Advance Notice

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With 150 feature films, 106 shorts, dozens of panels and live presentations, nine days, a dozen theaters, thousands of volunteers, and 72,000 attendees, Austin’s SXSW film festival, presented this year from March 13–21, has grown to one of the most important festivals of the season. Many of the best films of the year are introduced there.

It can also be the most frustrating festival of the season, with its policy of not selling advance tickets to any screenings. Attendees purchase a badge (costing several hundred dollars) for the entire festival and then line up according to the kind of badge they have chosen. Locals can purchase a wristband for $90, but their line is the last to gain entrance, just ahead of the misnomered “rush” line of stragglers hoping to find an empty seat for ten bucks after all the others have gone inside. (During the entire week I saw only two screenings where rushers were able to get in.) Badgeholders are allowed to pick up an express pass for up to two films per day, but that often means being in line by 7 a.m. and waiting for the express line to open at 9.

The Road Warrior was filmed chronologically in 35 mm before computer graphics — every stunt is real, and they are spectacular.

For some, however, that’s part of the fun at SXSW, and friendships are often made in line. I talked with one young filmmaker whose goal for the week was to meet a particular director and talk to him about a project. On the morning of the first day, there was the director he wanted to meet, sitting next to him on the floor waiting for the express line to open. They chatted for nearly two hours and shook on the deal. Who would have thought it possible?

Many films with theatrical release schedules were screening at SX, but I spent most of my time seeing documentaries and smaller films that I won’t be able to see at my local Cineplex in the next month or so. The one exception was a screening of The Road Warrior (aka Mad Max 2),the 1981 postapocalyptic cult classic, newly remastered for the festival and introduced by director George Miller himself. What a treat to see this film on a gigantic screen in an old-school theater holding nearly a thousand enthusiastic viewers. RW was filmed chronologically in 35 mm before computer graphics — every stunt is real, and they are spectacular. It’s a great story too, demonstrating the kinds of communities that arise under anarchy. Max is a lot like Paul Newman’s character in Hombre, just trying to make his way, barter for gas, and protect what little he has. We were hoping to see a “surprise” screening of the new sequel, Fury Road, afterwards (why else would they have brought back a 34-year-old film?) and indeed, we were treated to several chunks of the new movie. But even without that, Road Warrior was easily the most fun I had at the festival.

Here are some documentaries you might want to watch for on Netflix over the next year:

Steve Jobs: The Man in the Machine, (directed by Alex Gibney, 127 minutes).When Steve Jobs died of pancreatic cancer in 2011, the whole world mourned the loss of the man who brought us the personal computer and the magical triplets that reside in our pockets or under our pillows: the iPod, the iPhone and the iPad.But, according to the many people who were interviewed for this doc, Jobs was not a particularly lovable man. He could be ruthless, selfish, and unfair. He was a man of complex contrasts, “a monk with Zen-like focus but no empathy” who fancied himself to be enlightened and asked to be canonized as a monk. He was one of the wealthiest men in America but paid only $500 a month in child support for his daughter; when he returned to Apple after being pushed out in the ’80s, he ended all philanthropic activities (unlike his counterpart at Microsoft, Bill Gates); his factories polluted rivers in China; he arranged for backdating of stock options to increase the income of key employees (including himself); and he created offshore companies in Ireland to reduce the company’s tax bill (nothing illegal about that, but the filmmaker suggests it’s unethical or improper for Apple not to pay “their fair share”).

Jobs wanted to change the world, and he did. At one point the narrator asks cynically, “Is creating a product that makes buckets of money for its shareholders enough to change the world?” I would answer emphatically, “Yes!” but not because of the money. Everything we do is different now, because of the magic box we carry in our pockets, embed in our Google Glasses, and wear on our watches. Even getting around town is easier today — it was less than ten years ago that I carried a large street map in my car and had to pull over to find my way. This week, navigating around a large and unfamiliar city, I never once got lost, because Siri told me when to turn and even how to avoid traffic. Right now I’m writing this review on my iPhone. I can look up details about the films instantly. The iPhone has indeed changed my world.

Jobs was one of the wealthiest men in America but paid only $500 a month in child support for his daughter; when he returned to Apple after being pushed out in the ’80s, he ended all philanthropic activities.

Jobs created something beautiful and useful, and he created buckets of money in the process. We love our iProducts. We caress them. We even sleep with them. We love them because they connect us to a wider world and family far away. But they also tend to isolate us from those who are near at hand. The narrator sums it up well when he acknowledges, “I love my iPhone. My hand is drawn to it in my pocket the way Frodo’s hand is drawn to the Ring.” Indeed, many folks today create “phone free zones” when they are together, in order to resist the powerful attraction of the ‘net. Jobs himself might not have been a beautiful man on the inside, but he certainly created a beautiful product.

Peace Officer (directed by Scott Christopherson and Brad Barber, 109 minutes) was the most powerful and important film I saw all week, and it rightly won the Grand Jury prize for best documentary. I am hoping to bring it to the Anthem Film Festival at Planet Hollywood in Las Vegas in July. It chronicles the deadly results of militarizing our police agencies through SWAT teams and “1033” programs that provide new and used military equipment to local police forces.

The police have become an occupying force in many neighborhoods and this leads to an adversarial relationship even when no one has done anything wrong.

William “Dub” Lawrence is the central figure of the film. A likable, personable man, he was the police chief of Farmington, Utah, when he started Utah’s first SWAT team in 1975. (He also is the man who broke the Ted Bundy serial murder case.) He thought it would be an effective way to reduce the drug trade in his sleepy little community. In 2008 that same SWAT team killed Dub’s son-in-law over a domestic dispute that escalated into a standoff that involved over 80 police officers. Because of his connection to the police department, Dub had access to police cameras that revealed a scenario different from the one reported to the media (that the young man had taken his own life). He quit the police department and spent the next several years piecing together the actual timeline of events calmly, methodically, and with a megawatt smile that belies the pain he feels from the death of his daughter’s husband.

Peace Officer tells several stories of law enforcement turned aggressively non-peaceful and non-protective. “A peace officer should be a trusted friend,” Dub explains. “But today they no longer ‘serve and protect.’ Now they are trained as soldiers, and we are the enemy.” The police have become an occupying force in many neighborhoods, according to the film, and this leads to an adversarial relationship even when no one has done anything wrong. Connor Boyack, president of the Libertas Institute, acknowledges in the film that this isn’t entirely the police officers’ fault. “Laws and programs have set up these conflicts and turned them into soldiers,” he suggests.

One of the laws that has led to the most serious invasions of privacy and safety is the “no-knock warrant,” which allows SWAT teams to barge into a home in the middle of the night, rifles drawn, screaming at anyone in the house to back off. Awakened and terrified, the homeowners try to defend themselves from what appear to be home invaders, and they are often killed rather than arrested. The father of one young man who is dead because of such a raid (and who admittedly was growing marijuana in his basement) asks angrily, “What were they protecting us from? Marijuana plants?”

Several things are wrong with our law enforcement system, and Peace Officer reveals many of them. It’s an important, timely documentary that should keep the conversation going about the growing abuse of police power.

