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[Photo: STIL via Unsplash]

Angry Mom: Oh, Honey — If Anybody’s ‘Out of Touch’, It’s You

I wasn’t going to waste my time on the over-privileged, excessively-pampered trophy wife Treasury Secretary Steve Mnuchin stupidly took with him on a recent taxpayer-funded business trip.

But after thinking about her rude, snotty, and insanely ill-informed reply to someone who took issue with her gross display of wealth, I think I should expend a few words.

Mrs. Mnuchin believes she and her spouse contribute more to the country than whomever it was who critiqued her behavior.

No. They and their kind are leeches. Bloodsuckers. Literally part of the great vampire squid empire Matt Taibbi described.

They do not add value to this country. They chew at its foundations in great, monster-sized bites.

And they believe they are entitled to do so.

But they’re wealthy! Look at all the money they have, one might say.

What did they do to make that wealth? They inherited much of it, especially in his case — they had access to pre-existing capital.

Meanwhile, nearly half of this country’s citizens can’t put their hands on $400 or more in cash in the event of an emergency.

This, in spite of the fact roughly half of the country has some money in an investment account. Let me guess that much of this is a 401K established through an employer and it’s not liquid. It’s also money managed by financial industry professionals like Steve Mnuchin who don’t do a lot actively with the Average Joe’s 401K but use them in the aggregate to take positions in the stock market while skimming off a living through fees — and the Average Joe only has $104,000 saved by the time they retire, on which to live the rest of their life.

Yeah, but these Mnuchins must have worked hard to get through those private schools, one might say.

Prove it. How many times do these uber wealthy ever really show anybody their grades to get a six-figure entry-level job out of college? Mnuchin’s father was a partner at Goldman Sachs. Mnuchin himself rubbed shoulders with a network of uber wealthy as a member of Yale’s Skull and Bones society. With that background it’s not hard to get one’s foot in the door AND draw a salary more than twice that of the Average Joe.

Ditto for Mrs. Mnuchin, who also attended private schools in Scotland and a private university in the U.S.

Average Joe or Josephine doesn’t have either the family money to go to expensive private prep schools or attend a four-year university without being massively in debt. The Average Joe Junior who graduated last year had more than $37,000 of student loan debt which will take them on average 10-21 years to pay off.

(Gee, I wonder who benefits from the interest on these loans…Bueller? Bueller?)

Deplaning from her taxpayer-subsidized flight, Mrs. Mnuchin’s attire, from the top of her over-processed hair to the ends of her manicured toes, was roughly equal in cost to the average student loan debt — her Birkin handbag alone costs about $20,000.

The same Average Joe/Josephine/Junior also faces a job market with deeply entrenched wage stagnation, making savings difficult after paying on school loans.

They also face difficulty before they graduate if they hold down a minimum wage job; there’s no place in the U.S. where rent on a one-bedroom apartment is affordable for a full-time minimum wage worker, let alone one who is trying to go to school full-time.

After graduation, long-stagnant entry level wages may help ease the pinch, but then there’s the challenge of rising health care costs which have not abated even though the ACA makes access to health insurance easier.

Good luck finding a way to afford having children. Diapers alone will cost $750 to $1200 a year.

Don’t even get me started on transportation costs. And Boomer-aged pundits pule about Millennials killing all the things…

But surely these uber wealthy people must have earned some of their wealth, one might foolishly claim.

Oh, yes, definitely. They earned it by capturing legislatures and regulatory bodies, and by putting a squeeze play on both investment analysts and regulations. They’ve used them to insure they never actually pay taxes appropriate to the amount of public resources they or their investment portfolio consumed. They’ve demanded quarter-after-quarter profits off the backs of the Average Joe/Josephine/Junior, insisting corporate management maintain low wages to offset other rising costs like rent. They’ll reward upper management with ridiculous compensation packages if they can maintain profits and sack them if they don’t. And then because foreign investors are driving up the price of property, they sink those profits into the same bubble and continue to lean on corporate management for profits even as they increase other business costs through increased rents.

They earned that wealth by sucking the lifeblood out of the kind of people Mrs. Mnuchin talk down to so defensively, even after they’d just paid for her air travel.

I would be so incredibly embarrassed as a parent if my adult children ever acted like Mrs. Mnuchin — blind and stupid about her privilege, ungrateful to the people upon whom her lifestyle has been built, wasteful of an opportunity to be a better human.

