Our (grim) yuppy legacy [the triumph of Homo economicus]

Dylan Gottlieb, How Yuppies Changed America, NYTimes, May 4, 2026.

So much of what we take for granted today — from our meritocratic rat race to our gentrified neighborhoods to our culture of overwork, fitness training and foodie obsession — was born in the yuppie-made 1980s. In that moment, they fashioned a bargain that we are still living with: An increasingly diverse professional class signed up for a life of hard-won affluence, at the cost of deep inequality for everyone else.

Yuppies were called into being by the forces that were remaking the economy in the 1980s. After the Carter and Reagan administrations loosened the regulations governing Wall Street, finance began to generate a greater share of profits than manufacturing or services. Investment banks and law firms now shaped the fates of the corporations they had once served. As America hitched its fortunes to finance, those banks and firms began to chop up, spin off, merge, offshore or otherwise squeeze short-term value out of the nation’s legacy corporations. But to do it, they needed legions of employees to handle the grunt work: the proofreading, drafting and document review that kept the takeover machinery in motion.

o find those employees, recruiters flooded the campuses of America’s elite universities. In 1976, less than 5 percent of surveyed seniors at the University of Pennsylvania’s Wharton School were headed to Wall Street for investment banking. By 1987, it was one in three. At Yale, 40 percent of the entire graduating class of 1986 applied to work at the investment bank First Boston.

High-level grunt work:

Once they were hired, aspiring yuppies were expected to work more hours, often on smaller and less intellectually demanding piecework. They were also given less meaningful training, all for narrower chances of promotion to partner. As the professional world was beginning to diversify, it became an increasingly miserable place to work. This was no accident: The legal and financial bosses who were commanding these diverse armies of young professionals sought to extract maximum value out of their labor.

This early wave of yuppies contains the origins of our present-day meritocratic competition, which turned college admissions into something akin to “The Hunger Games.”

Grunt work all the time in everything:

On the job, newly minted yuppies were also sold a particular story: Upward mobility was open to anyone with the right degree and the right work ethic. [...]

That dogged pursuit of the strenuous life extended from the workplace into yuppies’ leisure time. They developed a passion for road races like the New York City Marathon. This wasn’t the casual jogging that countercultural types had embraced in the late 1960s. It was distance running, and it required the same self-control and long-range planning that characterized yuppie careers. [...

The yuppies also helped forge our modern foodie culture: one that required wealth but also the cosmopolitanism to know that, say, balsamic vinegar, sun-dried tomatoes and Manchego cheese were foods worth savoring.]

They consumed the Democratic Party:

Yuppies also redrew our political map. They helped to shift the Democratic Party away from the unions, Black Americans and urban bosses of the New Deal coalition and toward the interests of metropolitan professionals. During the 1980s, a new generation of politicians and donors — people like Gary Hart, Chuck Schumer and Bruce Wasserstein — remade liberalism for the postindustrial era. The meritocratic ethos of the trading floor, they reasoned, should govern society at large. Innovation, not regulation or redistribution, would drive growth. And the sclerotic regulatory state was only hampering it. What was needed instead was a nimbler government that oversaw a technology-heavy economy, with yuppies at the vanguard.

Hello inequality my old friend:

The rise of the yuppie was not without its costs. The upper echelons of our society became more inclusive in terms of race, ethnicity and gender — but only for those who ran a gantlet of educational and professional challenges on their way to the top. By admitting women and members of racial minorities, the new yuppie elite helped obscure the skyrocketing economic inequality that would soon become a central fact of American life. Since the 1980s, upwardly mobile yuppies have left blue-collar, pink-collar and less-educated service workers further and further behind.

Resentment sets in:

After decades sitting atop this brutal hierarchy, yuppies and their arrogance bred new resentments. In the 2010s, a brand of populist conservatism opposed nearly every tenet of the yuppie dream, from racial and gender diversity to educational meritocracy to frictionless finance and globalization to gourmet culture and the very idea of urban living itself.

This response was unsurprising given the real harm done by Wall Street firms to blue-collar America. But the wounds were as much psychic as they were economic. Racial grievance gave the movement its power. So did geographic and class-based resentment of the cosmopolitan elite that yuppies embodied. After all, locally rich but less educated white people — owners of car dealerships and construction companies across the South and Midwest — were among the fiercest populist conservatives.

And this set the stage for Donald Trump.

Today, the class of people once known as yuppies are both everywhere and under threat. The Trump administration’s attack on diversity, equity and inclusion and affirmative action might damage the recruiting pipeline that has conveyed women and members of racial minorities into the professions. Employers will have to rely on more informal and more discriminatory forms of hiring: personal connections, nepotism and cultural “fit,” all of which tend to favor the privileged. Our professional class may shrink, welcoming only the sons and daughters of the already rich. [...]

What’s more, the rollout of A.I. threatens to decimate entry-level professionals [...] Even a moderately secure upper-middle-class lifestyle might soon be out of reach.

The upshot:

Yuppies were the first class of young people to be drawn into the sweatshop of the meritocracy. Now is the time to rethink the bargain they made, which offered diversification and affluence at the cost of exploitation and broader inequality. If history teaches anything, it is that if a class can be made, it can also be unmade.

There's more at the link.

How long can democracy withstand the assault of AI?

Jennifer M. Harris, We Are Witnessing the Rise of a New Aristocracy, NYTimes, Apr. 8, 2026.

Inequality is such a fact of American life that it’s easy to shrug off. But we are in uncharted terrain. The amassed wealth of today’s tech titans makes the Rockefellers and the Vanderbilts look quaint. Over the past two years, 19 households have added $1.8 trillion to their coffers, the economist Gabriel Zucman told me — roughly the size of the economy of Australia.

Into this fragile state enters artificial intelligence. It threatens to make a bad situation much worse.

Left on its current course, A.I. could deliver a bleak picture: lower- and middle-income jobs automated away, with top earners remaining unscathed. Income shifting from middle-wage workers doing the bulk of the labor toward those wealthy enough to bankroll the technology. Growth headwinds. Worsening affordability. So, too, a federal government less able to respond, thanks to a shrinking tax base.

For any society in which this much wealth gets concentrated in so few hands, and is then so easily parlayed into political clout, the question becomes one not just of economics but of basic civic standing. At some point soon, we are no longer sharing in self-government. [...]

Those losses on the lower half of the scale are underway. One-quarter of computer programming jobs disappeared in 2023 and 2024. IBM’s chief executive said in 2023 he could “easily see” 30 percent of the company’s back office roles getting replaced by A.I. in the next five years. [...] A Stanford study found that early-career employees in A.I.-exposed fields like customer service have seen a 13 percent drop in employment since 2022 — unlike more experienced workers and those in other sectors.

At the same time, premiums for elite graduates with hefty Rolodexes full of powerful people, and tacit knowledge (like how to generate a laugh at a cocktail party on Park Avenue), aren’t going anywhere. Chatbots are no substitute for people who can call the right people when high-stakes deals go awry.

Meanwhile the investor class, which is very small, is making out like bandits:

What’s worse, much of the trillion-plus-dollar investment in the A.I. boom isn’t happening in the stock market at all — it’s happening in private funds out of reach to all but the wealthiest, most connected among us. In earlier technology-fueled booms, companies like Amazon sold their shares in the public markets. As the value of its shares soared, they enriched Amazon’s early investors, yes, but thousands of employees also benefited, as did millions of other Americans, through pension funds and retirement accounts.

That isn’t the case with A.I. Anthropic and OpenAI, the two best-known A.I. companies, raised over $150 billion, mostly from venture capitalists, private equity firms and foreign sovereign wealth funds — funds mostly inaccessible to the vast majority of investors (let alone ordinary Americans).

