The Less Finer Points of Politics
For this week's installment of the economic forces continuing to impact this election cycle, we start with this New York Magazine piece from Andrew Sullivan who says that tyranny could find a foothold in the United States by those who feel left behind:
It’s a period in which we have become far more aware of the historic injustices that still haunt African-Americans and yet we treat the desperate plight of today’s white working class as an afterthought. And so late-stage capitalism is creating a righteous, revolutionary anger that late-stage democracy has precious little ability to moderate or constrain — and has actually helped exacerbate.
For the white working class, having had their morals roundly mocked, their religion deemed primitive, and their economic prospects decimated, now find their very gender and race, indeed the very way they talk about reality, described as a kind of problem for the nation to overcome... A struggling white man in the heartland is now told to “check his privilege” by students at Ivy League colleges. Even if you agree that the privilege exists, it’s hard not to empathize with the object of this disdain. These working-class communities, already alienated, hear — how can they not? — the glib and easy dismissals of “white straight men” as the ultimate source of all our woes.
In response to this, Slate's Jamelle Bouie says pundits should be careful about conflating working-class and white-working class:
The American working class has changed. A lot. In the collective mind’s eye of political pundits and observers, the “working class” is what it was a generation ago: largely white and mostly male, with a heavy presence in trades and factories. There are still Americans who fit this description. But they’re also a shrinking portion of the working class, and the attention they receive perennially from political observers—many of whom see them as the pivot around which American politics turns—is entirely out of proportion to their declining numbers...
Much of this “new” working class, including a substantial minority of its whites, leans Democratic; they backed Barack Obama in 2008 and 2012, and many support Hillary Clinton in this year’s Democratic primary. They aren’t alienated by movements for immigrant rights and police reform; they’re sympathetic. They’re not just the beneficiaries of the liberal push for greater inclusion; they’re often the people driving it. These Americans, women in particular, are an integral part of the new liberal majority.
In this fascinating post from FiveThirtyEight, we get analysis on just how different U.S. demographics are when compared with the 1950s version folks like to sometimes opine on. Check out these charts:
There are lots of reasons to care deeply about places that are demographically different from today’s America: Some of those places may turn out to be bellwethers for a future America that will be older, more educated and more racially and ethnically diverse than today; and some of those places are especially deserving of public attention and investment because they worse off than most other places.
But if you’re trying to get outside of your bubble and get in touch with “normal America,” skip the small towns of your actual or imagined past and instead start with New Haven or Tampa.
FiveThirtyEight's Nate Silver also looks at the breakdown of voters by income and how they have supported individual candidates, and questions the notion that there is a working-class revolt inside the GOP:
Many of the differences reflect that Republican voters are wealthier overall than Democratic ones, and also that wealthier Americans are more likely to turn out to vote, especially in the primaries. However, while Republican turnout has considerably increased overall from four years ago, there’s no sign of a particularly heavy turnout among “working-class” or lower-income Republicans. On average in states where exit polls were conducted both this year and in the Republican campaign four years ago, 29 percent of GOP voters have had household incomes below $50,000 this year, compared with 31 percent in 2012.
Brookings' Alice Rivlin laments the state of the economy, which she blames on our collective inability to move forward on policies we mostly agree on that would help:
I believe we have at our disposal a set of economic policies that could command broad public support and could move us toward a higher level of sustainable prosperity in which all groups share. These policies would enable us to continue being the world’s leading economy power. We are that now, but we could be doing much better and leading the world to shared prosperity.
I am not talking about wild new policy ideas, although we ought to be open to those. I am talking about tried and true policies for growing the economy faster—such as, modernizing infrastructure, funding science and skill development—as well as tax and entitlement reforms to control the growth of long-term debt.
In general, the Economist finds that though this may be the new robber baron era, crony capitalism may be taking a turn for the slightly better:
Cartels, monopolies and lobbying are common ways to extract rents. Industries that are vulnerable often involve a lot of interaction with the state, or are licensed by it: for example telecoms, natural resources, real estate, construction and defence. (For a full list of the industries we include, see article.) Rent-seeking can involve corruption, but very often it is legal...
The rich world has lots of billionaires but fewer cronies. Only 14% of billionaire wealth is from rent-heavy industries. Wall Street continues to be controversial in America but its tycoons feature more prominently in populist politicians’ stump speeches than in the billionaire rankings. We classify deposit-taking banking as a crony industry because of its implicit state guarantee, but if we lumped in hedge-fund billionaires and other financiers, too, the share of American billionaire wealth from crony industries would rise from 14% to 28%. George Soros, by far the richest man in the hedge-fund game, is worth the same as Phil Knight, a relative unknown who sells Nike training shoes. Mr Soros’s fortune is only a third as large as the technologyderived fortune of Bill Gates.
