First and foremost, thanks everyone who commented on my inaugural post. I appreciate the warm welcome. And much food for thought.
A couple of people/robots/aliens brought up inequality and why talk about it. While I imagine it’s bad form to call out anybody directly by name, we do need a little anonymous snark to kick things off.
I mean, come on man…
This is a great Freudian slip – inequity tends to be the formal acadamese rather than the informal plain language. The reference was to wage inequality (which actually was in the piece), and we’ll treat it as meaning that moving forward. But first a little bit more snark: to get to that point, the commenter encountered the phrases “Occupy Wall Street” and “Social Security Administration” and kept going. Sounds like a closet commie to me. At any rate, a real American would have stopped after I said I was a tad younger and more liberal. Don’t worry about me, I’m not paid by the reader.
Ok, now that I’ve offended everybody (well, other than Admin, who I think sees offensiveness as a positive attribute) I thought I’d go into that part of my thinking a bit more. I highlight the comment precisely because it actually is a very useful implied question. Why care about this? Several reasons why TBPers should care:
1. I care. Isn’t that enough? What more do you need?
2. Admin has been incorporating an inequality perspective for a long time. For example, from the Hunger Games analysis (from over a decade ago):
I addressed how wealth inequality created by men rigging the system and utilizing media propaganda ultimately leads to rebellion. In Part 2, I will show how hope and defiance can ignite the flame of liberty in the minds of men.
3. Lots of liberals have been talking about this. Even if you disagree, that’s called situational awareness. For example, a couple quotes Admin has thought interesting to share.
Thomas Frank:
Let’s look at it in a statistical sense. If you look at it from the middle of the 1930’s (the Depression) up until the year 1980, the lower 90 percent of the population of this country, what you might call the American people, that group took home 70 percent of the growth in the country’s income. If you look at the same numbers from 1997 up until now, from the height of the great Dot Com bubble up to the present, you will find that this same group, the American people, pocketed none of this country’s income growth at all.
Our share of these great good times was zero, folks. The upper ten percent of the population, by which we mean our country’s financiers and managers and professionals, consumed the entire thing. To be a young person in America these days is to understand instinctively the downward slope that so many of us are on.
John Kenneth Galbraith:
When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are those we instruct in error.
4. Admin is a glutton for punishment reading government output like the Federal Reserve’s Triennial Survey of Consumer Finances.
A superficial flip through the first few pages of the 2016 SCF as most will do, reveals “broad-based gains in income and net worth since the previous time the survey was conducted, in 2013” as the Fed puts it. Unfortunately, reading between the lines reveals that while net worth and income did increase in the past three years, it was exclusively for the “top 10%” of Americans. The “bottom 90%” got virtually nothing of this so-called recovery.
5. Yeah, yeah, #1 was kinda good. But #2-4 were just blatant appeals to authority combined with buttering up the site owner. Is there any substance to this post?
6. Wait, was #5 a reason?
7. See #6.
8. Monkeys. No, not us. These ones.
There’s an infamous study from a couple decades ago with of course the obligatory TED talk self-promo making grandiose claims that monkeys experience unfairness, too. Take it with a grain of salt. Or grapes. Or whatever.
9. Inequality is a central component of how we got here and the parameters for moving forward. How we got here, from Admin again back in 2013:
The real median household income of the bottom 90% is lower than it was in 1968, as inflation has destroyed the purchasing power of the proletariat. While wages have stagnated due to mega-corporations off-shoring American jobs for the sake of quarterly profits and stock price performance, the price of middle class essentials like food, energy, shelter, tuition and medical care have skyrocketed. The demented American nobility have disregarded centuries of history with regards to inequality borne of corruption and unfettered greed.
Where it’s headed, from Strauss and Howe:
As the Crisis catalyzes, these fears will rush to the surface, jagged and exposed. Distrustful of some things, individuals will feel that their survival requires them to distrust more things. This behavior could cascade into a sudden downward spiral, an implosion of societal trust.
It’s the implosion of trust that interests me. The duplicity required to maintain central planning across such a large scale has built up to a point where too much credibility has been squandered on too many fronts to be reclaimed.
In other words, it’s like potential energy of an avalanche or dam or something. I’m not saying inequality right now is the tipping point. In fact, I’m not sure anything is imminent; the system is internally stronger and more resilient than some critics give it credit. Rather, the point is that when some external event does occur, something that can’t be planned for, the systemic distrust inherent in massive inequality will be unleashed.