With ownership of these firms concentrated in so few hands, any wealth they produce widens the gap between the richest households and everyone else. Also consider the fact that today’s A.I. firms employ far fewer people than established tech companies. OpenAI and Anthropic, which are already operating globally, employ only a few thousand people. Microsoft employs more than 200,000, and Amazon employs 1.5 million. The picture that emerges isn’t of just a deepening of the current divide. The A.I. story is one of more extreme concentration of wealth — at most likely not more than 3 percent of households, the very few who hold ownership in these A.I. companies or in the mostly private firms financing them.

And the inequality just keeps trickling outward:

Well-meaning policymakers often turn to federal spending to prop up our labor markets or address the affordability crisis. But they don’t factor in the tremendous debt load our government is currently servicing nor the negative impact A.I. is poised to have on the government’s coffers.

Because investment income is taxed at lower rates than wages — and because the wealthiest often find ways to defer or avoid those taxes altogether — A.I. will significantly shrink the tax base. Economists estimate that as $1 of value creation shifts from workers to owners, total tax revenue falls on the order of 10 to 15 cents. You don’t need to squint to see the resulting cuts to safety net programs like work-force training and Head Start that low- and middle-income families rely on — cuts that will, in turn, also worsen inequality.

What to do? How about public equity in AI?

Another idea, so far still confined to think tank circles, proposes innovative tax structures to create public equity stakes in large A.I. firms; these stakes could then fund a better safety net or simply put money in workers’ pockets. After all, the “intelligence” in A.I. was ours to begin with. One especially promising fix is to incentivize more firms to convert into worker-owned cooperatives, building on modest federal support passed in 2022. If we put more workers in charge of the firms deciding how to use A.I., the odds climb that they will figure out how to use A.I. so as to increase their own value.

All of these fixes are made harder as the wealthiest parlay their economic clout into political sway.

There's more at the link.

Ezra Klein interviews Anand Giridharadas about Epstein’s social infrastructure

Ezra Klein, The Infrastructure of Jeffrey Epstein’s Power, NYTimes, Feb. 13, 2026.

About Girardharadas:

Anand Giridharadas is a journalist who has written for The New York Times, The New Yorker and many other outlets. He publishes the great newsletter The.Ink and is the author of, among other books, “Winners Take All: The Elite Charade of Changing the World,” which he published in 2018, and the forthcoming “Man in the Mirror: Hope, Struggle and Belonging in an American City.”

I often think of his work as a kind of sociology of American elites and power, and that has been the perspective he has brought to his coverage of these files. I think it is revelatory and worth hearing.

Here are a few passages from a very long and interesting interview.

* * * * * 

Ezra Klein: You used the word “solidarity” a moment ago for this network. When you look at these communications, there are moments of solidarity.

You wrote, in some ways actually movingly, about Epstein having a talent for friendship. He has a talent for being of use to people. He becomes an adviser to them. You can’t be a great con man without understanding human beings at a very deep level.

But there’s also just an endless transactionalism. An endless trading of information, money, connections, favor, powers — ultimately, women and girls. And what feels oftentimes like it is attracting them to each other is not always what I would think of as solidarity or a fellowship but: What can you do for me?

If you can be the one who finds it for them, that’s real power.

Anand Giridharadas: And it’s different needs, right? The money people may not need money, although they always want more of it. They often want to seem and feel smart. If you have met people in those kinds of worlds — finance people — even if you make a lot of money in it, they’re often very boring people.

I don’t say this as slander. They know it. I’ve had so many conversations with people in this world where there’s an insecurity about how boring they are. So they want something else.

Then there’s a bunch of academics. Academics, I think, really figure in this story in a way that feels surprising. It’s a tough era to be an independent thinker, so the academics want money and access.

Larry Summers, a former Treasury secretary asked Epstein, “How is life among the lucrative and louche?” He wanted access to a party scene that’s not available to him. Advertisement

Everybody had something they needed. But his gift, if it can be called that, was understanding and mapping that so well.

* * * * *

There’s this amazing quote from Justin Nelson, Epstein’s personal banker. I’m quoting Nelson from the Times piece: He prepares a memo trumpeting Epstein’s large volume of business with JPMorgan, and noting that despite his status as a sex offender, he was “still clearly well respected and trusted by some of the richest people in the world.” His network is the proof that he is worth dealing with and not beyond the pale. Because if he was, well, then how would he still have this network?

He is revealing how these elites make decisions about trust — that I think are really different from the way folks at home go through the world and make decisions. I think you make character judgments about people, about how honest they have been and therefore will be.

These billionaires, these superelites, these superlawyers are working on a whole different kind of system. Their system has to do, as you say, with how loaded with connections you are in this network, how high your stock is on a given day in this network.

What Epstein figured out was how to game this. He figured out the vulnerability of this entire network, which is that these people are actually not that serious about character. In fact, character may be a liability for some of them, may be an unnecessary source of friction.

These people are actually not that grounded in the evidence of how someone has lived. These people are making very thin-sliced judgments about how central you are in their same networks. Therefore, something as simple — and this is true — as dining at Michael’s here in Midtown can do extraordinary wonders for people in the superelite. 

I think if I had to think about what I have most learned from what is now 13 months of the second Trump term — most learned about this country and the character of this country and the way this country functions right now — perhaps the biggest surprise for me is about the distribution or the paucity of bravery.  

Now most people listening to this will not have heard of the restaurant Michael’s in Midtown, but Michael’s is an example of a restaurant — a perfectly nice restaurant — but also a place where, if you can arrange to have lunch there, you will create an impression among certain people in publishing in New York, certain people who are in network television in New York, certain people in finance in New York — that you are in a certain place.

And on your way in and out, someone might introduce you to this person or that person. I’ve seen this organism flourish. And then these people will just assume you must be fine. They’ll maybe ask you to come in for a meeting to promote your children’s book or whatever it is.

He exploited the facile nature of many of these elites who have the mental skills to be serious people who evaluate character, who look up people’s history, who might, for example, find a conviction for soliciting sex with a minor problematic — but who, in fact, if you dined at Michael’s, if you were at that party, if you were at Davos, if you were at TED, must be all right.

* * * * *

Let me take that as a moment to ask something cautionary. Because as you’re saying, you look at these files, and there are a lot of people named in them. The number of people actually close to him, about whom you can get a lot by reading the files, we’re talking in the low dozens, maybe.

We’re talking about the elites, the power networks, but actually most people didn’t know Jeffrey Epstein. Most elites didn’t have much to do with him. Plenty of people saw him for what he was.

Tina Brown has this great line where she’s invited to a dinner with Epstein, Prince Andrew and Woody Allen. And she responded: What the [expletive] is this — the Pedophiles’ Ball?

Melinda Gates sees him perfectly clearly.

So is Epstein a way you see the elite, or is this a subcategory? It’s not telling us that much about power. It’s telling us something about some set of powerful people, in which — as in any other culture or network — there are going to be people of better and worse judgment, higher and lower character, more and less transactional.

Even in this JPMorgan Chase example I’ve been using, there are people in the bank who are fighting hard to cut ties with him. They lose until it becomes completely untenable for the bank to keep going. But they’re there.

I think that’s right. It’s an important point to dwell on for a second because you could take a narrow view that only the people who are actively involved in crimes of pedophilia here are really this group of people we should focus on, and everything else is a distraction.

You could take the opposite view that this is an indictment of every person with more than $10 million in the bank.

I think both of those are incorrect. I believe in this notion, and I’ve seen it in so many forms over the course of my years of reporting, of what I think about as concentric circles of enablement.

There is no doubt that there is a core group of people who were knowledgeable about, engaged in and shared participation in crimes of pedophilia at the burning heart of this story. That is, obviously, its own circle of hell.

