MULTI-MILLIONAIRE SEES REVOLUTION COMING

Multi-millionaire Nick Hanauer is no dummy. He sees the writing on the wall.

“And what do I see in our future now?

“I see pitchforks.

“At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country — the 99.99 percent — is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top one percent controlled about 8 percent of U.S. national income. The bottom half shared about 18 percent. Today, the top 1 percent [of the U.S. population] share about 20 percent; the bottom half, just 12 percent.

“But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

“And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

“No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counter-examples. None. It’s not if, it’s when.

Nick Hanauer, “The Pitchforks Are Coming for Us Plutocrats,” Politico Magazine "The pitchforks are coming . . . for us Plutocrats"

GOVERNMENT CONTRACTORS One-percenters like Boeing, Northrup-Grumman, and Lockeed Martin have charged the government billons of dollars for post-911 safety projects. Read Steven Brill’s deeply incisive article in the September 2016 issue of The Atlantic magazine at http://www.theatlantic.com/magazine/backissues/ page 61. Steven Brill, “Are We Any Safer?” The Atlantic, September 2016.

PEW SURVEY SHOWS NEAR-UNIVERSAL INCOME LOSSES

Households in all economic tiers experienced near-universal decreases in median incomes across U.S. metropolitan areas, according to the independent Pew Foundation’s Research Center. Middle-income households lost ground financially in 222 of 229 metropolitan areas from 1999 to 2014. Meanwhile, those in the lower-income tier saw their median income slip in 221 areas and those in the upper-income households took a financial hit in 215 areas.

Pew Research Center 2014 American Community Survey

MIDWEST HAS TOP 10 MIDDLE-CLASS AREAS

The 10 metropolitan areas with the greatest shares of middle-income adults are located mostly in the Midwest, according to the independent Pew Foundation’s Research Center. Metropolitan areas with the largest upper-income shares are mostly in the Northeast or on the California coast, while the 10 metropolitan areas with the biggest lower-income tiers are in the southwest, several on the border with Mexico.

Pew Research Center 2014 American Community Survey

TRUMP’S WHITE WORKING-CLASS SUPPORTERS

[Donald] Trump’s white working class supporters — who provide somewhere between 58 percent and 62 percent of his votes, according to data from NBC and ABC polls — have suffered a stunning loss of relative status over the past 40 years. Their wages have stagnated or declined; the ascendance of minorities has threatened their cultural dominance; and the growth of an increasingly large and affluent upper middle class has pushed goods and services once viewed as theirs by right beyond their reach.

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

MANY ESSENTIAL EXPENDITURES HAVE BECOME UNAFFORDABLE

For those in the bottom third of the income distribution, even essential expenditures have become unaffordable: the $7,000 to $10,000 average cost of a funeral, the $33,865 average cost of a new car, the $18,000 average annual cost of child care.

Crucially important is the fact that rising inequality constitutes a double whammy. It raises the cost of sought-after goods and it increases the economic gap between the working class and the affluent, spurring nostalgia for what was (even if what was really wasn’t).

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

WEALTHY PULLED THE RUG OUT

“In effect, the increase in the resources commandeered by the overclass has pulled the rug out from under the once upwardly mobile white working class.”

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

WEALTHY CAN BID UP THE PRICES

Thomas Edsall, writing in the New York Times, noted: “Growing income inequality in the U.S. has meant that, as those at the top are able bid up the price of valued goods like housing and access to good schools, those in lower groups have struggled to maintain their positions.” [quoting an essay titled, “Keeping Up With the Joneses,” presented at the annual meeting of the American Sociological Association by Neil Fligstein, a professor of sociology at Berkeley, Pat Hastings, a Ph.D. candidate at Berkeley, and Adam Goldstein, a professor of sociology at Princeton University.]

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

NO MONEY FOR A CAR REPAIR BILL

A May 2015 Federal Reserve report provides a window into the financial condition of many in the working class. It found that 47 percent of Americans do not have the resources to cover a $400 bill for such unanticipated costs as a car repair or a health emergency. They would be forced to borrow from friends or family, to sell something, to go to a payday loan company or to add to their credit card debt.

