Wednesday, November 30, 2011

Political Panders

Pandering for Reelection
Statements listed below are demonstrably false, either by peer-reviewed scientific research, fact-based logical reasoning, or a preponderance of expert opinion. Panderbear knows the latter is appeal to authority; however, when there exists a consensus among experts in a given technical field, giving their opinions greater weight than pandering politicians seems fair. Panders listed here are the most longstanding, egregious, and destructive. They are used to argue for a lot of bad public policy. Each and every statement is false and people using them are pandering. Beware!

  • Cutting taxes will stimulate the economy and reduce unemployment.
  • Cutting regulations will stimulate the economy and reduce unemployment.
  • The stimulus package didn't work.
  • The Affordable Care Act is a government takeover of health care.
  • Taxes are historically high.
  • Illegal immigrants taking Americans' jobs are a major cause of unemployment.
  • Raising taxes on the rich and corporations will hurt the economy.
  • Raising taxes on the rich and corporations will increase unemployment.
  • High taxes make American companies less competitive in global markets.
  • Making the rich pay higher taxes is class warfare.
  • Flat taxes are fairer than progressive tax rates.
  • The GOP isn't the party of the rich.
  • Redistribution of wealth is inherently bad.
  • Income divergence doesn't matter.
  • A large wealth gap doesn't matter.
  • The American Dream is alive and well.
  • Fox News is Fair and Balanced.
  • American voters are open-minded.
  • Racism is dead in America.
  • Racial discrimination is dead in America.
  • Sexual harassment is dead in America.
  • Sex discrimination is dead in America.
  • Liberals are bleeding hearts.
  • Compromise in Congress is bad.
  • Demanding political pledges leads to better public policy.
  • All politicians are liars.
  • Americans enjoy higher social mobility than other countries.
  • Private enterprise can do everything better than government.
  • There is no downside to American Exceptionalism.
  • We're still in a recession.
  • We have a spending problem, not a tax problem.
  • People are unemployed because they are lazy.
  • The welfare program is a significant contributor to the deficit.
  • Free markets work better with fewer regulations.
  • Capitalism works better with fewer regulations.
  • Voters always act in accord with their own best interests.
  • America has nothing to learn from other countries.
  • The foreclosure crisis is the fault of homeowners and government mandates.
  • Many scientists engage in long-lasting conspiracies and produce junk science.
  • Labor unions are bad for the economy.
  • Raising the minimum wage results in job losses.
  • America has the best schools in the world.
  • America has the best healthcare in the world.
  • A rising tide lifts all boats.
  • Class warfare is conducted by the political left.
  • The U.S. has greater social equality than other countries.
  • The U.S. has a level economic playing field with equal opportunity for all.
  • The 47% of households paying no federal income tax are getting a free ride.
  • President Obama is a big liar.
  • President Obama has broken all his promises.
  • President Obama's appointments have gone to a bunch of socialists.
  • Smaller government is inherently better government.
  • Corporations are people too.
  • Social Security is broke.
  • The Founding Fathers were for small government.
  • The Founding Fathers were against a strong central government.
  • Voter fraud is a big problem.
  • The use of torture increases our national security.
  • Waterboarding isn't torture.
  • The Founding Fathers were politically conservative.
  • President Obama created most of the national debt.
  • Affirmative action is reverse discrimination.
  • Every issue is a matter of opinion.
  • A scientific theory is just somebody's guess.
  • Most welfare recipients are welfare queens.
  • Illegal immigrants receive welfare.
  • Illegal immigrants receive Social Security
  • Illegal immigrants commit violent crime at high rates
  • Voters want to be told the truth.
  • There should be no difference between principles and public policy.
  • Guns don't kill, people do.
  • Global warming is a hoax.
  • There is controversy in the scientific community about global warming.
  • Politicians do not do what they were elected to do.
  • Republicans consistently support states' rights.
  • We can have all the government services we demand and also cut taxes.

Panderbear created this list in just a few minutes. Many are addressed in previous posts. Some are not (yet), but Panderbear has researched them all.

