7. Wall Street and corporate boards’ pampering of the Stinking Rich is responsible for 30 percent.
8. Various failures in our education system are responsible for 30 percent.

Most of these factors reflect at least in part things the federal government did or failed to do. Immigration is regulated, at least in theory, by the federal government. Tax policy is determined by the federal government. The decline of labor is in large part the doing of the federal government. Trade levels are regulated by the federal government. Government rules concerning finance and executive compensation help determine the quantity of cash that the Stinking Rich take home. Education is affected by government at the local, state, and (increasingly) federal levels. In a broad sense, then, we all created the Great Divergence, because in a democracy, the government is us.