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

U.S. MEDIAN INCOME IS $53,567

In July 2014, USA Today estimated that in the United States, where the median household income was $53,567, the minimum annual cost of living the American dream was $130,357.

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

BRITISH EXIT FROM EUROPEAN UNION RATTLES WEALTHY 

A measure of consumer sentiment dropped sharply in July, as wealthy Americans were rattled by a decision by the U.K. to leave the European Union. The University of Michigan said . . .  its consumer sentiment index fell to 89.5 in July, a three-month low, from 93.5 in June. Economists polled by MarketWatch anticipated a reading of 92.5.

Fidelity Alerts, July 15, 2016

FORMER UKRAINIAN PRESIDENT’S ADVISER NOW PLAYS SAME ROLE FOR TRUMP

            “In December 2013 Russian leaders made financial aid to [Ukrainian President Viktor] Yanukovych’s government contingent upon clearing the streets of protestors. The government’s subsequent escalation of repression – first the suspension of the rights to assembly and free expression in January 2014, and then the mass shooting of protestors in February – turned the popular movement into a revolution. On February 22 [2014], Yanukovych fled to Russia. (Two years later, his political strategist, Paul Manafort, would resurface in the US, playing the same role for [billionaire presidential candidate] Donald Trump.)”

Timothy Snyder, “The Wars of Vladimir Putin,” New York Review of Books, June 9, 2016. Timothy Snyder is the Housum Professsor of History at Yale University. His most recent book is Black Earth: The Holocaust as History and Warning.

MIDDLE-AGE WHITES DYING AT INCREASING RATES

“Last fall [2015], two Princeton economists released a study showing that, since the turn of the [21^st] century, middle-aged white Americans—primarily less educated ones—have been dying at ever-increasing rates. This is true of no other age or ethnic group in the United States. The main factors are alcohol, opioids, and suicide—an epidemic of despair. A subsequent Washington Post story showed that the crisis is particularly severe among middle-aged white women in rural areas. In twenty-one counties across the South and the Midwest, mortality rates among these women have actually doubled since the turn of the century. Anne Case, one of the Princeton study’s co-authors, said, “They may be privileged by the color of their skin, but that is the only way in their lives they’ve ever been privileged.”

“According to the Post, these regions of white working-class pain tend to be areas where [Donald] Trump enjoys strong support. These Americans know that they’re being left behind, by the economy and by the culture. They sense the indifference or disdain of the winners on the prosperous coasts and in the innovative cities, and it is reciprocated. Trump has seized the Republican nomination by finding scapegoats for the economic hardships and disintegrating lives of working-class whites, while giving these voters a reassuring but false promise of their restoration to the center of American life. He plays to their sense of entitlement, but his hollowness will ultimately deepen their cynicism.”

George Packer, “Head of the Class,” a Talk of the Town essay in the New Yorker,
May 16, 2016.

WORLD REPORT FINDS AMERICANS LESS HAPPY

“ . . .  the U.S. doesn’t just have income inequality. It has happiness inequality, too. The report [of the Sustainable Development Solutions Network] found that the gap between the most and least-happy Americans was significant: We came in 85th out of 157 countries.

“There is a very strong message for my country, the United States, which is very rich, has gotten a lot richer over the last 50 years, but has gotten no happier,” Jeffrey Sachs, head of the Sustainable Development Solutions Network, which developed the report, told Reuters. “The message for the United States is clear. For a society that just chases money, we are chasing the wrong things. Our social fabric is deteriorating, social trust is deteriorating, faith in government is deteriorating.”

Martha C. White, “Why Americans Have Gotten a Lot Less Happy Over the Past Decade,” Time magazine, March 16, 2016, Money Section.

AVERAGE HOURLY EARNINGS ROSE 2.56 PERCENT IN 2015

“It is worth noting that this doesn’t necessarily mean that pay is rising by that much for the typical worker. After all, the pay for chief executives and other highly paid people counts in those compensation numbers.

“Still, paired with other evidence, it doesn’t look as if this is solely a phenomenon of the highest-paid workers making more. For example, average hourly earnings for non-managerial private sector workers rose 2.56 percent in 2015 in a year of very low inflation. That number was only 1.69 percent in 2012, when inflation was higher.”

