Friday, March 25, 2016


“ . . .   if one is going to use[President Barak] Obama as an example of a president’s symbolic import, it seems only reasonable to acknowledge that his administration has coincided with the most drastic decline in the economic fortunes of African-Americans since World War II. In 2009 when Obama took office, the black poverty rate was 25.8 percent, and by 2014 it had risen to 26.2 percent. Between 2010 and 2013, the median wealth of white households increased by 2.4 percent, while black families’ median net worth declined by 34 percent. By any metric you care to mention — home ownership rates, unemployment rates, incarceration rates — the quality of African-American lives has either remained the same or sharply deteriorated during Obama’s time in office.”

Zoe Heller, Hillary & Women,” a review in the New York Review, April 7, 2016, pp: 14-18 (16).

“Why Income Inequality Isn’t Going Anywhere: Rich elites — even rich liberal elites — don’t believe in redistributing wealth”

By Ray Fisman and Daniel Markovits
[Published originally in Science and online in Slate, September 18, 2015]
“[Novelists] F. Scott Fitzgerald and Ernest Hemingway famously disagreed about the American elite. ‘The very rich are different from you and me,’ Fitzgerald wrote. ‘Yes,’ Hemingway shot back, ‘they have more money.’ With inequality in America continuing to rise, we revisited Fitzgerald and Hemingway’s (perhaps apocryphal) dispute, conducting a series of experiments designed to pinpoint the differences between the rich and those of more modest means.
“The conventional view of America as a classless society has long sided with Hemingway—the only difference is the money. But our results suggest that, at least when it comes to attitudes toward inequality, Fitzgerald is right: Elite Americans are not just middle-class people with more money. They display distinctive attitudes on basic moral and political questions concerning economic justice. Simply put, the rich place a much lower value on equality than the rest. What’s more, this lack of concern about inequality among the elite is not a partisan matter. Even when they self-identify as progressive Democrats, elite Americans value equality less highly than their middle-class compatriots.
“This finding has profound implications for public policy. Contemporary American politics presents an enduring mystery. Why does the public policy response to nearly five decades of rising economic inequality remain so tepid, even as large majorities of Americans consider inequality excessive, and even under a two-term Democratic president? Our study, published Thursday in the journal Science, co-authored with colleagues Pamela Jakiela and Shachar Kariv, proposes an answer: Regardless of party, the elite donors whose money dominates politics, and the elite officeholders whose decisions set policy, don’t value economic equality. When the American government abjures egalitarian policies, it is implementing the bipartisan preferences of the American elite.
“We measured attitudes toward equality by asking hundreds of Americans to distribute a pot of money between themselves and an anonymous other person. Our subjects weren’t making hypothetical choices in responding to the survey—their decisions affected how much real money they would get when the experiment ended.
“Each subject could keep or redistribute as much of her budget as she liked, but with a twist. Whereas the standard version of this experiment — known to economists as a ‘dictator game’ — asks subjects to split a fixed pie, we varied the ‘price’ of redistribution. In some cases, giving was expensive: Every dollar of her own that a subject sacrificed bought her anonymous beneficiary as little as a dime. In other cases, giving was ‘cheap’: Every dollar sacrificed contributed as much as $10 to her beneficiary. Most cases fell between these extremes.
“The choices that subjects made provide a window into their attitudes toward economic justice. First, the experiment allowed us to measure subjects’ selfishness. A ‘selfish’ subject keeps the entire pie, regardless of the price of giving. By contrast, a ‘fair-minded’ subject does not prefer herself over her beneficiary, so that, for example, if she keeps a lot when giving is expensive, she will give a lot when giving is cheap. This means that on average, across all prices of giving, a fair-minded person keeps and gives about the same amount of money.
“Our experiment also allowed us to measure how subjects trade off equality against efficiency. Subjects who care only about efficiency respond very sensitively to changes in the price of redistribution. When giving is expensive, they give little; when it is cheap, they give a lot. By contrast, an equality-minded subject will always ensure that both she and her recipient end up with the same amount, even if it means that less money is paid out overall.
