Jane Mayer at the New Yorker has a profile of Robert Mercer, the reclusive Billionaire who probably invested more money in getting Trump elected than any other American (and we don’t know how much Putin spent). He not only directly funded Trump, but he established Breitbart and other alt-right institutions which provided Trump with fanatical early support as well as a data analytics firm called Cambridge Analytica which worked on behalf of Trump and groups like Citizens United and the Council for National Policy. Mercer and his daughter even got Trump to shake up his campaign and hire Mercer’s associates from organizations that Mercer had been funding including Steve Bannon as CEO, Kellyanne Conway as manager, and David Bossie as deputy manager. One of Mercer’s former colleagues, Nick Patterson, said, “In my view, Trump wouldn’t be President if not for Bob [Mercer].”
David Magerman, a senior employee of Mercer at Renaissance told the Wall Street Journal that
Mercer wants the U.S. government to be “shrunk down to the size of a pinhead.” …Magerman told me, “Bob believes that human beings have no inherent value other than how much money they make. A cat has value, he’s said, because it provides pleasure to humans. But if someone is on welfare they have negative value. If he earns a thousand times more than a schoolteacher, then he’s a thousand times more valuable.” Magerman added, “He thinks society is upside down—that government helps the weak people get strong, and makes the strong people weak by taking their money away, through taxes.” …Another former high-level Renaissance employee said, “Bob thinks the less government the better. He’s happy if people don’t trust the government. And if the President’s a bozo? He’s fine with that. He wants it to all fall down.”
This quote demonstrates that Mercer is a believer in mmutilitarianism. This is also the ethical system that economists (and many in business) typically use, but they usually don’t take it to its logical conclusions like Mercer does in the above quote does because that is so abhorrent to most of society. Mmutilitarian ethics can actually be useful when used more judiciously because it is often better than pure selfishness. It is the ethical system that underlies cost-benefit analysis and the use of GDP as a measure of welfare which are very useful despite their flaws. And most economists don’t apply their mmutilitarian ethical logic to such an extreme as Mercer does and argue that the elderly and the poor should simply die rather than receive Medicaid and Social Security because they aren’t worth the cost of the programs. Indeed, most economists also argue in favor of environmental protections that Mercer opposes based on the logic of cost-benefit analysis too, but I don’t have time to write about why there is an apparent contradiction in the ethics of cost-benefit analysis tonight…
There are many diseases that have been basically eradicated from rich countries because they are easy to cure with modern medicine, but they persist in poor nations for the lack of money for basic treatments. For example, I’ll be taking students to Guatemala next semester and the CDC recommends getting the typhoid vaccine for travelers to rural parts of Guatemala. It is really cheap to treat typhoid with antibiotics and prevent it with sanitation, and that is why typhoid was basically eradicated in the USA decades ago, but it keeps getting reintroduced every year by travelers who pick it up in poor countries.
If every country were rich, Typhoid would probably be eradicated already because it only lives in human hosts. As would cholera, leprosy, hookworm, dracunculiasis and many other parasites and diseases that middle-class people can easily afford to cure. In a world where everyone has a middle-class income, many infectious diseases would have been eradicated by the ordinary efforts of middle-class individuals to avoid the disease. These diseases have only survived due to reservoirs of poverty where they have found refuge. Without poverty there would be no need for a decades-long Global Polio Eradication campaign. Middle class people would have eradicated it on their own initiative.
Middle-class society eradicated the bedbug mostly through individual efforts. It disappeared from large swathes of the world for decades, but it survived in places of poverty where it became resistant to insecticides and now it has bounced back into the beds of hotels of every income level around the world. If everywhere had had a middle-class income during the insecticide era, the bedbug would be extinct today, and probably head lice too. Middle-class areas are so good at eliminating malaria, I’d bet that it would have been eradicated long ago too if everywhere were middle class. What other diseases would have been inadvertently eradicated by individual actions if everyone in the world had been middle class?
A property right is the right to exclude others’ access to something. It is the right to infringe on others’ freedom. These rights are socially determined and vary greatly across different societies. For example, do you think you should own the property right to your own genetic information or do you think your employer owns it? A new bill, HR 1313, would give your employer a partial property right over your genetic code. Employees who violate that right would have to pay an annual fine sort of like the fine you would pay for trespassing on someone else’s lawn. Right now you own your own genetic information and if an employer would want to see it, they would have to pay you to transfer some of the intellectual property rights. Employers would love to know the genetic code of their employees because it could help them determine who to get rid of. Employers want the most productive people and anyone who is at a heightened genetic risk of a major disease would not only reduce productivity by missing work, but by bringing down morale too. Furthermore, because of America’s unique employer-centric health insurance system, employers have to pay higher insurance costs if their employees are sicker than average and that gives them an extra incentive to do genetic screening.
The fact that this is even being discussed–let alone voted on–shows how far political power has moved away from the median worker towards the owners of capital as inequality has risen. Gattaca, here we come. Julia Belluz has more details.
Raj Chetty et al. published a study of the correlation of class and life expectancy that got a lot of press, but I hadn’t actually looked at the original publication until this week. Here is the correlation between life expectancy and class:
Richer people live longer. And the gap between the life expectancy has been growing. It is visible even in just a 13 year time period:
MELI helps track both life expectancy and income and it would help track this kind of change.
Interest in median income is much bigger in the US compared with the rest of the world according to Google Search Trends.
Perhaps the US is more interested in median income because, as Brian Nolan, Max Roser, and Stefan Thewissen say, “the USA a clear outlier… the USA is quite distinctive in its combination of a striking GDP-median divergence and very little growth in the median” compared with all the other OECD nations.
But median income still isn’t nearly as popular as GDP in overall Google searches in the US:
One of the big problems with our official median income statistics is that the government only estimates the median income of households and we care about the welfare of people, not households. Household size has dropped which has tended to make median household income undercount the welfare of individuals because fewer people are dividing up household income. The graph below shows how the approximate average number of people per household has been declining:
If we divide median household income by the average number of people per household, we can get the approximate median income per person in the US.
This isn’t the best way to calculate this because it will have some aggregation errors due to using the average household size rather than dividing up each household’s income, but it is better than using the raw median household income data. The other things this doesn’t include are government taxes and transfers, the value of private benefits like employer-provided health insurance, and the imputed rent from owner-occupied housing.
Adjusting for household size doesn’t actually change much in the data since 1990 because the average household size has been very stable, but it would have been useful in the 1950s and 60s. In the available FRED data, there is less than a 2% difference between the two.
In any case, as with median household income it is a better indicator of economic welfare than real mean GDP:
Last December, the Census Bureau released official maps showing median income growth by county since the Great Recession began in 2007.
Too bad we don’t have data for 2016 yet. It might be interesting to use it to analyze voting patterns in the election. I don’t know why the high prairie has fared so well, but there is some correlation between oil and gas drilling and rising median income: