Five Things You Might Not Know About Inequality

Branko Milanovic’s book is a treasure trove of information and insight about inequality both within nations and across countries and populations. In the spirit of reducing inequalities of knowledge between readers of the book and those who haven’t yet had time to flip through it, here is a list of some of the more interesting findings and conclusions from his research:

1. John Rockefeller was the richest person ever. Comparing incomes across eras (adjusted as best as possible to a common standard that measures wealth and income in relation to historical and global context), John D. Rockefeller is probably the richest person in history because his wealth at its height in 1937 (about $1.4 billion) allowed him to command the most labor of others (about 116,000 people) in the then richest country in the world.  “The people whom he [Rockefeller] could hire would easily fill Pasadena’s Rose Bowl, and even quite a few would have remained outside of the gates.”

This puts Rockefeller’s wealth above that of the rich Roman Marcus Crassus who could command the labor of around 32,000 people; Andrew Carnegie who could command the labor of about 48,000 people; and Bill Gates who could hire about 75,000 people.  Mexican billionaire Carlos Slim is probably the richest person locally, with wealth capable of commanding the labor of around 400,000 people (but the low overall wealth of Mexicans make this less commanding than Rockefeller who was at his height of wealth in a comparatively richer country.)

2. Communism improved income inequality, but created new forms of hierarchy in its place.  Socialist countries like Russia, Hungary and Poland recorded some of the lowest measures of inequality in the post-war era.  How?  Basically by reducing the wealth and income of the then richest people in these respective countries and implementing full employment policies, free education, and other transfers to level incomes among people.  However, these policies took away nearly all incentives to work harder since “individual education, skill, and the like are immaterial” in societies like these.  In turn, economic productivity in communist societies declined and new “status”-based inequalities emerged where well-connected party elites enjoyed riches and leisure and ordinary workers did not.

“The rise and fall of communism may be interpreted in many different ways…First,..[i]t shows that distributions can be altered by different political arrangements.  Second, it shows that economic leveling (combined with political coercion) leads to stagnation and ultimately decline.  Third, it shows that it is important that the elites’ behavior not be overtly out of step with the ideological justification of their rule.  The financial elite on Wall Street may be well advised to ponder the third lesson.”

3. Barack Obama’s family was poorer than you know. President Barack Obama’s paternal grandfather, Hussein Onyango Obama (born in Kenya in 1895), had a household per capita income of 240 shillings per year, making him better off than about 90 percent of the population of Kenya.  Despite this advantage relative to his compatriots, the average per capita income of Asian and European colonizers in Kenya was estimated to be about 3,300 shillings per year and 16,000 shillings per year, respectively.

The “current U.S. president’s grandfather was thus working as a manservant or cook in a household of people whose incomes were sixty-six times greater than his own.  Onyango would have to work for an entire year to make as much as his British employer would make in less than a week.”

4. Poor people really do carry the weight of the world on their shoulders. It takes 77 percent of the world’s population to make up the first 20 percent of global income.  It takes 12 percent of people worldwide to make up the next 20 percent; 5.6 percent the next tranche; 3.6 percent the one after that; and only 1.75 percent (the richest people in the world) to make up the final 20 percent of global income.

5. The global one percent is largely American. Adjusting global incomes based on purchasing power, government transfers, housing costs, etc, there are approximately 60 million people worldwide in the richest top percent of earners.  29 million of these people live in the United States.  “There is nobody from Africa, China, India, or from East Europe or Russia (in statistically significant numbers, of course).”

These are just a few of the fantastic bits of information in The Haves and Have-Nots.  For a truly global perspective on the subject of inequality, there’s no better book to pick up.

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Marxists Infiltrated The Catholic Church, And Four Other Crazy Things We Learned At CPAC

Every year at the annual Conservative Political Action Conference, dozens of organizations big and small rent tables in an exhibition hall to dole out pens, stickers, and brochures promoting everything from homophobia to global warming denialism.

But alongside the National Organization for Marriage and the NRA are a cavalcade of fringe organizations warning of the dangers posed by the United Nations, secularism and foreign languages. Here are five of the craziest views advanced by their literature:

1. Marxists Control The Catholic Church. Fringe fundamentalist Cliff Kincaid’s organization America’s Survival is handing out a brochure warning Roman Catholics that the church “has been compromised philosophically — not only by infiltrators from the homosexual movement and Marxists. but by adherents of the so-called ‘New Age’ philosophy.” So vast is the communist infiltration within the Catholic Church, one “Catholic insider” told the organization that the bishops “made a deal with the devil to get Obamacare passed.”

