Don’t Lie to Poor Kids About Why They’re Poor


(Photo: Shutterstock)

Work hard and you’ll get ahead — that’s the mantra driven into young people across the country.

But what happens when children born into poverty run face first into the crushing reality that the society they live in really isn’t that fair at all?

As new research shows, they break down.

A just released study published in the journal Child Development tracked the middle school experience of a group of diverse, low-income students in Arizona. The study found that the kids who believed society was generally fair typically had high self-esteem, good classroom behavior, and less delinquent behavior outside of school when they showed up in the sixth grade.

When those same kids left in the eighth grade, though, each of those criteria had degraded — they showed lower self-esteem and worse behavior.

What caused this downward slide?

In short, belief in a fair and just system of returns ran head-on into reality for marginalized kids. When they see people that look like them struggling despite working hard, they’re forced to reckon with the cognitive dissonance.

This problem doesn’t afflict the well-off, who can comfortably imagine their success is the result of their hard work and not their inherited advantage.

Erin Godfrey, a psychology professor at New York University and the study’s lead author, explains that for marginalized kids who behave badly, “there’s this element of people think of me this way anyway, so this must be who I am.” She points out that middle school is the time when many young people begin to notice personal discrimination, identify as a member of a marginalized group, and recognize the existence of systemic discrimination.

The existence of a permanent and rigid system of inequality can be hard to grapple with at any age. The United States leads the world in overall wealth yet is also near the top in childhood poverty, with one in five kids born into poverty.

Despite an often-repeated myth about social mobility — the ability of the poor to become rich — the United States lags behind in this category. Canada now has three times the social mobility of the United States.

The gap between the rich and poor starts early. A 2016 study by the United Nations Children’s Emergency Fund reports: “From as early as the age of 3, children from more affluent backgrounds tend to do better in cognitive tests.” By age 5, children from poor families are three times more likely to be in the bottom 10 percent in cognitive ability.

It’s a complex problem. But the solutions to this deep structural inequality are actually fairly straightforward.

In short, we need major investments in universal public programs to rebuild the social safety net, ensure early childhood education as well as debt-free higher education, and good-paying jobs.

In other words, we need to help those born without inherited assets to get the same shot at education and employment as everyone else — and also reassure them that if they fail, they won’t end up homeless.

Those who claim the country can’t afford such programs should look at the massive subsidies lavished out to the ultra-wealthy. In 2016, half a trillion dollars were doled out in tax subsidies, overwhelmingly to the already rich.

But before we do all that, we simply have to tell the truth: Our economic system is far from fair. It’s tilted heavily against marginalized communities.

Teaching that to kids, rather than perpetuating a myth about “fairness,” is an important step forward.


Don’t Let Corporations Pick What Websites You Visit


(Photo: Flickr/ Backbone Campaign)

Think about the websites you visit. The movies you stream. The music you listen to online. The animal videos that are just too cute not to share.

Now think about the freedom to use the internet however and whenever you choose being taken away from you. That’s exactly what Verizon, AT&T, Comcast, and other Internet Service Providers (ISPs), are trying to do.

Right now, those companies are constrained by a principle called net neutrality — the so-called “guiding principle of the internet.” It’s the idea that people should be free to access all the content available online without ISPs dictating how, when, and where that content can be accessed.

In other words, net neutrality holds that the company you pay for internet access can’t control what you do online.

In 2015, the Federal Communications Commission adopted strong net neutrality rules that banned ISPs from slowing down connection speeds to competing services — e.g., Comcast can’t slow down content or applications specific to Verizon because it wants you to switch to their services — or blocking websites in an effort to charge individuals or companies more for services they’re already paying for.

But now the open internet as we know it is under threat again. Net neutrality rules are in danger of being overturned by Donald Trump’s FCC chairman Ajit Pai and broadband companies like Comcast, AT&T, and Verizon.

But these corporations aren’t doing this alone. They’re getting help from at least eight handpicked members of Congress, all Republicans (Paul Ryan being the most notable), who’ve signed statements of support for overturning the neutrality rules.

Why? All we need to do is follow the money.

These eight lawmakers have all received significant campaign contributions from these corporations. That means the big broadband corporations and their special interest groups are attempting — and succeeding — to influence policymakers’ decisions on rules that affect us all.

The fun doesn’t stop there.

Ajit Pai — the FCC chairman bent on overturning net neutrality — is a former lawyer for Verizon, one of the very companies petitioning to have the rules changed. Lately Pai has been citing an academic paper arguing that the FCC “eschewed economics and embraced populism as [its] guiding principle” in making decisions on issues like net neutrality.

The catch? This paper wasn’t written by independent experts. It was funded and commissioned by CALinnovates, a telecommunications industry trade group. Their biggest member? None other than AT&T, which stands to benefit a lot if these rules are overturned.

This is just one example of “information laundering,” in which corporate-commissioned research is being used to further corporate agendas. It’s just another way corporations are using their money and influence to lobby members of Congress.

