Are Your Children Likely to Make More Money than You?


No. The statistics are clear.  The ability to change class to move upward is very, very limited. Most people on average and most commonly will make about the same money as their parents.

Why are we in this situation? Well, education is no longer a likely venue to higher income. The privileged have access to Ivy League schools and privately educate their children from the nursery to college. Currently we have what is essentially two education systems in the United States, one for the upper class and public education for everyone else. God help anyone self-educated like Abraham Lincoln. People like that aren’t even in the ball game.

What else? Well there’s hiring practices. The upper middle class reassured by such books as “Emotional Intelligence” hire on the basis of comfort. And comfort by and large means hiring your own social class. It diminishes the importance of ability and makes skilled work annoying to others.

Contacts are another critical factor. I’ve heard many people say, “It’s not what you can do, it’s who you know.” I don’t think that knowing the plant manager is that big a deal down in the lower class where I dwell. That’s not what I’m talking about. I’m talking about access to Congressmen and Governors. I’m talking about the heads of corporations and the deans of business schools. I’m talking about knowing the players in the financial sector, of knowing where the levers are when it comes to getting loans, jobs and influence. Those are the contacts that make a difference.

Tell me, what’s all A’s at state U, compared to Harvard or Georgetown? What is raw ability when you don’t golf, wear the right clothes or speak the language of the upper class? What is your chance of moving up in the world when maybe you know a state representative and the other guy has a letter from the White House?

We can do better.

Ability should be the measure of success. Social class shouldn’t be a burden borne only by the workers. The cozy club atmosphere of the privileged should be open to all comers.

James Pilant

Here is the article title and a paragraph explaining the numbers behind my claims.

The Rise and Consequences of Inequality in the United States
Alan B. Krueger
Chairman, Council of Economic Advisers
January 12, 2012

More research has been done on intergenerational income mobility. Studies find that your
parent’s income is a good predictor of your subsequent income. Studies that use income data
averaged over longer periods of time for parents and children tend to find higher correlations
between parental and children’s income. A reasonable summary is that the correlation between
parents’ and their children’s income is around 0.50. This is remarkably similar to the correlation
that Sir Francis Galton found between parents’ height and their children’s height over 100 years
ago. This fact helps to put in context what a correlation of 0.50 implies. The chance of a person
who was born to a family in the bottom 10 percent of the income distribution rising to the top 10
percent as an adult is about the same as the chance that a dad who is 5’6” tall having a son who
grows up to be over 6’1” tall. It happens, but not often.

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Tell President Obama to Pay His Interns!


Would you, my kind readers, help me out?

First, it’s simply unjust to work without pay and, second, it means that only the wealthier students can afford to hold an internship where the contacts and influence acquired will benefit them their entire lives. If the President is serious about wealth inequality, then he should fix the inequity in his own backyard.

That’s why I created a petition to President Barack Obama, which says:

“White House internships should no longer be unpaid. These positions can be applied for by those who are in college or just graduates or military veterans with at least a high school education. Only a handful of this pool can afford to work without salary and so only the wealthy need apply. “

Will you sign my petition? Click here to add your name:

http://petitions.moveon.org/sign/white-house-interns-should?source=c.fwd&r_by=2956077

Thanks!

James Pilant

From around the web.

From the web site, Money.CNN.

http://money.cnn.com/2013/08/20/news/economy/unpaid-intern-white-house/index.html

For employers who rely on unpaid interns, it’s been the summer of reckoning.

Hundreds of interns have filed lawsuits or raised complaints over working long hours for free. But one group of former interns is sidestepping the courtroom and going straight to the White House to fight for fair compensation.

The Fair Pay Campaign, a grassroots lobby set to launch around Labor Day, is calling on President Obama to pay White House interns in order to set an example for other government agencies and private employers.

“We have a minimum wage law in this country, and just because you call someone an intern doesn’t mean you get out of it,” said Mikey Franklin, the leader of Fair Pay’s charge.