“Both trade-offs play central roles in the crafting of economic and social policy. The trade-off between selfishness and fair-mindedness informs the willingness of the haves to make sacrifices in order to aid the have-nots.’The trade-off between efficiency and equality speaks to the tolerance that policymakers have for redistributive programs (like taxing the rich and productive to support the poor) that might lead to lower GDP but divide our country’s income up more equally. Especially where redistribution transfers resources from the rich to the poor using what economists call leaky buckets, the trade-off between efficiency and equality determines how big a leak is acceptable.
“We invited three very different classes of subjects to play our game and thus reveal their distribution preferences. The first came from the American Life Panel, or ALP, an Internet-based pool constructed by the RAND Corp. to resemble, as accurately as possible, the American public at large: It’s composed of Americans from across the economic and social spectrum. The second class constituted an intermediate elite. It was made up of undergraduates at the University of California–Berkeley, one of the most selective colleges in America and indeed the world, and a subset from the American Life Panel filtered to hold post-B.A. degrees and enjoy household annual incomes of more than $100,000. The third and final class constituted an extreme elite, constructed from the student body at Yale Law School. The median annual income of recent Yale Law graduates exceeds $160,000; among its alumni are former President Clinton and Democratic front-runner Hillary Clinton, as well as Supreme Court Justices Samuel Alito, Clarence Thomas, and Sotomayor. Yale Law students constitute an extreme elite if ever there was one. (By comparing the behavior of Yale Law and Berkeley students, as well as the ALP elite, with that of the general population, we can have greater confidence that the differences we are noticing relate to eliteness rather than some idiosyncratic attribute of future lawyers or students at Yale.)
“The experimental behaviors of these three subject classes — once again, making real allocations with real money — revealed stark differences between attitudes toward economic justice among ordinary Americans and among the elite. To begin with, the Berkeley and Yale subjects were twice as likely to be selfish as their compatriots in general. In this respect, intermediate and extreme elites stand together with each other, and stand apart from the rest of the country.
“What’s more, elite Americans show a far greater commitment to efficiency over equality than ordinary Americans. And this time, the bias toward efficiency increases with each increment of eliteness. The ALP subjects split roughly evenly between focusing on efficiency and focusing on equality; the Berkeley students favored efficiency over equality by a factor of roughly 3-to-2; and the Yale Law students favored efficiency by a factor of 4-to-1.
“Yale Law students’ overwhelming, indeed almost eccentric, commitment to efficiency over equality is all the more astonishing given that the students self-identified as Democrats rather than Republicans—and thus sided with the party that claims to represent economic equality in partisan politics—by a factor of more than 10-to-1. An elite constituted by highly partisan Democrats thus showed an immensely greater commitment to efficiency over equality than the bipartisan population at large.
“Elites’ preferences matter. The American elite overwhelmingly dominates both campaign finance and political lobbying, and American policymakers themselves come overwhelmingly from elite circles—the powerbroker Yale Law alumni mentioned above represent just the tip of a vast iceberg.
“Our results thus shine a revealing light on American politics and policy. They suggest that the policy response to rising economic inequality lags so far behind the preferences of ordinary Americans for the simple reason that the elites who make policy — regardless of political party — just don’t care much about equality.
“Hemingway’s illusory but widely shared view that the only thing that separates the rich from the rest is their money thus disguises a central pathology of American public life. When American government undemocratically underdelivers economic equality, the cause is less party than caste.
“Democracy gives the mass of citizens a path for protest when the gap between ordinary views and a closed rank of elite opinion grows too great. The populist insurgencies that increasingly dominate the contests to select both the Republican and Democratic candidates in the upcoming presidential election show the protest path in action. Elites — in both parties — remain baffled by Donald Trump and Bernie Sanders’ appeal; and they prayerfully insist that both campaigns will soon fade away. Our study suggests a different interpretation, however. These bipartisan disruptions of elite political control are no flash in the pan, or flings born of summer silliness. They are early skirmishes in a coming class war.”

