Wednesday, March 30, 2011

Yes Asshole, the Rich Are Getting Richer

I visited my parents last weekend, and as I once mentioned before, these excursions usually include a lazy Sunday morning with the old home-town news rag. The city of Waterbury is most recently famous for the frightening habits of former mayors, but many years before that (maybe stretching into my early youth) the region I grew up was part of an important industrial hub. It's an urban mix peculiar to the northeastern United States: decades of corporate flight that should, you'd think, have given them some perspective by now on how difficult it is to run a city—whipping up its economy or providing services, depending on which church of ideas you attend—when the local hiring firms keep disappearing and abandoning the tax base. Despite this long trend, the Waterbury paper remains a bastion of conservative opinion, dancing with the one that brought 'em (down) over this timespan, and is currently and constantly worked up about Big Government as well as the scarier, swarthier immigrant population which is no longer from European countries that begin with the letter "I" (and which lacks those erstwhile job prospects). [Although maybe there's something to the Big Government points: no doubt any incentive the city can now offer—tax breaks, loans, industrial sites with all the hookups—is piddling consolation for taking away the freedom to dump all of the tailings you can directly into the Naugatuck river, and that pesky Superfund law clearly did slow down that mall project a few years ago, but those fine, fine minimum wage retail jobs got there anyway, they did.]

Which is not really what I'm getting at, beyond to say that the old local paper grants me a special annoyance. When my wife turns on the news at home or when I drive back listening to All Things Considered, then I only need to marvel about how extreme the mainstream has become, and the distress doesn't last. When I steal time online, I see the accepted conservatives actually subjected to the comments they so richly invite, which sates me enough to not have to write anything about it myself. But when I go to visit Mom and Dad, and the op-eds are framed in official-looking black-and-white, and what letters filter in through the editors are as supportive as they are illiterate, when, it's editorial policy aside, it's a pretty decent paper for its market size, then I find that no one is getting livid here but me. Among the usual inveterate assembly of Malkins and Wills and Krauthammers, the Republican American trucks in your more shameless (and artless) variety of deniers and class warriors for its editorial page. On Sunday, it was some guy named Steven R. Cunningham of the American Institute for Economic Research. (The version I read is behind a subscription wall, but you can find plenty of copies online from other venues.) I don't really know anything about the AIER, other than it's in the most beautiful part of Massachusetts, but if this guy is an example of its alleged mission of objective economics education and not representing concentration of wealth, then its founders are surely spinning in their graves. More likely it's just your standard pro-power think tank. Cunningham is out to skewer "one of the most enduring economic myths" that the rich are getting richer.

"It isn't true. When most people think of the rich, they probably are thinking of people with great wealth. When they think of the poor, they probably are thinking of people with low incomes. While there's obviously a correlation between wealth and income, they're not the same. And we shouldn't confuse them."
I'm going to limit the line-by-lines for this guy—the full FJM thing is not my bag, and I'm not quite making that the central point either—and excessive charts are boring (I'll link for you though), but that article should not pass without comment. From the opening graf, he proceeds from here to thrash, not this alleged myth, but a fairly irrelevant straw person, noting that people who have the most wealth are generally older, which may or may not mean something or other, but certainly leads the reader away from the important distinctions he didn't make between wealth and income, and rich and poor.

Most people consider "rich" or "poor" to be a state of concern about meeting basic necessities, extraneous pleasures, and once those things are taken care of, of attaining status. I suppose it's nice that we weren't treated to the usual false equivalence between modern pleasures (like iPods and TVs) and necessities (like cost of living and, if we wish to outlive our pre-industrial counterparts, medical care, and, of course, the indenture that most people accept to attain those things), but since richness is in part something you feel, then it's not surprising there's some subjectivity in the definitions.