During a recent day of action, major websites such as Facebook, Twitter, and Google stood up in defense of net neutrality by using pop-up ads, GIFs, and videos to inform the public of the issue and ask them to tell the FCC to “preserve the open Internet.”

You too can fight back against corporate influence by calling the FCC and telling them you won’t give up your right to use the Internet the way you want.


Trump’s Policy Is Clear: Civilian Casualties Don’t Matter in the War on Terror


(Photo: Flickr/Leigh Blackall)

Recent news reports describe a massive increase in civilian casualties at the hands of the US military or US allies. In Mosul, Iraq, hundreds of residents have been killed as US forces join Iraqi troops in the last stage of their assault on the ISIS-held city. In Yemen, the United States is increasing its direct involvement in the Saudi-led air war being waged against the poorest country in the Arab world, as the UN and other aid workers struggle against mass famine and a looming cholera epidemic on top of the thousands already killed and millions displaced. And in Raqqa, Syria, US air strikes and white-phosphorus munitions have led to what the UN calls “a staggering loss of life,” as Washington provides backup to Kurdish and Arab forces now besieging the ISIS stronghold.

These attacks, and the skyrocketing civilian casualties that result from them, have two things in common: direct US involvement, a result of the recent escalation in Washington’s direct role in the 16-year-old Global War on Terror; and an absolute disdain for the civilian lives being destroyed in these wars.

Defense Secretary James “Mad Dog” Mattis claimed in sworn congressional testimony that

there has been no change to our rules of engagement and there has been no change to our continued extraordinary efforts to avoid innocent civilian casualties, despite needing to go into populated areas to break ISIS hold on their self-described caliphate, despite ISIS purposely endangering innocent lives by refusing to allow civilians to evacuate. And we continue all possible efforts to protect the innocent.

And yet, the already high casualty figures continue to mount. When the top UN official on the Syria war described the “staggering loss of life,” he was specifically condemning the impact of US and allied air strikes against Raqqa, not simply bemoaning the war in general. He also discussed the 160,000 people driven out of their homes by US air strikes. An estimated 200,000 more civilians—families, children, old people—are still trapped in Raqqa, and according to the AirWars monitoring group in London, “Rarely a day goes by now when we don’t see three or four civilian casualty incidents attributed to coalition air strikes around Raqqa…. All of the local monitoring groups are now reporting that the coalition is killing more civilians than Russia on a regular basis.”

Read the full article on The Nation.


Trump, Syria, and Chemical Weapons: What We Know, What We Don’t, and the Dangers Ahead


(Photo: vector_brothers / Shutterstock)

Let’s start with what we don’t know. Experts remain uncertain what chemical(s) were involved in the horrific chemical attack, almost certainly from the air, on the village of Khan Sheikhun in Idlib province in Syria.  The nerve agent sarin, chlorine, and unknown combinations of chemicals have all been identified as possible, but in the first 48 hours nothing has been confirmed. We don’t know for sure yet what it was that killed more than 75 people, many of them children, and injured many more.

Crucially, we also don’t know who was responsible. Western governments, led by the United States, and much of the western press have asserted that the Syrian regime is responsible, but there is still no clear evidence. Certainly Damascus has an air force, has been known to use chemical, particularly chlorine, weapons in 2014 and 2015. So that’s certainly possible.

“A US military escalation against Syria (because we must not forget that US Special Forces and US bombers are already fighting there) will not help the victims of this heinous chemical attack, it will not bring the devastating war in Syria to a quicker end, it will not bring back the dead children.”

The Syrian military denies using chemical weapons.  Their international backer, Russia, claims that the Syrian military did drop bombs in the affected area but that the chemical effect was not in the bombs dropped but rather from the explosion of an alleged chemical warehouse under the control of unnamed rebel forces. The same report by the United Nations and the Organization for the Prohibition of Chemical Weapons that found Syrian government responsibility for chlorine attacks also found that ISIS had used another chemical weapon, mustard gas, and investigated at least three other chemical weapons attacks whose perpetrators could not be identified.  So that could be possible as well.

For a variety of reasons, some of these possibilities don’t hold up so well if the chemical used this week was the sarin nerve agent — but we don’t know yet what it was.

There are some other, perhaps even more important things, that we do know. We know that in 2013, at the time of an earlier, even more deadly chemical weapon attack, similar accusations against the Syrian regime were widely made, assumed to be true, and used as the basis for calls for direct US military intervention in the civil war.  And we know those accusations were never proved, and that it remains uncertain even now, almost four years later, who was actually responsible.

And we know that the bombing of Syria in 2013 was averted, despite President Obama’s “red line” being crossed, because an enormous US and global campaign against such a disastrous escalation made it politically too costly to launch a new US war.  This was a president willing but not eager, or driven, to go to war. When Obama turned decision-making over to Congress, hundreds of thousands of people across the United States called and wrote and emailed their representatives, urging them to prevent a new war. In some offices calls were running six or seven hundred to one against a new bombing campaign.

