Inequality

via Oregon Muse

What can Trump do to stop inequality?

Joel Kotkin writes at Daily Beast,

...Racial and class inequality is very much alive even in the most “progressive” cities. In New York, the poster child for urban revitalization, poverty and homelessness have worsened, in large part due to soaring housing costs. Since 2007, median rents in the city have gone up 8.5 percent while median renters’ incomes have gone down by 6.8 percent. Particularly shocking have been rent rises at the edge of gentrification, in places like Brooklyn’s Williamsburg—where rents have risen 80 percent since the 1990s.

...Overall, the outer suburbs and exurbs, home to more than 40 percent of the metropolitan population, have added population at more than five times the rate of urban cores.

...Bottom line: The suburbs and exurbs disdained by most urbanists and Democratic politicians continue to add residents and jobs as inner cities continue to languish.

In fact, roughly 80 percent of all job growth since 2010 has been in suburbs and exurbs. And tech, supposedly newly focused on the urban core, still concentrates largely in dispersed, suburban environments from Silicon Valley to Austin to Raleigh.

Increasingly, at least in the centers of the greatest hipster infestation, minorities and working class families are being driven into less desirable areas, often further from work locations. This helps create new social tensions and, in many places, notably Chicago, more social unrest, and now the most murders in more than two decades. Overall, the rate of violent crime in urban cores remains almost four times higher than the national average, according to FBI data. The worst violence, and the sharpest upticks over the decade have been in cities with large black populations, including Detroit, Oakland, St. Louis, Memphis, Cleveland, and Atlanta.

Left out of the urban revival, minority and poor communities face diminishing opportunities while others prosper. This is true not only in places like Chicago, notes researcher Daniel Hertz, but also in New York where class and race inequality are much higher than in the rest of the country. Generally speaking, it’s the bluest and largest cities that suffer the worst levels of inequality.

Indeed despite the media spin, in the core cities of the 51 metropolitan areas, 81 percent of the population increase over the past decade was under the poverty line, compared to 32 percent of the suburban population increase. Despite talk about “suburban ghettos,” the poverty rate in the suburbs remains roughly half that of urban centers (20.9 percent in core compared to 11.4 percent in the suburbs as of 2010). Crime rates in core cities, meanwhile, remain over three times higher than in the suburbs.

No surprise that discrete and genteel “ethnic cleansing”—in the form of HUD “affirmative action” or taxpayer funded redevelopment—appeals to many urban boosters. In contrast, the much sought after hipster and wealthy childless adults thrill developers and mayors; they love a population that will pay a premium to live there and that doesn’t need good schools or working-class jobs.

...Certainly, the new HUD should abandon its agenda of redirecting populations, or forcing high density on reluctant communities, whether in the poorer urban neighborhoods or the more comfortable suburbs. But there needs to more. One hopeful sign—particularly for cities in the heartland—would be attempts to keep industrial jobs in what’s left of the manufacturing economy, the loss of which has devastated cities such as Milwaukee. Similarly Trump’s stand against H-1B visas could help keep some white-collar positions in the hands of citizens residing in our cities, including on the coasts.

Other steps could be taken to reawaken the grassroots economy, particularly in hard-hit poorer neighborhoods. This might include such things deregulating some businesses, like in cosmetology, and making it easier for new restaurants and shops. Yet these things cannot be mandated from Washington; it will take some rise in the level of business savvy of our elected leaders in cities. Perhaps most critical will be addressing the escalating crime rate in many cities, where by far the vast majority of victims are minorities, as Trump himself pointed out.

Other parts of the potential Trumpian urban agenda, such as charter schools and vouchers, long supported by his Education Department nominee Kathy DeVos, could help address poor urban education, arguably the biggest reason why families don’t stay in cities like Chicago with their dysfunctional schools. Federal support for educational reform is vastly preferable to the kind of anti-charter agenda that, for example, Hillary Clinton, with her incestuous ties to the teacher unions, would have promoted.

Similarly, a shift away from “one size fits all” transportation policies might allow communities to build public transit options, ranging from bus rapid transit to innovative dial-a-ride services. Under the old regime, money tended to go into light rail and trolley projects designed to appeal to upscale riders and developers; a better focus on inner city needs might be actually helping working class people actually get to work as quickly and easily as possible, at reasonable cost rather than building dedicated lines that tend to push land prices up, and existing residents out.
Even if Carson can concoct such an agenda, this is unlikely to make Donald Trump popular among the retro-urbanist chattering class who have thrived under the current urban regime. But it is to be hoped that such a new approach, at very least, could finally make progressives, who control America’s big cities as virtual fiefs, reconsider policies that have led to tragic levels of impoverishment, violence, and inequality across our great urban centers.

Read more here.

