nation: United States

Sociologist Joel Best debunks the idea that “sex bracelets” — bracelets that indicate what type of sex you’re interested in and that oblige you to perform it — are really a thing. He and his colleague, Katherine Bogle, have been tracing the story over time on the internet and across continents in what he calls “the dynamics of rumor and legend.”

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.

Cross-posted at Montclair SocioBlog.

George W. Bush did not really say, “The problem with the French is that they have no word for entrepreneur.”  But that statement does fit with the American tendency to view our country as the land of entrepreneurship (literally “enterprise”).  America is, after all, the land of opportunity, where anyone can become rich.  And the way to get rich is to be an independent, risk-taking entrepreneur and start your own business.  That’s what we do here in the US, and we do it better than most.  At least that’s what we think.

But look at this chart showing the rate of start-ups per working-age population:

The US ranks 23rd.  That doesn’t quite square with all those photo-ops where the president (Obama, Bush, Clinton – they all do it) goes to some small successful company out in the heartland.  What is it about these other countries that makes for more risk-takikng?

James Wimberly has an answer: the safety net.  He makes the point with an analogy – his own photos of kids on a rope-walk – a single rope hung between two platforms in what looks like the Brazilian rain forest.  (It’s really just a replanted hillside, formerly the site of a favela). The kids have safety devices – hard hats, a safety harness, guide-ropes to hold on to.  Without these, only a few of the most f oolhardy would try a Philippe Petit walk.  But the safety devices allow lots of kids to take a risk they would otherwise avoid.

The same logic applies to small business.

How many Americans are locked into jobs they hate by the fear of losing health benefits? No Dane ever has to worry about losing her right to medical care by quitting her job to go it alone

Safety devices cost money, but they pay off.  On the rope-walk, you can see the reward in the expression on the kids’ faces when they reach the other platform.  In the national data, you see it in the those start-ups.

The countries with significantly higher startup rates than the USA are those with stronger, more comprehensive, and more centralised social safety nets, along with correspondingly higher taxation.

See Wimberly’s entire post – with the photos, footnotes, and comments – for a fuller explanation.

While men have always had sex with men and women have always had sex with women, the idea that a person could be of a particular homosexual type (as opposed to someone who did homosexual acts) only emerged in the late 1800s (in Western culture anyway).  Even then, it took a very long time for the idea that gay people might be among us to filter through popular culture.  Only after an active gay liberation movement made homosexuality more visible did people actually start to look for it in people they knew.

Accordingly, things that look very “gay” to us today, didn’t look that way before homosexuality became part of our consciousness. In a previous post on this topic, I discuss a vintage soap ad in which two naked men in a public shower have a conversation about “hard” water and “lathering” up.  It seems to have clear gay undertones today (maybe overtones), but it wasn’t meant to suggest homosexuality then.  Likewise, a series of military recruitment posters, sent in by Katrin, might very well trigger the “specter” of homosexuality today, but likely would not have inspired giggles at the time.

More at Scribd.

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.

The media likes to talk about markets as if they were just a force of nature.  In fact, markets and their outcomes are largely shaped by political power.  In a capitalist system like ours, that power is largely used to advance the interests of those who own and run our dominant corporations.

Thanks to Bloomberg News we have yet another example of this reality.  In brief, as a result of Congressional and media pressure the Federal Reserve was recently forced to reveal its lending activity for the period August 2007 through April 2010.   Bloomberg News examined these Federal Reserve records and found that the Fed secretly provided selected banks, brokerage houses, and even non-financial firms (such as General Electric and Ford) with at least $1.2 trillion in loans, often with minimal collateral required and at below market interest rates.

This money was given through more than a dozen lending programs.  Many firms tapped multiple programs through multiple subsidiaries. Bloomberg arrived at its total by focusing on the seven largest programs, which included the Fed’s discount window and six temporary lending facilities (the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility; the Commercial Paper Funding Facility; the Primary Dealer Credit Facility; the Term Auction Facility; the Term Securities Lending Facility; and so-called single- tranche open market operations).

If you like visuals, here is a 5 minute video that provides a good summary of what Bloomberg gleaned from its examination.

UPDATE: Embedding was disabled, but you can watch it here.

Bloomberg also has an interactive site that allows you to chart who got what and over what period.

Some of the highlights are as follows:

The largest borrower, Morgan Stanley, got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion . . .

Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. They included Edinburgh-based Royal Bank of Scotland, which took $84.5 billion, the most of any non-U.S. lender, and Zurich-based UBS AG, which got $77.2 billion. . . .

The $1.2 trillion peak on Dec. 5, 2008 — the combined outstanding balance under the seven programs tallied by Bloomberg — was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

The Federal Reserve fiercely resisted making its records public, arguing that doing so would stigmatize those institutions that received loans.  A group of the largest commercial banks actually petitioned the Supreme Court in an unsuccessful effort to keep the loan information secret.

