Thursday, September 26, 2013


By Ronald Fox

Part II: America’s Diminished Credibility and the Decline of America’s Global Power

Foremost in the current debate over how the U.S. should respond, if at all, to the probable chemical weapons attack by the Bashir al-Assad regime, has been the question of U.S. credibility. It is said that America’s credibility is on the line, a matter made more acute by President Obama’s poorly thought-out drawing of a game-changing, red line on Syria’s use of chemical weapons. This idea suggests a connection between our national credibility and the use of force to back up a threat; only thusly will bad guys be deterred. For those disposed to this line of thinking, it is the use of overwhelming force rather than negotiation aiming at a peaceful settlement that best serves American national interests. America does indeed have a credibility problem, but it isn’t because we haven’t been sufficiently tough in deploying force; rather, just the opposite: Washington’s credibility problem stems precisely from its heavy military response to the war on terror.

Wednesday, September 25, 2013


The Nazca lines are a series of ancient geoglyphs in the Nazca Desert in southern Peru. The hundreds of individual figures range in complexity from simple lines to stylized hummingbirds, spiders, fish, and lizards. Archeologists, ethnologists, and anthropologists have studied the ancient Nazca culture to try to determine the purpose of the lines and figures, but no single theory or explanation has come to be widely accepted. One interesting hypothesis is that the construction of the lines kept the Nazca people busy. In addition to farming and hunting, ongoing construction of the lines gave the community a sense of purpose and structure so that the people could move forward in a productive way and not get bogged down in competition and conflict.

The creation of the Nazca lines may serve a similar societal purpose to that of the American Dream. Numerous opinion polls conducted since the 1980s indicate that the majority of Americans believe that working hard is the most important element of getting ahead. These same polls also indicate that achieving the dream through fair means is becoming increasingly difficult for future generations. The main cause of the disappearing American Dream is economic inequality. The product of a variety of decisions and actions, income inequality has grown at an alarming rate over the last several decades. According to the Congressional Budget Office October 2011 report “Trends in the Distribution of Household Income Between 1979 and 2007,” overall real average (after-tax) household income grew 62% over this 28-year period. However, for the top 1% of earners, household income grew 275%, and for the bottom 20% of earners, it grew only 18%. Today, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.



In the coming days, Phronesis will present a series of pieces on economic inequality in America. We are specifically interested in addressing the question: Does inequality really matter, and if so, in what ways? We will draw on practical wisdom derived from our respective academic training and research as well as years of first-hand experience as American citizens living in an increasingly unequal world. Accordingly we will strive to offer evidence-based, commentaries on the issue of inequality. We hope to stimulate awareness and discussion of this important topic.

As an introduction to the inequality posts to come, let me say something about the main battle line in the inequality debate. Americans have widely varying beliefs and opinions about inequality. Those who embrace a free-market philosophy, usually people of conservative persuasion, tend to see inequality as a natural and healthy feature of an efficient running economy. Inequality is natural because in a free society with a free market system, individual differences in intelligence, education, talent, ambition, and work ethic will produce varying levels of achievement. Simply put, the best and brightest will earn and accomplish more than those who lack attributes for success. The recent spike in income inequality was an inevitable result of the globalization of finance and advances in technology in an increasingly complex world.

Free-market advocates cite two reasons why inequality is a natural thing. First, they believe it’s the people at the top, the accumulators of capital, who possess the necessary smarts and wherewithal to invest wisely in productive enterprises. This will stimulate growth, create jobs, and generally enhance national prosperity. Not surprisingly, they tend to oppose government meddling and other obstructions to capital accumulation. The second reason is the so-called goal gradient phenomena: the existence of a social hierarchy serves as an incentive for self improvement. People will strive to climb the ladder of success in order to, as the saying goes, “keep up with the Joneses.”

Other Americans have less faith in the capacity of the free market to promote the general welfare. Liberal in their worldviews, these people see a necessary role for government to intervene in the economy to protect consumers, stimulate growth, smooth out the boom and bust cycles inherent in a capitalist society, and generally ensure fairer economic outcomes for all citizens. This school of thought views inequality, when it reaches extreme proportions, as harmful to society. Extreme inequality confers disproportionate economic and political power on the wealthy, who without effective constraints will prioritize their own interests to the detriment of the public good. According to this school of thought, the “trickle-down theory” of economics is just that-- a theory. Without government intervention, the trickle is more likely to be up than down. Those at the top of the economic pyramid will be prone to conspicuous consumption, which will instigate a value shift in American culture toward an excessive preoccupation with money and materialism. Rather than striving to live like one’s peer-group Joneses, money-driven consumers will endeavor to emulate the lifestyles of the rich and famous, a preoccupation that will lead to all sorts of destructive behavior.