And we know that President Obama turned it over to Congress in the first place because the British parliament, facing massive public opposition, made clear that the UK would not join its US ally in going to war against Syria. And eventually, when Congressional opposition became undeniable, Russia provided the US with a way out, arranging for international collection and destruction of Syria’s chemical weapons arsenal. Chlorine was not included, and it is certainly possible that Syria didn’t declare all of its weapons, or perhaps the precursor chemicals to make them, and but that claim was never proven. Ultimately, though, a US attack was averted.

Much is different now from 2013. The state of the Syrian civil war is far different – in 2013, the war was still new and uncertain; today it is recognized as the world’s most devastating conflict.  There is little chance of UK involvement in a military attack on Syria this time around, so the sudden resistance of a key US ally isn’t going to happen. Congress is not being consulted, and it is very unclear whether Congressmembers of either party are prepared to take on challenging a military campaign dressed up as a campaign for justice.

At the United Nations, Trump’s Ambassador Nikki Haley seemed to be channeling George W. Bush even more than her actual boss. She threatened that if the Security Council did not act according to US demands—meaning if it resisted authorizing military escalation in Syria—that the US was prepared to go alone. International law, the UN Charter, diplomacy be damned.

And this is a president, a cabinet, a White House with no military or diplomatic experience, with no understanding of the complications of the roiling Middle East conflicts or the consequences of war, and with a personal eagerness to demonstrate power. This is not a president accountable to a political party, to Congress and its constitutional role in military decision-making, and certainly less accountable to international law.

Trump’s incoherent reaction on Wednesday showed the lack of any strategic understanding in his foreign policy. He blames former President Obama for the crisis in Syria, while Trump of course had urged Obama not to attack Syria after the chemical bombing of 2013, tweeting in all caps “DO NOT ATTACK SYRIA — IF YOU DO MANY VERY BAD THINGS WILL HAPPEN.”  He continued that criticism of Obama, but then switched gears to brag about his “flexibility,” noting that “my attitude towards Syria and Assad have changed very much.” It was a clear implication he’s considering a military response, although he pulled back from any clarity on that as well. Asked what his message would be to the Iranian militias supporting the Syrian military, Trump first went off on an unrelated attack on the Iranian nuclear deal, eventually circling back to a threatening but vague “You will see what the message will be. They will have a message.”

And the anti-Trump resistance that rose so heroically from the first moments of this presidency faces new challenges on a daily, even hourly basis. The mobilizations—in the streets, at the airports, at the White House, at the Supreme Court and beyond—and the letters and petitions and sit-ins and teach-ins and more, have been incredibly powerful.  Remobilizing those exhausted millions around an anti-war message will be a huge challenge for anti-war and indeed the whole range of social movements. As usual, much remains unknown.

But we know two crucial things, things that were true then, and remain true today.  We know that using chemical weapons—of any sort, in any war, against any target—is a crime. And we know there must ultimately be accountability for those who use it, regardless of who they are. That will take time.

In the meantime we know another truth: that a US military escalation against Syria (because we must not forget that US Special Forces and US bombers are already fighting there) will not help the victims of this heinous chemical attack, it will not bring the devastating war in Syria to a quicker end, it will not bring back the dead children. It will not defeat ISIS or end terrorism, it will create more terrorists. It will almost certainly cause more casualties, more injuries, and more dead. Maybe dead children.  There is still no military solution. This is what we know.

Phyllis Bennis directs the New Internationalism Project at the Institute for Policy Studies.


Trump’s Foreign Policy Picks Don’t Match His Isolationist Rhetoric

“The extremism of some of these characters is quite profound,” Phyllis Bennis told the Real News Network regarding Trump’s proposed foreign policy appointments.

Trump has chosen General Michael Flynn, who was fired as the Director of the Defense Intelligence Agency in the Obama administration, as his national security advisor. This appointment does not have to approved by the Senate. Bennis said Flynn is largely viewed by people in both parties as “somewhat of a nut job.”

Former KKK leader David Duke tweeted in support of Trump’s choice of Flynn, saying, “Great Pick!”

“When you’re getting support from the Klan for your choice of national security advisor,” Bennis said, “we’re in very serious trouble here.”

There has also been talk of former U.S. ambassador to the UN John Bolton as a pick for secretary of state. Bolton, Bennis said, is known for his extremist set of calls on Iran.

Bennis said we can’t know how many of these picks are a result of Trump’s own views, or how many reflect Vice President-elect Mike Pence’s views, or Trump’s son-in-law and close advisor Jared Kushner.

“We do know he has a heavy dose of anti-immigrant, anti-Muslim sentiment behind him,” Bennis said, even if it is still a mystery who’s calling the shots.

None of Trump’s picks so far match the kind of neo-isolationsist policies he pushed in the earlier days of his campaign.

As these names start coming up they’re generating enormous unease among mainstream press and political figures, Bennis said, but what’s more important is the social movements out there that are resisting Trump’s picks and focusing on foreign policy.

“We’re seeing just how dangerous these appointments are and I think it’s going to generate a much stronger movement,” Bennis said.

