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Gender: Do not display
Hometown: Xenia, OH
Member since: Tue Sep 19, 2006, 04:46 PM
Number of posts: 17,077

Journal Archives

Good news to liberals that global inequality is falling. Bad news that domestic inequality is rising

The top 1% has seen its real income rise by more than 60% over those two decades. The largest increases however were registered around the median: 80% real increase at the median itself and some 70% around it. It is there, between the 50th and 60th percentile of the global income distribution that we find some 200 million Chinese, 90 million Indians, and about 30 million people each from Indonesia, Brazil and Egypt. These two groups—the global top 1% and the workers of the emerging market economies— are indeed the main winners of globalization...

But the biggest loser (other than the very poorest 5%), or at least the “non-winner,” of globalization were those between the 75th and 90th percentile of the global income distribution whose real income gains were essentially nil. These people, who may be called a global upper-middle class, include many from former Communist countries and Latin America, as well as those citizens of rich countries whose incomes stagnated.

More than fifty percent of one’s income depends on the average income of the country where a person lives or was born (the two things being, for 97% of world population, the same). This gives the importance of the location element today. There are of course other factors that matter for one’s income, from gender and parental education which are, from an individual point of view externally given circumstances, to factors like own education, effort and luck that are not. They all influence our income level. But the remarkable thing is that a very large chunk of our income will be determined by only one variable, citizenship, that we, generally, acquire at birth. It is almost the same as saying, that if I know nothing about any given individual in the world, I can, with a reasonably good confidence, predict her income just from the knowledge of her citizenship... Around 1870, class explained more than 2/3 of global inequality. And now? The proportions have exactly flipped: more than 2/3 of total inequality is due to location.

OECD study: Income gains to top 1% last 30 years - US worst (by far), Europe best (by far).

Canada is second only to the U.S. in its growing inequality. In the U.S., about 47 per cent of total growth went to the wealthiest one per cent between 1975 and 2007, compared to 37 per cent in Canada, while in Australia and the U.K., about 20 per cent of growth went to the wealthiest.

In Nordic countries and in France, Italy, Portugal and Spain, about 90 per cent of growth went to the 99 per cent of middle and low-income earners in the same period.

Larry Summers, who was secretary of the treasury under Bill Clinton and is now a Harvard professor, has pointed out how the constant push for tax cuts and the erosion of union bargaining rights has led to greater income inequality.

The study calls for higher marginal tax rates and fewer tax deductions and credits aimed at high income earners. It also advocates wealth or inheritance taxes.


Nordic countries support (and the rest of European countries for that matter) support trade with the global poor with tariff-free trade with the poorest countries. They both support global equality and domestic equality at the same time.

Canada Day: How to Be Patriotic About a Country Built on Diversity

In absence of a single narrative, Canadians by and large cling to a celebration of difference. Accommodating a new culture is the national pastime, while intolerance is the national sin. This, of course, gets tricky when a new culture is intolerant. In such cases, Canadians -- or, to be specific, the Canadian justice system -- firmly defaults to its liberal democratic roots. It prioritizes individual rights over the community in question's right to force its values onto one of their own. But such clear stand-offs between specific rights do not themselves reveal a nascent national identity. Canadians are still left with a vague sense of collective self that is largely held together by a spirit of respecting differences.

This spirit as the main ingredient in the national consciousness is a double-edged sword. On the one hand, it promotes a self-reflexive sense of political identity that inhibits the ugliest elements of nationalism. It is difficult to rouse much Us vs. Them fervour when a) there is no clear Us and b) respecting differences is the one value respected by most. On the other hand, it inhibits a feeling of collective pride and care for each other with the capacity to stretch across the entire country.

There is much to be said for such a feeling. A deep sense of national belonging motivates not just the soldier, but the engineer designing bridges, the civil servant writing briefing notes, the small business serving customers, and the politician running for office, to name but a few. Collective identity, curbed before it escalates into ugly nationalism, can fuse civic purpose into all we do in the public sphere. And public actions couched in civic purpose can be the most rewarding societal acknowledgement that Canadians are responsible to, and benefit from, one another.

How can we achieve such a sense of collectiveness in a country so big and diverse? It may be simpler than it appears. We cannot rely on any one cultural marker, because a.) we're too diverse and b.) we know that such markers -- especially ethnic, racial, or religious ones -- as sparkers for national pride can be dangerous. We can, however, invigorate our loyalty to and affection for those Canadian political institutions that keep us accountable to one another; the ones that have stood the test of time even while demonstrating an ability to mould with the ages.


