Archive for the ‘ Income Distribution ’ Category

Security cameras vs. the Miami Gardens Police Department

Ravaged by drug crimes and gang activity, Miami Gardens finally found some statistical relief the last couple of years in overall crime only to be overshadowed by climbing homicide rates. The Florida city is in dire need of trusted cooperation between law enforcement and the community.

However, the community is not only being short-changed by the efforts of the Miami Gardens Police Department, their rights are being violated in the process. The infringement has been so drastic as to prompt shopkeeper Alex Saleh to purchase and install 15 security cameras to surveil and document police activity at his store. One of his employees, Earl Sampson, has been arrested countless times for trespassing at the store, his own place of work. In spite of not once being convicted of anything more than marijuana possession, his rap sheet stacks intimidatingly high against him: 56 arrests, over 100 searches, and 258 times he has been stopped and questioned.

Sampson isn’t the lone victim to the harassment. Another employee was arrested for illegal possession of a firearm. Charges were never filed, however, as the firearm was found during an illegal search captured on security cameras.

Once Saleh signed up and posted a sign endorsing zero tolerance as the police had requested his business to do, the police have frequented the store at incessant rates. Saleh claims that the police have harassed him as well once he started questioning them and sticking up for the rights of his employees and customers. On one occasion a patrol of 6 policemen comprising the entire Miami Gardens Rapid Action Deployment squad marched in and posted up ceremoniously for 10 minutes side by side as one went in to use the restroom. Saleh, bemused, could only ask questions to which the squad gave no response. On another night, two policemen followed Saleh out to his car and wrote him up for the tail light above his license plate being out. Two more patrol cars came to bring the total policemen necessary to write a tag light ticket to 6. They searched his car and found a gun, which Saleh had a license to carry. Saleh claims the police threatened with an expletive that they were going to get him before they finally left. The security tape of the parking lot from the night before captures a perfectly working tag light on Saleh’s car.

There are plenty of ways to analyze and speculate about the controversy in Miami Gardens and the egregious profiling habits of its police department. What is most important, however, is to realize how iconic this case is of the social injustice that plays out in the United States on an everyday basis and the real lives it ruins.

The ACLU recently released a report revealing that although whites are a little more likely to smoke marijuana, blacks are almost 4 times as likely to get arrested for it. Racial profiling abounds, and hopefully ambassadors like the Alex Saleh’s sticking up for victims like the Earl Sampson’s can do enough to at least bring awareness to the injustice of a society that too often would prefer to roll over and sleep on it.

To explore further how far behind the U.S. is compared to other social democracies concerning issues like these and many more, please visit our Social Justice page at InternationalComparisons.org.

U.S. “social netting” lacks and inequitably distributes

In the middle of a series of articles titled “The High Cost of Low Taxes” for Moyers and Company, Josh Holland challenges the stigma of higher taxes and exposes the issue in its proper context. Whereas InternationalComparisons.org compares the United States to 11 of the top performing Organization for Economic Co-operation and Development (OECD) countries, Holland includes all 37 OECD countries for his series. Simultaneously dispelling myths and reconstructing the argument in the terms we should have been using all along, Holland evaluates whether the U.S.’ tax system is equitable, efficient, effective, or enough.

Credit: politicalgrafiti.wordpress.com

Holland raises the argument that we should be comparing how much we spend (publicly and privately) on social costs and what kind of “social netting” we get as the product for our expenditures. Noting that since the U.S. public and private sectors combined social spending is comparable to the OECD average (29% to 32%, respectively), U.S. quality of social netting should also be proportionate. However, this is hardly the case. In his second article, he tackles specifically the issue of health care, revealing through a World Health Organization report and a compilation of statistics at Bloomberg just how poorly the U.S. health care system performs (in many cases close to last and others dead last) compared to its most relevant peers. Here, then, is Holland’s reasoning: if we are paying nearly the same social costs, why is there such a discrepancy in the quality of the results?

The discrepancy begins in the imbalance between public and private spending on social costs. According to the statistics, OECD countries that delegate social spending to the public sector provide better social netting for its citizens. Health care, as established above, is one dynamic example of how the U.S. has been short-changed; the U.S. tax systems is yet another.

Americans’ heavy reliance on the private sector to provide social goods and services doesn’t only result in us paying a lot and getting a lot less for it, compared to other wealthy countries. It also makes the financing of our entire social welfare system far less fair. It’s a great deal for the wealthiest, and a huge rip-off for the rest of us.

