Are red or blue states better?

 From Applied Sentience

Source: Applied Sentience

In comparing the quality of life between Red vs Blue states, I’ll be grouping all 23 indicators into 4 main categories:

• 4 Crimes Indicators,
• 4 Social Indicators,
• 7 Health Indicators
• 8 Economic Indicators.
• Plus the Research Methodology
• And the Summary of All 23 Indicators

Intro Comments

As with every other indicator in this study, all of the data collected comes from official government sources and not potentially liberal universities, think tanks, etc.  Specifically, the Bureau of Econ Analysis at the Dep of Commerce (GDP per Capita), the US Census (Median Income, HS Graduation, College Graduation), the Bureau of Labor Statistics at the Dep of Labor (Unemployment), the Dep of Agriculture (All Poverty, Child Poverty), and the US Interagency Council on Homelessness (Homelessness).  All data sets are the most recent I could find, and from 2018 or 2019, except for the two graduation rates (2017).

If you have any questions about purchasing power parity, what year $$’s are bench-marked at, real vs nominal figures, etc etc, then please check out the respective data sets linked to in this Excel document on Economic Indicators.  Since this is just a personal side project I’m doing for fun, I decided to defer to whatever that gov agency decided was the best to collect and present that stat when comparing states.

One interesting indicator that was ultimately rejected was 1) a State Gov’s Federal Dependency, ie funding per capita a state receives from the national government.  In some recent debates, states that take the most money are, in a twist of the common phrase, “welfare states.”  However, I couldn’t find direct gov stats, only third party studies (which themselves used such stats).  Similarly, I couldn’t find anything about per capita welfare program participation, except for 2) Food Stamps.  I rejected using this since I didn’t want to be seen as cherry picking this particular program.  Both Indicators are analyzed in the Controversial Indicators post (not yet up).

Note: A political party can do “vastly,” “clearly,” or “slightly” better.

GDP per Capita  –  Democrats do Vastly Better

Median Household Income – Democrats do Vastly Better

Unemployment  –  Democrats do Slightly Better

All People in Poverty  –  Democrats do Vastly Better

Child Poverty  –  Democrats do Vastly Better

Pop Graduated HS  –  Democrats do Slightly Better

Pop Graduated College  –  Democrats do Vastly Better

Homelessness – Republicans do Vastly Better

[Read the rest of the article here]

What I find especially interesting about this analysis is that the poorer States are right-wing.  In the rest of the world, the poor support left-wing parties.  In America, the poor vote for the Republican Party.  Some of that has to do with religion, as the book Deer Hunting with Jesus so cleverly shows.  Some with the resilient but (these days) inaccurate belief that everybody in America can escape poverty if only you work hard enough.  What it means, though, it that the Republican Party is a coalition of the rural precariat and the rich who prey on them.  

One of the reasons America is so strange to outsiders is this bizarre nexus.  Another is the extreme inequality not just within the States, but between them, too.  And the rich keep in power by frightening the (white) poor with bogeymen:  Mexicans, Blacks, "liberals", "elites", "gays", the ungodly; and by dragging people to vote for them using single-issue triggers, like gay marriage, abortion, critical race theory, immigration.  You then engineer your way to electoral victory by gerrymandering and denying poor people and Blacks the vote.

It's no wonder America is so dysfunctional, nor that right-wing parties elsewhere have attempted to follow the American play-book.  After all, most billionaires are perfectly happy to pay less tax than nurses and teachers, and if you can construct a political movement which achieves that, then why not?

Capitalism is working perfectly

 A cartoon from First Dog on the Moon

20 Things which will change the world by 2040

Here are 20 things in no particular order which I think will totally change the world over the next 20 years.

1.  CHEAP ELECTRICITY

 Wind costs are falling by 5-10% per annum, solar by 10% to 20% and batteries by 15% plus.  Wind's cost declines will prolly slow over the next 10 years—it's a mature technology.  But the cost declines in solar are likely to continue, and in batteries, there's a real chance they'll accelerate.  If these trends continue (and why won't they?), in 10 years electricity will cost 25% of what it does now.  If the trend decline then halves to, say 7% a year, then in 20 years, electricity will cost just 10% of what it does now.  Cheap energy supercharges economic growth.  The low oil price from 1945 to 1973 helped drive rapid and sustained growth in the world economy.  Cheap renewables will do the same over the next 20 years and beyond.

