Oh, really ...

 

Quantifying the cost of rising US inequality

A recent study from RAND has put hard numbers to just how severe the rising income inequality is for average wage earners in the US. The study finds that during the first two decades after the Second World War, income and economic growth tracked at roughly the same rate, indicating fairly even distribution. But since 1974, the benefits of growth haven’t been evenly shared. Labor, capital, and pre- and posttax income have been increasingly concentrated at the top of the distribution since the middle of the 20th century.

+ From Pew: “Trends in Income and Wealth Inequality”

+ From the Center on Budget and Policy Priorities: “A Guide to Statistics on Historical Trends in Income Inequality”

Cropped image by Derek Tam on Flickr

When good governments go bad In a new paper (written prior to the insurrection at the US Capitol), anthropologists examined a broad, global sample of 30 premodern societies and found that societies collapse when leaders undermine social contracts. Even “good” governments—those that provided goods and services for their people and did not severely concentrate wealth and power—fell apart, and when they did, they broke down more intensely than collapsing despotic regimes. “The states that had good governance, although they may have been able to sustain themselves slightly longer than autocratic-run ones, tended to collapse more thoroughly, more severely,” says Gary Feinman, the MacArthur Curator of Anthropology at Chicago’s Field Museum and one of the study’s authors. And as Richard Blanton, a professor emeritus of anthropology at Purdue University and the study’s lead author, explains: We noted the potential for failure caused by an internal factor that might have been manageable if properly anticipated. We refer to an inexplicable failure of the principal leadership to uphold values and norms that had long guided the actions of previous leaders, followed by a subsequent loss of citizen confidence in the leadership and government and collapse.

The future history of America and the world (to 2050) Most of us are trapped in the anxiety-provoking present and fearful of a future that we can barely see....If only we could pull back and see how new technologies emerging now could scale up and make a positive impact in the coming years. If only we could better understand how many long-term trends inexorably making progress in our economy and society and culture could come to fruition in the decades ahead. Or get a better sense of all the innovators working on new ways forward that hold great promise to reinvent the world in myriad ways. If only we could somehow see how all these encouraging developments could come together to largely solve our big challenges in the end. Then we might be able to move out of the debilitating present and do the right thing to help build that better future now. Peter Leyden, coauthor of The Long Boom, a History of the Future, 1980 to 2020, talked with 25 innovators, including Mariana Mazzucato, John Battelle, Saul Griffith, Carlota Perez, and Tim O’Reilly, to find a “positive and plausible scenario about how we could solve our many challenges and transform our world for the better in the next 30 years.”

Ill-gotten data? FTC rules you have to delete the models too. The maker of a now-defunct cloud photo storage app, Ever, that had pivoted to selling facial recognition services trained on users’ photos without permission has been ordered to delete not only the user data but any algorithms trained on it, under the terms of an FTC settlement. This has implications for any tech company that has harvested data to train AIs without express permission to do so. Previous settlements with Facebook and Google required the deletion of the data itself, but not the models trained on the data. In this Twitter thread, Rohit Chopra, a commissioner on the Federal Trade Commission, calls the settlement “an important course correction” for the FTC.

Why markets boomed in a year of human misery This recession hasn’t been evenly distributed. Certainly, 800,000 people a week are filing new unemployment claims, and there are lines at the food banks. But, as it turns out, white-collar jobs are more resilient to stay-at-home orders than expected. Total employee compensation was down only 0.5 percent for the last nine pandemic months. As this New York Times article explains: The arithmetic is as simple as it is disorienting. If a corporate executive gets a $100,000 bonus for steering a company through a difficult year, while four $25,000-per-year restaurant workers lose their jobs entirely, the net effect on total compensation is zero—even though in human terms a great deal of pain has been incurred. Additionally, the stimulus money, extra unemployment benefits, and Paycheck Protection Program provided a boost that’s almost hard to fathom: Americans’ cumulative after-tax personal income was $1.03 trillion higher from March to November of 2020 than in 2019, an increase of more than 8 percent. Combined with a less surprising drop in American spending (to the tune of $535 billion)—after all there are now fewer flights to take, restaurants to eat at, or sporting events to attend—personal savings is up $1.56 trillion, a 173% increase from 2019. Essentially, the rise in savings among the people who have avoided major economic damage from the pandemic is creating a tide lifting the values of nearly all financial assets. Strange times, indeed. + “The Economic Consequences of the Putsch: Why Are Markets Optimistic?”

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