Inequality offensive

March 15, 2012 by Peter Dizikes

Inequality offensiveDavid Autor, professor of economics and associate head of MIT’s Department of Economics, left, with Institute Professor Peter Diamond at Tuesday’s forum. Photo: Peter DizikesEconomists have measured America’s growing wealth gap in great detail: by income, educational attainment, and in terms of the country’s declining social mobility, among other metrics. At an MIT forum on Tuesday night, however, economists suggested the issue matters for an overarching reason that’s slightly harder to quantify: Inequality, they said, constitutes a threat to America’s values and political system.

“If there’s any national religion that we have, it’s the religion of meritocracy, the belief that people get where they end up in life because of hard work and playing by the rules,” said moderator David Autor, professor of economics and associate head of MIT’s Department of Economics. “That’s a very powerful belief system to have … it makes people say, fundamentally, ‘I can accept the outcome I get, because it’s not arbitrary, it reflects some kind of justice.’”

By contrast, Autor noted, a decline in opportunities for advancement threatens to undermine that confidence. “If rising  makes our society more dynastic, less determined by what you do and more determined by choosing the right parents, that’s harmful … the system is not rewarding [those] values and virtues.”

Inequality can also distort the ways political decisions are made, noted Peter Diamond, Institute Professor and professor emeritus of economics at MIT.

“Given the way we organize Congress and the presidency, [corporations and individuals] with a lot of money … have a lot more of an impact on policies,” Diamond said at the event, “Minding the Gap: A Conversation about Economic Inequality,” hosted by MIT’s Technology and Culture Forum. In this sense, he added, inequality is not just a symptom of larger economic or social problems, but a problem in itself.

College as a dividing line

To be sure, the basic numbers on economic inequality in the United States are striking, as detailed at the event. In 1980, the top 1 percent of U.S. households earned about 10 percent of the nation’s income; today that top percentile receives about 25 percent of income. The top 10 percent of households accounted for a bit more than 30 percent of income from World War II until about 1980, but now receives 50 percent of all income.

And among the top 1 percent of households, 70 percent of income stems from returns on capital — the assets they already own — whereas for all households, only 20 percent of income comes from capital, noted Arjun Jayadev, an economist at the University of Massachusetts at Boston.

This income inequality often manifests itself in educational inequality, which in turn helps perpetuate the divisions in society; 82 percent of children in the wealthiest quartile of households obtain a college degree, compared to just 8 percent of children in the bottom quarter.

“College really begins to be a dividing line in terms of things like family formation,” said Frank Levy, the Daniel Rose Professor of Urban Economics in MIT’s Department of Urban Studies and Planning, noting that wealthier people are more likely to marry and have children.

With this in mind, Levy added, Republican presidential candidate Rick Santorum’s recent remarks on the subject — he called President Barack Obama a “snob” for promoting the idea that all Americans should attend college — “speak to a real and deep resentment.”

Mixture of solutions

To be sure, identifying the inequality problem is easier than resolving it. But the panelists all suggested that certain policy initiatives, if implemented, would help address the issue.

Diamond’s own policy wish list features items designed to help an economy that, in his view, remains in an “incredibly awful” position. He called for more infrastructure investment — which he noted would be a relative bargain at the moment, given the country’s very low borrowing rates — and further investment in education.

The latter, Diamond emphasized, does not require a search for elusive “shovel-ready” spending projects, but could be accomplished by the federal government providing aid to school districts so they could re-employ some of the thousands of teachers laid off during the recent downturn.

“While we also know that merely throwing money at the [education] problem won’t solve it, taking money away from the problem is unlikely to solve it, yet that is exactly what has been happening in state after state as they deal with the fallout from the financial crisis,” Diamond said. “We need the federal government to pump more money through the states and local governments into education.”

Diamond also pointed to some of his own recent research, with economist Emmanuel Saez of the University of California at Berkeley, which found that the optimal marginal income tax rate on the highest earners — those making $400,000 or more per year — is well above the current 36 percent, or even the 39 percent level that existed during the 1990s.

