Reduce poverty by creating wealth among women

Social Mobility?

Other people's kids

"The American dream is in crisis. . .because Americans used to care about other people's kids and now they only care about their own kids."

 

Robert Putnam,

Our Kids:  The American Dream in Crisis

Check out related The New Yorker article here

Inclusive capitalism?

A good, relatively new friend sent me a message that read in part:

I just emailed to you a column from the NY Times talking about “inclusive capitalism.”  Reading it made me think of your concept of the wealth of the poor.   .   .   .  The fact is that the poor and the middle class have been hammered for too long and there must be a way for them too to share in the wealth they are helping to create.  If our capitalistic society cannot create wealth for the vast majority of our people, then at some point our people will reject it, which would be a disaster.  The secret to our success has been that those who hold the levers of wealth have been far sighted enough to understand that unfettered capitalism will over time devour itself, so balance must be struck with government regulation.  We have managed to do that most of the time, but the balance is now frayed.  Regulated capitalism makes the most sense, because capitalism is the very best way to engineer wealth in a democracy.  We need to keep it that way.

All the best to you in the new year.

 

You can read the article he refers to here.

 

Reactions???

Wealth gap at historic high

Wage injustice

Minimum wage needs to be raised because current value is LOWER than it was in the 1960s.

Seriously!

Life Purpose?

Will someone please tell me what this means?

I'm not connecting to the images of labor, sacrifice, deeper meaning, danger, giants and even community that take us to an expensive sports car.

Educate me.

An interview with Steve Blow

Yesterday, Dallas Morning News columnist, Steve Blow published comments on a conversation that he and I enjoyed last Tuesday.

 The subject:  income inequality and "the poor" in general.

Read it here!

Wealth distribution: perception and reality

Public policy over the last 30 years produced the wealth inequality we face as a nation today.

Bottom line:  this reality is not sustainable for our national life,  for community health or for peace and unity.

Reactions welcome.

Turns out the "wealth gap" hurts us all

JANUARY 19, 2013, 6:47 PM

Inequality Is Holding Back the Recovery

By JOSEPH E. STIGLITZ

The re-election of President Obama was like a Rorschach test, subject to many interpretations. In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest - an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream - a good life in exchange for hard work - is slowly dying.

Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues - as it did in a special feature in October - that the magnitude and nature of the country's inequality represent a serious threat to America, we should know that something has gone horribly wrong. And yet, after four decades of widening inequality and the greatest economic downturn since the Depression, we haven't done anything about it.

There are four major reasons inequality is squelching our recovery.

To read the entire essay click here.

Joseph E. Stiglitz, a Nobel laureate in economics, a professor at Columbia and a former chairman of the Council of Economic Advisers and chief economist for the World Bank, is the author of "The Price of Inequality."

Here's how to fix the economy

This is really on target!

How To Fix The Economy... In One Simple Chart

Henry Blodget | Aug. 22, 2012, 8:39 AM 

Henry Blodget is CEO and Editor-in-Chief of Business Insider.

 To read the article click here.

Economic fragility...financial stress expands

My friend, Jeremy Gregg, Executive Director of the PLAN Fund here in Dallas, reminded me of a Dallas Morning News report that the "average Dallas poor family" spends $800 annually on check cashing and payday lending.  Based on the report below, I expect many other families are forced to use the incredibly expensive financial services as well.  It was a big win on Wednesday when, thanks to the efforts of CitySquare and our partners, the Dallas City Council approved new zoning regulations as a means of beginning to regulate payday lending operations in Dallas.  Read the report and tell me what you think.

Nearly Half of Americans Are ‘Financially Fragile’
May 23, 2011, 2:22 PM ET

Nearly half of Americans say that they definitely or probably couldn’t come up with $2,000 in 30 days, according to new research, raising concerns about the financial fragility of many households.

Many Americans aren’t able to cope with an unexpected bill.  In a paper published by the National Bureau of Economic Research, Annamaria Lusardi of the George Washington School of Business, Daniel J. Schneider of Princeton University and Peter Tufano of Harvard Business School used data from the 2009 TNS Global Economic Crisis survey to document widespread financial weakness in the U.S. and other countries.