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Tuesday, November 29, 2011

Atheists Underrepresented

Religion is one of the most pandered issues in American politics. Candidates for the Republican nomination compete for the title of most religiously pious. President Obama professes to be a Christian. Of course, if he didn't he wouldn't be president. Though several presidents, none in recent history, have had no particular religious affiliation, they all claimed to be Christians.

U.S. Religious Affiliation

In an interactive map entitled, "Topography of Faith," USA Today presents the results of an extensive Pew poll involving over 36,000 American adults. For the country as a whole and for individual states, percentages are given for each religion including Christian, Muslim, Jewish, and several others.

Also included in the Pew poll are "unaffiliated" which includes atheist, agnostic, and "nothing in particular." For the nation as a whole 16% of those polled, that's about one in six and the 4th largest group just behind mainline Protestant, stated they were unaffiliated.

Of the 535 members of Congress exactly one is openly atheist. Panderbear concludes from these numbers that atheists and other non-affiliated people are underrepresented in the U.S. Congress by almost two orders of magnitude. This may make atheists the most underrepresented segment of the population in America. In a country that professes freedom of religion as a fundamental right, this seems more than a little hypocritical.

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Monday, November 28, 2011

Truth Quotient History - Candidates

The chart shows the Truth Quotient (TQ) history for each of the leading candidates in the 2012 presidential election race over the past two and a half months. In order to have discernible resolution at the low end a logarithmic TQ scale is used. Also note that the data points for different dates are equally spaced even though the time intervals are not equal. Panderbear is only able to do so much on his laptop. As benchmarks, the TQ histories for the Democratic National Committee (DNC), Republican National Committee (RNC), and Chain Emails are included.

The data are bracketed by the DNC results on the high side and Chain Emails on the low side. RNC results are somewhere in the middle, but well below the flip-of-a-coin mark which lies at a TQ of 1.0. The chart shows three distinct non-overlapping groups: those who tell the truth most of the time - Huntsman, Obama, Paul, and Romney; those who are somewhat less reliable than a coin flip - Perry and Gingrich; and those who, to put a generously, are truth-challenged - Santorum, Bachmann, and Cain.

Panderbear is intrigued by the consistency of the three tier grouping. Though Paul and Romney slipped a bit during the period covered by the chart they are in no danger of transitioning to a lower tier group. The middle tier is especially tightly grouped though Gingrich moved gradually from the top to the bottom of this group. Surprisingly, to Panderbear at least, in the lower truth-challenged tier Bachmann actually gained ground while Cain slumped.

To Panderbear's eye there still appears to be no particular correlation between the candidates' TQ and their standing in the polls (not shown). Jon Huntsman leads the TQ rankings, but is stuck near the bottom in the polls. Cain is barely clinging to top tier status in the polls even while he continues in the TQ cellar. Gingrich's surge in the polls is not reflected by so much as a ripple in the TQ rankings. So far none of the data contradict Panderbear's preliminary conclusion that Republican voters don't know or just don't care whether their candidate choice tells the truth or not. Sad.

Friday, November 25, 2011

Presidential and Pundit Panderer Polls




Thursday, November 24, 2011

Xenophobia and Immigration


Xenophobia Leads to Bad Immigration Policy



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Wednesday, November 23, 2011

Employment Policy Options

In testimony before the Senate Budget Committee last week, Doug Elmendorf, Director of the Congressional Budget Office (CBO), confirmed that policies informing President Obama's jobs plan would be far more effective than policies favored by Republicans. In the table are CBO estimates of the potential effects of various policy options on employment.

The single most effective way to create jobs is to increase aid to the unemployed, because they are most likely to spend the money and stimulate the economy. Democrats favor extending unemployment benefits. Republicans are opposed. Extending Obama's payroll tax reductions for employees and reducing employer's payroll taxes for businesses that increase their payroll are also quite effective. Continuing reduced payroll taxes for employees is the only tax cut that Republicans oppose. Next most effective at creating jobs would be additional refundable tax credits to lower and middle income households.

Among the policies that according to Elmendorf's testimony would have little or no effect on employment are reducing taxes on business income and reducing tax rates on repatriated corporate foreign earnings. Republican claims in support of these actions are pure pandering. Republican prescriptions would have little effect beyond further enriching wealthy individuals and multinational corporations, their corporate officers, and their stockholders.

