Let's start with a cartoon:
In the New York Times, David Castillo and William Egginton discuss how the fascination with vampires and zombies reflects a collective feeling about capitalism:
If the modern vampire may have functioned as an apt metaphor for the predatory practices of capital in colonial and post-colonial societies, today’s zombie hordes may best express our anxieties about capitalism’s apparently inevitable byproducts: the legions of mindless, soulless consumers who sustain its endless production, and the masses of “human debris” who are left to survive the ravages of its poisoned waste.
Perhaps our fixation with images of the zombie apocalypse is ultimately tied to the conviction that there is no possible alternative to capitalism as a worldwide economic system, paired with the realization that the logical evolution of global capitalism leads to nothing but destruction. As the philosopher Slavoj Zizek has said of our love of films depicting cataclysms of Earth-threatening proportions, we have come to a time when “it’s much easier to imagine the end of all life on Earth than a much more modest radical change in capitalism.”
If you read one piece in full this week, read this Michael Sauga piece in Spiegel Online discussing what he says is a crisis of "zombie capitalism" six years post financial crisis:
A new buzzword is circulating in the world's convention centers and auditoriums. It can be heard at the World Economic Forum in Davos, Switzerland, and at the annual meeting of the International Monetary Fund. Bankers sprinkle it into the presentations; politicians use it leave an impression on discussion panels. The buzzword is "inclusion" and it refers to a trait that Western industrialized nations seem to be on the verge of losing: the ability to allow as many layers of society as possible to benefit from economic advancement and participate in political life... In this sense, the crisis of capitalism has turned into a crisis of democracy. Many feel that their countries are no longer being governed by parliaments and legislatures, but by bank lobbyists, which apply the logic of suicide bombers to secure their privileges: Either they are rescued or they drag the entire sector to its death. It isn't surprising that this situation reinforces the arguments of leftist economists like distribution critic Thomas Piketty. But even market liberals have begun using terms like the "one-percent society" and "plutocracy." The chief commentator of the Financial Times, Martin Wolf, calls the unleashing of the capital markets a "pact with the devil." They aren't alone. Even the system's insiders are filled with doubt. There is the bank analyst in New York who has become exasperated with banks; the business owner in Switzerland who is calling for higher taxes; the conservative Washington politician who has lost faith in the conservatives; and the private banker in Frankfurt who is at odds with Europe's supreme monetary authority.
They all convey a deep sense of unease, and some even show a touch of rebellion.
In this video, Intelligence Squared squares the Economic Policy Institute's Elise Gould and venture capitalist Nick Hanauer against the American Enterprise Institute's Edward Conrad and the Manhattan Institute's Scott Winship on whether income inequality is destroying the American dream: http://youtu.be/3GHKp6tPsEY In this New York Times Room for Debate, six experts weigh in on whether the Fed should take a role in addressing inequality. Here's what Stanford's Anat Amanti had to say:
The Fed continues to fail to counter flawed incentives in banking with effective regulation, and this failure endangers us and distorts markets. For example, it allows banks to borrow excessively, which biases them in favor of risky, even wasteful, investments. Regulations also use a system of so-called risk weights that tends to bias banks against making business lending and instead gives them incentives to favor risky investments viewed by regulators as safer than they are, such as highly rated securities, or to lend to governments.
Meanwhile, over at the Nation, Shawn Van Valkenburgh says a rising "corporate myth of spirituality" is just another set of memes helping drive massive inequality:
We might call this a belief in spiritual meritocracy. The implicit idea here is that our professional and financial growth depends on our spiritual merit, not on the presence or absence of social structures and biases. We are told that if we are grateful enough, if we put enough happy energy into the universe, then we will be rewarded with material wealth and earthly pleasures. (Think “The Secret.”) We are told that we actually can have it all: a rich spiritual life, leading to a rich material life. Of course, this is just the new-agey equivalent of the same old meritocracy myth that’s been floating around America since at least the 19th century; that in the land of the free, anyone can become rich if they just work hard enough, if they use the right brand of elbow grease... In other words, rather than helping yogis become more socially conscious spiritual warriors, Buddhist meditation can get hijacked by the status quo. It only brings us a shallow peace that makes us less likely to question what counts as normal.