2.  EVS

They're going to be cheaper than ICEVs (internal combustion vehicles) to buy, and much cheaper to run.  They'll be replacing ICEVs  so the shifts in society might not seem dramatic.  But with AIs running them, transport as a service will become common.  You'll summon a car using your phone, and it will drive itself to where you are and then to where you want to go.  Because EVs will last much longer than ICEVs and will be significantly cheaper to run, "transport as a service" will be a popular way for people to get around.  Car sales are likely to decline by 50% plus, as TAAS takes off.  Air pollution in cities will end.  By 2040, most of the world's vehicle fleet will be electric.  Maybe hydrogen fuel-cell, but I doubt it.  The cost of building a hydrogen refuelling network will be much more costly than just attaching your car to an already existing network, the electric grid.  And the energy efficiency of the hydrogen cycle is much lower than batteries.

3.  AI

I don't think we'll have true AI, as in sentient robots.  But we will have very sophisticated computerised control systems, such as those which will allow for self-driving cars and self-landing rockets.  This has been made possible by the 5 or 6 orders of magnitude decline in the costs of and size of super computers, as Tony Seba points out.  SpaceX's ability to land and re-use its rockets would not have been possible without the advances in computing power.  These advances and changes all interact.

4.  3-D PRINTING

This cuts the cost of manufacturing metal things by at least half, because there's much less scrap.  It also reduces the stock of parts you have to keep on hand.  And allows you to make more complicated things, like SpaceX's extraordinary new Raptor rocket engines.  On the ISS, there is a 3-D printer to make spare parts.  On Mars, and the Moon, 3-D printers will be used to build habitats; to make things which would take too long or are too expensive to get from Earth; and to make things which have short production runs or are experimental.

5.  VAT MEAT, MILK AND FISH

Cheap energy will change agriculture.  Right now, 20% of Australia's tomatoes come from a factory in the semi-desert in the north of the State of South Australia, using desalinated sea water and growing the tomatoes in greenhouses.  This undertaking uses no fossil fuel at all.  Animal rearing  uses vast areas of land, is highly polluting, and contributes 20% to global CO₂ emissions.  Vat meats and fish are already starting to take off.  Their costs are declining year by year.  By 2040, they will become the norm.  

There won't be "real" meat on Mars or on the Moon or in Space Stations .  There just aren't the resources to grow it.  If vat meat, fish and milk taste like the real thing, cost about the same or less, are environmentally kinder, and involve no animal suffering, why wouldn't you switch?  This will reduce emissions by 20% while allowing the rewilding of unused fields and grasslands.

6.  CHEAP ACCESS TO SPACE

Cheap access to space will change everything.  To settle Mars, we'll need to rapidly improve a whole range of technologies, like vat meat production, genuine air conditioning (meaning far more than just heating and cooling), hydroponics, water purification, extracting CO₂ from the atmosphere, genetic modification, medicine, and so on.

By the time SpaceX's Starship is running, SpaceX will have cut the cost of launching a kilogram to LEO (Low Earth Orbit) from $22,000 to ~$20.  Whenever you have a 10-fold decrease in costs you get disruption, as new technolgies take off.   This will be a 1000-fold decrease in cost.  We're already seeing the consequences of cheaper launches in the roll-out of SpaceX's Starlink super fast internet.  The development of a space-faring civilisation will spawn new technologies we haven't even thought of.  Who would have thought 20 years ago that we would carry computers in our pockets millions of times more powerful than the first IBM computer, computers which connect us to a massive knowledge network as well as news, videos, maps, Wikipedia?   None of that was predicted.  Yet think of the businesses which have developed because of those twin inventions, the smart phone and the internet (Apple, Google, Uber, Air BnB ....).  And think also how the explosive growth of smart phone sales also drove down li-ion battery prices,  allowing EVs and grid energy storage to happen.