2. The UN Will Take One-Quarter Of America’s Land. The American Jobs Alliance, a conservative business advocacy group, is handing out hundreds of fliers warning attendees of the dangers posed by the Trans-Pacific Partnership, an undeniably controversial free trade agreement that the United States is currently negotiating with a handful of South Pacific nations. Instead of reasoned criticism however, AJA sounds the alarm over Sharia Law, and claims that the Partnership “cedes 1/4 of U.S. to Foreign Control. A quarter of the entire U.S. land area will fall under UN court jurisdiction.”

3. Marriage Equality Must Be Opposed. Reason #8 in the American Society for the Defense of Tradition, Family and Prosperity’s “10 Reasons Why Homosexual ‘Marriage’ is Harmful and Must to Opposed” brochure: “It Imposes its Acceptance on all Society.” One example of the horrors of acceptance? “Rental property owners will have to agree to accept same-sex couples as tenants.” 10 reasons weren’t enough for the Ruth Institute, who have a brochure of their own with “77 Non-Religious Reasons to Support Man/Woman Marriage.”

4. George Soros Controls Everything. In another brochure published by Cliff Kincaid’s America’s Survival organization, author Zubi Diamond proclaims that President Obama “hates America just like his master George Soros.” Racially questionable language aside, Diamond’s obsession with French financier George Soros spills over to the rest of the brochure, going so far as to claim that former Fox News firebrand Glenn Beck was fired from the network for “exposing George Soros.”

5. Puerto Rico’s Statehood Referendum Was Rigged. ProEnglish’s singular mission — to promote English as country’s official language and wage war on any attempts to provide civic services in Spanish or any other foreign language — is laid forth in an 8 page newsletter on display at CPAC. Such articles include “Canada’s Struggles with Bilingualism Continue,” “ProEnglish Ally Rep. Steve King Re-Elected,” and cover story “Rigged Vote in Puerto Rico Produces Artificial Majority for Statehood.”

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4 Things The New Congressional Budget Office Projections Show Us About The Economy

The Congressional Budget Office (CBO) released its latest budget projections today, which show that the U.S. has made substantial progress towards getting its deficit and debt under control. However, the flip side of that reality is that CBO projects economic growth will be sluggish for the next several years, meaning that unemployment will only come down slowly. Here are the four biggest takeaways from the report:

1. The deficit has been reduced by a lot. As Center for American Progress Director of Tax and Budget Policy Michael Linden noted, in August 2010, CBO’s “alternative fiscal scenario” projected a deficit in 2020 of 7.8 percent of GDP. Now it projects that deficit will be 4.7 percent of GDP. The difference between the projected 2013-2020 deficit in 2010 and that same projection today adds up to $4.5 trillion in deficit reduction.

2. The debt is stabilized. Thanks to the fiscal cliff deal and previous budget agreements, most of the country’s debt problem is solved. The CBO’s report shows debt will now peak at 77.7 percent of GDP in 2014, then drop to 73.1 percent in 2018, then rise back to 76 percent in 2022. (See graph below.) According to the Economic Policy Institute, flattening out that second rise from 2018 to 2022 will only require $670 billion in additional deficit reduction — $580 billion in actual policy savings, plus $90 billion in resulting interest savings. That’s less than half the $1.5 trillion in additional deficit reduction President Obama is calling for.

3. Austerity is killing the recovery. The CBO anticipates that economic growth will be slow this year, which “reflects a combination of ongoing improvement in underlying economic factors and fiscal tightening that has already begun or is scheduled to occur — including the expiration of a 2 percentage-point cut in the Social Security payroll tax, an increase in tax rates on income above certain thresholds, and scheduled automatic reductions in federal spending.” Large austerity efforts in Europe have been stifling economic growth and causing continued economic contractions.

4. Jobs aren’t coming back fast. Due to a pronounced output gap — the gap between what the economy is producing and what it could be producing (shown below) — unemployment will remain elevated for several years. CBO projects that the unemployment rate “falls from 8.0 percent in the fourth quarter of 2013 to 6.8 percent in the fourth quarter of 2015 and then declines gradually to 5.5 percent in the fourth quarter of 2018.”