And incredibly out of touch with Americans.

And I’d be just as embarrassed if my kids ever acted like Mr. Mnuchin, too, but that’s another chapter.

Three Things: Non-Nuclear Proliferation

The entire social media universe has been panicking over Fearless Leader’s whacked-out statement on North Korea at the end of his bigly speech yesterday on opioids. His hyperbole was on par with his decades of hawkishness about nuclear weapons, so both unsurprising while infuriating.

What I want to know: did he say what he did to distract from the Trump-Russia investigation underway, and/or did he say what he did roughly 30 minutes before the stock market closed for somebody’s benefit? I’d love to know who might have been short selling yesterday afternoon and this morning after his recent petulant tweet hyping the stock market’s record highs. Things don’t look good today, either, in spite of calming noises from Secretary of Exxon Tillerson.

[source: Google Finance]

Whatever. Let’s look at some non-nuclear matters.

~ 3 ~

The New York Times’ op-ed, Our Broken Economy, trended yesterday morning on Twitter and is still making waves today. It’s a pretty good read with compelling charts, if not very deep. Morons across the internet have misinterpreted what it tells us, which is that income has stagnated or fallen for the majority of the U.S. while the income of the uppermost 1% to .01% has skyrocketed in less than a decade. Loss of leverage in wage negotiations due to union busting and the skyrocketing cost of secondary education have held back the lower 80%.

What has most recently ‘weaponized’ the growth of income, while destroying any illusion of the American dream? In my opinion, three things contributed the most:

— the loss of Glass-Steagall Act and the subsequent unmooring of the financial industry from risk-reducing practices which siloed capital;

Citizens United, which exacerbated the trend toward regulatory capture;

— the financial crash of 2008 and the subsequent loss of wealth for the lower 80% in terms of savings, investments, and property ownership.

But a fourth, rapidly growing factor is making difference and may also be exploding as an unintended consequence of legislation passed in 2007 requiring a larger percentage of margin on commodities trading. Algorithmic trading, conducted out of sight, skimming from every trade, on stocks rather than on commodities and at inhuman speed and scale, has increased unearned wealth but only for the very wealthiest.

Matt Bruenig says we must confront capital. Yes, but I think the appeal to do so is based in fairness, a universal ethic. A system which distorts pricing by not allocating true and full costs of the commons consumed to products and services  sold is unfair. It is not a ‘free market’ and certainly not a fair when the playing field isn’t level and not every business pays for what it consumes of the commons.

And it’s not fair when businesses deliberately suppress wages below workers’ real cost of living. That’s slavery. We don’t need charts to tell us something is wrong when the prevailing wage won’t provide meager shelter and food.

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The effect of Michigan’s criminal state government on Flint doesn’t remain in Flint. More than 70 new cases of Legionnaires disease have been reported in southeastern Michigan; this time the state’s health authorities have been prompt about reporting them, unlike the shoddy reporting around cases 2-3 years ago directly related to the water in Flint.

I will bet good money many of these new cases have a link to Flint since the water system has still not been completely replaced.

Eclectablog reminds us Flint’s Water Crisis is now at Day 678 and the city has yet to be made whole though Michigan’s Gov. Rick Snyder admitted he knew that Flint’s drinking water was poisoned with lead. There are still Flint residents who cannot drink their tap water without the use of a water filter.

Given the outbreak of Legionnaires disease, I wonder how many more Michiganders may actually sicken and die because of Rick Snyder’s handling of Flint’s financial emergency and the water system.

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You might already have read about the lawsuit filed against Disney for its failure to protect children’s privacy; I know Marcy tweeted about it. More than 40 applications Disney developed and sold collect information without consent about the kids using them, putting them at risk, in violation of the Children’s Online Privacy Protection Act (COPPA).

But here’s what really bugs me about this on top of the privacy problems: Disney not only had a history with violating COPPA; the government went after them in 2011 and 2014 for problems with Playdom and MarvelKids. Disney must have known competitors Mattel and VTech had problems with their network-enabled electronic toys breaching children’s privacy circa November 2015. Why did Disney fail to remediate their 43 applications more than 18 months ago when both Mattel and VTech were under fire?

Disclosure: I own Disney stock. And yes, I’m thinking shareholders should be pissed off about this failure to disclose a material risk in financial reports BEFORE parents filed a lawsuit.