Perhaps one reason that the Federal Reserve and the banks were reluctant to have these records made public is that they raise significant questions of conflict of interest.  According to a statement by Vermont Senator Bernie Sanders:

…the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.  Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds.  One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

Another reason may be that the Federal Reserve didn’t want it known that it was deviating from its past practice of requiring borrowers to provide secure collateral, which was normally either Treasuries or corporate bonds with the highest credit rating, and never stocks.  For example:

Morgan Stanley borrowed $61.3 billion from one Fed program in September 2008, pledging a total of $66.5 billion of collateral, according to Fed documents. Securities pledged included $21.5 billion of stocks, $6.68 billion of bonds with a junk credit rating and $19.5 billion of assets with an “unknown rating,” according to the documents. About 25 percent of the collateral was foreign-denominated.

Moreover, as Bloomberg News also reported, many Fed loans were made at below market interest.

On Oct. 20, 2008, for example, the central bank agreed to make $113.3 billion of 28-day loans through its Term Auction Facility at a rate of 1.1 percent, according to a press release at the time.

The rate was less than a third of the 3.8 percent that banks were charging each other to make one-month loans on that day. Bank of America and Wachovia Corp. each got $15 billion of the 1.1 percent TAF loans, followed by Royal Bank of Scotland’s RBS Citizens NA unit with $10 billion, Fed data show.

These loans were absolutely critical to the survival of our leading companies.  A case in point:

Citigroup was in debt to the Fed on seven out of every 10 days from August 2007 through April 2010, the most frequent U.S. borrower among the 100 biggest publicly traded firms by pre- crisis market valuation. On average, the bank had a daily balance at the Fed of almost $20 billion.

These loans are also a key reason that our post-Great Recession economy remains largely unchanged in structure.  In other words, it was the exercise of political power, rather than so-called market dynamics or efficiencies, that explains the financial industry’s continuing profitability and economic dominance.

Now imagine if we had a state that engaged in transparent planning and was committed to using our significant public resources to reshape our economy in the public interest.  As we have seen, state planning and intervention in economic activity already goes on.  Unfortunately, it happens behind closed doors and for the benefit of a small minority. It doesn’t have to be that way.

Mexico filmmaker Pablo Fulgueira happened to be traveling in New York shortly after the attack of 9/11. He took the opportunity to interview people on the streets and turned that footage into this short documentary, “SiNYster,” showing the very first social consequences of the 9/11 attack in New York City.

Part I:

Part II:

Pablo Fulgueira studied filmmaking at the Centro de Capacitación Cinematográfica in Mexico City and graduated in 2006.

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.

Cross-posted at Reports From the Economic Front.

The media generally talk about the economy in national terms — as if economic trends affect us all equally and we all share a common interest in supporting or opposing the same economic policies.  This comforting view tends to promote political passivity — since we are all in the same “boat,” it makes sense to leave policy making to the experts.

A recently published study on income distribution by economists Anthony Atkinson, Thomas Piketty and Emmanuel Saez stands as a welcome corrective.  Uwe E. Reinhardt discusses some of the main implications of their work in his New York Times blog.

Reinhardt’s Figure 1 shows average annual income growth for households in the United States and the different experiences of the top 1% and the bottom 99%.  From 1976 to 2007, average household income grew at an average annual rate of 1.2%.  Over the same period, the top 1% of households experienced an average annual income gain of 4.4% while the bottom 99% of households gained only 0.6% a year.  Household income gains were higher in both subperiods (1993-2000 and 2002-2007), in large part because these subperiods were recession free.

Figure 2 shows the share of total income growth in each time period that was captured by the top 1% of households.  Over the years 1976 to 2007, these households captured 58% of all income generated.  Their share was an astounding 65% in the period 2002 to 2007.

This skewed income distribution means that average income figures present a highly misleading picture of the American experience.  As Reinhardt explains:

So if an American macroeconomist — a specialist who tends to think of nations as people — or high-level government officials or politicians mimicking a macroeconomist boasted on a television talk show that “average family income grew by 3 percent during 2002-7, more than in most European economies,” about 99 percent of American viewers, reflecting on their own experience, would probably scratch their heads and wonder, “What is this guy talking about?”

Figure 3 highlights the growth in real GDP per capita and median household income from 1975 to 2007.  The data show a growing divergence between what working people produced and what the average household received from that production.  Real GDP per capita rose by an annual compound rate of 1.9% while real median household income increased by less than 0.5%.

As Reinhardt points out: “Other than national pride in league tables, that 1.9 percent average economic growth does not mean much for the experience of the median household in the United States.”