The celebration of difference in Canada is encouraging. A country with an immigration rate over twice that of the US and a multiethnic, multiracial democracy that functions better than ours does. Canada's Charter of Rights and Freedoms declares multiculturalism to be a constitutionally protected value.

Our right loves to rail against multiculturalism. It is small wonder that Canada holds little appeal for them. They base much of their appeal in the US on generating fear in the "us vs. them" paradigm that is much harder to sell in Canada.

It is difficult to rouse much Us vs. Them fervour when a) there is no clear Us ...

Poll: repub base/establishment agree (Obama, gov't role), disagree (immigration, gay rights)


All republicans agree on how bad Obama, the federal government and help for the poor are.

They disagree on immigration, acceptance of gays, the value of Wall Street and US efforts to solve global problems.

None are too surprising but interesting to see them summarized so succinctly in this poll.

How China views the TPP, the WTO and bilateral trade agreements.

China’s FTA Strategy

Beijing takes a strategic approach on free trade agreements, particularly in the face of challenges such as the TPP.

This post explores the motivations of China’s promotion of FTAs, and examines its FTAs to highlight underlying trends and the future strategies Beijing may pursue in the face of the challenges posed by mega-regional trade deals such as the Trans-Pacific Partnership (TPP) and Regional Economic Comprehensive Partnership (RCEP.)

China has one of the busiest FTA programs in Asia. Agreements in place include FTAs with countries such as Chile, Costa Rica, New Zealand, and Switzerland. Meanwhile, FTAs now in the pipeline will boost China’s economic integration with Australia, Japan, the Republic of Korea, Norway, and the Gulf Cooperation Council countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates. China has recently taken a more comprehensive and vigorous approach to FTAs. For example, agreements with Iceland and Switzerland, signed in 2013, provide wider coverage in goods, services, and investments.

Meanwhile, a number of initiatives are underway to liberalize trade and facilitate investment within the region. For instance, RCEP incorporates a range of Asia-Pacific countries, such as ASEAN, Australia, China, India, Japan, and New Zealand. The fourth round of negotiations was held in Nanning, China, from March 31 to April 4, 2014. it is expected to be concluded by 2015.

On the other hand, the U.S.-centered TPP negotiations have put China under considerable pressure. Though it is open to joining TPP negotiations, given its domestic industrial structure China would find it difficult to accept some of the issues under negotiation. Issues such as state-owned enterprises or labor and environmental standards would impose very high costs on China’s domestic industries. Consequently, Beijing has been cautious on joining TPP talks.


China seems to be negotiating many bilateral trade agreements rather than going for multilateral deals. Perhaps this is because they are sensitive to maintaining control of their "domestic industrial structure" (weak unions, lots of pollution). That is easier to do with bilateral deals in which they are the larger, stronger partner rather than multilateral deals where things get more complicated.

There need to be labor and environmental standards in any trade agreement.

If TPP does not have them, and it sure seems like it doesn't, then sticking with WTO trading rules (which do not have labor nor environmental standards that affect labor rights in a place like Vietnam) is better than missing the opportunity that TPP could have represented.

To improve labor and environmental standards globally we will have to negotiate enforceable agreements with the rest of the world. Given what we know about TPP it looks like we will have to wait a long time for that.

One of many countries that actually does what many US politicians profess is impossible:

supporting a strong safety net with high progressive taxation without killing the economy that generates the wealth.

Great Title: “Change They Can’t Believe In: The Tea Party and Reactionary Politics in America”

Another axis of difference between the two is that an establishment conservative will see policy differences or policy preference differences between them and progressives as merely political differences. But these reactionary conservatives see policy differences, or differences of policy preferences, as a contest between good and evil. They have this Manichaean way of looking at politics, this apocalyptic way of looking at politics. Therefore, compromise cannot be . Compromise will not be tolerated whatsoever, because they see it as concession to evil, whereas an establishment conservative knows that compromise is necessary.

The bottom line is that a lot of people assume that the Tea Party people are just crazy … but that’s not the case. I mean, that’s really not the case, and I want to dismiss that misconception as soon as I can … Another misconception that the Tea Party is really just a bunch of racist people and that their movement is about racism — and it’s really not … It’s bigger than racism. People who tend to support the Tea Party, they tend to be sexist, they tend to be homophobic, they tend to be xenophobic; so it’s not just about race. It’s about difference. It’s about anything that violates their phenotypical norm of what it’s supposed to mean to be an American: white, mainly male, middle-class, middle-aged or older, heterosexual, and native born. Anything that falls beyond that description is considered not to be a true American and therefore … these groups are encroaching on what they see as the “real” America, the America that they’ve come to know and love through their lifetime.

