RESOURCE FILES OF NIKHILESH DHOLAKIA:

INEQUALITY VER. 1
2015 NIKHILESH DHOLAKIA

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This document contains web links to opinions,
columns, news items, articles, data, etc. on
Inequality. The collection represents this researcher's
personal interests, but should be of value to other
researchers interested in Inequality.

Dholakia, Nikhilesh (2015),

Resource Files of Nikhilesh
Dholakia: Inequality Ver.1,
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Noam Chomsky on AlterNet, Jan 2014:

http://www.alternet.org/visions/chomsky-how-can-we-escape-curse-economic-exploitationand-political-and-social-enslavement?akid=11383.10893.mPX_2&rd=1&src=newsletter944928&t=5&paging=off&current_page=1#bookmark

Paul Krugman in NYT on the massive efforts to obfuscate inequality:

http://www.nytimes.com/2014/01/20/opinion/krugman-the-undeservingrich.html?ref=paulkrugman&_r=1

Articles on Oxfam inequality report, and Davos 2014, and other fallout from Oxfam report:
http://nymag.com/daily/intelligencer/2014/01/what-oxfam-should-have-told-davos.html
http://www.thewire.com/politics/2014/01/worlds-rich-are-not-incomprehensibly-wealthybecause-they-work-harder/357187/

Interview with Matt Taibbi on the untouchable super-rich:

http://goo.gl/Gj68aD

Kemal Dervi, former Minister of Economic Affairs of Turkey and former Administrator for the
United Nations Development Program (UNDP), is a vice president of the Brookings Institution.
http://www.project-syndicate.org/commentary/publicly-funded-inequality-by-kemal-dervi-201503?utm_source=MadMimi&utm_medium=email&utm_content=Project+Syndicate%27s+Econo
mics+Update&utm_campaign=20150306_m124717829_Project+Syndicate%27s+Economics+Up
date&utm_term=Publicly+Funded+Inequality

Piketty review John Cassidy in New Yorker:

http://www.newyorker.com/magazine/2014/03/31/forces-of-divergence

Piketty review Lawrence Summers

http://www.democracyjournal.org/33/the-inequality-puzzle.php?

Piketty review Paul Krugman

http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

Piketty review von Mises organization

http://mises.org/library/thomas-piketty-inequality-and-capital

Piketty review James Galbraith

http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-century

Piketty review Deirdre McCloskey

http://www.deirdremccloskey.org/docs/pdf/PikettyReviewEssay.pdf

Google search on Horatio Alger

https://www.google.com/?gws_rd=ssl#q=horatio+alger

Brookings study on inequality levels in US cities:

http://www.marketwatch.com/story/san-francisco-is-richest-but-atlanta-is-the-most-unequal2015-03-20

Child poverty and privations, reported by UK school teachers:

http://www.bbc.com/news/education-32181848

WSJ-CBSMarketWatch columnist Paul Farrell on dangerous, permanent inequality:

http://www.marketwatch.com/story/the-inequality-bubble-is-accelerating-worse-than-29even-1789-2015-04-14?link=mw_home_kiosk
Van Arnum, Bradford M., and Michele I. Naples. "Financialization and Income Inequality in the
United States, 19672010." American Journal of Economics and Sociology 72, no. 5 (2013):
1158-1182.
CBS/MarketWatch-WSJ columnist Rex Nutting on the inequality and Finanzkapital impacts of
the US corporate finance culture of share buybacks:
http://www.marketwatch.com/story/how-the-stock-market-destroyed-the-middle-class-201504-24?dist=lcountdown
Quotes from above:

one big reason for the increase in inequality in America since the 1980s is the explosion of
compensation [in the form of stocks, now 80% of compensation] to top corporate executives,
who now make up about 60% of the top 0.1% of earners.
Even managers who are initially resistant to authorizing stock buybacks often succumb to the
pressure of outside activist investors such as Carl Icahn, Daniel Loeb or T. Boone Pickens to
unlock shareholder value by buying back as many shares as possible.

Lets be clear about our terminology here: Icahn is not really an investor in Apple Inc.; hes a
speculator in Apple shares Icahn has never contributed any financial or human capital to
Apples success, unlike its original investors or its workers and executives, who provided the
money and brains that made Apple the worlds most successful corporation. Or the taxpayers,
for that matter, who funded the research that invented almost all the technology that makes an
iPhone work.
The sums involved are staggering. In 2014, S&P 500 companies bought back $553 billion in
shares, in addition to paying shareholders $350 billion in dividends. Total returns to
shareholders equaled $904 billion, a bit shy of reported earnings of $909 billion.
Its not as if companies are raising lots of new capital from the stock market to replace the
money they are handing over to shareholders. Banks are raising capital in the stock market, but
net issuances of nonfinancial equities have been negative for 21 straight years.
The companies that are doing the most buybacks Exxon XOM, -0.62% IBM IBM, -0.82%
Apple, Microsoft MSFT, +8.14% and Cisco CSCO, +0.40% frequently return most of their
annual profits to shareholders, leaving very little to invest in the future. From 2004 to 2013,
Pfizer PFE, -0.20% returned 137% of profits to shareholders, Merck MRK, +0.94% returned
104%, and Hewlett-Packard HPQ, -0.09% returned 168%, according to Lazonicks analysis.
Stock buybacks are making a few people fabulously wealthy, but they are impoverishing the
economy and the workers.
Lazonick argues that innovative companies need to invest time and money in facilities,
equipment and especially in workers. Innovation and incremental productivity improvements
come mainly from people whove learned how to work together and when a company allows
itself to think in time periods longer than the next quarter or the next year.
But buybacks hollow out a corporations ability to innovate. Workers dont get the chance to
learn how to solve problems together, because the managers need to downsize the company to
make their short-term earnings targets and collect their millions.

William Lazonick, U-Mass-Lowell, has many papers on corporate financialization, share

buyback, enriching the top managers, and hollowing out the American middle class:
http://scholar.google.com/scholar?as_vis=1&q=lazonick+buyback+economy&hl=en&as_sdt=1,
5

Shareholder Value theory, attributed to Jack Welch of GE, which is used to justify share
buybacks, has a mixed scholarly history: critical (Lazonick) but otherwise supportive or nuanced
evaluation, including J-Mktg articles:
http://scholar.google.com/scholar?hl=en&q=%22shareholder+value%22+theory+finance+econ
omics&btnG=&as_sdt=1%2C5&as_sdtp=

http://www.nytimes.com/2015/04/19/upshot/why-americans-dont-want-to-soak-therich.html?rref=collection/column/economicview&module=ArrowsNav&contentCollection=The%20Upshot&action=swipe&region=FixedLeft
&pgtype=article&abt=0002&abg=0

With rising income inequality in the United States, you might expect more and more people to
conclude that its time to soak the rich. Heres a puzzle, though: Over the last several decades,
close to the opposite has happened.
Since the 1970s, middle-class incomes have been stagnant in inflation-adjusted terms, while the
wealthy have done very well; inequality of wealth and income has risen.
Over that same period, though, Americans views on whether the government should work to
redistribute income to tax the rich, for example, and funnel the proceeds to the poor and
working class have, depending on which survey answers you look at, either been little
changed, or shifted toward greater skepticism about redistribution.
In other words, Americans desire to soak the rich has diminished even as the rich have more
wealth available that could, theoretically, be soaked.
Its not just public opinion polls, either. It shows up in the actual policies espoused by
candidates for office and enacted by Congress. In 1980, the highest earning Americans faced a
70 percent tax on every dollar they earned beyond $215,400 for a married couple, for example,
the equivalent of $544,000 today.