Holland introduces his third installment with this remark and proceeds to discuss that the tax system is not only unequally weighted, but also that there are hidden implications. For example, federal taxes might seem more progressive, but the distribution of state taxes is the antithesis of progressive. In fact, the weight of taxes is nearly level, but the bottom-most quintile provides for 11.1% of state tax revenue. As the quintile groups ascend by earning, the percentage by which they’re taxed descends with the largest earning quintile being taxed 7.5%.

Taken from: Rip-off: High Out-of-Pocket Social Costs are a Stealth Tax on the Middle Class and the Poor, http://bit.ly/19CRoR9

Still, even within the federal tax system, examples of regressive taxes thrive. Holland discloses that payroll taxes that provide for social security and Medicare are a flat tax with those making $20,000 a year paying 6.2% just like those who make up to $113,000.

We may deduct from Holland regarding social netting that those who need it and pay for it the most–whether by the unfair tax system or by out-of-pocket costs they can hardly afford–receive the least from it, especially when compared to the social nettings of the best performing OECD countries.

Holland has two more installments yet to come in the series to be published at billmoyers.com in the next few weeks.

Citigroup writes bill and history (which is now set to repeat itself)

Credit: usnews.com Silver linings are only hard to come by depending on which side of the spectrum you’re on.

After passing Dodd-Frank in 2010 and letting Wall Street go with a mere slap on the hand and a “Don’t you ever do that again,” United States Congress passed a bill to enable Wall Street to do just that: repeat history and endanger us with another crisis due to egregious financial management.

Passing  292-122 votes, the Swaps Regulatory Improvement Act reverses the portion in the 2010 agreement that restricted Federal Deposit Insurance Corporation (FDIC)-insured funds from being invested in high-risk “swaps” also known as derivatives, the same type of investments that brought down banking giants like Bear Stearns, AIG, Lehman Brothers, Washington Mutual, Wachovia, and countless others. Aptly interpreted by dailykos.com, this means that, “In short, this bill socializes risk (we all pay for their gambles if they fail) and privatizes profit (they gain a whole lot with very little risk because of your guarantee).”

To ask, “How does Congress get the nerve to write such a bill?” would be an inaccurate question. Citigroup, in fact, is responsible for having written 70 out of the 85 lines in the bill. The financial giant is again able to afford such extracurricular activity on Capitol Hill thanks to a $45 billion dollar bail out after the first go-’round. Still, Congress summoned the courage it takes to copy and paste (changing merely two words from singular to plural in two of the most essential paragraphs) during the writing process and voted for it, indeed, overwhelmingly so!

Nearly six times as much money, $22.5 million to $3.8 million dollars, were given to members who voted for the Act according to a Maplight report. History is poised to repeat itself should Too-Big-To-Fail again be tested. And why shouldn’t it? It’s not their risk that is at stake, only our risk for their gain.

Measuring development and subjective well-being: Human Development Index vs. World Happiness Report

Can measuring “happiness” be a science? Doesn’t the meaning vary too much from person to person and culture to culture? The squishiness of happiness has not prevented researchers from trying to measure it and make it relevant for public policy.

With studies tracing in the paths of what the Human Development Report started over two decades ago, the OECD’s Better Life Index, the OECD’s Guidelines on Measuring Subjective Well-Being, the Happy Planet Index, and the U.S.-focused Gallup-Healthways Well-Being Index (with an international report from 2010) have aimed to perfect the science of quantifying subjective well-being and demonstrate the relatively fresh attention the subject has elicited. Most recently, the United Nations Sustainable Development Solutions Network has released its first World Happiness Report last year.

Subjective Well-Being Indices Rankings-page-001

According to the above table, rankings for well-being become pretty varied. Different indices use and weigh different indicators in different ways. The most exceptional example in this case is the Happy Planet Index which places an immense amount of weight on its indicator, “Ecological footprint” in order to emphasize the importance of environmental sustainability.

But let’s direct our attention to the first two: the United Nations Development Programme’s Human Development Index (HDI) 2013 and the United Nations Sustainable Development Solutions Network’s World Happiness Report (WHR) 2013. The HDI has been a pioneer, and Internationalcomparisons.org has long considered the index to be one of if not the authoritative voice on quality of life, achieving results profoundly more telling than the traditional GDP/capita. The WHR has developed under the influence of the HDI, yet it has come up with different results contrasting most significantly as it relates to Internationalcomparisons.org and the countries studied. Fortunately, the WHR dedicated an entire chapter (Chapter 8) to compare its system to the HDI.

