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thinkahol *

The global crisis of institutional legitimacy | Felix Salmon - 0 views

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    When Perry accuses Ben Bernanke of treachery and treason, his violent rhetoric ("we would treat him pretty ugly down in Texas") is scary in itself. But we shouldn't let that obscure Perry's substantive message - that neither Bernanke nor the Fed really deserve to exist, to control the US money supply, and to work towards a dual mandate of price stability and full employment. For the first time in living memory, someone with a non-negligible chance of winning the US presidency is arguing not over who should head the Fed, but whether the Fed should even exist in the first place. Looked at against this backdrop, the recent volatility in the stock market, not to mention the downgrade of the US from triple-A status, makes perfect sense. Global corporations are actually weirdly absent from the list of institutions in which the public has lost its trust, but the way in which they've quietly grown their earnings back above pre-crisis levels has definitely not been ratified by broad-based economic recovery, and therefore feels rather unsustainable. Meanwhile, the USA itself has undoubtedly been weakened by a shrinking tax base, a soaring national debt, a stretched military, and a legislature which has consistently demonstrated an inability to tackle the great tasks asked of it. It looks increasingly as though we're entering Phase 2 of the global crisis, with 2008-9 merely acting as the appetizer. In Phase 1, national and super-national treasuries and central banks managed to come to the rescue and stave off catastrophe. But in doing so, they weakened themselves to the point at which they're unable to rise to the occasion this time round. Our hearts want government to come through and save the economy. But our heads know that it's not going to happen. And that failure, in turn, is only going to further weaken institutional legitimacy across the US and the world. It's a vicious cycle, and I can't see how we're going to break out of it.
Michael Haltman

The Healthcare Public Option And Other Short Stories - 0 views

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    A Rose By Any Other Name Or Speak No Evil, See No Evil, Hear No Evil Things have been a little quiet on the healthcare debate front over the past day or two, but the 800 pound gorilla is still in the room and is still very much alive and well. During this short lull I wanted to take a look at the critical public option piece for the program, and the fact that it is apparently losing its luster with many on the near left as a it remains a huge impediment to any legislation having a chance of being passed. And not getting something passed will doom the democrats in mid-term elections...
thinkahol *

Chris Hedges: This Hero Didn't Stand a Chance - Chris Hedges' Columns - Truthdig - 0 views

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    As the trial began, the judge refused to let DeChristopher's defense team inform the jury that the auction was later overturned and declared illegal. The judge also refused to let the defense team inform the jury that DeChristopher had raised the money for the initial payment and offered it to the Bureau of Land Management (BLM), which then refused to accept it.
thinkahol *

Arab Spring and an Economic Platform for Demonstrators - Associated Content from Yahoo!... - 0 views

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    The Arab Revolutions Have a Chance to Really Make a Difference IF the Protesters Formulate and Demand a Coherent Anti-imperialist and Mainly Economic Developmental Program
Bakari Chavanu

10 reasons why #DemExit is serious: Getting rid of Debbie Wasserman Schultz is not enou... - 0 views

  • The fact that the party even has superdelegates is a sign of its anti-democratic, pro-oligarchy stance. As Branko Marcetic of In These Times reports the superdelegate system was created specifically to challenge the will of voters. According to Marcetic, “When a Sanders supporter criticized superdelegate Howard Dean for sticking with Clinton despite Sanders’ landslide victory in Vermont, Dean tweeted back: “Superdelegates don’t represent the people.”
  • The DNC created a debate schedule designed to make it hard for candidates to challenge Clinton’s status as the “presumptive” nominee.  Debates were held on weekends, at times that conflicted with other events, and were generally slotted to attract fewer viewers.
  • Fox News offered to host one.  Fox News wrote that, “the race is still contested, and given that you sanctioned a final trio of debates, the last of which has not yet been held, we believe a final debate would be an excellent opportunity for the candidates to, as you said when you announced these debates, ‘share Democrats’ vision for the country.’”  There never was a California debate set up. Not on Fox News or any other venue.
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  • The Sanders camp alleged that the joint fundraising agreement offered Clinton a chance to “launder” money through the DNC.
  • It clearly goes against what was intended for the joint fundraising committees.”  Given the already significant war chest Clinton had to run her campaign it is not surprising that Sanders supporters would find this news disturbing.
  • The recent fights over the DNC platform reveal a real lack of support for progressive policy, especially on key economic issues
yosefong