Neil Irwin, “Workers Are Getting a Bit More of the Economic Pie,” New York Times, May 3, 2016 [in print May 6, 2016, page B1].

EVICTED RENTER KILLED HIMSELF

“Evictions are brutal. [Matthew] Desmond watches as an armed deputy knocks and a mother pleads vainly for time. The mover says she can pay to store her possessions or have them left on the street. She can’t afford storage. ‘Curbside service, baby!’ the mover tells the crew. Three children watch their mother pace. ‘Her face had that look,’ Desmond writes. ‘The movers and the deputies knew it well. It was the look of someone realizing that her family would be homeless in a matter of hours.’ One woman from the trailer park spent $1,000 on the storage bills but fell behind and lost her belongings anyway. About 70 percent of evicted tenants who opt for storage do. A week earlier, a man asked the deputy for a private moment, then shot himself in the head.”

Jason DeParle, “Kicked Out in America,” a review in the New York Review (March 10, 2016, pp:25-27) of Evicted: Poverty and Profit in the American City, by Matthew Desmond.

COMPANIES HAVE TO PAY MORE

“Part of the reason corporate profits are falling appears to be that companies are having to pay their employees more.

“Hiring has been quite strong over three years, with millions of Americans getting jobs. That has pushed the unemployment rate steadily downward, to about 5 percent. Very gradually, a labor market that was very much tilted in favor of employers is tilting the other way.

“That means companies are having to work harder to attract good employees. They do that by paying higher wages and salaries (up 10 percent in 2015 compared with 2013) and more generous benefits package (up 6 percent over the two-year period).”

Neil Irwin, “Workers Are Getting a Bit More of the Economic Pie,” New York Times, May 3, 2016 [in print May 6, 2016, page B1].

PROPORTION OF NATIONAL INCOME FOR WORKERS HAS RISEN

“At the start of 2013 . . .  61 percent of national income went to pay and benefits for workers. But by the end of 2015, that had risen to 62.6 percent. (That said, in the early 1990s, that figure was around 66 percent.)

“If the proportion of national income going to workers in early 2013 had stayed constant, there would now be $251 billion a year less flowing into Americans’ paychecks than is the case. That is about $1,900 a year per household.”

Neil Irwin, “Workers Are Getting a Bit More of the Economic Pie,” New York Times, May 3, 2016 [in print May 6, 2016, page B1].

WORKERS ARE GETTING A BIT MORE OF THE ECONOMIC PIE

“American workers are reaping fewer of the gains of a growing economy in the form of pay and benefits. Shareholders are reaping more in the form of corporate profits. That shift has been one of the most important economic stories of the last several decades, and it is the key to understanding stagnant wages for middle-class workers and a soaring stock market in the last quarter-century.

“Here is what is less widely understood: That trend appears to be reversing itself.

“It is early and the reversal may not last. And it certainly hasn’t fully undone the shift underway since the 1980s. But the numbers are quite clear that in the last couple of years workers have claimed a bigger piece of the economic pie and shareholders a smaller one.

“The evidence available so far in 2016 — steady growth in wages and weak earnings for publicly traded companies — suggests that the reversal is continuing this year.”

Neil Irwin, “Workers Are Getting a Bit More of the Economic Pie,” New York Times, May 3, 2016 [in print May 6, 2016, page B1].

PARALLEL ISOLATION OF THE TOP AND BOTTOM

“ . . .  the United States has a double-edged problem — the parallel isolation of the top and bottom fifths of its population. For the top, the separation from the middle and lower classes means less understanding and sympathy for the majority of the electorate, combined with the comfort of living in a cocoon.

For those at the bottom, especially the families who are concentrated in extremely high poverty neighborhoods, isolation means bad schools, high crime, high unemployment and high government dependency.

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

DEMOCRATS NOW COMPETITIVE AMONG TOP 20 PERCENT

“Democrats are now competitive among the top 20 percent. This has changed the economic makeup of the Democratic Party and is certain to intensify tensions between the traditional downscale wing and the emergent upscale wing.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

WEALTHY VOTERS BECOMING INCREASINGLY DEMOCRATIC

“At the same time that lifestyle and consumption habits of the affluent diverge from those of the middle and working class, wealthy voters are becoming increasingly Democratic, often motivated by their culturally liberal views. A comparison of exit poll data from 1984 to 1988 to data from the 2008 to 2012 elections reveals the changing partisan makeup of the top quintile.