Democratic Presidential Candidate Bernie Sanders (2016)


 “Today, we live in the richest country in the history of the world, but that reality means little because much of that wealth is controlled by a tiny handful of individuals.
“The issue of wealth and income inequality is the great moral issue of our time, it is the great economic issue of our time, and it is the great political issue of our time.

               “The reality is that since the mid-1980s there has been an enormous transfer of wealth from the middle class and the poor to the wealthiest people in this country. That is the Robin Hood principle in reverse. That is unacceptable and that has got to change.

Just as the commandment Thou shalt not kill sets a clear limit in order to safeguard the value of human life, today we also have to say thou shalt not to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? Pope Francis

There is something profoundly wrong when 58 percent of all new income since the Wall Street crash has gone to the top one percent.

Despite huge advancements in technology and productivity, millions of Americans are working longer hours for lower wages. The real median income of male workers is $783 less than it was 42 years ago; while the real median income of female workers is over $1,300 less than it was in 2007. That is unacceptable and that has got to change.

                 “There is something
 profoundly wrong when we have a proliferation of millionaires and billionaires at the same time as millions of Americans worklonger hours for lower wagesand we have the highest childhood poverty rate of nearly any developed country on earth.

                  “There is something profoundly wrong when one family owns more wealth than the bottom 130 million Americans.

                   “The reality is that for the past 40 years, Wall Street and the billionaire class has rigged the rules to redistribute wealth and income to the wealthiest and most powerful people of this country.

                    “This campaign is sending a message to the billionaire class: “you can’t have it all.” You can’t get huge tax breaks while children in this country go hungry. You can’t continue sending our jobs to China while millions are looking for work. You can’t hide your profits in the Cayman Islands and other tax havens, while there are massive unmet needs on every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America, if you refuse to accept your responsibilities as Americans.”

Thursday, March 24, 2016


“The odds are that, a year from now, Bernie Sanders won’t be in the White House pushing the Too Big to Fail, Too Big to Exist Act. Still, the 2016 Presidential campaign has demonstrated that many Americans don’t feel that the system—the dominant institutions in government and in business—is working for them. Then, there’s the fact that economic power, especially in finance, has become much more concentrated in the past twenty-five years: during that time, the five biggest banks have gone from controlling about a tenth of assets to close to half. That makes for an obvious target for people’s stalled-out feelings.”

Nicholas Lemann, “Notorious Big, Why the Spectre of Size Has Always Haunted American Politics,” in the New Yorker, March 28, 2016, pp: 72-75.

“Our campaign-finance laws allow big businesses to buy a great deal of influence in Washington. The sociology of the American élite means that the people at the higher rungs of government and the people at the higher rungs of business often went to school together, live in the same neighborhoods, and move back and forth between the two sides during their careers. That dulls the edge of their putative opposition. The European Union, which can go after monopolies under an “abuse of dominance” standard that doesn’t exist in the United States, has been rattling its sabre at Google and Amazon. The Obama Administration, like the Bush Administration, has not. And so the ‘Trust problem’ has become a trust problem.”

Nicholas Lemann, “Notorious Big, Why the Spectre of Size Has Always Haunted American Politics,” in the New Yorker, March 28, 2016, pp: 72-75.


A recent article by Phillip Longman, in The Washington Monthly, demonstrates that inequality in America has risen alarmingly not just by race and class but also by region (the coasts get an ever larger share of income, at the expense of the middle), and he attributes this development to the demise of economic-republican legislation like Glass-Steagall [Act] and Robinson-Patman [Act].

Nicholas Lemann, “Notorious Big, Why the Spectre of Size Has Always Haunted American Politics,” in the New Yorker, March 28, 2016, pp: 72-75.