7.  ASTEROID MINING

With cheap access to space also comes asteroid mining.  Because the asteroids aren't in deep gravity wells like the Earth or Mars, nudging them into orbits which intersect Earth's or Mars's will be cheap.  The resources of a single medium-sized  asteroid, for example for rare earth metals, will more than equal all the rare earth metals that have ever been mined on Earth.   We will prolly stop stripping the Earth to produce metals and minerals and instead start disassembling asteroids to do that.  The world's major resource companies will be asteroid miners.

But some of these will be used in space manufacturing.  Why take stuff into the gravity well when you can build it in LEO?  Asteroid mining will be even more important on Mars, as asteroids will likely provide the volatiles needed to give Mars an atmosphere dense enough for humans to work in without needing to wear pressurised space suits. 

8. BECOME A MULTI-PLANETARY SPECIES

Our first colony will be Mars.  Read  the Red Mars trilogy to see how colonising Mars will change Earth too.  Not just in technological advances but also in social advances.  Looking down on Mars and Earth from space will change mankind's perception of itself.  As Robert Zubrin says, knowing that there is no shortage of resources because we have unlimited resources in space means that most of the causes of war on Earth will disappear.  Of course, no matter how technologically advanced and prosperous humans become, there is no reason to suppose we will ever be more intelligent, less venal, less greedy, and less petty. 

After we colonise Mars, we'll start on Venus.  That'll be much harder.  But by then we will also have colonies in the asteroid belt and large inhabited space stations in orbit round the Earth and Mars.  We will truly be a multi-planetary species.  And that will change everything.

9. TRULY GLOBAL HIGH-SPEED INTERNET

SpaceX's Starlink has kicked off a revolution in high-speed internet.  Starlink's network will be truly global, available in the Arctic and Antarctic,  the Sahara and across the world's oceans.  In countries where wired internet is only available in cities, such as most of Africa, Starlink will provide links to remote villages and towns.  It'll be expensive ($100 per month), but villages could club together to pay for it.  Those same villages are off the electric grid, too, and small solar panels and batteries will change that.  Children who do their homework by candlelight will now be able to do it by LED light, and access the internet, connecting to the ginormous encyclopedia which is the interweb.  20 years ago we didn't have Wikipedia.  Today, even if your village doesn't have a library, even if you  can't afford to buy a book, you'll still be able to study science, maths, languages, technologies.    

10.  TERRAFORMING THE EARTH

The current fall in emissions isn't rapid enough to prevent a rise of more than 1.5 degrees C, maybe even 2 degrees C,  in global temperatures.   We will need to remove CO2 from the atmosphere.  One way would be to cover desert and semi-desert areas with forests.  To do this would require desalination plants, powered by solar, which will get cheaper and cheaper over the next 2 decades.  It would be a mammoth undertaking, almost beyond our imagination.  But it will prolly be necessary.  Given the scale of the problem, any de-carbonisation method will have to be massive.  But something will have to be done to remove CO2 from our atmosphere.  Changing a planet's climate to make it more livable is called terraforming.  You might also call it geo-engineering.  Whatever; we will prolly have started to do it by 2040.  We will have no choice.


11.  GENE THERAPY & GENETIC MODIFICATION

The colonisation of Mars and the growth of space travel will accelerate the development of gene therapy, because radiation on Mars and in space will cause genetic damage.   Treating that will become imperative, and as technology often responds to extreme need, it will likely be developed, because it has to be.  Gene therapy will provides cures for cancer, diabetes, heart disease, and inherited genetic diseases like cystic fibrosis. 

Creating plants which will grow in our domes on Mars and on space stations to provide us with food will be important to the pioneers.   Dwarf wheat, larger tomatoes, low-rise almond/fruit trees, and so on and so on.  The need for these advances will drive rapid change.  But the advances themselves will drive down the cost of food back here on Earth.  


12.  THE RISE OF AFRICA

Africa is the second-largest continent, in population and size, compared to Asia.  For decades, Africa has been an economic laggard.  But solar favours countries near the equator.   Seasonal storage needs are much less than in high latitudes further from the equator.  8 hours of storage will be enough for most places within 30 degrees north and south of the equator.  Cheap electricity will be even cheaper in Africa.  In addition, Africa's population is young, it speaks English as a first or second language, and it's so far behind the production possibility frontier that high speed internet and distributed solar power will be transforming.    

