Tag Archives: wealth

Red States, Blue States…

Local Government, , ,

The battles over abortion are highlighting some previously under-appreciated differences between life in Red and Blue states. Those differences include health outcomes as well as economic circumstances..

As Jennifer Rubin summed it up in the Washington Post, 

 If you live in a red state, your risk of getting and dying from covid-19 is higher than in blue states. On average, your life span is shorter, your chance of living in poverty higher, your educational attainment lower and your economic opportunities are reduced relative to blue-state residents.

There are–as Rubin also acknowledges– policies being pursued in Red states that are increasingly persuading people to decamp and live elsewhere:  If they have a choice, “diverse” workers–LGBTQ+ folks, women and members of minority groups with skills needed by high-tech businesses– frequently choose to live in places they find welcoming, or at least safe. (As we saw when Indiana passed RFRA, unlike Republican politicians, local business enterprises understand that they are significantly disadvantaged in unwelcoming states. Low taxes– accompanied by a corresponding lack of public amenities and a poor or mediocre quality of life–simply aren’t enough to attract either new business or the skilled workforces on which those local enterprises depend.)

Red states like Indiana that have participated in the unremitting right-wing attack on public education tend not to produce the educated workforces that appeal to companies looking to relocate. Those disadvantages have produced the significant differences between Red and Blue state economies. As the Brookings Institution has reported,

To be sure, racial and cultural resentment have been the prime factors of the Trump backlash, but it’s also clear that the two parties speak for and to dramatically different segments of the American economy. Where Republican areas of the country rely on lower-skill, lower-productivity “traditional” industries like manufacturing and resource extraction, Democratic, mostly urban districts contain large concentrations of the nation’s higher-skill, higher-tech professional and digital services.

Many of these differences have been apparent for years–and as the Brookings report noted, they have recently been accelerating.  But that’s not all. As Rubin writes,

And then came the abortion bans. Thousands, if not millions, of women of childbearing age might reconsider their residence if they want to avoid the potentially life-threatening bans — or if they simply want to be treated like competent, autonomous adults.

There are signs the reality of forced-birth laws are registering with those most affected. Reuters reports: “The U.S. Supreme Court’s decision in June to overturn the 1973 Roe v. Wade case that legalized abortion nationwide has some students rethinking their higher education plans as states rush to ban or curtail abortion, according to interviews with 20 students and college advisers across the country.” While the evidence is anecdotal at this point, “in the wake of Roe’s overturn, college counselors said abortion has figured prominently in many conversations with clients, with some going as far as nixing their dream schools.”

Lest you be tempted to “pooh pooh” the effect of Dobbs on the college choices of talented young women, I have an example close at hand. My granddaughter–an excellent student–immediately removed Texas’ Rice University–an otherwise highly desirable school– from her list of schools to consider. She’ll attend the University of Chicago, in Illinois, a pro-choice state.

The Times reports that blue-state governors have begun “depicting their abortion rights policies as a business advantage, reinforcing the appeal of the wealthier and more progressive states that many businesses opt to call home in spite of their taxes.

In fact, multiple data points confirm that, among other things, the GOP’s cult ideology decreases life expectancy and keeps many women out of the workplace. It also contributes to the “brain drain” that sends a state’s college graduates to places with more educated populations and a higher quality of life. And if you don’t think any of this really makes a difference in individual life prospects, Brookings will disabuse you of that belief

With their output surging as a result of the big-city tilt of the decade’s “winner-take-most” economy, Democratic districts have seen their median household income soar in a decade—from $54,000 in 2008 to $61,000 in 2018. By contrast, the income level in Republican districts began slightly higher in 2008, but then declined from $55,000 to $53,000.

Underlying these changes have been eye-popping shifts in economic performance. Democratic-voting districts have seen their GDP per seat grow by a third since 2008, from $35.7 billion to $48.5 billion a seat, whereas Republican districts saw their output slightly decline from $33.2 billion to $32.6 billion.

Retrograde public policies have real-world consequences. And those consequences are substantial. Indiana has long suffered the economic and health results of an unhinged and provincial legislature, but it’s about to get much, much worse.

 

Giving and Taking

Random Blogging, , ,

The other day, NPR ran a story about a recent study on charitable giving. It turns out that poorer people give a significantly larger percentage of their incomes to  charity than do the wealthy. The report included interviews with people from some especially deprived neighborhoods, and the general import of their responses was empathetic: they knew first-hand how tough things can get, because they had experienced rough times first-hand.

The report made me think of a conversation a few years back with a Canadian colleague. I was curious about the differences in attitudes between Canada and the U.S. when it comes to the social safety net. Here are two countries with immensely similar histories and populations. We watch the same television programs, (mostly) speak the same language, and have remarkably similar popular cultures. Why, then, I asked, are American and Canadian attitudes so different when it comes to the need for programs guaranteeing access to healthcare? Why do the two countries have such different approaches to other social programs?

Her theory was intriguing: Canada is cold.Canada’s early settlers faced an environment that required them to share and co-operate with each other in order to survive. That reality produced a culture that recognizes the necessity and value of interdependence.

I have no idea whether my colleague’s theory is correct, but intuitively, it makes sense. And it helps to explain why people who have so little themselves seem more willing to share what they do have with their neighbors. Hardship reminds us of a truth we sometimes prefer to overlook: we’re all in this thing called life together.

Wealth–not to mention temperate climate–evidently tends to insulate us from that inconvenient truth.

Wealth and Power

Public Policy and Governance, ,

For the last few years, there’s been a good deal of debate over the growing gap between the rich and everyone else.

We’ve all seen the numbers: the top 1% of Americans own 43% of all the nation’s wealth, and the next 4% owns another 29%. Meanwhile, 80% of Americans share only 7% of the nation’s total wealth.

That bare fact is troubling enough–disparities of this magnitude typically generate resentment and often lead to significant social disruptions–but the reasons for that gap are even more worrisome. The truth of the matter is that money buys access and power. Poor folks don’t have lobbyists, they don’t make significant political contributions. To use academic jargon, the poor lack “voice.” Meanwhile, the rich have megaphones.

Look at the proposals to cut the deficit–a deficit caused primarily by two ill-considered wars (wars that “coincidentally” enriched a number of major corporations) coupled with massive tax cuts for the wealthy. Programs at risk include things like early childhood education, low-income housing programs, community health centers, family planning and job training–all programs that assist poor Americans. It’s estimated that cuts to these programs will “save” 44 billion dollars (save is in quotes because most of these are short-term savings with significant long-term costs). Meanwhile, the recent extension of the Bush tax cuts to the richest 2% of Americans cost the treasury 42 billion a year. Changes to the estate tax–dubbed the “death tax” by opponents–cost another 11.5 billion.

Let me be very clear: I accept the argument that confiscatory tax rates dampen innovation and entrepreneurship. And I not only accept, but heartily endorse market economics. I’m a capitalist and make no apologies for that. But American tax rates are at their lowest levels in fifty years, and one would have to be delusional to believe that returning the top rate to 39%–the rate during the Clinton administration–would discourage investment. What is even clearer is that we have abandoned markets in favor of crony capitalism. Large employers and the wealthy have used their clout to game the system; they have effectively bought tax and other advantages that have had the effect of protecting them from the very market forces they so piously invoke.  Instead of a genuinely free market, where businesses compete on a level playing field, we have an economic oligarchy–an Animal Farm where some are much more equal than others.

This state of affairs is bad for the economy in the long term. It is worse for social stability and democratic institutions.