Are more developed countries happier?

Human development, as an approach, is concerned with what I take to be the basic development idea: namely, advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it.
-Economist Amartya Sen on the capabilities approach and what it means to defining subjective well-being

The objective of Chapter 8 in the WHR is to observe the relationship between human development and life satisfaction, that is to say in certain terms the HDI and the WHR. The chapter discusses at great length the different approaches (human development vs. capabilities) to define and measure development, satisfaction, happiness, and subjective well-being. Chapter 8 asks how positive is the relation between the HDI and life evaluation of well-being? For the intents and purposes of the HDI and WHR reports in the scope of the 150+ countries surveyed, very positive. Chapter 8 dissects individual indicators of the HDI like life expectancy, years of expected education, actual years of schooling, and GNI/capita with positive life satisfaction and concludes with correlative coefficients of 0.70, 0.69, 0.63, 0.73, and 0.78. Finally, HDI (overall score) shares a correlative coefficient of 0.77 with life satisfaction.

While this is good news in determining that the gap between measurements of human development and subjective well-being is closing thanks to an increased focus and research on the subject, our more narrow scope concerning the gap among the 12 countries studied at Internationalcomparisons.org disappointingly still lacks explanation.There are 33 places between the systems’ rank for Japan, 20 places for Germany and Italy, and 14 places for the U.S. and Denmark (which the WHR has at 1st). The correlative coefficient is either not strong enough at 0.77 or not relevant enough with the 12 countries on which we focus.

The Crisis of the Anthropocene: Part 2

Continued from The Crisis of the Anthropocene: Part 1.

by Dr. Sherman Lewis, Professor Emeritus Political Science, California State University East Bay

Cheap fossils

Peak oil refers to the gradual increase in the cost of extracting fossil fuels causing higher prices, decreasing demand, and declining production. As peak oil is reached, the volume of extraction declines. Peak oil was reached years ago in the US. In 2010 the International Energy Association announced that peak oil may have occurred internationally in 2006. The price of gasoline has been erratically ratcheting up. Conventional petroleum is probably less available at the same time that rapidly growing economies demand more oil. Most Americans are likely to continue to buy gas as if there were no tomorrow and blame politics, oil companies, and speculators for a problem inherent in the earth’s crust. The timing of the ratchet is unpredictable. Crudeoilpeak.info/global-peak has excellent data on the past, but less certain projections for the future.

Credit: theresilientearth.com

Unfortunately, the benefit peak oil might provide to reduce global warming is being more than offset by other fossils, which seem well short of any peak. Higher oil prices so far only serve to stimulate more extraction of oil from risky deep ocean platforms, coal, dirty oil from shale and sand, and natural gas from fracking, which pollutes huge volumes of clean water. Fossil fuels are still in under-priced over-abundance and consumption is even increasing. The earth’s crust appears sufficiently generous in fossils to assure the demise of the climate that supported human development. However great for the money economy, it is not sustainable in the whole economy.

Under-pricing reduces the viability of non-fossil alternatives—solar wind, photovoltaic and thermal energy, energy efficiency, conservation, non-auto modes, and efficient land use.

Water

Humans appropriate more than half the world’s fresh water. Ancient aquifers in the world’s bread baskets, including the Ogallala in the Great Plains, are being drained. California has diverted so much water from the Bay Delta system that its historic ecology has collapsed. The salmon, steelhead, and striped bass are mostly gone, leaving the tiny Delta Smelt as the remaining indicator species. Water shortages are increasing. A federal court recently ordered water released into the Klamath River to prevent fish kills, at the expense of farmers who wanted the water. The San Joaquin Valley has sunk many feet in some places due to over-pumping of ground water.

In December 2012, the Interior Department said by mid-century the Colorado River will not support demand from the seven states it supplies, including California. The main reason is expected population growth in the region from 40 million to as many as 76 million people. “Phoenix continues to grow at one of the highest rates in the country,” said Jerry Karnas, population and sustainability director of the Center for Biological Diversity. “There is no discussion about what the future Phoenix is going to do when the Colorado River is done.”