“In the 1980s, voters in the top ranks of the income ladder lined up in favor of Republican presidential candidates by 2-1. In 1988, for example, George H.W. Bush crushed Michael Dukakis among voters making $100,000 or more by an impressive 34 points, 67-33.

“Move forward to 2008 and 2012. In 2008, voters from families making $100,000 to $200,000 split their votes 51-48 in favor of John McCain, while those making in excess of $200,000 cast a slight 52-46 majority for Barack Obama.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

TOP 20 PERCENT FORM SOLID WALL AGAINST REFORM

“As the top 20 percent becomes more isolated and entrenched, reforms designed to open opportunities for those in the middle and on the bottom ‘can all run into the solid wall of rational, self-interested upper middle class resistance,” [Richard] Reeves of the [Brookings Institution] argues.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

83 PERCENT IN AFFLUENT HOMES ARE MARRIED

“ ‘Family structure, as a marker and predictor of family stability, makes a difference to the life chances of the next generation,’” [Richard] Reeves [of the Brookings Institution] writes:

“ ‘To the extent that upper middle class Americans are able to form planned, stable, committed families, their children will benefit — and be more likely to retain their childhood class status when they become adults.’

“Using 2013 census data, Reeves finds that 83 percent of affluent heads of household between the ages of 35 and 40 are married, compared with 65 percent in the third and fourth income quintiles and 33 percent in the bottom two.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

INEQUALITY GAPS SPREADING ACROSS THE RANGE OF AMERICAN LIFE

“In a September 2015 essay, ‘The Dangerous Separation of the American Upper Middle Class,’ Richard Reeves, a senior fellow at the Brookings [Institution], writes:

‘The top fifth have been prospering while the majority lags behind. But the separation is not just economic. Gaps are growing on a whole range of dimensions, including family structure, education, lifestyle, and geography. Indeed, these dimensions of advantage appear to be clustering more tightly together, each thereby amplifying the effect of the other.’

“The same pattern emerges in the case of education. Reeves cites data showing that 56 percent of heads of households in the top quintile have college or advanced degrees, compared with 34 percent in the third and fourth quintiles and 17 percent in the bottom two quintiles.

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

POLITICAL LEVERAGE GREATER FOR TOP 20 PERCENT

“Political leverage is another factor separating the top 20 percent from the rest of America. The top quintile is equipped to exercise much more influence over politics and policy than its share of the electorate would suggest. Although by definition this group represents 20 percent of all Americans, it represents about 30 percent of the electorate, in part because of high turnout levels.
"Equally or perhaps more important, the affluent dominate the small percentage of the electorate that makes campaign contributions."

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

THREEFOLD INCREASE BY THE RICH IN SPENDING ON THEIR CHILDREN

“Timothy Smeeding, a professor of public affairs and economics at the University of Wisconsin, has explored how the top quintile is pulling away from the rest of society. In an essay published earlier this year ‘Gates, Gaps, and Intergenerational Mobility: The Importance of an Even Start,’ Smeeding finds that the gap between the average income of households with children in the top quintile and households with children in the middle quintile has grown, in inflation-adjusted dollars, from $68,600 to $169,300 — that’s 147 percent.

“In an earlier paper, Smeeding and two co-authors wrote that:

“ ‘we have seen a threefold increase between 1972 and 2007 in top-decile spending on children, an increase that suggests that parents at the top may be investing in ever more high-quality day care and babysitting, private schooling, books and tutoring, and college tuition and fees.’

“The bottom line, Smeeding wrote in an email, is this:

“‘The well-to-do are isolated from the day to day struggles of the middle class and below to provide these key services (health, education, job search and other opportunities) to aid the upward mobility of their children. But the upper middle class are happy to take advantage of tax subsidies for their own housing, preschool for their kids, and saving for college which benefit them.’”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

TOP FIFTH IS DISENGAGING FROM EVERYONE WITH LOWER INCOMES

“Geographic segregation dovetails with the growing economic spread between the top 20 percent and the bottom 80 percent: The top quintile is, in effect, disengaging from everyone with lower incomes.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

SERIOUS EFFECTS OF INCOME INEQUALITY

“The Continuing Increase in Income Segregation,” a March 2016 paper by Sean F. Reardon, a professor of education at Stanford, and Kendra Bischoff, a professor of sociology at Cornell, demonstrates the accelerating geographic isolation of the well-to-do — the upper middle and upper classes (a pattern of isolation that also applies to the poor, with devastating effect).