Are you're Asking Yourself, "Where Can I Find a Notary?" - 2 views

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Where Can I Find a Notary

started by yosefong on 29 May 12 no follow-up yet
Arabica Robusta

Bulgaria in limbo | openDemocracy - 0 views

  • The good news is that the general election on 5 October 2014 did not, as some had feared, enthrone a populist strongman in the mould of Hungary's Viktor Orbán, Turkey's Recep Tayyip Erdoğan, or Serbia’s Aleksandar Vučić. The centre-right GERB (“Citizens for European Development of Bulgaria”) headed by Boyko Borisov, a former bodyguard and police chief known for his macho persona and folksy ways, scored a victory, sweeping about one-third of the votes cast and humiliating its principal rival, the Bulgarian Socialist Party (BSP), which trailed far behind with a paltry 15.4%. But proportional representation soured the feat: GERB saw its caucus shrink from 97 to 84 members of parliament. As a result Borisov has no choice but to share power with others in any new cabinet.  The bad news is that Bulgaria got a fragmented legislature, which bodes ill for the government that will follow, whatever its composition.
Bakari Chavanu

toledoblade.com -- - 0 views

  • He believes our economic system has lost its way after decades of perversion by greedy politicians in Washington and money-minded fatcats on Wall Street and in corporate America.
  • And as the great American dream slipped further from the middle class, more consumers relied on credit cards and loans to catch it, and a system based on people buying what they need became one in which people buy what they want but often cannot afford.
  • Perhaps the film's most powerful statement is Moore's claim that 1 percent of the richest Americans own 95 percent of our nation's wealth.
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  • Capitalism: A Love Story contends that such a movement has already begun. Families being evicted from their homes by bank foreclosures refuse to leave, the film shows, even when law enforcement shows up. A successful workers' strike in Chicago proved that the power to overcome corporate greed and mishandling still rests with the people.
    • Bakari Chavanu
       
      This may be a hopeful way to look at it, but I really doubt it. Most people don't have a clue about what to do. There's very little or effective organized resistance.
  • The film isn't so much Moore piling on our battered, bruised capitalism as it is loaded commentary on what got us here. The evidence is damning, and thought-provoking to those who will give the film a chance.
  • Perhaps Capitalism: A Love Story will be the impetus we need for wholesale change. Or if change is too ambitious, given our circumstances, the film should at least spark meaningful dialogue and rigorous debate, something Moore supporters and detractors alike should welcome.
Levy Rivers

Tom Watson MP » Blog Archive » Power of Information: New taskforce and speech - 0 views

