Poverty and network effects

Ran across a really interesting that I want to share. No time to comment on it at length, but the approach it describes to poverty is really important. It’s from Claire Melamed at Aeon. Here’s a quick summary:

“Look at that seesaw again. It’s tempting to picture the people on it as atomised individuals, randomly distributed between the two sides. But in fact they aren’t like that at all. People don’t end up among the very rich, or languish on the side of the very poor, by chance. Rather, their position depends to a remarkable degree on the groups that they belong to. Where do they live? What is their ethnic group or religion? Do they have a mental illness or a physical disability? What family do they come from?”

There are some really important insights in this piece, but perhaps most important is her emphasis on network effects as related to poverty and inequality. In American culture we imagine wealth and poverty, like nearly everything else, as almost exclusively a matter of individual qualities. We are quite deliberately and ideologically blind to the wider effects of region, race, culture, and other network factors that influence success.

This blindness may have something to do with the ways that the New Deal led to the Civil Rights movement, or the Great Society seems to have actually exacerbated poverty in African American communities. Many of our efforts to relieve poverty are built in a way that impacts different networks in different ways. Our blindness to that dynamic creates strange distortions.

The anti-poverty campaigns of the 30’s and 60’s were actually radically successful in mainstream white and urban communities. They have been less successful in minority urban communities and white rural areas like the Appalachians. In fact, the structure of some of these efforts and their localized successes, may have actually contributed to inequality in some strange ways. My conclusions, not the author’s.

More to come. Complete article here.

Chris Ladd is a Texan living in the Chicago area. He has been involved in grassroots Republican politics for most of his life. He was a Republican precinct committeeman in suburban Chicago until he resigned from the party and his position after the 2016 Republican Convention. He can be reached at gopliferchicago at gmail dot com.

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115 comments on “Poverty and network effects
  1. tuttabellamia says:

    Well, everyone, I have to report for jury duty Monday morning, so I may get the chance to put to real-world use the discussion and reasoning skills I’ve learned from being on this blog.

    Wish me well, and have a great weekend.

    • flypusher says:

      Hey Tutta, I hope it’s an interesting and enlightening experience. I’ve always wanted to have that experience at least once, but I’ve never even made it past the initial large pool. 😦

      If it’s Harris Co., bring plenty to read and/or a good selection of electronic games!

    • desperado says:

      If you haven’t been to jury duty recently, be prepared. Jury duty is now an airport-like experience. Get ready to take your shoes off and be herded through a metal detector.

      • Owl of Bellaire says:

        And I just received a summons for Bellaire jury service. Apparently the dictum from on high now is *no* iPads, smartphones, or other electronic devices whatsoever in the courtroom, whether you be a plaintiff, witness, observer, or juror. It merely continues the journey of the courts from a place where reasonable behavior was expected (and a lack of it was punishable) to a place where no trust or leeway is permissible for anyone.

        Perhaps I ought to take one of those hollowed-out hardback storage boxes, to point out that the ban on electronic devices ostensibly for “security” reasons doesn’t really wash. It’s pretty clear the magistrate just has a bug up his butt.

        Oh, and I caught three typos in the jury summons. Will the fall of civilization never cease? 🙂

      • flypusher says:

        “Apparently the dictum from on high now is *no* iPads, smartphones, or other electronic devices whatsoever in the courtroom,..”

        Now that is just crazy talk!

      • objv says:

        We’re doomed – grammatically, that is. Owl and Tutt will need to start stocking their respective bunkers with cans of tuna, bottled water and a copy of “Eats, Shoots, and Leaves.”

        I’ll probably muddle along just fine not noticing that civilization has fallen – sort of like those sad, pathetic people in the “Left Behind” book.

      • objv says:

        Fly, I know what you mean. My septic system backed up last night. My first thought was of relief that it wasn’t the internet that was out of commission. However, I quickly came to my senses as I started clean-up. 😦

  2. Brent says:

    Lots of conversation on stuff social science figured out long ago. try these insights friends.

    1.
    The Hidden Cost of Being African American: How Wealth Perpetuates Inequality Paperback – January 27, 2005
    by Thomas M. Shapiro (Author)
    2.
    Unequal Childhoods: Class, Race, and Family Life, 2nd Edition with an Update a Decade Later Paperback – September 20, 2011
    by Annette Lareau (Author)

    BUT new research is revealing that our social networks have the most power in determining everything from economic opportunity to susceptibility to contagion (see my previous comment).
    Thanks for listening.

    • tuttabellamia says:

      Brent, speaking of networks, never underestimate the power of the Hispanic family network! 🙂

      We are fruitful (usually), and we tend to take care of each other. As an only child, I’ve been rather standoffish from my own large, extended family, going it alone as much as possible, but in the back of my mind, I know they’re there to help me if I call upon them.

    • johngalt says:

      I don’t disagree that we are walking ground that has been well-trodden by academics, Brent. But there are quite a lot of people, some of whom are regular commenters here, who honestly don’t understand this and think that the playing field is, by and large, level, and therefore the lack of achievement on behalf of any given individual is the fault of that individual alone. This guides a lot of policy discussions. Part of the challenge is convincing those hold-outs that there is a problem and the other is figuring out how to meet that problem.

      • flypusher says:

        I do have to wonder why the American exceptionalism crowd doesn’t seem to get very upset over the fact that American upward mobility isn’t as mobile as many other First World countries.

      • Owl of Bellaire says:

        Because that data comes from professional academics, who are well-known left-wing pinko commie sympathizers, and it disagrees with their preconceived beliefs, so it must be wrong.