The survey asked a simple question, “If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?” In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable. The $2,000 figure “reflects the order of magnitude of the cost of an unanticipated major car repair, a large copayment on a medical expense, legal expenses, or a home repair,” the authors write. On a more concrete basis, the authors cite $2,000 as the cost of an auto transmission replacement and research that reported low-income families claim to need about $1500 in savings for emergencies.

Financial fragility isn’t limited to low-income groups. “Households with socioeconomic markers of vulnerability (income, wealth, wealth losses, education, women, families with children) are more likely to be financially fragile, and substantially more so,” the authors write. “The more surprising finding is that a material fraction of seemingly ‘middle class’ Americans also judge themselves to be financially fragile, reflecting either a substantially weaker financial position than one would expect, or a very high level of anxiety or pessimism. Both are important in terms of behavior and for public policy.”

Lusardi, Schneider and Tufano also looked at the ways in which people coped with an unexpected expense. Most would use multiple methods ranging from dipping into savings, asking for help from family and friends, using loans or credits cards, taking out payday loans or selling possessions. “Taken together with those who would pawn their possessions, sell their home, or take out a payday loan, 25.7% of respondents who were asked about coping methods (equal to 18.6% of all respondents) would come up with the funds for an emergency by resorting to what might be seen as extreme measures,” the authors write. “Along with the 27.9% of respondents who report that they could certainly not cope with an emergency, this suggests that approximately 46.5% of all respondents are living very close to the financial edge.”

Meanwhile, Lusardi, Schneider and Tufano also looked at how different countries compare. They consulted with local partners to set the number used in local currency at a comparable level. “Perceived capacity to cope with an emergency is lowest in the U.S., U.K. and Germany, all countries in which 50% of households or more would probably or certainly be unable to come up with the emergency funds,” the authors wrote. “France and Portugal occupy an intermediate position; 46% of respondents in Portugal would certainly or probably be unable to come up with the funds as would 37% of those in France. The highest levels of coping capacity are found in Canada (28% certainly or probably unable), Netherlands (27.9%), and Italy (20%).”

Creating wealth for the wealthy

This report appeared in the Philanthropy News Digest and suggest that the wealthy in the U. S. receive numerous hidden benefits, many obvious and some not so obvious to the uninformed.  Certainly, the source of the report is well-respected and the basis of the information grounded in solid research and investigation.  Not something we're likely to hear about on the Sunday morning talk shows this week.  Have you noticed, no one seems to talk about "the poor,"  those folks who live in and struggle with poverty. 

Study Finds Federal Asset-Building Programs Reward the Rich, Penalize the Poor
Posted on September 24, 2010

The federal government spent nearly $400 billion in fiscal year 2009 to help people save money and build wealth, but the vast majority of the money went to the nation's richest taxpayers, a new report from the Annie E. Casey Foundation and the Corporation for Enterprise Development finds.

According to the report, Upside Down: America's $400 Billion Federal Asset-Building Budget  (26 pages, PDF), the top 1 percent of families received an average of $95,000 in assistance last year, while families making $100,000 annually received $1,600, and the poorest received less than $5. The inequitable distribution is all but invisible, the report found, because the wealth-building strategies are tucked into the federal tax code — as deductions, credits, and preferential rates — rather than in the government's annual discretionary budget, where they would receive more scrutiny.

By embedding asset-building strategies into the tax code as deductions and exclusions, the federal government naturally favors those who bear the heaviest tax burden. Indeed, the wealthiest 1 percent of taxpayers received 45 percent of the federal asset budget while contributing just 27 percent of total tax revenue. Policies that depend on direct outlays in the annual budget, including the Assets for Independence program, which provides matched-savings accounts for low-income families, have proven successful in encouraging savings, homeownership, and business startups. Yet, because they are visible, such programs often become fodder for partisan political battles.