Sandra Day O’Connor, a veteran of the Arizona legislature, has expressed outrage at the Citizens United decision and the [U.S. Supreme] Court’s other deregulatory actions on campaign finance, because she knows firsthand what it means to raise money to run for office. When you understand the real reasons that people and corporations subsidize candidates, as O’Connor does, the Court’s pious invocations of ‘freedom of speech’ sound almost comically oblivious.

Jeffrey Toobin, “Court Politics,” a Talk of the Town essay in the New Yorker, March 28, 2016, pp: 21-22. 

Wednesday, March 23, 2016

“Two Democratic members of the New York State Assembly, Jeffrion Aubry and Sean Ryan, introduced a bill this week to close the ‘carried interest loophole, which lets partners in private equity firms and hedge funds pay a greatly reduced federal tax rate on much of their income.
“The measure is the most innovative of several to close the loophole. Several bills in Congress on the issue have gone nowhere. Congress has also ignored repeated calls from President Obama to close the loophole. Even bipartisan calls to close the loophole — from presidential candidates as diverse as Hillary Clinton, Donald Trump, Bernie Sanders and Jeb Bush — have not moved Congress.
New York’s proposal would get around this congressional inaction by raising state income taxes on private equity and hedge-fund partners who live in New York. The increase would be equal to the tax savings they receive from using the loophole at the federal level.
Partners at private-equity firms and hedge funds typically treat a big portion of the fees they charge their clients as a capital gain — that is, as profit on the sale of an investment — so they can pay tax at the capital-gains rate of 20 percent (plus a surtax of 3.8 percent typically). Ordinary income is taxed at a rate of up to 39.6 percent. But labeling fees as capital gains is a stretch, in part because the partners generally earn their fees by managing other people’s money, not by investing their own.
“The New York bill is supported by a coalition of activists focused on inequality and tax fairness. The group plans to work with lawmakers in nearby states on similar bills. The aim is for the tax increase to take effect once various states have closed the loophole. That way, the tax could not be avoided by moving to a neighboring state.
“The bill’s supporters estimate that closing the loophole would raise $3.7 billion a year in New York.  Estimated annual income would be $938 million in Massachusetts, $535 million in Connecticut and $112 million in New Jersey.
“Virtually every tax dodge involves somehow passing off relatively high-taxed ordinary income as low-taxed capital gains. The best solution would be for Congress to do away with special low tax rates for capital gains. But for now, the New York bill and the push for similar legislation in other states could offer a bold and smart step forward.”

New York Times editorial, March 11, 2016.
“You might think that Republican thought leaders would be engaged in some soul-searching about their party’s obsession with cutting taxes on the wealthy. Why do candidates who inveigh against the evils of budget deficits and federal debt feel obliged to propose huge high-end tax cuts — much bigger than those of George W. Bush — that would eliminate trillions in revenue?
“And economics aside, why such a commitment to a policy that has never had much support even from the party’s own base, and appears even more politically suspect in the face of a populist uprising?
“But here’s what Mr. [Paul] Ryan, Speaker of the House of Representatives] said about all those tax cuts for the top 1 percent: ‘I do not like the idea of buying into these distributional tables. What you’re talking about is what we call static distribution. It’s a ridiculous notion.’”

Krugman, Paul, ‘On Invincible Ignorance,’ Op-Ed column in The New York Times, March 21, 2016. [Paul Krugman is a winner of the Nobel Prize in economics.]
“Ever since income inequality began its sharp rise in the 1980s, one favorite conservative excuse has been that it doesn’t mean anything, because economic positions change all the time. People who are rich this year might not be rich next year, so the gap between the rich and the rest doesn’t matter, right?
“Well, it’s true that people move up and down the economic ladder, and apologists for inequality love to cite statistics showing that many people who are in the top 1 percent in any given year are out of that category the next year.
“But a closer look at the data shows that there is less to this observation than it seems. These days, it takes an income of around $400,000 a year to put you in the top 1 percent, and most of the fluctuation in incomes we see involves people going from, say, $350,000 to $450,000 or vice versa. As one comprehensive survey put it, ‘The majority of economic mobility occurs over fairly small spans of the distribution.’ Average incomes over multiple years are almost as unequally distributed as incomes in any given year, which means that tax cuts that mainly benefit the rich are indeed targeted at a small group of people, not the public at large.”