From the web site, Minding the Workplace. This blog belongs to my colleague, David Yamada, an expert in the field of workplace bullying.

http://newworkplace.wordpress.com/2012/05/07/a-movement-emerges-will-unpaid-internships-disappear/

This summer, countless numbers of students will work in unpaid internships, in many instances for large corporations that could easily afford to pay them. Not only is this widespread practice often in apparent violation of state and federal minimum wage laws, but also it creates barriers to those who want to break into an occupation but who cannot afford to work for free.

Now there’s an emerging movement against unpaid internships (especially in the private sector), and here’s evidence of its coming out party:

Lawsuits

Well-publicized legal claims for back pay by unpaid interns have played a significant role in bringing this common practice to public light.

It started last fall with a lawsuit filed by two unpaid interns, Alex Footman and Eric Glatt, who worked on the production of the movie “Black Swan,” alleging that Fox Searchlight Pictures violated minimum wage and overtime rules.

Earlier this year, Xuedan Wang, a former unpaid intern for Harper’s Bazaar, filed a claim against the magazine’s publisher, the Hearst Corporation.

Self Regulation and Chicken!


Can't claim credit for this cooking, my friend...
Can’t claim credit for this cooking, my friend Paul was responsible. (Photo credit: Wikipedia)

 

Self Regulation and Chicken!

 

Here Milton Friedman explains that business will self regulate without government regulation.

 

How do you feel about that? Ever had food poisoning? Fun?

 

I don’t get the impression that businesses aren’t willing to lose a few customers (and I mean permanent losses) if it means more profits.

 

Maybe I’m cynical or maybe I just read the news?

 

Or how about this?

 

How many people have to be killed or injured by supposedly self regulating businesses before you realize that Milton Friedman was a much better television celebrity than an economist?

 

James Pilant

 

Is our chicken safe to eat? | Business Watch | McClatchy DC

 

http://www.mcclatchydc.com/2013/10/17/205695/us-urged-to-do-more-to-protect.html

 

After 317 people in 20 states got sick from eating contaminated chicken, consumer groups today urged the U.S. Department of Agriculture to do a better job of inspecting poultry.

 

via Is our chicken safe to eat? | Business Watch | McClatchy DC.

 

From around the web.

 

From the web site, Eslkevin’s Blog.

 

http://eslkevin.wordpress.com/2013/10/09/government-washes-its-hands-of-meat-and-poultry-safety-inspections/

 

In 1998, USDA rolled out its pilot HACCP system. The acronym stood

 

for “Hazard Analysis and Critical Control Points” but federal meat

 

inspectors, industry watchers and food advocates quickly dubbed it “Have

 

a Cup of Coffee and Pray” because it transferred oversight from the

 

government to the plant, in shocking, industry-friendly de-regulation.

 

HACCP was supposed to replace meat inspectors’ old-fashioned “poke and

 

sniff” method of visually examining carcasses by instituting advanced

 

microbiology techniques. But it is also an “honors system” in which

 

federal inspectors simply ratify that companies arefollowing their own

 

self-created system. As in “Trust us.”

 

Last week,   a coalition of food and worker safety advocates and

 

allies gathered outside the White House to protest USDA’s imminent plan

 

to implement HACCP system-wide now that it has been used at pilot

 

locations. “Instead of trained USDA inspectors, companies will police

 

themselves,” says the site of the group that organized the protest, sumofus.org.

 

“Plants will be allowed to speed up production dramatically. Chickens

 

will spend more time soaking in contaminants (including pus and feces!),

 

and poultry plants are compensating by washing them in with chlorine.”

 

The Aaron Swartz Legacy?


 

Aaron Swartz
Aaron Swartz

The Aaron Swartz Legacy?

