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One conventional explanation for our economic problems seems to be that our businesses are strapped for funds.  Greater business earnings, it is said, will translate into needed investment, employment, consumption and, finally, sustained economic recovery.  Thus, the preferred policy response: provide business with greater regulatory freedom and relief from high taxes and wages.

It is this view that underpins current business and government support for new corporate tax cuts and trade agreements designed to reduce government regulation of business activity, attacks on unions, and opposition to extending unemployment benefits and increasing the minimum wage.

One problem with this story is that businesses are already swimming in money and they haven’t shown the slightest inclination to use their funds for investment or employment.

The first chart below highlights the trend in free cash flow as a percentage of GDP.  Free cash flow is one way to represent business profits.  More specifically, it is a pretax measure of the money firms have after spending on wages and salaries, depreciation charges, amortization of past loans, and new investment.  As you can see that ratio remains at historic highs.  In short, business is certainly not short of money.

So what are businesses doing with their funds?  The next chart looks at the ratio of net private nonresidential fixed investment to net domestic product (I use “net” rather than “gross” variables in order to focus on investment that goes beyond simply replacing worn out plant and equipment).  The ratio makes clear that one reason for the large cash flow is that businesses are not committed to new investment.  Indeed quite the opposite is true.

Rather than invest in plant and equipment, businesses are primarily using their funds to repurchase their own stocks in order to boost management earnings and ward off hostile take-overs, pay dividends to stockholders, and accumulate large cash and bond holdings.

Cutting taxes, deregulation, attacking unions and slashing social programs will only intensify these very trends.  Time for a new understanding of our problems and a very new response to them.

Cross-posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

We have an ever-growing collection of ways in which men are frequently positioned as people and women as women.  We’re always on the lookout for new examples and sociologist Nathan Palmer recently highlighted a nice observation about how this happens in language.

He asked readers to consider a quote from a textbook (not to single Conley out, he’s using standard language and I use it as well in my own textbook).  Here’s the quote with the relevant part in bright white:

Applying an insight by sociologist Michael Kimmel, Palmer then updated the slide with slightly different language:

If a dollar is the amount by which all other wages should be compared, then the first sentence centers men’s experiences and positions women as a deviation from that.  The second sentence switches that around.

By switching the referent, this change in language shifts the center of the discussion from women’s disadvantage to men’s advantage.  Of course, there is both unfair disadvantage and advantage in this story, and we need to make both visible, but always talking in terms of the former makes women and their disadvantage the problem and hides the way that we need to be addressing men’s unfair advantage as well.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Immediately after the Seattle Seahawks beat the San Francisco 49ers on Sunday, Richard Sherman gave an intense, boastful post-game interview.  This triggered the always-present racism, as illustrated by many tweets that followed.  Here is just a sample from Public Shaming:

These are obviously cruel and full of hate, but the ones in which he was called a “thug” got somewhat less attention:

In interviews about the racist response, Sherman made some really nice points about what this means about the state of America and the specifically racial insults.  In a press conference, for example, asked about being called a “thug,” he argued that it’s just “the accepted way of calling someone the n-word these days.”  He points out that, in no way was what he was doing thug-like:

Maybe I’m talking loudly, and doing something… talking like I’m not supposed to, but I’m not… there’s a hockey game where they didn’t even play hockey, they just threw the puck aside and started fighting.  I saw that and I said, “Aw man, I’m the thug? What!? What’s going on here?”

[youtube]https://www.youtube.com/watch?v=wPSiOCC8nvc[/youtube]

In another video, he expands on this point, saying: “I’m not out there beating on people, or committing crimes, or getting arrested, or doing anything; I’m playing a football game at a high level and I got excited.”

Sherman’s making two points.  First, that there was nothing thug-like about his behavior.  Thugs are violent criminals.  He’s just playing a game.  And, second, the term is decidedly racial, applied to him largely because of the color of his skin.  Meanwhile, hockey players, who are overwhelmingly white, as well as other white athletes, don’t as often get these sorts of labels even if they are physically violent in ways that exceed the demands of their sport.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Officially our most recent recession began December 2007 and ended June 2009.  The following chart provides an important perspective on the recovery period.

Stocks and profits have enjoyed a remarkable recovery.  While income is slightly up over the period, it is critical to remember that this is average income and the increase largely reflects gains for those at the very top of the income distribution.  Jobs and housing have yet to recover.

So, with returns to capital booming, it is easy to understand why business leaders are relatively content with current policies and, by extension, political leaders are reluctant to rock the boat.

Unfortunately, current policies are unlikely to do much to improve the job prospects or income of most workers.  In fact, the rise in business profits owes much to our depressed labor conditions.  Unless something dramatic happens, we can expect the next few years to look very much like the past few years.

Cross-posted at Reports from the Economic Front and Pacific Standard.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

New survey data shows that the average person overestimates the diversity of the American population, both now and in the future.  Today, for example, racial minorities make up 37% of the population, but the average guess was 49%.