If youre conservative, a compelling answer might be this: Americans are seeking less
redistribution because they have come to their senses. They realized the very high tax rates and
generous social spending that prevailed in the middle decades of the 20th century came at a
high economic cost, and that low taxes on the rich encouraged greater investment and

entrepreneurship, spurring faster economic growth that ultimately made everybody better off.
(The economists Glenn Hubbard and Tim Kane have made a version of that argument.)
If youre a liberal, the answer might be more like this: Americans have been hoodwinked by
conservative politicians and media outlets, and have come to view redistribution as a dirty
word because they dont recognize the ways it benefits them. This barrage of misinformation
has led them to view any redistributive efforts as welfare that goes to somebody else,
particularly to someone with a different color skin. (Paul Krugman has made a version of that
argument.)
New research offers a bit more evidence on what may be occurring. It doesnt disprove either
the conventional liberal or conservative argument. But it does show some of the ways that
Americans attitudes toward redistribution are more complex than either would suggest.
A National Bureau of Economic Research working paper by Jimmy Charit, Raymond Fisman
and Ilyana Kuziemko tackled this with an online experiment in which a random sampling of
Americans were asked what tax rate they thought appropriate for someone whose annual
income had suddenly increased by $250,000 for reasons involving luck. The researchers asked
the question twice. In one version, the income gain occurred in the current year; in the other, it
happened five years ago. Surprisingly, the respondents favored a 1.7 percentage point higher
tax rate if the person with the income gain had recently started earning the extra money than if
the person had been earning it for five years. That may not sound like much, but it is more than
half of the gap the same experiment showed between the tax rate favored by Obama voters
and the rate favored by those who said they voted for Mitt Romney in 2012.
In other words, respondents favored less redistribution if they believed that the person had
already grown accustomed to a higher income. The psychology seems to be something like
this: Rich people who have been rich for a while have gotten used to their money, so it would
be unfair to tax them heavily. But people who have just gotten rich have not become
accustomed to higher levels of after-tax income, so it wouldnt be as harmful to raise their
taxes in the interest of greater equality. [emphasis added by me]
Another working paper, from the Brookings Papers on Economic Activity by Vivekinan Ashok,
Ms. Kuziemko and Ebonya Washington, looks at how thinking about redistribution has varied
over time among groups. One of its more striking conclusions: The shift away from a belief in
redistribution has been stronger among older Americans than any other age group.
Might this be explained by the elderly becoming more conservative in general, and therefore
taking a more conservative view on this issue? Not really. The shift showed up even when the
researchers controlled for views on hot-button social issues like abortion and gun control.
The researchers offer another way of making sense of the pattern: Older Americans benefit
more directly than any other age group from the social safety net, specifically, Social Security
and Medicare. The fact that American seniors already receive government-provided health care

may make them view any talk of greater redistribution as taking away what they already have,
the researchers suggest.
During the debate over President Obamas health care overhaul, this thread was often evident;
with opinion polls showing that older Americans opposed the law more than younger people
did. At the same time, conservative politicians and commentators pummeled the law for
cutting Medicare spending to help pay for expanded coverage for younger Americans.
The two studies indicate how complex even messy opinions on this question of political
philosophy are. Our views on proper tax levels and redistribution may be shaped by seemingly
extraneous factors, like whether we believe the rich are already used to being rich, and
whether we are already getting government benefits.
In other words, the question isnt, Why dont Americans want to soak the rich more? It may be,
Who exactly is being counted as rich and who is perceived to be benefiting from the soaking?

Sad capitalist perversion (empirically speaking) bad job report is usually good news for stock
prices:
http://www.marketwatch.com/story/historically-bad-jobs-news-really-is-good-news-for-stocks2015-05-07

The impoverished aristocracy of America

http://money.cnn.com/2015/05/07/news/economy/issa-poor/index.html?iid=HP_LN

Kenneth Rogoff global inequality and global migration:

https://www.project-syndicate.org/commentary/europe-immigration-inequality-by-kennethrogoff-2015-05
Quotes:
Many broad policy issues are distorted when viewed through a lens that focuses only on
domestic inequality and ignores global inequality. Thomas Pikettys Marxian claim that
capitalism is failing because domestic inequality is rising has it exactly backwards. When one