Watch the full interview on the Real News Network’s website.

The post Trump’s Foreign Policy Picks Don’t Match His Isolationist Rhetoric appeared first on Institute for Policy Studies.

Phyllis Bennis directs the New Internationalism project at the Institute for Policy Studies.


Keep Elites Accountable, But Don’t Dumb the Issues Down

You know you’re a wonk when your nighttime reading is as thick as the latest Stephen King novel, but no one in your family is clamoring to borrow your doorstop.

Consider, for instance, the Iran nuclear agreement. It’s a mere 159 pages, but it’s full of technical language that requires the parsing of a physicist. The deal’s opponents in Congress, the ones who would like to rip it up as soon as President Obama exits the White House, have not likely read the full text.

Meanwhile, the typical accession agreement between the European Union and a prospective member state is at least as long — the most recent one, with Croatia is 250 pages — and consists of equally turgid prose that only an economist could love. Going into the recent referendum on EU membership, most Brexit supporters didn’t have a clue what their membership entailed or even what the EU was precisely.

The Trans-Pacific Partnership trade agreement is larger still, more than 2,000 pages, and it really gets down to the nitty gritty of such subjects as tariff rate quotas, post-market surveillance, and whey protein concentrate. I’m not sure who has had to read the entire document, but pity the poor wonk.

Whatever you might think about these agreements, they are the result of long negotiations by teams of experts. They represent difficult compromises and carefully balanced trade-offs. There might have been some drama in the negotiating process — particularly the nuclear agreement, which went down to the wire — but the results are not page-turners.

These agreements are also, by their very nature, the product of elites. They are negotiated by elite diplomats and elite experts. Even if they eventually garner popular support, these agreements represent the geopolitical interests of elites. They are the supreme expression of the inside game.

Elites are insiders — but they’re not exactly “in” at the moment. The world is currently experiencing a backlash against elites. The British voted themselves out of the European Union, American voters have rallied around Bernie Sanders and Donald Trump, and populist leaders from Pauline Hanson of Australia to Julius Malema of South Africa are gaining strength all over the world.

Some of the anti-elite political organizing is done in the spirit of inside-outside strategizing — exerting pressure in the streets to strengthen the hands of sympathetic allies at the negotiating table on the inside. Bernie Sanders, for instance, decided to run for president within the Democratic Party, not as an independent, and now Sanders campaign alumni are trying to translate street heat into institutional change.

But much of the recent populism is quite different. The British who rejected the EU were not interested in reform. They had no interest in staying inside at all. They wanted out.

Similarly, the Trump candidacy is a bombshell directed at “powerful corporations, media elites, and political dynasties,” as the candidate declared back in June in his jobs speech. “I want you to imagine how much better our future can be if we declare independence from the elites who’ve led us to one financial and foreign policy disaster after another,” he went on.

“Throw the bums out” is a rousing cry that has attracted support for centuries. Indeed, the exclusively outside game — of just saying no — is indispensible when dealing with crushing injustice such as apartheid in South Africa, dictatorships in the Middle East, or genocide against minority populations. But these are the outliers in today’s complex world. Preventing wars, stopping global warming, bridging the wealth gap: These challenges require committed activists who stand on principle as well as allies on the inside who can play the political game.

“It is easy to boo,” Sanders told his supporters at the Democratic National Convention as he was executing his pivot to supporting the party ticket. More difficult is to craft political compromises that deliver on the promises made during the campaign.

It’s not just anti-elitism that fuels these efforts. It’s a yearning for simple solutions. As the world becomes ever more complex, one response has been to chuck it all in favor of “simpler times.” It’s a fundamentalist message that appeals to British nationalists, Trumpian exceptionalists, and Islamic State reactionaries alike.

The Reality of Complexity

Modern complex societies require new elites for their maintenance. Gone for the most part are the kings and the feudal lords.

In their place, a modern technocracy administers democratic political systems. Economists and Wall Street manage an increasingly interconnected global economy. Media elites preside over television, the printed page, and the blogosphere. Entertainment elites produce the movies and TV shows that translate our dreams into virtual reality. We have academic elites, religious elites, NGO elites, and even anti-elite elites (see, for example, Alex Jones).

All of these elites have developed expertise in their fields. They are also, almost by definition, arrogant. It is the rare member of an elite who doesn’t believe that he or she knows better. If they didn’t know better, they’d be out of a job. This is not the explicit arrogance of a megalomaniac like Trump. Rather, it’s structural arrogance. It goes with the territory.

So, yes, the economic transformations of the last several decades have not benefitted everyone. Rage against the European Union, anger at both liberals and conservatives in the United States, and the retreat into extremisms of various types are all fueled by economic dislocation, income inequality, and the perception that government helps the unworthy. But Donald Trump, Nigel Farage, Marine Le Pen, and their ilk rely on a much deeper disaffection with complexity, the institutions that manage it, and the people who make their livings sustaining it.