      • texan5142 says:

        Nailed it Owl.

  3. flypusher says:

    I see the usual Horato Alger cheerleading from the right here. Even if I accepted the premise that “wealth is infinite”, (and I don’t, but that’s another argument), not everyone can have the same access because our society has some very skewed priorities in the values we assign (and by values I mean paychecks) to various jobs. There are jobs out there that are absolutely vital to our society, that absolutely must be done, but the people who do them are not always compensated in proportion to the importance of that job. Examples should be obvious.

    • RightonRush says:

      Health care & daycare workers are the first that come to my mind. Also, Para Professional that work in our schools. These folks do a valuable job and are worth much more than minimum wage.

      • flypusher says:

        Indeed. And think how much value an excellent teacher has. We also need the people who build things and fix things. The reading-comprehension challenged will no doubt misinterpret this thread as an argument that everyone ought to be paid the same. It isn’t.

  4. Brent says:

    Hi Chris

    I didn’t read the voluminous comments so please forgive me if this was mentioned but given the interest you express you really should check out all the work being down through the insights of complex systems theory on social networks. The article you reference is, I believe refering to these insights. Start with Linked:
    http://www.amazon.com/Linked-Everything-Connected-Business-Everyday/dp/0465085733/ref=sr_1_1?s=books&ie=UTF8&qid=1411749621&sr=1-1

  5. tuttabellamia says:

    I know I angered many people here when I posted a few months back that I had once lived in “genteel poverty.”

    Last night I came across another phrase which may better describe my situation — it was an attempt on my part to “triumph over mediocrity.”

    For the record, the phrase came from a short story by Mary Gordon called “Sick in London.”

    • Houston-stay-at-Homer says:

      I don’t remember the anger or that topic.

      I have caught myself on more than a few occasions congratulating myself for overcoming “growing up poor”. However, my parents were never long term unemployed, and I had food to eat every day. We paid bills late, but we never had electricity or water shut off. I frequently had to answer the phone to tell bill collectors that my folks weren’t home.

      We always had a TV (and one year in high school we had HBO – Angie Dickinson in Big Bad Mama was a great thing for a teenage boy on the good side of puberty).

      I think, “wow, we were poor”, but then I realize a huge chunk of the population is poor, and what I experienced was far from it. I complained that I didn’t have Nikes, not that I didn’t have shoes.

      I like to think I am doing pretty well for myself, but I am not deluded enough to pretend I didn’t get through a lot on the “easy” setting of life’s video game based on no small part on the quirks of genetics that resulted in a penis, little pigmentation in my skin, and an ability to understand numbers.

      • tuttabellamia says:

        HT, what I find funny is that you are under the impression that I had major struggles just because I’m a Mexican-American female. That was far from the case.

      • tuttabellamia says:

        As you once told me sarcastically — “Tutt, please detail for us how you won the lottery by being a minority” — or something to that effect.

        Darn it. I still can’t find that quote from you so that I can copy and paste it.

      • tuttabellamia says:

        By the way, the period of “genteel poverty” to which I was referring was the time during which I was working part-time from home in order to care for my elderly mom who was in diapers and had dementia.

        I was earning a “minimum income” — about $15k a year — and I had no idea how long the situation would last.

        To make myself feel better I said I was living in “genteel poverty,” and I called my home a “cultural salon.” I likened myself to those proper, schoolmarmish, spinster ladies in British novels.

      • Houston-stay-at-Homer says:

        Tutt…I have no impression that you had any major struggles at all.

        I sincerely do not remember such a conversation, and if I did say that, I hope it was taken out of context.

      • tuttabellamia says:

        It was a conversation between you, me, and Kabuzz about whether being a minority had its advantages.

      • tuttabellamia says:

        And it was toward the bottom of the thread, maybe two-thirds of the way down.

      • tuttabellamia says:

        I see it in my mind’s eye but can’t find it, not even with a Google search.

      • Houston-stay-at-Homer says:

        I wish I could remember it, and I am not doubting your memory. I hope what I said was sarcasm, typos, or out of context.

        Are their benefits to being minority? Sure.

        Give me two 17 year olds with 780s across the board on the SAT applying to the last opening for an engineering program at a university, and for this decision (ignoring all the things that happened before getting to the 780 on the SAT and all the things that will happen afterwards), sure, the minority female candidate applying to engineering school is likely to have an advantage.

        The dude who was killed by cops for carrying a BB-gun at Walmart (a gun sold at Walmart) or the guy last week shot in the hip by the hair trigger cop for reaching for his ID (after being told to get his ID) might have a slightly different interpretation of the benefits of being a minority member.

      • Confederate Rose says:

        Homer, Tutt has accused me of saying things that I never said to Sternn of all people. Just blow it off and certainly don’t spend time worrying or issuing an apology for something you aren’t guilty of.

      • tuttabellamia says:

        HT, thanks for giving me the benefit of the doubt.

        The two examples you bring up fit in with what I’ve said about the advantages of being a woman.

      • Crogged says:

        I reacted to your expression, too quickly and harshly. It’s probably rare that asking someone why is worse than assuming bad intent.

      • tuttabellamia says:

        Thanks, Crogged. I think we are all guilty of making assumptions, or of saying things that come across as tone deaf.

        Anyway, my point is that I discovered a cool new phrase: “he had triumphed over mediocrity.”

        It was about an old gentleman in a geriatric ward who spoke grandly and wistfully of his “days in the cinema,” complete with name-dropping about various film stars. It turns out he had been a film projectionist at a movie theatre.