weights all of the worlds citizens equally, things look very different. In particular, the same
forces of globalization that have contributed to stagnant middle-class wages in rich countries
have lifted hundreds of millions of people out of poverty elsewhere.
By many measures, global inequality has been reduced significantly over the past three
decades, implying that capitalism has succeeded spectacularly. Capitalism has perhaps eroded
rents that workers in advanced countries enjoy by virtue of where they were born. But it has
done even more to help the worlds true middle-income workers in Asia and emerging markets.
Allowing freer flows of people across borders would equalize opportunities even faster than
trade, but resistance is fierce. Anti-immigration political parties have made large inroads in
countries like France and the United Kingdom, and are a major force in many other countries as
well.
Of course, millions of desperate people who live in war zones and failed states have little choice
but to seek asylum in rich countries, whatever the risk
Economic pressures are another potent force for migration. Workers from poor countries
welcome the opportunity to work in advanced countries, even at what seem like rock-bottom
wages. Unfortunately, most of the debate in rich countries today, on both the left and the right,
centers on how to keep other people out. That may be practical, but it certainly is not morally
defensible.
And migration pressure will increase markedly if global warming unfolds according to
climatologists baseline predictions. As equatorial regions become too hot and arid to sustain
agriculture, rising temperatures in the north will make agriculture more productive. Shifting
weather patterns could then fuel migration to richer countries
With most rich countries capacity and tolerance for immigration already limited, it is hard to
see how a new equilibrium for global population distribution will be reached peacefully
As the world becomes richer, inequality inevitably will loom as a much larger issue relative to
poverty, a point I first argued more than a decade ago. Regrettably, however, the inequality
debate has focused so intensely on domestic inequality that the far larger issue of global
inequality has been overshadowed. That is a pity, because there are many ways rich countries
can make a difference. They can provide free online medical and education support, more
development aid, debt write-downs, market access, and greater contributions to global
security. The arrival of desperate boat people on Europes shores is a symptom of their failure
to do so.

Fighting inequality in US: Sen. Warren, Mayor de Blasio, Prof Stiglitz:

http://www.dw.de/stiglitz-de-blasio-and-warren-team-up-against-inequality/a-18445794

Opinion piece on do-good capitalists by Nicole Aschoff, author of The New Prophets of
Capital:
https://www.opendemocracy.net/transformation/nicole-aschoff/exposing-false-prophets-ofsocial-transformation
http://www.versobooks.com/books/1845-the-new-prophets-of-capital

The conservative It aint SO unequal, yall.. position:

https://www.project-syndicate.org/commentary/are-us-middle-class-incomes-stagnating-bymartin-feldstein-2015-07

Stiglitz is not mincing words

https://www.project-syndicate.org/commentary/us-international-development-finance-byjoseph-e--stiglitz-2015-08
http://www.marketwatch.com/story/how-america-keeps-the-worlds-poor-downtrodden-201508-06

Most of the investment projects that the emerging world needs are long term, as are much of
the available savings the trillions in retirement accounts, pension funds, and sovereign
wealth funds. But our increasingly shortsighted financial markets stand between the two.
. Back then [c. 2000], the G-7 dominated global economic policy making; today, China is the
worlds largest economy (in purchasing-power-parity terms), with savings some 50% larger than
that of the U.S. In 2002, Western financial institutions were thought to be wizards at managing
risk and allocating capital; today, we see that they are wizards at market manipulation and
other deceptive practices.
Wealth, poverty, inequality in USA (2015):
http://money.cnn.com/2015/09/18/news/economy/americans-wealth/index.html?iid=hpstack-dom

Venezuelan official, Harvard prof defends unbridled capitalism:

https://www.project-syndicate.org/commentary/does-capitalism-cause-poverty-by-ricardohausmann-2015-08

No surprise the center of Finanzkapital, of USA and the world, is the NYC metro area. The map
also show the GDP and, as an extension, wealth concentration across USA:
http://www.marketwatch.com/story/wheres-the-money-in-america-this-3d-map-will-showyou-2015-11-05?dist=tbeforebell

Nobel-winner Tunisian labor union leader and US labor union leader team up, in this column, to
outline the key role of unions in trying to curb inequality:
http://www.theguardian.com/commentisfree/2015/nov/05/strong-unions-strengthendemocracies-deliver-peace-tunisia-united-states