By refusing to pass the president's plan Republicans are hurting the economy and causing unemployment to stay high longer than necessary.

Employment Policy Options

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Tuesday, November 22, 2011

First, Do No Harm


Congress Doing Nothing Reduces Deficits

  • $1.2 trillion from letting sequestration take effect; and
  • $0.9 trillion in lower interest payments on the debt.


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Monday, November 21, 2011

Bernie Sanders PSA

Panderbear posts the occasional anti-pander public service announcement. This one is from Senator Bernie Sanders of Vermont.

Bernie Sanders on the Budget Deficit

Amen, Bernie.

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Friday, November 18, 2011

Death of the American Dream




The strength of the link between individual and parental earnings    


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Thursday, November 17, 2011

Coddle the Rich, Bust the Budget

Tax Breaks for the Rich Bust the Budget
Two favorite panders of so-called fiscal conservatives are: 1) high corporate taxes make American companies less competitive in the world market; 2) high taxes on wealthy "job-creators" kills jobs. Panderbear pointed out previously that most economists consider those notions nonsense, and with good reason.

Historically there is no correlation between federal tax rates and employment. Tax cuts for corporations went directly into huge bonuses and whopping salaries for corporate officers and into stockholder dividends, not into job creation. Wealthy individuals said thanks a lot and put the money in their pockets, not into hiring. Tax rates for individuals and corporations began dropping precipitously 30 years ago with President Reagan's tax cuts, plunged under President Bush II, and are now at historic lows. If cutting taxes on the rich creates jobs, how is it we have 9% unemployment while corporations sit on record amounts of cash?

Nominal tax rates and effective tax rates are two different things. Many corporations do not pay anything close to the top corporate tax rate of 35%. Notoriously, General Electric in two consecutive years reported billions of dollars in profits and yet paid zero federal income tax. That's not 35%. That's 0.0%. Likewise, wealthy individuals seldom pay anything close to the 35% top marginal rate. First, many of the rich can turn most or all of their income into capital gains which are taxed at only 15%. That's why billionaire, Warren Buffet, paid an effective rate of just 17%. You may be paying a higher effective rate than that. Second, because there are no income limits on deductions, the rich and their accountants can find loopholes and tax dodges to reduce their tax bill even further. Buffett says we should stop coddling the rich. Panderbear thinks Mr. Buffett is a very wise man.

The chart, from Tim Dickinson's November 9, 2011  Rolling Stone article, "How the GOP Became the Party of the Rich," gives some idea of the magnitude of potential tax revenues lost to tax breaks going mainly to corporations and high-income individuals. These subsidies of the monied-class are greater than all discretionary spending, even larger than the defense budget. Eliminating those tax breaks would double the amount of income taxes collected, easily wiping out the deficit and creating huge surpluses. Panderbear thinks that lowering nominal tax rates while making them more fair and progressive and eliminating most loophole-creating deductions is a better, more transparent approach to sustainable fiscal policy.

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Tuesday, November 15, 2011

Truth Hurts

Panderbear was curious as to what correlation, if any, exists between recent poll standings of candidates for the Republican nomination and their Truth Quotient ratings. Does the truth hurt or help? In the graph both poll percentage and Truth Quotient are plotted for each candidate. Truth Quotients have been multiplied by 10, because they are so small compared to poll numbers.

Republican Voters Don't Reward Those Who Tell the Truth

Poll percentages (blue segmented line) decline steadily from left to right, because Panderbear ordered them that way. The Truth Quotients (green segmented line), however, displays a slight upward trend. This suggests an inverse relationship between truth-telling by a candidate and his or her popularity. Before we go too far down that road note that Jon Huntsman is an outlier. Were he not in the nomination race with his Republican voter-annoying habit of telling the truth, the remaining data points would show no particular trend up or down.

Panderbear concludes that either Republican voters who were polled do not know or do not particularly care which candidates are more truthful. The data support the proposition that Republicans polled by Gallop who expressed a preference represent an opinion demographic more interested in having its biases confirmed than in being informed by the truth. Panderbear is saddened by this result, but not surprised. Should Republicans ultimately nominate Ron Paul or Jon Huntsman they will be vindicated. Panderbear would be surprised if that happened.