“In hard numbers, the percentage of families with children living in very affluent neighborhoods more than doubled between 1970 and 2012, from 6.6 percent to 15.7 percent.

“At the same time, the percentage of families with children living in traditional middle class neighborhoods with median incomes between 80 and 125 percent of the surrounding metropolitan area fell from 64.7 percent in 1970 to 40.5 percent.

“Reardon and Bischoff  write:

“ ‘Segregation of affluence not only concentrates income and wealth in a small number of communities, but also concentrates social capital and political power. As a result, any self-interested investment the rich make in their own communities has little chance of “spilling over” to benefit middle‐ and low-income families. In addition, it is increasingly unlikely that high‐income families interact with middle‐ and low‐income families, eroding some of the social empathy that might lead to support for broader public investment in social programs to help the poor and middle class.’”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

TOP FIFTH IS SEPARATING ITSELF FROM THE REST OF US

“For years now, people have been talking about the insulated world of the top 1 percent of Americans, but the top 20 percent of the income distribution is also steadily separating itself — by geography and by education as well as by income.

“This self-segregation of a privileged fifth of the population is changing the American social order and the American political system, creating a self-perpetuating class at the top, which is ever more difficult to break into.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

SPENDING BY TOP 5 PERCENT ROSE 35 PERCENT

“There is also increasing demand from the most affluent shoppers. Spending by the top 5 percent of earners rose nearly 35 percent from 2003 to 2012 after adjusting for inflation, according to a study by Mr. Fazzari and Barry Z. Cynamon of the Federal Reserve Bank of St. Louis. For everyone else, spending grew less than 10 percent.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

MOST NOT LIVING THE AMERICAN DREAM

“ ‘We are living much more cloistered lives in terms of class,’ said Thomas Sander, who directs a project on civic engagement at the Kennedy School at Harvard. “We are doing a much worse job of living out the egalitarian dream that has been our hallmark.”

“Emmanuel Saez, a professor of economics at the University of California, Berkeley, estimates that the top 1 percent of American households now controls 42 percent of the nation’s wealth, up from less than 30 percent two decades ago. The top 0.1 percent accounts for 22 percent, nearly double the 1995 proportion.

“But even as income inequality and the wealth gap stoke the discontent that has emerged as a powerful force in this year’s presidential election, for American business it represents something else entirely. From cruise ship operators and casinos to amusement parks and airlines, the rise of the 1 percent spells opportunity and profit.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

24, 2016, page A1.

VERY RICH GAINED EIGHT TIMES THOSE WITH LESS THAN $1 MILLION

“Today, ever greater resources are being invested in winning market share at the very top of the pyramid, sometimes at the cost of diminished service for the rest of the public. While middle-class incomes are stagnating, the period since the end of the Great Recession has been a boom time for the very rich and the businesses that cater to them.

“From 2010 to 2014, the number of American households with at least $1 million in financial assets jumped by nearly one-third, to just under seven million, according to a study by the Boston Consulting Group. For the $1 million-plus cohort, estimated wealth grew by 7.2 percent annually from 2010 to 2014, eight times the pace of gains for families with less than $1 million.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

CREATING A MONEY-BASED CASTE SYSTEM

“With disparities in wealth greater than at any time since the Gilded Age, the gap is widening between the highly affluent — who find themselves behind the velvet ropes of today’s economy — and everyone else.

“It represents a degree of economic and social stratification unseen in America since the days of Teddy Roosevelt, J. P. Morgan and the rigidly separated classes on the Titanic a century ago.

“What is different today, though, is that companies have become much more adept at identifying their top customers and knowing which psychological buttons to push. The goal is to create extravagance and exclusivity for the select few, even if it stirs up resentment elsewhere. In fact, research has shown, a little envy can be good for the bottom line.