  • We commissioned Ed Mayo and Tom Steinberg to write the Power of Information report because we knew that information, presented in the right way, was a potent driver for improving public services and government.
  • Today I am going to offer two arguments that I think compliment the Prime Minister’s recent announcement on public service reform
  • Firstly, that freeing up data will allow us to unlock the talent British entrepreneurs. And secondly, engaging people - using the simple tools that bring them together - will allow the talents of all our people to be applied to the provision of public services.
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  • The difference of course is that today we contend with what Richard Saul Wurman describes as a ‘tsunami of data’
  • My job is to make sure that government can benefit from this new thinking too. When we were first elected in 1997 people had a recipient relationship with data, they got what they were given when they were given it. It was static.
  • In scale, the spread of social media is comparable to the spread of telephones in the 1930’s to the 1950’s. Yet it’s happened in two years not 20.
  • As Clay Shirky would say, we’ve reached a point where technology is simple and boring enough to be socially useful and interesting.
  • Over 7 million electronic signatures have been sent, electronically, to the Downing Street petition website. 1 in 10 citizens have emailed the Prime Minister about an issue. The next stage is to enable e-petitioners to connect with each other around particular issues and to link up with policy debates both on and off Government webspace.
  • Only last week, the Prime Minister became the first head of Government in Europe to launch his own channel on Twitter, which I can tell you from experience, is extremely useful to his ministers at least
  • Richard is here tonight and I hope that after the formal proceedings you might like to share some of your own ideas with him. Richard is also joined by a number of other taskforce members. They’re all people with remarkable track records in this field. We’re lucky. The UK has some of the world’s leading talent.
  • And today the PM announced an initiative that would allow you to find your community Bobbies using your postcode.
  • The taskforce will bring its expertise to bare on existing initiatives to see if we can what we already do better
  • I want the taskforce to ensure that the COI and Cabinet Office produce a set of guidelines that adheres to the letter of the law when it comes to the civil service code but also lives within the spirit of the age. I’ll be putting some very draft proposals to the taskforce to consider later this week.
  • By bringing people onto the taskforce with the skills and experiences of people like Sally Russell we can move further and faster in this area.
  • Two weeks ago the Prime Minister signalled that we were moving public services to the next stage of reform. He said that we were not only going to, further enhance choice but also empower both the users of services and all the professionals who deliver them - to drive up standards for all.
  • Transformational government is about wrapping services around the citizen, not citizens around the services.
  • Last month DirectGov had over 7 million visitors. Peter is seeing the aggregate desires of millions of UK public service using citizens. I had half an hour with him a fortnight ago and came away with a dozen ideas as to how we can improve our public services.
  • I’m the Member of Parliament for West Bromwich East and I didn’t know about an important recycling initiative going on in my own patch. This information now means that a bag load of clothing for a small child and a habitat sofa are about given a second chance to give pleasure.
  • And much of that information has the potential to be reused in data mashups. Some of it already is, like Hansard on theyworkforyou, or Google Maps using Ordnance Survey data.
  • The Power of Information Report recognised that, and made recommendations to the Treasury. The Treasury, with the Department for Business, Enterprise and Regulatory Reform, published an independent economic study in the Budget and announced its intention to look at these issues during this spending review cycle.
  • It was this early open source approach that arguably fostered 500 years of Islamic scholarship in important fields like medicine, astronomy, lexicography, literature and science. In contrast, European data was stored in monasteries and did not foster easy knowledge transfer. As Gibbon wrote in the ‘Decline and fall of the Roman empire’ the ‘age of Arabian learning continued about five hundred years’ and was coeval with the darkest and most slothful period of European annals?
  • I believe in the power of mass collaboration. I believe that as James Surowiecki says the many are smarter than the few. I believe that the old hierarchies in which government policy is made are going to change for ever. I said that I don’t believe the post-bureaucratic age argument. It’s just old thinking, laissez faire ideas with a new badge. The future of government is to provide tools for empowerment, not to sit back and hope that laissez-faire adhocracy will suffice.
  • The irony that laying claim to the ownership of a policy on open source was lost to the poor researcher who had spent a day dissecting the speech. He’d been able to do so easily because it was freely available on my blog, a simple tool used for communicating information quickly and at nearly zero cost without the requirement to charge for access. The point is, who cares? It doesn’t matter who has the ideas. It’s what you do with them and how you improve on them that counts.
Skeptical Debunker

Robert Reich: It's Time to Enact Health Care Reform With 51 Senate Votes - 0 views