Raiders! (directed by Jeremy Coon and Tim Skousen, 95 minutes). In 1982, three 11- and 12-year-old boys undertook an ambitious project: as fans of Indiana Jones and the Raiders of the Lost Ark, they would recreate the Steven Spielberg masterpiece shot-for-shot. This was before the film was available on VCR; amazingly, the boys were able to recreate the entire film from watching it in a theater and reviewing the story in a “Raider’s” comic book one of them owned. Over the next seven years, from middle school through high school, they would enlist their friends to serve as cast and crew, commandeer their parents’ houses as movie sets, and spend their summer vacations filming the project. By the time they graduated from high school, all but one scene was finished: the one in which Indie and Marion fight off a German airplane mechanic while a WWII airplane rolls around in circles with propellers running. Now, 33 years after beginning the project, they have gone back to film that missing scene.

Raiders! documents the project from start to finish, incorporating footage from 30 years ago along with the scenes of the new project. How they managed not to burn down their parents’ houses or run over a cast member or two during the chase scenes was a feat in itself. These background stories are told with unabashed glee and deadpan humor. As grownups the filmmakers faced a host of new obstacles, including funding the project, getting time off from their fulltime jobs, and dealing with days and days of rain that threatened to end the filming before it even began. Still, they were determined to finish this project. It’s an amazing story of perseverance, creativity, sacrifice, and pursuing one’s dreams. The film is funny, smart, and inspiring. I’m also hoping to bring this film to the Anthem Film Festival this summer.

How they managed not to burn down their parents’ houses or run over a cast member or two during the chase scenes was a feat in itself.

Raiders of the Lost Ark: The Adaptation (directed by Eric Zala, 107 minutes). After watching the documentary about the making of the greatest fan-film ever made, audiences were treated to the film itself. These kids were remarkably skillful in recreating Spielberg’s actual shots, including the dialogue, the costumes, the camera angles, and even the facial expressions. It’s fun to watch their ages change, as many of the scenes were filmed out of sequence. And of course, it’s hilarious to see them emerge from the underground temple nearly 30 years older in the newly finished scene, still wearing the same clothing! The Adaptation has developed a cult following since it premiered at Harry Knowles’ “Butt-Numb-a-Thon” at the Alamo Draft House in Austin several years ago; now, partnered with the documentary about its completion, it is going to grow in stature. You can get a copy by donating to their crowdfunding campaign at raidersguys.wix.com.

Finders Keepers (directed by Bryan Carberry and Clay Tweet, 82 minutes).If you’ve ever watched the cable TV show Storage Wars, you know that the strangest things often show up in storage units. When people don’t pay the rent on their units, the facility owners are entitled to sell the contents to the highest bidders. Most of the time they end up with household furnishings and personal effects. Occasionally they might find an expensive piece of jewelry or a cache of valuable collectibles. When Shannon Whisnant bid on the storage unit rented by John Wood, he had no idea that he would find a human leg inside Wood’s smoker grill.

The two men argued for several years over who was the rightful owner of the leg (amputated when Wood was injured in an airplane crash). Whisnant wanted to put it on display and charge people $3 to look at it. ”The cholesterol was dripping right out of it!” he says with glee as he describes discovering the leg. Wood simply wanted to keep it and have it buried with him some day. They were invited to tell their bizarre story on talk shows worldwide and even ended up on an episode of Judge Mathis. But Finders Keepers is not so much about the legal battle to determine ownership of the leg as it is a study of these two backwoods North Carolinians (you know you’re in the deep South when subtitles are required for people who are speaking English). As presented by the film, both struggle with addictions, Wood the traditional kind (drugs and alcohol) and Whisnant of a less tangible kind — he craves attention and longs to be on television making people laugh. “I’m pretty smart,” he says shortly after describing the events that “perspired” regarding the leg. “I’m pretty sure you’ve figured that out by now. “ He thought the leg would be his ticket to fame and fortune.

This colorful and engaging documentary was a favorite with the SXSW audience. It’s funny without being exploitive, and bizarre without being gross. Participating in its making was life-changing for both men, but not in the ways they expected.

Brand: The Second Coming, (directed by Ondi Timoner, 125 minutes, festival headliner). Russell Brand is another character from a poor socioeconomic background who craves attention on the world stage. Best known for his deviously charming smile, his outrageous wit, and his raunchy and irreverent stand-up routines, a few years ago Brand decided to “re-brand” himself as a serious thinker with a plan to change the world through books, op-ed pieces, impassioned speeches, and a stand-up comedy tour that focuses on his four new heroes: Gandhi, Jesus, Malcolm X, and Che Guevera. (For an example of Brand’s unscripted humor, google Russell Brand/Morning Joe to see the interview in which he completely overwhelmed three veteran MSNBC TV anchors.)

Brand’s number-one goal is to end inequality. He has no idea how to do that, however, other than to say that rich people have too much and poor people have too little and that isn’t fair. He doesn’t understand how the world works, and believes the old mercantilist philosophy that “where there is profit there is deficit.” He simply doesn’t understand that the pie can be made bigger. But he has millions of followers (mostly of the “Occupy” ilk) who think he’s right. Rosie O’Donnell gushed, “If I could sell everything I have and give it to his cause, I would!” to which the logical response should be, “Well, what’s stopping you?”

Brand’s epiphany occurred after seeing children in Africa digging through garbage dumps in search of recyclable goods to sell. To his credit, his heart was broken by the sight. But then he opines, “I live in a mansion, and these children dig around in a garbage dump. And the same system put both of us there.” Of course, he’s wrong about that. The system that put him in a mansion is based on Western values, capitalism, and free markets. Audiences chose to spend their money enjoying the entertainment that he provides, and it makes him wealthy. The system that put those children into a garbage dump is anything but market based or embracing of Western values. Moreover, selling his house and living in a tent is not going to change their plight.

Rosie O’Donnell gushed, “If I could sell everything I have and give it to his cause, I would!” to which the logical response should be, “Well, what’s stopping you?”

Brand makes a solid case for decriminalization of drugs, and if he used his celebrity to focus on that one cause, he would probably be quite successful in his goal to “change the world.” He also turned one of his building complexes into a self-sustaining rehab center, which is pretty impressive. Addiction is a topic he knows well, at least according to his own reports. “Prison isn’t working!” he proclaims, and he is right. “As long as it is illegal, they will continue to use dirty needles and back-alley doctors. . . . Drug laws penalize the people at the bottom of the scale.” He did his homework and presented a strong case at the UN meetings in Vienna. I wish he would continue to lead that charge.

Brand should stay with what he does well — unscripted, irreverent comedy — and focus on causes with which he has valid, knowledgeable experience, such as the problems of drug addiction. He is no Messiah, and his knowledge of economics is laughably shallow. But I think he is a good man at heart who sincerely wants to make a difference in the world.

Love and Mercy (directed by Bill Pohlad, 119 minutes).This biopic about Brian Wilson, the musical genius behind the Beach Boys, was one of only two narrative films that I caught during the festival. I was expecting to see a feel-good story about a feel-good band from my youth, but I was sadly mistaken. It is a horrifying story that left the audience in absolute silence at the end. It is true that Wilson suffered from mental illness and was away from the music industry for several decades because of it. But this film is so unrelentingly sad that I walked away convinced that I will never be able to enjoy hearing a Beach Boys song again without thinking of the nightmares Wilson experienced while creating them.

Despite his debilitating mental illness, Wilson was able to create harmonies and musical arrangements that are considered today among the best of the era.