We know from testimony of survivors that it was more people than just him. He was trafficking them to other people. We have some of the names. We don’t have all the names. But that was happening, and that’s the burning heart of this story that can’t be forgotten.

And then there’s what made that possible. Very practically, that means: Who were the other people who didn’t do that but who were aware of it, who facilitated it, for whom it was not a problem, who were not later discouraged by it when deciding whether to let him into something?

Then: What was the circle around that? Universities that maybe knew that Larry Summers was pally with him or that were accepting money and just didn’t stop the thing.

Then you can keep going out from there. Sometimes it’s helpful to shift the metaphor. I think about when I was in India as a reporter for The Times, and you would have a problem of so-called honor killings in rural villages in North India. A young woman dares to have a boyfriend or some kind of dalliance before marriage, and her own father might kill her or men in her family might kill her or people in her village might kill her. It happens a lot.

If you take every instance where that happens, there’s often one guy who committed murder. So one guy.

But I think anybody looking at it would say it took a lot of other things going on to make it possible for that guy to commit the murder — and a lot of other people who didn’t commit murder, who would never commit murder, who were not OK with murder, who maybe opposed the murder — but a lot of people and systems and institutions and values are conspiring to make that murder possible.

So if you shift back to this example, I think if you just had a pedophile in Jeffrey Epstein who wanted to procure 15-year-old girls and rape them, and that was all you had, it would have been very difficult for him. This is not an easy thing to pull off.

It’s not just Kathryn Ruemmler [BTW, who has resigned from Goldman Sachs since this interview took place], who presumably had nothing to do with that burning heart of the story. It’s the fact that today, Kathryn Ruemmler, as you and I speak, is still the chief lawyer at Goldman Sachs. It’s the fact that association is not something — forget one individual — that institutionally, Goldman Sachs does not think today is a problematic association.

The fact that not just some professor at Harvard or some professor at M.I.T. was involved but that those institutions, two of the world’s most august learning institutions, essentially had this guy able to swim through their networks and be central to them. I remember talking to women at the M.I.T. Media Lab who were forced to give tours to Jeffrey Epstein at the Media Lab.

It’s these law firms that, before they were capitulating to Donald Trump, were able to be gamed by, again, not just individuals but entire organizations that were not able to have an appropriate histamine reaction to one of their lawyers being too close to such a depraved person.

Even when there were so many reasons to know he was a problem. Even when Tina Brown knew enough to call him a pedophile.

Even when Donald Trump was giving quotes to New York Magazine saying: Jeffrey Epstein likes them on the younger side.

It was, as you say, a quite small number of people who presumably were involved in the worst crimes. It was a larger number who maybe knew about them and looked the other way. It was a larger number still who maybe were just at parties where things happened.

But eventually, you’re talking about all or many of the most prestigious institutions in this country — universities, corporations, law firms, conferences, down the line.

Disney is abandoning the middle class, and the internet and AI are helping it do so

Daniel Currell, Disney Is the Happiest Place on Earth, if You Can Afford It, Aug. 28, 2025.

About Disney World:

For most of the park’s history, Disney was priced to welcome people across the income spectrum, embracing the motto “Everyone is a V.I.P.” In doing so, it created a shared American culture by providing the same experience to every guest. The family that pulled up in a new Cadillac stood in the same lines, ate the same food and rode the same rides as the family that arrived in a used Chevy. Back then, America’s large and thriving middle class was the focus of most companies’ efforts and firmly in the driver’s seat.

That middle class has so eroded in size and in purchasing power — and the wealth of our top earners has so exploded — that America’s most important market today is its affluent. As more companies tailor their offerings to the top, the experiences we once shared are increasingly differentiated by how much we have.

Data is part of what’s driving this shift. The rise of the internet, the algorithm, the smartphone and now artificial intelligence are giving corporations the tools to target the fast-growing masses of high-net-worth Americans with increasing ease. As a management consultant, I’ve worked with dozens of companies making this very transition. Many of our biggest private institutions are now focused on selling the privileged a markedly better experience, leaving everyone else to either give up — or fight to keep up.

Disney’s ethos began to change in the 1990s as it increased its luxury offerings, but only after the economic shock of the pandemic did the company seem to more fully abandon any pretense of being a middle-class institution. A Disney vacation today is “for the top 20 percent of American households — really, if I’m honest, maybe the top 10 percent or 5 percent,” said Len Testa, a computer scientist whose “Unofficial Guide” books and website Touring Plans offer advice on how to manage crowds and minimize waiting in line. “Disney positions itself as the all-American vacation. The irony is that most Americans can’t afford it.”

Back in the day (when I went to Disneyland on a family trip in the mid-1960s):

Disney was never cheap. A family day at the original Disneyland in California, including tickets, some rides and food for four people, was about a $30 affair when the park opened in 1955, which was a lot of money when the median family income was $4,400. But $30 — roughly the cost of a week’s groceries — was still an attainable number for much of America’s rapidly growing middle class.

In the early years, Disney ticket prices rose so slowly that at times they got cheaper after inflation. An employee handbook from the 1950s quotes Walt Disney as saying, “We roll out the red carpet for the Jones family from Joliet just as we would (with a few embellishments) for the Eisenhowers from Palm Springs.” Versions of Walt’s “Everyone is a V.I.P.” credo were in Disney’s new-employee training materials long after his death in 1966. Fortunately for him and his shareholders, embracing everybody made good business sense. That began to change in the 1990s.

Michael Eisner, Disney’s chief executive at the time, created a bevy of products for the affluent — including fancier hotels, a cruise line and white-tablecloth restaurants. But he rejected the idea of allowing customers to pay to skip lines at the parks, according to a Disney historian, Aaron Goldberg. When a rival, Universal Studios, introduced paid line-skipping in the early 2000s, Disney — perhaps fearing backlash from its large fan base — stood firm.

In the mid-2000s, however, the growing ranks of the affluent presented a profit source that could not be ignored. According to Datos Insights, in 1992 there were 88,000 households worth $20 million or more in 2022 dollars; by 2022, there were 644,000. Those who could pay almost anything for a vacation were becoming their own mass market.

Comes the smartphone and analytics:

At the same time, smartphone apps transformed how companies connected to their customers. In 2012, the My Disney Experience app gave guests an easy way to check wait times, show times, restaurant bookings and more. In return, Disney gained a trove of information on exactly where guests went, what they purchased and how much they spent in its complex. The app eventually became so integrated with a visit that much of a Disney park day can be dedicated to checking it; savvy guests bring an external battery.

More than ever before, Disney and companies like it have access to data showing them who is willing to spend what for which experiences. “Disney is an analytics company that happens to do movies and parks,” Mr. Testa said. [...]

The pandemic was the final blow. Covid shutdowns and the streaming wars delivered staggering financial losses. In October 2021, Disney killed its free FastPass system, upsetting many hard-core fans, and started offering ride reservations for $15 each at Disney World. Over the next three years, the line-skipping options multiplied in number and in price. Disney also offered perks for those staying in its properties — one of them being the ability to make ride reservations before those staying elsewhere.

Middle America at the middle of the 20th century:

America’s 20th century was a fortunate moment when we could rely on companies like Disney to deliver rich and unifying elements of our culture. Walt Disney hoped that his audience would have “no racial, national, political, religious or social differences” — he wanted to appeal to everyone, in no small part because appealing to everyone was profitable. It was a time when big institutions were trusted, and the culture they created was shared by nearly all Americans.

The article follows two very different families through Disney World, an affluent one and a one on the low-end of middle-class. 

There's much more at the link. 

