Moral policy = Good economics

[Paco Dennis]

"Lifting up poor and working-class people—and our whole economy​

When the coronavirus pandemic arrived, the United States was already deeply unequal. Before the pandemic, 140 million Americans were poor or near poor,* living just one emergency above the poverty line. The 140 million included approximately 60 percent of Black, non-Hispanic Americans (24 million), 64 percent of Hispanic Americans (38 million), 60 percent of Indigenous Americans (2 million), 40 percent of Asian Americans and Pacific Islanders (8 million), and 33 percent of white Americans (66 million).2


Indeed, the pandemic spread rapidly in the fissures that previously existed because of racism, poverty, and profound inequality—and our refusal to acknowledge the full extent of these injustices in our public discourse or public policies. Alongside enduring inequities in the social determinants of health (including access to safe and affordable housing, clean air and water, healthful foods, quality education, and public transportation), the economic effects of the pandemic hastened even greater insecurity, especially for poor people of color. It is estimated that the 140 million grew to nearly 150 million during the pandemic,3 but most of these people remain uncounted among the poor and therefore excluded from many of our policies. At the same time, our policy responses to this widespread insecurity are constrained in part because we do not have an accurate account of it.


This inequality in the United States did not happen suddenly and cannot be explained as the consequence of individual failures; rather, decades of public policies brought us to this point, making the rich richer at the expense of everybody else. When we fail to meet basic needs for food, housing, and health care for everyone, when we fail to invest in education, safe communities, and fair elections, the health and well-being of our entire nation is compromised. We waste our most precious resources, yes. But more than that, we allow the potential of individuals, families, and communities—and the full potential of our nation and its ideals—to go unrealized.


This article is a collaboration between the Poor People’s Campaign: A National Call for Moral Revival—a moral movement rooted in the legacy of Rev. Dr. Martin Luther King Jr. that is organizing around the needs and demands of the 140 million in 45 states—and the Economic Policy Institute (EPI)—an independent, nonprofit, nonpartisan organization that uses economic research and analysis to understand and improve the economic conditions of workers and their families. In this article, we evaluate the public policies that shaped the preexisting conditions of the pandemic, policies that were by no means accidental or morally neutral, and lay out the policies that we need to counter and reverse the status quo, including the heightened suffering from the pandemic."

The article goes into compelling detail...about a 12 minute read

https://www.epi.org/publication/moral-policy-good-economics/

 

[JimBob1952]

Let me be the first to say that I find this point of view to be more or less absolute BS. We have 4.5 percent unemployment and millions of open jobs. "Inequality" is growing (not just in the US but in Western Europe) but that's because there are more and more rich people due to the explosion in data-driven industries. The rate of poverty in the US has dropped steadily and hit a record low in 2019 (10.5%). Even during the pandemic it only went up to 11.4% and has been falling again ever since.

People drop out of school, pop out babies, addict themselves to drugs and alcohol, and then complain about public policies? Please. I'm all for helping those who can't help themselves, but in the US most economic misery is self-inflicted.

 

[Paco Dennis]

Let me be the first to say that I find this point of view to be more or less absolute BS. We have 4.5 percent unemployment and millions of open jobs. "Inequality" is growing (not just in the US but in Western Europe) but that's because there are more and more rich people due to the explosion in data-driven industries. The rate of poverty in the US has dropped steadily and hit a record low in 2019 (10.5%). Even during the pandemic it only went up to 11.4% and has been falling again ever since.

People drop out of school, pop out babies, addict themselves to drugs and alcohol, and then complain about public policies? Please. I'm all for helping those who can't help themselves, but in the US most economic misery is self-inflicted.

Please explain runaway inflation and increasing shortages, please.

 

[JimBob1952]

Please explain runaway inflation and increasing shortages, please.

I'd be happy to, but it has nothing to do with the article you cited. Inflation and shortages aren't even mentioned.

Inflation is the result of too much money chasing too few goods. The shortages are the result of pandemic-related disruptions to the global supply chain.