Krugman, Paul, ‘On Invincible Ignorance,’ Op-Ed column in The New York Times, March 21, 2016. [Paul Krugman is a winner of the Nobel Prize in economics.]
Capitalists Arise, We Need to Deal with Income Inequality
By Peter Georgescu
“I’m scared. The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. Not of Al Qaeda, or the vicious Islamic State or some other evolving radical group from the Middle East, Africa or Asia. We are afraid where income inequality will lead.
“For the top 20 percent of Americans, life is pretty good.
“But 40 percent are broke. Every year they spend more than they have.
“While so many people are struggling, even those on the higher end of the middle class have relatively little after paying the bills: on average, some $1,300 a month. One leaky roof and they’re in trouble.
“If inequality is not addressed, the income gap will most likely be resolved in one of “two ways: by major social unrest or through oppressive taxes, such as the 80 percent tax rate on income over $500,000 suggested by Thomas Piketty, the French economist and author of the best-selling book Capital in the Twenty-First Century.

                “We are creating a
caste system from which it’s almost impossible to escape, except for the few with exceptional brains, athletic skills or luck. That’s why I’m scared. We risk losing the capitalist engine that brought us great economic success and our way of life.
Ken Langone and I both feel very grateful to this country, and we have been meeting with chief executives, trying to get action on inequality.
“This country has given me remarkable opportunities. I am an off-the-boat immigrant, having arrived in the United States as a teenager from Romania in 1954. I had been separated from my parents when I was 7 because they had traveled to the United States and could not return to Romania when it was taken over by the Soviet Union. When I was about 10 I was placed in a hard-labor camp along with my 15-year-old brother. With the help of the American people and the intervention of President Dwight D. Eisenhower, we were reunited with our parents after five years in the camp. Through kindness and compassion, I was invited by the headmaster of Phillips Exeter Academy to attend his school. From there I went to Princeton and the Stanford Business School.
“During more than 50 years in the marketing, advertising and public relations business, I was helped by many kind people to fulfill the American dream.
Ken Langone was the first in his family to finish high school and attend college. His grandfather made a living in Italy with his hands. He has been successful in business as well as in philanthropy. New York University Hospital became the NYU Langone Medical Center.
“Would young people like Ken and me get those opportunities now? I don’t think so.
“Who will be courageous enough to start the ball rolling? The most obvious choice is our government. But the current Congress has been paralyzed.
“We business leaders know what to do. But do we have the will to do it? Are we willing to control the excessive greed so prevalent in our culture today and divert resources to better education and the creation of more opportunity?
“Business has the most to gain from a healthy America, and the most to lose by social unrest or punitive taxation. Business can start the process in two steps. First, invest in the actual value creators — the employees. Start compensating fairly, by which I mean a wage that enables employees to share amply in productivity increases and creative innovations.
“The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows that has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees.
“Second, businesses must invest aggressively in their own operations, directing profit into productivity and innovation to boost real business performance. Today, too many corporations reduce investment in research and development and brand building. As a result, we see a general decline in the value of their brands and other assets. To make up for those declines and for anemic revenues, businesses buy back their stock (now at record levels) and thus artificially boost earnings per share.
“Someone must break the ice; someone must lead. Companies including Home Depot, Costco Wholesale, Whole Foods, Publix, Qualcomm, Starbucks and Gravity Payments are taking small steps, and compensating employees more. These are the green shoots we need. Similar changes must be made by many more businesses.
“As Ken and I talk to business leaders and try to drum up support for our cause, we find almost unanimous agreement on the nature of the problem and the urgent need for solutions. That’s the good news. Our concern is action. We have been told by chief executives that to pay employees more fairly, they need more support from their boards, from prominent business leaders, from the media and even from the government, to combat the intense market pressure to maximize short-term shareholder returns.
“So while we celebrate those who do the right thing, how can we move more businesses and chief executives to act now? We really don’t want civil unrest or an 80 percent tax rate to jar us into action.
“There is a way to start. Government can provide tax incentives to business to pay more to employees making $80,000 or less. The program would exist for three to five years and then be evaluated for effectiveness.
“The benefits would be huge. People would have more money to spend, and many would no longer need government help. That would mean a reduction in entitlements.
“Finally, that other America, the one that hasn’t been able to climb out of debt, will know that help is coming — not as an increase in government support, but as a fairer way to share in the hard work and incremental value a business generates. As has been proved again and again, shareholders also win, because satisfied employees produce better results.
“Is this idea simply pie in the sky? Not really. Senator Mark R. Warner, Democrat of Virginia, is working on a somewhat similar bipartisan plan to introduce in Congress. I don’t know yet what it would cost. But not acting would be far more costly. The urgency is clear. A fair and responsible free enterprise system is still the best engine ever invented to create opportunity and a higher standard of living.
Peter Georgescu, “Capitalists Arise, We Need to Deal with Income Inequality,” Op Ed article in the New York Times, August 7, 2015. Peter Georgescu, chairman emeritus of Young & Rubicam, is at work on a book about the death of the middle class.

