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Does Income Inequality Matter?
theodp is concerned about the following: "Alarmed by Goldman Sachs CEO Lloyd Blankfein's record-setting $53M bonus, Charles Wheelan (aka The Naked Economist) argues that income inequality matters. Wheelan notes that the Gini Coefficient (a measure of income inequality) for the U.S. has been moving away from countries like Japan and Sweden and closer to that of Brazil, where the murder rate is 5X that of NYC and crime is materially impacting GDP."
Income inequality drives crime. When everyone is poor, no one steals from each other. When everyone is rich, everyone steals from each other, but there are rules. When some people are very, very rich and some are poor, the poor feel justified in evening out the unfairness through direct action. If everyone had their basic needs met, I don't think income inequality would matter as much. But as long as some people are desperare and feel they are being screwed, and they can find an easy target in a rich person, there will be crime.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Causality is different, of course, though "indirect cause" is a very medieval concept.
I don't think anybody would suggest that paying a banker a lot of money will suddenly cause someone to become a street robber. But if there is a correlation become income inequality and crime, and given the high cost of crime, there is a case for investigating the nature of any relationship.
As an example, it is known that high incomes in the City of London are associated with cocaine use. This inevitably brings rich people into contact with drug dealers. Given the profits to be made, it might be that the existence of a rich and rather well protected class of drug users made them a very attractive target for drug dealers, causing increased competition for access to this market. Since drug dealing is an illegal, unregulated market, this might cause more turf wars and therefore more visible drug-related crime. That is a possible chain of causation which, if correct, could have implications for policy on drugs (e.g. toleration and a legalised market.)
The US has, I believe, nearly 2 000 000 people in prison. This is a big enougfh cost item that it needs proper study.
Pining for the fjords
Perhaps a link to Paul Graham's Mind the Gap essay would be worth reading as well.
There's at least four fundamental errors that are made or implied by the Inequality Matters argument:
The present situation in which the middle class is losing ground is not as some would have it, the mysterious workings of a competitive, dynamic free market economy. It's the direct result of decades of corporate controlled multi-national trade agreements and labor arbitrage provisions facilitating the offshore outsourcing of work and the importation of "cheap labor" into the U.S.
I've fought this fight in the IT sector for more than 5 years now. Middle and upper middle class American IT workers have been methodically targeted for replacement with lower wage foreign replacement workers. Carly "the Outsourceress" Fiorina was notorious for this activity but she is hardly alone. Her successor at HP, Mark Hurd was part of the same dynamic during his tenure at NCR in Dayton, Ohio. Larry Ellison and Bill Gates have been whacking their American workforce for years while whining to Washington politicians that they can't find qualified American IT workers. The result: politicians keep expanding the number of foreign "guest workers" permitted into the U.S. under non-immigrant visa programs such as H-1b. (There's a push underway even now for an increase.)
I think that the many Americans seeking a middle class life, well-qualified to perform even advanced work who may have lost jobs, are under threat of job loss and seeing their wages/salaries pushed DOWN by offshore outsourcing and NIV work programs SHOULD be outraged at both the politicians and the so-called business leaders and the Wall Street investors who demand that American workers get kicked to the curb.
The wealth now accruing to the already wealthiest segments of our society represents an illegitimate TRANSFER of wealth from the American middle class.
The increasing share of wealth controlled by the richest Americans is NOT the result of any Darwinian "survival of the fittest". Offshore outsourcing, "free trade" and NIV worker replacement programs are POLITICAL creations driven by lobbies funded by the wealthiest segments of our society.
This is a recipe for CLASS WARFARE. You'll find that Sen. Jim Webb of Virginia has spoken out re. this situation since before he entered the Virginia primary in which he defeated longtime ITAA pro-outsourcing and pro-NIV President Harris Miller.
I can tell you that I get pretty pissed off when I hear about million-dollar bonuses when if I had 1% of that money I wouldn't have to worry about college tuition for the rest of my career. It makes me angry, so I try to ignore it. Watching commercials also gets me a little mad because of the huge disparity between the way the "average american" is depicted on television, and the way we actually live. If you're willing to buy into the commercial vision, then you start to think that everyone but you is living like that, and then you start to wonder how you can get to that point. When you start to think that you can't, you get angry.