Computers have enabled the creation of ever more complex institutions and relationships. The new science of complexity helps explain phenomena that hitherto exceeded our grasp, such as the behavior of consumers in a retail market and the myriad interactions in an ecosystem. But there will always be a backlash against this complexity, if only because control drifts further and further up the great chain of authority. The desire for simplicity is really about power and who wields it.

The Tower of Babel

In the story of Genesis, the people once spoke a common language. Together they worked to fashion bricks and wedge them together with tar. In this way, they built a tower that rose higher and higher. They built this structure “so that we may make a name for ourselves.” As their tower climbed ever higher, humans set their creation against their creator in what seemed an effort to storm heaven. And so the Lord set out to “confuse their language so they will not understand each other” and then scatter his most arrogant of creatures to every corner of the planet.

The EU is a similar structure, the creation of many different people who have found a common functional language to build something complex out of simpler parts. Yes, the EU is arrogant, in the sense that it arrogates to itself the role of administering a political, economic, and social overlay. The bureaucracy of Brussels could do with a dose of humility, a dash more democracy. But to enjoy the fruits of modern life — greater economic prosperity, freedom of movement — Europeans have until now been willing to cede a measure of power to an elite over and above their own national leaders.

The British rejected the EU because a large number of voters didn’t perceive the obvious benefits of membership, resented the elites that seemed to hold sway over their lives, and felt uncomfortable with complex solutions to complex problems. They wanted to destroy what they didn’t fully understand.

Donald Trump has taken aim at his own towers of Babel: multiculturalism, government, NATO, the global economy.

He has a deep aversion to complexity. He talks at the level of a third or fourth grader(occasionally reaching the eloquence of a sixth grader). He boils down his adversaries to cutting nicknames (that are usually only partial words like “lyin’” and “cheatin’”). He traffics in conspiracy theories that reduce the messiness of reality to simple narratives of hidden manipulation. He presents the world in black and white with no grey subtleties in between. Anything that does not elevate his own name — Trump Plaza, Trump Tower — is automatically under suspicion.

Trump and the Euroskeptics are keeping it simple. They appeal to the pieties of homeland. They are not interested in cultural diversity. They are fundamentally uninterested in the politics of give-and-take (as opposed to the politics of popularity contests). Like the Islamic State, they don’t want a place at the table — they want to blow the table up.

The Roman Empire, for all its myriad faults, created a complex set of political and economic institutions. Swept away by the barbarians, the empire devolved into a few enlightened duchies and monasteries scattered across Europe. In place of aqueducts and Roman law came Attila the Hun, the Plague, and a great cultural leap backward.

Invoking the barbarians at the gate is by no means a plea to accept everything that global elites offer. The EU, for instance, desperately needs reform, and free trade agreements like the TPP continue to favor powerful corporations. Elites are indispensible to a modern society — but they need to be kept accountable through democracy, not dictatorship.

To avoid slipping back into a new Dark Ages presided over by Donald the Hun and crippled by various modern plagues, a new commitment must be made to preserving global public goods. To rescue the better part of globalism, we need stronger responses to pandemics, to global economic inequality, to human rights violations. We need more internationalism, not less.

Above all, we need a renewed inside-outside full-court press on climate change. Trump, if he improbably won the presidency, would be the only national leader to reject climate change. His counterparts in other countries — like Pauline Hanson in Australia and Siv Jensen in Norway — have a similar bias. It would be catastrophic for such populists to take the helm of their countries.

The world simply can’t afford simple-minded leaders and simple-minded solutions. As H.L. Mencken once said, “For every complex problem there is an answer that is clear, simple, and wrong.”

The post Keep Elites Accountable, But Don’t Dumb the Issues Down appeared first on Institute for Policy Studies.

John Feffer directs Foreign Policy In Focus, a project at the Institute for Policy Studies.


Don’t Spend Your Money on Already Rich Schools

Don’t go to Bowdoin College. Don’t give a huge check to Stanford. Don’t give Wilt Chamberlain a hard time for shooting free throws underhanded. And don’t underestimate how much inequality rots our society from all sorts of different angles.

You’ll take away these insights and plenty more like them from Malcolm Gladwell’s fascinating new Revisionist History podcast. His new series, currently ranked number one on iTunes, rummages the past for events and ideas that we as a society have badly misread and really need to rethink.

Gladwell asks, for instance, whether the American Dream is still alive, and that question leads to a novel review of America’s deeply unequal college scene.

In one episode, titled Food Wars, Gladwell compares both the proportion of low-income students attending elite universities and the schools’ dining halls. The premise is that spending significant sums on food takes away from spending on scholarships for needy students. Two schools are highlighted on either end of the “food vs scholarships” spectrum: Bowdoin College in Maine and Vassar College in New York.

Bowdoin has the best dining hall in the country with fresh local organic meals that could just as easily be found at a Michelin rated restaurant. And that is the problem with American higher education today, according to Gladwell.

Don’t go to Bowdoin, he advises, don’t let your friends or children go to Bowdoin. The money wasted on fancy food that doesn’t go to scholarships for needy kids is what’s driving the gap in education. (As you can imagine, Bowdoin took issue with this.)