Monday, March 21, 2016

By Robert J. Shiller
Winner of the Nobel Prize in Economics
“Wage insurance may not be on your radar, but it should be. It helps people who have lost their jobs and cannot find new ones that pay as well. That assistance can reduce economic inequality while providing incentives for unemployed people to go back to work quickly.
“What’s more, wage insurance has bipartisan support, at least in its current limited form. We ought to expand it, both through government and in the private sector.
“Canada experimented with wage insurance in 1995, and six years later Lori G. Kletzer, now of Colby College, and Robert E. Litan, adjunct senior fellow at the Council on Foreign Relations, advocated its use in the United States in an aptly named paper, ‘A Prescription to Relieve Worker Anxiety.’ The idea caught on: President George W. Bush and Congress embraced it in 2002, and last June President Obama a form of wage insurance through 2021.
“There is a catch, though. The Bush-Obama insurance is limited to people who have lost their jobs to foreign workers. If a computer is now doing the work you used to do, this insurance won’t help you.
‘The current insurance has other limits, too. It is restricted to American workers over the age of 50 who have been earning wages up to $50,000 a year, were employed full time and had to take a different, lower-paying job. For people in such circumstances, the insurance provides an amount equal to half the difference in pay, for two years, capped at a total of $10,000
By some measures, the $50,000 earnings cutoff is fairly generous: It is almost twice the median annual earnings of American women in 2014, $28,000, for example. The insurance is administered by the states. In New York State, for example, the local  New York State Career Center is the place to go for this kind of assistance.
President Obama recognizes that the current program does not go far enough. In his State of the Union address in January [2016] and in his budget for fiscal year 2017 he proposed a significant expansion. While maintaining the $50,000 income threshold, he would drop the age requirement as well as the link to job loss because of foreign competition.
“These changes are critical. After all, most working people in the United States are under 50, and most job loss cannot be clearly attributed to replacement by foreign workers. Technology is making some jobs obsolete, and factors like recessions and shifts in demand for products and services eliminate many jobs. In this expansion, described in a recent blog post by Jason Furman, chairman of the Council of Economic Advisers, and Jeffrey Zients, director of the National Economic Council, wage insurance would help many people who desperately need it. We can expect some opposition to it, though, simply because it would increase the role of government.