Until recently, Africa has lagged the world economy, but access to electricity and information will change everything.  Africa will be the new China, with high growth rates, falling poverty and  rapid development, and with that will come greater political power.  China has recognised this reality; the rest of the world has not.  That needs to change.


13.  THE END OF NEO-LIBERALISM

Neo-liberalism has been tried for 40 years.  It has resulted in greater economic and financial instability, and vastly increased inequality of income and wealth (especially in those mostly Anglophone countries which have most enthusiastically embraced it), as well as a lower growth rate.   The rising inequality has also led to increased political extremism.  Economists like to pretend that economics is separate from politics.  But the consequences of increased inequality and greater uncertainty have shown that there is a non-economic price for neo-liberalism: the rise of far right parties and policies. The dogma of small government, low taxes, and deregulation is becoming tarnished.  The Covid crisis has conclusively shown that there are some things government does better than the private sector.  Unlike the neo-liberal dogma, the private sector doesn't inevitably do things better and more cheaply than the public sector, especially when second order effects are considered.  Privatisations of state-owned enterprises have mostly failed: costs are higher, services no better, corruption worse.

Expect a gradual retreat from the extreme tenets of neo-liberalism towards a more measured and pragmatic process.  Big(ger) government is back.  The big borrowings government took up under Covid are not going to be repaid.  Instead, governments will start running deficits again.  The post WW2 pragmatic neo-Keynesian synthesis will once again modify red-in-tooth-and-claw capitalism.  

14.  A UNIVERSAL BASIC INCOME

Technological advances will cause major disruptions to job markets.  So will shifts in economic growth and development.  In the past, dire poverty among the old was reduced by the introduction of a universal basic income or social wage for old people, otherwise known as the old age pension.  A UBI in developed countries, for everyone, has so far been seen as a step too far.  But opinion is changing.  If we are truly to drain the poison of the extreme right, we will need to address the insecurity and poverty of the precariat, which will likely be worsened by the technological and economic changes I think will happen.   A UBI would do that.

15.  HYPERSONIC INTERCONTINENTAL FLIGHTS

SpaceX would like to use Starship to run suborbital long-distance flights.  Musk has said that over long distances, suborbital flights will have a lower cost than conventional jet travel.  At 20 times the speed.  Anybody want to bet it won't happen?

16.  NEURALINK

Musk is afraid that a real AI (as opposed to very clever software) would end up ruling the world and humanity would end up being no more than pets of the machines.  If we even survive.  His response to that is to develop brain-machine interfaces.  This would make us as clever as our AI overlords.  We would have chips in our brain, like a permanently embedded smartphone.  It might never get to that, but if an interface can enable a blind person to see again, or a disabled person to walk, then that would be huge.  And having a small device in your head which allows one to communicate directly with the interweb would be revolutionary.  Not sure I like the security implications of that, though.

17.   ELECTRIC PLANES

We will soon see the introduction of electric planes which will allow short flights (up to 400 km) at 1/20th the cost of jet or jet-prop aircraft of today.  They will be used to connect outlying regions to the spaceports where suborbital ultrasonic flights will depart from and arrive at.  The long-term outlook for conventional airliners isn't good at all.  What these two developments mean together is that one will be able to fly from a small town in the bush to another small town on the other side of the world in a few hours.  A hundred years ago, it took 3 weeks for a ship to sail from Australia to Europe.  Currently, it takes 24 hours to fly that distance.  With suborbital hypersonic rockets, the journey time will be down to just an hour.

18.   NUCLEAR FUSION

Nuclear fusion is the opposite of nuclear fission, where large atoms, e.g., uranium, are split into smaller atoms, releasing massive amount of energy.  Fusion is what happens inside stars like our sun, where the lightest atoms, hydrogen, are blasted together under intense heat and presure to produce heavier atoms.  And therein lies the difficulty--it's very hard to create those conditions outside the fiery heart of a star.   For 70 years, the joke goes, nuclear fusion has always been 30 years away. But maybe that's changed.  Fusion is likely to make much faster progress now that private firms and individuals are bankrolling research than it has under the aegis of giant bureaucracies, so I think we'll prolly have fusion by 2040.  We will need nuclear fusion on Mars, and to mine the asteroids.  And it will be enormously useful on Erarth, too.