“The Washington debate right now is between the Bush and Clinton tax rates on the top,” Diamond said. But his work with Saez shows that a more efficient rate for raising revenue — without significantly deterring the wealthy from trying to earn more — is “somewhere between the tax rate at the top in Reagan’s first administration, which was 50 percent, and the tax rate at the top from the Johnson years up to the Reagan change, which was 70 percent.”

A few of the panelists also emphasized the need for improved education at the community college level, and for providing job-training opportunities for high school graduates affected by the movement of manufacturing and technical jobs overseas. All of them emphasized educational improvements, at every level of school, as a way of helping to restore a society with a reasonable equality of opportunity, though not necessarily of outcomes.

“The playing field is tilted right from the beginning, and it’s very hard to avoid that,” Levy said. “That’s not going to stop.” Through education, he added, “You have to do things to try to even up [opportunities] for kids who don’t have access to as much.”

Provided by Massachusetts Institute of Technology (news : web)

This story is republished courtesy of MIT News (, a popular site that covers news about MIT research, innovation and teaching.

Virginia Senate Passed NDAA Nullification Bill

Joe Wolverton writes in the New American:

On January 16, Virginia Delegate Bob Marshall (left) introduced HB 1160, a bill designed to “prevent any agency, political subdivision, employee, or member of the military of Virginia from assisting an agency or the armed forces of the United States in the investigation, prosecution, or detainment of a United States citizen in violation of the Constitution of Virginia.”

After being passed on Valentine’s Day by an overwhelming majority (96–4) in the House, the bill was sent to the Senate for deliberation by that chamber. In a telephone conversation with this reporter, Delegate Marshall broke the latest news of the procedural progress of his very important legislation …

… Marshall’s bill is the first measure in the nation that is based on the Liberty Preservation Act. This model legislation (a copy of which is available from the Tenth Amendment Center) is designed to block the enforcement of the provisions of the NDAA authorizing the apprehension and indefinite detention of citizens of the United States …

… Most of what is contained in the over-500-page NDAA is in fact “inimical to liberty.” For example, under the provisions of Section 1021 of the NDAA, the President is afforded the absolute power to arrest and detain citizens of the United States without their being informed of any criminal charges, without a trial on the merits of those charges, and without a scintilla of the due process safeguards protected by the Constitution of the United States …

Read More: New American

Poll: Most Americans Want Super PACs To Be Illegal

Poll: Most Americans Want Super PACs To Be Illegal


PEMA LEVY  1028 8


If Americans were wary of the Supreme Court opening the floodgates of outside election spending with Citizens United two years ago, they like it even less now that they’ve seen what the decision has reaped. A new ABC News/Washington Post poll Tuesday shows 69 percent of Americans think super PACs should be illegal.

Super PACs, highly visible in the volatile Republican primary, have taken to playing bad cop by flooding the airwaves with negative attack ads that benefit their chosen candidate but also allow the candidate to absolve himself of any blowback. Super PACs have spent an estimated $75 million to date on the election, almost entirely on the presidential race, according to Langer Research Associates, the firm that conducted the poll. That’s more than the candidates’ own campaigns.

Despite super PACs’ efforts, spending so far on the GOP primary is far less than normal — overall fundraising and spending this election cycle is lower than in the last three election cycles, a report in the Washington Post found Tuesday. The report, which compiled spending through January 2012, shows money raised and spent this cycle at less than half of where it was four years ago, when super PACs weren’t a factor. The Post attributes the dampened fundraising to a lack of enthusiasm over a weak candidate field. If anything, it seems super PACs’ largely negative ads would help suppress overall enthusiasm for the race.

The slower fundraising by the campaigns has, in turn, increased super PACs’ influence. As David Donnelly, executive director of the Public Campaign Action Fund, told the Post, if super PACs were around in 2008, when campaign spending was high, they would have had less of an impact. In February 2008, the Obama campaign raised five times what Mitt Romney raised in February 2012, $57 million to $11.5 million. If the 2012 campaigns were raising at that clip, super PACs might not feel as compelled to spend as heavily.