Taxes paid by US Billionaires

Tyler Cowen gives us this abstract from an NBER Working Paper, Akcan S. Balkir, Emmanuel Saez, Danny Yagan & Gabriel Zucman, How Much Tax Do US Billionaires Pay? Evidence from Administrative Data, August 2025:

Abstract: We estimate income and taxes for the wealthiest group of US households by matching Forbes 400 data to the individual, business, estate, and gift tax returns of the corresponding group in 2010–2020. In our benchmark estimate, the total effective tax rate—all taxes paid relative to economic income—of the top 0.0002% (approximately the “top 400”) averaged 24% in 2018–2020 compared with 30% for the full population and 45% for top labor income earners. This lower total effective tax rate on the wealthiest is substantially driven by low taxable individual income relative to economic income. First, the C-corporations owned by the wealthiest distributed relatively little in dividends, limiting their individual income tax unless they sell their stocks. Second, top-owned passthrough businesses reported negative taxable income on average in spite of positive book income, further limiting their individual income tax. The top-400 effective tax rate fell from 30% in 2010–2017 to 24% in 2018–2020, explained both by a smaller share of business income being taxed and by that income being subject to lower tax rates. Estate and gift taxes contributed relatively little to their effective tax rate. Top-400 decedents paid 0.8% of their wealth in estate tax when married and 7% when single. Annual charitable contributions equalled 0.6% of wealth and 11% of economic income in 2018–20.

Inequality is a major factor in eroding democracy

Thomas B. Edsall, Democrats Delivered Millions to Texarkana. It Didn’t Matter One Bit. NYTimes, Aug. 12, 2025.

The article is generally about why the Democrats and in trouble and bumbling around. The title refers to the fact that Biden delivered pork for Texarkana and it did nothing for the Democrats in the 2024 election. That's how the article opens. Then Edsall gets around to a general enumeration of the Democrats' problems. Inequality isn't the only one, but it's the one that interests me at the moment:

Let’s start with Susan Stokes, a political scientist at the University of Chicago and director of the Chicago Center on Democracy. She wrote by email that inequality

is harmful, politically, but not because it undermines liberal values. A sense of being left behind in a society where many people are fabulously wealthy and others have comforts and opportunities that one lacks does fuel a loss of confidence in institutions.

Income inequality can also encourage partisan polarization. Let me stress that inequality has these effects directly but they are amplified by the rhetoric of ambitious politicians who find it easier to stoke distrust and mutual hatred among the public when there are big gaps between the wealthy and even the affluent, and the rest.

In a December 2024 article, “Income Inequality and the Erosion of Democracy in the 21st Century,” Stokes and Eli G. Rau, a political scientist at Tecnológico de Monterrey in Mexico, conducted a cross-national survey that showed:

Income inequality is a strong and highly robust predictor of democratic erosion. This basic result is stunningly robust. In all, we find a consistent, positive association between income or wealth gaps and democratic erosion across more than 100 distinct statistical models.

Other factors are covered in the rest of the article.

Neil de Grasse Tyson tears Elon & his techbro minions & cronies a new one

Neil deGrasse Tyson REVEALS
The TRUTH About Feud With Elon Musk

From the YouTube page:

On his show Star Talk, Astrophysicist Neil deGrasse Tyson set the record straight on a supposed "feud" Elon Musk.

Tyson explained what is simply true: that Elon Musk has done nothing that NASA hadn't already done.

Neil deGrasse Tyson rightfully points out that nearly all major projects in society have been done by nations rather than companies.

With Elon Musk being lauded as some kind of genius by the right as he slashes his way through our government, it's important to hear a different point of view from a sane and intelligent voice like Neil deGrasse Tyson. Let me know in the comments what you think of what Neil deGrasse Tyson had to say about Elon Musk.

We have a generation of techbros and VCs who've forgotten that the federal government did all the basic research, especially computing & rocketry, that the current tech revolution is built on. They're prancing around, pretending like they did it all themselves, and now they're asking the government to fund mega power stations and server farms so they can build bigger and bigger toys. 

What do they want to do with that government-funded infrastructure? Construct a virtual world where they'll capture people's time and attention so they become addicted to the techbros. The techbros will then take all the money for themselves, decamp for their bunkers in Hawaii and the South Pacific and then pop pills and workout with private trainers so they can live forever.

On the dockworkers strike, labor on the rise

Sohrab Ahmari, In Praise of the Dockworkers Shutting Down Our Ports, The Free Press, October 2, 2024.

The International Longshoremen’s Association, whose strike is crippling U.S. ports from the Gulf Coast to New England, may not seem like the wretched of the Earth. They’re asking for a 77 percent pay increase on top of the $39 per hour those on the top tiers already make. The union’s president, Harold Daggett, earns $728,000 a year and once owned a 76-foot boat. With major disruptions looming, no wonder even some of those Americans ordinarily sympathetic to organized labor might be thinking, Okay, this is going too far. The less sympathetic are already calling for the Marines to suppress the strike.

But here’s the hard truth: The militancy showcased by the ILA is exactly what is needed to restore a fairer, more balanced economy—the kind that created the middle class in the postwar decades and allowed your grandparents to access reliable healthcare, take vacations, and enjoy disposable incomes. Those who complain that today’s left has come to privilege boutique identity politics over bread-and-butter concerns should cheer the longshoremen. There is nothing “woke” about their exercise of economic power to win material gains for themselves and their industrial brethren.

The longshoremen are striking for familiar reasons: better wages and benefits, and to prevent automation from decimating their livelihoods. [...]

Some critics argue that the ILA’s demand that no automation take place at the ports is unreasonably rigid. It’s certainly audacious, but it’s called an opening gambit for a reason. I suspect we will see concessions on both sides leading to a reasonable settlement, as in the case of SAG. The rest—gripes about how much the ILA president earns or how longshoremen are already well-compensated—is the tired propaganda of the C-suite class. [...]

The ILA strike is a rare reminder of working people’s power to shut it all down. [...] Real progress in market societies results from precisely this dynamic tension between labor and capital. For too long, however, one side of the equation—labor—has been torpid, not to say dormant. The asset-rich had it so good over the past few decades—capturing the lion’s share of the upside from de-unionization, financialization, and offshoring, as wages stagnated for the bottom half—that they all but forgot what labor militancy can look and sound like. How much it can sting.

Now, the labor movement is on the move. Since the pandemic, workers across a wide range of industries have joined arms to form new unions or to secure better wages and working conditions under existing collective-bargaining agreements. Last year, some 539,000 workers were involved in 470 strikes and walkouts, according to Cornell researchers, up from 140,000 workers mounting 279 strikes in 2021. This ferment—what one labor scholar has called a “strike wave”—comes after the union share of the private-economy workforce has declined from its peak of one-third in 1945 to 6 percent today.

There’s more at the link.

Living in Elon's orbit

Christopher Hooks, Try Living in Elon Musk’s Company Town, NYTimes, May 24, 2024. Note that Hooks is an Austin-based writer.

The article opens:

Just after 7 a.m. on Saturday, Nov. 18, as the sun was rising in the Gulf of Mexico, Noel Rangel, a 26-year-old native of Brownsville, Texas, was brought unwillingly into wakefulness by an uninvited sensation: The richest man in the world was shaking him. Or rather, his entire apartment. His bed was rumbling, his windows rattling. “I could hear the glass,” he said. He was confused. He woke as if Elon Musk himself had grabbed him by the shoulders.

Rangel was woken up by a launch by SpaceX, which is based 25 miles away. Local residents had not been notified about the launch and so could not prepare. The article goes on to detail how Musk's nearby presence has changed life in Brownsville in many ways:

To some, Mr. Musk has given Brownsville, a particularly poor city of about 200,000 in a neglected part of Texas, a reason for being, a future. To others, he’s a colonizer, flirting with white nationalists online while exploiting a predominantly brown work force in one of Texas’s fringes.

