Tag: Income Inequality

Book Review: ‘Deaths of Despair and the Future of Capitalism’ by Anne Case and Angus Deaton

We all are aware of how the economic conditions in this country have changed over the last 30-40 years. Where once assembly line manufacturing was the main driver of the GDP here in the US now it’s high-tech engineering, microchips and software, industries that require far fewer employees but those with greater education. These changes in the economy have brought with them demographic changes as millions of high school graduates lost well paying jobs with benefits while people with a college degree were in ever greater demand, and therefore saw at least a modest increase in their income and wealth.

I could have picked any of a hundred different graphs all saying the same thing. The higher the education a person attains the higher the average salary they will earn throughout their lives! (Credit: Fox Business)

One unexpected outcome of these economic changes is the effect on the overall health of the American people caused by a massive growth in ‘Deaths of Despair’ that is drug overdoses, suicide and alcoholism. ‘Deaths of Despair and the Future of Capitalism’ by Anne Case and Angus Deaton examines the increase in drug overdoses, suicide and alcoholism from both an economic and sociological perspective, both authors are retired professors of economics at Princeton University and Professor Deaton was awarded the Nobel Prize in Economics in 2016.

While the difference in salary between College graduates and High School graduates may be understandable the difference in Life Expectancy is harder to grasp. That’s the thesis of ‘Deaths of Despair’ by Anne Case and Angus Deaton. (Credit: World Socialist Web Site)

‘Deaths of Despair’ begins by demonstrating just how large a problem drug overdoses, suicides and alcoholism have become. In fact these social diseases were actually causing a decline in the average life expectancy of Americans before the Covid-19 pandemic. The book then goes on the show how these ‘Deaths of Despair’ reside almost exclusively in the white male population without a college degree, exactly the part of the population that has seen the most economic turmoil in the last 40 years. That turmoil being the driving force behind the despair a large part of our population now feels.

Cover art for ‘Deaths of Despair and the Future of Capitalism’ by Anne Case (l) and Angus Deaton (r). (Credit: YouTube)

The central portion of the book is a detailed examination of how the economy has changed over the last 40 years and why damage generated by those changes seem to have almost targeted white males with only a high school education or less. In addition to the lost of income in going from a well paid factory job with benefits to a low paid service job with few benefits ‘Deaths of Despair’ also considers such factors as the loss of pride and community that accompanied the switch from buildings cars at General Motors to flipping burgers at McDonald’s. At the same time social changes of the last few decades added to the despair of white, blue-collar males. The advancement of both woman and minorities only increased the feeling of lost prestige and privilege.

Symbol of a population left behind economically, a factory that once drove American prosperity left to rust and decay. What happened to the people who once worked here earning a good life for themselves? (Credit: Wikipedia)

Then, at just the time when these changes were generating despondency within a large section of the population the pharmaceutical industry began a campaign of selling synthetic, non-addictive opioids as a cure all for any kind of pain. Of course we now know that OxyContin and its relatives are actually highly addictive and can even act as gateway drugs to worse opioids like heroin and fentanyl. The callous greed of the drug companies who made billions by turning millions of Americans into addicts, or in all too many cases corpses is graphically detailed.

As a large portion of the American working class saw their once comfortable life disappearing many of them got caught up in the opioid epidemic. Notice how the number of overdoses among men is nearly twice that among women. (Credit: Wikipedia)
In ‘Deaths of Despair’ the authors cover the effects of suicide, alcoholism and the opioid epidemic on those with less than a college education. However they completely miss the equally tragic effect of education on smoking rates with high school graduates smoking, and dying because of smoking at more than twice the rate of those with a college degree. (Credit: Medical Express)

In the final section of ‘Deaths of Despair’ the authors give their recommendations on how to rebalance the economic system so as to better serve all Americans not just the top 1% or even the better educated. To be honest however the authors are academics and as such they are cautious in their suggestions.