Saturday, November 12, 2011

Richest 400


GOP Policies Make the Rich Even Richer


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Party of the Rich

GOP is Benefactor of the Rich
In his November 9, 2011  Rolling Stone article, "How the GOP Became the Party of the Rich," Tim Dickinson gives a blow-by-blow account of how the GOP transformed from a fiscally conservative party into the great benefactor of the rich at the expense of the rest of us. It is a damning story liberally annotated with quotes of old-time Republicans who are aghast that the modern Republican Party has become the tool of the wealthy.

Republican tax-related policies have hollowed out the middle-class transferring trillions of dollars of wealth from the middle-class and poor to the already wealthy, a fact that has belatedly begun to dawn upon the American public and supplies juice to the Occupy Wall Street movement. The results of our 30-year experiment with trickle-down economics are in. Fail. As Dickinson points out trickle-down turned out to be gusher-up.

The table illustrates the Republicans' ideas of what programs should be on the deficit reduction table and which subsidies for the rich should be exempt. Compare corresponding entries in the two columns. Decide for yourself which is more important, cutting the National Institutes of Health budget or keeping unlimited itemized deductions for top-bracket taxpayers, eliminating energy grants that help poor families afford heat or continuing subsidies for oil and gas companies. Note that you would have to not just cut, but zero-out the entire budgets of the agencies and programs to roughly match the direct loss of revenues due to the corresponding tax breaks and subsidies for corporations and the rich.

To be sure the Republican tax war on the non-rich has paid off handsomely for the super-rich and their pandering political lackeys. Panderbear prays the advent of OWS, informed by the historical fact of wealth redistribution upward and accelerating income divergence, signals the beginning of the end for party of the rich economic policies that unfairly tilt the playing field in favor of the rich and are killing the American Dream.

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Friday, November 11, 2011


Some folks are pander-ready. Their belief systems make them easy marks for panderers. Those who habitually accept dogma without benefit of fact-based logical reasoning are easily led astray by pandering politicians who appeal to emotion (fear, anger) or to authority (God, Bible) while eschewing facts and logic.

Everyone is subject to confirmation bias, a natural tendency to accept assertions in accord with preconceived notions while dismissing contrary information. Confirmation bias is especially rampant among the political right. There is a reason the Religious Right is a significant political faction, while the religious left is not. There is a reason scientists are far more liberal than voters as a whole. There is a reason conservatives are quick to blame problems on one out-group or another, rather than their own choices at the polls. There is a reason that right-leaning viewers have made Fox News the most profitable cable network news outlet. More so than liberals those on the political right prefer confirmation to troubling and confusing facts that contradict their biases.

Confirmation Bias

Panderbear makes a point of reading scientific studies documenting personality differences between political liberals and conservatives. Liberals are more comfortable with ambiguity than conservatives who prefer more black-and-white certainty. Unfortunately, the world is too complex for bumper-sticker politics. Conservatives have a higher tolerance for inequity than liberals. This allows them to rationalize inequality as the fault of the less fortunate, to blame the victim. While Panderbear experiences fear and anger, prefers simplicity to complexity, and is not immune to confirmation bias, he thinks rational thought informed by verified facts is a sounder basis for public policy than either religion or emotion.

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Thursday, November 10, 2011

Truth Quotient Rankings - Politicos

Both Joe Biden and Mitt Romney escaped the flip-a-coin TQ of 1.0. Joe climbed back up into anti-panderer territory while Mitt Romney continued his slow, inexorable decline ending up in Panderers Row. Congressional leaders mostly remained silent except for Harry Reid who issued a "mostly false" statement and consequently fell into a tie with Sarah Palin. How embarrassing. Newt Gingrich took a real dive, plunging below both Rick Perry and the RNC. Meanwhile Herman Cain consolidated his last place position among individuals and continued his relentless pursuit of chain email's level of verisimilitude. Panderbear notes that both Newt's and Cain's plunges in TQ were simultaneous with significant increases of their popularity in Republican polls.