But income and wealth are more quantitative. And yes, it's an important distinction, but as an economics educator (yar har), Mr. Cunningham might understand that the reason people prefer to discuss income distribution is because it's just easier to come by. Most countries keep statistics on this sort of thing, which is handy if you try to make informed economic arguments, comparisons between countries, and other stuff you'd think would be important to economics educators. Wealth assets, meanwhile, are more varied in form, and more likely to be undisclosed and private. Wealth can mean less liquidity than the numbers on your paycheck represent, but lets not kid ourselves that the "wealthy" are exemplified by the old people receiving fixed annuity payments in Cunningham's hypothetical anecdote, or that the very wealthy are in any way not rich. Steve-O is counting on his readers to neglect looking very closely at the wealth distribution he mentions, which in Waterbury is evidently a good bet. When you do look at those numbers, they're far more damning than income distribution when it comes to inequality: the top 1% of the wealthy own about 35% of it, and the top 20% own about half. It's slightly less unequal in terms of net worth (because lots of people have home equity) than it is for financial wealth, but either one is sufficient to roundfile his whole thesis. Yes, based on analysis of wealth, more of it is concentrating in the upper levels and yes, there is less distributed among us proles in the lower 80% as time goes by. The rich are getting richer, and the wealthy are getting wealthier.
"For example, from 2000 to 2009, inflation-adjusted household income fell 4.5 percent, but consumer spending increased 22.4 percent. This raises an obvious question: How did people dramatically increase spending on shrinking paychecks? The answer is: They didn't."
Hey, I wonder if anything else changed in 2000-2009! I won't keep you in suspense. Among other things, household debt increased in this timeframe by about 12% per year, while income fell as stated. I'm sure there's a relationship to spending here somewhere.
"They did increase spending. But paychecks weren't shrinking. Instead, the number of individuals per U.S. household was shrinking, which lowered the average. Real disposable income, which is essentially total after-tax income, rose 25.2 percent from 2000 to 2009. At the same time, however, households got smaller, as more people divorced, or rejected or delayed marriage. So total spending went up, while average household income - due to the larger number of households - went down."
I'm the last person to buy into the idea that economics is a field with engineering precision and scientific understanding, but we can still endeavor to put useful numbers to this sort of thing for the purposes of estimates, and some of these institutional numbers are publicly recorded and pretty easy to come by.

Households only shrank a little in this time period, but there's definitely been a downward trend since the 1960s. Cunningham is probably tooting some social dogwhistles here, but the down-slope has correlated pretty strongly with decreased fertility rate, and the smaller households are largely a result of there being fewer children in all, and more people living alone (e.g.). We can look at this a little more objectively using useful variables such as the dependency ratio, which is the ratio of the too-young and/or too-old (depending on how it is broken down; the latter usually trotted out for Social Security scare stories, but the former is more relevant to household size) compared to people of working age, and this has also declined in the cited time frame, most of the decline coming from, again, fewer children. We can also look at the participation rate, which is the number of people of working age that are in fact working. Eyeballing the graphs and applying some simple math gives relevant ratios:

2000: 1.1 children per worker
2010: 1.3 children per worker

So people are, on average, supporting more kids, contrary to Cunningham's statement, but hold the phone for a minute here... The trend since the sixties has been fewer children. If you click on the chart for participation rate, you'll note another awesome economic revolution that happened in about 2000, when the bubble burst: all of a sudden there turned out to be a lot more people than jobs. Household size shrunk slightly, but the fact that the number of available jobs dried up affected the number more.

