Sunday, November 13, 2011

Massive Income Inequality, and Achievement among the 99%

The latest from Tyler Cowen:

Nonetheless, higher income inequality will increase the appeal of traditional mores — of discipline and hard work — because they bolster one’s chances of advancing economically.
Let's be clear here:

Severe income inequality DECREASES, not increases, the chances of the poor and middle class to get ahead, not that Libretario Cowen would care much; as an extreme libertarian he'd rather have massive suffering, loss, and decreased growth rather than give up even a tiny amount of personal freedom.

It DECREASES the chance to get ahead when you have to work 40 hours per week while going to college full time, thus having far less time to study, learn, and succeed. Studies have shown that this substantially reduces the odds of graduating, as well as learning, and GPA. But, hey, let's cut college aid even further, so we have even more income inequality!

It DECREASES the chance to get ahead when poor –  and middle class – children have no health insurance, so they grow up sicker, and more poorly developed mentally and physically, and when their mothers can't afford to spend the time to breastfeed due to work, or to buy and cook the healthier foods, whole fruits and vegetables. Or when they have to live in more and more polluted areas because of Republican deregulation. But, hey, no problem, the rich can afford to move away from the pollution. It's only the children of the poor – and middle class – who as a result will be sicker, dumber, and more likely to suffer from behavioral problems.

It DECREASES the chance to get ahead when poor and middle class children can't go to pre-school because their parents can't afford it, or they can only afford day care which just sits them in front of the TV because that's a lot less time consuming and expensive than teaching.

It DECREASES the chance to get ahead when little regulated for-profit schools can prey on unknowing young people with promises of great careers from substandard education that does little to increase earnings, but costs 10 times as much as GOVERNMENT community colleges, and is financed with loan shark private student loans that can quickly grow exponentially so they're impossible to ever pay off, but thanks to the Republicans can never be escaped in bankruptcy – Welcome back indentured servitude! Always nice to ruin lives before they can even get started, and the poor kid has any idea even what's going on. But hey, Pure Free Market! And better to ruin a billion lives than give up even one micron of personal freedom, right Libretario?

But does this "increase the appeal of traditional mores — of discipline and hard work", as Libretario says? Taken to this kind of extreme, especially for the poor, it can do the opposite, because it can increase hopelessness, people just giving up and turning to crime and an underclass mentality, people just thinking why try.

Remember, it may not be nice and simple, but the reality is that lots of things graph U-shaped, or upside-down U, not simple straight line, always increasing or always decreasing. A certain amount of income inequality increases discipline and hard work, but at some point it gets so extreme that things just look too daunting or herculean for most,  hopeless and rigged, and then effort, and a belief in the payoff of hard work, starts decreasing.

You increase discipline and hard work, and achievement, overall, by giving people the means to succeed and clear, reasonably realistic looking, routes to success. Make college more affordable (a lot more), give all children healthcare and truly nutritious school breakfasts and lunches, and quality pre-school and daycare, give middle aged mothers and fathers who have made mistakes, or just had no idea of how important education was when they were kids, but want to work hard now and turn it around, the realistic possibility of going back to school and getting a college degree, without making it a herculean task that few will attempt, let alone succeed at.

Do these kinds of things, and then you'll see both more effort AND more success, because effort is a lot more productive if you provide tools and resources to go with it, and you get a lot more effort from most people if you make the goal look realistically achievable, not a daunting, or herculean, task. Yes, some people will take on daunting or herculean tasks; they won't shy away, and they will work themselves to the bone, and may succeed. But do you want only this minority of people to get ahead and do well, and screw the majority, or do you want to make the high return investment to make the majority highly productive and financially comfortable too?

Of course, Libretario, you don't actually care, if it means giving up even a speck of personal freedom.