“But it remains insurance, and in a vibrant capitalist economy, expanding it makes sense on theoretical grounds. Insurance is a type of risk management. Rational people would want to pay for this benefit so that they could take promising but risky employment opportunities. It could help spur innovation in the economy.
“With a potentially expensive program, financing is critical. Like Social Security, an expanded wage insurance system might best be financed by a payroll tax. To be fair, people with wages just below the $50,000 limit — who might receive more money from the program than lower-income workers — should pay higher premiums. True insurance needs to be priced appropriately.
“There is another objection to wage insurance. It can create a moral hazard — an incentive to take a lower-paying, and perhaps less demanding, job than the one the person lost. Most people will agree that people who want to work harder and at unpleasant jobs to earn more income should not be discouraged from doing so. There is a safeguard against this in the current plan, which limits benefits to two years. That reduces moral hazard, but at the expense of providing benefits with a longer horizon. There are always trade-offs.
“The role of government is important in this case because for social insurance, governments have a significant advantage in putting into place big ideas that are difficult to market. That was true for federal Old-Age, Survivors and Disability Insurance in the Social Security system starting in 1935, which was followed by an explosion of additional private pension and disability plans. Government is needed again now.
“But ultimately, there should be two insurance systems, a government one that is limited to assisting lower-income workers and a private one that allows everyone — including those with higher incomes — to buy insurance against wage loss.
“In my book, The New Financial Order, I proposed a private sector form of wage insurance that I called livelihood insurance. It would be an extension of disability insurance, which is already marketed and sold by private insurance companies. It would just add specified job market problems to the list of covered disabilities. For example, it might include a decline in income for, say, nurses, or a decline in the number of people employed in nursing, or some combination of the two, with payments not just for two years but for as long as the condition persisted. Such insurance policies would be based on objective marketwide factors for a person’s occupation, reducing the possibility that the insurance might encourage people to take less demanding jobs.
Appropriate pricing for livelihood insurance would also avoid selection bias — people with exceptionally insecure jobs signing up in disproportionately large numbers — a problem that government wage insurance can avoid by being offered to everyone
“If the private sector offered livelihood insurance, people in riskier careers would be charged higher insurance premiums. At the same time, by reducing wage risk, the insurance would encourage people to be more adventuresome and entrepreneurial. Risk management and insurance costs might then become essential elements of career planning. Employers in risky industries might buy livelihood insurance for their employees as a benefit.

“If these concepts seem unfamiliar, that is partly because privately issued livelihood insurance is not common today, if it exists at all. But that could change quickly. Expanding government wage insurance now might clear the way for the private sector. At a time of rising economic inequality and job dislocation, wage insurance makes a great deal of sense.”
Robert J. Shiller, “How Wage Insurance Could Ease Economic Inequality,” New York Times, March 11, 2016. Nobel Prize winner Robert Shiller is Sterling Professor of Economics at Yale University and is the author of The New Financial Order. Also search the archive for “SPECTACULAR” using Microsoft Command f.

            “At a debate in Miami last week [March 9, 2016],
on the day after his Michigan victory, he [Senator Bernie Sanders]
pilloried [Hillary] Clinton for delivering a speech to an audience at
Goldman Sachs [the multinational investment banking firm] for two
hundred and twenty-five thousand dollars
. ‘I would think that a speech
so great that you got paid so much money for, you would like to share
it with the American people,’ he said. ‘So I think she should release the

Ryan Lizza, “The Great Divide, Clinton, Sanders and the Future
of the Democratic Party,” New Yorker, March 21, 2016, pp: 38-44 (39).

“Lately [2016], Hillary [Clinton] has sounded less like a Clinton Democrat
and mor
e like a Sanders Democrat. Since the campaign began, she has modernized
her positions on trade, the economy, and criminal-justice reform. (She came
out in support of same-sex marriage only in 2013.) A few days before the
primary in Michigan, where her husband's free-trade agenda is highly unpopular,
gave a major economic speech, in which she asked, How do we raise incomes and
eate the good jobs of the future?’ She then said, ‘I don't think we can answer
that question by refighting battles from twenty years ago.She blamed some
roblems in the economy on Wall Street and some of our corporations,’ and
noted that
the purpose of banks is not to create huge riches for a select few
at the
expense of everyone else.’"

Ryan Lizza, “The Great Divide, Clinton, Sanders and the Future
of the Democratic Party,” New Yorker, March 21, 2016, pp: 38-44 (39).