The heightened visibility of super PACs has not endeared them to Americans of either party. Among the seven in 10 Americans who want to ban super PACs, according to the poll, 52 percent feel very strongly about the issue. Among Tea Party supporters, 69 percent oppose such groups, 59 percent of whom strongly oppose them. Along party lines, 70 percent of Democrats, 55 percent of Republicans and 78 percent of independents favor outlawing the outside spending groups.

The national poll of 1,003 adults by landline and cell phone was conducted March 7-10, and has a 4-point margin of error.

Police drones to be equipped with non-lethal weapons?

Reuters / Handout

Reuters / Handout

TAGS: SciTechVehiclesUSA


Law enforcement near Houston, Texas will soon have a $300,000 robotic surveillance drone in their arsenal, and if Montgomery County’s chief deputy has his say, it’s only a matter of time before that aircraft will be equipped to fire from above.

Discussing a new deal that will give the Montgomery County Sheriff’s Office near Houston, Texas an unmanned, robotic spy drone, Chief Deputy Randy McDaniel tells The Daily that he hasn’t rule out adding weaponry to the lightweight aircraft. The deputy says that while the department doesn’t have any plans at the moment to acquire an army of drones equipped with weapons, he opines that it could be advantageous for some endeavors.

On the topic of tacking a tear gas dispenser or a firearm that shoots non-lethal rubber bullets, McDaniel says it could eventually be an idea the department decides to go with.

“Those are things that law enforcement utilizes day in and day out and in certain situations it might be advantageous to have this type of system on the UAV,” McDaniel tells The Daily, referring to the unmanned aerial vehicle the agency recently acquired.

While Montgomery County will soon have one new set of eyes in its skies thanks to acquiring a pricey ShadowHawk drone, it is hardly the only small-time town that is getting such gizmos. Surveillance drones are already used across the southern United States and the US Department of Homeland Security has acknowledged that it has had a fleet of drones for watching its borders for years. The Federal Aviation Agency is also readying rules to guide the crafts once they are more easily obtainable and the Electronic Frontier Foundation has filed a lawsuit against the FAA’s parent entity, the Department of Transportation, “Demanding data on certifications and authorizations the agency has issued for the operation of unmanned aircraft, also known as drones.”

“This is a tool that many law enforcement agencies never imagined they could have,” Steven Gitlin of AeroVironment Inc. told the Los Angeles Times last year. His company currently ready to offer thousands of small drones for sale to small-time agencies like McDaniel’s Montgomery County, but with the ShadowHawk able to do so much — and maybe even more as the sheriff’s deputy has in mind — others are worried that this more drones will be the nail in the coffin of a collapse of the First Amendment already started by the recent passing of the National Defense Authorization Act and H.R. 347.

“The biggest fear with domestic drones is the prospect of surveillance, the idea that Americans will simply be subject to surveillance by drones outdoors whenever they happen to go outside,” Kirsten Bokenkamp of the Houston American Civil Liberties Union tells The Daily.

FBI Urges Coffee Shops To Report Cash-Paying Customers To Authorities

Via Boing Boing:

According to a set of guidelines sent out by the FBI as part of its Communities Against Terror program, ordinary citizens need to be on the lookout for suspicious characters who follow patterns of behavior of a covert operative.

The latest revelation from the FBI files? Paying in cash for coffee. The most recent update asks coffee shop owners, baristas and other customer-service specialists to lookout for the enemy who walks among us…Using cash for small purchases like a cup of coffee, gum and other items is a good indication that a person is trying to pass for normal without leaving the kind of paper trail created using a debit or credit card for small purchases.

Gore says ‘democracy has been hacked’ at SXSW

March 13, 2012 By JAKE COYLE , AP Entertainment Writer

(AP) — In a wide-ranging talk about the Internet and government, Al Gore urged the techie crowd at South By Southwest to use digital tools to improve government.

The former vice president sat for a conversation with  co-founder and Web entrepreneur Sean Parker on Monday at SXSW in a flashy tete-a-tete that drew an audience of thousands at the Austin Convention Center and more viewers via a .