      • Houston-stay-at-Homer says:

        Tutt…sadly, for lots of women, the advantages of being a woman include on-the-street catcalls; subtle and not-so-subtle harassment; worry that someone is going to slip something in your drink at a bar; worry that if you drink too much, a “friend” may do very bad things to you; watching as clients direct questions to your less qualified male colleagues; and then there is the whole pay equity thing.

        Everyone’s experiences are different, and everyone has somewhat different advantages and disadvantages, but there are not lots of additional burdens associated with being straight, male, and White in the US.

      • tuttabellamia says:

        Ok, I am sold.

        I was remembering when my mom was at the hospital being transferred to hospice care, and the hospice administrator kept addressing Cap instead of me, and when I said I wanted to think about it further before signing the final papers, she begged him to please “reason with her (me).” I had to put my foot down.

      • Crogged says:

        I read “A Room of One’s Own” years and years ago, thank you Virginia Woolfe. One must have some economic stability to have life satisfaction, the two are often confused as the same..

    • Houston-stay-at-Homer says:

      Tutt…little did the administrator know that there is no reasoning with you.

      Editor’s Note: The above line is presented fully in jest and in no way represents the author’s actual perceptions.

      • tuttabellamia says:

        🙂

        All Cap could reply was, “She’s HER mom, not mine. I’m just here for moral support.”

      • tuttabellamia says:

        Hey, HT, I will make sure to copy, paste, and save just the first line to use against you in the future, and I will conveniently leave out the Editor’s Note. 🙂

  6. CaptSternn says:

    Well, John, while I said I might have been a little more “enthusiastic” in my reply to you than I wished, you went out of your way to prove that I wasn’t, that I was right in my observation. ‘Nuff said.

    • CaptSternn says:

      I will add this, Tutt speaks volumes with her comments. My lady is better at expressing views than I am. She is right, don’t be jealous of those that are successful. Wealth is infinite, it is created, not limited. Just because somebody has more and provides for their children doesn’t mean you cannot do the same. Don’t hate people because their parents or grandparents worked and did those things for their family. Don’y envy them, work to succeed like they have.

      • tuttabellamia says:

        I don’t detect envy in people’s hearts. It just seems like the easy way out to focus on the rich. It just happens to be the current trend. Wait a couple of years and it will change.

      • kabuzz61 says:

        I disagree Tutt. There can be no other reason to be absorbed with other peoples wealth and success. On the moral scale, it is neither right or wrong but how you handle your wealth. But those wanting to ‘reform’ how they keep their wealth or whatever can only be rooted in jealousy and/or envy. Just look at the term they use: Have and have nots. Really, what do the ‘have nots’ not have? The others wealth and opportunites that come with it.

      • tuttabellamia says:

        It’s easier to “blame” the rich, because poverty is complicated.

        As you have pointed out, we first must define poverty, which is not easy, because one man’s poverty is another man’s wealth. Also, to what extent is a poor person to blame for his own circumstances, etc? There are a lot of complex questions to tackle with respect to poverty.

      • johnofgaunt75 says:

        Ugh. The old “you’re just jealous” argument. Ask yourself, do you think Marie Antoinette had that thought in her mind while she was dragged to the guillotine with tens of thousands of shoeless, dirt-poor French peasants calling for her head? Was she thinking that “they are such envious people” right before the blade dropped and severed her head from her body?

        See. What this is all about it not jealously or hate or even morality. What this is about is social cohesion and quality of life. Because, folks, when you look at todays world, and throughout history for that matter, countries with high levels of concentrated wealth and little to no social mobility are unstable, corrupt, poorly developed, dangerous and just crappy places to live. You guys might not feel that is an issue but many people do.

      • Houston-stay-at-Homer says:

        Stern and Buzz…as much as we like to go back and forth on issues, I’ve never really understood your fascination with this being envy or jealousy. I don’t want to bring anyone down to a common level. I’m more interested in giving the opportunities to people to achieve a livable level.

        For me, it is about equal opportunities, social and economic mobility, and working towards a “more perfect union”.

        I can’t imagine anyone here (well, maybe one person) has any problem with folks running out and buying a sweet new Maserati each year. I think folks are more concerned with the fact that the elementary schools on the southeast side of Houston, in rural Alabama, and in Bronx probably are not giving kids the opportunities they need or that families cannot figure out a way to afford daycare that doesn’t cause one to shudder as you walk in the door.

        Some of those “on the left” here are likely to be the elitist snobs who are doing just fine financially and have little reason to be jealous of other people’s wealth. I’m a big fan of rich people. I like rich people.

        While there are tremendous stories of people rising from difficult circumstances to achieve great things, there is little doubt that living the “American dream” is just not in the cards for huge chunks of the population. The possibility may be there for a few, but the opportunity isn’t going to be there for the many.

      • BigWilly says:

        I worked at an apartment complex when I was in college. It was an interesting microcosm at the time because there we two contingents of young men working there during the summer; one group was fairly privileged the other was solidly blue collar. I’d have to say that, by and large, the rich boys were arrogant jack asses.

        They knew they would succeed, all they had to do was stay in line and do what was expected of them.

        Envy the rich? Why would I envy an asshole? They are reason #1 that this country is failing.

        Think about that the next time a prominent person’s child kills someone in a drunken driving accident and gets a light sentence because of parental influence.