Vassar, on the other hand, has a mediocre dining hall, but has double the low-income students Bowdoin has. Overly simplistic? Yes. But it’s not really about food, it’s about priorities and Gladwell wants to see those priorities shift.

Mostly left out of the conversation is the role of public colleges and the steady disinvestment in higher education by state legislatures. All but three states spend less on higher education today than they did ten years ago. This speaks to Mr. Gladwell’s bias, whose focus is generally on the elite and the gifted, not on the average poor student with average or even below average intellect.

How do we educate those less gifted and ensure that they too can rise above their social class? How do we treat education as public good, one deserving of public investment? This might be the one major blind spot throughout the series, but it’s a small critique of an otherwise brilliant analysis.

In the next episode, “My Little Hundred Million,” Gladwell touches on this topic with a look at Rowan University in New Jersey. Rowan is a rather unremarkable school, a small public university with mostly local, low-income students. But about 20 years ago, Rowan got a huge boost—a hundred million dollar donation from philanthropist Hank Rowan (for whom the school was subsequently re-named). At the time, this size gift was unheard of and it had a huge impact on the school and the students who would later attend. Gladwell praises Rowan for selecting a school like Rowan to give his money to, a school that could put it to good use.

Unlike, say Stanford.

Stanford, like many of the Ivy League schools and similar institutions, has a massive endowment. At over $ 20 billion, it’s bigger than the gross domestic product of most island nations. Yet, it was the recent recipient of a $ 400 million gift earlier this year from Nike founder Phil Knight. And there too is the problem in higher ed, according to Gladwell.

Almost all of the big donations going to higher education go to wealthy universities that already have plenty of money. While Stanford catches the ire in this episode, it could just as easily have been Harvard. Last year, Gladwell jokingly tweeted in response to headlines that billionaire John Paulson was giving the school $ 400 million, “If billionaires don’t step up, Harvard will soon be down to its last $ 30 billion.”

The message is clear: if you’ve got big money to give and want to fix education, don’t give it to schools that already have a ton of money.

Like his best-selling books, Gladwell’s podcast is engaging and moves seamlessly back and forth between nuanced academic studies and interesting character profiles. His critiques are a welcome shake-up to beliefs about education and the American Dream.

The post Don’t Spend Your Money on Already Rich Schools appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies. 


Don’t let Koch’s New “End the Divide” Ad Fool You

(Photo: Flickr / Popularglasses)

(Photo: Flickr / Popularglasses)

In this year’s first quarter, the Federal Reserve reported last week, the total amount of wealth in the United States nudged over $ 88 trillion, an all-time record high.

So do you feel wealthier than ever? Probably not. Economic insecurity remains the norm for tens of millions of Americans. In fact, as the Federal Reserve reminded us last month in another report, nearly half of all Americans — 46 percent — don’t have enough cash on hand to cover a $ 400 emergency expense.

How can so many Americans be having such a rough time when the nation’s overall wealth is soaring? No big mystery there. Wealth is only soaring for some. The United States continues to be an exceptionally unequal society.

Yet huge chunks of the nation’s policy elite and chattering class are still rolling their eyes whenever anyone suggests that maybe we ought to start confronting that inequality, either by getting serious about taxing the rich or changing the economic rules that keep the rich getting richer.

Stop fixating on the really rich, these pols and pundits advise us. Help “grow” the economy instead. Restore “business confidence.” Free our “job creators” from nasty government regulations. Cut taxes to give our innovators more of an “incentive” to innovate.

This chill-out-about-the-rich message now has some powerful new wind behind it. Koch Industries, the money-making engine of the billionaire Koch-brother empire, has just begun a nationwide TV ad campaign that more or less urges us to “end the divide” by giving billionaires everything they want.

The new Koch “end the divide” ads feature swelling music and fetching images of hard-working average Americans of all races and creeds. About the only thing noble missing from these incredibly slick and polished ad spots: the truth.

For that truth, for an explanation of what’s really gone wrong with the American economy, we need to turn to an another new contribution to America’s political discourse, a just-published study from the Washington, D.C.-based Economic Policy Institute.

This new paper by EPI research director John Bivens has, unfortunately, no mega-million ad campaign behind it. But this EPI paper — Progressive redistribution without guilt — does have plenty of eye-opening evidence that directly links concentrating wealth and income at America’s economic summit and the relentless economic squeeze at America’s economic base.

Much of that evidence rests on what Bivens calls “simple arithmetic.” The numbers show clearly, as his paper puts it, that “the gains at the very top of the income distribution in recent decades have come essentially straight out of potential gains at the bottom and middle.”

What sort of numbers? Try these. Between 1947 and 1979, the years that made up America’s most equal modern-day era, the nation’s most affluent 1 percent accounted for 7.8 percent of the nation’s average income growth. The bottom 90 percent accounted for 65.9 percent.

Since 1979, an entirely different story. Over the last three-and-a-half decades, the top 1 percent has grabbed 70.5 percent of all income growth.

