Sunday, September 03, 2006
 

Getting the job done

Ana Bernasek:

Sir Michael Marmot, a professor of epidemiology and public health at University College London and director of its International Institute for Society and Health, has spent most of his career studying the link between inequality and health around the world. In a much-publicized paper published in May in The Journal of the American Medical Association, Sir Michael and three colleagues studied health in the United States and in Britain. They found that at various points throughout the social hierarchy, there was more illness in the United States than in Britain.

Sir Michael theorizes that a reason for the disparity was the greater inequalities in the United States and heavier stresses resulting from them.

Other researchers have focused on how income inequality can breed corruption. That may be especially true in democracies, where wealth and political power can be more easily exchanged, according to a study of 129 countries by Jong-Sung You, a graduate student at the Kennedy School of Government at Harvard, and Sanjeev Khagram, a professor of public affairs at the University of Washington in Seattle.

Corruption, of course, can hurt growth by reducing the efficient allocation of public and private resources and by distorting investment. That may end up creating asset price bubbles.

Unchecked inequality may also tend to create still more inequality. Edward L. Glaeser, a professor of economics at Harvard, argues that as the rich become richer and acquire greater political influence, they may support policies that make themselves even wealthier at the expense of others. In a paper published last July, he said, "If the rich can influence political outcomes through lobbying activities or membership in special interest groups, then more inequality could lead to less redistribution rather than more."

In the United States, there is plenty of evidence that this has been occurring. Bush administration policies that have already reduced the estate tax and cut the top income and capital gains tax rates benefit the well-to-do. It seems hardly an accident that the gap between rich and poor has widened.

[New York Times (6/23/2006)]

No, hardly an accident. One almost might suspect that increasing income inequality was the purpose of the policies of the Bush administration, if one was a suspicious sort of person.

The best interpretation one can put on this is that they honestly feel that our society is better off with more and richer rich people, that there's more innovation, more robust international competition, that the well-off will take more risks if they're well taken care of. They may really believe this.

On the other hand, they could just be servicing their clientele.

Or maybe both.

Addendum: New York Times (8/27/2006):

Bankruptcy court is supposed to be a place where facts remain out in the open. But that seems to be changing in Delaware, one of the largest homes for corporate bankruptcy cases.

The Werner Company, a maker of ladders, filed for Chapter 11 reorganization in June; its bankruptcy is being overseen by Judge Kevin J. Carey of United States bankruptcy court in Delaware.

Earlier this month, Judge Carey agreed to seal documents detailing bonuses that will be paid to nine Werner executives. The move came after company lawyers argued that the pay disclosures “may create low morale and an unhealthy work environment” at Werner.

Ya think?

The judge also shut out the public from the Aug. 17 hearing on the pay. [Emphasis added -- Ed]

Ed Fitzgerald | 9/03/2006 02:43:00 AM | | | del.icio.us | GO: TOP OF HOME PAGE







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Ed Fitzgerald

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