~ 0 ~

That’s it for now. See you tomorrow if we haven’t already been fried to a crisp. This is an open thread – treat each other nicely.

‘Look, You Can Live on Minimum Wage!’ Say Modern Slavers

[Sample budget via McDonald’s and VISA]

Jesus fecking Christ on a pogo stick. I can’t believe McDonald’s and VISA were stupid enough to put together this oh-so-helpful budget estimate showing how fast food workers can get by and still have money left over.

After looking it over, here’s my assessment: A couple corporations need to do drug testing among white-collar staff. Somebody had to be be out of their gourd to think this was accurate, let alone an effective marketing tool to promote their businesses.

As many folks have pointed out, an immediate glaring error on this ‘budget cheat sheet’ is the lack of heating/cooling expenses. Sure, some apartment complexes included HVAC in the rent they charge, but this can’t be assumed as a norm.

Every line item included is grossly flawed. I’ll look at three points:

1) First job’s NET salary of $1105 based on an estimated 21% income tax equals ~$1400 gross salary. Based on current federal minimum wage of $7.25 per hour, that’s ~193 hours worked in a month, or ~44.6 hours a week.

This is NOT a part-time job. Most fast food jobs are deliberately limited to under 32 hours a week to avoid paying unemployment taxes or other benefits.

2) Second job’s NET salary of $955 — HAHAHAHAHAHAH Right. That’s another ~167 hours of labor per month at current federal minimum wage and 21% income tax rate.

To make this sample budget work, either two people MUST live together, MUST work a combined ~83 hours a week at current federal minimum wage. Or one person must do all this and simply have no time to do anything beyond eat/sleep/bathe/maybe laundry.

If two people lived together to make this budget work, they MUST share a tiny/cheap/ratty car, or hope like hell there’s public transportation which costs less than $150 a month to get to/from ~83 hours of work, grocery store, school, so on.

The rest of the assumptions in this budget are just plain trash. Like health insurance for two people versus one. Or savings of $100 which is really half that, spread between two people, as is the discretionary daily spending.

Some trollish account said, “But nobody stays at minimum wage forever! They get pay increases!” Sure…now person working First Job only has to work 43 hours a week instead of ~44.6. The average wage at McDonald’s is $8.25 — but does that include assistant managers and shift managers? Does this include people who’ve worked at McD’s for years? Let’s be real: most fast food workers are closer to the federal minimum wage.

Perhaps with pay increase a person working BOTH jobs only has to work ~80 hours a week instead of ~83. Give me a fucking break.

3) Transportation and insurance combined = $250 — HAHAHAHAHAHAH Right, again. I checked Progressive’s website calculator for insurance on a vehicle only, assuming a 2007 4-door Honda Civic, personal use, unmarried single male driver age 18-24 living alone, who lived in the same rented home for 1-3 years, had driven for more than 3 years, had insurance for 1-3 years, assuming a 20-year old male student living in Lansing, Michigan. Car insurance alone was $219 per month AND +$400 was required upfront before coverage began.

Maybe bundling renter’s insurance would help but the cost McDonald’s and VISA used in their example budget for insurance and a used car loan is simply unmoored from reality.

And perhaps insurance is cheaper in other parts of the country, but I will bet good money some other line item in that budget increases. Like the cost of an annual automobile license (higher in FL than MI) or a mandatory vehicle emissions test (required in CA but not MI).

Roughly 50% of Americans can’t get their hands on $400 cash for an emergency. Imagine if your insurer dropped you and you’re a fast food worker living to this prospective budget. That’s where VISA comes in with an opportunity to finance your emergency, compounding the stranglehold minimum wage has on your life.

God help you if you’re trying to put yourself through college without scholarships or family assistance. Even the imaginary example student attending Lansing Community College will pay more than $65,500 for four years. How long will it take to get through a four-year degree if one works ~83 hours a week? How long will it take to pay off school loans if one manages to break out of fast food service work after graduation — let’s say they double or triple their wages to $14.50 or $21.75 hour? This prospective student faces somewhere between 12 and 15 years of payments ranging from $950 to $1050 per month, and payments may begin as early as NOW while attending school at $650 per month.

You will be in debt for much of your adult life. There will be no extra money for anything.

Maybe the rare avocado toast, if you can find one marked down in the Damaged bin or live someplace warm where fallen avocados can be found for free. And maybe if you can afford bread this week.