And if we look at just the years 1997 through 2014, the figures turn even starker. The top 1 percent in these years accounted for 92.4 percent of all average income growth.

The bottom 90 percent? Since 1997, the real incomes of this vast majority of Americans have fallen by an average 0.3 percent a year.

Average Americans, notes EPI’s Bivens, have been paying what amounts to an “inequality tax.” Rising inequality since 1979 has cost households in the bottom 90 percent roughly a fifth of what their incomes would be today had inequality remained at pre-Ronald Reagan levels.

But Bivens doesn’t share these numbers to depress us. He wants to see the silver lining his stark stats suggest.

We owe our current economic reality, Bivens points out, to the redistribution of income up that the United States has experienced over recent decades. We can bring average Americans a substantially better reality simply by undoing that upward redistribution.

And how do we that? Bivens outlines a series of concrete steps, everything from a financial transactions tax on Wall Street speculation to labor law reform that shifts bargaining leverage from CEOs to workers.

“If we want to ensure that the living standards of the vast majority rise in the next decade,” the EPI analyst concludes, “we need to embrace policies explicitly aimed at progressively redistributing income.”

The post Don’t let Koch’s New “End the Divide” Ad Fool You appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.


History Shows us we Don’t Need Billionaire Doctors to Make Medical Breakthroughs


Dr. Jonas Salk, 1955. (Photo: Wikipedia)

Dr. Patrick Soon-Shiong has helped make a little medical history. The good doctor holds over 95 patents. He pulled off the first pig-to-human cell transplant to treat diabetes. And one of the drugs he designed and developed, Abraxane, keeps cancerous cells from dividing.

How much of a personal reward does Dr. Soon-Shiong merit for contributions like these? No one, of course, can definitively say. How much in personal rewards has Dr. Soon-Shiong actually collected over the course of his medical career? That figure we can pin down.

Dr. Soon-Shiong, the wealth trackers at Bloomberg tell us, has amassed a personal fortune worth $ 9.7 billion. And plenty more is coming. Dr. Soon-Shiong currently serves as the CEO of NantKwest, a San Diego cancer research firm. The pay deal he cut last year, we’ve just learned from required filings, will bring him at least $ 148 million for his CEO labors — and maybe as much as $ 330 million.

Do these sums strike you as a tad excessive? Fans of Dr. Soon-Shiong don’t see things that way. They believe Medical progress requires lush rewards. The possibility of hitting it spectacularly rich, their argument goes, gives physicians like Dr. Soon-Shiong an incentive to work ever harder to conquer cancer and other illnesses.

But the historical record shows brilliant doctors don’t need the incentive of becoming fabulously rich to make their medical breakthroughs. Dr. Jonas Salk certainly didn’t.

In the 1950s, Salk developed the first successful vaccine against polio, the disease that terrified young American families in the years after World War II. In 1952, the polio epidemic’s peak year, U.S. health officials counted 58,000 cases, with children making up most of the victims. Over 3,100 died from polio that year. Many thousands more faced lives in “iron lungs.”

Salk’s dogged research brought families real hope. In 1954, a massive field trial of his new vaccine passed with flying colors. Mass inoculations began in 1955.

Within a few short years, polio had virtually disappeared. The chairman of the American Medical Association board would go on to label this momentous achievement “one of the greatest events in the history of medicine.” No one disagreed.

And how many millions did Dr. Salk reap from his striking medical success? Not one. Salk, the son of a New York City garment worker, didn’t feel he had any right to make a fortune off his research. He never filed for a patent that would have “monetized” the vaccine for him.

Salk would explain why in a live national interview with his era’s most famous news broadcaster, Edward R. Murrow.

“Who owns the patent on this vaccine?” Murrow asked the newly-famous doctor.

“Well, the people, I would say,” Salk replied. “There is no patent. Could you patent the sun?”

How much did Salk’s public-spirited approach to the drive against polio cost him personally? A Forbes analysis in 2012 concluded that Salk “would have been richer by $ 7 billion” if he had patented his vaccine.

Some might argue that we ought to see Salk as a special case, the sort of saintly figure who only comes around once a millennium. We shouldn’t consider his example, this perspective holds, a realistic precedent for how we should expect medical researchers to behave.

But Salk, in his day, hardly rated as wildly unique. His chief medical competitor Albert Sabin also developed a powerful and effective polio vaccine in the 1950s. Sabin never patented his work for personal profit either.

Mid-20th-century America seems to have abounded with public-spirited talents like Salk and Sabin. That shouldn’t surprise us. The rules of the economic game in mid-20th-century America encouraged public-spirited behavior.

Much of that encouragement came from the federal tax code. In the 1950s, tax rates actively discouraged greed and grasping. Income over $ 400,000 — about $ 3.5 million in today’s dollars — faced a 91 percent tax rate.

This steep tax rate on top-bracket income sent a clear social message: Some things matter more than making tons of money. Our contemporary tax rates, by contrast, send no such message. Today’s super rich — Americans who routinely take in over $ 100 million a year — seldom pay over 25 percent of their overall incomes in federal tax.