Panderbear regrets his slight of John Huntsman and has added him to the standings. Huntsman comes in with an outstanding TQ of 2.0 and takes over first place among individuals, relegating President Obama to second. Huntsman is second overall only to the DNC. Apparently, Huntsman's habit of telling the truth has not endeared him to Republican voters as he trails badly in the polls. Panderbear is not surprised.

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Wednesday, November 9, 2011

The Great Divergence - Part III

In parts I and II Panderbear discussed the causes of and cures for the Great Divergence, the steady 30-year growth in income disparity in the U.S. But why should we care about income divergence? What's wrong with large income disparities? In his 2009 book, The Spirit Level, and in his July 2011 TED talk, How Economic Inequality Harms Societies, Richard G. Wilkinson, Professor Emeritus of social epidemiology at the University of Nottingham, addresses the question of why extreme income inequality should be avoided.

The graph plots an index of health and social problems based upon life expectancy, math and literacy scores, infant mortality, homicides, imprisonment, teenage pregnancies, trust, obesity, mental illness, alcohol and drug addiction, and social mobility for 1st world countries versus income inequality.

U. S. Income Inequality Worsens Health and Social Problems

The obvious takeaway is that increasing income inequality correlates strongly with increasing health and social problems. People are happier and healthier in countries where income disparity is lower. Another rather shocking fact is that the U.S. is an outlier and not in a good way. Of all the countries plotted the U.S. has by far the highest income inequality and the worst index of health and social problems.

Unless Americans soundly reject Republican economic policies that cause rising income divergence, we can expect unhappier times ahead. As Wilkinson wryly put it, "If Americans want to live the American Dream, they should move to Denmark."

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Tuesday, November 8, 2011

Polarized Opinion

Fox News
In the beginning there were ABC, NBC, and CBS. These were the national TV news sources in Panderbear's youth. It didn't really matter which network you watched. All three delivered pretty much the same content and fit it into half an hour each evening. All three attempted to serve the largest possible audience. News consumers got a consistent just-the-facts-ma'am message without opinions or editorials. Viewers were treated as adults able to interpret for themselves the meaning of the facts presented. Network news then had a homogenizing effect on U.S. public opinion.

No more. Now each of a plethora of cable news networks targets a particular opinion demographic. Fox News has captured the far-right audience share, MSNBC the left. Viewers can now immerse themselves 24 hours a day in news with a message tailored to their biases. No troubling dissonance with stories or facts contrary to one's own philosophy. This self-selection arises from the human evolutionary trait called confirmation bias. People are simply more comfortable receiving input consistent with what they already believe.

The problem is that news selected and presented to appeal to a particular opinion demographic is no longer news. It's propaganda. It's 24/7 pandering, selection bias, and opinion presented as fact. Self-selection of bias confirming news sources leads to public opinion polarization. Each audience increasingly believes its own rhetoric, its own echo chamber, and discounts contrary opinion. Ultimately people feel free to discard or condemn science and fact-based logical reasoning inconsistent with their particular received doctrine.

Panderbear thinks fractionation of news consumers into strict, mutually exclusive and mutually intolerant groups is hurtful to a democracy with government whose proper functioning requires an informed electorate and tolerance for political compromise. Sadly the trend toward news sources with finely tuned messages is likely to continue. Panderbear stopped watching TV news decades ago.

One positive development is the proliferation of fact-check blogs and websites, though true believers often scoff and dismiss them as liberal and biased. The ultimate solution is for people to recognize their own confirmation bias and take steps to counter it. They must get actively involved in their own news aggregation. They must challenge all opinion and do their own fact-checking from multiple sources. Most basic of all, they must learn to value facts and reason above emotion, above bias, and above dogma. Panderbear doesn't expect that to happen any time soon.

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Monday, November 7, 2011

American Exceptionalism

American Exceptionalism
American Exceptionalism is self-indulgent arrogance in the guise of patriotism. It is also a pander much favored by politicians, especially those on the political right where "real" Americans live. Panderbear thinks America is exceptional in many respects and he is just as patriotic as the next bear, but going around telling ourselves and the world how much better the U.S. is than other nations is counterproductive.

