Some People Got Lost in the Flood
So your editor has Randy Newman as this week's soundtrack. **Editor's note: The video embed has been removed. Sadly in our initial pass, we missed that the last 45 seconds of this video delves into conspiracy territory. It is otherwise one of the better ones in terms of compelling images and sound. If you watch, be ready for the Illuminati Easter egg at the end.
It has been ten years since Hurricane Katrina devastated the Gulf states and a levy failure flooded New Orleans, as reported in this amazing New York Times' interactive. In all, the storm left nearly 1,900 people dead (for a magnitude comparison, that is over half the number of people who died in the 9/11 attacks). Sadly, your editor got a front row seat for the political stupidity (Congress) that followed the catastrophe with finger-pointing at the people who stayed at home in the storm's path.
In all, Katrina became a symbol for American poverty worldwide. Over at Brookings, Alan Berube and Natalie Holmes break down why some many of the city's most vulnerable were left behind:
Our analysis in 2005 found that among the 50 largest cities in the United States, New Orleans before the storm had the second-highest share (behind only Fresno) of its poor residents living in neighborhoods of extreme poverty, where more than 40 percent of individuals had incomes below the poverty line. We suggested that, in addition to suffering long-term effects on their well-being from living in such neighborhoods, residents at the time of the storm may have been cut off from information about the scale of the impending disaster, from private transportation that could help them evacuate, and from social networks outside the city that could provide them shelter and assistance.
Check out this chart from the Globe and Mail showing that whites are slightly wealthier and blacks slightly poorer in the city than they were a decade ago:
Also in the NYTimes, Gary Rivlin looks at the fate of a black-owned bank and why so many black residents are still basically underwater:
McDonald picked up a black marker and drew a line down its middle. He pointed to the western half. ‘‘That’s the New Orleans you know,’’ he told me: the French Quarter, the Superdome, the Warehouse District, the Garden District, St. Charles Avenue. Those areas had largely remained dry. Then he pointed to the eastern half of the map. ‘‘Where you saw water up to the rooftops?’’ he said. ‘‘That’s where most of the city’s black people lived. That’s where my customer base lived. My employees lived out there.’’ McDonald, who was only a couple of weeks from turning 62, shook his head and gave a rueful laugh. ‘‘Hell, that’s where I lived.’’...
You could say Alden McDonald triumphed over adversity, too. Today he runs the country’s third-largest black-owned bank, according to the Federal Reserve. But despite his personal success, McDonald is still focused on the eastern half of that map that he marked up at our first meeting. There, the recovery is far from complete — and in some areas things are worse than before the storm.
Meanwhile, over at the LA Times, Matthew Fleischer argues post-Katrina New Orleans still suffers from magical thinking:
Ten years after Katrina, New Orleans’ levee system has been rebuilt and reinvented — as has its failing school system. It’s safe to say the city is undergoing an economic renaissance. Hollywood has arrived in force, with massive production budgets in tow, and a new generation of young outsiders has stormed the remaining stock of shotgun houses that Katrina failed to destroy...
By most accounts, many of these newcomers are far more engaged than I ever was when I first showed up in New Orleans nearly two decades ago. That said, after 10 years of honest soul-searching, it’s hard not to suspect a new layer of magical varnish is beginning to gloss over New Orleans’ enduring frailties.
Despite all its storm-protection improvements, New Orleans still isn’t safe. Its new armaments are stronger than they were in the run-up to Katrina, but they are built to withstand only a 1-in-100-year storm (Katrina was a 1 in 150). Without massive coastal restoration, that level of protection likely will erode even further as Louisiana’s coastal wetlands dissolve into the Gulf of Mexico. Violent crime is up, and despite earnest attempts at reform, the city’s crushing poverty has been pushed further to the margins by a wave of gentrification.
This academic paper from Alice Fothergill looks at socioeconomic status and natural disasters:
The review illustrates how people of different socioeconomic statuses perceive, prepare for, and respond to natural hazard risks, how low-income populations may be differentially impacted, both physically and psychologically, and how disaster effects vary by social class during the periods of emergency response, recovery, and reconstruction. The literature illustrates that the poor in the United States are more vulnerable to natural disasters due to such factors as place and type of residence, building construction, and social exclusion. The results have important implications for social equity and recommendations for future research and policy implementation are offered.
There are numerous efforts to protect people from climate change, which according to the World Bank is already being felt by the world's poorest people and is complicating efforts for poverty alleviation:
The photos we see of crops withering in fields from lack of rain or of homes splintered by a storm provide only a glimpse of the damage climate change can do to the world’s poor. Peel back more layers, and the interplay between poverty and climate change becomes more complex.
