Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Joseph Stiglitz comments on the wider lessons we should take from Detroit's bankruptcy:

Detroit’s travails arise in part from a distinctive aspect of America’s divided economy and society. As the sociologists Sean F. Reardon and Kendra Bischoff have pointed out, our country is becoming vastly more economically segregated, which can be even more pernicious than being racially segregated. Detroit is the example par excellence of the seclusion of affluent (and mostly white) elites in suburban enclaves. There is a rationale for battening down the hatches: the rich thus ensure that they don’t have to pay any share of the local public goods and services of their less well-off neighbors, and that their children don’t have to mix with those of lower socioeconomic status.

The trend toward self-reinforcing inequality is especially apparent in education, an ever shrinking ladder for upward mobility. Schools in poorer districts get worse, parents with means move out to richer districts, and the divisions between the haves and the have-nots — not only in this generation, but also in the next — grow ever larger.
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Adding to the problems that would inevitably arise from such poorly designed urban agglomerations is the fact that the Detroit metropolitan area is divided into separate political jurisdictions. The poor are thus not only geographically isolated, but politically ghettoized as well. The result is a separate, poorer inner city with a dearth of resources, made even worse because the industrial plants that had provided the core of the tax base are shut down.
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The same skewed priorities that have gutted Detroit at the local level are echoed in a void at the level of national policy. Every country, every society, has regions and industries whose stars are rising, and others that are in decline. Silicon Valley has, for some time, been America’s rising star — just as the upper Midwest was a hundred years ago. With technological change and globalization, though, the Midwest’s comparative advantage as a global manufacturing hub has ebbed, for reasons too well known to list here. Markets, however, often don’t do a good job of self-rejuvenation.

Rather than deal purposefully with this changing economic landscape with useful policies encouraging the growth of other industries, our government spent decades papering over the growing weaknesses by allowing the financial sector to run amok, creating “growth” based on bubbles. We didn’t just let the market run its course. We made an active choice to embrace short-term profits and large-scale inefficiency.

There may be something inevitable about the structural changes that have made American manufacturing less central to our economy, but there is nothing inevitable about the waste, pain and human despair in cities that have accompanied that change.

- And Robert Reich points out how the same trends of increasing inequality and economic segregation feed into a wider sense of anger:

(F)or the last three and a half decades, the middle class has been losing ground. The median wage of male workers is now lower than it was in 1980, adjusted for inflation.

In addition, all the mechanisms we’ve used over the last three decades to minimize the effects of this descent — young mothers streaming into paid work in the late 1970s and 1980s, everyone working longer hours in the 1990s, and then borrowing against the rising values of our homes — are now exhausted. And wages are still dropping — the median is now 4 percent below what it was at the start of the so-called recovery.

Meanwhile, income, wealth, and power have become more concentrated at the top than they’ve been in ninety years.
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The last time America was this bitterly divided was in the 1920s, which was the last time income, wealth, and power were this concentrated.

When average people feel the game is rigged, they get angry. And that anger can easily find its way into deep resentments — of the poor, of blacks, of immigrants, of unions, of the well-educated, of government.

This shouldn’t be surprising. Demagogues throughout history have used anger to target scapegoats — thereby dividing and conquering, and distracting people from the real sources of their frustrations. 

- But of course, it is worth pointing out when systems of privilege are in fact abused at the public's expense. On that front, CBC points out the surprises within the now-released audit of Pamela Wallin's Senate expenses. Tim Harper fills in a few details of his own, while Rosie DiManno traces Wallin's descent into ignominy. And the Star thoroughly misses the point in framing the issue as one of Stephen Harper's judgment of character in appointing Wallin and Mike Duffy to the Senate - rather than the culture of corruption and naked self-interest that he's used to define his party.

- Josh Eidelson writes about the expanding scope of fast food strikes as workers fight for fair wages and recognition. And Steven Greenhouse discusses the efforts of the Workers Defense Project to organize and assist those without union representation.

- Finally, Erin Weir calculates what corporate tax reductions have cost the Canadian public - with the final number for the Cons' tax slashing alone reaching upwards of ten billion dollars each year.