 

[Paco Dennis]

They are related in the facts about HOW we distribute wealth...and that is a definitively a moral based choice. We LET the wealthy make the choices, and they have very little interest in those who are down and out. It can be a much more equatable distribution IF people wanted it to be, or maybe by now we are doomed to serfdom.

"Closing the racial wealth gap requires heavy, progressive taxation of wealth​

Summary​

"Centuries of discrimination and exploitation have left Black Americans much poorer than white Americans. The median white household has a net worth 10 times that of the median Black household. If Black households held a share of the national wealth in proportion to their share of the U.S. population, it would amount to $12.68 trillion in household wealth, rather than the actual sum of $2.54 trillion. The total racial wealth gap, therefore, is $10.14 trillion.


There is a vital and vibrant conversation in America today about reparations programs and other expenditure-based approaches to close the racial wealth gap. These investments are a moral imperative and an urgent economic necessity.


But any program to close to racial wealth gap must grapple with the reality of wealth concentration in contemporary America. The 400 richest American billionaires have more total wealth than all 10 million Black American households combined. Black households have about 3% of all household wealth, while the 400 wealthiest billionaires have 3.5% of all household wealth in the United States. Because wealth in the United States is so highly concentrated, and because the wealthiest Americans are almost exclusively white, the racial wealth gap is also concentrated among the wealthiest families. Indeed, if the wealth gap were completely eliminated for all but the richest 10% of households, the total racial wealth gap would still be more than $8 trillion, 80% of the total wealth gap that exists today.

“The 400 richest American billionaires have more total wealth than all 10 million Black American households combined.”

Any plan to eliminate the total racial wealth gap requires, in addition to a transformative national investment in Black households and communities, a program of heavy and highly progressive taxation aimed at the very wealthiest Americans. A comprehensive agenda to close the racial wealth gap would likely include reforms to income and estate taxation, plus new taxes on wealth and inheritance, buttressed by a substantial investment in enforcement.


While these taxes would likely also raise substantial revenue, this is not their primary purpose. High and progressive taxation of extreme wealth is in itself a strategy for racial justice because it would directly reduce the portion of the racial wealth gap that exists at the top of the economic ladder.


This paper begins by describing the racial wealth gap, its origins and some of the recent spending proposals to reduce or eliminate it. I then examine how the racial wealth gap interacts with wealth concentration in America and demonstrate the vital role that taxation must play in closing the racial disparity in wealth.""

The articles details these points in depth....10 minute read

https://www.brookings.edu/research/...equires-heavy-progressive-taxation-of-wealth/

 

[JimBob1952]

I disagree more or less completely. "High and progressive taxation" discourages innovation and investment. It deters growth and provides powerful disincentives to hard work and enterprise. And I don't see anything "just" about seizing assets from someone to make up for past racial injustice.

 

[Paco Dennis]

I disagree more or less completely. "High and progressive taxation" discourages innovation and investment. It deters growth and provides powerful disincentives to hard work and enterprise. And I don't see anything "just" about seizing assets from someone to make up for past racial ANY injustice.

So which injustice's DO you consider "just" to seize assets? The one's that make the wealthier WEALTHIER?

"He who controls the spice controls the universe." Dune

 

[JimBob1952]

So you respond with a meaningless non sequitur from a science fiction novel? What does that have to do with anything?

There are a lot of things that could be done to give poor black people a better shot at prosperity. Criminal justice reform would be a start. Carping about capitalism and quoting Dune doesn't take anybody anywhere.

 

[oldiebutgoody]

Ending the Reagan era "trickle down theory" myth and closing all foreign tax shelters would end the wealth gap, put the economy back on its feet, end the debt, and emancipate the entire populace. For a nation that claims to be Christian it fails to adhere to its Bible and to heed the warnings spelled out in the Book of Amos. But all that has been discussed before.

 

[Paco Dennis]

So you respond with a meaningless non sequitur from a science fiction novel? What does that have to do with anything?

There are a lot of things that could be done to give poor black people a better shot at prosperity. Criminal justice reform would be a start. Carping about capitalism and quoting Dune doesn't take anybody anywhere.