Finding the New Sharing Quotient
Surprise, an Italian court found that stealing food is not illegal if you have no other way to feed yourself, overturning the six-month sentence handed to a man for stealing some some sausage and cheese:
“For the judges, the right to survival has prevailed over the right to property,” Massimo Gramellini, an editor at La Stampa newspaper, wrote in an opinion column (link in Italian), adding the court’s judgment “reminds everyone that in a civilized country, not even the worst of men should starve”.
You might be interested in this video interview with Steve and Jean Case of the Case Foundation discussing impact investing and social entrepreneurship:
This interview with the Financial Times is featured in part of a five-part series by Sarah Murray on foundations. Heron is mentioned in part two discussing impact investing. You also might be interested in this Alliance Magazine interview with Stephen Heinz of the Rockefeller Brothers' Fund on their decision to divest from fossil fuels.
As philanthropists, we should recognize that we don’t hold transformative solutions ourselves, and we never will. The most radical way to advance meaningful change is to shift economic, social and cultural power to those who don’t have it. We can do that by truly listening to and centering the perspectives and priorities of people who are the most marginalized. And by providing flexible, long-term funding that allows change to grow from the bottom up, rather than short-term, project based grants that assume change is directed from the top down. Progress should be less about “innovation,” and more about a radical trust in the idea that people know what’s best for their own lives, and should have the power to pursue it.
In this sponsored-content from JP Morgan Chase, Politico looks at the role small businesses play in the economy and the Community Development Financial Insitutions that help them get a leg up:
Beyond the crucial issue of equal opportunity, there are important economic reasons to work against that disparity. Small businesses create about two-thirds of all new jobs in the private sector, and a lot of those jobs are in businesses with fewer than five employees, such as local dry cleaners, hairdressers, shoe stores, and diners. These so-called “micro businesses” carry outsized economic weight. If only a third of them hired a single person, according to one study, there would be full employment in the U.S.—and that would set off the virtuous circle in which increased consumer spending leads to more and better businesses and stronger communities, the bedrock for economic expansion.
That’s why “micro loans” to aspiring small-business entrepreneurs who don’t yet qualify for traditional bank loans have economic and social impact far beyond their face value.
In this multi-part series, NPR looks at school funding and why it matters:
Across the country, schools in low-wealth districts face tough choices. Not only do they struggle to raise money locally, but many saw drastic cuts in state funding during and after the Great Recession.
According to this study from the Center on Budget and Policy Priorities, at least 31 states spent less money per student in 2014 than they did in 2008. During that time, the study found, local funding also dropped in 18 states.
To make ends meet, schools are cutting back everywhere they can. And some are hitting bone.
And now, we return again to the discussion of the middle class and the ability to make ends meets. This week Rebecca Rosen weighs in on how parents struggle to do better for their kids:
It’s all too clear why parents will spend down their last dollar (and their last borrowed dollar) on their kids’ education: In a society with dramatic income inequality and dramatic educational inequality, the cost of missing out on the best society has to offer (or, really, at the individual scale, the best any person can afford) is unfathomable. So parents spend at the brink of what they can afford. By contrast, non-parents are far more likely to actually build up savings. (In cases where parents do manage to find affordable housing in a district with good-quality schools, it can make all the difference.)..It’s possible to imagine a country where the schools are good everywhere and prosperity is widespread. In such a country, parents don’t pour their resources into maximizing their kids’ educational quality, because their kids will have basically the same outcome anywhere. That’s not the country America is.
Can college become the great economic leveler it once was? In this two-part series in the New York Times, Tina Rosenberg looks at why colleges are increasingly failing to enroll more low-income students:
Enrolling poor students is costly, especially because each scholarship student will take the place of someone who could pay in full. The financial crisis of 2008 sliced into endowments. States are cutting public schools’ budgets.
In addition, the money colleges do have increasingly goes to students who don’t need it. Private colleges engage in bidding wars for talented wealthy students. Burd writes that the same thing is happening at public colleges, where tuition is higher for out-of-state students, and bidding wars for them gobble up a growing percentage of aid. While this crowds out low-income students, and many colleges say they would like to stop, they do not because their competitors are still doing it.
Drivers who rely on Uber for their main income are more likely to be poor, and generally those people relying on labor platforms like Uber make less than income derived from capital-based platforms like AirBnB, reports Quartz:
In the New York Times, Campbell Robinson and my former colleague Coral Davenport look at what they say are some of the first U.S. climate refugees:
The Isle de Jean Charles resettlement plan is one of the first programs of its kind in the world, a test of how to respond to climate change in the most dramatic circumstances without tearing communities apart. Under the terms of the federal grant, the island’s residents are to be resettled to drier land and a community that as of now does not exist.