    • johngalt says:

      I have no idea whether you’re referring to something johnofgaunt wrote or my comment in the previous thread. But this idea that we are envious of the wealthy is nuts. Surely, some people are, but I’m close enough to the 1% (as I suspect jg75 is as well) that I have no need of envy. The salient points are two-fold, both political and economic. We have seen in the last 30 years that essentially all of the gains in wealth have been concentrated in a small segment of the society. If you are in the bottom 90% in terms of wealth or income, then you are certainly no better off than you were in 1980 (in real terms) and might be worse off. In contrast to this insulting meme from the right, most people work pretty hard and they are running to stay in place.

      Why does this matter? This is a consumer economy. As I explained in the previous post, the ultra-rich can only spend so much of their money. A household that earns $10 million per year does not buy anywhere near as much stuff as 100 households earning $100,000. Those purchases, of soap, books, electronics, cars, is what creates jobs. Concentrating wealth reduces overall consumer spending. This has combined with the off-shoring of manufacturing over the last three decades to reduce the middle class jobs that paid for a modest house in the burbs, a new car every few years, and a week at the beach for a week each summer. We have not figured out as an economy what replaces these decent-paying jobs.

      Second is political – we are a democracy (or, as Sternn the pedant will remind us, a constitutional republic). The wealthy have always been able to buy a little power but a combination of factors has increased the role of money from deep-pockets donors. This has paid for a media onslaught that has convinced a lot of people to vote against their economic self-interests, for a variety of reasons. When this tips over, and it will if we keep heading this way, then the outcome will be the election of people who will make Obama look like Barry Goldwater. You don’t want that, I don’t want that, and it would be terrible for the country. So we better figure out how to roll back this trend and reduce wealth inequality for the good of everyone.

      Blaming this opinion on emotions like envy is a comfortable way for you to avoid wrapping your pretty little head around hard problems.

      • johnofgaunt75 says:

        Well said.

        When the next Huey Long comes around or worse, what will Stern and his crowd of “they are just jealous” cheerleaders say?

      • Turtles Run says:

        Bravo JG, Bravo

      • kabuzz61 says:

        You can always find an outlier for any subject. Marie Antoinette? Please.

        John75, you are correct in history demonstrating problems countries faced when wealth is concetrated. But our country is unique. We the people run the show. I know at times it doesn’t seem like it, but we do.

        I contend there was more influence bought by the rich in the late 1800’s and early 1900’s then now.

        Envy and jealousy are not emotions. They are feelings. And feelings are a spontaneous reaction to a person, place or thing.

        Add on top of that what Tutt said about defining the parameters of this debate and something might reveal itself but your ‘damn them all’ argument is not convincing anyone.

        Then you have to add the millions of illegal immigrants that skew the numbers of the poor.

        I also have been blessed for very long hard work over the course of my life but I do not consider myself special or unique. Just determined to better myself. No magic.

      • johnofgaunt75 says:

        Marie Antoinette is simply the extreme end of what eventually happens when wealth and power accumulates in a small set of people and the vast majority of people have little to no ability to advance into said small set of people.

        American Exceptionalism? Please. No country thinks it could happen there. Do you think the average German thought that Germany, one of the world’s greatest industrial power houses, the home of some of the greatest companies of the late 1800’s, creater of many inventions that we take for granted today, would….in the span of a generation….see people carting around wheel barrows full of marks just to buy basic goods and electing perhaps the greatest monster of the 20th century?

        Extreme wealth inequality destroys countries and can end the power of the people in a country. You cite the late 1800’s, for example. You do realize how close this country came to an armed insurrection and revolution do to the extreme circumstances at that time (and in the 1930’s)? Thankfully, we had leaders who understand that to save democracy and capitalism they had to rest some of the control back from the rich and powerful and….yes…share the wealth a little (God forbid!).

      • johngalt says:

        “I contend there was more influence bought by the rich in the late 1800’s and early 1900’s then now.”

        You might be right about that. Let’s think about how that turned out. The “Robber Baron” industry made staggering piles of money for a few people while the rest huddled in tenements (or on dirt farms) eating rat droppings in their canned meats. This started to change when Cleveland was elected for the second time and started cracking down on the corruption that let political machines and the wealthy control elections. It accelerated with McKinley, Roosevelt and Taft. William Jennings Bryan, who may be the closest thing to a socialist to ever make a serious run at the White House, was nominated three times.

        The outcome of this: the Interstate Commerce Act, the Sherman Antitrust Act (and several subsequent laws), the creation of the FTC, the FDA, the Federal Reserve, the 16th Amendment (Income tax), the breakup of Standard Oil, regulation of railroads, etc.

        Are you sure this is the parallel you wish to draw?

      • Crogged says:

        Kabuzz, yes, there was a Gilded Age as described by Mark Twain.

        This is how it works.

        http://theweek.com/article/index/268765/speedreads-how-the-rich-devoured-the-american-economy-in-one-chart

      • flypusher says:

        “Envy and jealousy are not emotions. They are feelings. And feelings are a spontaneous reaction to a person, place or thing.”

        Someone get this man a dictionary, stat!

        Although it’s already been stated quite well, I add my 2cents- this mindless “you’re just jealous” mantra is the height of intellectual laziness and denial.

      • kabuzz61 says:

        So fly, feelings are not spontaneous? Idiot.

      • flypusher says:

        No Buzzy, envy and jealousy are emotions. Spontaneity is completely irrelevant, as is ascribing those emotions to the people shredding your weak arguments here.

    • Owl of Bellaire says:

      Sternn vapidly yawps, “My lady is better at expressing views than I am.”