19.  A RETURN TO DEMOCRACY

Winston Churchill said that democracy was the worst system, apart from all the others.  People have pointed to the Chinese and Russian dictatorships as exemplars of how to run politico-economic systems.   Yet both countries have declining growth rates.  This is particularly interesting in the case of China, which is far from being a wealthy country, and where you would expect growth to remain higher than it is, given where it is in the typical development pathway.  For all America's faults, and despite the out-and out dementia of the Right and the Republican Party, the technological developments there are breathtaking.  Perhaps people need freedom if they are to innovate.  Just a thought.  

If we drain the pus of divisiveness and far-right toxins from our democracies by reducing inequality, and again giving ordinary people hope that their lives and the lives of their children will be better, I believe that the autocratic political/social/ economic alternatives of China and Russia will be seen as what they are: relative failures.

20.  SYNERGY

All these changes will interact, just as smartphones and internet did, the one driving the development of the other.  And the interactions will spiral out of control unforecastably. changing the world in ways which will surprise and shock us.  And some of the consequences will be adverse.  But it's going to be a most interesting ride.

The great wages suppression is destroying trust

 From The New Daily

Ask nearly any employer or read the Australian Financial Review and you’ll be told Australian wages are too high.

It’s a claim the federal government listens to and is acting upon, working to weaken wages growth – one of the policies worsening inequality here.

Yet a smarter employer might answer a little differently: They would like their wage costs to be lower so their profits could be higher, but they wish other employers would pay their employees more so that those employees – consumers – could buy more stuff.

Weak domestic consumption – the inevitable result of weak real after-tax wages growth – has been our biggest domestic economic problem for several years.

Pent-up demand during COVID and the government’s cash splash is providing a temporary Band-Aid for consumer spending, but that will pass soon enough, leaving the underlying problem worse.

The Reserve Bank has been hoping – in vain – for stronger wages growth for half a dozen years.

Two years ago, RBA governor Philip Lowe was calling for caps on public sector wages increases to be removed, with wage rises of 3 per cent in both the public and private sector “a reasonable medium-term aspiration”.

“My view is that a further pick up in wages growth is both affordable and desirable,” he told the House economics committee.

Instead of various public-sector wage rise caps being lifted, some state governments have reacted to COVID by introducing wage freezes.

The Morrison government is removing the cap – but that’s a ruse to cover cutting real wages.

Instead of a cap, public servant wages rises are linked to private sector movements, the government fully aware private-sector wages growth has collapsed and will remain weak with higher underemployment and unemployment.

On top of reducing penalty rates, encouraging greater casualisation and promising euphemistically phrased “greater industrial relations flexibility”, it adds up to wages suppression while profits overall are rising.Dr Michael Keating exposed the shallowness of Treasury’s neoclassical model of the wages v jobs argument back in May when a wages freeze was being pushed.

“We’ve had 17 interest rate cuts in the past decade, the Treasury and Reserve Bank have continued to forecast wage growth while taking the cash rate all the way down from 4.75 per cent to close to zero,” he wrote in The Conversation.

And the forecast wage growth never happened.

Very large increases in real wages could certainly dent economic growth, as it did in the early 1970s.

“But mostly, wage rises boost consumer demand by more than they cut business investment,” Dr Keating wrote.

“Indeed, they can actually push business investment higher. This is because profits are often more responsive to the increase in capacity utilisation that results from increased consumer demand than to a lower profit share.

This seems to explain the economic stagnation we have experienced since the global financial crisis. Low wage growth has held back consumer demand, which has also held back business investment.”

The resistance to paying higher wages is continuing to play out most publicly in the agricultural sector, with farmers relying on Pacific Islanders and backpackers to work for less than Australians will accept.

During the 2019 election campaign, then finance minister Mathias Cormann attacked Labor’s “living wage” proposal with the standard line that higher wages would mean higher unemployment.

Labour force flexibility was government policy.

Wages suppression has broader implications than economic growth, though. In a broader speech than normally associated with RBA governors, Dr Lowe explored the importance of “the community’s trust that real living standards will improve over time” in a 2018 speech.

