Super rich benefit from 'status quo bias'

Dec 24, 2013 by H. Roger Segelken

(Phys.org) —Income inequality – between the super-rich and the rest of us – and a sorry record of progressive policy initiatives from Congress all can be traced to a built-in "status quo bias" in our political system, according to Cornell's Peter K. Enns and colleagues at three universities.

They analyzed the behavior of Congress and economic trends for the past 70 years in for their article, "Conditional Status Quo Bias and Top Income Share: How the U.S. Political Institutions Have Benefitted the Rich," forthcoming in the Journal of Politics.

"Policy change, to ease and other socioeconomic ills, is made more complicated by the U.S. Senate's filibuster rules," says Enns, an assistant professor of government. "Furthermore, because more policy action is necessary to change the income distribution as inequality increases, the effects of status quo bias grow as inequality rises."

Reports from 2012 – showing more than half the nation's total income going to the top 10 percent of earners, and one-fifth to the top 1 percent – bear out the political scientists' analysis, which covered the years 1940-2006. Data on "top income share" were easy enough to find and plot on graphs across seven decades of ups (mostly) and downs.

Quantifying the politics of status quo bias required two approaches: the so-called "filibuster pivot distance" – which measures the ideological difference between the "median" senator, in terms of ideology, and the filibuster pivot, the senator who would cast the vote to end a filibuster – and the "Congressional policy product," which measures the overall legislative productivity of Congress.

The wider the filibuster-pivot distance, the more difficult it is to enact policy change that reduces income inequality, the political scientists asserted. Except for some deviation between 1958-76, the 70-year plots of filibuster pivot distance and top income share were similar. The more successful obstructionist filibusters were, the richer the rich became.

Determining Congressional policy product was also conceptually straightforward – especially in recent years when there wasn't much coming from Capitol Hill. (Policy product output peaked in the mid-60s to early 1970s, and again in the late 1980s.) When the graph of Congressional policy product was inverted and superimposed on top-income share, the ups and downs are eerily alike: Policy-wise, nothing puts distance between the super rich and the rest like a well-maintained status quo.

Another author of the "status quo bias" paper, the University of Tennessee's Nathan J. Kelly, noted the "nuclear option" recently invoked by the Senate Democratic majority leaders to curtail filibuster on presidential appointments. Limiting the use of filibusters on appointments "won't have much effect on policy gridlock in Washington," Kelly predicted. "Only the very rich benefit from today's anti-majoritarian, gridlocked government."

Concluded Enns, "Our evidence suggests that the filibuster gets in the way of that could reduce inequality of all kinds, including income inequality. Given the polarized political environment in Congress, significant changes in policy will be difficult without institutional reform."

Explore further: Income inequality is rising, but maybe not as fast as you think

More information: Read the complete paper: falcon.arts.cornell.edu/pe52/T… IncomeShares.JOP.pdf

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RMQ
3.6 / 5 (18) Dec 24, 2013
The USA is a republic, so it is ruled by a small group of rich people (mostly men) and they organize their country to serve their interests. This is the main source of income inequality. Of course there is money and resources to educate everyone in the USA, but it might be bad for the super rich and their families. They THINK they are better of with a nation of people addicted to entertainment and physically ill (obese, sedentary, depressed).
bearly
4.2 / 5 (6) Dec 24, 2013
So they have proven scientifically that the politicians and the rich are greedy sobs.
TheGhostofOtto1923
2.3 / 5 (4) Dec 24, 2013
The study was from 1940 to 1976.

"Except for some deviation between 1958-76, the 70-year plots of filibuster pivot distance and top income share were similar."

-This period of deviation was during a time when blacks were finally given social equality. Welfare was a way of subsidizing their rapid growth to meet demographic parity.

The authors are saying that US politics favor the rich but I think they are failing to recognize how major social programs are engineered with the active participation of all politicians.