      And, for the sake of truth and accuracy, it should be pointed out that Tutt’s views were exactly the *opposite* of Sternn’s.

      tuttabellamia, September 25, 2014 at 7:42 am: “I don[‘]t think the tax[-]free status of churches has anything to do with sovereignty. Churches are not some sort of parallel form of government, a theocracy, which requires immunity. The immunity from taxes would be tied in with the freedom to practice religious expression. But would that mean that the newspaper industry should also be tax[-]free, since it is practicing freedom of speech?”

      tuttabellamia, September 25, 2014 at 8:20 am: “And if the US govt [sic] taxes churches, that doesn[‘]t give churches the right to tax the govt [sic]. Churches have no right to tax whatsoever, no right to sovereignty, only the right to be tax[-]exempt as an entity which practices religious expression and perhaps as a non[-]profit charitable organization.”

      When Sternn can’t even get “his lady” to support his wildly fringe views, then you *know* he’s gone off his rocker.

      • tuttabellamia says:

        Actually, Owl, I think Cap was referring to my view that we should not focus so much on the wealthy. He made it seem as though I attributed the focus on the rich to envy and jealousy, when in fact my view is that focusing on entrenched wealth is a waste of time, when we should focus on entrenched poverty instead.

      • CaptSternn says:

        You mean to say that Tutt and I don’t agree on every little thing? Oh, the horror. Silly bird.

      • tuttabellamia says:

        Owl, I just noticed Cap didn’t say I was better at expressing HIS views, only that I was better at expressing “views.”

  7. geoff1968 says:

    I’d reckon that the private and public sectors act as their own check and balance. When the two come together in partnership we get fascism. Narcissus enters our conversation.

    And so does Kansas City.

    Wilbert Harrison 1959, with the brushes. That’s the way you’re supposed to do it.

  8. kabuzz61 says:

    OT, but it looks like Holder resigned because all the emails concerning fast a furious are going to be released. How much do you want to bet that he lied before congress???

    It feels very good to be at the end of this regime.

    John75, why do democrats vote for entrenched wealth people. The Kennedy’s and now the Clinton’s??? I know. That doesn’t count.

    • johnofgaunt75 says:

      Who in the hell is bringing up Democrats? Why are you so quick to assume I am a damn Democrat?

      You are so blinded by your partisanship that you can’t see that BOTH PARTIES are the problem. One is worse and making problem worse, at a faster rate but the other party isn’t helping either.

      Partisans like yourself are part of the reason we are in the current situation we are in. Now go back to Fox News and their hard-hitting “Latte Salute” controversy.

      • flypusher says:

        The “latte salute”, talk about something that isn’t even a molehill. I love how someone dug up a pic of W’s “Barney salute” as a counterpoint. If you fussed about either one you are an idiot.

    • johngalt says:

      The Clinton’s are “entrenched wealth people”? Bill has made a pile of money giving speeches, but they’re not exactly the Rockefellers. In fact, the Bush family has far more claim to be entrenched wealthy, or does everyone have a compound in Kennebunkport?

  9. tuttabellamia says:

    Mr. 75, there is a middle ground. It’s not as though you’re either an Ivy Leaguer or low income. There are thousands of excellent schools that lead to high-income careers.

    • tuttabellamia says:

      Oops. Wrong spot. The first shall be last.

      • johnofgaunt75 says:

        I agree. I went to a very highly rated private school on the East Coast. I even know a few people who went on to land highly coveted jobs on Wall Street. That is not what I am talking about though.

        What I am talking about is the entrenched wealth in a certain segment of the United States. Unless you grow up in a few places in this country, you are really not exposed to it. People living in Des Moines (while I am sure it is a lovely place), probably are not exposed to the type of people and families I am talking about. But they exist in this country and they hold great power. Public policy in this country, for many years now, has developed to entrench that wealth even more and make wealth, power and status hereditary.

        Now, a ruling aristocracy is fine if that is what you want. Many people have advocated for the existence of such a group to temper the whims and excesses of the masses. Aristole is a perfect example. But that is not what what the United States was founded upon. This country was founded as a rejection of such a system but we are increasingly becoming such a society while, for example, European countries (that historically were such systems), are turning away from it.

      • tuttabellamia says:

        But the rich will always be with us. In the meantime the rest of us carry on with our lives. Life may not be totally fair, but I think it makes more sense to focus our efforts on helping those who live in entrenched poverty than worrying about entrenched wealth.

      • johnofgaunt75 says:

        Why is it an either/or decision?

        Perhaps we should examine the policies of other countries, with similar levels of development but have less inequality and a greater degree of mobility. What is Australia or Canada doing right for example, that the US is doing wrong?

      • tuttabellamia says:

        I guess I don’t consider entrenched wealth a problem. I don’t see anything “wrong'” wth being wealthy, or with the wealthy becoming more wealthy. There is nothing to “fix” here.

        I consider entrenched poverty a problem. People not eating is a problem. People with no roofs over their heads is a problem. People dying young is a problem. The same thing happening to their kids is a problem. If there is a crisis it is on this end of the spectrum. Worrying about the wealthy is a waste of time.

      • tuttabellamia says:

        I guess I don’t consider wealth inequalty a problem, either. I take it you are better off than I am, but I have more important things to worry about..

      • Turtles Run says:

        Tutt

        You should be concerned. When wealth is concentrated in the hands it creates a dysfunctional economy, greater concentration of political power in the hands of the wealthy, and potentially civil unrest.

        Our economy is a consumer based economy so wealth inequality will retard our economic growth which we are seeing today. Granted there are other factors at work but the inequality gap will continue to have a greater negative affect on the economy as a whole.

        Too much wealth concentration is the enemy of the democratic system.