Not everyone was sharing the positive assessment of economic growth that year. Dr Lowe produced a graph that showed why: Since 2012, there had been little change in real hourly earnings.

“The wage increases that have occurred have been broadly matched by inflation,” he said – and missed the fact that the real world was worse than that, because he overlooked the impact of the tax system.

As repeatedly explained in this space, a wage rise that matches inflation means take-home real wages – living standards – fall thanks to the tax man.

That regular mistake aside, Dr Lowe ventured into the role wages suppression plays in sowing the seeds of Trumpism: “Flat real wages are diminishing our sense of shared prosperity. The lack of real wage growth is one of the reasons why some in our community question whether they are benefitting from our economic success.

“This is not a uniquely Australian story. A similar thing has happened across most of the advanced economies.

“As a result, too many citizens around the world have diminished trust in the idea that the policies that have underpinned growth over the past 30 years are working for them.

“They feel more uncertain about the future and, in some countries, are also having to deal with very high housing prices. This unease is despite unemployment rates in many advanced economies being the lowest in many decades.

“The diminished trust in the idea that living standards will continue to improve is a major economic, social and political issue. It underlies some of the political changes we are seeing around the world. It is also making it harder to implement needed economic reform. It is in our collective interest that this trust is restored.”

Unfortunately, there is no sign of the Morrison government being committed to restoring that trust. The government seems to listen more closely to those who say wages are already too high.

Unemployment & underemployment

 When I started in economics and investments, the unemployment rate was a reliable economic indicator.  The percentage of the labour force who worked part-time was small.  Most ppl had full-time jobs.  The definition of employment is one hour of work per week.  When most ppl worked full-time that was a workable (though odd) definition.  But that's all changed.  A person might work only an hour a week but would like to work 10 hours or 20.  And those ppl are called 'underemployed'.  

The Parliamentary website has a clear explanation.

The Australian Bureau of Statistics (ABS) identifies two distinct groups as underemployed:

• part-time workers who wanted to work more hours and could start additional hours either in the reference week or in the subsequent four weeks; and
• full-time workers who worked part-time hours in the reference week for economic reasons (such as being stood down or insufficient work being available). It is assumed these people wanted to work full-time and would have done so, had the work been available.

The underemployment rate has been steadily increasing over time, as the gig economy increases the size of the precariat.  Note that all these charts end before the covid crash.

The underutilisation rate is the sum of the unemployed and the underemployed, expressed as a proportion of the labour force.  It's scarcely surprising that with so many in the labour force 'underutilised' that wage increases are negligible.

This chart from Greg Jericho in The Guardian shows the inverse relationship between the underemployment rate and wage inflation.  The data in this chart end in 2018.

Given that the share of GDP going to profits is at a record high, and the share going to wages at a record low, it's obvious that we need to run the economy 'hotter', and it's equally obvious that monetary policy is not achieving this.  Monetarism is a central plank of neo-liberalism.  Time to dump this failed policy prescription.

Most political unrest caused by soaring inequality

I was a believer in the neo-liberal consensus (though with some doubts) until the GFC (global financial crisis) of 2008.   The GFC showed conclusively that many of the tenets of neo-liberalism were false.  Markets are not "self-regulating", banks are not to be trusted to manage their affairs properly,  the main burden of recovery from the crisis fell on the poor, because governments had to take over failing companies and the explosion in deficits which resulted wasn't borne by the rich but by the poor, through welfare cuts.  Since the GFC inequality has risen sharply, and our political discourse has become much more rancid and toxic.  I've talked about this often before, but this article from the Guardian puts it rather well.

The popular protests that erupted in 2019 and have continued to rumble – from France and Spain in Europe to Hong Kong and India in Asia; from Chile, Colombia and Bolivia in Latin America to Lebanon, Iran and Iraq in the Middle East – have perplexed analysts. Because they have been so far-flung and have lacked an iconic moment like the fall of the Berlin Wall, the common thread hasn’t been obvious. But there is one: rage at being left behind. In each instance, the match may differ, but the kindling has (in most cases) been furnished by the gross inequality produced by global capitalism.