While since 1975 many nations have seen the top 1% grab a larger share of the wealth here in the US that increase is significantly greater. Leaving that much less for the average person. (Credit: Wikipedia)

The most fundamental change put forward in ‘Deaths of Despair’ is a complete reform of the healthcare system in the US, which the authors contend does not even meet the criteria of a true capitalist marketplace. Not only are the drug companies and health insurance corporations criticized in detail but hospitals, ambulance services and even doctor’s associations are shown to be guilty of acting as an Oligopoly. (An Oligopoly is a small group of merchants or corporations that by colluding together rather than competing virtually become a monopoly, raising prices while using their power to destroy any competitors) According to the Authors this is why Americans spend more for their healthcare than any other nation while both life expectancy in the US and approval of our healthcare system rank amongst the lowest for any industrialized, wealthy country. In ‘Deaths of Despair’ the authors estimate that a through reform of the health care system could free up as much a a trillion dollars a year in GDP that could be used to maintain our infrastructure, improve education etc, etc, etc.

As a fraction of our countries wealth (GDP) the costs of Health Care have more than tripled since 1960! Are we living three times as long or has the Health Care Industry simply become inefficient and wasteful? (Credit: Kaiser Family Foundation)

While reform of the healthcare system is the author’s main recommendation they also suggest a stronger social safety net for those who lose their jobs due to changes in the economic system, the safety net must be of longer duration and include retraining for newer jobs. On the other hand they do not recommend simply raising taxes on the wealthy as a means of fixing income inequality nor do they endorse programs like the Universal Basic Income (UBI).

A dream of Socialists since the 19th century Universal Basic Income would make certain that no one falls into poverty despite lack of education, layoffs, sickness or any other circumstance. Conservatives counter that it simply promotes laziness. (Credit: The Nation)

Now, back in May of 2019 I reviewed the book ‘Dying of Whiteness’ by Jonathan M. Metzl, see my post of 5 May 2019, which covers much the same subject as’ Deaths of Despair’. Mr. Metzl however was a state health official while Professors Case and Deaton are among the world’s leading economists so there is a very different perspective in the two books, to my mind in a way that they compliment each other.

Jonathan M. Metzl and his book ‘Dying of Whiteness’ (Credit: Seminary Co-Op Bookstores)

So while I do highly recommend  ‘Deaths of Despair and the Future of Capitalism’ I do so with the proviso that it is a very technical book written by scholars who are among the best in their profession. Those readers who really want to understand the complexities of our current situation, both economic and political will gain a great deal from it.

Book Review: ‘Evil Geniuses, The Unmaking of America, a Recent History’ by Kurt Anderson.

 Forty years ago the United States was in the midst of a contentious presidential election. The incumbent Democratic President Jimmy Carter was being challenged by Republican B-grade movie actor turned politician Ronald Reagan.

Even at the time America could sense the political shift that Reagan’s defeat of then President Carter entailed but after 40 years the true extent of the damage is only now becoming clear. (Credit: Snopes.com)

Carter was widely viewed as a kind and gentle but weak leader who was unable to solve the country’s many problems. And America had a lot of problems back then. Not only was the economy sluggish, with low growth and very high interest rates but thanks to the Vietnam war and the Watergate scandal the average American’s trust in their government was at an all time low.

Reagan promised a new vision for the country. Government was the problem he asserted. His plan was to lower taxes, especially on the wealthy, and shrink the size of government. With their increased wealth the rich would invest more in the economy he told voters.  With all of that new investment the economy would grow at a faster rate than even during prosperous times of the 50s and 60s. The economy would grow so fast he assured us that before long the benefits would ‘Trickle Down’ to everyone so that ‘A rising tide would raise all boats’.

How Trickle Down economics was supposed to work. (Credit: Economics Help)

With his fatherly, show business personality Reagan easily won the 1980 election and proceeded to turn his agenda into policy. Since Reagan’s presidency that mantra of ‘Lower Taxes’ and ‘Shrink the Government’ has been gospel for the Republican Party, an act of faith without any evidence to support it. As the rich get richer, they still promise, the wealth will someday trickle down.

After 40 years how it actually feels like Trickle Down economics works. (Credit: St. Louis Post-Dispatch)

Regulations were another target; they just got in the way of Big Business making America a wealthier nation. Get rid of all of that anti-trust, anti-financial, pro-environment government meddling. The ‘Invisible Hand’ of a ‘Free Market’ would solve all of America’s problems.

Again, how the Invisible Hand is supposed to work. (Credit: Market Business News)

Well over the next forty years the rich certainly got richer, the rest of us are still waiting for the trickle to start. In fact while the real wealth of the top 1% of Americans has quadrupled the wealth of the middle 50% has remained virtually the same and the wealth of the lowest quarter of Americans has actually fallen by about a third.