“When top-dollar travelers switch planes in Atlanta, New York and other cities, Delta ferries them between terminals in a Porsche, what the airline calls a ‘surprise-and-delight service.’ Last month, Walt Disney World began offering after-hours access to visitors who want to avoid the crowds. In other words, you basically get the Magic Kingdom to yourself.”

“When Royal Caribbean ships call at Labadee, the cruise line’s private resort in Haiti, elite guests get their own special beach club away from fellow travelers — an enclave within an enclave.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

“In many ways, the rise of the velvet rope reverses the great democratization of travel and leisure, and other elements of American life, in the post-World War II era. As the Jet Set gave way to budget airlines, in places like airports and theme parks even the wealthiest often rubbed shoulders with hoi polloi.

“These days, whether the provider is a private company or a public agency, special treatment for the very rich isn’t personal, it’s business. Late last year [2015], public officials in Los Angeles agreed to lease a separate facility at LAX to a private firm that would serve celebrities or anyone else willing to pay $1,800 to skip the traffic jams and lines at the main terminals.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

CORPORATE INFLUENCE OVER GOVERNMENT POLICY

“Progressives have long complained of corporate influence over government policy. They’ve pilloried companies that threaten to move operations in order to extract favors from state legislatures; they’ve attacked the Koch-funded American Legislative Exchange Council for its role in drafting a slew of pro-business state laws; they’ve called for overturning Citizens United.”

James Surowiecki, “Unlikely Alliances,” in the New Yorker, April 25, 2016, financial page.

VIEWS OF BUSINESS MATTER MORE THAN WHAT VOTERS WANT

“In a comprehensive 2014 study of two decades of public-opinion data, the political scientists Martin Gilens and Benjamin Page showed that the views of business leaders and the economic élite matter far more to politicians than what ordinary voters want.”

James Surowiecki, “Unlikely Alliances,” in the New Yorker, April 25, 2016, financial page.

The Rich Live Longer Everywhere.
For the Poor, Geography Matters

By  Neil Irwin  and Quoctrung Bui

New York Times
APRIL 11, 2016

“For poor Americans, the place they call home can be a matter of life or death.

“The poor in some cities — big ones like New York and Los Angeles, and also quite a few smaller ones like Birmingham, Ala. — live nearly as long as their middle-class neighbors or have seen rising life expectancy in the 21st century. But in some other parts of the country, adults with the lowest incomes die on average as young as people in much poorer nations like Rwanda, and their life spans are getting shorter.

“In those differences, documented in sweeping new research, lies an optimistic message: The right mix of steps to improve habits and public health could help people live longer, regardless of how much money they make.

“One conclusion from this work, published on Monday [April 11,2016] in The Journal of the American Medical Association, is that the gap in life spans between rich and poor widened from 2001 to 2014. The top 1 percent in income among American men live 15 years longer than the poorest 1 percent; for women, the gap is 10 years. These rich Americans have gained three years of longevity just in this century. They live longer almost without regard to where they live. Poor Americans had very little gain as a whole, with big differences among different places.

“The Richest American Men Live 15 Years Longer than the Poorest 1 Percent

“But the fact that some places have increased the life span of their poorest residents suggests that improving public health doesn’t require first fixing the broader, multidecade problem of income inequality. Small-scale, local policies to help the poor adopt and maintain healthier habits may succeed in extending their lives, regardless of what happens with trends in income inequality.

“ ‘You want to think about this problem at a more local level than you might have before,” said Raj Chetty, a Stanford economist who is the study’s lead author.

“ ‘You don’t want to just think about why things are going badly for the poor in America. You want to think specifically about why they’re going poorly in Tulsa and Detroit,’ he said, naming two cities with the lowest levels of life expectancy among low-income residents.

“The research, in the works for nearly three years and based on a vast trove of records on earnings and deaths, is the most detailed analysis to date of a pattern first identified at least a couple of centuries ago, that more money translates into a longer life.

“It could be as simple as this: Wealth buys higher-quality medical care, which allows people to live into old age. But a long line of evidence, including the new work, suggests it’s less obvious than it might seem. The affluent seem to live in healthier ways. They exercise more, smoke less, feel less stress and are less likely to be obese.