This brings us back to the issue of whether it makes sense to talk in “national” terms, especially given the dominance of the top 1% of households.  According to Anthony Atkinson, Thomas Piketty and Emmanuel Saez:

Average real income per family in the United States grew by 32.2 percent from 1975 to 2006, while they grew only by 27.1 percent in France during the same period, showing that the macroeconomic performance in the United States was better than the French one during this period. Excluding the top percentile, average United States real incomes grew by only 17.9 percent during the period while average French real incomes — excluding the top percentile — still grew at much the same rate (26.4 percent) as for the whole French population. Therefore, the better macroeconomic performance of the United States and France is reversed when excluding the top 1 percent.

None of this is to suggest that U.S. society is best understood in terms of a simple division between the top 1% and the bottom 99%; the latter group is far from homogeneous.  Still, this division alone is big enough to establish that talking in simple national terms hides more than it illuminates about the American experience.  Said differently, just because the top 1% of U.S. households have reason to celebrate the U.S. economic model doesn’t mean that the rest of us should join in the celebration.

The U.S. economy is in trouble and that means trouble for the world economy.

According to a United Nations Conference on Trade and Development report, “Buoyant consumer demand in the United States was the main driver of global economic growth for many years in the run-up to the current global economic crisis.”

Before the crisis, U.S. household consumption accounted for approximately 16 percent of total global output, with imports comprising a significant share and playing a critical role in supporting growth in other countries.

…as a result of global production sharing, United States consumer spending increas[ed] global economic activities in many indirect ways as well (e.g. business investments in countries such as Germany and Japan to produce machinery for export to China and its use there for the manufacture of exports to the United States).

In short, a significant decline in U.S. spending can be expected to have a major impact on world growth, with serious blow-back for the United States.

There are those who argue that things are not so dire, that other countries are capable of stepping up their spending to compensate for any decline in U.S. consumption. However, the evidence suggests otherwise.As the chart below (from the report) reveals, consumption spending in the U.S. is far greater than in any other country; it is greater than Chinese, German, and Japanese consumption combined.

Moreover, there is little reason to believe that the Chinese, German, or Japanese governments are interested in boosting consumer spending in their respective countries.  All three governments continue to pursue export-led growth strategies that are underpinned by policies designed to suppress wage growth (lower wages = cheaper goods = stronger competitiveness in international markets).  Such policies restrict rather than encourage national consumption because they limit the amount of money people have to spend.

For example, China is the world’s fastest growing major economy and often viewed as a potential alternative growth pole to the United States.  Yet, the Economist reveals that the country’s growth has brought few benefits to the majority of Chinese workers.

According to the U.S. Bureau of Labor Statistics, despite several years of wage increases, Chinese manufacturing workers still only earn an average of  $1.36 per hour (including all benefits).  In relative terms, Chinese hourly labor compensation is roughly 4 percent of that in the United States.   It even remains considerably below that in Mexico.

Trends in Germany, the other high-flying major economy, are rather similar. As the chart below shows, the share of German GDP going to its workers has been declining for over a decade.  It is now considerably below its 1995 level.  In fact, the German government’s success in driving down German labor costs is one of the main causes of Europe’s current debt problems — other European countries have been unable to match Germany’s cost advantage, leaving them with growing trade deficits and foreign debt (largely owed to German banks).

The Japanese economy, which remains in stagnation, is definitely unable to play a significant role in supporting world growth.  Moreover, as we see below, much like in the United States, China, and Germany, workers in Japan continue to produce more per hour while suffering real wage declines.

For a number of years, world growth was sustained by ever greater debt-driven U.S. consumer spending.  That driver now appears exhausted and U.S. political and economic leaders are pushing hard for austerity.  If they get their way, the repercussions will be serious for workers everywhere.

Our goal should not be a return to the unbalanced growth of the past but new, more stable and equitable world-wide patterns of production and consumption.  Achieving that outcome will not be easy, especially since as the United Nations Conference on Trade and Development’s World Investment Report 2011 points out, transnational corporations (including their affiliates) currently account for one-fourth of global GDP.Their affiliates alone produce more than 10 percent of global GDP and one-third of world exports.  And, these figures do not include the activities of many national firms that produce according to terms specified by these transnational corporations.   These dominant firms have a big stake in maintaining existing structures of production and trade regardless of the social costs and they exercise considerable political influence in all the countries in which they operate.

Photography projects can draw our attention, poignantly, to class inequality.  Consider Vivian Mayer’s vintage photographs of New York and Chicago, for example, or Peter Menzel’s What We Own series.  We need these projects because most of us are in class-segregated occupations and neighborhoods, not to mention a profoundly unequal world.

Photographer James Mollison has embarked on a similar project, Where Children Sleep, sent in by Kristina Killgrove, an anthropologist at Vanderbilt University, Yvette M., Amanda B., Dmitriy T.M., and my sister, Keely.  Mollison has documented children and their bedrooms around the world.  It’s heartbreaking to see how much some children have, and how little others do.

See the pictures, with details about the children, at the New York Times.

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.