White House Grants Aaron Swartz’s Wish: Taxpayer-Funded Research Will Be Free

Aaron Swartz, a well-known Internet activist who killed himself last month, believed that information should free, not digitized and put behind pay walls.

“The world’s entire scientific and cultural heritage, published over centuries in books and journals, is increasingly being digitized and locked up by a handful of private corporations,” he once wrote.

The Obama administration just granted his wish — at least as it pertains to research funded by taxpayers.

The White House directed federal agencies on Friday to make the results of federally-funded research freely available to the public within one year of publication. The new policy came “>after more than 65,000 people signed a petition asking for expanded public access to the results of studies paid for by taxpayers.

“Americans should have easy access to the results of research they help support,” John P. Holdren, the president’s senior advisor on science and technology, said in a memo announcing the new open-access policy.

White House Grants Aaron Swartz’s Wish: Taxpayer-Funded Research Will Be Free

Well, it’s something but it can become so much more. Swartz wanted to free up information for the use of all mankind. This is a step in the right direction. We can build a world of free information free of corporate or government control. We owe it to Aaron to fight hard for a better Internet, a better world.

James Pilant

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Abraham Lincoln and the Bottom 47%


Abraham Lincoln and the bottom 47%

Abraham Lincoln and the Bottom 47%

Recently, a presidential candidate referred to bottom 47% of the American population as self identified victims. Abraham Lincoln had a different view of the poor. He had a deep concern for the less fortunate in society as is illustrated by this story (below). Would we lived in such times that this kind of judgment (and the kind of man who would make it) were honored and esteemed. Instead we are told to worship and respect the “job creators,” the PR name for what are often little more than predators.

James Pilant

 

“AND YOU DON’T WEAR HOOPSKIRTS.”

 

An Ohio Senator had an appointment with President Lincoln at six o’clock, and as he entered the vestibule of the White House his attention was attracted toward a poorly clad young woman, who was violently sobbing. He asked her the cause of her distress. She said she had been ordered away by the servants, after vainly waiting many hours to see the President about her only brother, who had been condemned to death. Her story was this:

 She and her brother were foreigners, and orphans. They had been in this country several years. Her brother enlisted in the army, but, through bad influences, was induced to desert. He was captured, tried and sentenced to be shot—the old story.

 The poor girl had obtained the signatures of some persons who had formerly known him, to a petition for a pardon, and alone had come to Washington to lay the case before the President. Thronged as the waiting-rooms always were, she had passed the long hours of two days trying in vain to get an audience, and had at length been ordered away.

 The gentleman’s feelings were touched. He said to her that he had come to see the President, but did not know as he should succeed. He told her, however, to follow him upstairs, and he would see what could be done for her.

 Just before reaching the door, Mr. Lincoln came out, and, meeting his friend, said good-humoredly, “Are you not ahead of time?” The gentleman showed him his watch, with the hand upon the hour of six.

 “Well,” returned Mr. Lincoln, “I have been so busy to-day that I have not had time to get a lunch. Go in and sit down; I will be back directly.”

 The gentleman made the young woman accompany him into the office, and when they were seated, said to her: “Now, my good girl, I want you to muster all the courage you have in the world. When the President comes back, he will sit down in that armchair. I shall get up to speak to him, and as I do so you must force yourself between us, and insist upon his examination of your papers, telling him it is a case of life and death, and admits of no delay.” These instructions were carried out to the letter. Mr. Lincoln was at first somewhat surprised at the apparent forwardness of the young woman, but observing her distressed appearance, he ceased conversation with his friend, and commenced an examination of the document she had placed in his hands.

 Glancing from it to the face of the petitioner, whose tears had broken forth afresh, he studied its expression for a moment, and then his eye fell upon her scanty but neat dress. Instantly his face lighted up.

 “My poor girl,” said he, “you have come here with no Governor, or Senator, or member of Congress to plead your cause. You seem honest and truthful; and you don’t wear hoopskirts—and I will be whipped but I will pardon your brother.” And he did.