The rise of inequality

Third Way reports,

San Francisco is now home to 80,000 more dogs than children. In Manhattan, singles make up half of all households. And “super-global Chicago may be better understood in thirds—one-third San Francisco and two-thirds Detroit.”

A new paper for Third Way’s NEXT series, by Joel Kotkin of Chapman University in California, argues that the price of housing “represents a central, if not dominant, factor in the rise of inequality” and that there is tremendous variation in housing costs by region. In parts of the country affected by high-priced housing, it has become so expensive that it acts, according to Kotkin, “as a cap on upward mobility … driving many—particularly young families—to leave high-priced coastal regions for less expensive, usually less regulated markets in the country’s interior.”

In the ongoing national debate over economic opportunity and rising inequality, one important factor is consistently overlooked—the price of housing in elite urban cores. The result is the making “of two divergent Americas, one that is largely childless and has a small middle class and another that, more like pre-1990 America, still has a large middle class and children.” Big cities, as Kotkin points out, have been losing the middle class— with the result that they are becoming areas of great wealth and entrenched poverty—while the suburbs tend to have less inequality. These trends fly in the face of what Kotkin calls “the Density Delusion” as the solution to housing affordability. But, as Kotkin points out, not only is dense housing more expensive than the much derided “sprawl,” the importance of housing has led to job growth in smaller cities and in the suburbs.

Kotkin's article is full of interesting graphs. Read it here.

A proposal to reduce inequality

Glenn Reynolds writes at USA Today about inequality.

The problem of “inequality” looms over America like a storm cloud. According to our political and journalistic class, inequality is the single biggest problem facing our nation, with the possible exception of climate change. It is a desperate problem demanding sweeping solutions. President Obama calls it the "defining challenge of our time." Hillary Clinton says we’re living in a throwback to the elitist age of "robber barons.” Bernie Sanders says inequality is the result of a "rigged economy” that favors those at the top while holding down those at the bottom.

In that spirit, I have a modest proposal: Abolish the Ivy League. Because if you’re worried about inequality among Americans, I can think of no single institution that does more to contribute to the problem.

...Once you’re out of college, your chances of making it to the top are much, much greater if you’re an Ivy League graduate. Take the Obama administration. A National Journal survey of 250 top decision-makers found that 40% of them were Ivy League graduates. Only a quarter had earned graduate degrees from a public university. In fact, more Obama administration officials had degrees from England’s Oxford University than from any American public university. Worse yet, more than 60 of them — roughly a fourth — had attended a single Ivy League school, Harvard.

...What is to be done? Well, in the name of ending inequality, I have a few modest proposals.

We should eliminate the tax deductibility of contributions to schools having endowments in excess of $1 billion. At some point, as our president has said, you’ve made enough money. That won’t end all major donations to the Ivy League, but it will doubtless encourage donors to look at less wealthy and more deserving schools, such as Northern Kentucky University, recently deemed "more inspirational than Harvard” in the London Times Higher Education magazine.
We should require that all schools with endowments over $1 billion spend at least 10% of their endowment annually on student financial aid. That will make it easier for less wealthy students to attend elite institutions.
We should require that university admissions be based strictly on objective criteria such as grades and SAT/ACT scores, with random drawings used to cull the herd further if necessary. That will eliminate the Ivy League’s documented discrimination against Asians.

Read more here.

"Real Life Hunger Games."

How does the inequality gap affect children? What have been the effects of progressive, centralized control of education, healthcare, and social services? Jeb Kinnison writes about these issues in "Real Life Hunger Games."

What are the best ways to combat inequality?

Richard Epstein writes at Hoover's Defining Ideas blog,

The critical political struggle of the 2016 presidential election may well be the redistribution of wealth. How that issue plays out is likely to depend on whether it is cast in terms of economic growth or income inequality. If the Republicans successfully push the growth agenda, then the Democrats will be on the defensive. If the Democrats drive home the theme of income inequality, then the Republicans will squirm. This is a contest that the Republicans should win if they play their cards correctly.

...Put simply, it is an intellectual fantasy to think that it is possible to address questions of inequality without taking into account any productivity losses that these proposals may take. Those difficulties do not arise if the first emphasis is placed instead upon the creation of wealth. Indeed it is altogether possible to improve the position of the worst off in society by a set of productive measures that widen the income gap between rich and poor.

Assume that we have just two groups in society, one of whose members all have wealth at the level of 10 and the second, far smaller, have wealth at the level of 1,000. A change in legal position that increases the wealth of the bottom group from 10 to 15 and the top group from 1,000 to 1,200 will increase absolute inequality even as it improves the position of the people at the bottom. Ironically, it will also give larger percentage increases to those at the bottom. Indeed, many social changes do produce gains across the board. But it is typically beyond the capacity of any social planner to steer productive activity in ways that ensure that whatever growth does take place will result in a reduction of any income gap by any system of state taxation and regulation.