10. The Econ nerdery. I’m interested in theories of human capital around how people justify compensation strategies. Because there are legitimate differences in wages. How much you work, when you work, where you work, the danger of the work, the desirability of the work, the skills/training involved, and so on. You know, the basic concept that you should produce value, meaning labor that is valuable to somebody else who actually wants to purchase your good or service.
A Tennessee Case Study
The State and University of Tennessee are good models of what should be standard across any entity that handles or receives public resources. They have transparency websites where, among other things, you can search base salaries of employees. I encourage you to explore such outlets in your own area. And to wonder why the Feds put so much effort into hiding so much information about their own operations.
In Tennessee, the executive management of the state’s education department is the commissioner and deputy commissioner. In the abstract, they make good salaries. Nobody’s living in poverty in this story: deputy makes $18,334 per month ($220,000/yr) and commissioner makes $21,252 per month ($255,000/yr).
But when you go over to the university, it’s not just a handful of leaders making that. There are dozens of folks with no particularly unique responsibilities or insights or dangerous jobs being paid more than the very top education officials in the entire state.
There’s an Assistant Professor making $258,000. A Medical Director making $262,000. A VP for Student Success making $265,000. A VP for Government Relations and Advocacy making $275,000. A VP for Enrollment Management making $289,000. An Associate VP for Finance and Administration making $294,000. A VC for Diversity making $296,000. And that’s just a smattering of folks making less than $300K.
You’ve got a Distinguished Professor making $343,000. A General Counsel making $375,000. A Professor and Chair making $434,000. A Senior VC making $481,000. 13 people make $500K – $1 million while the top two make over $1 million.
These aren’t salaries driven by customers buying products. There is no market here. Yet it distorts every market. The energy that the credentialed class expends to land these cushy posts consumes a vast amount of our nation’s output. And then once one attains one of these posts, you become trapped. You can’t do or say anything because there’s nowhere else to go. You’re being paid way beyond the value of your work. So you go along and look the other way on anything and everything. That’s the soft corruption of careerism. It’s the importance of talking about wage inequality seriously and with substantive analysis.
Again, I’m using Tennessee because they’re a relatively good example, not because they’re particularly egregious. It gets worse out there when you start looking under the hood, especially intersections of healthcare and law and national security (which of course isn’t entirely distinct from academia itself – much of the UT system’s high end is the Health Science Center, after all). If high salaries led to courageous acts of leading by example of what independence and freedom and human rights and critical thinking look like, it might be different. But even with a General Counsel making $375K/yr and 15 positions at half a million+, when it matters, even a university far from the coast that (supposedly) isn’t run by the Feds puts out weaselly garbage like this:
As I communicated last week, I am following up with additional information related to President Biden’s Executive Order 14042. As a federal contractor, we are moving forward today to implement the federal executive order as required. The situation could change at any moment dependent upon pending decisions by the courts, and we will keep you updated.
We have determined that the federal vaccine mandate applies to nearly all UT Knoxville buildings and the people who work in them…
We’re powerless! It’s the Feds! It’s the courts! We aren’t responsible for anything like morality or courage. Oh, but please pay us lots of money. We totally deserve it because we’re awesome leaders and what would you do without us?!?
What I imagine the real concern is when discussing wage inequality is the expected proffering of government doing more as the solution. The exact opposite condition exists, though. The key reason for talking about inequality is that public policy is the primary driver of its excessiveness. The federal government directly determines or tacitly endorses the wages for millions of overpaid insiders in a variety of ways, some more obvious than others. All told, it’s the Cantillion effect, but we don’t need fancy names at this point.
Ron Paul (pick a year):
Mr. Speaker, I once again find myself compelled to vote against the annual budget resolution for a very simple reason: it makes government bigger.
The concentration of wealth and power is so far removed from market-based economics that nobody even bothers to justify the salaries of the technocratic elite any more. It simply must be paid…or else.
I personally think Americans of all ages sense this unfairness and instability. But even if it’s not important to you personally, you should know younger Americans think and talk and care about inequality a lot. It doesn’t fit neatly into partisan politics or ideological labels. All the more reason it’s a great topic for TBP.