From – LINCOLN’S YARNS AND STORIES

A Complete Collection of the Funny and Witty Anecdotes that made Abraham Lincoln Famous as America’s Greatest Story Teller With Introduction and Anecdotes

By Alexander K. McClure

(This material is in the public domain.)

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President Claims to be Concerned with the Mortgage Crisis


The following article title and brief selection is by Zandar from the web site, Zandar Versus the Stupid.

I very much want you to visit the site and read the article in full. If at all possible explore the web site and look at other essays.

My commentary is below the article excerpt.

Turn On The Lights, Watch The Roaches Scatter Part 84

A White House official said Obama has taken the housing crisis seriously since the start of his term and will look to augment the effort in the months ahead.

“From day one the President has worked to stabilize the housing market and help responsible homeowners stay in their homes, including through refinancing efforts, foreclosure prevention programs and programs directed at the hardest hit states,” said White House spokeswoman Amy Brundage.

“The President will continue to expand on these efforts and look at new ways to help homeowners, just as he has over the past few months with new programs to help underwater homeowners and expanding forbearance so more unemployed homeowners can stay in their homes,” she said.

I wish that were true. I wish the mortgage crisis had been an important concern for the White House but it has not been a concern and is unlikely to become one.

When the President was first elected he had large majorities in both the House and Senate. He could have made mortgage foreclosures a priority instead he created TARP, a plan which did not allow for mortgages to be reduced in line with reduced home values but only extended the time for payment. The banks used this program as a club to expedite foreclosure. They told clients to skip payments for three months to qualify for the program, then foreclosed on them telling them they had decided they were ineligible. The government didn’t even keep records of what the program was doing for the first year.

When the robo-signing scandals began, the federal government did nothing. When the scandal expanded to impugn the record keeping and practices of several large banks, the federal government did nothing.

And now the federal government attempts to cut a sweetheart deal with the industry so that they can evade any legal responsibility for their acts while, in theory, bringing some minimal aid to homeowners.

This administration has always been far more a servant of the banks than a servant of the people. I want as many State Attorney Generals as possible to no longer cooperate with the administration and pursue their own negotiations with the financial industry. That will mean that justice at least has a chance of being served.

James Pilant

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Bachmann Criticizes Obama’s Student Loan Plan – From the Wires – Salon.com


Obama is changing the rules governing student loans to make them easier to pay. Bachman does not like it.

Like her right-wing brethren, Bachman has a fetish for a thing called “personal responsibility.” I put it in quotes because what she means by the phrase is different than an actual English interpretation of it. Let’s quote from the article:

“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” she said. “The individual needs to repay and be responsible for repaying their student loan debt.”

 Bachmann Criticizes Obama’s Student Loan Plan – From the Wires – Salon.com

In English, personal responsibility means that individuals have a responsibility for their obligations. But Bachman only means the little people, those individuals with mortgages, student loans and credit card debts. She is merciless in her desire to have every last dime extracted from these individuals.

But she is less enthusiastic about investment banks, American corporations’ overseas operations, or any legal accountability for the economic catastrophe of the Wall Street Crash of 2007 and it subsequent bailout (at a 100% of the value of the toxic assets). How long could I go on about the incredible lack of responsibility by much of our corporate and ruling class?

So, personal responsibility is only applicable to certain people.

Let me make a guess as to how the little people, those with personal responsibility, as opposed to those without are divided. It’s purely driven by the size of their campaign contributions and the number of lobbyists they field.

It is not surprising that Bachman is unable to manage any criticism of a student loan system that among other problems happily pays out money for valueless degrees by unaccredited institutions. It is not surprising that imposing twenty and thirty years of debt on America’s young is not a problem in her eyes. It is not surprising that the pain of ten of millions of Americans who live day to day one step above financial insolvency while American* corporations horde their money and enjoy record profits does not strike her as a serious problem.