Check out this cartoon from David Fitzsimmons:
In this in depth Politico article, Sarah Varney explores why the 2010 health reform law has failed in Mississippi, arguably the country's poorest state:
The first year of the Affordable Care Act was, by almost every measure, an unmitigated disaster in Mississippi. In a state stricken by diabetes, heart disease, obesity and the highest mortality rate in the nation, President Barack Obama’s landmark health care law has barely registered, leaving the country’s poorest and most segregated state trapped in a severe and intractable health care crisis. Even the law’s vaunted Medicaid expansion, meant to assist those too poor to qualify for subsidized private insurance, was no help after the U.S. Supreme Court ruled that states could opt out. Bryant made it clear Mississippi would not participate, leaving 138,000 low-income residents, the majority of whom are black, with no insurance options at all. And while the politics of Obamacare became increasingly toxic, the state’s already financially strapped rural hospitals faced a new crisis from the law’s failure to take hold: They had been banking on newly insured patients to replace the federal support for hospitals serving the uninsured, which was set to taper off as people gained coverage. Now, instead of more people getting more care in Mississippi, in many cases, they would get less.
Peter Beinhart in the Atlantic looks at voter ID laws, which he says act as new poll taxes threatening the ability of the poor to vote:
Voter-identification laws, in particular, act as new form of poll tax. After Texas passed its voter-ID law, a study found that Texans who earned less than $20,000 per year were more than 10 times more likely to lack the necessary identification than Texans who earned more than $150,000. On the surface, this discrepancy might seem possible to remedy, since courts have generally demanded that the states that require voter identification provide some form of ID for free. But there’s a catch. Acquiring that free ID requires showing another form of identification—and those cost money. In the states with voter-ID laws, notes a report by the Brennan Center for Justice at NYU Law School, “Birth certificates can cost between $8 and $25. Marriage licenses, required for married women whose birth certificates include a maiden name, can cost between $8 and $20. By comparison, the notorious poll tax—outlawed during the civil rights era—cost $10.64 in current dollars.”
To make matters worse, roughly half a million people without access to a car live more than 10 miles from the nearest office that regularly issues IDs. And the states that require IDs, which just happen to be mostly in the south, also just happen to have some of the worst public transportation in the country.
Four conservative leaning states will vote Tuesday on ballot initiatives to raise the minimum wage reports the Huffington Post:
Republicans in Congress may be in no mood to hike the minimum wage, but four conservative-leaning states are poised to do it on their own next week. Initiatives to raise the minimum wage appear on the ballot in Alaska, Arkansas, Nebraska and South Dakota on Tuesday. Alaska, Arkansas and South Dakota all have Republican-controlled legislatures, and Nebraska is solidly red despite the official lack of party affiliation in its statehouse. Recent polls have shown strong support for each of these ballot initiatives. That should come as no surprise. The idea of hiking the wage floor tends to receive bipartisan backing among Americans, with around two-thirds of voters saying they favor such proposals in most surveys.
Check out this chart on employment figures for other states that have hiked their minimum wage as reported on by Mike Konczal and Bryce Covert in the Nation:
The Urban Institute reported on nonprofit employment in the United States based on a new Bureau of Labor Statistics data, here are a few stats:
In the Boston Globe, Katie Johnston reports on growth in interest in reducing CEO pay:
Income inequality has emerged as a major political and policy issue, and chief executive pay has become a potent symbol of the growing divide between rich and poor. Many economists argue that the widening gap hurts the economy: When wealth is concentrated instead of broadly distributed, it curtails the spending of middle- and lower-income consumers who ultimately drive the US economy.
In the United States, compensation for chief executives soared 937 percent between 1978 and 2013, while the average worker’s compensation climbed just 10 percent, according to the Economic Policy Institute. CEOs at the top 350 firms made an average of $15.2 million in compensation last year – nearly 296 times higher than the average worker’s earnings of about $52,000...
But some analysts say the role CEO compensation plays in income inequality is overstated. The American Enterprise Institute, a right-leaning Washington think tank, notes that studies revealing huge pay gaps are limited to large, publicly traded companies. If all firms are considered, it says, the divide shrinks to 4:1.