This line of reasoning has not, of course, stopped the champions of income equality in the Democratic Party from pushing its front-running candidate, Hillary Clinton, into putting the inequality issue front and center during the current campaign.

...But it is a much harder position to think of how best to provide those “robust services” to get children out of poverty. On this score, the standard progressive line is to favor stronger unions within the framework of an overall public school system. But that system works for the benefits of the unions, and not for the benefit of the children who are denied access to charter schools, which provide better education to the children that they teach than ordinary public schools.

...Sensible policies to combat inequality follow from a consistent classical liberal position, which seeks to promote competition in the private market and in the provision of public education. The rest of the egalitarian program is counterproductive insofar as it keeps the poor worse while leaving the rich worse off as well. That is a strategy for dual ruin that will only deepen the current economic malaise.

Read more here.

Inequality: Hillary's singular life achievement

Noemie Emery writes at Weekly Standard about Hillary's history of amassing financial and political power.

The Clinton machine is best explained as a wondrous contraption designed to funnel cash to Bill Clinton, with a million or two tossed now and then in the way of the needy, along with a supply of fascinating new friends, ready to fly him to beautiful islands, in the pursuit of women and song.

And what did Hillary hope to get from all this, beyond a share in the family fortunes? Much the same thing that she got when she lived in the White House as first lady during the years that she ran for the Senate, namely a series of glamorous feel-good occasions meant to showcase her as a species of royalty, altruistic, benevolent, and above it all.

...The Democrats may want to run on inequality, but they should look for some other candidate to do it, and not someone who has made inequality, when it heavily tilts in her direction, her singular calling and life’s achievement.

Read more here

Liberal apartheid

Economic mobility. Where are people getting ahead? Where are the greatest gaps between those who are doing well economically and those who are not? This subject is one of the specialties of Joel Kotkin. He writes,

An extensive examination by University of Washington geographer Richard Morrill found that the worst economic inequality is largely in the country’s biggest cities, as well as in isolated rural stretches in places like Appalachia, the Rio Grande Valley and parts of the desert Southwest.

Kotkin cites another study by some Harvard researchers in 2013, which found

the highest rates of upward mobility in more sprawling, transit-oriented metropolitan areas like Salt Lake City, small cities of the Great Plains such as Bismarck, N.D.; Yankton, S.D.; Pecos, Texas; and even Bakersfield, Calif.

Kotkin writes that

The most profound level of inequality and bifurcated class structure can be found in the densest and most influential urban environment in North America — Manhattan.

The role of costs is critical here. A 2014 Brookings study showed that the big cities with the most pronounced levels of inequality also have the highest costs: San Francisco, Miami, Boston, Washington, D.C., New York, Oakland, Chicago and Los Angeles. The one notable exception to this correlation is Atlanta. The lowest degree of inequality was found generally in smaller, less expensive cities like Ft. Worth, Texas; Oklahoma City; Raleigh, N.C.; and Mesa, Ariz.

Income inequality has risen most rapidly in the bastion of luxury progressivism, San Francisco, where the wages of the 20th percentile of all households declined by $4,300 a year to $21,300 from 2007-12. Indeed when average urban incomes are adjusted for the higher rent and costs, the middle classes in metropolitan areas such as New York, Los Angeles, Portland, Miami and San Francisco have among the lowest real earnings of any metropolitan area.

Perhaps no place is inequality more evident than in the rural reaches of California, the nation’s richest agricultural state. The Golden State is now home to 111 billionaires, by far the most of any state; California billionaires personally hold assets worth $485 billion, more than the entire GDP of all but 24 countries in the world. Yet the state also suffers the highest poverty rate in the country (adjusted for housing costs), above 23%, and a leviathan welfare state. As of 2012, with roughly 12% of the population, California accounted for roughly one-third of the nation’s welfare recipients.

The vast expanse of economic decline in the midst of unprecedented, but very narrow urban luxury has been characterized as “liberal apartheid. ” The well-heeled, largely white and Asian coastal denizens live in an economically inaccessible bubble insulated from the largely poor, working-class, heavily Latino communities in the eastern interior of the state.

Another example of this dichotomy — perhaps best described as the dilemma of being a “red state” economy in a blue state — can be seen in upstate New York, where by virtually all the measurements of upward mobility — job growth, median income, income growth — the region ranked below long-impoverished southern Appalachia as of the mid-2000s. The prospect of developing the area’s considerable natural gas resources was welcomed by many impoverished small landowners, but it has been stymied by a coalition of environmentalists in local university towns and plutocrats and celebrities who have retired to the area or have second homes there, including many New York City-based “progressives.”