        We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both. ~ Louis Brandeis

      • tuttabellamia says:

        By the way, Turtles, I like to say that you’re my Hispanic conscience.

      • johnofgaunt75 says:

        And, for the record, I don’t have any particular problem with people making money and becoming financially successful. I think that is a great thing. What I do have a problem with is entrenched wealth and power. As Turtles said, countries with high levels of wealth inequality and low levels of social mobility have, throughout history, had a myriad of social problems and it is not conducive to the type of consumer based economy we have here in the US.

      • I think Turtles and Tutt are both in the right here (although I would be loathe to apply Brandeis’ solution). As Tutta says, there is *nothing* “‘wrong’ with being wealthy, or with the wealthy becoming more wealthy.” As Turtles points out, we *should* be concerned about “concentration of political power in the hands of the wealthy.”

        The key is to foster economic and social mobility *without* resorting to coerced redistribution. The concentration of both wealth and political power in the same hands leads to current Russian system of government: a corrupt, totalitarian plutocracy. Forced redistribution, on the other hand, leads to Russia’s prior system of government: a corrupt, totalitarian (communist) plutocracy. 😉

        The best way to keep money out of politics is to take politics out of money. The vast regulatory Leviathan that is our federal government functions as an attractive nuisance to wealth. Wealthy individuals and corporations are very strongly incented to lobby and manipulate this behemoth is every way possible, because failure to do so negatively impacts the bottom line.

        Perhaps we might instead want to consider drastically cutting back on the size, complexity and intrusiveness of the regulatory state. If the system is streamlined and simplified to point where there is nothing to manipulate, wealth will ignore the regulatory state and concentrate on doing what is does best (generating more wealth).

      • Turtles Run says:

        TTHOR – I am not talking about redistribution of wealth nor am i attacking the wealthy. People should be rewarded for their success. I am discussing the influence and power that concentrated wealth holds over the economy and political influence. Brandis speaks to the inability of a representative democracy to function well when the wealthy few who are able to purchase influence and obtain an outsized voice in the law making process.

        We have faced redistribution in this country since the 1980’s. The portion of the economic pie for the wealthy has gone from 8% to nearly 24%. Think about that 16% of economic wealth has left the hands of the middle-class and the poor into the hands of the extremely well-off. That is devastating to our economic progress. Yet, the only redistribution you seem concerned about is some of that lost portion of the economic pie returning to the middle class. Our country should not seek to redistribute the economic pie but to make the pie grow larger so everyone benefits.

        Simplifying government will not change the nature of people to control outcomes in their favor. If anything you simply make it easier. With concentrated wealth inequality the ultra-wealthy are going to do two things – 1) make sure that wealth is protected and 2) grow that wealth even more – they will do these things even at the detriment of the nation. History has proven this over and over again.

      • johnofgaunt75 says:

        Tracy

        I am just as concerned about the ability of the extremely wealthy to gain power and influence at the expense of the less well off in the private sector as in the public.

        Look at the history of landlord-tenant relations in this country, for example, and you can see that the effect can be just as pernicious. The market is not the be-all, end-all, of every solution. If anything, civilization has learned that over the past couple of thousand years.

      • Turtles, JofG, I suspect we are in violent agreement. I’m not suggesting that markets are the solution to all problems, but rather that simple, clear regulations with no loopholes that are impossible to game or circumvent are far more desirable than the mess we currently suffer under.

        Our byzantine, opaque regulatory infrastructure and the Leviathan bureaucratic regulatory state that goes along with it serves only itself and the corporatists latched onto it like lampreys. It needs a drastic haircut.

      • johnofgaunt75 says:

        Tracy,

        I also would like to see cleaner, easier and more efficient rules, regulations and laws. But part of the reason our laws and regulations seem so complex is that very rich people or companies with very deep pockets pay very smart (and very expensive) lawyers a lot of money to get around said simple, clean and “efficient” rules, regulations and laws. Trust me. I know from personal experience.

      • JofG, I grok your concern. However, a ridiculously large portion of my professional life revolves around resolving the idiosyncrasies, internal inconsistencies and outright tomfoolery of CFR governing oil and gas pipelines (49 CFR §§ 192 and 195), and the myriad bulletins, notices, letter of interpretation, etc. that ride along. It’s a hideous mess and in my view should be scrapped completely and totally revamped.

        Much of this complication arises from the simple accretion of layer upon layer of rule making naturally developed over decades as we’ve collectively gotten smarter about the best ways to run and regulate pipelines. Unfortunately the resulting mess is largely unmanageable, and leaves enforcement to the whim of the auditor and/or the prevarication of the operator. This is good for no one.

        We are *much* smarter now than we were 50 years ago about the proper ways to manage our pipeline infrastructure. We *know* how to write regulations that are simple, clear, amenable to computerized analysis, and impervious to gaming (unlike existing regulation; see §192.5 in comparison to §192.905 for an example of game-able ‘old’ code and non-game-able ‘new’ code). If the rest of the CFR in any way resembles those portions pertinent to the pipeline industry, then the whole thing is clearly long overdue for a major overhaul.

      • johnofgaunt75 says:

        No argument from me against re-writing a lot of the current regulation on the books. After they take care of the oil & gas regulations, they can tackle the tax code. An absolute mess (but also a perfect exaample of how we get into the problem of too complicated and too many words).

    • tuttabellamia says:

      Rice, for example.

  10. Owl of Bellaire says:

    Chris, your friendly editor here. Second sentence of penultimate paragraph:

    “They have been successful in minority urban communities and white rural areas like the Appalachians.”