  • Why haven't the President and Senate Democrats pulled the reconciliation trigger before now? I haven't spoken directly with the President or with Harry Reid but I've spent the last several weeks sounding out contacts on the Hill and in the White House to find an answer. Here are the theories. None of them justifies waiting any longer. Reconciliation is too extreme a measure to use on a piece of legislation so important. I hear this a lot but it's bunk. George W. Bush used reconciliation to enact his giant tax cut bill in 2003 (he garnered only 50 votes for it in the Senate, forcing Vice President Cheney to cast the deciding vote). Six years before that, Bill Clinton rounded up 51 votes to enact the Children's Health Insurance Program (CHIP), the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since Medicaid began in the 1960s. Through reconciliation, we also got Medicare Advantage. Also through reconciliation came the COBRA act, which gives Americans a bit of healthcare protection after they lose a job ("reconciliaton is the "R" in the COBRA acronym.) These were all big, important pieces of legislation, and all were enacted by 51 votes in the Senate. Use of reconciliation would infuriate Senate Republicans. It may. So what? They haven't given Obama a single vote on any major issue since he first began wining and dining them at the White House. In fact, Senate Minority Leader Mitch McConnell and company have been doing everything in their power to undermine the President. They're using the same playbook Republicans used in the first two years of the Clinton administration, hoping to discredit the President and score large victories in the midterm elections by burying his biggest legislative initiative. Indeed, Obama could credibly argue that Senate Republicans have altered the rules of the Senate by demanding 60 votes on almost every initiative - a far more extensive use of the filibuster than at any time in modern history - so it's only right that he, the President, now resort to reconciliation. Obama needs Republican votes on military policy so he doesn't dare antagonize them on health care. I hear this from some quarters but I don't buy it. While it's true that Dems are skeptical of Obama's escalation of the war in Afghanistan and that Republicans are his major backers, it seems doubtful R's would withdraw their support if the President forced their hand on health care. Foreign policy is the one area where Republicans have offered a halfway consistent (and always bellicose) voice, and Dick Cheney et al would excoriate them if they failed to back a strong military presence in the Middle East. This is truer now than ever. Reid fears he can't even get 51 votes in the Senate now, after Scott Brown's win. Reid counts noses better than I do, but if Senate Democrats can't come up with even 51 votes for the health care reforms they enacted weeks ago they give new definition to the term "spineless." Besides, if this is the case, Obama ought to be banging Senate heads together. A president has huge bargaining leverage because he presides over an almost infinite list of future deals. Lyndon Johnson wasn't afraid to use his power to the fullest to get Medicare enacted. If Obama can't get 51 Senate votes out of 58 or 59 Dems and Independents, he definitely won't be able to get 51 Senate votes after November. Inevitably, the Senate will lose some Democrats. Now's his last opportunity. House and Senate Democrats are telling Obama they don't want to take another vote on health care or even enact it before November's midterms because they're afraid it will jeopardize their chances of being reelected and may threaten their control over the House and Senate. I hear this repeatedly but if it's true Republicans have done a far better job scaring Americans about health care reform than any pollster has been able to uncover. Most polls still show a majority of Americans still in favor of the basic tenets of reform - expanded coverage, regulations barring insurers from refusing coverage because of someone's preexisting conditions and preventing insurers from kicking someone off the rolls because they get sick, requirements that employers provide coverage or pay into a common pool, and so on. And now that many private insurers are hiking up premiums, co-pays, and deductibles, the public is even readier to embrace reform.
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    This week the president is hosting a bipartisan gab-fest at the White House to try to tease out some Republican votes for health care reform. It's a total waste of time. If Obama thinks he's going to get a single Republican vote at this stage of the game, he's fooling himself (or the American people). Many months ago, you may recall, the White House and Democratic party leaders in the Senate threatened to pass health care with 51 votes -- using a process called "reconciliation" that allows tax and spending bills to be enacted without filibuster -- unless Republicans came on board. It's time to pull the trigger.
Skeptical Debunker

Leaked intelligence documents: Here's what Facebook and Comcast will tell the police ab... - 0 views