James Pilant

*I sometimes wonder just how American they are. Corporate fidelity to the moral standards of a patriot seem questionable at best. Many business thinkers deny that corporation have any responsibility toward the nations whose laws and military protect them.

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Business Ethics in History – Abraham Lincoln


… An old acquaintance in Illinois, having organized a bank under the new National Bank Act, wrote offering some of the stock to Lincoln, who replied with thanks, saying he recognized that stock in a good national bank would be a good thing to hold, but he did not feel that he, as President, ought to profit from a law which had been passed under his administration. “He seemed to wish to avoid even the appearance of evil,” said the banker.

Carl Sandburg’s

Abrahm Lincoln – The War Years, 1861-1864

Page 344

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Obama To Lower Corporate Tax Rate!


From Reuters

Democrats and Republicans should begin a conversation next year about a broad overhaul of the tax code that would involve lowering rates while eliminating tax breaks for favored groups, President Barack Obama said in an interview broadcast on Friday.

The Republicans now have a majority in the House. Shouldn’t this have been something done during the first two years?

Obama said any effort to streamline the multilayered U.S. tax code would be challenging but if successful, it could set the stage for more robust growth.

Okay guys, I’ve been around the block a few times and when ever someone talks about simplifying the tax code, the middle class is about to get nailed hard. By the way, “robust growth” is a code word for lower corporate taxed and business benefits like subsidies.

Tax reform is an idea backed by many in the business community who say the current corporate tax structure puts American firms at a competitive disadvantage.

For “many in the business world,” read every corporate lobbyist is salivating like a hungry German Shepherd in front of filet mignon.

“Typically, the idea is, simplifying the system, hopefully lowering rates, broadening the base — that’s something that I think most economists think would help us propel economic growth,” Obama told National Public Radio in an interview. “But it’s a very complicated conversation.”

Verbiage – means nothing.

“So what I believe is, is that we’ve got to start that conversation next year. I think we can get some broad bipartisan agreement that it needs to be done. But it’s going to require a lot of hard work to actually make it happen,” he said.

For “work” read continuous concessions stretched out over months so that the lack of backbone, resolve and political intelligence of the Obama White House will be fully revealed.

“Change You Can Believe In.” Yes, in the same way I believe in post-apocalyptic waste lands.

Explain this to me. For decades large corporations have been directly evading, off shoring their corporate headquarters, sometimes just not paying taxes, and blackmailing every State, county and city humanly possible to cut their taxes, so we reward them with lower rates?

And here I am again trying to teach business ethics to my students who will observe the real life machinations of our President, which means, I get to say, “Okay, do the right thing, everyone from the President on down will reward the other guys, but you still be good.”

Then I get to go into “good for your soul” argument which is pretty much all I got left at that point.

Writing a business ethics web blog under this Presidency has all the benefits of being a medieval flagellant.

James Pilant

BP Cleared By Presidential Inquiry


lol

Right! The President covered for the oil company for months. They restricted press access to the affected waters. The declined the recommendations of their own scientists. They underestimated the amount of oil leaking from the disaster.

We already know that BP was drilling deeper than they were supposed to. We know they had accumulated an awesome number of violations of regulations and had violated the regulations on a regular basis. We know their conduct in the 2002 gas explosion and their maintenance of the Alaska pipeline were disastrous. We know that they had good reason to believe their cement was substandard, this cement being one of the causes of the incident.

In short, the White House has a strong interest in giving British Petroleum a clean bill of health.

We also know that considering BP’s conduct that such a clean bill of health is not credible.

I am far more interested in the outcome of the lawsuits by the states and individuals harmed by this disaster.

The tragedy is that these findings may not be public for at least seven years. By that time, the heat on the government and that corporation will have long dissipated.

Whatever, you may think of the finding, in the long term it will be effective in blunting criticism and, more important, buying time.

Cynicism is merited.

James Pilant