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Why Inequality is Getting Worse

From George Will at National Review, A Philosopher Takes On the Left’s Obsession with Income Inequality

First, the entitlement state exists primarily to transfer wealth regressively, from the working-age population to the retired elderly who, after a lifetime of accumulation, are the wealthiest age cohort. Second, big, regulatory government inherently exacerbates inequality because it inevitably serves the strong — those sufficiently educated, affluent, articulate, and confident to influence the administrative state’s myriad redistributive actions.

Third, seven years of ZIRP — zero interest-rate policy — have not restored the economic dynamism essential for social mobility but have had the intended effect of driving liquidity into equities in search of high yields, thereby enriching the 10 percent of Americans who own approximately 80 percent of the directly owned stocks. Also, by making big government inexpensive, low interest rates exacerbate the political class’s perennial disposition toward deficit spending. And little of the 2016 federal budget’s $283 billion for debt service will flow to individuals earning less than the median income.

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A Change in Consumer Patterns

from the New York Times, Stores Suffer From a Shift of Behavior in Buyers by Hiroko Tabuchi


Data released by the Commerce Department shows that American consumers are putting what little extra money they do have to spend each month into eating out, upgrading their cars or fixing up their homes, as well as spending on sports gear, health and beauty. Spending at restaurants and bars has jumped more than 9 percent this year through July compared with the same period last year, and on autos by more than 7 percent, according to the agency.

Analysts say a wider shift is afoot in the mind of the American consumer, spurred by the popularity of a growing body of scientific studies that appear to show that experiences, not objects, bring the most happiness. The Internet is bursting with the “Buy Experiences, Not Things” type of stories that could give retailing executives nightmares.

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The New Migration


from Joel Kotkin in New Geography, The Changing Geography of Racial Opportunity:


Perhaps the greatest irony in our findings is the location of many of the best cities for minorities: the South. This is particularly true for African-Americans who once flocked to the North for both legal rights and opportunity. Today almost all the best cities for blacks are in the South, a region that has enjoyed steady growth and enjoys generally low costs. Indeed, of the top 15 cities for African-Americans, 13 are in the old Confederacy starting with top-ranked Atlanta, No. 2 Raleigh, No. 4 Charlotte, No. 6 Virginia Beach-Norfolk, No. 7 Orlando, No. 8 Richmond (a distinction it shares with Miami and San Antonio), as well as   four of Texas’ large metro areas: No. 12 Houston, No. 13 Dallas-Ft. Worth and No. 8 San Antonio. The only two other metros are “inside the Beltway”: the metropolitan expanses of Washington and, surprisingly, Baltimore.

What accounts for this? Well, in Washington and Baltimore, the obvious answer is the federal government.  Roughly one in five black adults works for the government, and are far more likely to have a public sector job than non-Hispanic whites, and twice as likely as Hispanics. These are not the people who rioted in the inner city; most of them live in prosperous suburbs surrounding these cities. But outside the Beltway region, the explanations tend towards more basic economics, like job creation, low housing prices and better opportunities for starting businesses.

Ironically, blacks – 6 million of whom moved to the North during the great migration — are once again voting with their feet, but back to the same region in which, for so long, they were so harshly oppressed.   Between 2000 and 2013, the African-American population of Atlanta, Charlotte, Orlando, Houston, Dallas-Fort Worth, Raleigh, Tampa-St. Petersburg and San Antonio all experienced growth of close to 40 percent or higher, well above the average of 27 percent for the nation’s 52 metropolitan areas with more than 1 million residents.

In contrast, the African-American population actually dropped in five critically important large metros that once were beacons for black progress: San Francisco-Oakland, San Jose, Los Angeles, Chicago and Detroit.  In many cases, most notably in San Francisco, blacks have become the unintended victims of soaring housing prices and rampant gentrification, with little option to move to the also high-priced suburbs.   Today, suggests economist Thomas Sowell, the black population of the city itself is half that of 1970; the situation has changed so much that former Mayor Gavin Newsom even initiated a task force to address black out-migration.


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Economic Growth and the Ruling Class


In our present “age of elites,” as author Chrystia Freeland has dubbed it, this ideological shift among the rich, particularly the new rich, is critical to understanding the new class order. Some of the nation’s wealthiest regions, many of which were once Republican strongholds, are now among the most reliably Democratic. In 2012, for example, President Obama won eight of the country’s ten wealthiest counties, sometimes by margins of two- to- one or better. He also triumphed easily in virtually all of the top counties with the highest concentrations of millionaires, as well as among managers of hedge funds.

Perhaps the biggest difference between the ruling classes of the nineteenth century and those emerging in the twenty- first can be seen in attitudes toward economic progress. The old plutocracy— notably energy, manufacturing, mass agriculture, and construction— generally supported and even encouraged economic progress among those below them, who also served as their customers. This fixation on growth was also shared by many on the left, including labor leaders such as Walter Reuther. Agreement that broad- based expansion was a good thing remained largely universal, at least until the late 1960s.

This approach has implications for the nature of growth, according to economist Benjamin Friedman. Growth, Friedman notes, is critical to maintaining a socially just order, increasing opportunity both for individuals and regions, particularly those historically left behind. For all its many environmental and social shortcomings, the old economic regime emphasized growth and upward mobility. In contrast the new economic order focuses more on the notion of “sustainability”— so reflective of the feudal worldview— over rapid economic expansion.

This shift in emphasis can be seen in many of the often palpably good causes touted by Oligarchs— notably, contemporary environmentalism. Yet while progressive in their intent, these policies in practice turn out to be socially regressive in their application. Take up less space, make a smaller impact, consume less: this has replaced the notion of accelerating economic mobility. This behavior often hurts most those “tangible” industries, such as energy, manufacturing, logistics, and housing, that heavily employ blue- collar workers. Ironically, the mandate to “live small” frequently comes from individuals who are ensconced on huge estates or in incredibly expensive trophy apartments and who travel by private jet. For all the trappings of progressivism, the current ideology is remarkably degenerative.

from The New Class Conflict by Joel Kotkin

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Uber and DUIs

In LA Weekly Dennis Romero writes IS UBER REDUCING DUIS IN L.A?

In a vast, 4,000-square-mile county, it’s hard for many folks to get around without a car. And that has meant that DUIs have become a much-feared epidemic.

But ride-sharing apps like Uber, Lyft and Sidecar have become a go-to Godsend for party people in L.A. And it’s conceivable that they’re starting have their impact on DUI statistics, possibly making streets safer for everyone.

How many friends do you know who now “Uber it” rather than get behind the wheel for a night out?

Brewer told us that she’s not sure why there’s such a serious drop in DUIs for Labor Day weekend….


This data is still being greeted with some skepticism, but I believe it will prove significant. This same report is being repeated in several cities.  There are just too many anecdotes and stories from passengers and drivers and the incredible growth in the use of Uber make the conclusion one that would be logically expected.

Further the elimination of cash payments reduces theft, and there may be some social (crime reducing) benefits from the increase of the sense of community these service engender.  That last benefit may be a stretch, but the DUI reduction should be expected.

In New York there are stories of people getting rid of their cars in light of the ease and availability of Uber type services.  This may be unique to New York given the high costs of car ownership there.

Government efforts to limit Uber in an effort to protect the taxi franchise may be coming at a high cost.