Wilson is played by both Paul Dano (1960s) and John Cusack (1990s). The decision to use two actors who don’t look at all alike instead of simply aging Dano through prosthetics seems odd, but it serves to emphasize Wilson’s schizophrenia — not only does he hear voices in his head, but we see two different people inside his skin. Young Wilson is plagued by an abusive father who seems to exacerbate his illness, while the older Wilson is abused by his tyrannical psychiatrist Gene Landy (Paul Giamatti) who eventually lost his medical license for his mistreatment of Wilson.

Despite his debilitating mental illness, Wilson was able to create harmonies and musical arrangements that are considered today among the best of the era. We see him in the studio, pressuring the musicians to create the sounds he hears in his head, and while it is amazing to watch him at work, it is also devastating to see the agony he experiences while trying to get it right. This is the kind of film that could end up winning numerous awards, while earning very little at the box office. It is just too sad to endure.

I had marked dozens of other films that I wanted to see, but there wasn’t enough time and the films I wanted were often scheduled in conflict with each other. I was also distracted by multiple other features of the festival, including a four-day interactive gaming and creative technology show, live music performed at nearly every corner, and crazy good food that you can only get in Austin, and often only from a truck. It was a great experience, and I will definitely be back.




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R>G Revisited

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The Washington Post chose July 4 — a holiday kicking off a three-day weekend — to bury an interesting article, and it’s not hard to see why. Check out Zachary Goldfarb's lede:

After making fighting income inequality an early focus of his second term, President Obama has largely abandoned talk of the subject this election year in a move that highlights the emerging debate within the Democratic Party over economic populism and its limits.

During the first half of this year, Obama shifted from income inequality to the more politically palatable theme of lifting the middle class, focusing on issues such as the minimum wage and the gender pay gap that are thought to resonate with a broader group of voters.

The pivot is striking for a president who identified inequality as one of his top concerns after his reelection, calling it “a fundamental threat to the American Dream, our way of life and what we stand for around the globe.”

The Post is the quintessential establishment newspaper, as in tune with everything DC and its satellite suburbs as it is out of tune with everything else. Generally, the Post house style is to provide justifications for the actions of the powerful and connected, because they must be, on average, wiser and better than the populace — if they weren’t, then how would they have obtained their power and connections?

Imagine a “tax” on power — every year, those in whose hands so much is gathered must surrender a small percentage of it, to be distributed among those who have so little.

With few exceptions, then (notably, the articles on Edward Snowden and national security) you shouldn’t read the Washington Post for intellectual stimulation. Rather, read it for insights into the cramped and contorted psyche of the ruling class — there’s really no better way to place yourself into the sort of mental confines occupied by those who hold federal office.

For instance, to read the paragraphs above, it might seem as if the president is being called out for waffling on a core principle, or worse, betraying a group of people to whom he successfully pandered in the last election. The piece might even be interpreted as a lament for what is “politically palatable” in this country, or for the voters who would put the concerns of the middle class over those of the truly destitute. But the Post would never run even mild criticism without outweighing it with rationalizations or outright praise: thus the focus here is not on the president’s shortcomings, but rather his shrewdness, softening his rhetoric in time for the midterm elections. Where once the president had been determined to bring up inequality, not caring “whether that was a good economic message” (according to that ultimate Beltway insider, the mysterious “person familiar with the process, who spoke on the condition of anonymity in order to discuss private conversations”), he has caved to political reality, and shifted his rhetorical course.

Of course, it must just be a coincidence that this new tack steers the president toward the interests of the DC establishment — and toward Wall Street, to boot. If one thought otherwise, why, there are employees at a whole range of DC-based thinktanks, from the Center for Equitable Grown on the left, to the Heritage Foundation on the right, and plenty more in between, all waiting to give soundbites about how one set of words is so much better than another for this thing called the “American middle class,” which we never actually see in the story, but which must exist given how often these important people discuss it. And of course, even the more radical of Obama’s supporters can delude themselves into thinking that such strategery is necessary so that Obama can devote himself to truly egalitarian reforms in his final two years.

It would be unthinkably gauche for the Post to suggest that Obama’s rhetoric on inequality was never sincere, or to point out that Wall Street has overwhelmingly backed Obama from the start — that’s left for journalists such as Tim Carney and unfavored papers such as the Washington Examiner to do. But all in all, the performance in this article isn’t entirely convincing, as if even the Post was tiring of repeating the talking points of K Street thinktankers and anonymous apparatchiks. Maybe it’s the Snowden files, or maybe it’s the shift to a new generation, or maybe it’s just the unstable position of newspapers with our digital present, but the Post is a little uneasy about just how much the people at the top control. And that means at least some portion of the establishment is uneasy about that as well.

The president might have to stop ordering people locked up or killed without some pretense of due process.

All of this made me revisit the discussion in these pages of Thomas Piketty’s book Capital. Piketty’s massive tome oversimplifies to a single principle, given as r>g, meaning that the rate of return on wealth exceeds the rate of economic growth, at least in Western industrialized nations. Were this true, then income inequality would inexorably increase, and wealth would be concentrated in ever greater amounts in ever fewer hands. Of course, as Mark Skousen and Leland Yeager showed, Piketty’s principle rests on several unsustainable assumptions about the permanence of capital and the assumption of risk.

However, Piketty’s principle makes a lot of sense when viewed as a statement not about wealth, but about political power. Yes, the two are related; in the present day, perhaps fatally so. But that sort of crony capitalism would be impossible without the power consolidation represented by Washington DC — the very arrangement that ensures that power will continue accruing to those already neck deep in it.

Piketty’s preferred solution for his perceived economic problem, a wealth tax, would only increase the flow of money going into, and much more rarely out of, our imperial metropolis. Imagine, however, an equivalent “tax” on power — every year, those in whose hands so much is gathered must surrender a small percentage of it, to be distributed among those who have so little. There are benefits straight off: everyone in office would have to list off all the political powers and assets they think they possess, and these could then be compared to the Constitution to get an idea of how deep the cuts would have to be.

Ideally, the tax would be progressive, so that those with comparatively little scope of power, such as first-year podunk-state congressmen with bottom-tier committee assignments, would only give up, say, a sugar subsidy that helps out a campaign donor. Those at the top, meanwhile, would be expected to turn over much more for the commonweal: the president, for instance, might have to stop ordering people locked up or killed without some pretense of due process.

It would take a while. And realistically, it would never come close to evening things out. But if we had such a mechanism that put power back in the hands of the people — as in, actual control over their own lives, not just as some weak metaphor for voting blocs — we could nonetheless do a great deal to reduce political inequality in the United States. And that would go much farther toward protecting The American Dream, our way of life, and what we stand for around the globe than anything else Obama or any other DC denizen might choose to do.



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Another Perspective on Piketty

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Someone acquainted only secondhand with Thomas Piketty’s book translated as Capital in the Twenty-First Century or who has only skimmed it might well dismiss it as a mere leftist, redistributionist tract. That would be a mistake and injustice — and thus counterproductive. Libertarian critics should try to answer Piketty’s findings, attitudes, and recommendations respectfully and seriously (unless, of course, they find themselves converted away from their own doctrine).

His tome of viii + 685 pages, full of tables, charts, and citations, is an impressive work of resourceful scholarship. A massive and detailed web site supplements it. I have neither the time and energy nor the competence to verify his voluminous statistics. Pieced together, as some of them are, from fragmentary sources (such as tax and probate records) of decades and even centuries ago, they must incorporate some elements of interpolation and educated guessing. Still, no reason is apparent for questioning his and his collaborators’ diligence and honesty.