High national self-esteem is mostly a good thing, right up to where it leads to international boorishness and bullying. Being enamored of our exceptional military might and the exceptional righteousness of our cause led to foreign adventures in Iraq and Afghanistan that have cost us dearly in both lives and treasure.

National hubris leads to a false sense of infallibility and the belief that other nations' experiences are irrelevant. Conservatives openly mock the idea that we may have something to learn from our European friends. Economic and social problems in the U.S. plague other nations as well. Ignoring their successes and failures in facing these same challenges is foolish. Exceptionalism blinds us to our faults and to potential remedies. If you cannot see a problem, you cannot solve it. If someone else has solved it, why reinvent the wheel?

Even our best friends and allies have noted our tendency toward national arrogance. Winston Churchill said, "The Americans will do the right thing, after they have exhausted all the alternatives." Like Churchill, Panderbear thinks Exceptionalism impedes the pragmatism and open-mindedness essential to efficiently and effectively address our challenges. American Exceptionalism is insulting to friends and foes alike and is contrary to the egalitarian ideals that make America truly exceptional.

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Friday, November 4, 2011

Dubious Dogma

Oracle of Omaha
Do higher taxes discourage business investment and hiring? Would eliminating regulations lead to job growth? Cutting taxes and regulations are on the n-point plan of every candidate for the Republican nomination. For decades Republicans have claimed taxes on corporations and the wealthy and business regulations are job killers. These are the twin pillars of Reaganomics, articles of faith among conservatives. At first blush these dual tenets of conservative economic thought seem plausible. But are they actually true?

Bruce Bartlett, economist in both the Ronald Reagan and George H. W. Bush administrations said, "Republicans favor tax cuts for the wealthy and corporations, but these had no stimulative effect during the George W. Bush administration, and there is no reason to believe that more of them will have any today." In fact, most economists agree that tax cuts are not stimulative; increased government spending is. Regarding the notion that eliminating regulations will lead to significant job growth, Bartlett said, "It's just nonsense. It's just made up." He should know. He was there.

The fundamental flaw in these two bits of conservative economic dogma was pointed out by no less than the Oracle of Omaha, perhaps the most successful investor of all time, billionaire Warren Buffett. Taxes and regulations are simply not relevant in determining the timing of business investment. The overriding factor is the expectation of growing markets for products and services. The Bureau of Labor Statistics reported that for the first 6 months of 2011 1,119 layoffs were attributed to government regulations vs 144,746 attributed to poor "business demand."

Corporate profits have never been higher. Research firm Birinyi Associates and rating firm Moody's say cash reserves of U.S. corporations are at an all time high, well over a trillion dollars. So why aren't they hiring? Well, in fact they are, but due to federal and state budget cutbacks government funded jobs have been disappearing almost as fast. Nevertheless, employment in the private sector needs to grow faster. The reason it isn't is actually pretty obvious. Business investment and hiring won't go up until Corporate America is convinced that consumers are going to start spending more.

The U.S. economy is consumer driven. Lowering taxes on the rich and eliminating regulations would have little effect on unemployment, but would increase corporate profits and lead to greater income divergence and degradation of the environment. Cutting government spending in an effort to reduce the deficit would cause reduced consumer spending and even higher unemployment. It's exactly the wrong thing to do in a weak economy, dubious Republican economic dogma notwithstanding. According to Bartlett, "People are increasingly concerned about unemployment, but Republicans have nothing to offer them." Panderbear agrees.

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Thursday, November 3, 2011

Ultimatum - Part II

Got an unemployment problem? Blame illegal immigrants or better yet blame the lazy unemployed, not the corporations sitting on record profits and cash reserves who discriminate against the unemployed. Got a problem with underwater mortgages? Blame American Dream-seeking homeowners, not the financial experts who made ill-advised loans. Got a budget deficit? Blame it on tax-and-spend Democrats and welfare-collecting parasites, not Republicans who cut taxes while increasing spending to support two wars and ushered in the Great Recession.

Blaming the victim is standard operating procedure for pandering right-wing politicians. Demonize some out-group. Blame our problems on them. Repeatedly claim, contrary to the facts, that "they" are enjoying advantages "we" are not. Play up the unfairness angle and as the Ultimatum Game predicts many people will support policies that punish others rather than policies in their own best interest.