The report clearly shows that, despite the ongoing deficit hysteria in Washington, the far more pressing problem is growth and jobs.

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Three Things The NRA Wants You To Believe About Biden’s Gun Safety Task Force That Aren’t True

On Thursday, the National Rifle Association (NRA) blasted the Obama administration for undermining Americans’ Second Amendment rights just moments after its representatives met with Vice President Joe Biden and the White House task force to reduce gun violence.

Two years ago, the NRA wouldn’t even meet with President Obama and the group’s CEO and executive vice president Wayne LaPierre warned that he would confiscate “our firearms” and undermine America’s greatness. In a statement following Thursday’s meeting, the group demonstrated that it’s still not interested in reducing gun crimes, offering three misleading claims about its intentions:

1. The NRA was “prepared to have a meaningful conversation.” The NRA claimed that it’s willing to consider “school safety, mental health issues, the marketing of violence to our kids and the collapse of federal prosecutions of violent criminals.” The glaring omission in that list is any action involves the sale of guns and ammunition. It’s the same tactic they tried in their widely-panned press conference where they went so far as to blame hurricanes, but not guns. The resistance to any gun violence prevention measures that involve actual firearms shows that the NRA really wasn’t interested in a “meaningful conversation” where all options were on the table.

2. The White House has “an agenda to attack the Second Amendment.” Despite LaPierre’s paranoid insistence that the White House was lulling gun owners into a false sense of security by not passing any gun laws during his first four years, the Obama administration actually expanded gun rights in its first four years by loosening restrictions for concealed carry on federal grounds. Both Biden and Obama have insisted that they have no intention of changing the right to bear arms — rather, they simply want to create restrictions that make it harder for murderers to acquire their weapon of choice.

3. The “Administration continues to insist on pushing failed solutions.” There’s really no proof that universal background checks, restrictions on military-style assault weapons and high-capacity magazines, and expanded mental health services are “failed solutions.” In fact, evidence points to the opposite: Since the repeal of the assault weapons ban, mass shootings have drastically increased and studies show that the firepower of gunmen (how many rounds they shoot, and how quickly they shoot them) has jumped significantly.

Biden plans to deliver his suggestions for possible gun violence prevention laws to Obama on Tuesday. On Friday, he will meet with the entertainment and television industries. It’s likely that will be a more positive meeting, since representatives have signalled they will be more receptive to Biden’s case. In a statement, they wrote, “We welcome the opportunity to share that history and look forward to doing our part to seek meaningful solutions.” That’s despite that videogames and movies, unlike guns, can’t kill people.

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The Way Things Are Going, They’re Gonna Crucify Me.

Apologies to John Lennon. Concept by Al Armendariz, Administrator of EPA Region VI. Repair Man Jack posted the video with analysis here.

No apology is necessary, Mr. Armendariz. In a perverse way, your comments reveal the tactics of your agency, and more importantly, the philosophy which motivates Mr. Obama’s entire Administration.

It also speaks of the arrogance of a government that thinks its citizens are its subjects, and whose middle managers find amusement in crushing people’s lives and livelihoods.

One more thing about the Roman analogy — mmm, as I recall, that strategy didn’t work out too well for the Romans. Does Mr. Obama play the fiddle?

If it sounds like I take this issue personally, I plead guilty.

My employer is a small oil and gas company. All of our operations are in EPA Region VI which Mr. Armendiaz oversees. I’m the operations manager, so the threat of crucifixion falls squarely upon me.

Rush Limbaugh characterized the crucifixion comment as a vendetta against Big Oil.

Wrong-o. EPA is after smaller oil and gas companies, like Range Resources (800 employees) and my company (24 employees). Big Oil has unlimited resources and staff attorneys to fight back. EPA can much more effectively achieve their goals by singling out the little guy who they can crush like a bug.

Or crucify, as it were.

I am a citizen. I am a taxpayer.

You work for me.

Don’t threaten me with crucifixion.

This guy Armendariz needs to go. His boss need to go – Armendariz’s comments were recorded in 2010.

We’ll take care of the Big Guy in November.

Cross-posted.

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