Piketty avoids the pretensions of so much academic economics — decorative mathematics and dubious econometrics. (“[M]athematical models ... are frequently no more than an excuse for occupying the terrain and masking the vacuity of the content,” p. 574.) His book employs, and sparingly, only the simplest algebra; but I did find a few symbols and their definitions bothersome.

Piketty’s case for reforms is not mainly an economic argument but a sustained appeal to the reader’s intuition against extreme inequality.

For example, Piketty makes much of the inequality r>g as the condition of growth of the ratio of capital (wealth) to national income, g being the growth rate of the denominator. The condition would be trivially obvious if r, the numerator, were the growth rate of the capital stock; but Piketty usually, and misleadingly, calls it the “rate of return on capital.” That description would apply if all and only the earnings on capital were saved and reinvested. Expenditure of some capital earnings on consumption instead would reduce the growth of the capital stock and the capital-income ratio, as Piketty occasionally mentions; and saving or dissaving from labor income would also affect the ratio’s growth (or shrinkage).

Nevertheless, Piketty’s compilation of long-term statistics for several countries suggests a trend to him. Only occasionally does he mention that most of his income figures are of income before taxes and before supplementation by government redistribution. Anyway, the long-term trend of the capital-income ratio seems to have been upward, exacerbating the inequality of both wealth and income. The chief historical exception is the period 1914–1945, when wars and depression destroyed so much wealth.

Piketty gives particular attention to the concentration of income and wealth in the top 1%, or even the top tenth or hundredth of 1% of their distributions. He seems particularly concerned about great inherited fortunes and the lavish leisured lifestyles that they make possible (as in novels by Jane Austen and Honoré de Balzac, mentioned as a welcome change of pace from dense argument).

His remedy for great inequality would be not only highly progressive income and inheritance taxes but progressive annual taxes on total wealth itself. He recognizes the political unlikelihood of getting his wealth taxes enacted and enforced, however, because implausibly close international collusion of governments would be required. He draws on the literature of Public Choice little if at all. He supplements his arguments with page after page of the history of taxation in different countries.

Nowhere, as far as I noticed, and to his credit, does Piketty blame inequality for economic crises and depressions or commit the crude Keynesianism of recommending redistribution to raise the propensity to consume. He does not maintain that the apparent trend toward greater inequality will continue without limit. He does not maintain that the extreme wealth of only a few thousand families will give those few tyrannical power over their fellow citizens — far from few enough, actually, to be a coherent oligarchy. Nor does he (or his translator) toss about words like “unfair” and “unjust,” although he does occasionally aspire to more “social justice” and “democracy” in the inexpediently and popularly stretched sense of the latter word.

One might expect concern about inequality to include concern about further concentration of resources and power in the state. However, Piketty does not expect his more drastic and broad-based progressive taxes to raise much more revenue. Nor, perhaps inconsistently with not expecting this, does he worry about damaging incentives to work and innovate. Possibly he agrees with John Stuart Mill in thinking that the distribution of wealth can be separated from its production. Possibly, like José Ortega y Gasset’s Mass Man (The Revolt of the Masses, 1930), he regards the wonders of modern industrial civilization as automatically existing, like facts of nature. Although an avowed socialist in the loose European sense of the term, he does not want to destroy capitalism. He even welcomes considerable privatization: government agencies and employees need not themselves provide all the services that tax money pays for.

Wealth is not something that belongs to the government, which it may leave to its producers or redistribute as the country’s rulers see fit.

For Piketty, reducing inequality is a goal in its own right. I agree so far as reducing it means undoing government measures that actually foster it. These include aspects of crony capitalism: subsidies, tax privileges, protection from both domestic and foreign competition, and most of what makes highly paid lobbying worthwhile. Also at others’ expense, arguably, a policy of artificially low interest rates benefits Wall Street operators and wealthy stock investors and traders.

As I ended reading his book, I realized that Piketty’s case for reforms is not mainly an economic argument but a sustained appeal to the reader’s intuition, although not explicitly to envy. Intuition presumably carries more weight if the reader comes to share it himself without having actually been told what to think. If so, Piketty’s economic language and massive quantities of ingeniously gathered statistics amount to what I call a Murray Rothbard or Alan Reynolds style of argument: deploy such an array of facts and figures, dates, places, mini-biographies, and even personality sketches that, even if they scarcely add up to a coherent argument, you come across to your reader or audience as a consummate expert whose judgments command respect. But saying so may exaggerate; for Piketty’s tables, charts, and sketches of characters in novels may usefully jog the intuition. Anyway, one should not disparage Piketty’s impressive research and methods and their likely application in projects beyond his own.

As for an intuition against extreme inequality, I confess to one of my own, although it does not mean welcoming heavier and more progressive taxes. We should worry about undermining respect for private property as a human right and essential pillar of any functioning economic system. Wealth is not something that belongs to the government, which it may leave to its producers or redistribute as the country’s rulers see fit.

Still, the intuition persists, as it did with Henry Simons, that saint of the Chicago School of economics in its early days, who found inequality “unlovely,” and as it persisted with Nobelist James Buchanan, prominent libertarian, who advocated stiff inheritance taxes. Somehow, I am uneasy about the pay of executives said to be 600 times as great as the pay of their ordinary workers, even though they may well contribute more than that much to their companies’ revenues. I am uneasy about lifestyles of opulent leisure permitted by great inherited wealth, rare though they may be. I cannot justify or explain my intuition, which, anyway, is not crass envy.

I don’t call on public policy to heed that intuition, any more than I share the apparently spreading expectation that some authority take action against whatever offends somebody, whether the lifestyle, the behavior, the speech, or the suspected thought of someone else. I wouldn’t want an egalitarian intuition implemented in anything like Piketty’s ways. Government measures to alleviate or avoid actual poverty, even beyond the “safety net,” are something quite different.

An intuitive dislike of extreme inequality does not rule out unease at Piketty’s line of thinking. Again, however, I warn libertarians: don’t risk a boomerang effect by unfairly dismissing his work as a mere ideological tract. It is indeed a work of genuine scholarship. Dealing with its challenging ideas can strengthen the libertarian case.


Editor's Note: Review of "Capital in the Twenty-First Century," by Thomas Piketty, translated by Arthur Goldhammer. Belknap Press, 2014.



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Inequality: The Democrats’ Defining Issue

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Those of us who have been troubled by issues such as economic decline, unemployment, public debt, healthcare, foreign policy, and federal power should know that our worries have been misplaced. President Obama now tells us that income inequality is the principal concern — the "defining issue of our time," he says. It's a timely discovery, what with America's victims of inequality looking ahead to the November congressional elections.

The Democrat Party (protector and savior of all such victims) had to choose between inequality and the unfolding Obamacare debacle. That was a no-brainer. Naturally, Joe Biden made the call, counseling that "income inequality is our issue this year." After six years of rewarding the rich and punishing the poor and middle class, newly impassioned Democrats declared inequality as their battle cry for 2014. Why not? Six months of melodramatic hypocrisy spent on attacking plutocrats is wildly preferable to six months of cognitive dissonance spent on defending Obamacare.