“But millennials buying pricey iPhones!” some out-of-touch jackass might say. Let’s say you’re a fast food worker who might have to change housing at any time because rent has increased dramatically in your city. Even my example dude in innocuous Lansing faces a +7% increase in rent each year though his wages have been stagnant. Your entire life — telephone, computer, internet access, records, more — resides in a single, portable device. Of course you’ll pay more for a phone which hails a tow truck when your ratty little car breaks down, or finds you a quick cash gig (or a plasma blood bank) to pay for repairs. That phone is your lifeline, the lifesaver you can count on unlike white-collar jerk-offs who have no clue what you’re going through to survive.

And God help you if you get sick or injured. You can’t count on your elected officials to make sure you’ll be healthy enough to show up to work those ~83 hours a week.

Indentured servitude, without a contract, that’s what this budget reflects. Product marketing by modern slavers.

And they can’t understand why millennials are killing so many things like fast food businesses. They simply can’t afford them.

Death of the Car(go) Cult(ure)

I had an epiphany recently. It sneaked up on me, right about the time I let go of my comfortable illusion of middle-class security and embraced the fact I may be faced with more than $26,000 per year in health care premiums and untold thousands in out-of-pocket deductibles and medication expenses. It could be more than my household income, forcing me to draw down on retirement savings nearly ten years prematurely.

Ticking off monthly expenses — what things could be reduced or eliminated in my household to make up for the additional health care expenses if some mutant abomination of AHCA passes — I came to an abrupt conclusion.

I don’t need a car anymore.

It costs more to own a car at my personal disposal than calling a car-for-hire, whether Uber or Lyft or local cab service.

I had to sit down after that. For nearly fifty years I’ve thought I needed a car, that every American aspired to vehicle ownership, save for big city residents for whom cars would be unmanageable. My entrance to adulthood was marked by the ability to drive a car; my personal freedom hinged upon being able to get away in my own vehicle.

But now? I might be trapped by a car. My six-year-old grocery-getter Mom mobile cost me more than I invested in the stock market the year it was manufactured — it’s worth a fraction of its original value, while my stock is worth several times over. My investment in wheels won’t pay for my future health.

I thought about my kids and the reality they face; only four years separates these two siblings, but a massive cultural shift occurred between them. My 23-year-old daughter drove off like the wind when I gave her my car keys seven years ago; she saw her first vehicle as freedom, just as I did when I was her age. She just signed her first lease on a vehicle, though; after crunching the numbers on new cars, it didn’t make sense to buy one. Leasing a car would yield a lower total cost to operate than buying one. She’s also not stuck with trying to sell it in a couple years when an electric vehicle might be preferred.

This isn’t an earth-shattering shift, but it’s a tectonic move; no one in my family has ever leased a vehicle. We have always bought and owned them over the last four generations.

And now my son. One might assume he was a car buff living here in the backyard of the Big Three Automakers, the progeny of one family which made its fortunes in auto parts and spawn of another family in which two successive generations made a living engineering in automobile manufacturing.

But no — he dragged his feet for nearly three years getting his license. He just didn’t care to get it; the only reason he got a driver’s permit was that everyone else his age had done so. He had the public school bus to get him to class every day, and me to get him to every intramural event. Why should he bother when he had it so good?

Especially when it came to the annoying expense of having his own vehicle. Being in a high-risk group — male, 16-25, driving more than 25 miles a week — he might pay more in insurance each year than the purchase price of the car he would drive. And then gas, which was near $4.00/gallon when he got his permit. And car washes, tires, wipers, oil changes, other increasingly frequent car repairs, and so on…this was not freedom.

His sister had been fortunate to land an internship for the duration of her college career, which helped defray automobile expenses. This has not been the case for her brother because of their different academic pursuits. He works at a summer job, stashing as much of his paycheck away for the academic year while living on his tips during the season. The paycheck and tips combined from his summer service job do not equal the amount his sister made each year; he simply cannot afford a car of his own.

We don’t know how long this may be the case, either. His prospects are different from his sister’s given his field of study. He may need to pursue a master’s degree immediately after he gets his bachelor’s. Leads on internships for his junior year of college are good, but the pay may be less than his sister made at the same point in their studies. A car of his own is a very iffy prospect for years.

Let’s face it: my son’s life is closer to that of the overwhelming number of American’s his age than my daughter’s is to her cohort. This is the shift in our culture, one in which we begin to let go of personal and family automobiles as a norm.