It won’t be surprising to those who follow Phronesis that we are sympathetic to the liberal perspective on inequality, propagated most passionately by British economist John Maynard Keynes. Our posts on inequality will reflect this worldview. Nevertheless, the overall objective is to encourage readers to think about the meaning of inequality and its effects on the American economy, culture and political system. Has it shaped your life for better or worse?


By Ronald Fox

America’s most powerful and wealthy elites have always shaped our politics, economy and culture, sometimes for the good, and sometimes, not so good. The worst behavior of American elites has occurred historically when income has been highly concentrated at the top of the economic hierarchy: around the turn of the 20th Century when corrupt, robber barons dominated the American economy, in the last few years leading up to the Great Depression, and, from the late 1970s to the present. Elites were at their best when income inequality was only modestly skewed. The period from the end of World War II up to the late 1970s was a golden era in the United States. With the effective tax rate for the highest income earners over 50%, and government spending as a percentage of GNP high, the economy grew, wages multiplied, economic opportunities flourished, and most Americans shared in the steadily growing, national prosperity. Economic inequality was the lowest since the Progressive Era.

This period also brought out the very best in elite behavior. The upper class took seriously the responsibility that comes with their power and visibility. They were engaged in community life and committed to public service; they tried to be good citizens. They enjoyed the good life, but often railed against conspicuous consumption. In their money-making ventures, they relied on an innate wisdom and savvy in their investment choices and in choosing the people with whom they worked. They tended to choose people like themselves, with breakaway independence of mind, wisdom, good judgment, empathy, imagination, and, to be sure, intelligence, though this was not the main thing they looked for. Upward mobility in America guaranteed the elite strata would be cross-fertilized with young minds bringing new ideas. Yes, they accumulated great wealth, but their share of the nation’s wealth was only modestly greater than the majority of working class wage earners. To be sure, the elites I’m describing were not all angels, but in comparison to those leading America today, their behavior was exemplary.

Tuesday, September 17, 2013


By Ronald Fox 

The possibility that the United States might intervene militarily yet again in a Middle East country got me to thinking about the legacy of Osama bin Laden. The war of terror he unleashed over a decade ago has caused a sea of change in the Middle East and throughout the world. It has also radically changed the America I grew up to care deeply about. I am profoundly concerned about the path my country has taken in pursuing its global war on terror. In our response to the terrorist challenge, the United States has lessened domestic freedoms, compromised democratic values, squandered economic resources, violated the rule of law, helped sow chaos in the Middle East, and diminished the good will and respect we once enjoyed as the undisputed leader of the free world. In this two-part essay, I will discuss the heavy price we Americans are paying for Washington’s global war on terror.

Tuesday, September 3, 2013


By Ronald Fox

It’s that time of year; public school academic test scores are in and are being reported in the news. The Sacramento Bee reported on August 30 that 70% of schools in the Sacramento region had their Academic Performance Index (API), a composite of student test scores, decline from 2012 to 2013. Curses! Already fingers of blame are being pointed. Teachers blame larger classrooms, reduced school funding, and the inappropriateness of standardized tests for measuring academic performance; principals cite disruptions associated with implementing new California state curriculum standards (called Common Core); district chiefs emphasize that scores have been rising over the last dozen years or so and perhaps the schools have “topped out,” and a slight slip was inevitable; many school “reformers” and politicians insist poor teaching is at fault; and, free-market fundamentalists would have us believe, it's those damned teachers' unions.  What's with all the ado over test scores? 

I don’t know who or what's at fault for the API decline, or even if the falling scores, in fact, really mean anything.  You see, standardized school tests, as administered in the U.S., are notoriously flawed instruments for measuring student knowledge and learning; they're even worse as an indicator of teaching effectiveness.  What I do know is that standardized test scores can have monumental consequences. Falling scores predict trouble for students, teachers, principals, schools, and even states.