  • The "Facebook Subpoena/Search Warrant Guidelines" from the Cryptome site are dated 2008, so there's a chance they've been superseded. The document spells out how law enforcement and intelligence agenices should go about requesting information about Facebook users, and details what information is turned over. Following is what Facebook will turn over about you, taken verbatim from the guide: Types of Information Available User Neoprint The Neoprint is an expanded view of a given user profile. A request should specify that they are requesting a “Neoprint of used Id XXXXXX”. User Photoprint The Photoprint is a compilation of all photos uploaded by the user that have not been deleted, along with all photos uploaded by any user which have the requested user tagged in them. A request should specify that they are requesting a “Photoprint of user Id XXXXXX”. User Contact Info All user contact information input by the user and not subsequently deleted by the user is available, regardless of whether it is visible in their profile. This information may include the following: Name Birth date Contact e-mail address(s) Physical address City State Zip Phone Cell Work phone Screen name (usually for AOL Messenger/iChat) Website With the exception of contact e-mail and activated mobile numbers, Facebook validates none of this information. A request should specify that they are requesting "Contact information of user specified by [some other piece of contact information]". No historical data is retained. Group Contact Info Where a group is known, we will provide a list of users currently registered in a group. We will also provide a PDF of the current status of the group profile page. A request should specify that they are requesting "Contact information for group XXXXXX". No historical data is retained. IP Logs IP logs can be produced for a given user ID or IP address. A request should specify that they are requesting the "IP log of user Id XXXXXX" or "IP log of IP address xxx.xxx.xxx.xxx". The log contains the following information: * Script – script executed. For instance, a profile view of the URL http://www.facebook.com/profile.php?id=29445421 would populate script with "profile.php" * Scriptget – additional information passed to the script. In the above example, scriptget would contain "id=29445421" * Userid – The Facebook user id of the account active for the request * View time – date of execution in Pacific Time * IP – source IP address IP log data is generally retained for 90 days from present date. However, this data source is under active and major redevelopment and data may be retained for a longer or shorter period. Special Requests The Facebook Security Team may be able to retrieve specific information not addressed in the general categories above. Please contact Facebook if you have a specific investigative need prior to issuing a subpoena or warrant.
  • Comcast The Comcast document is labeled "Comcast Cable Law Enforcement Handbook," and is dated 2007, so there's a possibility that it, too, has been superseded. As with the other documents, it explains how law enforcement agenices can get information, and details what information is available. There's a great deal of detail in the 35-page document, which describes what Internet, phone, and television information will be turned over. For example, here's the IP information it will make available: Comcast currently maintains Internet Protocol address log files for a period of 180 days. If Comcast is asked to respond for information relating to an incident that occurred beyond this period, we will not have responsive information and can not fulfill a legal request. (Comcast can process and respond to preservation requests as outlined below in this Handbook.) As expected, Comcast will also turn over the emails, including attachments, of those who use Comcast's email service, but "In cases involving another entity’s email service or account, Comcast would not have any access to or ability to access customer email in response to a legal request." Information Comcast turns over to law enforcement agencies varies according to the request. For example, a grand jury subpoena will yield more information than a judicial summons, as you can see in the excerpt below. Comcast notes, though, that this is just a sample, and that "Each request is evaluated and reviewed on a case by case basis in light of any special procedural or legal requirements and applicable laws." So the examples "are for illustration only."
  • For those who worry about privacy, though, all of this information is small potatoes. The real worry is about the use of what are called pen registers or trap-and-trace devices, which essentially capture all of your Internet activity --- the Web sites you visits, the emails you send and receive, IM traffic, downloads, and so on. Here's what the document says about them: Pen Register / Trap and Trace Device Title 18 U.S.C. § 3123 provides a mechanism for authorizing and approving the installation and use of a pen register or a trap and trace device pursuant to court order. All orders must be coordinated prior to submission to Comcast. Law enforcement will be asked to agree to reimburse Comcast's reasonable costs incurred to purchase and/or install and monitor necessary equipment. See "Reimbursement," below.
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  • As for your voice calls made via Comcast, here's what the company will turn over: Call Detail Records - Comcast maintains two years of historical call detail records (records of local and long distance connections) for our Comcast Digital Voice telephone service. This includes local, local toll, and long distance records. Comcast also currently provides traditional circuit-switched telephone service branded Comcast Digital Phone. Call detail records for this service are collected by AT&T and are available for approximately two years as well. To determine which type of service is involved, contact the Legal Demands Center—Voice and Video at 800-871-6298. Account Records - Account records are generally stored for approximately two years after the termination of an account. If the account has an outstanding balance due, records may be retained for a longer period of time. As with Internet information, what phone information will be turned over depends on the specific kind of legal request, and the examples "are for information only." Here's an excerpt:
  • And, as you would expect, there is the same pen register/trap-and-trace device language as in the section about the Internet. Oddly enough, it appears that when it comes to information about your television viewing habits, you have more privacy rights than you do when it comes to information about your Internet and voice use, because it can only be turned over in response to a court order, not a subpoena. Here's what the document has to say about TV information: Subscriber Account Identification and Related Records For subscribers to our cable television service, the Cable Act requires Comcast as a cable operator to disclose personally identifiable information to a governmental entity solely in response to a court order (and not, for example, a subpoena) or with the subscriber's express written consent. The Cable Act requires that the cable subscriber be afforded the opportunity to appear and contest in a court proceeding relevant to the court order any claims made in support of the court order. At the proceeding, the Cable Act requires the governmental entity to offer clear and convincing evidence that the subject of the information is reasonably suspected of engaging in criminal activity and that the information sought would be material evidence in the case. See 47 U.S.C. § 551(h). Why does the law give you more privacy protection over your television viewing habits than your Internet or phone use? I haven't a clue --- ask your congressman.
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    Wonder what information Facebook and Comcast will turn over to police and intelligence agencies about you? Cryptome, the site that last week posted the leaked Microsoft "spy" manual, has posted company documents that purport to describe what those companies will reveal about you. As with the Microsoft document, the information is eye-opening.
Skeptical Debunker