The more I thought about it, the more disturbed I became. Both of my kids will leave college without any debt; I spent what should probably have been my retirement health care savings on their tuition and board. In contrast, my prospective son-in-law carries $40,000 in debt after his graduation this month. Thankfully he has a good job and can pay it down quickly, but what of all other college students in the U.S.? The overwhelming majority will be saddled with a similar or greater amount of debt and middling jobs. They’re part of nearly 50% of America which cannot muster $400 cash in the event of an emergency, perhaps part of the 53% participating in the stock market but still one of the precarious.

These youngsters will be hard pressed to juggle health insurance premiums and deductibles under AHCA with massive college tuition debt and rising rents.

They will be hard pressed to buy a car outright. Screw all of those idiotic “Millennials are killing everything!” opinion pieces; their parents and grandparents have done little to ensure college would not burden them as much or more than an automobile payment.

Or a mortgage. I realized, too, that I am financing and paying taxes on a garage and a driveway I rarely use. I must trek out and shovel tons of snow every year to keep that rarely-used driveway clean; when it’s too much to do by hand, I break out the gas-guzzling, exhaust-belching snowblower.

All in service to a rapidly depreciating fossil-fueled demi-god with a deteriorating finish and in need of an oil change. I’ve become an adherent of a cargo cult, who has for too long believed that possessing this object would yield some greater blessing from the great god of capitalism. Instead of throwing several handfuls of dollars per mile traveled into a gaping maw I should be riding my bike or taking a bus.

When the rest of the U.S. wakes up to this same reality, the real earth-shattering shift will begin. Perhaps it already has.

What happens to a people when they lose their religion? We’re about to find out.
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Food for thought:
U.S. automakers question possible excess capacity – but is the challenge too much manufacturing capacity or too little buyers’ capacity due to decades of stagnant wages?

If carmakers like Volvo are already committed to switching completely to electric while entire cities and countries are forcing fossil fuel’s phase out, are potential car buyers simply driving their gas guzzlers to death until the industry has completely migrated?

Or maybe the future isn’t on the road but in the air; will buyers save their pennies for a flying car?

Who Are The Non-Celebrities In The Panama Papers?

In the first stories about the Panama Papers, we got the names of a bunch of politicians, a few criminals, sports and other celebrities and one or two names of rich people. But in focusing solely on this kind of person, we miss the major point about tax havens. They are used by hundreds of thousands of people, including many who are not billionaires and who are not famous or otherwise newsworthy. They are commonly used by doctors, lawyers, accountants, small business owners and those who inherited money from such people.

Here’s a chart from the New York Times showing the mix of people making up the top 1% in income in the US; the chart is from 2012 and uses 2007 data. The cut-off for this level is the Census Bureau figure of $380K, while other studies put it higher. The Fed Survey of Consumer Finances, a better survey, has it at $690K in 2007. The cut-off for the top 1% in wealth was estimated at nearly $8.4 million in 2007. Those numbers went down after the Great Crash, but recovered smartly. By 2013, the cut-off for the top 1% in wealth was back to nearly $8 million, and climbing.

Lisa Kiester of Duke University, a sociologist who has published on the 1% describes a group she calls the double rich in this article. These are people who are in the top 1% in both income and wealth. Their median wealth was about $12 million in 2010, and their median income was in the range of $1.2 million. Both have no doubt risen since then. Kiester does not give an estimate of the number of the double rich, but this New York Times article, using 2007 data, says that there is about a 50% overlap between the two groups. There were about 117 million households in 2010 according to the Census Bureau. From that we can estimate that there are about 560,000 households making up the double rich.

Kiester examines the lack of discontent with wealth and income inequality in this 2014 paper. She offers five explanations with supporting evidence from research:

!. Homophily, the tendency to hang out with people like us. We aren’t often exposed to the impact or the magnitude of wealth inequality.

2. People think things will get better because they always have.

3. There is some evidence of social mobility, and it’s even possible for people to think they could move into the top 1%.

4. People are too busy, distracted and stressed to care.

5. People focus on poverty, not inequality. Academics are concerned about inequality because they think huge wealth gaps lead to power imbalances that favor the rich at the expense of the rest of us. That’s completely outside the scope of most people’s worries about money.

Gabriel Zucman, one of Piketty’s collaborators, estimates that individuals have approximately $962 billion of unreported assets in tax havens. Source: Data figure 4 tab 1 from a spreadsheet found here; click on Tables and figures included in the book. The book is The Hidden Wealth of Nations. For a description of Zucman’s methodology see this by Cass Sunstein.