    I believe you’re missing a “less” right before “successful.”

  11. johngalt says:

    A chart was posted to my FB feed just yesterday that tracks accumulated wealth by race and education level. The median household headed by a white high school dropout has more wealth than black or hispanic college graduates. Calculated based on average wealth, it’s pretty close to even between the white dropouts and black college graduates. That’s a shocking legacy.
    http://www.demos.org/blog/9/23/14/white-high-school-dropouts-have-more-wealth-black-and-hispanic-college-graduates

    • fiftyohm says:

      JG- Really interesting stuff. It would be worth a blog all by itself to discuss this and drill down into these data.

    • johnofgaunt75 says:

      It is not surprising. For over 100 years, large sections of this country had laws that explicitly discriminated against African Americans (and in some cases Latinos) and enforced what was essentially an American version of apartheid. White Americans were made legally superior to Africans Americans under such a system and thus were better able to access jobs and thus gather more wealth over generations. Even in the lower classes, this occured. Only now are African Americans finally starting to gather some wealth but that is a slow process and is often hindered by policies in this country.

      For example, the poorly regulated housing market and lending industry in this country severally damaged the wealth of many middle class, college educated African Americans. All of their wealth was tied up in their home and, unlike others, lacked secondary sources of wealth to fall back on when the crash occured.

      • fiftyohm says:

        One thing I’ve learned in a lifetime in the “hard sciences”, is that simple explanations, even those that sound entirely reasonable, are often wrong when dealing with complex systems. The “soft “sciences””, (double quotes intentional), deal with systems so complex, (and practitioners often *so* undisciplined), little of value comes from the effort. And wrong conclusions are not just useless, but harmful.

        Of course there was a vast racial divide in America. Of course this prevented wealth accumulation for generations of minority citizens. But the extrapolation “All of their wealth was tied up in their home and, unlike others, lacked secondary sources of wealth to fall back on” is probably wrong on several counts. First, the vast majority of mortgages that went into default had very little equity at the time of issue. (That was one of the problems). Houses therefore represented very little “accumulated wealth”, other that from an overheated housing market. Next, the rash of bankruptcies that came with the crash sort of belies the notion of the existence of “other pools” of personal wealth. But…

        The data suggest race is an extremely strong factor in the accumulation of wealth. Additional data with trends, geographical information, number of household members, and a host of others will help to possibly ferret out most of the causes. Either way, there will be substantial uncertainty.

      • Owl of Bellaire says:

        fiftyohm claims, “First, the vast majority of mortgages that went into default had very little equity at the time of issue. (That was one of the problems). Houses therefore represented very little ‘accumulated wealth’.”

        How did you manage to buy your house without a down payment? Or are you just being forgetful?

      • fiftyohm says:

        Hey Owl- One of the most significant issues associated with the foreclosure crisis was zero-down loans. There is much evidence of this, back to as early as 2009. http://online.wsj.com/articles/SB124657539489189043 It was to that I was in reference.

        In my case, I saved (for years) for a down payment, and rolled that forward through a couple of houses until, when we downsized, we retired the mortgage.

      • Owl of Bellaire says:

        That is as may be. But in, for example, the Ta-Nehisi Coates (sp?) piece that Chris posted a while back, there most certainly *were* African-Americans who were taken advantage of, through both high down-payments and inflated loan payments (i.e. money higher than a standard, reasonable mortgage or rent, which wealth was essentially vaporized in many cases).

      • fiftyohm says:

        This is true, but the vast majority of foreclosures were new loans with little or nothing down, and therefore represented little ‘accumulated wealth’. QED

    • Interesting. I couldn’t help but note that Asians weren’t considered as a group. Here’s some information that pretty much confirms what one might expect: http://money.cnn.com/2012/06/21/news/economy/wealth-gap-race/

      Time allowing, I’ll map the pertinent data and make it available for all to peruse. Sometimes putting this type of data into spatial context yields intriguing insights.

      My own net worth appears to correlate with observed data. I drive a 10 year old truck and an 8 year old motorcycle. My wife drives an 8 year old car. I can’t help but wonder to what extent cultural attitudes towards saving and spending skew the results.

      • fiftyohm says:

        Tracy – Hope it’s not a rice-rocket. Mine’s Limey through and through!

        But my car is a 2001!

      • Fifty-o, mine’s a Bonny. Wish it were a Vincent, but if wishes were fishes… 🙂

        I think there’s an Indian Roadmaster in my future, though. (My beloved has a curious performance envelope evaluation method that focuses solely on the “cushy-butt” factor – by this measure the Roadmaster is a high performance machine.)

        My stepdad rode an Indian straight-four back in the pre-war days.

        He can barely walk now, but if I get the big Indian I’m going to get him on the back of that sucker come hell or high water!

      • fiftyohm says:

        Heh! Great minds and all that! I want to post a picture of my Bonnie, but need to study how to do it. Don’t want to post some huge-ass Indian like JG did last week. *Your* Indian was much more appropriate.

      • fiftyohm says:

        Er, I mean “Native American”.

  12. fiftyohm says:

    Chris – It was a good piece as far as it went. But it deftly sidestepped an issue that applies to both the international issue of poverty and the domestic: *culture*.

    Let’s just say that much of the Islamic world does not exactly encourage education of women. Let’s just say that high birthrates are, in general, not tickets out of poverty. And let’s just observe that, in our own country, Hip-Hop culture does not exactly laud the value of education.

  13. johnofgaunt75 says:

    Great article.

    Although it mainly deals with extreme poverty in undeveloped countries, I agree that there are general rules that can be applied here in our own country (that is increasingly becoming a country of “haves” and “have-nots”).