For better trade, give peace a chance - 0 views

  • Trade's effect on military conflict is one of the most important issues in international relations. The last decade has seen research and debate into the role of trade intensify; Liberals argue that trade brings peace, neo-realists and neo-Marxists reason that trade brings conflict, and classical realists contend that trade has no impact. This debate is not just academic: some key U.S. policymakers (Senator McCain and former President Clinton for instance) believe that trade brings peace, a view that contributes to their support for free trade. Economists developed bilateral trade models in isolation from models of interstate conflict, which were the work of political scientists. These two types of models handle distance between nations differently. Bilateral trade takes its cue from Isaac Newton's formula for the gravitational attraction between two objects: the larger the objects' masses and the shorter the distance between them, the larger the attraction. So the larger the trade partners' economies and the closer they are to one another, the greater their trade. However, conflict models instead incorporate shared borders by land or close distance over water (contiguity) - stressing the role of border disputes in sparking interstate conflict. Distance is included in conflict equations based on the idea that an army gets weaker the farther it strays from its base, but what point in a nation to pick for the trade and conflict equation is unclear. Often theorists use the distance between capital cities, which is problematic: wars generally happen around borders where armies are often based, and capitals have historically changed without this altering the likelihood of war between the nation and its neighbours. The authors suggest that the trade data set plugged into trade and conflict equations is critical. This type of data often contains gaps - there are a number of reasons why data from a particular nation might be unavailable, inevitably leaving researchers to make assumptions. The majority of trade and conflict studies define conflict to include all types of militarised interstate disputes (MIDs). But Keshk, Reuveny, and Pollins question the results generated when different conflict definitions are chosen. For instance, a conflict such as a threat to use nuclear weapons would not cause fatalities, but may still have some impact on trade and vice versa. In fact, by altering the data treatment and assumptions in the equation, the authors generated a variety of results, which supported several different theoretical viewpoints. The authors suggest that future research should investigate questions of missing bilateral trade data, and attempt a more subtle use of the meaning of "military conflict". Researchers might also develop distance and contiguity measures at a more sophisticated level. "Any signal that trade brings peace remains weak and inconsistent, regardless of the way proximity is modelled in the conflict equation. The signal that conflict reduces trade, in contrast, is strong and consistent," say the authors. "Any study of the effect of trade on conflict that ignores the reverse fact is practically guaranteed to produce estimates that contain simultaneity bias." Studies of the relationship between international trade and military conflict can be traced back many centuries, particularly in the works of luminaries such as de Montesquieu, Immanuel Kant, John Hobson, Vladimir Lenin, Henry Morgenthau, Kenneth Waltz, Frederic List, and Albert Hirschman. This latest study emphasises that international politics are affecting trade between nation pairs, while it is far less obvious whether trade systematically affects politics. "To our colleagues from the liberal camp we would like to say that we still believe there are limited circumstances in which more trade may help lead countries to more peaceful resolutions of their differences, particularly if they are already at peace," the authors state. "However, it is past time for academics and policymakers to look beyond the naive claim that the cultivation of trade ties will always and everywhere produce a more peaceful world."
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    Liberal theorists and politicians have long argued that trade leads to peaceful relations between nations - a view that informs the push for free trade. However, many international relations experts dispute this claim. New US research out today, in the journal Conflict Management and Peace Science published by SAGE, finds that rather than trade being the driver, peace is actually the vital ingredient that allows trade to flourish.
Yee Sian Ng