"If we are serious about cutting the deficit, Congress could start by trimming these upside-down subsidies and creating a more equitable approach," said CFED president Andrea Levere. "As Congress debates whether to extend the Bush-era tax cuts for the wealthy and the president's fiscal commission develops recommendations to balance the federal budget, they should remember that we could shave $1 trillion off the deficit in the next decade simply by capping some of these benefits."

Charity usually misses the most in need of it

The essay below appeared in the July 20, 2010 edition of The Chronicle of Philanthropy.  After you've read it, let me know what you think.

The Gates-Buffett Giving Pledge Won’t Do Much Good Unless It Changes Philanthropy
By Pablo Eisenberg

Most of the nonprofit world seems to be agog over the news that Bill and Melinda Gates, along with their friend Warren Buffett, are joining together to ask fellow billionaires to sign a pledge to give at least one-half of their fortunes to charity.

That could lead to an enormous increase in the amount of money available to nonprofit organizations. Fortune magazine estimates that if the people on the Forbes 400 list of the wealthiest Americans all made the pledge, an additional $600-billion could flow to nonprofit groups—twice the amount Americans gave last year.

When will this money be distributed to charities? Mr. Buffett has said that he plans to give away 99 percent of his fortune while he is alive or at his death, and he has made clear in his gifts to the Gates Foundation that he wants the money to be distributed quickly rather than left to sit in the foundation’s coffers. But will other donors do the same, or will they put their money into foundations that give only a small percentage of their assets every year?

Who will provide the leadership to increase the quality of philanthropy, not just the amount of money given? So much of the giving wealthy donors and foundations now do is lackluster and does not involve risk taking or innovation. Nor does it seek to solve urgent public needs. Will the new pledges mean more of the same?

What steps will be taken to ensure public accountability? Will the funds that are steered into new or existing foundations follow the Gateses’ approach, namely grant-making institutions governed by a very few family members that, in a real sense, are not really publicly accountable? Do we want an explosion of these tax-exempt oligarchic entities with huge assets that can help set public priorities without public discussion or a political process? Would this be a healthy development for democracy? If not, what can be done to mitigate the potential undemocratic nature of these new mega-foundations?

Perhaps the most troubling issues posed by the Gates-Buffett crusade is its potential to intensify the inequities that exist both in the nonprofit world and in the rest of society.

Foundations, corporations, and other forms of institutional philanthropy tend to favor the nation’s most-privileged citizens and neglect the neediest people and organizations. An outsize share of the money from those institutions goes to established colleges, hospitals, and arts and cultural organizations. Only a small amount finds its way to organizations that serve vulnerable children, low-income people, minorities, women, the disabled, and other disadvantaged constituencies. A tiny portion of philanthropic money is channeled to groups that seek to influence public policies.

To read the entire article click here.

Wealth gap belies comprehensive "trickle down" benefit

Assessing the wealth holdings of the same families for 23 years (1984-2007) shows that the wealth gap between whites and African Americans increased more than 4 times, from $20,000 in 1984 to $95,000 in 2003. This gap persisted for African Americans and white families in the same income range.

For example, middle-income white households had greater gains in financial assets than high-income African Americans; by 2007, they had accumulated $74,000, whereas the average high-income African American family owned only $18,000. At least 25% of all African American families had no assets to turn to in times of economic hardship.

To read a more detailed report click here.

Institute on Assets and Social Policy

The Heller School for Social Policy and Management

Brandeis University

Income moves upward, gap grows

Where has all the income gone? Look up.


March 3, 2010
By Lawrence Mishel

The 400 American households with the highest incomes also have enjoyed a much faster pace of income growth than the vast majority. And, because tax rates applied to their income have fallen by a third, their after-tax incomes grew substantially faster than their pre-tax incomes. The figure looks at inflation-adjusted pre-tax and after-tax income growth for the 400 top-income families between 1992 and 2007, based on new data recently released by the Internal Revenue Service. It shows that while pre-tax income grew by a staggering 409% over that 15-year period, after-tax income increased even more, by 476%.