And so it goes.

I live about 300 miles from Brownsville, in Austin, Texas, where Mr. Musk moved in 2020. His presence here is felt very strongly: Residents whisper about his social life, and his companies’ health affects the real estate market. In 2022, he bought the website formerly known as Twitter, where I am still, as a journalist, effectively required to spend a good portion of my time online. Mr. Musk’s presence made both places worse, a little cheaper, a little phonier. His promises always seemed to fall flat, both the trivial (he vowed to eradicate bots, but now X is filled with automated porn) and the consequential (he vowed to make his Tesla factory in Austin an “ecological paradise,” but is now fighting to exempt it from environmental regulations).

Around that time, I started to consider how much of my adult life had been intimately shaped by billionaires and the otherwise very wealthy. The answer, I realized, was all of it. For a decade I’ve written about Texas politics, which is almost all reducible to fights between plutocrats belonging to different factions. I was a stenographer recording the symptoms of feuds between powerful men I’d never meet. National politics was not much different. At some point, it became more important to follow Robert Mercer and Peter Thiel than the Speaker of the House. Billionaires ran the new media (Mr. Musk, Mark Zuckerberg, Sergey Brin and Larry Page) and the old (Rupert Murdoch, the Sinclair family). My childhood newspaper, The Austin American-Statesman, was gutted by the mismanagement of the Cox family, descendants of old-school media barons, and then sold to hedge fund vultures. The chaos they created was inseparable from the chaos I was writing about in politics.

For all their wealth and power, these figures generally seem maladjusted, unhappy and insecure. Maybe that is to be expected. In 2012, social scientists found that those driving more valuable cars were less likely to stop for pedestrians at a crosswalk. If that’s what a slightly nicer whip does to the human brain, what does ten thousand million dollars do? What strange ideas might you develop about yourself? Would you feel bound by conventional morality? Would anyone around you seem real?

Mr. Musk seems even more disconnected to the bonds that tie the rest of us. He has talked often of his suspicion that the world around us is a computer simulation, which seems less of a philosophical inquiry than an explanation of how far he feels from human connection.

FWIW, spent the first four years of my life in Ellsworth, PA., which was effectively a company town, organized around coal mines owned by Bethlehem Steel. But I remember nothing of it. The family then moved to Johnstown, PA., which was dominated by both Bethlehem Steel and US Steel. But that was before the world of social media. No matter where you live, if social media are important to you – they certainly are to me – then you live in the orbits of the billionaires who control it. An so it seems to go with AI. This very important and consequential technology is subject to the whims of some billionaires with very strange conceptions of themselves and their place in the world.

And so Hooks goes on to tell his story. At some point a bit later he says:

In writing about politics, I am struck forcefully again and again by the desire most people have to be part of a grand story, an exciting narrative that gives meaning to their lives. We live in an age of declining religious belief and existential unrest. Mr. Musk is offering the public a chance to be part of his grand narrative. It’s a kindness.

Still later:

SpaceX hoped to present to other humans struggling with the big questions “the idea of us being a spacefaring civilization.” That’s the language Ms. Tetreau, and so many others in Brownsville and elsewhere have picked up on: the idea that by “making humanity multiplanetary” by facilitating human settlement of Mars and beyond and by protecting sentience in case humans one day die off here, the “light of consciousness” will be preserved or extended.

It’s language that sounds like it might come from an eastern religion — taking the Dao to Pluto — or New Age syncretists. Mr. Musk has self-interested reasons to make this case, of course. If SpaceX has a spiritual mission, then he is a spiritual leader, all the better to receive the approval he seems to crave. In 2021, he argued that he shouldn’t pay higher taxes because it would interfere with his mission to “preserve the light of consciousness.”

But he clearly also believes it. And Mr. Musk is properly understood as a kind of spiritual leader. There’s something of a dividing line among SpaceX fans between engineer types who think the rockets are cool, and those who accept Mr. Musk’s premise that the company is saving the human race. He offers community. He offers hope.

Returning to earth we have:

In July 2021, Jeff Bezos, a different billionaire with a private space program in a different part of Texas, experienced weightlessness, briefly, after being launched by a Blue Origin rocket. A few months later, the company launched William Shatner, the progenitor, as Captain Kirk, of several generations of adolescent space fantasies. When he landed, while Mr. Bezos grinned nearby at the success of his latest toy, Mr. Shatner wept. He was struck not by how much was “up there” but how little. “Everything I had thought was wrong,” Mr. Shatner wrote later. “The contrast between the vicious coldness of space and the warm nurturing of Earth below filled me with overwhelming sadness.” He suddenly understood how fragile the home planet was, and he knew it was all we had.

There's more at the link.

A Systematic Review and New Analyses of the Gender-Equality Paradox

Herlitz, A., Hönig, I., Hedebrant, K., & Asperholm, M. (2024). A Systematic Review and New Analyses of the Gender-Equality Paradox. Perspectives on Psychological Science, 0(0). https://doi.org/10.1177/17456916231202685

Abstract: Some studies show that living conditions, such as economy, gender equality, and education, are associated with the magnitude of psychological sex differences. We systematically and quantitatively reviewed 54 articles and conducted new analyses on 27 meta-analyses and large-scale studies to investigate the association between living conditions and psychological sex differences. We found that sex differences in personality, verbal abilities, episodic memory, and negative emotions are more pronounced in countries with higher living conditions. In contrast, sex differences in sexual behavior, partner preferences, and math are smaller in countries with higher living conditions. We also observed that economic indicators of living conditions, such as gross domestic product, are most sensitive in predicting the magnitude of sex differences. Taken together, results indicate that more sex differences are larger, rather than smaller, in countries with higher living conditions. It should therefore be expected that the magnitude of most psychological sex differences will remain unchanged or become more pronounced with improvements in living conditions, such as economy, gender equality, and education.

H/t Tyler Cowen.

Racism and social welfare in the good old USofA

Bryce Covert, There’s a Reason We Can’t Have Nice Things, NYTimes, July 21, 2022.

The United States is one of six countries in the world without a national guarantee of paid parental leave. Twenty-three other countries have universal child or family allowances. We spend just 0.2 percent of our gross domestic product on child care for our youngest children, compared with an average of 0.7 percent among countries in the Organization for Economic Cooperation and Development.

In other words, paid leave, child care systems and child allowances are so common as to be banal in much of the rest of the developed world. But the United States has none of these things.

Racism:

Why is it so much harder — right now, seemingly impossible — for our country to enact new programs that are customary in much of the rest of the world? It’s easy to blame one or two senators, but the problem runs much deeper. More or less, it comes down to our long history of racism and how it’s wormed its way into every debate over government benefits.

In a seminal 2001 paper, the economists Alberto Alesina, Edward Glaeser and Bruce Sacerdote tried to answer this very question: Why doesn’t this country have a welfare system that looks like the ones in European countries, progressively taxing those with the most wealth to redistribute resources to those with the least? Economic differences, they concluded, don’t explain it. But they did find that “racial fragmentation” has played a “major role” in keeping us from these policies in a way it hasn’t elsewhere. They also find that while Europeans see the poor as members of their own group who are merely unfortunate, Americans see them as lazy “others.” American voters are less likely to demand that their leaders pass policies that help the least well off. “Racial animosity in the U.S. makes redistribution to the poor, who are disproportionately Black, unappealing to many voters,” they conclude.

The United States is not the only country that has racists and racism, of course. But our history is deeply intertwined with race, tracing back to slavery and its role in building the country. [...]

Race has played an outsized role in nearly every debate over the American social safety net.

There's more at the link.