The people will never be allowed to decide the most important issues. Rich or poor are favored depending when it is the proper time to do so. The study should have included the Great Depression when social programs favored the poor. It should have included civil war reconstruction in the south and the waves of euro immigration at the turn of the century.
rdk612
4.5 / 5 (11) Dec 24, 2013
The authors failed to demonstrate, in any way, that more policy change would reduce income inequality. In fact, more policy change is just as likely to produce policies that are more favorable to the wealthy and influential. As bearly pointed out, the rich are greedy SOBs. Just like the rest of us. The difference is, the rich are more effective at it. On the front end, they deploy lobbyists and 'experts' to influence policy change. On the back end, they deploy lawyers, accountants, and strategists to take advantage of policy change. No where, and at no time, has more government produced more equality. Government can take from the rich, but that does not make them less influential. Government can give to the poor, but that does not make them more powerfull. Knowledge is the root of all power. In a society that values leisure over the pursuit of knowledge, those who are willing to acquire knowledge, and the skills to use it, will always rule over those who pursue simple entertainment.
antialias_physorg
4.8 / 5 (12) Dec 24, 2013
"Only the very rich benefit from today's anti-majoritarian, gridlocked government."

What a coincidnenc, then, that a disproportionally large number of congressmen/women are of the very rich caste.

What more evidence does anyone need that politics/politicians have nothing to do with serving the people (and this state of affairs is not exclusive tothe US)?
TheGhostofOtto1923
2.3 / 5 (3) Dec 24, 2013
What more evidence does anyone need that politics/politicians have nothing to do with serving the people (and this state of affairs is not exclusive tothe US)?
If politicians did as you say nothing but favor the rich then this country or any country would quickly descend into chaos and revolt. As I say both sides were complicit in the liberal social programs in the 60s. Both sides appreciated the benefits of incorporating minorities into society and liberating women when the time was right to do so.

Liberated white women have fewer babies, leaving more room for minorities to grow. Everything at the proper Time.

"3 There is a TIME for everything,
and a season for every activity under the heavens:"
"11 He has made everything beautiful IN ITS TIME." -ecc3

-A Proper Time for everything under the sun. The bible is talking to you

An even greater % of congresspeople are lawyers who are very skilled in defending positions they might not personally agree with.
Shootist
1.7 / 5 (11) Dec 24, 2013
and a sorry record of progressive policy initiatives from Congress


phys.org drops all pretense of being a politically neutral reporter of the news.

phys.org has no honor.
antialias_physorg
4.4 / 5 (12) Dec 24, 2013
phys.org drops all pretense of being a politically neutral reporter of the news.

Physorg copy/pastes text. It doesn't author it.

phys.org has no honor.

Honor? You mean that quality of a human being that is always evoked as a positive to justify doing dumb stuff? Like being soldiers?

Yeah...people have been falling for that 'honor' line for ages. It's even cheaper than the 'medals' as it doesn't even cost the metal (just the fake speeches) to get someone to lay down their lives for someone else's bank account.

If the results weren't so tragic it would be ridiculously funny watching the people who actually believe in it. (much like religion, actually, ...and for the same reasons, too)
TheGhostofOtto1923
2.3 / 5 (4) Dec 24, 2013
Aa is trolling now. As pat Moran said after he beat the snot out of me in high school, "Sometimes you gotta fight." And as Darwin observed, the tribal dynamic is what made us human.

"There can be no doubt that a tribe including many members who, from possessing in a high degree the spirit of patriotism, fidelity, obedience, courage, and sympathy, were always ready to give aid to each other and to sacrifice themselves for the common good, would be victorious over most other tribes; and this would be natural selection" (Darwin, 1871)

-Sounds to me like your branch is about to die out.
bliskater
1.9 / 5 (7) Dec 24, 2013
"If the results weren't so tragic..." ...that halfwit "progressives", failing to understand how much better off, in living standards, we all are than 100 years ago, because of the system that they hate so much and can actually through technological development brought on by same can speak their mind (lessness) without persecution. Tragic
Code_Warrior
2.4 / 5 (7) Dec 25, 2013
Gee, that pesky filibuster just puts the brakes on the majority and the rich benefit. Wow, what a revelation. Of course, what is left out is that there are rich people on both sides of every argument, so some rich will always benefit regardless of the outcome. But let's just put our little blinders on and act like there aren't any rich people on the opposite side of any particular filibuster and let's imply that anyone using a filibuster is evil because some rich person will benefit. Let's just ignore the rich who benefit when the filibuster fails, after all, if they are on the opposite side of the filibuster they must be paragons of virtue.