[Most of the post-1960 growth in the participation rate is due to women entering the workforce, which no doubt has contributed to the decreasing fertility rate as well. But these two trends before 2000 (not to mention extant retirement schemes since 1935 or so) have overall been to drastically reduce the number of dependents per worker. Cunningham is, of course, prevaricating here in a general sense, even if he's picked out a little patch on which he can daub on some bullshit. Fewer dependents from 1960-2000 probably did help people feel richer though, but I don't think the increased participation rate did. Are you richer when you need two incomes to do what your dad managede with one? (If you are a woman, you may indeed be freer.) This is a reason that household income is relevant.]
"The problem is that we are not told that the top 20 percent of households includes four times as many workers as the bottom 20 percent, and nearly six times as many full-time, year-round workers. Knowing this makes a lot of difference in interpreting the original statement."
People in lower quintiles have fewer earners per household, but they also have fewer children to support. The ratios of earners per household are pretty shocking, really. The summaries in the Wiki article are consistent with all of the above figures. And what exactly do they prove? Rich households, we are pretty sure from experience and data, do not tend to have six earners in them, not without some hefty violations of child labor laws, nor are they comprised of sprawling complexes filled with in-laws and cousins, or at least that's not the sort of arrangement that pops up on the lifestyle shows. Rich households (obviously) top out at a little less than two earners per home. You have to conclude that poorer households have not only a significant fraction of zero income people, but to approach four-to-one, over half of them need to have no earners in them at all. And among those working in the bottom 20%, most of them are only doing it part time. This seems to be a horrifying reason that they're poor, and not really a point in favor of the awesomeness of the rich. I mean, it's another way of looking unemployment—of course the lowest income group is going to include all the people who have zero income—but these numbers are telling us that that comprises a hell of a lot of people. Is this sinecured fucker really ginning up contempt for all those lucky duckies with no jobs at all? (Yes.) And it's clear from the same data that working part time isn't going to do a damned thing for you either.

And needless to say, the income that the quintiles receive is well-published, and only the top two really have made gains, before or after taxes, in forty years. The fact that the lowest quintile is largely unemployed does not refute this.
"Yet, economic mobility is a characteristic that helps differentiate the United States from many other countries. Between 2004 and 2007, for example, roughly a third of the households in the lowest income group moved up to a higher income group, according to the Census Bureau, while roughly a third of the households in the highest income group moved down."
Sure, income mobility is a great thing in this country. The fact that it's less great than it used to be, or is less great than in other countries (even historically aristocratic ones), well, we peasants should shut up and be thankful for what we've got.


And look, I'm sorry, but that had to be exorcised. It used to be even longer. If I am so motivated, I'll take out the hyperbole and send it as a letter to the editor to be unpublished. Here's the part that's getting me though, the actual point if you want to call it that. I can understand why people employed by the AIER write and publish this sort of crap—they're paid to, directly, by people who have the wealth and power they're apologizing for—but I'm disgusted by people who continue, despite evidence, to lap it up and sell it on the retail market. You'd think that anyone above drinking age might have noticed some general economic trends by this point, and yet the entire News-o-verse has already let go of Two Thousand Eight. I don't expect Truth to be folded up and handed to me, but a little more than a thin gruel of shallow marketing disguised as evidence would be okay. Hell, just losing the certitude would be a plus, especially when you're peddling the same crap you were two decades ago, during which time the wealth community has gotten pretty much everything it's asked for. At least this Cunningham guy's an obvious whore, obviously shilling for interests that aren't mine. What the hell is the editor's excuse? What power is he speaking the truth to?

The game I usually see played with things like this (and that I am playing here too) is one of competing narratives, of different takes on the same data. Commenters like me don't usually angle straight for the lie, and call it. We like to see the twists of truth instead, different takes on it, and target a rebuttal that harvests the seeds of refutation that the writer himself sowed, and there's plenty of that here. (Maybe this thought would be better spared for the next someone who is inclined to fact-check a Megan McArdle column or something, but whatever.) But Steven Cunningham is doing more than misleading with statistics. When he poses the idea that the rich are getting richer and leads with "it isn't true," it's baldfaced.

Thursday, March 24, 2011

Review: Axis, by Robert Charles Wilson

Axis is the sequel to Spin, which I (much more succinctly than usual) enjoyed. A worthy followup I suppose, but I the enjoyment this time around was somewhat less. (Spin was well-received and won some awards, and maybe Wilson worked fast to sell a few books while his brand was hot.) I found the characters likeable, but not especially compelling. Or rather, I found that the intersting people were the ones who spent most of the novel offscreen while protagonist Lise Adams, in her effort to find out about the disappearance of her father, gets turned into too many expository circles for the purposes info-dumping. Wilson does a lot of telling of the background, stuff which, in other novels I remember, he was decent enough to get into a story of discovery or else just remain decently unanswered. It might be because this version has a substantial backstory that it needs to submit to the reader, in order to get to the questions of What's Really Happening down there with the deep magic.