Amidst reports of strike, Slate's Alison Griswold looks at Uber's claims that their drivers make as much as $90,000 and finds the numbers don't add up:
For a driver like Garay, all those deductions mean an initial $30 in fares leaves him with about $21 for the hour. According to statements Garay provided Slate, he made $1,163.30 in fares for 40 hours of work in the week ending Oct. 13. From that, he took home just under $850. In any given week, Garay expects to lose a bit more than $350 to gas, car cleanings, insurance, maintenance, and parking costs. That leaves him with about $480 before income taxes. Effectively, he’s making $12 an hour. Twelve dollars an hour isn’t terrible. But it’s a far cry from the kind of numbers that Uber advertises to drivers on its platform—the numbers it uses to paint itself as empowering contract workers in the sharing economy.
Dealbook's Sarah Max features Nancy Fund, founder of DBL Investors (a Heron investee), about investing in startups with a social mission:
Many of the companies in DBL Investors’ portfolio have an obvious social impact, like clean energy or sustainable products, but the universe of potential investments is much broader than that. “Part of our mission is to show that companies can have a profound impact regardless of their business,” Ms. Pfund said.
In fact, Ms. Pfund and Ms. Ringo view early-stage investing as an opportunity to make socially responsible practices a keystone of corporate culture. “This isn’t like saying, ‘Let’s have a toy drive,’ ” Ms. Ringo said. “The second bottom line needs to be integral to how the company is doing business.”
...One stipulation of investment is that companies must work with DBL to identify their social impact goals and report on them twice a year. DBL Investors has one person on its eight-member staff who focuses on measuring the social impact of its investments. Most of the companies in the two funds are making an impact in multiple areas. At the same time that SolarCity is helping convert households and businesses to solar power, for instance, it employs more than 7,500 people, including hundreds of veterans, and many in areas where jobs aren’t as readily available.
Over at Think Progress, Scott Keyes takes a look at the rate of homelessness comparing New York and Tokyo. Take a look at the stats:
Why the massive discrepancy in rates of homelessness between two of the most populous cities in the world?... As with most socioeconomic phenomena, there are a number of contributing factors. First and foremost, income inequality is a massive and growing problem in the United States, while Japan has historically had one of the lowest rates of inequality among developed countries. One principal measure of income inequality is the GINI coefficient, a measure from 0.0 (perfect equality) to 1.0 (perfect inequality). Recent surveys in the two countries found a GINI coefficient in Japan of 0.32, while in the US that rate was 0.41. However, income inequality can’t be the only explanation for Japan’s success combatting homelessness, especially considering that the country’s inequality index has actually worsened over the past few decades. Where Japan is really surpassing the United States, instead, is in the social safety net it offers its citizens. It begins with the Japanese Constitution, which unlike the U.S. version guarantees its citizens “the right to maintain the minimum standards of wholesome and cultured living.” As such, the country has a far more robust safety net than the United States.
In the Atlantic, Rose Hackman says one fifth of Detroit residents could lose their homes:
This year in Detroit, there have been 22,000 foreclosures on properties whose owners failed to pay property taxes three years in a row. Of those, 10,000 are estimated to be occupied, meaning this year's foreclosures are set to oust about 27,000 Detroiters from their homes.
That’s a large number in a dwindling city with fewer than 700,000 residents, but the figures are set to get even worse. In the next couple of months, Wayne County's treasurer will be serving foreclosure notices on 75,000 more properties, 62,000 of which are in Detroit, according to its chief deputy treasurer David Szymanski.* With half of those Detroit properties estimated to be occupied, this means a further 115,000 Detroiters might lose their homes next year. (There are 110,000 properties in Wayne County that are eligible to be foreclosed on next year, 85,000 of which are in Detroit.)
In a city supposedly trying to attract residents rather than lose them, this means a potential 142,000 Detroiters—one-fifth of the city’s population—will be shown the door within the next year and a half. The city has yet to announce plans for accommodating those who get evicted.
You might also be interested in this story in the Huffington Post about a group of investors spending roughly $3 million to buy a 6,000 house "blight bundle" in the Detroit. They say they will work with the community and residents still living in some of the houses.