It’s not the astroturf movement that a lot of people think it is. I said that in that Brookings piece and I’ve backed that up with some evidence. Now, we saw what happened in Virginia, right? You had this guy, Brat, who got almost zero support from national Tea Party organizations — and look what happened. So I think there’s really valid data showing that the Tea Party movement is not the astroturf movement that people think it is.

People want to say that they’re crazy, and they’re really not. They want to maintain their social position, their social prestige; and as Frederick Douglass once said, “Power concedes nothing without a demand. It never has and it never will.” So it’s rational to want to hold onto your position; it’s completely rational. It’s about the means through which do that — that’s what the problem is.

Great find, xchrom. Thanks for posting it.

Certainly true that agreements (trade, peace or labor) can be "good or crappy" but

the republican accusation was that they were both crappy - "flooding our markets with foreign commodities" - and negotiated secretly - "It secretly has made tariff agreements with our foreign competitors".

Reciprocal Tariff Act of 1934

President Franklin Delano Roosevelt signed the Reciprocal Trade Agreements Act (RTAA) into law in 1934. RTAA gave the president power to negotiate bilateral, reciprocal trade agreements with other countries. This law enabled Roosevelt to liberalize American trade policy around the globe. It is widely credited with ushering in the era of liberal trade policy that persists to this day.

By giving the President the authority to negotiate these deals, the Congress effectively ceded a part of their power (authorized under US Constitution, Article I, Section VIII) to the executive branch.

After the Civil War, Democrats were generally the party of trade liberalization, while Republicans were generally for higher tariffs. This pattern was clear in congressional votes for tariffs from 1860 until 1930. Democrats were the congressional minority in the majority of Congresses between the Civil War and the election of Roosevelt. During their brief stints in the majority, Democrats passed several tariff reduction bills. Examples include the Wilson-Gorman Act of 1894 and the Underwood Tariff Act of 1913. However, subsequent Republican majorities always undid these unilateral tariff reductions.

... the administration decided to take advantage of having a Democratic-controlled Congress and Presidency to push through the RTAA. In 1936 and 1940, the Republican Party ran on a platform of repealing the tariff reductions secured under the RTAA.


FDR's RTAA is what gave us "secret trade deals" and 'fast track' for their approval or rejection by Congress.

The complaints against FDR in 1936 were quite similar to the complaints against Obama today even though times and the nature of the agreements has changed.

In 1936 Republicans accused FDR of making "secret" trade deals with "our foreign competitors".

The 1936 republican party platform looks like it could have been written for the tea party:

It has coerced and intimidated voters by withholding relief to those opposing its tyrannical policies.

It has destroyed the morale of our people and made them dependent upon government.

Appeals to passion and class prejudice have replaced reason and tolerance.

It has created a vast multitude of new offices, filled them with its favorites, set up a centralized bureaucracy, and sent out swarms of inspectors to harass our people.

It has bred fear and hesitation in commerce and industry, thus discouraging new enterprises, preventing employment and prolonging the depression.

It secretly has made tariff agreements with our foreign competitors, flooding our markets with foreign commodities.


Eurostat report: The EU continues to have the highest taxed countries in the world.

Danes the highest taxed in Europe, reveals Eurostat

Denmark, Belgium and France are the highest taxed EU countries according to research by the bloc’s statistical agency Eurostat.

The data in Eurostat’s report on ‘Taxation trends’ in the EU, published on Monday (16 June), found that the Danish government collected tax worth 48.1 percent of economic output in 2012.

Overall, the average tax-to-GDP ratio in the EU increased to 39.4 percent in 2012, slightly up from 38.8 percent the previous year. Eurostat says the rate continued to rise in 2013.

The EU continues to have some of the highest taxed countries in the world. Of the major OECD countries outside the bloc, only Norway, at 42 percent, has a higher tax burden. Meanwhile, the US, Canada and Japan have rates of 25 percent, 28 percent and 30 percent, respectively.


Germany's taxes totaled about 39% of GDP, Sweden and France at 44%. It's amazing how much in the way of social services and safety net these countries can provide with an extra 15% of GDP in tax revenue. Of course, a stronger middle class and greater income equality are the result.

The Eurostat report itself is at http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-DU-13-001/EN/KS-DU-13-001-EN.PDF.
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