Since Reagan’s time the Invisible Hand has lifted the wealth of the top 1% by quite a lot. The bottom 50%, not so much! (Credit: Vox)

‘Evil Geniuses, the Unmaking of America, a Recent History’ by journalist Kurt Anderson is the story of how the people of the United States were duped into accepting a flawed, indeed a dangerous economic plan. It’s the story of how in the 60s a few ultra-conservative, New Deal hating politicians and economists began to build a movement that in the 80s not only dominated the Republican Party but received the tacit consent of many Democrats.

Cover of ‘Evil Geniuses’ by Kurt Anderson. (Credit: Amazon)
Author and Journalist Kurt Anderson. (Credit: The Village Vioce)

But the conservative movement in the US was about more than just the economy. The ‘Free Market’ conservatives not only co-opted the support of the ‘Moral Majority’ religious right but even bargained with the racist, anti-immigrant hate mongers in America for their support. This latter accommodation with the old white supremacists was started by none other than Richard Nixon as his ‘Southern Strategy’.

Senator Strom Thurmond was one of many segregationist Democrats who switched to the Republican party in opposition to the civil rights movement of the 1960s. (Credit: Simple Wikipedia)

In ‘Evil Geniuses’ Kurt Anderson gives you all of the details of that monumental con game and even more importantly makes all of the connections. You’ll discover how the Koch brothers and other millionaires used their huge fortunes to fund conservative think tanks and endow university professorships with the sole intention of providing intellectual justification for their wholesale theft of the wealth of America. You’ll learn about how Roger Ailes, before creating the ‘fair and balanced’ FOX News was executive producer for Russ Limbaugh. Together the two demonstrated how to turn anger and hatred into entertainment, politics as show business laying out the path that would eventually lead to the ultimate hate monger Donald Trump.

Roger Alies (l) helped create right wing hate media with Rush Limbaugh (r). Today it has devolved into Breitbart, One America Network and even such underground conspiracies as Qanon. (Credit: YouTube)

There are far too many details to mention here, too many connections between the principal players; you’ll just have to read “Evil Geniuses’ to get the whole story. As Kurt Anderson himself says several times the story reads almost like a conspiracy theory except that, with the exception of a few individuals like the Koch brothers, all of the conspiring was done in public, there was virtually no attempt made to hide anything. Several times Mister Anderson points to the character of Gordon Gekko in the movie ‘Wall Street’ claiming that ‘Greed is Good’ as an example of the brazen economic immorality that has dominated right wing politics for the last 40 years.

Actor Michael Douglas as Wall Street executive Gordon Gekko. The unfortunate thing is that there are literally thousands of ‘businessmen’ who look upon Gekko as a role model.

I do have a few small criticisms of ‘Evil Geniuses’ however. For one thing Mister Anderson needs to learn how to present data in either graph or table form. Throughout ‘Evil Geniuses’ we are giving a good deal of statistics about GDP or unemployment or income inequality exclusively in prose form, not the easiest way to absorb a large number of facts. I know that Mister Anderson is a magazine writer and editor not a scientist, but he must know some science journalists who could give him a few pointers on how to use graphs and tables.

Let me give one example. Anderson discusses a survey where people in the US are shown pie charts illustrating the wealth breakdown in two countries, i.e. how much the top 1% own, the next 10% own on down to the people at the bottom. The people surveyed aren’t told which countries are represented, they are in fact the US and Sweden, and are asked, based on the information from the graphs only, which country they would rather live in. Of course more than 90% chose Sweden. Well I think that the point could have been made more effectively if the pie graphs themselves had been shown! If Anderson had access to the survey’s results he could have gotten access to the pie graphs and just shown them! Really, in my opinion a dozen or so graphs or tables would have greatly improved the punch of ‘Evil Geniuses’.

See how much better it is to show data rather than try to talk about it! A picture is worth a thousand words after all. (Credit: Morningside Center for Teaching Social Responsibility)

 Other than that I give my highest approval to ‘Evil Geniuses’ by Kurt Anderson. It is without doubt an important and well researched book in these trying times for our country. In addition to being important however it also succeeds in being an absorbing, enjoyable book, a combination not at all easy to accomplish.