Kotkin goes on the explain that inequality is greatest in the core cities, especially among African Americans and Hispanics, and that inequality is smallest in the suburbs. Read more here.

Concentrations of rich folks and poor folks

Where are the highest concentrations of "rich folks?" Richard Morrill provides us with this graphic.



Poor folks?

Tired of the shrill nerdocracy

Victor Davis Hanson wonders if we have gone from the iconic Marlboro Man to Pajama boy without as much as a blink in between. He asks,

how many of us have joined Pajama Boy nation — 20%, 40%, 60%? — and how many want nothing to do with such metrosexual visions of a huge state run by a nerdocracy, incompetently doling out other people’s money. How many were on board for Obamacare, more entitlements, and lectures from the apartheid elite on inequality and fairness, versus how many turn the channel at sound of His voice.

Obama obsesses on inequality, but cannot even go through the populist motions of avoiding Martha’s Vineyard, or not dressing like a nerd for golf at the latest tony course.

He is an arugula-eating man of the people who tries to bowl only during election season. Michelle rags on the 1%, but still hits Costa del Sol and Aspen. Obamacare for us; for congressional staffers and insiders something quite different. A Nobel Prize and a half a billion dollars for guru Al Gore; and dumping Current TV on a fossil-fuelled, anti-Semitic authoritarian Middle Eastern regime to fund more good work of our green Elmer Gantry. Amnesty for illegal aliens, but private academies for liberal kids far from the ensuing chaos of the public schools. Pajama Boys are fiercely liberal so that they can fiercely avoid the people they so champion and are so afraid to live among.

Second, the architects of Pajama Boy nation always expect others to go on despite rather than because of them. The frackers must frack so that Obama can brag about their productivity, while he bites his lip and looks pained to billionaire coastal benefactors about pumping liquid into the bowels of their Mother Earth.

Savings accrued from the sequester that was forced upon Obama by those Tea Party nuts in the House. Gas prices are dropping despite the efforts of Obama to stop fracking and horizontal drilling on federal lands. Senator Obama himself voted to shut down the government under George W. Bush, rather than to raise the debt ceiling — having once passionately adopted the very stance that he now demonizes others for.

There is a growing tiredness with Pajama Boy nation. Millions are sick of being lectured, caricatured, and slandered for their supposed pathologies by the Sandra Flukes of the age and those in their pajamas who still grasp with two hands their hot chocolate. Add all their annoying Stalinist efforts up — to selectively going after Chick-fil-A or the Washington Redskins or Duck Dynasty — and the public is becoming tired of the shrill nerdocracy.

Inequality and social rule

Matthew Continetti writes,

It’s a funny thing about the inequality debate that has consumed the American intelligentsia for the past several years: The individuals who are most interested in identifying, describing, diagnosing, and addressing the phenomenon of income inequality are the individuals least affected by it.

The administration focusing all of its efforts on combating inequality is the same administration advocating: an amnesty that would incentivize illegal immigration and drive down low-skilled wages; trade deals with mercantilist nations that would reap profit for Democratic donors and job losses for the low-skilled; a minimum wage increase that makes it less likely an unskilled teen gets his first job; an unending delay on a pipeline that would create jobs and bolster energy independence; and an all-lifestyles-are-equal social policy that offers nothing but speeches in the face of the decomposition of the nuclear family.

What the income inequality debate is about is not social justice but social rule. It is about power, about who wields it and to what purposes, and the slogans and statistics that appear in the papers are the weapons by which a caste of liberals organizes its political coalition and vanquishes its opposites.

Generate economic growth!

What do the poor need? Your money redistributed to them? Or a strong, vibrant, growing economy? Robert E. Grady writes in the Wall Street Journal that

In periods of high economic growth, such as the 1980s and 1990s, the vast majority of Americans gain, and have the opportunity to gain. In periods of slow growth, such as the past four and a half years since the recession officially ended, poor people and the middle class are hurt the most, and opportunity is curbed.

If the goal is to deliver higher incomes and a better standard of living for the majority of Americans, then generating economic growth—not income inequality or the redistribution of wealth—is the defining challenge of our time.

Where has the stimulus money gone?

Regarding growth, Mr. Obama claimed in his speech that we should use some money "to create good jobs rebuilding our roads and our bridges and our airports, and all the infrastructure our businesses need." Yet a recent analysis by BCA Research shows a sharp drop in real spending by the government on nondefense infrastructure since the president took office. When a Democratic Congress passed the president's massive $800 billion stimulus bill, seven-eighths of the total went to transfer payments like Medicaid, food stamps and sending a check to millions of Americans who do not pay income taxes.

Thanks to Donald Douglas for linking to the WSJ article.