“Our democracy has been hacked,” said Gore, framing Washington gridlock and the effects of special interest money in digital terms.

To fix what he called a no-longer functional U.S. government, Gore urged the audience to begin a new “Occupy Democracy” movement. He pushed for the creation and implementation of  and social media to “change the democratic conversation.”

Gore talked of a “Wiki-democracy” of “digital flash mobs calling out the truth” and “a government square that holds people accountable.”

Parker, who was famously portrayed by Justin Timberlake in “The Social Network,” has gotten into politics by investing in Votizen, an online network of voters that leverages social networks to campaign for their issues. He also sits on the board of NationBuilder, which also seeks to organize political change.

Parker said he believes social media is only its infancy of what it can do to spur action. He cited the Internet rally against the Stop Online Piracy Act as a hint of the power of social networks. He called the protest “Nerd Spring,” alluding to the Arab Spring uprisings in the Middle East.

Both Gore and Parker derided the dominant role of television in elections and political dialogue. Change, Parker said, won’t come from within the political system.

To applause, Gore added; “I can confirm that.”

80% of Bankruptcy Lawyers Report a “Substantial Increase” in Clients Buried by Student Loan Debt

Monday 12 March 2012
by: Pat Garofalo , ThinkProgress | Report

A report released last week by the Federal Reserve Bank of New York showed that the total balance of student loans in the U.S. has reached $870 billion, while 27 percent of student loan borrowers are at least 30 days behind on their payments. Since 1985, the cost of college tuition and fees has sextupled.

Average college debt now exceeds $25,000, spurring fear of a “student debt bubble.” And a recent survey of bankruptcy lawyers seems to confirm those fears, as a vast majority of them have seen an increase in clients seeking relief from student loan debt:

According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.

In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.

William Brewer, head of NACBA, has said, “This could very well be the next debt bomb for the U.S. economy” (though it won’t reach the level of the mortgage bubble, due to the sheer size of the U.S. mortgage market).

Student loans are one of the few debts that are not easily discharged in bankruptcy, and restrictions on discharging loans from for-profit colleges have coincided with that industry’s rapid growth (and the student debt that comes along with it). The Roosevelt Institute’s Mike Konczal has suggested undoing some of the restrictions on discharging student loans that were instituted in the 80s and 90s, since “it is hard to see these as anything other than a giant subsidy to private agents.”

Originally published on ThinkProgress

Bank of America Stole Homes – So Occupiers Move In

Posted 6 hours ago on March 12, 2012, 11:52 a.m. EST by OccupyWallSt

Bank of America has stolen millions of homes. It’s time to turn the tables! Watch a crew of Occupiers set up their new living room in a New York City branch of Bank of America, which is being rented by the taxpayers at a cost of $230 billion in bailouts from the U.S. government:

If you are asking yourself, “Why Bank of America?”, please visit F(oreclose) the Banks!

How Corporations Corrupt Science At The Public’s Expense

The Union of Concerned Scientists explains how they do it. To sum up:

Corporations suppress research. (”After pork producers contacted his supervisors, a USDA microbiologist was prevented from publishing research showing that emissions from industrial hog farms contained antibiotic-resistant bacteria.”)

They ghostwrite articles. (”A 2011 analysis found evidence of corporate authorship in research articles on a variety of drugs, including Avandia, Paxil, Tylenol, and Vioxx.”)

They create front organizations. (”The Center for Consumer Freedom is a nonprofit that targets dietary guidelines recommended by the FDA, other government agencies, medical associations, and consumer groups. It was founded with a $600,000 grant from Philip Morris, but has also received funding from Cargill, National Steak and Poultry, Monsanto, and Coca-Cola.”)

They corrupt advisory panels. (”A few weeks before a CDC advisory panel met to discuss federal lead standards, two scientists with ties to the lead industry were added to the panel. The committee voted against tightening standards.”)

Hits, and Misses, in a War on Bribery

Insu Lee
By  New York Times Published: March 10, 2012

PRISON is the last place Albert J. Stanley seemed destined for. But on Feb. 23, Mr. Stanley, a legendary figure in the high-octane world of Big Oil, was sentenced to two and a half years for his role in one of the biggest bribery cases in American history.