The third line in the figure offers some perspective by showing the change in the pre-tax median household income over the same period, which grew just 13.2%. The median pre-tax household income for a family of four in 2007 was $50,233, while the top-earning 400 households earned a median $345 million, almost 6900 times as much income. In contrast, in 1992 the ratio was just a sixth as large, with the top 400 households having 1124 times as much income.

Wealth Gap? No real surprise here. . .

Small group takes large slice of capital income

April 14, 2010
By Andrea Orr

Rising rates of stock ownership and home ownership in recent decades notwithstanding, the families with the highest incomes are receiving a growing share of total capital income. The Figure shows the share of capital income that went to different income groups in 1979 and 2006, the last year for which data are available. In 1979, the top 10% of families received 67.0% of all income generated by assets such as stocks, bonds and real estate. By 2006, that share had risen to 81.3%. By contrast, the share of capital income that went to the other 90% of families has fallen from 33.0% in 1979 to 18.7% in 2006. The portion of capital income going to the top 1% of families has gradually increased from 38.0% in 1979, so that by 2006 this small group received more than half – 57.7% -- of all capital income.

While it is common to think of an individual’s or a family’s income in terms of their wages and salary, ownership of assets like stocks, bonds and real estate can also be a major contributor to total income. The shift of more of this capital income to the top income groups has helped make income disparities more pronounced.

Inequality and illness. . .

Every once in a while I run across an exceptional website or blog. 

Good.is happens to be one of those. 

Don't know how I missed it for so long. 

You can check out the home page here. 

What follows was "Post of the Week" for March 6-12, 2010. 

Inequality Makes Me Sick (Literally)

GOOD Blog > Andrew Price on March 6, 2010 at 5:39 am PST

Given that income inequality in the United States is pretty bad (see map), this interview with the epidemiologist Richard Wilkinson is especially interesting. Wilkinson has found that high levels of income inequality correspond to all sorts of social problems. In other words, it isn't having more, but sharing more, that makes a community healthier.

"...we looked at life expectancy, mental illness, teen birthrates, violence, the percent of populations in prison, and drug use. They were all not just a little bit worse, but much worse, in more unequal countries. ... Epidemiologists and people working in public health have been doing this work for some time, not only controlling for relative poverty, but for all the income levels within, for instance, an American state. So once you know the relationship between income and death rates, for example, you should be able to predict what a state's death rate will be. Actually, though, that doesn't produce a good prediction; what matters aren't the incomes themselves but how unequal they are. If you're a more unequal state, the same level of income produces a higher death rate."

Wilkinson's explanation? In countries with more income inequality there is fiercer competition for status, and that leads to higher stress, more crime, less trust, and a host of other socially corrosive phenomena.

To check out this site click here.

Wealth keeps moving upward. . .

The chart above pretty well sums up economic reality in the United States these days. Poverty, personal and family options and equity are all shaped by this report. The chart comes with the following report from the Economic Policy Institute.

Here's what the report reveals: 

Where has all the income gone? Look up.
March 3, 2010
By Lawrence Mishel

The 400 American households with the highest incomes also have enjoyed a much faster pace of income growth than the vast majority. And, because tax rates applied to their income have fallen by a third, their after-tax incomes grew substantially faster than their pre-tax incomes. The figure looks at inflation-adjusted pre-tax and after-tax income growth for the 400 top-income families between 1992 and 2007, based on new data recently released by the Internal Revenue Service. It shows that while pre-tax income grew by a staggering 409% over that 15-year period, after-tax income increased even more, by 476%.

The third line in the figure offers some perspective by showing the change in the pre-tax median household income over the same period, which grew just 13.2%. The median pre-tax household income for a family of four in 2007 was $50,233, while the top-earning 400 households earned a median $345 million, almost 6900 times as much income. In contrast, in 1992 the ratio was just a sixth as large, with the top 400 households having 1124 times as much income.

An observation. . .

Jesus never told or asked rich people how they intended to "convert" the poor.

Rather, he offered invitations like, "Give all you have to the poor and come and follow me."

Maybe our ministry is really to and for the well-to-do--a ministry of giving it all away. 

What do you think?