In a speech last December, Mr. Obama launched his new crusade against patrimonial wealth, promising to devote the remainder of his presidency to this "dangerous and growing inequality." It is a phenomenon he has observed for many years — perhaps as early as his first reading of Das Kapital. His monologues on the subject (e.g., his notorious December 2011 Osawatomie, Kansas speech) voicethe deeply felt, though tacit, theme that capitalism is to blame for the widening income gap between the rich (the bourgeoisie) and the rest of us (the proletariat). He presents his observations as evidence both of capitalism's failure and of his fervid concern for correcting its excesses. And there is what he doesn't say, what he would like to exclaim with glee: that Karl Marx was right.

It is difficult to imagine any set of policies that could punish our economy and darken our future as much as the Democrat policies have.

Because of capitalism, the president tells us, "the basic bargain at the heart of our economy has frayed." To Obama, free market capitalism is a mysterious, chaotic game in which the winners prosper through deceit and theft, allowing but a meager share of their vast wealth to trickle down to the poor and middle class. It's a "theory," he says, that "fits well on a bumper sticker," but "it doesn’t work. It has never worked." Who — apart from Vladimir Lenin, Joseph Stalin, Mao Tse-Tung, Fidel Castro, and Paul Krugman — could have put it better?

In his economic homilies, Obama excoriates capitalists who tell us that "the market will take care of everything" and that "if we just cut more regulations and cut more taxes — especially for the wealthy — our economy will grow stronger." He laments that "a family in the top 1% has a net worth 288 times higher than the typical family," while"a child born into the bottom 20% has a less than 1-in-20 shot at making it to the top." He reminds average Americans of deep frustrations "rooted in the nagging sense that no matter how hard they work, the deck is stacked against them." Marx could not have taken a more sinister view.

But the capitalism Obama decries is not free market capitalism. The latter predated his selective observations, performing marvelously well for America's first two centuries. The capitalism that Obama rails against is the patriarchal, democratic crony capitalism that politicians of his ilk (including every president from Lyndon B. Johnson to George W. Bush) created. That system — which is precariously held together by the political influence of the rich and the "fatal conceit" of central planners — has failed, and failed chronically since the advent of the "Great Society." Today, after five years of eco-socialism, Obama outshines all his predecessors. The inequality gap has become so intolerably large under his stewardship that he himself declared it as a national issue. Well, somebody had to do it.

During his 2012 reelection campaign, Obama told audiences what the weak regulation of the Bush administration had accomplished: "Insurance companies that jacked up people's premiums with impunity and denied care to patients who were sick, mortgage lenders that tricked families into buying homes they couldn't afford, a financial sector where irresponsibility and lack of basic oversight nearly destroyed our entire economy." As 2014 election campaigns begin, voters who were among Obama's cheering crowds in 2012 may ask what the strong regulation of the Obama administration has accomplished. They, and Democrat candidates, won't like the answer.

In 2007, the share of the nation’s income earned by the richest 1% was 18%. Today, that elite group's share has increased to 22%. Ninety-five percent of the income gains since Obama took office have gone to the top 1%. Yet, during that period (aka, the "recovery"), median annual household income dropped by 4.4%, the number of people in poverty increased by 6,667,000, and Democrats, with a new battle cry but still blaming George Bush, gained 100% of the nation's inequality bullshit.

The tax and regulate policies of Democrats (Obamacare, Dodd-Frank, EPA and DOE regulations, to name a few) are wreaking havoc on the very groups they are supposed to help. A March 2014 report ('The Irony of ObamaCare: Making Inequality Worse”) declared that Obamacare "threatens the middle class with higher premiums, loss of hours, and a shift to part-time work and less comprehensive coverage." It was published by a labor union — one of many angered by Obamacare. With the Dodd-Frank reforms, minorities, low-income people, and the young are being shut out of mainstream banking. The economic impact and regulatory compliance cost, estimated to be $1.9 trillion annually, will be passed on to people in the middle class, who haven't been shut out — yet.

For black Americans, the poverty rate has increased from 12% in 2008 to 16.1% today; their unemployment remains twice the rate for white Americans. According to radio talk-show host Tavis Smiley, "the data is going to indicate sadly that when the Obama administration is over, black people will have lost ground in every single leading economic indicator category."

Meanwhile, the stock market is doing well, for the rich; the S&P 500 is up 52.8% since the passage of Obamacare in March 2010. How have health insurance companies fared — companies that were allegedly jacking up people's premiums with impunity and denying care to the sick? The top five are up 100.7%. And what about banks, which were allegedly tricking families into buying homes they couldn't afford? According to a February 2014 FDIC report, their profits are at an all-time high.

Democrats argue that the inequality gap would grow wider under Republican leadership. Not to defend Republicans, but it is difficult to imagine any set of policies that could punish our economy and darken our future as much as the Democrat policies have. When it comes to the advancement of inequality, Democrats are unrivalled. Clowns could do no worse.

For black Americans, the poverty rate has increased from 12% in 2008 to 16.1% today.

Clowns would come up with better ideas than Obama's latest offerings: inequality busters such as “equal pay for equal work,” universal preschool, and raising the minimum wage. They would know that impoverished burger flippers making $7.25 an hour would remain in poverty at Obama's recommended pay of $10.10 an hour, as would the half million people who, according to the CBO, would lose their jobs as a result. Clowns would reject the assertion that women earn only 77% of what men earn for the same work. Male clowns would worry about the wholesale job losses and wage cuts that would ensue if employers acted on the idea that they are overpaying men by 23%.

Then there are Democrat anti-inequality panderisms such as the "Stop Subsidizing Multi-Million Dollar Corporate Bonuses Act," sponsored by Senators Blumenthal (CT) and Reed (RI). Can an Occupy Wall Street pleaser such as the "Use Congressional Authority and Oversight to Ensure that Appropriate Federal Agencies Fully Investigate and Prosecute the Wall Street Criminals Act" be far behind?

The policies of Democrats, however well-intentioned, have backfired. They have exacerbated inequality, a result that, after almost six years of economic stagnation, high unemployment, staggering debt, grinding income decline, etc., clowns would notice. If for no other reason than comic relief, they would reject Democrat ideas — all two of them: redistribution of wealth and regulation of everything.

Clowns would tease us with a little free-market capitalism and tickle us with our own newly discovered energy bonanza, especially the vast taboo region lying fallow beneath federal land. After all, there is no clown ideology against fossil fuels. Besides, clowns would be awestruck by the giant nodding donkeys erected on private land, producing enormous wealth and prosperity in places like Texas and North Dakota. Think of the chuckle that clowns would get from telling a burger flipper that, while he waits for Obama's $10.10 an hour to kick in, he could work at a MacDonald's for $18 an hour . . . in North Dakota. Then there's the sidesplitter involving a blue-collar guy who makes $80,000 a year driving a tanker truck full of Bakken shale oil from the Williston Basin to refineries in the South . . . because Obama won't use his pen and cellphone to approve the Keystone XL pipeline.