It was a stunning downfall for a man who had spent his career clinching deals in far-flung corners of the world. But it turns out that Mr. Stanley, known as Jack, also played dirty: he pleaded guilty to conspiring to bribe officials in Nigeria in return for $6 billion in business contracts.

“I am truly sorry,” Mr. Stanley, the former chief executive of the engineering giant KBR, told a court in Houston last month. “I lost touch.”

The particulars of his case aside — Mr. Stanley said alcoholism played a role — perhaps the most surprising aspect of this story is that it might have unfolded at any number of big corporations. Graft is alarmingly commonplace in global business today, so much so that the Justice Department is waging an aggressive — and controversial — campaign against it.

At least 78 corporations are under investigation for possible violations of the Foreign Corrupt Practices Act, a 35-year-old law that bans American companies from paying bribes to government officials abroad. Among those companies are such well-known names as Alcoa, Avon, Goldman Sachs, Hewlett-Packard, Pfizer and Wal-Mart Stores, although none of these companies have been charged.

And, last week, it emerged that News Corporation, which is controlled by Rupert Murdoch and has been trying to contain the damage from a long-running phone-hacking scandalin Britain, is the subject of an F.B.I. inquiry into possible bribery there and in Russia. A spokesman for the News Corporation, Jack Horner, declined to comment.

Until recently, federal prosecutors had won settlements in nearly every battle involving charges of foreign bribery by multinational corporations and their executives. But in late February — indeed, the very week that Mr. Stanley was sentenced — the Justice Department had an embarrassing setback: it abruptly withdrew the biggest case ever brought against individuals under the Foreign Corrupt Practices Act.

It was an extraordinary turn of events. The F.B.I. had recorded 800 hours of video and audio as part of a sting operation involving supposed arms contracts in Africa. Twenty-two executives had been arrested.

Then the whole case fell apart. In a withering appraisal, the federal judge in the case, Richard J. Leon, called the government’s effort “a long and sad chapter in the annals of white-collar criminal enforcement.” Its approach to the law, Judge Leon said, had been “very, very aggressive.”

THE development opened the door for critics who assert that federal authorities have overstepped in trying to fight corruption overseas. They say that the crackdown, which began in earnest three years ago, has made it harder for companies to win legitimate business and that it has needlessly instilled fear among executives. Many companies would rather make any charges brought under the act go away with a quick settlement than try to fight them in court.

“We are seeing companies getting scooped up in aggressive enforcement actions and investigations,” said Lisa A. Rickard, president of the United States Chamber of Commerce’s Institute for Legal Reform, which is pushing to modify the law. “A culture of overzealousness has grabbed the Justice Department.”

“The last time I checked,” Ms. Rickard added, “we were not living in a police state.”

Such heated criticism aside, federal authorities say they are unbowed.

Lanny A. Breuer, the assistant United States attorney general who has stepped up enforcement actions under the act, said he saw no reason to change course. In fact, he is expanding his staff — and his range of potential targets.

“We have to be willing to take cases that we would be willing to lose,” Mr. Breuer said in an interview. “We can’t just pick the easy cases.”

Even more, he sees himself on the right side of history, especially given the outcry against government corruption in the Arab world and elsewhere.

“This is not the time for the United States to be condoning corruption,” Mr. Breuer said. “We are a world leader and we want to do everything to make sure that business is less corrupt, not more.”

Enacted in 1977, the Foreign Corrupt Practices Act prohibits American companies and foreign companies whose securities are traded on exchanges here from bribing foreign officials to attract or keep business. For many years, there were few prosecutions under the act. In 2003, for instance, not a single person was charged.

But in the last four years, a total of 58 companies have paid a combined $3.74 billion to settle such corruption charges. Since 2009, some 67 people have been charged, 20 are still awaiting trial or are at large, and 42 have been convicted, some from charges prior to 2009. A total of 22 have been acquitted or had charges dismissed.

[read more]

Leslie Wayne is senior editor at 100Reporters, an independent nonprofit news organization.