He gave himself a lot of good stuff to work with. There's a sudden injection of the world into a universe a couple billion years older, and populated a bit more completely by a thin, slowly expanding skein of self-replicating hardware. There's the big puzzle of its baffling, disconnected attention to human society. There's humanity's brash attempts to understand it, a sort of self-exiled biochemical Manhattan project with human subjects. There's the boy Isaac (said subject) and Sulean Moi, an unwelcome observer in the compound getting on as outcasts' outcasts. There's competing ideas of human anthropological development in different circumstances. The polyglot colonial landscape that set the detective and chase scenes is well-conceived too, but, while not especially horrible, that particular plot was only just enough to keep the pages turning until the last quarter of the book, where the characters finally come to face the strangeness. I could have done with more Sulean and Isaac, more evidence of crazed obsession among the true believers. More internal conflict needed here please, and less 'splainin.

And while I liked the large questions that Wilson plays with, a little bit more philosophical meandering on the ideas wouldn't have upset me too much either. I mean, he's basically, and later explicitly, offered a plausible--on a science-fiction level--conception of what a powerful and indifferent god might actually look like. And it's just a damn cool idea: a universe that's full of designed machines that (very slowly, and with the aid of some fourth-dimensional physics without which they couldn't cover much volume (these don't even get a handwave, which is just as well)) reproduce and expand and communicate with each other among the cold vast reaches of space. Is it evolutionary and insensate, the characters ask, or is it thinking out there, mimicking meat heads on an impossible scale? Does it live and die too, is it finite? The manifestations of the big celestial mind, the behavior of its "cells", are pretty cool too, machine-like, life-like, weird, and pretty innovative when seen from the ground. It's use for civilization, we learn, is to grow itself. Biological societies at a certain state of development will eventually launch hardware into the void, and when they encounter evidence of that network, will want to swap collected information on that scale too. Maybe, like our jelly life, the cosmic mind is out to create pockets of information in eternal defiance of the second law.

It's likely that many of Wilson's novels (well, that I've read) could get retconned back into this same universe. The themes presented here are definitely his usual schtick, which I've always liked. The couple requisite moments of sentimentality are not forgotten, finding compassion in that weird juxtaposition of the cosmic against the human.

Sunday, March 06, 2011

In between the bright lights and the far unlit unknown...

You know, there's a pretty good incentive to get that current turgid blob of a post off of the top of the queue and try to write something which, at least for me, passes as entertaining. Well, better luck next post. That I'm feeling somewhat less than entertaining is obviously part of the problem, and my mood these last few weeks has been anchored by the disheartening realization of the mutually exclusive financial realities of cultivating my own damn garden and giving my children future opportunities to do the same. If only...blah blah blah, it's not like I haven't been over it before. And anyway, gardening has its own share of commitment and frustration. Even in an ideal world of unfettered self-actualization, there it's hard to figure out what your passions and skills are, and in this bizarre world where livings have to be made, then good luck on that passion, if you have one, keeping you fed. At thirteen years old? Did you know what you wanted to do at thirteen?

I'm not unaware that I'm talking about problems of relative privilege. What I'm really doing is pissing and moaning about the governing social paradigm (handy concept, that) which for all of its papered-over inequity, evil, structural inequality, and destructiveness has in this country at least managed to foster a middle class full of crackers like me for almost 80 years now. Lots of different treadmills, many of them decently upholstered, and even those of us without connections have some options about which one we hop on, and the sooner we decide the sooner we can put in a down payment.