The herder who loses one or two cows to famine amid a drought may feel he has little choice but to sell other livestock at very low prices – the only prices he can get – to keep his family fed. The family may survive the crisis, but they will have lost productive economic assets they relied on, assets that had paid for the children to attend school and were helping the family move out of poverty. The children lose the advantage of an education, the herder has lost an economic base to build from, and he becomes less likely to take risks that could increase his income. Escaping the poverty trap becomes more difficult, and the effects can extend for generations.
In June, Pope Francis took the unprecedented step of issuing a sweeping encyclical on the environment:
Instead of resolving the problems of the poor and thinking of how the world can be different, some can only propose a reduction in the birth rate. At times, developing countries face forms of international pressure which make economic assistance contingent on certain policies of ‘reproductive health.’...
To blame population growth instead of extreme and selective consumerism on the part of some, is one way of refusing to face the issues.
Over at Gawker, Joseph Stiglitz is still talking inequality and says it is at "corrosive" levels:
We’ve reached a level of inequality where it’s unambiguously clear to me and to most observers that it’s interfering with our economic performance. It’s having a corrosive effect on the way our democracy works. It’s having a corrosive effect on the way our society functions. So we’re in the bad regime. We’re facing very large costs. The other question that you’re asking is, “Is there a tipping point, a dynamic where things get more and more unequal and increasingly hard to pull back?” I would say yes, and what that point is depends on a number of factors, including the political landscape.
On Wall Street he adds:
[One] way in which the banking sector contributes to inequality is a more general effect that it has on the function of our economic system. It helps encourage short-termism, which in turn leads to lower investments in people. Studies we did at the Roosevelt Institute showed that the financial sector—the standard story is that it brings money from households and gives it to corporations. In the last 10-15 years, it’s been taking money from corporations and giving it to households—to rich people. So it’s been disintermediating, not intermediating.
And speaking of Wall Street, what do this week's crazy market swings mean for inequality? Check out, this Wall Street Journal report:
From the 1980s to the peak of the dot-com bubble, families of all income were increasingly likely to own stocks, either directly or through retirement accounts. From 2001 to today, however, ownership of stocks has only increased among the top 10% of families. Families at all other income levels have been getting out of the market entirely. That may have protected them from brief losses in today’s drop, but also means they missed out on the gains from 2009 onward. (Even at today’s worst moment, the Dow was nearly 9,000 points higher than the levels plumbed in 2009.)
That means today the losses fall on higher-income families, more so than when the dot-com bubble burst in 2001 or when stocks fell in 2007 and 2008 during the financial crisis...
The economist Frank Stafford at the University of Michigan has found that when stocks crash, those with less education and smaller balances are the most likely to sell—locking in losses. Households with more wealth and more education are likely to buy during declines and thus experience gains when the stocks recover.
People, such as the Guardian's Mike Daisey, are still talking about "Amazon's brutal" work culture and what it means for workers:
The question we refuse to ask is: why have we repeatedly heard stories about Amazon’s harmful culture without any of the criticisms sticking? And the answer is that right now, we believe in the marketplace more than we believe in human beings.
The fact is that Amazon’s stock is flying high, and nothing about these revelations will pull it down. The latest version of late-stage, post-national capitalism doesn’t believe in the value of work except as dictated by a marketplace, and with a whole planet to play with, corporations can afford to spread their work out onto people you will never see, never think of and never hear from.
It doesn’t matter if this conception, which prioritizes profits over workers, makes you feel guilty as an individual or not, because at the end of the day you’re human. The entities we’ve created that organize and execute inhumane work systems don’t actually have feelings. Amazon isn’t exploiting its employees, both white and blue collar, until they burn out; it is churning through an indiscriminate biomass, which is in fact us. We are its fuel.
A previous generation of Americans could count on a social compact; if you stuck loyally by a company, it would stick by you, providing you with a good job and a decent retirement. Long ago, loyalty fell by the wayside, and longtime employees learned that their loyalty meant nothing when companies “downsized.”
Amazon — and, to be sure, any number of other companies as well — has taken this idea to its logical extreme: Bring people in, shape them in the Amazon style of confrontation and workaholism, and cast them aside when they have outlived their usefulness.
For a data-driven executive like Bezos, this kind of culture is appealing, because it maximizes the amount of work a company can wring from fundamentally fungible human beings. The question Amazon’s culture raises is whether it is an outlier — or whether it represents the future of the workplace.
Over the Economic Policy Institute, a new report says trade deficits are to blame for U.S. manufacturing losses:
At CFR's Renewing America blog, economist Michael Spence looks at jobs, trade and automation:
The organizing principle of global supply chains for most of the post-war period has been to move production toward low-cost pools of labor, because labor was and is the least mobile of economic factors (labor, capital, and knowledge). That will remain true for high-value-added services that defy automation. But for capital-intensive digital technologies, the organizing principle will change: production will move toward final markets, which will increasingly be found not just in advanced countries, but also in emerging economies as their middle classes expand.