Panderbear is aware of the apparent contradiction that the same Republicans who ignore the exploding income divergence have nevertheless managed to internalize the lesson of the Ultimatum Game. Perhaps out of hubris they think they and their rich corporate allies have nothing to fear from Occupy Wall Street rabble and their sympathizers. Perhaps it is just wishful thinking, whistling past the graveyard.

Be that as it may, conservative ideologues have clearly mastered the Ultimatum Game's essential lesson. Convince voters that they are being treated unfairly, that one out-group or another is getting something they don't deserve, and the primate reflex to punish, rather than do the logical thing, will take over.

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Wednesday, November 2, 2011


Ultimatum Game
It's called the Ultimatum Game. The first player proposes a split of some gift of money. The other player chooses whether to accept the proposed split or reject it. If the offer is rejected neither player gets anything. The game is played only once and anonymously so expectation of reciprocity is not a factor.

Logically, the second player should accept any non-zero offer. In actual experiments people tend to reject offers less than about 20%. The exact percentage varies with culture. In some cultures it is considered an insult if the second player is not offered more than 50%. All cultures have a sense of fairness. People will reject what is clearly the logical thing to do if they think they're being treated too unfairly.

Versions of the Ultimatum Game designed for experiments with non-human primates show similar results. When one primate sees another consistently rewarded with more food or a more favored food for the same effort or less they eventually reject their lesser gift or even throw it at the experimenter. An innate sense of fairness, of justice is apparently a primate birthright, an evolved trait going back millions of years. Push primates, including humans, too far and they will rebel, even if it is not in their best interest.

Republicans who ignore today's Gilded Age income divergence are ignoring something more visceral than self-interest or even greed. At some point the non-rich will decide that the split is too unfair and reject it, possibly violently. This isn't just an issue of political philosophy or even logic. It's biological fact. Republicans ignore it at their peril. Unfortunately, ignoring or even attacking science that contradicts their dogma is something Republicans excel at.

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Tuesday, November 1, 2011

The Great Divergence - Part II

Panderbear's previous post identified what economists think are the major causes of The Great Divergence, the multi-decade trend toward a more lopsided income distribution in the U.S. The three most important factors are the decline of labor unions, failures in our educational system, and excesses in the financial sector and in corporate lobbying of Congress.

From the Taft-Hartley Act of 1947, to the breaking of the Professional Air Traffic Controllers Organization (PATCO) by President Reagan in 1981, to the present day attacks on public employee unions by several midwest Republican governors, the Republican Party has been unrelentingly anti-labor. Marginalization of labor unions is a significant contributor to The Great Divergence.

In some respects our education system is in decline. As noted previously the aspects of failure most relevant to income divergence are decelerating rates of educational attainment and failure to equip students with skills needed in today's economy. These problems are not just a matter of money, but cutting the federal education budget and abolishing the Department of Education would be decidedly unhelpful. Republican candidates from Ronald Reagan, to Bob Dole, to Michele Bachmann have advocated demoting the department from Cabinet status or eliminating it outright.

Under-regulation of the financial sector permitted unchecked growth of complex, highly-leveraged financial instruments based on sub-prime mortgages. This resulted in financial and real estate bubbles that inevitably burst taking down the entire economy. Increases in lobbying and investments in electoral politics have ensured Congress had little appetite for policies thought unsalubrious by Corporate America. Deregulation has been a battle cry for every conservative since, well, forever. However, Republicans have had much greater success in deregulating almost everything, including corporate campaign contributions, since the election of President Reagan 30 years ago.

These are the major drivers of The Great Divergence. In every case the enabling public policies derived directly from Republican political orthodoxy. Republicans seem little troubled by our historic income imbalance and believe more extreme application of the policies that got us here is what the economy needs. Panderbear respectfully disagrees. Let's take another look at the data gleaned from the Census Bureau Historical Income Tables by political scientist Larry Bartels, this time in graphic form. It speaks volumes about the efficacy of Republican economic dogma.

All Income Groups See More Income Growth Under Democratic Presidents

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