Ramble at the beginning of August 2021: We’re lost, looking for meaning, alas inequality [the Tractatus]

The inequality that sends billionaires into space is not an independent and isolated feature of the contemporary world. But let’s not start there. Let’s start with something ‘easy,’ Wittgenstein’s Tractatus, then we can think about the meaning of life, and then we can take a look at inequality – kith and kin to those billionaires. I end with a somewhat whimsical suggestion for a Twitter tax for the rich.

This is something of a grab bag and a parking lot. I’ve been thinking of these things and put them here so I know where they are. In time I’ll attempt to make sense of them. Maybe.

Wittgenstein’s Tractatus

I recently read a post by Rohit (The Architecture of Knowledge) that reminded me of Wittgenstein’s Tractatus Logico-Philosophicus. I asked him about it and he replied that, yes, he was familiar with it and that it was “an inspiration forever in its scope and ambition.”

I understand where he’s coming from. I read it early in my undergraduate years at Johns Hopkins and it had a strong effect on me. Yes, for its logical structure, but also for its last proposition: “7. Whereof one cannot speak, thereof one must be silent.” I’d almost say its appeal was evenly split by that proposition and by the rest of it.

Looking back, it is a peculiar work. I went on to study computational semantics in my graduate years at SUNY Buffalo where I studied computational semantics with David Hays (while working on a degree in English literature). There I certainly was interested in something one might as well call “the architecture of knowledge,” that is, the structure of human knowledge. For the most part we – members of Hays’s research group – were interested in general principle, on the one hand, and small scale structures on the other. Yet my first major piece of work, an analysis of Shakespeare’s Sonnet 129, certainly implied large scale structure, as did my dissertation, “Cognitive Science and Literary Theory” (1978). That work certainly looks very different from Wittgenstein’s Tractatus.

Wittgenstein was much taken with symbolic logic, which was relatively new at the time. He took its propositions to represent, that is, to be capable of representing, facts about the world. The world itself? Is that what he was chasing? Or did he think of those propositions as representing what Noam Chomsky came to call mentalese, the conceptual language of the human mind? Perhaps he did, but if so, he later came to rather different views on such subjects. In any event it certainly doesn’t look the work I did with David Hays or, for that, matter any of the roughly similar work others were doing at the time (see, e.g., John Sowa’s comprehensive website on knowledge representation).

Of course representing how we think about the world is very different from representing the world as it really is. That’s something fraught with metaphysical difficulties. And yet that’s something I’ve given some attention to in recent years, I’m thinking particularly about my work on pluralism, but also my more recent work, What economic growth and statistical semantics tell us about the structure of the world. This work, however, is quite different from, has a very different texture than, the earlier work on conceptual structures.

That there is a clear difference between these two bodies of work suggests that we’ve learned something in the decades that have passed since Wittgenstein wrote his Tractatus. That work, it seems to me in retrospect, is neither about the world nor about our representations of the world. Or it is indifferently about both. It is an undifferentiated metaphysical ether.

To live a meaningful life

Meanwhile, our visions of the future are vapid, a theme I’ve been exploring in a recent series of posts on billionaires-in-space and in a post on our visions of the future. I think this is linked to various posts I’ve made about living a meaningful life:

• Scott Sumner, Meaning in Life,
  
• Our Rage for Order and Coherence,
  
• Personality, understanding, and anxiety as the driver of cultural evolution [Tech Evol],
  
• Fear of death as a driving force in human (cultural) life

Our visions of the future are not coupled with, do not emerge from, a belief in living a meaningful life. Absent such a belief, billionaires going into space collapses into self-regarding joy-riding. These seem to be people unconnected with the world, holding themselves above and outside the world. They are hollow men.

But how does the human mind, the human spirit, find itself at home in the world? For that’s what’s at stake. In a post about Mark Moffett’s The Human Swarm I made some observations about identity that are relevant to the question of meaning:

The argument that needs to be made is that our nervous system affords us open-ended awareness of the world. I suspect that’s a joint product of the active nature of the nervous system and the emergence of language. On that active nature, the nervous system doesn’t passively take the world in, but rather actively probes the world through continuously projecting expectations – think, for example, of the model William Powers developed almost a half century ago in Behavior: The Control of Perception (1973). Thus perception is a process of verifying those projections (or, to use a more current language, updating Baysian priors).

The emergence of language leads to an endless curiosity about everything: What’s that? How does it work? Where’d it come from? Living becomes thus becomes a dialog with the world. And the question, Where did WE come from? will arise in that process. The answer initially takes the form of myth, of stories about origins. And those stories, in effect, establish the link between a society and world. That too is a matter of identity.

Those same myths and stories direct our search for meaning in life. Where do stories of billionaires joy-riding in space direct that search for meaning?

Inequality, executive pay, and stagnation

Back in 2019 Tyler Cowen published a short article in Time, Why CEOs Actually Deserve Their Gazillion-Dollar Salaries, which was excerpted from his recent book, Big Business: A Love Letter to an American Anti-Hero. After acknowledging that that top CEOs make 300 times as much as the average worker, Cowen argues:

While individual cases of overpayment definitely exist, in general, the determinants of CEO pay are not so mysterious and not so mired in corruption. In fact, overall CEO compensation for the top companies rises pretty much in lockstep with the value of those companies on the stock market.

The best model for understanding the growth of CEO pay, though, is that of limited CEO talent in a world where business opportunities for the top firms are growing rapidly. The efforts of America’s highest-earning 1% have been one of the more dynamic elements of the global economy. It’s not popular to say, but one reason their pay has gone up so much is that CEOs really have upped their game relative to many other workers in the U.S. economy.

Today’s CEO, at least for major American firms, must have many more skills than simply being able to “run the company.” CEOs must have a good sense of financial markets and maybe even how the company should trade in them. They also need better public relations skills than their predecessors, as the costs of even a minor slipup can be significant.

And so forth and so on, “yada yada,” to quote various characters from Seinfeld. I’m willing to grant that these highly compensated executives get their jobs through honest labor, rather than some form of corruption, and that, on the whole, they are more competent than the next lower tier of executive talent.

What I question is that ratio between CEO pay and the pay of the average worker, 300-to-1. Is that necessary? Wouldn’t a 30-to-1 compensation ratio leave plenty of room for these (mostly) guys to play “mine is bigger than yours”? Where did that ratio come from?

We know roughly when it arose, after the 1960s. In August of 2020 the Economic Policy Institute reported:

In 2019, a CEO at one of the top 350 firms in the U.S. was paid $21.3 million on average (using a “realized” measure of CEO pay that counts stock awards when vested and stock options when cashed in rather than when granted). This 14% increase from 2018 occurred because of rapid growth in vested stock awards and exercised stock options tied to stock market growth. Using a different “granted” measure of CEO pay, average top CEO compensation was $14.5 million in 2019. In 2019, the ratio of CEO-to-typical-worker compensation was 320-to-1 under the realized measure of CEO pay; that is up from 293-to-1 in 2018 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989. CEOs are even making a lot more—about six times as much—as other very high earners (wage earners in the top 0.1%). From 1978 to 2019, CEO pay based on realized compensation grew by 1,167%, far outstripping S&P stock market growth (741%) and top 0.1% earnings growth (which was 337% between 1978 and 2018, the latest data year available). In contrast, compensation of the typical worker grew by just 13.7% from 1978 to 2019.

Cowen has also written about something he calls The Great Stagnation (2011), when America’s productivity started slumping. As I recall he sees stagnation as beginning in the 1970s. So CEO pay starting galloping upward at roughly the same time economic productivity started slowing down. Is there a connection there?

I’m not suggesting that one caused the other, though I must admit the correlation is tempting. However, the CEO compensation system is not a system that is isolated from and thus independent of the overall economy. They are two aspects of the same economic system.