Consider Lebanon. The demonstrations that erupted there in October were triggered by the government’s plan to tax calls made through WhatsApp and other internet services, but they quickly mushroomed into a broader protest against high unemployment, sectarian rule, corruption, and the government’s failure to provide basic services like electricity and sanitation.

According to the World Inequality Database, the top 1% of Lebanon’s population receives about 25% of the nation’s income. Six Lebanese billionaires have a combined personal wealth of about $11bn, according to Forbes. Three of those billionaires are the sons of Rafik Hariri, who made a fortune in construction and twice served as Lebanon’s prime minister before being assassinated in 2005. (A fourth son, Saad Hariri, was prime minister until his recent resignation amid reports that he had given more than $16m to a bikini model he had met while vacationing in the Seychelles.) Protesters maintained that the pampered elite, rather than strapped working people, should foot the bill for the country’s economic problems.

In Chile, an increase in subway fares catalyzed protest. The popular discontent caught many observers by surprise, since Chile has experienced years of steady growth and has a reputation for good governance. In fact Chile, with a per capita income of $15,800, is a member of the Organization for Economic Cooperation and Development for prosperous nations. Of the OECD’s 36 members, however, Chile has one of the highest levels of inequality. Its economy is dominated by a group of powerful oligarchs, among them its current president, Sebastián Piñera, who is worth an estimated $2.8bn (amassed largely in the credit card business). Despite their country’s wealth, working Chileans have had to grapple with rising utility costs, stagnant wages and paltry pensions. The protests have registered their fury.

In Hong Kong, months of demonstrations have had one overriding goal: resisting China’s encroachments on the city’s autonomy and democratic institutions. That the protests have become so virulent and lasted so long, however, reflects deep exasperation with the region’s sky-high cost of living. By some accounts, Hong Kong is the world’s most unaffordable city, with rents higher than London and New York for apartments half the size. It may also be the world’s most unequal city: its 93 or so billionaires have a combined worth of more than $300bn while nearly one in five residents lives in poverty.

Worldwide, the numbers are stark. As calculated by Oxfam, 26 people have the same amount of wealth as the 3.8 billion people in the world’s bottom half. In the United States, the three richest people have the same amount of wealth as the bottom 160 million.

And the political fallout continues to spread. Not only the current round of street protests but also such recent upheavals as Brexit, Trump, the gilets jaunes in France, and rightwing populist governments in Hungary, Poland and Italy all have roots in the financial crash that was set off by the fall of Lehman Brothers in September 2008 and followed by the world’s worst economic contraction since 1929.

In the US alone, the great recession erased about $8tn in household stock-market wealth and $6tn in home value. From 2003 to 2013, inflation-adjusted net wealth for a typical household fell 36%, from $87,992 to $56,335, while the net worth of wealthy households rose by 14%. Workers without college degrees and low-income Americans were especially hard hit.

In a recent New York Times article about Vladimir Putin’s growing worldwide stature, the former Kremlin adviser Gleb Pavlovsky sought to explain why Putin turned away from his earlier aspirations to join the western family of nations and toward his current brand of authoritarian nationalism. The “decisive threshold” was the 2008 financial meltdown, Pavlovsky said. Before it, Putin saw America as running the world economy. “Suddenly it turned out: no, they are not running anything.” At that moment “all the old norms vanished” and Russia set about creating its own norms.

Many members of the liberal establishment in America [and elsewhere!] have failed to come to terms with the waning appeal of the free-market model. They dismiss populism as a sort of exogenous disease to be cured by appeals to reason and facts rather than recognize it as a darkly symptomatic response to a system that has failed so spectacularly to meet the basic needs of so many.

[Read more here]

"Trickle-down" doesn't work.  The increased incomes of the rich haven't led to increased incomes for the poor.  Rather the opposite.   Rising inequality hasn't led to higher growth, but lower growth.  Rising inequality hasn't produced higher productivity growth as it was supposed to—higher inequality supposedly being the goad which pushes people to greater efforts—but lower.  The neo-liberal consensus had comprehensively failed.  

The Left will go on losing elections until it starts caring about the poorest and most disadvantaged.  Those left behind—the precariat—will continue to support extreme parties on the right and left in the hope that someone will do something about their situation. 

Source: Green Left