As rains diminish and the climate dries in some areas, increased pumping from falling aquifers becomes more expensive due to the cost of electricity, itself dependent on water supplies and fossils. As diets improve, demand for food higher up the food chain requires more water. Only 2 percent of major U.S. rivers run unimpeded to the sea. California’s Sacramento-San Joaquin River Delta has been entirely re-engineered. The last time the Colorado River reached the Sea of Cortez was in 1998. The Nile, Indus and Ganges rivers have been reduced to a trickle. (See chellaney.net for information on the most pertinent international water issue.)

Credit: thelivingocean.net

 

Pollution

Pollution of water, air, and land comes from burning fossils, hazardous chemicals, excess nutrients, and solid waste. Small amounts of a chemical can devastate amphibians and bees. Residues from 100 million tons of synthetic chemical compounds produced each year commonly appear in polar bear tissues, whale blubber, and human breast milk and umbilical cords. Nitrogen can be a fertilizer; the excess is a problem. Human activity surpasses nature as a source of nitrogen emissions, altering the planet’s nitrogen cycle.

Radioactivity has been an evolutionary background reality and a minor pollutant since the Strontium 90 scares of the 1950s, but is now looming much larger as radioactivity from the Japanese Fukushima Daiichi Reactor melt-down drifts across the Pacific Ocean to the West Coast of North America. Radioactivity has proven deadly from the earliest research to the bombing of two Japanese cities. In theory and most practice radioactivity is one of the most strictly regulated pollutants, but the difficulty of failsafe nuclear energy and the possibility of nuclear war and nuclear terrorism are still there.

Bioengineering is not usually thought of as a pollutant, but at the micro-scale of DNA it could be considered to be one, much like an invasive species in a habitat. So far, research and industry safeguards have prevented acute problems, but secrecy about Genetically Modified Organisms, lack of consumer choice, and industry assurances motivated in part by profit-seeking do not inspire confidence. Wind-blown GMO seeds have already contaminated some organic crops. We are still learning the most basic things about DNA, let alone how it can safely be manipulated.

California has eight of the 10 most air-polluted cities in the country and 725 metric tons of solid waste are washing up on our coast each year.

Higher, higher still Credit: InternationalComparisons.org

Credit: InternationalComparisons.org

Land

Humans have converted more than 40 percent of the earth’s land, usually the most biologically productive land, to cities and farms. Urbanization often destroys prime farmland. Roads and structures fragment the habitat of much of the rest. The increasing need for food and decreasing yields due to climate change, salinization, soil erosion, soil depletion, and conversion to other uses have led to converting more marginal, unfarmed land to crops. Farms and logging are big sources of deforestation and also causes greenhouse gases and loss of sequestration of atmospheric carbon.

Oceans

A third of world fisheries are exhausted or degraded. Forty percent of coral reefs and a third of mangroves have been destroyed or degraded. Most species of the great predator fish are in decline. Ocean acidification, a product of fossil fuel burning, is dissolving calcifying plankton at the base of the food chain. Coral reefs are disappearing as warming, over-fishing, and pollutants cause massive bleaching, i.e., the ejection by the coral of the algae it needs to grow. Less life in the oceans reduces sequestration of carbon. A garbage gyre at least twice the size of Texas swirls in the Pacific Ocean. “We can’t just continue dumping nitrogen into the ocean at the same rate and expect everything to be fine,” Santa Clara University’s Marvier said.

Auto-dependency

The world is rapidly increasing the number and use of cars, while other, healthier, modes of transportation, especially walking, are shrinking in proportion. Underpricing of fossil fuel drives land use dispersion, resulting in a suburban system which makes other modes uneconomic and unavailable. Californians own 32 million registered vehicles for 29 million people aged 16 and older.

Misconceptions

The problem is not consumption as understood by economists, but rather the over-consumption of some things due to their under-pricing which fails to consider full economic cost and allows externalization of costs, degrading the whole economy: “problem consumption.” The whole economy includes values of obvious economic worth that are not reflected in prices. We cannot conceive a sustainable economy because it is too complex, but we can have policies which push us towards one, with sustainable consumption replacing the unsustainable over time, and an improving status of women reducing population growth.

There is no “birth dearth,” at least, not yet. World fertility rates have fallen from 4.9 births per woman in the 1960s to the current 2.6, still too high. The rate in about half the world—Japan, Western Europe, China, Vietnam, Brazil, Iran, Thailand, and other emerging economies—is below the 2.1 births per woman needed for zero growth. The United States, the world’s third-largest country behind China and India, and the only rich country still growing, nevertheless recently saw its birth rate fall to 1.9.