Board openings give Obama a rare chance to remake the Federal Reserve - washingtonpost.com - 0 views

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    "The No. 2 official on the Federal Reserve Board said Monday that he will retire, opening a third seat on what may be the world's most powerful economic body and giving President Obama a historic opportunity to reshape the central bank.\n\n[...]\n\nThe changes come at a time of epic transformation in, and intense scrutiny of, the Fed's mission. During the past two years, the Fed has taken extraordinary actions to contain a financial crisis and prop up the economy. Now the institution must decide how and when to wind down some of those emergency measures."
Sarah Eeee

Income Inequality and the 'Superstar Effect' - NYTimes.com - 0 views

  • Yet the increasingly outsize rewards accruing to the nation’s elite clutch of superstars threaten to gum up this incentive mechanism. If only a very lucky few can aspire to a big reward, most workers are likely to conclude that it is not worth the effort to try.
  • It is true that the nation grew quite fast as inequality soared over the last three decades. Since 1980, the country’s gross domestic product per person has increased about 69 percent, even as the share of income accruing to the richest 1 percent of the population jumped to 36 percent from 22 percent. But the economy grew even faster — 83 percent per capita — from 1951 to 1980, when inequality declined when measured as the share of national income going to the very top of the population.
  • The cost for this tonic seems to be a drastic decline in Americans’ economic mobility. Since 1980, the weekly wage of the average worker on the factory floor has increased little more than 3 percent, after inflation. The United States is the rich country with the most skewed income distribution. According to the Organization for Economic Cooperation and Development, the average earnings of the richest 10 percent of Americans are 16 times those for the 10 percent at the bottom of the pile. That compares with a multiple of 8 in Britain and 5 in Sweden.
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  • Not coincidentally, Americans are less economically mobile than people in other developed countries. There is a 42 percent chance that the son of an American man in the bottom fifth of the income distribution will be stuck in the same economic slot. The equivalent odds for a British man are 30 percent, and 25 percent for a Swede.
  • Just as technology gave pop stars a bigger fan base that could buy their CDs, download their singles and snap up their concert tickets, the combination of information technology and deregulation gave bankers an unprecedented opportunity to reap huge rewards. Investors piled into the top-rated funds that generated the highest returns. Rewards flowed in abundance to the most “productive” financiers, those that took the bigger risks and generated the biggest profits. Finance wasn’t always so richly paid. Financiers had a great time in the early decades of the 20th century: from 1909 to the mid-1930s, they typically made about 50 percent to 60 percent more than workers in other industries. But the stock market collapse of 1929 and the Great Depression changed all that. In 1934, corporate profits in the financial sector shrank to $236 million, one-eighth what they were five years earlier. Wages followed. From 1950 through about 1980, bankers and insurers made only 10 percent more than workers outside of finance, on average.
  • Then, in the 1980s, the Reagan administration unleashed a surge of deregulation. By 1999, the Glass-Steagall Act lay repealed. Banks could commingle with insurance companies at will. Ceilings on interest rates vanished. Banks could open branches anywhere. Unsurprisingly, the most highly educated returned to banking and finance. By 2005, the share of workers in the finance industry with a college education exceeded that of other industries by nearly 20 percentage points. By 2006, pay in the financial sector was again 70 percent higher than wages elsewhere in the private sector. A third of the 2009 Princeton graduates who got jobs after graduation went into finance; 6.3 percent took jobs in government.
  • Then the financial industry blew up, taking out a good chunk of the world economy. Finance will not be tamed by tweaking the way bankers are paid. But bankers’ pay could be structured to discourage wanton risk taking
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    (Part 2 of 2 - see first part below) What impact do the incredible salaries of superstars have on the rest of us? What has changed, technologically and socially, to precipitate these inequities? This article also offers a brief look at the relationship between income inequality and economic growth, comparing the US throughout its history and the US vis a vis several European countries.
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