Many Americans fear rising diversity.  Over half worry that more minorities means fewer jobs, nearly half think that it means more crime, and almost two-thirds think these groups strain social services.  If people think that minorities are bad for America and overestimate their prevalence, they may be more likely to support draconian and punishing policy designed to minimize their numbers or mitigate the consequences they are believed to bring.

Not all Americans, of course, fear diversity equally.  Below are the scores of various groups on an “openness to diversity” measure with a range of 0-160.

For the future, Americans are still strongly divided as to what to do about diversity and the racialized inequality we currently see.

Via The Atlantic; thanks to @_ettey for the link.  Cross-posted at Pacific Standard.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

If you’re looking for just one image that says a thousand words about what’s wrong with America, here’s a contender.  It is a screenshot of the website for the Silver State Schools Credit Union:

Yep, it’s an invitation to K-12 teachers to go into debt to do their job.

Speechless.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Part of what makes professional basketball appealing, for kids who love to play as well as fans, is the idea that a person can come from humble beginnings and become a star.  The players on the court, the narrative goes, are ones who rose to fame as a result of incredible dedication and extraordinary talent.  Basketball, then, is a way out of poverty, a true equal opportunity sport that affirms what we think America is all about.

Seth Stephens-Davidowitz crunched the numbers to find out if the equal opportunity story was true.   Analyzing the economic background of NBA players, he found that growing up in a wealthy neighborhood (the top 40% of household incomes) is a “major, positive predictor” for success in professional basketball.  Black players are also less likely than the general black male population to have been born to a young or single mother.  So, class privilege is an advantage for pro ball players, just like it is elsewhere in our economy.

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The richest Black men, then, are most likely to end up in the NBA, followed by those in the bottom 20% of neighborhoods by income.  Middle class black men may, like many middle class white men, see college as a more secure route to a successful future.  Research shows that poor black men often see sports as a more realistic route out of poverty than college (and they may not be wrong).  This also helps explain why Jews dominated professional basketball in the first half of the 1900s.

LeBron James was right, then, when he said, “I’m LeBron James. From Akron, Ohio. From the inner city. I am not even supposed to be here.”  The final phrase disrupts our mythology about professional basketball: that being poor isn’t an obstacle if one has talent and drive.  But, as Stephens-Davidowitz reminds us, “[a]nyone from a difficult environment, no matter his athletic prowess, has the odds stacked against him.”

Cross-posted at Pacific Standard.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

We’re celebrating the end of the year with our most popular posts from 2013, plus a few of our favorites tossed in.  Enjoy!

@bfwriter tweeted us a link to a college design student’s photograph that has gone viral.  Rosea Lake posted the image to her tumblr and it struck a chord.

What I like about the image is the way it very clearly illustrates two things.  First, it reveals that doing femininity doesn’t mean obeying a single, simple rule. Instead, it’s about occupying and traveling within a certain space.  In this case, usually between “proper” and “flirty.”  Women have to constantly figure out where in that space they’re supposed to be.  Too flirty at work mean’s you won’t be taken seriously; too proper at the bar and you’re invisible.  Under the right circumstances (e.g., Halloween, a funeral), you can do “cheeky” or “old fashioned.”

The second thing I like about this image is the way it shows that there is a significant price to pay for getting it wrong.  It’s not just a faux pas.  Once you’re “‘asking for it,” you could be a target. And, once you’re reached “prudish,” you’ve become socially irrelevant.  Both violence and social marginalization are serious consequences.

And, of course, all women are going to get it wrong sometimes because the boundaries are moving targets and in the eye of the beholder. What’s cheeky in one setting or to one person is flirty in or to another.  So women constantly risk getting it wrong, or getting it wrong to someone.  So the consequences are always floating out there, worrying us, and sending us to the mall.

Indeed, this is why women have so many clothes!  We need an all-purpose black skirt that does old fashioned, another one to do proper, and a third to do flirty… at the very least… and all in casual, business, and formal.   And we need heels to go with each (stilettos = provocative, high heels = flirty, low heels  = proper, etc, plus we need flats for the picnics and beach weddings etc).  And we need pants that are hemmed to the right length for each of these pairs of shoes.  You can’t wear black shoes with navy pants, so you’ll need to double up on all these things if you want any variety in your wardrobe. I could go on, but you get the picture.

Women’s closets are often mocked as a form of self-indulgence, shop-a-holicism, or narcissism.  But this isn’t fair.  Instead, if a woman is class-privileged enough, they reflect an (often unarticulated) understanding of just how complicated the rules are.  If they’re not class-privileged enough, they can’t follow the rules and are punished for being, for example, “trashy” or “unprofessional.”  It’s a difficult job that we impose on women and we’re all too often damned-if-we-do and damned-if-we-don’t.

Cross-posted at Business Insider and The Huffington Post; view the original.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.