Funny how the side in power always complains about the filibuster like it's cheating, but when they become the minority party, they don't hesitate to use it. Waaaaaahhhhhhhh! I don't like these rules that prevent me from imposing my will on the people! Waaaaahhhhhhh! I want to change them so that I can! Waaaaaaaahhhhhhhh!
jdepz
2.6 / 5 (7) Dec 25, 2013
The damage done by the present executive branch of the government has done more to destroy the economy and mislead the masses by circumventing the constitution than any other in history.
Academia only adds to the lie.
How do you explain the argument that wall st. was to blame @the beginning of this monarchs run for the presidency and thereafter, that main st. is what counted, but yet, QE2 has until recently provided wall st. with the printing of $85bn a month, until recently (now lowered by $10bn), and when QE2 is finished the market and country will once again feel the affects of progressive thinking and theory.
To think I live bagging groceries to help my family and money is so wasted in our greater, higher institutions of learning.
zaxxon451
3.4 / 5 (5) Dec 25, 2013
"If the results weren't so tragic..." ...that halfwit "progressives", failing to understand how much better off, in living standards, we all are than 100 years ago, because of the system that they hate so much and can actually through technological development brought on by same can speak their mind (lessness) without persecution. Tragic


Progressives are the ONLY reason we have any semblance of proper living standards. The rich have always waged war on the poor. The "technological development" you so cherish is a tool to enslave our minds so that we submit to the status quo. Class warfare has been the human condition since the beginning, and when we begin to measure human progress by the amount of technological junk we can accumulate we are complicit in our own destruction.
JinXer
4 / 5 (4) Dec 26, 2013
The problem of income inequality isn't the actual income gap. Our economic system isn't a zero sum game, in a more free market the wealth of another has no bearing on your ability to create your own wealth. The real issue is Congress' ability to pick winners and losers, to dole out favors in terms of tax law, barriers to entry for competition and the awarding of government contracts.

Walmart isn't as resistant to minimum wage increases because it is now large enough to absorb the cost of compliance... whereas a start-up company or even a smaller veteran company may go out of business - artificially cutting out Walmart's competition. And the same scenario plays out in most every industry, there are far too many regulations which regulate an industry that were actually lobbied for by the big business' in said industry.

Zaxxon451 - sorry but upward mobility can never be sustained through redistribution of wealth... the War on the Poor by the Rich is a noxious distraction. cont...
JinXer
3.4 / 5 (5) Dec 26, 2013
Who creates sustainable jobs? Government? HA! If you're being honest I think you know the answer to that is "the rich".

Take away Congress' ability to pick who the winners will be and the system only improves for everyone.
cantdrive85
1.6 / 5 (7) Dec 26, 2013
Super rich benefit from 'status quo bias'

Any engrained social group, belief, or entity benefit from the status quo, modern science included.

Who creates sustainable jobs? Government?

Name one government job that has been cut after being created. Even the obsolete ones remain.
TheGhostofOtto1923
3.7 / 5 (7) Dec 26, 2013
Name one government job that has been cut after being created. Even the obsolete ones remain.

"The biggest downsizing of state and local government in modern history has proved to be a big drag on the U.S. economy since 2009 and a primary reason the four-year-long recovery is more sluggish than other recoveries since World War II, economists say.

