Inequality in the US – Part 1

I have been spending a lot of time reading about inequality in the U.S. Today I am posting part 1 of my findings related to inequality, campaign finance, & political influence.*Note today’s curations might seem a bit left leaning. I hope to balance this effect with tomorrows post.

2 Books to read:

Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems – by Thomas Ferguson  -Synopsis via UChicago –

“To discover who rules, follow the gold.” This is the argument of Golden Rule, a provocative, pungent history of modern American politics. Although the role big money plays in defining political outcomes has long been obvious to ordinary Americans, most pundits and scholars have virtually dismissed this assumption. Even in light of skyrocketing campaign costs, the belief that major financial interests primarily determine who parties nominate and where they stand on the issues—that, in effect, Democrats and Republicans are merely the left and right wings of the “Property Party”—has been ignored by most political scientists. Offering evidence ranging from the nineteenth century to the 1994 mid-term elections, Golden Rule shows that voters are “right on the money.” Thomas Ferguson breaks completely with traditional voter centered accounts of party politics. In its place he outlines an “investment approach,” in which powerful investors, not unorganized voters, dominate campaigns and elections. Because businesses “invest” in political parties and their candidates, changes in industrial structures—between large firms and sectors—can alter the agenda of party politics and the shape of public policy.”

Affluence and Influence: Economic Inequality and Political Power in America – by Martin Gilens –  Teaser via Amazon

“Can a country be a democracy if its government only responds to the preferences of the rich? In an ideal democracy, all citizens should have equal influence on government policy–but as this book demonstrates, America’s policymakers respond almost exclusively to the preferences of the economically advantaged. Affluence and Influence definitively explores how political inequality in the United States has evolved over the last several decades and how this growing disparity has been shaped by interest groups, parties, and elections. With sharp analysis and an impressive range of data, Martin Gilens looks at thousands of proposed policy changes, and the degree of support for each among poor, middle-class, and affluent Americans. His findings are staggering: when preferences of low- or middle-income Americans diverge from those of the affluent, there is virtually no relationship between policy outcomes and the desires of less advantaged groups. In contrast, affluent Americans’ preferences exhibit a substantial relationship with policy outcomes whether their preferences are shared by lower-income groups or not. Gilens shows that representational inequality is spread widely across different policy domains and time periods. Yet Gilens also shows that under specific circumstances the preferences of the middle class and, to a lesser extent, the poor, do seem to matter. In particular, impending elections–especially presidential elections–and an even partisan division in Congress mitigate representational inequality and boost responsiveness to the preferences of the broader public.”

Papers worth reading: 

Inequality –  by Glaser

“This paper reviews five striking facts about inequality across countries. As Kuznets (1955) famously first documented, inequality first rises and then falls with income. More unequal societies are much less likely to have democracies or governments that respect property rights. Unequal societies have less redistribution, and we have little idea whether this relationship is caused by redistribution reducing inequality or inequality reducing redistribution. Inequality and ethnic heterogeneity are highly correlated, either because of differences in educational heritages across ethnicities or because ethnic heterogeneity reduces redistribution. Finally, there is much more inequality and less redistribution in the U.S. than in most other developed nations.”

Party Competition and Industrial Structure in the 2012 Elections: Who’s Really Driving the Taxi to the Dark Side? -By Ferguson, Jorgensen, & Chen

“This paper analyzes patterns of industrial structure and party competition in the 2012 presidential election. The analysis rests  on a new and more comprehensive campaign finance database that catches far more of the myriad ways businesses and  major investors make political contributions than previous studies. By drawing on this unified database, the paper is able to  show that both major parties depend on very large donors to a greater extent than past studies have estimated. The paper  outlines the firm and sectoral bases of support for the major party nominees, as well as for Republican candidates who  competed for the GOP presidential nomination. The paper shows that President Obama’s support within big business was  broader than hitherto recognized. A central conclusion is that many major companies in the sectors most involved in the  recent controversies over surveillance were among the president’s strongest supporters. The paper also analyzes patterns of  business support for the Tea Party in Congress, showing that certain parts of business are more supportive of Tea Party  candidates than others. The role of climate change, financial regulation, and other issues in the election is discussed at length.”