Yes it does. It is pure economics. The greedy and powerful CONTROL how resources are dispersed. There is no middle of the road , either people are compassionate, or greedy. Thus a very good symbol of ultimate greed with Baron Harkonnen.

 

[Paco Dennis]

Ending the Reagan era "trickle down theory" myth and closing all foreign tax shelters would end the wealth gap, put the economy back on its feet, end the debt, and emancipate the entire populace. For a nation that claims to be Christian it fails to adhere to its Bible and to heed the warnings spelled out in the Book of Amos. But all that has been discussed before.

Amen! The Bible is full of advice on how goods should be supplied, and it is to the poor and hurting that Jesus tells us to take of first. He became quite angry at the Pharisees buying and selling in the temple, so much so he took a whip to them. I could post about 50 verses that say the same.

 

[JimBob1952]

Yes it does. It is pure economics. The greedy and powerful CONTROL how resources are dispersed. There is no middle of the road , either people are compassionate, or greedy. Thus a very good symbol of ultimate greed with Baron Harkonnen.

Amen! The Bible is full of advice on how goods should be supplied, and it is to the poor and hurting that Jesus tells us to take of first. He became quite angry at the Pharisees buying and selling in the temple, so much so he took a whip to them. I could post about 50 verses that say the same.

Yes it does. It is pure economics. The greedy and powerful CONTROL how resources are dispersed. There is no middle of the road , either people are compassionate, or greedy. Thus a very good symbol of ultimate greed with Baron Harkonnen.

Yes it does. It is pure economics. The greedy and powerful CONTROL how resources are dispersed. There is no middle of the road , either people are compassionate, or greedy. Thus a very good symbol of ultimate greed with Baron Harkonnen.
[/QUOTE]

The New Testament is full of insight and wisdom, but it's not much of a primer for running a modern economy. Dune is a boring sci-fi novel and not much of a model for anything. And many, many people are both compassionate and greedy. Look at Warren Buffett.

 

[Paco Dennis]

"Why rich people tend to think they deserve their money ​

It turns out that having more money doesn’t necessarily make a person more inclined to share their money with others — in fact, research suggests the opposite is true.


One experiment by psychologists at the University of California, Irvine, invited pairs of strangers to play a rigged Monopoly game where a coin flip designated one player rich and one poor. The rich players received twice as much money as their opponent to begin with; as they played the game, they got to roll two dice instead of one and move around the board twice as fast as their opponent; when they passed “Go,” they collected $200 to their opponent’s $100.


“So one possibility is that rich players are kind of embarrassed by the situation, doing what they can to help out this other person who undeservedly is a poor player — and that’s actually the opposite of what we found,” said Paul Piff, the psychologist who conducted the experiment. (Piff is featured in “Capital in the 21st Century,” a film we’re watching as part of our Econ Extra Credit project).

In various ways — through body language and boasting about their wealth, by smacking their pieces loudly against the playing board and making light of their opponents’ misfortune — the rich players began to act as though they deserved the good fortune that was largely a result of their lucky roll of the dice.


At the end of the game, when researchers asked the rich players why they had won the game, not one person attributed it to luck.


“They don’t talk about the flip of the coin. They talk about the things that they did. They talk about their acumen, they talk about their competencies, they talk about this decision or that decision,” that contributed to their win, Piff said in an interview with host David Brancaccio.


Piff said the experiment reveals a fundamental bias that most humans share.


“When something good happens to you, we think about the things that we did that contributed to that success,” Piff said.

That can be a problem when it comes to inequality, which has skyrocketed in advanced economies in recent decades.


“It can get people who are winning at the game of life — who have more money, who have more privilege, who have more power — to think about their resources as things that they deserve; to be less likely to think that inequality is a problem, because after all, they deserve what they have; and as a result, to be less willing to do things about it,” Piff said.


The following is an edited transcript of the conversation.


David Brancaccio: So here are these players, one of them doing well because of a flip of a coin, the other one not doing well. And what happens to the players doing better? It kind of goes to their head?


Paul Piff: Yeah. I think what was notable was that, within just a couple of minutes, dynamics start to crystallize. The rich players start to take up more space at the table, so they actually take on a more physically dominant posture. They start making more noise. They start banging the table louder with their pieces as they move around. And over the course of the 15 minutes, one of the things that we noticed is that they actually became ruder in their behavior.