The rich do very well under Republican or Democrat administrations. Has it ever been otherwise? But under the Obama administration, the rich have grown extraordinarily wealthier, and the inequality gap has grown extraordinarily wider, than under the Bush administration. The stimulus, Obamacare, Dodd-Frank, EPA and DOE regulations, and other Democrat policies — all big (federal) government efforts, promising to humble the rich, uplift the poor, and strengthen the middle class — have nefariously combined to produce the opposite effect. As the mid-term elections near, "Redistribute and Regulate" bumper stickers won't make many voters think that Democrats will do any better than clowns to shrink the inequality gap. The real challenge for Democrats is not to stamp out inequality, but to escape from the dark shadow of Obama's anti-capitalism, anti-fossil fuel, eco-socialist ideology, where most candidates are discovering a "nagging sense" that "the deck is stacked against them."




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Cash Poor

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In spite of Liberty contributing editor Mark Skousen’s observation that “income isn’t distributed, it’s earned,” much handwringing has followed recent reports that income distribution in the US is becoming increasingly unequal.

To a libertarian, how much one earns or owns — so long as it’s acquired honestly and honorably — is nobody’s business. But at the other extreme are the still-influential Rawlsian redistributionists. They believe that since each person’s station in life is due to little more than a roll of the existential dice, income distribution ought to cluster tightly. If it doesn’t, it’s an indication of an unjust society, and something must be done about it. That’s the ideology.

Nevertheless, there’s a pea under that ideological mattress: the fear of revolution if the rich get richer, the poor get poorer, and the middle class disappears. Though probably a reductio ad absurdum, it is nonetheless a theoretical possibility under a laissez-faire economic system.Friederich Hayek understood this, which is why — to the consternation of many libertarians — he advocated a minimal welfare state as a worst-case scenario safety net.

Whatever the chances might be that a just economic system — laissez-faire capitalism — could lead to the penury of a majority, income distribution is a concern to the inner Hobbesian in all of us. So when income inequality rears its ugly head, it bears critical investigation.

In 1912 Italian statistician and sociologist Corrado Gini devised the eponymous Gini Coefficient, a statistical formula based on the Lorenz curve, to measure variability and mutability among data in any discipline. The index is now widely accepted as a measure of income inequality in economics. Values range from 0, total equality, to 1, maximal inequality.

As of 2009, Sweden scored .23, the lowest Gini Coefficient, indicating the highest income equality; while Namibia rated a .74, indicating a large income inequality. Most first-world nations have Gini coefficients in the high point-twenties to the mid-thirties, with a .31 for the EU average. Back in 1980, the US rated a .40 Gini; today we rate around .47, a figure comparable to Russia or Turkey and a trend that is alarming to many.

The fear of revolution, though probably a reductio ad absurdum, is nonetheless a theoretical possibility under a laissez-faire economic system.

Paul Krugman, who could be considered the Linus Pauling of economics — for his previous Nobel-recognized genius, followed by descent into crankhood for his advocacy of snake-oil remedies: vitamin C in the latter case, dirigisme in the former — refers to the period after 1979 as the “Great Divergence,” because of the rapid increase in inequality that had occurred. According to a 2011 Congressional Budget Office report, “Real income (adjusted for inflation) in the US grew by 62% for all households between 1979 and 2007. However, after-tax income of households in the top 1% of earners grew by 275%, while income growth for the bottom fifth of earners was 18%.”

If, instead of income distribution, we look at wealth, the disparity is even greater. While the bottom 60% of the US population lost about 6% of its wealth, the net worth of the top 5% increased by 40% between 1983 and 2009.

Why the increasing inequality in a political and economic system deemed among the freest by classical economists?

* * *

Before addressing that question we must deal with a concept clamoring for immediate attention: fuzzy numbers.

Nearly all the figures quoted in this article come from Wikipedia compilations replete with references, from various other internet sites, The Economist,Scientific American, Money,Chris Martenson’s The Crash Course, and PuruSaxena’s Money Matters. Although these sources are ostensibly reliable, please take them with a pinch of salt. Some figures purporting to measure exactly the same thing vary wildly.

For instance, that 275% of after-tax household income growth for the top 1% earners, derived from 2011 Congressional Budget Office figures of 1979 to 2007, becomes a 176% increase — from 1979 to 2005, nearly the same time range — in a 2006 New York Times article.

Exactly what is being measured, how it is defined, over what period of time it is measured (a variable often manipulated for calculating equity returns down to the day), and what statistical tools are employed can have considerable impact on the figures. Just the difference between ‘”household” and “individual” income measurements can affect income inequality figures substantially.

Dodgy numbers can also lead to convertibility problems and out-of-this-world results — literally out of this world. Composite numbers (such as indices, among others), which are built up from subsidiary numbers, can become statistical black holes, swallowing endless data but illuminating little. As The Economist reports, “In theory, countries’ current-account balances should all sum to zero because one country’s export is another’s import. However, if you add up all countries’ current-account transactions, the world exported $331 billion more than it imported in 2010, according to the IMF. Are aliens buying Louis Vuitton handbags?”

And of course, ideology plays a big part. As the old saw goes, “He who frames the question determines the shape of the answer.”

On top of this are myriad unexamined assumptions. Statistician Joseph Locascio has identified what he calls “publication bias,” which means that academic journals “often give greater weight toward publishing articles that report statistically significant findings over those that don’t.” With this kind of review process, if out of 20 studies one shows a slight significance (perhaps because of chance), while the other 19 show none, that one will be published and the others ignored.

Not all people are driven to make the most money they can, all the time. Many earn and live below their possibilities, and spend the rest of their time pursuing their passions.

Hoover Institute economist Thomas Sowell suggests that many discussions of income equality are based on fallacious reasoning. For example, “an absolute majority of the people who were in the bottom 20% [of income] in 1975 have also been in the top 20% at some time since then. Most Americans don’t stay put in any income bracket. At different times, they are both ‘rich’ and ‘poor’ — as these terms are recklessly thrown around in the media.”

Finally, somewhere between the last two observations, lies individual choice. Not all people are driven to make the most money they can, all the time. Many earn and live below their possibilities, earning what they consider a sufficient amount, and spending the rest of their time pursuing their passions: music, rock climbing, walking around the world preaching the gospel . . . whatever.

So, to that pinch of salt, add a squeeze of lime and, what the hell, a shot of tequila.

* * *

But back to the ostensible causes of inequality, which remain unknown to many, even to theNew York Times, as proclaimed in an article onJune 5, 2005. Let’s consider these causes.

1. The rich work more than the poor. As of 2005, 42% of all US households had two or more income earners. However, in the top quintile of households, nearly twice as many (76%), had dual-earners. Among the lower class, the most common source of income is not occupation but government welfare (according to the leftish Winner-Take-All Politics by Hacker and Pierson, 2010).

2. The rich are more educated than the poor. In the top quintile, 62% of householders are college graduates; while many at the bottom half of earners hold at most a high school diploma. Educational and occupational achievement and the possession of scarce skills correlate with higher income.

3. People of modest means keep giving their money to the rich. George Mason University economist Walter E. Williams recently recognized that “the millions of people who watch LeBron James play are the direct cause of LeBron’s earning $43 million and are thereby responsible for — in Paul Krugman’s terms — ‘undermining the foundations of our democracy.’” The same can be said of the millions of Walmart and Microsoft shoppers who keep enriching the Walton and Gates families.

4. Government policies. Among the usual partisan suspects — such as decreased expenditure on social services and labor’s diminishing political clout, suffering from declining union membership — are Republican tax policies, specifically the “low” progressivity of US tax rates. Reversing these factors through government diktat is a crude cure that doesn’t address the underlying ecology (Thomas Sowell’s term) of the marketplace. The enforcement of legislation such as higher redistributive taxes and the imposition of closed shops would require force, a road down which classical liberals would prefer not to travel. Might there be another cause of the increasing income inequality that hasn’t yet been identified? One whose correction does not require coercion?