Martin Luther King on the "Freedom Budget" [inequality]

Matthew Yglesias, Martin Luther King called for radical redistribution of material resources, Slow Boring, July 8, 2021.

The Freedom Budget

I think it’s reasonably well known that after the Civil Rights Act in ’64 and the Voting Rights Act in ’65, King went on to speak out against the Vietnam War and to launch something he called the Poor People’s Campaign.

But I belabor some of those points of the I Have A Dream speech just to underscore that the themes of economic justice and substantive equality were there from the beginning. King was from the south, most of the Black population lived in the south, the most egregious acts of racism were in the south, and the most intransigent politicians were from the south, so the south was a big focus of his work. But he’s saying in Cotton’s favorite speech that the situation in “the slums and ghettos of our northern cities” is unacceptable.

In 1966, King writes an introduction to a proposal that Bayard Rustin calls the “Freedom Budget.”

It’s a plan, essentially, for massive government-led investment to eradicate poverty and generate full employment. You could think of it potentially as what the US government could have tried to do in the mid-1960s instead of the big military buildup in Vietnam. And while I think you could take issue with some of the technical elements of Rustin’s program, his basic vision — improved public services, an enhanced welfare state, a robust commitment to full employment — is exactly what I think a sound political vision looks like.

And here’s a bit of King’s introduction:

After many years of intense struggle in the courts, in legislative halls, and on the streets, we have achieved a number of important victories. We have come far in our quest for respect and dignity. But we have far to go.

The long journey ahead requires that we emphasize the needs of all America’s poor, for there is no way merely to find work, or adequate housing, or quality-integrated schools for Negroes alone. We shall eliminate slums for Negroes when we destroy ghettos and build new cities for all. We shall eliminate unemployment for Negroes when we demand full and fair employment for all. We shall produce an educated and skilled Negro mass when we achieve a twentieth century educational system for all.

Now obviously, conservatives don’t agree with those ideas and that’s fine.

But if you want to understand why racial justice advocates aren’t satisfied with the “judge by the content of character” nostrum, it’s because King’s version of that dream was the endpoint of a program of massive material redistribution to build a radically more egalitarian society.

Class struggle, not DEI initiatives

Right before King was murdered, my grandfather interviewed him for a magazine article about the Poor People’s Campaign. It was a really big moment for grandpa and he spoke about this stuff with me when I was a kid. King was saying at the end that the moral fervor of the civil rights movement needed to go in the direction of “class struggle” and “redistribution of economic power,” and that America risked damnation over its indifference to the fate of the poor.

Here’s Jose Yglesias in 1968:

A few minutes later, in Dr. King’s office on the other side of a thin partition, an office no larger than Young’s and much more cluttered, I asked King also if he hadn’t abandoned moral issues for the class struggle. He was in shirt sleeves and had leaned back in his chair, one arm raised, tapping his head lightly with his hand, a favorite position with him. Now he leaned forward and spoke directly, a manner I was to find customary with him, so that interviewers seldom have to rephrase questions; he responds to the tone and level of the question but also, as if fulfilling a personal need, to implications that at first do not seem implicit in the question: an intellectual curiosity that gives the effect of total sincerity.

“In a sense, you could say we are engaged in the class struggle, yes,” he said. He explained that the gains for which the civil-rights movement had fought had not cost anyone a penny, whereas now — “It will be a long and difficult struggle, for our program calls for a redistribution of economic power. Yet this isn’t a purely materialistic or class concern. I feel that this movement in behalf of the poor is the most moral thing — it is saying that every man is an heir to a legacy of dignity and worth.”

Although we went on to talk of other things, this question remained with him, and I heard him the next night, at a church in Birmingham, expand on it. There he continued with a discussion of the parable of the rich man and the beggar Lazarus. Lazarus had not gone to heaven simply because he was poor, King argued, nor was the rich man to hell because he was rich. “No, the rich man was punished because he passed Lazarus every day and did not see him … and I tell you if this country does not see its poor — if it lets them remain in their poverty and misery — it will surely go to hell!”

Looking back at this from the vantage point of 2021, I’m struck by a few things:

• We have made some progress on these issues since 1968, but honestly not all that much — though the full impact of changes that were adopted earlier in the Johnson administration was maybe not yet known.
• We are actually on the verge of a massive breakthrough in reducing child poverty if we can extend and improve the American Rescue Plan’s Child Tax Credit provisions.
• There’s nothing here about microaggressions or diversity training or the difference between equity and equality.

All in all, it’s a very populist, straightforward vibe.

It’s also self-consciously radical — King doesn’t talk like a politician who’s trying to be seen as moderate — and King was an unpopular figure in his day. Today we tend to telescope the Civil Rights Era. But there were constant bouts of racial progress in mid-century America from the appointment of the first Black general in 1940, to Jackie Robinson in 1947, to Truman ordering military integration in 1948, and Brown v. Board of Education in 1954. The ’64 Civil Rights Act is preceded by the Civil Rights Act of 1957 and then the Civil Rights Act of 1960. White America wanted to be congratulated on all this rather than told the current trajectory of the country was leading to deserved damnation. King was not running for office, so he did not really cater to that desire for congratulation.

There's much more at the link.

For an oblique comment, see my post, TO WAR! Part 1: War and America's National Psyche, where I note:

Thus we have the thesis in Klinkner and Smith, The Unsteady March (U. Chicago, 1999). They argue that African Americans have been able to move forward on civil rights only during periods where the nation faced an external threat - the Revolutionary War, the Civil War, and the major wars of the first half of the 20th century. When the external danger had subsided, gains were lost. From my point of view, they’re arguing that, when external danger looms large and demands attention, the citizenry can focus aggression there and so ease up on the internal colony. Beyond this, of course, it becomes necessary to recruit from the colony to fight the external enemy, both physically and propagandistically - be kind to your black citizens when you fight the Nazis, etc.

So much for the competitive marketplace [it took a woman to call the bluff]

Zachary D. Carter, The Woman Who Shattered the Myth of the Free Market, NYTimes, April 24, 2021.

Back in the old days, before World War II:

Marshallian economics was a realm of beautiful symmetries. Supply and demand naturally reached an equilibrium, and workers were paid the precise value of what they contributed to production. So long as companies had to compete on the price and quality of their goods, consumers could force producers to make improvements by purchasing cheaper, superior goods from their competitors. The market would respond to consumers and the wealth of society would increase.

The snake to this Eden was monopoly. If a single producer captured enough market share, it could immunize itself from competition and force consumers to respond to its preferences — higher prices, inferior quality, suppressed innovation. Marshall recognized that most markets were not perfectly competitive. But like other thinkers of his day, he believed that these were passing flaws and that markets had a natural tendency toward competition. The market was almost always improving itself of its own accord; only conditions of pure monopoly could impede this progressive trend.

Robinson turned Marshall’s framework on its head. Competition, she argued in her landmark 1933 book, “The Economics of Imperfect Competition,” wasn’t an on-off switch between pure monopoly and pure competition. A competitive market was not the normal state of affairs — it was a rare “special case.” Markets typically reached a state of “equilibrium” in which Marshall’s progressive improvements halted while exhibiting many of the flaws of a monopoly regime. [...]

The most potent arrow in Robinson’s conceptual quiver was a new idea she called “monopsony.” A monopoly had always been understood to involve a single seller forcing its prices on powerless buyers, like the U.S. oil industry at the turn of the century. But buyers, Robinson observed, could enjoy the forbidden fruits of imperfect competition as well: If only one buyer for a good existed, then that buyer could dictate its price, no matter how many sellers might be competing for its purchases. This was monopsony.