So one possibility is that rich players are kind of embarrassed by the situation, doing what they can to help out this other person who undeservedly is a poor player — and that’s actually the opposite of what we found. The rich player became ruder; became less sensitive to the plight of the other player. They started eating more pretzels and did so in ruder fashion; we had a bowl of pretzels positioned on the table as another way of watching dominance in our rich players. They start showcasing their property, their wealth, sort of exhibiting how well they’re doing.


So across all these different indexes we found that rich players, despite winning the game through really very little effort — because of the coin flip that went their way — they still acted as if they deserved to win and that the poor player deserved to lose.


Brancaccio: They think it’s their own awesomeness. You gotta love human beings, don’t you? We’re just such great people.


Piff: And I think that’s the kicker. At the end of the study, we ask rich players why they inevitably won, and they don’t talk about the flip of the coin. They talk about the things that they did. They talk about their acumen, they talk about their competencies, they talk about this decision or that decision or that thing that they did.


And I think that this is a basic human bias that’s true of all of us: When something good happens to you, we — I think because of the cognitive machinery that we’re equipped with — think about the things that we did that contributed to that success. And we see that in people who win in all walks of life. When you’re winning, you think about the things that you did to help you win. The problem is, that bias writ large, at least in the domain of inequality, it can get people who are winning at the game of life — who have more money, who have more privilege, who have more power — to think about their resources as things that they deserve, to be less likely to think that inequality is a problem because after all, they deserve what they have, and as a result, to be less willing to do things about it, to be less willing to contribute to people who have less, to be less willing to behave in ways that are compassionate, that help the needs of those who have less than they do.


Brancaccio: And we can see why it’s such a challenge to deal with widening inequality that we see. But we’ve got to remember though that life isn’t completely a randomized game of Monopoly. Sometimes it’s because you did work harder and that’s why you’re making more.


Piff: I think that’s absolutely true. There’s obviously lots of situations in which wealthy people and people who are more privileged have obviously done things to contribute and to help generate the resources and the privilege that they have. But I think across all people, it’s universally true that there are things that you benefit from that you did not contribute to. There are things that you benefit from that you did not build; there are things that you benefit from that you did not make. You benefit from the roads that are built, from people that have helped you along the way, from the mentors that you accidentally found yourself in the same classroom with. And it’s those kinds of key ingredients that, in recent work, we’re trying to highlight to get people to think about how no matter what they’ve done to help generate the power and success they have, they’ve inevitably benefited from the help of other people, and as a result, get people to see other people as potentially unlucky and be more willing to contribute to their benefit.


Brancaccio: I was thinking maybe your test subjects in the Irvine, California, area were just especially entitled twits, but you’ve tested this elsewhere.


Piff: Yeah, so we ran a similar study in South Africa. We’ve run some versions of this in Europe. In different contexts that we’ve run this experiment, or versions of this experiment where people just become sort of randomly privileged or randomly disadvantaged, you find very similar differences where, if you have it play out, all of a sudden people that have benefited from a coin flip, start to think that they deserved to win.


Brancaccio: So your lab there works on really interesting things. I mean, you study this idea of inequality and altruism. Give us a taste of maybe something you’re working on now.


Piff: Yeah, so one of the things we’re really interested in is if it’s the case that inequality, in part, is perpetuated because of the biases that emerge from inequality in the first place, we’re really interested in what are the simple psychological levers that we could leverage to get people across the board to think about how life may not be fair, and how things can happen just like a global pandemic that can all of a sudden cause people, through no responsibility of their own, to experience distress and to experience for instance, even poverty or unemployment.


And how can getting people to think about these undeserved, unfair, potentially unjust world events or life outcomes get them to switch how they think about what happens to people — the circumstances that people’s lives take, and the things that happen to people ultimately — as not fair and not deserved, but things that may warrant individual, societal and even government intervention."

https://www.marketplace.org/2021/01/19/why-rich-people-tend-think-they-deserve-their-money/