Sunday Morning Links

Assorted content for your Sunday reading.

- Robert Reich comments on the concerted effort by the U.S.' rich to exacerbate inequality - and points out how it's warped their worldview. And Dean Baker criticizes the spread of inequality by design:

And then there is the financial sector where Mankiw tells us that the extraordinary pay is compensation for the volatility of paychecks. That's interesting, except the vast majority of comparably talented and hardworking people would be happy to get the pay the finance folks get in the bad years. Much of the big money on Wall Street stems from highly leveraged bets that beat the market by seconds or even milliseconds. This provides as much value to the economy as insider trading, which it in fact it resembles closely.

It would be interesting to see what would happen to the big fortunes in the financial sector if it had to pay a small transaction fee, effectively subjecting it to the same sort of sales tax that is paid in almost every other sector of the economy. It would also be interesting to see what would happen to the private equity folks if they lost the opportunity for the tax gaming that is their bread and butter.

I could go on (read my non-copyright protected book on the topic), but the point should be clear. If the 1 percent are able to extract vast sums from the economy it is because we have structured the economy for this purpose. It could easily be structured differently, but the 1 percent and its defenders aren't interested in changing things. And the 1 percent and its defenders have a great deal of influence on the direction of economic policy.

- And Kathleen Raven discusses how children in particular suffer from the spread and entrenchment of poverty and inequality:

Researchers looked at data on 3,142 U.S. counties between 2005 and 2009. They found that rates of child maltreatment ranged widely, from 0.2 percent to 3.1 percent of children.

Using statistical methods to gauge income inequality, they found a steep rise in the rate of child maltreatment with rising inequality. The relationship held after researchers adjusted for poverty itself, and other factors such as the racial and ethnic makeup of regions, education levels and the number of people receiving public assistance income.

Where inequalities are most extreme, communities may become more polarized, with the affluent group influencing where public aid money goes, or what programs are made available in the community, said Dr. Ruth Gilbert, a clinical epidemiologist at University College London in the UK.

"Where the state or federal government is a key provider of services, such as day care and education," Gilbert said, "then you may have situations where poorer children mingle with middle-class kids and this helps create a better understanding between the two classes."

- Unfortunately, the needed end to the Cons' income-splitting scheme seems to have given rise to plenty of talk about how to develop the next-most-destructive option to destroy the federal government's fiscal capacity. Maria Babbage surveys a range of policies from the reasonable (child care and targeted benefits to lower-income parents) to the thoroughly top-weighted (general income tax cuts), while Barrie McKenna has little apparent interest in anything but the latter. And Dennis Howlett notes that there's precious little evidence to suggest a fair tax system is on the Cons' radar.

- Finally, Simon Enoch takes a look at the track record of prison food privatization in the U.S.