Crucially, Robinson argued that workers, as sellers of their own labor, almost always faced monopsonistic exploitation from employers, the buyers of their labor. This technical point had a political edge: According to Robinson, workers were being chronically underpaid, even by the standards of fairness devised by the high priests of the free market.

There's more at the link.

CEO cut his own pay, drastically, so he could afford to raise his employees to a minimum of $70K per year

Since our $70k min wage was announced 6 years ago today:
*Our revenue tripled
*Head count grew 70%
*Customer base doubled
*Babies had by staff grew 10x
*70% of employees paid down debt
*Homes bought by employees grew 10x
*401(k) contributions grew 155%
*Turnover dropped in half

— Dan Price (@DanPriceSeattle) April 13, 2021

We started our $70k min wage with about 130 employees in Seattle.

It worked so well we expanded it to a new Boise office, where the cost of living is lower but people deserve good pay all the same.

We now have about 200 employeeshttps://t.co/0eJxdZYape

— Dan Price (@DanPriceSeattle) April 13, 2021

What helped inspire our $70k min wage?

An employee was secretly working a 2nd job at McDonald's. It was clear I was an awful CEO who was failing his employees. I gave her a raise to quit that job. No one should have to work two jobs to make ends meet.https://t.co/hrgDYUDXYB

— Dan Price (@DanPriceSeattle) April 13, 2021

Our success with a $70k min wage isn't some fluke.

A Massachusetts biotech recruiting firm raised its min wage and saw revenue and headcount grow 50%, while retention rates doubled. Profit held steady despite the $500,000 cost of raiseshttps://t.co/AnJR3xN6y4

— Dan Price (@DanPriceSeattle) April 13, 2021

People focus on the cost of paying employees well but not on its benefits.

For us: Our happy employees drove record sales and we now have 20,000 small business clients.

Our turnover is low and we spend $0 advertising openings since we get thousands of applicants.

— Dan Price (@DanPriceSeattle) April 14, 2021

We're doubling down on our mission to invest in employees. Our revenue (which comes from small busienss credit card processing) is still down slightly from pre-pandemic. But we're handing out raises of 5-6% and hiring to grow headcount by 10% to make workloads easier.

— Dan Price (@DanPriceSeattle) April 14, 2021

I made a lot of personal changes. But I still had savings and made a fair salary. I don't miss anything about the millionaire lifestyle. Money buys happiness when it gets you out of poverty but not when it gets you from well-off to very well-off.

— Dan Price (@DanPriceSeattle) April 13, 2021

a few small businesses here and there have. But not a single big corporation has followed suit. I thought if I set an example and proved that it worked, the "free market" would follow, but I realize how naive I was.

— Dan Price (@DanPriceSeattle) April 13, 2021

a few small businesses here and there have. But not a single big corporation has followed suit. I thought if I set an example and proved that it worked, the "free market" would follow, but I realize how naive I was.

— Dan Price (@DanPriceSeattle) April 13, 2021

How it all started, from the NYTimes in 2015, One Company’s New Minimum Wage: $70,000 a Year.

Is New York "society" over? New York Social Diary on Ghislaine Maxwell

David Patrick Columbia, July 7, 2020:

The story to take to the beach (with your mask) this past weekend was the discovery and arrest of Ghislaine Maxwell at her retreat/hideout at the foot of Mt. Sunapee in New Hampshire.

Aside from the scandal, the mysteries, the Epstein death/suicide/disappearance, it’s become a turgid subject of what used to be the world of society in New York. That world over the last now century and a half has not only changed but in many ways dissolved. The last gasp might have been provided by Covid.

Ghislaine Maxwell, ten years ago was riding high, along with her cohort Epstein. I never met him. I had met her. That is not to say I got to know her. But I did have a favorable first impression. That does not confer reality but it does provide some clues. I knew background from the press and her famous father’s death. She was very personable and in a very pleasant way. I never knew about her relationship with Epstein until his closing scenes. She seemed intelligent. And congenial.

Epstein:

Jeffrey Epstein was an important social figure to many people who did not partake or indulge in his sex-business. He sought social connections with all kinds of prominent and important people. Felicia Taylor, who knew him socially, recalled the time he invited her to his mansion “for tea.” They sat in one of his parlors where there was a grand piano and had tea. Afterward he gave her a concert on the piano. He was an accomplished pianist. After the concert, that was that. Teatime over, Felicia departed.

Connections:

Ghislaine had many social connections in this country as well as the UK and elsewhere. According to Emily Smith in yesterday’s NY Post, “Prince Andrew helped launch Ghislaine into the New York social scene when she was nothing after the death of her father. She always saw him as a real friend.” It may have been that Andrew met Epstein through Maxwell. Or Maxwell met Epstein through Andrew. Whatever it was, they all clicked. Between the three of them, the connections were plentiful. Together they could only grow.

At the close:

In the case of Epstein and Maxwell they had something special which included their hazy crazy maybe notoriety. And it had to do with sex. And all kinds of sex. And all kinds of participants. This went on for decades, and well within the knowledge of those who have every reason to NOT want the world to know what turns them on when Mommy’s not around. [...]

Whatever happens, we are not going to find out what Ghislaine Maxwell knows. What we, “the great unwashed,” are getting to see is how some people, mainly male, who acquire great fortunes and/or acquire “power” in the public arena, are inclined to push the “power” in other areas of one’s life. Potential gross humiliation is probably the motivation behind a love of taking a chance.

Ghislaine knew all about that. She was, in a way, a 21st century madam in a world of corporatacasy. So maybe this is the end of her life. Maybe this is where her head is at now. Because if, in fact she does reveal The Story of a lot of the Epstein clientele, it would affect many lives and many who are innocent. If that is The Story.

Does it make sense to see the California blackouts as an effect of inequality, as a tax the 1% is imposing on the 99%?

I wonder how many of the executives (and board members?) who made this decision will feel the effects themselves?

Two days ago Tyler Cowen had a post, The economics of California power blackouts. He began by quoting from a NYTimes article [1]:

“When you turn the lights out on 3 million people because you have to keep the power lines safe then there’s no reason you should be allowed to continue,” Mr. Court said.

Michael Lewis, PG&E’s senior vice president of electric operations, said the issue was safety.

“We would only take this decision for one reason — to help reduce catastrophic wildfire risk to our customers and communities,” Mr. Lewis said in a statement.

PG&E filed for bankruptcy in January after amassing tens of billions of dollars in liability related to two dozen wildfires in recent years. As speculation grew that its equipment might be the cause of the Kincade Fire, its stock price plummeted about 30 percent on Friday to $5.08, a small fraction of its 52-week high of $49.42.

He then went on to observe:

I would think the market expectation is that if PG&E is allowed to continue, as is likely to be the case, that it slowly will claw its way back to profitability, given that this is a highly regulated sector with barriers to entry. So the company is afraid of losing its expected remaining profit from further liability, and thus it plays it safe with power, too safe because they don’t suffer so much from the power blackouts. Sadly, the retail customers do not have many other options.

The rest of his column is about how this situation might better be handled. Let's set that aside. What interests me is just what's set forth above. It looks like the 1% who are making PG&E's are protecting their own financial interests rather than the interests of the 99% who they are supposed to serve, not out of good will mind you, but because they are customers. They are paying for power, but not getting it in this instance.

Cowen has a more recent post in which he laments that economists are all over it when it comes to opining on Big Issues, but when it comes to "designing a better incentive model for California power utilities — a concrete problem for which economics is remarkably well-suited — there has been close to complete silence." Whoops!

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[1] Cowen's link points to a running compilation of reports; that particular one is no longer in the compilation. But this NYTimes article, PG&E Warns It Could Cut Power to California Users Again, contains the relevant statements (from Lewis) and information (about the bankruptcy filing).