    First, look at the GINI Index of the United States as compared to other countries. The 2014 number in the US was 48, with 0 equally perfect equality and 100 perfect inequality. So we are about in the middle. But let’s compare that number to our two closest neighbors. Canada a richer, per capita, country and consistently ranked as one of the countries with one of the highest standards of living in the world, is 32.6. Mexico, a country that many Americans view as a place controlled by a few wealthy oligarchs and rich landowning families, has a GINI Index of 47. When you look at other comparable countries in Europe and Asia, the numbers are even more telling. The United States is the most unequal developed country in the world, with GINI Index numbers nearer to developing countries in Africa and Latin America.

    All this wouldn’t be so troubling if we witnessed a high amount of social mobility in this country. If it was fairly common for the poor to climb to be rich and vice-versa, perhaps the rate of inequality in this country wouldn’t be a concern. After all, that was the old story of the United States; one of its enduring myths: the classic Horatio Alger story.

    Sadly, that is no longer the case. Social mobility is declining in the United States. Wealth, and thus social class, is increasingly a dynastic, intergenerational phenomenon in the US. The US now has some of the lowest degree of social mobility in the developed world. Depending on the study, the US or the UK have the lowest social mobility of such countries. We are far behind other rich countries like Norway, Canada, Germany, Australia and Japan.

    So, we have to ask ourselves, do we want to continue down the policy road we have taken over the last generation that has given us a country of high income inequality and social mobility on par with a country that still has Lords, Earls and Kings? We are becoming a country of aristocracy and everyone else. Is that what the United States was founded to become? What will it take for the American people to finally understand that the “Rags to Riches” story in the US is, just that, a story (well, for the vast majority of people) and that most of the wealthy and successful are where they are because of who their parents where, where they were born and their social circles?

    • Crogged says:

      Maybe after Chelsea Clinton leaves her position as part owner and COO of the New York Knicks and immediately is a front runner for the presidency in 2034? When the term “capital gains” is believed by 49 percent of the public to have been originated and defended as a right in the New Testament?

      • johnofgaunt75 says:

        It’s not just our political class but also our business elite. Want a job making millions on Wall Street? Well you better have gone to Andover or Phillips Exeter and then subsequently went to Harvard or Yale…of course becoming members of the most elite social clubs at either school.

        Want to get into those schools? Where did your father attend school?

      • fiftyohm says:

        Oh how our President decries tax inversions as ‘unpatriotic’! Oh how he would wail at the exodus of capital from these shores should we decide, in some ill-conceived and futile effort to address ‘inequality’, and spearhead a drive toward the elimination of CG treatment for the developed world!

      • fiftyohm says:

        jg75 says, “Want to get into those schools? Where did your father attend school?”

        Bullshit. About half of all students, (more at Harvard), receive financial aid. http://www.admissionsconsultants.com/college/ivy_league_financial_aid.asp

        Oops.

      • johnofgaunt75 says:

        Ugh, not everyone who goes to Harvard gets a job at Goldman or Blackrock. Want to land a spot at those places? Better have run in exclusive circles at Harvard, Yale, etc. and grown up in established families in places like Greenwich.

      • johngalt says:

        Harvard admits 6% of its applicants. Unless one of your parents went there, then the acceptance rate is 30%. An eighth of Harvard’s undergraduates are legacies.

        http://www.thecrimson.com/article/2011/5/11/admissions-fitzsimmons-legacy-legacies/

      • objv says:

        Crogged,I believe the key to success lies in making sure you don’t have BO when interviewing for a job. Best to avoid that stinky cab on the way there, too. 😉

      • tuttabellamia says:

        OV (OT), but I would love to go back to the days of reading the newspaper thrown onto my lawn, but my eyesight is not what it used to be.

      • objv says:

        Tutt, I’ve been enjoying having a real newspaper again. I used to enjoy reading the paper first thing in the morning with my cup of coffee, but with a 230 ft. driveway, I usually don’t go pick it up until later in the morning. It’s too long a distance to make a run for it in my jammies and slippers! 🙂

    • kabuzz61 says:

      The ‘have nots’ you like to throw around are wealthy compared to other countries. Plus the safety net is alive a well. What you really mean to say is the earned and the wants.

      • johnofgaunt75 says:

        Earned? Did you look at the data or not?

        Someone who works their ass off, sacrifices, gets into an incredible school, gets excellent grades and lands a high powered job and makes a ton of money perhaps “earned” what they got.

        Someone who was born into a powerful and wealthy family, landed a reserved seat for legacies at some WASP prep-school and then grabbed another legacy spot at Yale because his father went there (as well as his father’s father, and his father’s father’s father and…). Then grabbed a spot at Goldman because the family business (or family trust fund), is a large client is not “earning.”

        Do you not grasp the difference? Look at the aggregate data and then ask yourself which one dominates in this country?

      • tuttabellamia says:

        The wealthiest in the US would be the “have lots.”

      • kabuzz61 says:

        And the man or woman that did work their ass off and made it to wealth, his or her kids have it easier. That is life. It is not unfair. My wife and I started out with nothing and now are retiring as upper middle and my son and grandson takes part in some of that success. Your ‘it’s not fair’ ranting is imature to say the least. Conversely when wealthy people make bad investments and lose the wealth, that happens to. I do not see what the fuss is unless you look at it through the prism of envy or jealousy.

      • johngalt says:

        Unless the person who worked their ass off did not make it ahead because the deck was stacked against them through centuries of institutional barriers to their success.

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