“It’s not even certain that the cause and effect flows from higher income to greater health; to some degree, it may go the other direction as well, because people who are healthy are better able to hold down a demanding job, and so have higher incomes.

“Geography Matters More for the Poor

“The new paper, in fact, finds little correlation between a region’s Medicare spending rate or the proportion of the population with health insurance and how long its poor citizens live.

“Public health experts who examined the results said the weak relationship did not mean that health insurance had no value. Research has long established that health care interventions have a much smaller effect on life span than behavioral factors like smoking and exercise. But health care does help people who are already sick lead healthier lives. And it can provide economic security and peace of mind that improve the lives of the poor in other ways.

“Economic measures like the unemployment rate and income inequality also showed little relationship to low-income people’s life spans. There was a much stronger relationship between longevity and obesity and smoking rates, which is unsurprising. Places where poor citizens had long life spans also tended to have a high concentration of college graduates and high local government spending.

“Life expectancy for the poor is lowest in a large swath that cuts through the middle of the country, and it appears in pockets in the rest of the country, in places like Nevada. David M. Cutler, a Harvard economist and an author of the paper, calls it the “drug overdose belt,” because the area matches in part a map of where the nation’s opioid epidemic is concentrated.

“The new findings dovetail with a much-discussed paper by Anne Case and Angus Deaton published last year. That research showed rising death rates among middle-age white Americans, especially those with low education. It also showed a sharp increase in drug and alcohol poisonings, suicides and accidents in the first years of this century. Research from the Brookings Institution published in February also found a growing gap in life span between the rich and the poor.

“ ‘There is some deeper distress going on among white middle-aged Americans that may continue to propel these mortality rates higher,” Mr. Deaton, a Princeton economist who wrote an editorial critiquing the new paper by Mr. Chetty and his colleagues, said in an interview. “If so, these people at the bottom will live even less long than they’re calculating.”

“The great question for public health officials is what strategies might help low-income people live as long as their richer neighbors.

“ ‘There is a very strong correlation between income and life span,’ Dr. Thomas R. Frieden, director of the Centers for Disease Control and Prevention, said in an interview. ‘But it is not inevitable. There are things we can do to change the life trajectory of people. What improves health in a community? It includes wide access to social, educational and economic opportunity.’

“A common thread among many of the places with a smaller longevity gap was population density, with wealthy cities leading the way. New York has a high rate of social spending for low-income residents andhas been aggressive in regulating trans fats and smoking.

“In the area in and around Birmingham, Ala., the life span for adults in the bottom quarter of income rose 3.8 years for men and 2.2 years for women from 2001 to 2014. (Because people of different races have different life expectancies regardless of income, the researchers statistically adjusted these local numbers to simulate a world in which all places matched the racial composition of the country as a whole. These numbers are after these race adjustments.)

“Dr. Mark E. Wilson, chief executive of the health department in Jefferson County, Ala., which includes Birmingham, ticked off a number of things that might have helped.

“The county expanded availability of preventive health care like vaccinations and mammograms by opening clinics in poorer neighborhoods in the 1990s and early 2000s (though recently it has closed some of the clinics). Although a relatively high percentage of the population lacks health insurance, a portion of local taxes goes to hospital care for those who cannot pay. The county has been ahead of the rest of Alabama in banning smoking in restaurants and workplaces, with a law enacted in 2012. And philanthropic foundations backed by old industrial money have funded campaigns to make people healthier in the Birmingham area.

“ ‘These aren’t all huge-scale projects, but there is still an alignment of getting resources moving in the same direction around health,’ Dr. Wilson said. ‘We’re trying to establish a culture of health and get it more and more on the radar screen of our community.’

“Mr. Cutler, the Harvard economist, argues that the new research should serve as a jumping-off point. ‘Why is it that Birmingham has done well but Tulsa has done poorly?’ he said.

“It may be good to know that poor Americans are living a lot longer in some places than in others, but it would be better to know — in terms of specific policy prescriptions — how the places with better results are doing it.

Source: “The Association Between Income and Life Expectancy in the United States, 2001-2014”, The Journal of the American Medical Association;healthinequality.org. Contains charts, graphs, and sources.