I believe there is, and that culprit is inflation — in spite of the fact that nearly all of the above statistics are adjusted for inflation. And, as Milton Friedman recognized, since “inflation is always and everywhere a monetary phenomenon,” it is a direct result of government policy. Inflation is a word often misunderstood. It is the decreased purchasing power of currency, caused by the expansion of the money supply, and not to be confused with price increases caused by scarcity.

Krugman’s “Great Divergence” begins soon after America’s divorce from the gold standard and the subsequent collapse of the Bretton Woods currency exchange system in the early 1970s. After that, the Federal Reserve instituted a Keynesian monetary expansionist policy. In 1972, the price of a new house averaged $27,600; in 2010 (despite 2008’s deflation of the housing bubble), the average price was $272,900. A 1972 Coke cost a dime; today it’s a buck. By 1973, gold hit a high of $126 per ounce; in 2009 it topped $1,212. In 1972 the Dow Jones Industrial Average hit 1,000; by 2010 it had reached 11,000 — a ten-fold increase in only four decades. A $10 Hamilton from 1972 is today’s $100 Franklin. How does this stark change affect the disparity between rich and poor?

* * *

But first, more fuzzy numbers.

Without an objective anchor such as gold, the value of money is subject to fluctuation according to the active “monetarist” policy set by the central bank. That policy is based on many variables — prominently including the consumer price index (CPI), with a nod to gross domestic product (GDP), processed through complex formulae and topped with a generous dollop of intuition. The objective is a stable currency — a very difficult goal with such a capricious policy, and one whose results always lag policy implementation.

For a variety of reasons, the central bank considers deflation a greater evil than inflation. So, wishing to avoid deflation at any cost, the Federal Reserve sets an inflation goal of 1–2%. It often misses this goal. The October 2011 rate was 3.53%, according to the Bureau of Labor Statistics (BLS), as measured by the CPI.

How reliable is this number? Not very — as it is neither accurate nor even precise. Like an aging diva afflicted with weight gain, wrinkles, fatigue, loss of figure and overexposure, the CPI has been massaged, injected with Botox, subjected to fad crash diets, over-cosmetized, face-lifted, repackaged, and rebranded. Richard Nixon, for example, bequeathed us the so-called “core inflation” measure, which strips out food and fuel — a bit like weighing yourself without your belly. In 1996 Bill Clinton implemented three oddities in the measure of inflation: substitution, weighting, and hedonics.

Krugman’s “Great Divergence” begins soon after America’s divorce from the gold standard and the Federal Reserve’s institution of a Keynesian monetary expansionist policy.

With substitution, it is now assumed (for example) that if the price of salmon goes up too much, people will switch to something cheaper, such as hot dogs. So as the price of an individual item within a representative basket of thirty goods rises, that item is removed and substituted with something cheaper, chosen by a trained bureaucrat. According to the BLS, food costs rose 4.1% from 2007 to 2008. But according to the Farm Bureau, which tracks exactly the same shopping basket of 30 goods from one year to the next without substitution, food prices rose 11.3% for the same year.

Weighting is an even sharper tool for cutting the measure of inflation. Anything that rises too quickly in price is undercounted in the CPI, under the assumption that people will use less of those things. For example, although healthcare is about 17% of the economy, it is weighted as only 6% of the CPI basket.

But the most creative way to fiddle with inflation is hedonics. This adjustment is supposed to reflect quality improvements. Here’s how it works, based on a presentation by a commodity specialist at the BLS and explained by Chris Martensen:

In 2004, the commodity specialist at the BLS noted that a 27-inch television selling for $329.99 was selling for the same price in 2007, but was later equipped with a better screen. After taking this subjective improvement into account, he adjusted the price of the TV downwards by $135, concluding that the screen improvement was the same as if the price of the TV had fallen by 29%. The price reflected in the CPI was not the actual retail store cost of $329.99, which is what it would cost you to buy, but $195. Bingo! At the BLS, TVs cost less and inflation is heading down. But at the store, they’re still selling for $329.99.

Hedonics rests on the improbable assumption that new features are always beneficial and are synonymous with falling prices (never mind that most old rotary phones still work, while modern cell phones seldom seem to last three years). Hedonics is now used to adjust as much as 46% of the total CPI.

What would the inflation rate have been for, say 2008, before all the fuzzy statistical manipulation gussied it up? John Williams of shadowstats.com, using early 1980’s formulas, computed the figure at 13%: the BLS reported a 5% inflation rate for the same year — a stunning 8% difference.

But that’s not all. During Alan Greenspan’s tenure at the Federal Reserve — particularly while the real estate bubble was growing gangbusters — some economists bemoaned that, without asset prices such as real estate and equities being included in the CPI, true inflation rates would be misleading, thereby skewing monetary policy.

While inflation has been massaged down, GDP has been steroided up, by similar sleight-of-hand manipulations — further inflating the money supply.

So, at this point, brace yourself with another shot — this time of hedonic Cuervo Añejo.

* * *

Inflation affects the poor and the rich in completely different ways, though both lose wealth. No one benefits — except for government and banks, which, having access to newly created money before it hits the streets and raises prices, can buy goods and services at the old, cheaper rate. By the time the surplus money has permeated the economy and reached the masses, prices have usually risen significantly.

Broadly speaking, the poor — for the purposes of this essay, people in the lower 40% of income distribution — have fewer assets, lack financial sophistication, and tend to hold, at most, a high school diploma. They deal in cash and its derivatives and equivalents — CD’s, bonds, and interest-bearing accounts. In an inflationary regime, these lose value. In an underreported inflationary regime, the effect is not only obviously greater but, because wages only grudgingly and loosely track the “official” inflation rate of the CPI (if at all), “much of the developed world’s workforce has been squeezed on two sides, by stagnant wages and rising costs,” as The Economist opined in its November 19, 2011 issue.

There is one factor leading to wealth disparity that Rawlsians and Marxists most seem to ignore, but classical economists believe is fundamental — productive innovation.

As if this situation were not bad enough, many of the poor were lured into buying homes by dodgy loans and government social engineering policies (such as the Community Redevelopment Act, Fannie Mae and Freddie Mac practices, and lower than historic interest rates) in the middle of a bubble. When the bubble burst, these folks lost whatever equity they had managed to cobble together, as well as ending up with ruined credit. And they couldn’t even rely on their savings (what little they might have saved between stagnant wages and rising costs), as these too had dwindled along with the higher interest rates that made savings more attractive.

So, without a doubt, the poor are getting poorer. What about the rich?

While cash loses its value, real goods such as commodities, equities, and real estate track the changing value of money and, long term — with the dips and highs of the business cycle evened out — generally keep pace. The rich, with more education, more financial sophistication, and more discretionary income, invest. The poor, on the other hand, save (if they can afford to). All other things being equal, inflation makes investments tread water, but savings lose. Without inflation, income inequality might not have become so pronounced over the last 40 years.

Though the above analysis might go a long way toward explaining the increasing income inequality in the United States, it still isn’t the full picture.