You get angry or jealous? There is a difference.
1% of one million is $10,000. I spent more than that on college but I'm sure you could get an education for less than that. But let's say that a million-dollar-bonus earner was forced to give it away in 1% increments. He would be able to give $10,000 to exactly 100 people (all before taxes of course). After taxes, he could give approximately $6000 to 100 people, who in turn would only receive $4000 each (after taxes again). Could you go to college on $4k?
Finally, in your perfect world where the rich have to give all their money to pay for your college, why would you want a college education anyway? You bust your ass through college, work hard, long hours in your job, and when you are successful, you'd have to give away your money to some angry kid who despises you for your hard earned success and is too lazy to pay for his own education!
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
I would rate *your* post +5 pandering to stereotypes as well, to assume that "cultural differences" (which usually is just the politically correct way to say "uncivilized slant-eyed brutes" whenever I've ever heard it) even matters in this case. I admit my "evidence", though it was never meant as such, is anecdotal, but considering how prevalent and worrisome the issue was at the time, I would say the majority of the country's elite felt the same pressures.
Honestly, unless you are also an Asian immigrant, I would contend that I have a far better sense of "cultural differences" between East and West. I was born and raised in a bilingual environment, lived in both the east and west, speak both English and Mandarin fluently, and I consider myself a pretty even mix of Chinese and American/Canadian cultural traditions.
So let me comment on your post from that perspective:
First, in the West there has been a concerted (and almost completely sucessful) effort to stamp out kidnapping for ransom. The penalties are steep...
And how does that matter? Don't be quick to assume that there have been no major effort to stamp out kidnapping for ransom in Taiwan. Massive undertakings have been taken, with some limited success. Oh, and by the way, we shoot kidnappers (not that I agree with it entirely, but that's the penalty of kidnapping). On the whole Asian penal systems have harsher penalties: prisoners are rarely afforded the kind of quality of life that you see in American jails, and we still shoot people in a public venue (such as a stadium), as opposed to pump them full of anesthetics till they die.
This isn't a commentary on supporting or opposing capital punishment, but rather my belief that when the wealth gap is sufficiently wide, no level of punishment or threat of punishment will deter the people from trying to even the playing field. If you and your neighbours cannot afford to eat, have corrugated aluminum over your heads, while behind a chain-link fence lies huge mansions of exorbitant excess, you will try and take it.
and typically the top echelons of the police get involved.
And they didn't in Taiwan? You try to sound diplomatic and neutral, but clearly you're biased against Asian culture and capability. Considering that the kidnapped children were always part of the rich elite, you can bet your ass that the top echelons of the police were always involved. There were nation-wide manhunts for alleged kidnappers, where absolutely no expense was spared to apprehend the criminals (and then shoot them).
Secondly, in the West - families don't typically cooperate with the kidnappers. They go to and cooperate with law enforcement authorities.
As they did in Taiwan. See my point above. Why are we assuming that an Asian family would be more likely to keep the kidnapping to themselves instead of going to the authorities? What reason do you have to make this assumption?
Thirdly, when the crime of kidnapping for ransom involves children - it invokes the 'protect the children' meme that appears much stronger in the West than in Asia. (For example, you hear tales of children in Asia being sold into chattel bondage, often sexual. Such tales are noticeable by their near complete absence in the West.)
Ooh, this is a huge can of worms. Having seen the media first-hand during this time of my life, I can say without a doubt that the "ZOMG protect the children from eeeeevil!" thing was as strong in Asia as I've seen in America. Are you trying to tell me that the Chinese culture is somehow less susceptible to the ancient "think of the children!" ploy?
Oh, and the tales of children being sold into chattel bondage, often sexual, are really not prevalent. They are equally absent in Asia as they are in the West. Keep in mind that much of Western media's portrayal of Asia is extremely negatively biased, probably for the enjoyment of people such as yourself. Why? I don't really know, but it reinforces the stereotype o