Okay, at thirteen I did have a vague idea, if not a passion. I'm thinking that I must have seemed like a promising kid, and god knows that my parents tried to keep doors open and encourage things. When I was little, I alternatively wanted to be an astronomer or a chef (I was joking to a friend last month that I split the difference and went into chemistry). Mom cooked a lot at home, so that makes sense, but I don't where the science bug came from. And all these years later, I am acutely aware that there's something that keeps me apart from passionate scientists too, and that I'm a mediocre performer, and I have reservations about role of the field and its future, but I don't know what the hell else I'd do (although doing honest work with a science hobby seems like it could be more rewarding than the current arrangement). That general orientation helped my parents do what they could to get things started in my life. Strange to think of it that way, but I was pretty lucky for that.

My daughter will be entering high school next year. She's already presented with a choice between technical and academic programs, and these too are mutually exclusive. The tech ed seems like a good program, but it definitely takes her off the academic path. If she takes the culinary arts training, there aren't, at a minimum, any advanced placement courses available (I think AP is a scam, but as a synonym for "more challenging classes", this is annoying), and by junior or senior year, it's special alternative tech courses, a recent innovation, thanks to Massachusetts' graduation requirements. The kids, the instructor told me, tend to go on to culinary college, which seems to me like a strange metric. While I'm happy that cooking is taken as a serious vocation in this country now, it's disappointing to be reminded how far we're down the Player Piano timeline. I mean, that's what sets trades apart, right? Learning by doing, and a tradition of apprenticeship? Do you need that cooking doctorate before you take the $4/hr dishwasher job to get started in the actual industry? (I bet the chemistry requirements would be pretty cool though.) On the other hand, assuming the normal vocational path is still available, then I'd be happy to support that route too (with the fortune I save an added bonus). Adding to it all, there is my opinion that general high-level education is good for humans, and the way we tend to squander it when we're young, well, that can be too. (Good times.) But if she's got a real passion there, then she's ahead of the game.

And speaking of paradigms, I wish I could shake the sense that this is all about picking teams for the next generation's class structure. There are lots of ways to live even within the system, and since my town offers so few examples of them, we (by which I mean my wife) have doing a lot of research for enrichment programs for young people. We've just enrolled Junior for what is basically an educational summer camp, which, at least as far as I can gather from the brochure and the orientation seminar, is totally awesome, with not only classes and workshops, but also optional cruises and outings and all kinds of genuinely fun activities—stuff I wish I had some excuse to do as an adult. It's not exactly the Bohemian Grove, but there's a strong networking component here, and there's much they're encouraged to do together in a variety of overlapping groups: let's forge bonds among the kids labeled up-and-comers, build up those intra-class intangibles. A stronger experience is expected with those that supply more cash, and I expect my little girl might find a small cultural divide between her and the residential students.

The administrator of the program gave us parents a short presentation last week, talking how much more satisfying (and easier) this job is for him than actually teaching middle school. Well, sure, when you run a word-of-mouth sort of program among the helicopter set, and when you keep the riffraff out with a stiff $2500 minimum requirement for enrollment, no credit cards, thanks, then it probably makes it all a little easier. The imagination and enthusiasm is impressive so far, don't get me wrong, but as for the kids without these opportunities or motivations, then they're left to the same devices as before.

And for all this, the course themes, all these new opportunities, they're are all targeting the petit-bourgeoisie. They have cooking, woodwork, art and music, production, sports, along with some business- and law-themed classes, and a smattering of medical industry sorts of enrichment. Some themed chemistry too, I note approvingly. Not a lot of financial analysis or "leadership" training. And it's fine, I guess, from one point of view, as these are all things that people do in the part of working America that doesn't have it too easy or too hard. And it's a fuller set of ideas than we've been able to showcase so far. Welcome to the middle class, kiddo. I'll do my part and start getting used to the crippling payments that go along with your indoctrination.

The future looks vast from far away, and has a habit of shrinking as you meet it. You find the wide open road gets narrower as you walk , and its direction depends on many more people than you. It's great to be young, to be starting out on the journey. I hope my daughter can find more paths than I've been able to show, wish I were better at pointing them out.