Tax bites this gentle encourage today’s medical entrepreneurs to go for the gold at every opportunity. Consider the gold that awaits Joseph Papa, the new CEO at Valeant Pharmaceuticals. Papa’s new pay deal, notes Fortune magazine, will hand him a stunning $ 500 million if Valeant’s stock price hits $ 270 per share, the company’s share price territory last July.

The prospect of a windfall this huge gives Papa an enormous incentive to hike Valeant’s share price by whatever means necessary. The greater the profit he can squeeze out of the drugs that Valeant markets, the greater the personal windfall he gets to pocket.

Valeant is already squeezing at a phenomenal pace. The company specializes in buying up drug patents, then quickly raising the prices of its new drugs to whatever the market can bear.

Under current patent rules, this strategy makes eminent business sense. The returns can be other-worldly. Since 2013, for instance, Valeant has hiked the price of Cuprimine, a drug for one rare condition, by 5,787 percent.

The resulting profits have made Valeant a hedge fund favorite. Patients and their families — and the doctors who feel a real professional responsibility to them — have less reason to cheer.

“We spend a lot of time with our patients talking about options based on what they can and can’t afford,” explains Dr. Richy Agajanian, a California oncologist. “As doctors, we are constantly juggling what’s best for patients versus what they can afford.”

How can we go beyond all this juggling? Having more public-spirited Dr. Salks and Dr. Sabins around would help. But what we need even more: egalitarian-minded rules for our economy — on everything from patents to taxes — that make public spiritedness the only logical choice.

The post History Shows us we Don’t Need Billionaire Doctors to Make Medical Breakthroughs appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.


Don’t Be a Fossil-Foolish Investor

(Image: Jeff Turner / Flickr)

(Image: Jeff Turner / Flickr)

Investors who choose to steer clear of oil, gas, and coal are protecting their portfolios in the short term and the long run.

Who has divested lately? The fast-growing list includes the University of California, insurance giant Allianz, the German city of Munster, and the London School of Economics. Portfolios that add up to a total of $ 3.4 trillion are now either entirely fossil-free or exclude specific kinds of dirty energy like coal and tar sands.

Rather than punishing the people and institutions who commit this act of climate kindness, financial markets are rewarding them. Shunning fossil fuels has boosted returns for the past decade, as measured by a specialized index the financial tracking firm MSCI manages.

And while markets and energy trends are hard to predict, you don’t need a crystal ball to see that 2016 looks like a terrible year to bet on fossil fuels. For one thing, OPEC just passed up an opportunity to cut its oil production. Oil prices, already driven low enough to gut profits worldwide due to oversupply, are diving again.

How low will they go? Even before OPEC made news by doing nothing, Goldman Sachs analysts were forecasting $ 20 a barrel — about half of recent levels and more than 80 percent below mid-2014 highs. As consensus builds around a “lower for longer” oil outlook, U.S. natural gas prices are slumping due to a glut in that fuel too.

Then there’s the coal industry’s financial freefall. The leading coal exchange-traded fund (ETF), known as KOL, had lost nearly 55 percent of its value by early December, after suffering double-digit declines for the prior four years. KOL joined several natural gas ETFs on a list of the worst performers in that asset class during the first nine months of 2015.

With bankruptcy and debt distress in store next year for the oil and gas industries, according to Fortune, the purely financial case for going fossil-free is getting stronger.

Do you want to invest in S&P 500 companies, aside from any oil, gas, and coal outfits? Financial firm State Street Global Advisors partnered with the Natural Resources Defense Council to create a low-carbon vehicle that lets you do that now.

Better yet, invest some money in the industries bound to replace fossil fuels, such as renewable energy and other climate-friendly technologies. One option is FAN, a wind ETF. It had gained more than 10 percent through the first week of December, making it among 2015’s top performers. (Disclosure: I’ve both lost and made money over the years investing in the wind and solar power industries.)

As the Paris climate talks have made clear, the question is increasingly when, not if, the world will stop burning oil, gas, and coal. So the long-term case for abstaining from any investment in those businesses is even more powerful than current market malaise.

How powerful is it?

Those wild-eyed radicals at Citigroup have estimated what averting a climate catastrophe by leaving more than three quarters of oil, gas, and coal reserves underground or beneath the seawould cost.

The price tag for this collectively rational behavior, whether it will be due to government action or booming demand for environmentally friendlier options, is $ 100 trillion. That huge number, which exceeds the combined value of the economy of every country on earth, has ominous implications for ExxonMobil and all of its competitors.

In any case, a global shift toward greener energy is already underway. Acting now to protect your money from the financial risks associated with this upheaval — while putting it where your mouth is if you care about climate change — sends a message to energy companies and Wall Street. And it just might speed up this monumental industrial transformation.

The post Don’t Be a Fossil-Foolish Investor appeared first on Institute for Policy Studies.

Emily Schwartz Greco is the managing editor of OtherWords, a project of the Institute for Policy Studies.