All Social Problems Come from Inequality

Very interesting article in the paper about two academics whos research points to inequality as the cause of almost all social problems - now duh, you might say - of course. However it is not (if I understand it right) the fact that some are in poverty that creates the problems - it is the gap between those in poverty and the wealthy that determines the social problems;

Take these random headline statistics. The US is wealthier and spends more on health care than any other country, yet a baby born in Greece, where average income levels are about half that of the US, has a lower risk of infant mortality and longer life expectancy than an American baby. Obesity is twice as common in the UK as the more equal societies of Sweden and Norway, and six times more common in the US than in Japan. Teenage birth rates are six times higher in the UK than in more equal societies; mental illness is three times as common in the US as in Japan; murder rates are three times higher in more unequal countries. The examples are almost endless.

Very interesting stuff:

In Britain, the Labour government, despite its protestations to the contrary, has only maintained inequality at the level at which it inherited it. "They've taken some positive action at the bottom income levels for pensioners and young families," says Pickett. "But the damage has all been done at the other end. Peter Mandelson said early in the Labour administration, 'We are intensely relaxed about people getting filthy rich,' and he's been as good as his word."

What is it about unequal societies that causes the damage? [Richard] Wilkinson believes the answer lies in the psycho-social areas of hierarchy and status. The greater the differential between the haves and have-nots, the greater importance everyone places on the material aspects of consumption; what brand of car you drive carries far more meaning in a more hierarchical society than in a flatter one. It's the knock-on effects of this status anxiety that finds socially corrosive expression in crime, ill-health and mistrust.

I liked this bit:

"I've become gripped by Paris Hilton's Best Friend," [Wilkinson] laughs. "It's the perfect example of a dysfunctional, hierarchical society."

-

Funny Money

As it all melts away, this story made me laugh...

The boss of a successful US hedge fund has quit the industry with an extraordinary farewell letter dismissing his rivals as over-privileged "idiots" and thanking "stupid" traders for making him rich.

Andrew Lahde's $80m Los Angeles-based firm Lahde Capital Management in Los Angeles made a huge return last year by betting against subprime mortgages.

Yesterday the 37-year-old told his clients that he had hated the business and had only been in it for the money. And after declaring he would no longer manage money for other people, because he had enough of his own, Lahde said that instead he intended to repair his stress-damaged health; he made it clear he would not miss the financial world.

"The low-hanging fruit, ie idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking," he wrote. "These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government," he said.

"All of this behaviour supporting the aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America."

A perspective I had not considered - that moneyed elites giving jobs to the boys were taken for a ride by smarter traders...

More Bailout Info

A bit of recommended reading on the bailout;

Article by John Gray, author of the excellent Black Mass: Apocalyptic Religion and the Death of Utopia;

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

and Chalmers Johnson's piece, We Have the Money If Only We Didn't Waste It on the Defense Budget;

There has been much moaning, air-sucking, and outrage about the $700 billion that the U.S. government is thinking of throwing away on rich New York bankers who have been ripping us off for the past few years and then letting greed drive their businesses into a variety of ditches. In fact, we dole out similar amounts of money every year in the form of payoffs to the armed services, the military-industrial complex, and powerful senators and representatives allied with the Pentagon.

And finally...700 billion dollars is enough to give all 1 million defaulting mortage holders $700,000 dollars each.