Super Pacs – by Briffault

“The most striking campaign finance development since the Supreme Court’s Citizens United decision has not been an upsurge in corporate or union spending as many commentators predicted. Instead, federal election campaigns have witnessed the emergence of a new campaign finance vehicle – the Super PAC – which relies primarily on extremely large individual contributions, not corporate or union money, but which threatens to upend the federal campaign finance regime in place since 1974.  Super PACs can accept contributions in unlimited amounts and use them to engage in unlimited independent expenditures expressly supporting or opposing candidates. Non-existent before the spring of 2010, Super PACs were significant players in a number of 2010 Congressional elections and became major factors in the 2012 Republican presidential nominating contest. In many of the Republican primaries, Super PACs outspent the candidates. Nearly all the leading Super PACs in 2011-12 were closely identified with specific presidential contenders, and they became vehicles for wealthy donors who had given the legal maximum in contributions to a candidate’s campaign to give much more to the Super PAC backing that candidate. As a result, Super PACs threaten to effectively eliminate limits on contributions to candidates.This article examines the Super PAC phenomenon. It compares and contrasts Super PACs with other campaign finance actors. It considers the judicial and Federal Election Commission decisions that authorized their existence and operations, and the impact of Citizens United — which is not directly responsible for Super PACs — in creating an atmosphere in which lower courts concluded that donations to independent spending committees cannot be limited. The article explores the preliminary data on Super PAC fundraising and spending and the evidence that they function as virtual, but legally far less constrained, alter egos for the candidates they support. As a result, the emergence of Super PACs may very well spell the beginning of the end of our nearly four-decade-old post-Watergate campaign finance regime.”

Inequality & Democratic Responsiveness – By Gilens

“By Allowing voters to choose among candidates with competing policy orientations and by providing incentives for incumbents to shape policy in the direction the public desires, elections are thought to provide the foundation that links government policy to the preferences of the governed. In this article I examine the extent to which the preference policy link is biased toward the preferences of high-income Americans. Using an original data set of almost two thousand survey questions on proposed o policy changes between 1981 and 2002, I find a moderately strong relationship between what the public wants and what the government does, albeit with a strong bias toward the status quo. But I also find that when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of the poor or middle-income Americans. The vast discrepancy I find in government responsiveness to citizens with different incomes stands in stark contrast to the ideal of political equality that Americans hold dear. Although perfect political equality is an unrealistic goal, representational biases of this magnitude call into question the very democratic character of our society.”

Money Talks but it Isn’t Speech – by Hellman

“This Article challenges the central premise of our campaign finance law, namely that restrictions on giving and spending money constitute restrictions on speech and thus can only be justified by compelling governmental interests. This claim has become so embedded in constitutional doctrine that in the most recent Supreme Court case in this area, Citizens United v. FEC, the majority asserts it without discussion or argument. This claim is often defended on the grounds that money is important or necessary for speech. While money surely facilitates speech, money also facilitates the exercise of many other constitutional rights. By looking at these other rights, this Article notes that sometimes constitutional rights generate a penumbral right to spend money and sometimes they do not. Thus the fact that money facilitates the exercise of a right is insufficient to show that the right includes a penumbral right to give or spend money. The first contribution this Article makes is to identify this question: when do constitutional rights generate a penumbral right to spend money? The second contribution this Article makes is to provide an answer. When a right depends on a market good for its exercise, the right generates a penumbral right to give or spend money. When a right does not depend on a market good for its exercise, the right does not include a penumbral right to spend money. Using this account, this Article argues that the right to give and spend money in connection with elections need not be protected as speech under the First Amendment.”

The Democracy to Which We are Entitled: Human Rights and the Problem of Money in Politics – by Kuhner

“This Article is the first to argue that campaign finance, corporate political activity, lobbyists, and other ‘money in politics issues’ fall within the purview of human rights treaties. The universal assumption that domestic political finance is a purely domestic issue is mistaken. Domestic political finance is actually a matter of concern for international law. This is so because the provisions of the democratic entitlement under international law cannot be reconciled with the high levels of money in politics observed in many democracies. If this argument is sound, then human rights law requires States to enact political finance reforms.”

Inequality and Institutions in 20th Century America – by Levy & Temin

“We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage – all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story.”

Does Corruption Affect Income Inequality & Poverty –  by Gupta, Davoodi, Terme

“This paper demonstrates that high and rising corruption increases income inequality and poverty by reducing economic growth, the progressivity of the tax system, the level and effectiveness of social spending, and the formation of human capital, and by perpetuating an unequal distribution of asset ownership and unequal access to education. These findings hold for countries with different growth experiences, at different stages of development, and using various indices of corruption. An important implication of these results is that policies that reduce corruption will also lower income inequality and poverty. “


Video: Affluence & Influence: Economic Inequality and Political Power in America

Video: How Economic Inequality Harms Societies 


About Miguel Barbosa

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09. April 2014 by Miguel Barbosa
Categories: Curated Readings, Wisdom Seeking | Leave a comment

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