The improvement in the status of women has driven birth rates down through education, economic opportunity, legal protections, family planning, and, to a small extent, therapeutic abortion. Across cultures, women choose to provide a better life for fewer children.

The revolution, however, is incomplete because high economic costs are still imposed on most women who choose to have children. Historically, the duties of child-rearing have been assumed by women, but, with improved status and given a choice, women reduce the burden. Once a developed country chooses to tax itself to ease the cost, women, if need be, are ready, willing, and able to have more children, because few things in life are more fulfilling.

While the population gets older, the ratio of dependent seniors on younger workers does not tell us what we need to know. The ratio is less relevant, possibly irrelevant, because health is increasing faster than age, and many older people want to work at work they choose. Also, if there are tax penalties, like loss of retirement income if one works, people will work less for money and more at other things. I retired to avoid tax penalties and to work voluntarily on sustainability analysis and advocacy. My wife retired and is almost fulltime at granddaughter care so that our kids can work for money. Rebalancing incentives for having children and for older working can solve problems, if they occur.

Major source: Carolyn Lochhead, San Francisco Chronicle Washington correspondent, SF Chronicle, Sept. 3, 2013.

Norway=model; exception

In addition to already having country profile pages for Germany and Japan, we have recently just added Denmark and Norway (also accessible from our home index page under the “countries covered” listing). While putting together the Norway page, we realized even more how exemplary Norway truly is.

Norway is not a member of the European Union. Also a factor in escaping the eurozone crisis is their oil and gas industry which has them benefiting from the largest budget surplus among all advanced democracies. Norway has an unemployment rate below 3%, no net national debt, and around $640 billion dollars stored away in a sovereign wealth account, mostly from its oil and gas industry. In 2009 Norway earned the highest per capita income.

Deserving much credit for its success is Norway’s fearlessness to tax. Their prosperous oil and gas industry receives a 28% corporate tax and a 50% industry surtax. Overall tax as a share of GDP is among the highest in the OECD. Corporate taxes are four times as high as U.S. rates. Their highest income tax bracket kicks in at $124,000 at 47.8%. Yet businesses aren’t saddling up to head to places where they might save on looser tax breaks, an argument from those in the U.S. representing a vast majority who refuse to consider any tax increase. In fact, start up activity not only in Norway, but also Denmark, Switzerland, and Canada is higher than that of the U.S. From 2006-2009, the U.S. economy treaded at a practically stagnant .1% growth rate compared to Norway’s exponentially faster rate of 3%. Norway also boasts more entrepreneurs per capita than the U.S.

Part of the reason why business owners are so keen to comply without raising a stir at Norwegian taxes is the sense of appreciation they have for the system. Norwegians benefit from free education from preschool to graduate school (often including universities outside of Norway); free healthcare; generous unemployment benefits due to a competitive, employee-friendly job market; forty-six weeks of maternity leave paid in full, 10 weeks for paternal leave. Education, retirement, and medical expenses are three paramount concerns for the average U.S. citizen, but all of which are provided in Norway. There’s a sense of giving back to the system in Norway for the ways one has benefited previously from the system.

 

Adapted from“US fiscal debate could learn from Norway” by Mark Provost from Progressive Press and  “In Norway, start ups say Ja to socialism” by Max Chafkin in Inc. Magazine.

The price of income distribution

We have all had our blinders on and carried our focus for Tuesday’s election (with tragic exception to Sandy and, hopefully, its indications concerning climate change). But before we resume full throttle in election reports with an international perspective next week, we offer a quick break from your Obamney monopolized newsfeed and towards the issue of income distribution.

In his review of Joseph E. Stiglitz’s book The Price of Inequality, Thomas B. Edsall cites culpability with both neoliberal and free market strategies, both democratic and republican parties. According to Edsall, the fundamental issue is

not only that inequality violates moral issues, but it also interacts with a money-driven political system to grant excessive power to the most affluent.

With the all-too-fine line between financial power and its influence on policy and elected officials, the affluent aim to perpetuate their position and status at the top with political demands to protect their ability to generate their money (by successfully fighting off tax hikes). Stiglitz and Edsall reveal the result: a far less efficient economic system that has discounted the contributions of (and even the opportunities to contribute by) those at the bottom of the system. As our income distribution page implies, there is a relation to the US’ position in income distribution (the GINI index) and our positions in child income poverty, Index of Health and Social Problems, and the Human Poverty Index, all in which we rank at the bottom among the 12 advanced democracies studied.