There will always be income inequality, if for no other reason than the fact that people’s work habits, education, and ambition vary tremendously. But the one factor leading to wealth disparity that Rawlsians and Marxists most seem to ignore, but classical economists believe is fundamental — productive innovation — also plays a big part.

A study done by University of Texas economists James K. Galbraith and Travis Hale found that

During the technology boom of the late 1990s, most of the gains enjoyed by the top 1% came from a small number of counties, rather than a national trend. Almost all of the richest 1%’s gains occurred in the economic hotbeds of Silicon Valley, and also New York City. If the top four counties in those regions are removed, there is almost no trend towards income inequality during the years studied (1994–2000). On this basis, the researchers ascribe the growth in income inequality in the late 1990s to the growth of information technology.

Earned income.

Definitely.




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"The Help" Deserves the Buzz

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The Help is the film everyone has been talking about this week. Based on the bestselling novel of the same name by Kathryn Stockett, it has been eagerly awaited by book club members and sensitive readers nationwide since it was published two years ago. The film provides an intimate look at the often-demeaning relationship between white women in Mississippi and the black maids who served them during the turbulent 1960s.

During this time, women up north were beginning to recognize the vast career options available to them. But in the Deep South, women were still staying at home with their children, joining the Junior League, hosting bridge clubs, and criticizing "the help" — and each other. In this story, Hilly Holbrook (Bryce Dallas Howard) is the "queen bee" whose opinion matters to everyone, black or white. She controls the social life of the town by voicing her opinions firmly and then leads the shunning of anyone who dares to disagree with her. Her kind of female has always existed, of course, and not just in the South. She has been immortalized in such films as The Women and Mean Girls, and can still be found controlling social groups, PTA meetings, cheerleading squads, and even board rooms, with a raised eyebrow and a withering look. No one likes her, but no one dares to cross her.

In the story, Hilly has been leading her group of friends since grade school. All of them are now married with children, except Skeeter (Emma Stone), who has chosen to finish college and wants to become a writer. She lands a job at the local newspaper as an advice columnist answering questions about house cleaning. Ironically, of course, Skeeter has never polished a spoon or scrubbed a bathtub ring in her life. So she turns to "the help" for help, in the person of Aibileen (Viola Davis), her friend Elizabeth's maid. Eventually she convinces Aibileen and a dozen other maids to share their stories, and a book is born.

As a nation we are proud of how far we have come in terms of civil rights. But we still notice racial differences and often act accordingly.

Aibileen is what Skeeter ought to be. Like many white college graduates, Skeeter simply "wants to be a writer." She doesn't have a burning topic just itching to come out. She wants the title of "writer" as much as she wants the occupation. When she applies for a job at Harper & Row, the editor (Mary Steenburgen) tells her, "Write about something that disturbs you, particularly if it bothers no one else." Skeeter looks for a topic that will allow her to become a writer, rather than using her writing to expose a problem she cares deeply about. Aibileen, by contrast, is simply a writer. She writes every night for an hour or two. She writes what is in her soul. She writes her prayers.

In many ways, Viola Davis as Aibileen carries the show and at the same time embodies the central conflict of the story. I say this because, although Davis is one of the finest actors in Hollywood, with an Oscar to her credit, you will seldom see that accolade in print without the modifier "black actress." As a nation we are proud of how far we have come in terms of civil rights: our schools and neighborhoods are fully integrated. We have a black president in the White House. But we still notice racial differences and often act accordingly. I would love to ask Davis how she feels about the roles she has been offered.

Equally impressive is Octavia Spencer as Aibileen's best friend, Minny Jackson, an outspoken maid who has lost so many jobs because of her sassy back talk that she now works for the last woman in town who will hire her — Celia Foote (Jessica Chastain), who is shunned by the ladies because of her "white trash" background. Celia doesn't know the rules of maid-employer relationships. Ironically, Minny teaches Celia the boundaries she and the other maids are trying to expose with Skeeter’s book. Spencer's large liquid eyes alternately shine with sharp-witted laughter and melt into pain-filled tears. If Aibileen is the soul of this black community, Minny is its heart.

Having read the book, I wasn't pleased to learn that the beautiful Emma Stone had been cast as the tall, skinny, unattractive Skeeter, since her gangly appearance is such an important part of her character. But somehow Stone manages to look like a plain Jane in this film — her eyes are too big, her lips are too thin, her hair is too curly, and her face is too pale. In short, she is perfect.

Despite having grown up in Jackson, Skeeter really doesn't fit in with her snooty friends. She is disturbed by Hilly's insistence that Elizabeth install a separate bathroom for Aibileen. In fact, Hilly wants a law mandating separate facilities in private homes, "for the prevention of disease." This prompts Skeeter to examine the way maids are treated by the women who employ them. "Colored women raise white children, and twenty years later these white children become the boss," she muses. "When do we change from loving them to hating them?" Aibileen observes the same dilemma: "I want to stop that moment coming — and it come in ever white child's life — when they start to think that colored folks ain't as good as whites."

Toilets, and the material that goes into them, become the strongest recurrent image in this film. From diapers and potty training to vomiting and pranks, toilets are a symbol for what was wrong with the "separate but equal" policy in the south. The facilities were separate, but they most assuredly were not equal. Aibileen's bathroom is a plywood closet located in a corner of the garage with a bare bulb hanging from a wire, and toilet paper resting on a bare 2x4. The symbol, which emphasizes how badly blacks could be treated by whites in those days, provides moments of both shame and laughter.

However, the film misses the richer, darker, and more sinister tone that underlies the book. For black women to write about their employers was no joke, and the book makes it clear that its women are risking real dangers when they decide to tell the truth. Permanent job loss, physical violence, and even jail are real threats in a society where the mere accusation of a crime can lead to vigilante justice with lifetime consequences. By showing this clearly, the book gains a tension and suspense that is missing from the film.

The most important question asked by The Help is this: how did these southern women go from loving the black maids who reared them as children to degrading them in adulthood?

Strangely, I found it more difficult to enter the minds and lives of the maids while watching the film than I did while reading the book. The story is told through the three voices of Aibileen, Minny, and Skeeter, who narrate alternating sections of the book. These voices are strong and rich, and I could enter their worlds, empathizing with their experiences vicariously. In the film, however, I was merely an observer. I often felt defensive, rather than empathetic, about what I was seeing, as though I were somehow responsible for the actions of those women long ago, simply because I am white. If we learn anything from our battle for civil rights, however, it is that each person should be judged individually, and not collectively as part of a race.

The most important question asked by The Help is this: how did these southern women go from loving the black maids who reared them as children to degrading them in adulthood? Stockett, who was reared in Mississippi by a black maid whom she says she loved, suggests that they learned it from their mothers, by example as well as by instruction. To quote Oscar Hammerstein in South Pacific, racism "has to be carefully taught." But books like this also suggest that children can be carefully taught not to be judgmental. Every day Aibileen tells Elizabeth's little girl, "You is smart. You is kind. You is important." She says nothing about little Mae Mobley's appearance, good or bad. Knowing that she will likely be fired or retired before Mae Mobley reaches her teen years, Aibileen hopes desperately that these words will be enough.

As is often the case, the film is good, but the book is so much better. Don't take a short cut this time. Read The Help first, and then see the movie. You will enjoy both so much more if you do it that way.


Editor's Note: Review of "The Help," directed by Tate Taylor. Dreamworks, 2011, 137 minutes.



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