Kiester says that 56% of the top 1% by net worth were self-employed in 2010. These are people who have the means to move money into tax havens, as are the rest of the top 1%. There are hundreds of thousands of US citizens who would benefit from tax havens, and there is so much money out there by Zucman’s estimate that it must be that case that tens of thousands of them have done so.

The ICIJ and its participating groups name politicians, celebrities, and crooks who hide their wealth in tax havens, and who won’t be prosecuted, but at least are shamed. But what about the huge number of the 1% who hide their wealth abroad and are not even shamed for their corruption?

This kind of disclosure would help break through the mental barriers to making inequality itself a force in politics.

Update April 15, 2016 From ICIJ:

The law firm’s [Mossack Fonseca] leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories. ICIJ will release the full list of companies and people linked to them in early May.

David Axelrod’s Quaint Idea of Middle Class “Security”

There’s a lot to despise about David Axelrod’s announcement of Obama’s capitulation to the oligarchs on tax cuts, not least that he made this announcement on the same day Obama’s Catfood Commission Chairs started the process of stealing from seniors to “fix” our deficit.

Let yesterday be marked as the day when a nominally Democratic President began to dismantle Democrats’ signature policy achievement, social security, so he could shovel $700 billion to the very rich.

But I was particularly irked by what Axe described as “middle class security.”

“There are concerns,” he added, that Congress will continue to kick the can down the road in the future by passing temporary extensions for the wealthy time and time again. “But I don’t want to trade away security for the middle class in order to make that point.

Here, Axe is defining “security for the middle class” as tax cuts. Not “jobs.” Not “access to health care, not just insurance.” Not “a guarantee a bankster can’t just foreclose on their house with a trumped up piece of paper.” Not “some basic safety net for retirement.” But “tax cuts.”

According to Axe, we have to shovel even more money on the already rich so as to ensure the “security” of the middle class by giving them a tax cut.

And while I agree that raising middle class tax cuts at this point would be bad for the economy, it’s not the worst thing that could happen to the economy.

In fact, the worst thing that could happen to this economy may well be passing legislation that continues to hollow out of the middle class and with it increasing the massive income inequality that continues to subject the American people to the craven demands of a few very rich people. That is, precisely what Axe and Obama have now agreed to do.

These men either don’t know or don’t give a damn about the security of the middle class.

Top Culprits for Income Inequality? Exec Pay and Educational Failures

Tim Noah’s great series on the causes of income inequality got a lot less attention during its second week than its first week. So I thought it worthwhile to focus on what he concluded was causing the dangerous new income inequality in America.

Here’s how he described the relative importance of each of the causes of income inequality he looked at:

Here is a back-of-the-envelope calculation, an admittedly crude composite of my discussions with and reading of the various economists and political scientists cited thus far:

  • Race and gender are responsible for none of it, and single parenthood is responsible for virtually none of it.
  • Immigration is responsible for 5 percent.
  • The imagined uniqueness of computers as a transformative technology is responsible for none of it.
  • Tax policy is responsible for 5 percent.
  • The decline of labor is responsible for 20 percent.
  • Trade is responsible for 10 percent.
  • Wall Street and corporate boards’ pampering of the Stinking Rich is responsible for 30 percent.
  • Various failures in our education system are responsible for 30 percent.

Most of these factors reflect at least in part things the federal government did or failed to do. Immigration is regulated, at least in theory, by the federal government. Tax policy is determined by the federal government. The decline of labor is in large part the doing of the federal government. Trade levels are regulated by the federal government. Government rules concerning finance and executive compensation help determine the quantity of cash that the Stinking Rich take home. Education is affected by government at the local, state, and (increasingly) federal levels. In a broad sense, then, we all created the Great Divergence, because in a democracy, the government is us.

Here’s Noah’s installment on executive pay, in which he argues that things like technology make it easier for entertainers and top execs to maximize their pay, while deregulation allowed the banksters to command huge salaries.

And here’s the one on educational problems. Largely, Noah describes, the problem is that K-12 education isn’t preparing students as well for today’s job market as it used to. In addition, between college costs and the removal of incentives (like the draft) to stay in school, educational attainment stalled for a number of years. As a result, the value of a college education is much greater, so those without a degree do worse by comparison.