"While the private sector has generated 7.4 million jobs since the recession and is approaching its pre-recession levels of overall employment, government at the federal, state and local levels continues to shed jobs, diminishing the performance of the job market. Overall, federal, state and local governments have eliminated more than 750,000 jobs since the recession ended in June 2009, with no end in sight to the trend, according to figures from the Bureau of Labor Statistics."
Jimee
2.8 / 5 (4) Dec 27, 2013
The rich take billions in tax breaks and much more in our tax money and give back beggars' wages, which further strains our government resources while the rich lobby to pay lower and lower taxes and pass off the burden to the middle class. It is the small business entrepreneur who provides the jobs in this country (and any others), and it is only because CONSUMERS spend money that there is any economy at all. Large corporations are the TAKERS, while it is the little guys (or gals) who are the MAKERS. The Right has it completely backward.
Returners
1.4 / 5 (5) Dec 27, 2013
Who creates sustainable jobs? Government? HA! If you're being honest I think you know the answer to that is "the rich".

Take away Congress' ability to pick who the winners will be and the system only improves for everyone.


Wrong and ridiculous.

They tried that for about 100 years, and it didn't work. It resulted in laborers being virtual slaves to companies, and also monopolies trying to take over everything, and in some cases companies even hiring hitmen or even small armies to kill people or put down strikes.

That's what unregulated capitalism does. It always has. Why? because capitalism is essentially the system fo greed and selfishness. There is no responsibility to those less fortunate, nro to future generations, nor to the environment. There is only capture and harness resources at whatever the outcome, and profit to the maximum you can squeeze out of people, while paying as little wages as possible. That's what the real "American Dream" created via Capitalism.
Returners
1.5 / 5 (4) Dec 27, 2013
Now one of you was complaining about people putting leisure above knowledge, I think.

I suppose we can easily say we all see this and do this all the time, but I don't think that is necessarily a bad thing either.

To put things in context, the average middle school student probably has more formal knowledge than the average adult did a few generations ago. We live in an age which is unlike anything in human history, or in the history of life itself. Never before has there been any such automatic, communication, electronic games, cameras, e-books and so on.

Newton is sometimes called the "Last man to know everything." However, given the amount of knowledge humanity has compiled since then, it is neither practical nor possible, nor sensible for anyone to spend their life trying to learn everything about anything, nevermind everything about everything.

"Be not righteous overmuch; neither make thyself overwise: why shouldest thou destroy thyself?"
KBK
1 / 5 (1) Dec 29, 2013

The authors are saying that US politics favor the rich but I think they are failing to recognize how major social programs are engineered with the active participation of all politicians.

The people will never be allowed to decide the most important issues. Rich or poor are favored depending when it is the proper time to do so. The study should have included the Great Depression when social programs favored the poor. It should have included civil war reconstruction in the south and the waves of euro immigration at the turn of the century.


The social programs were created via concessions to the corporations and the elite/rich. Result: the barb of control and owning of the society was inserted much deeper.

Never-mind that the elite/rich and 'private debt based' fiat currency and forced wars is what created the depression in the first place. The whole thing was a subtle forced hidden game.

Thus you have the insane corporatism that is the USA today: emergent open fascism.
ryggesogn2
2.3 / 5 (3) Dec 29, 2013
If the Senate filibuster is such an evil tactic, then repeal the 17th amendment and return the power of the senate to the states.
The 'progressives' have had over 100 years to redistribute income and have failed, and will continue to fail.
riogranderift
5 / 5 (1) Dec 29, 2013
Those who are of the opinion that the rich are such only as the result of greed and selfishness insult the intelligence of the poor by implying they are poor because they are incapable of these human emotions.
ryggesogn2
5 / 5 (1) Dec 30, 2013
"A renowned Wall Street tycoon gave away his entire $800 million fortune before falling to his death in a suicide jump this week."
http://www.indepe...278.html
"Chuck Feeney: The Billionaire Who Is Trying To Go Broke"
http://www.atlant...go-broke
"When Carnegie retired from business in 1901, he set about in earnest to distribute his fortune. In addition to libraries, he provided hundreds of church organs to local communities. Carnegie's wealth helped to establish numerous colleges, schools, nonprofit organizations and associations both in his adopted country, as well as in Scotland and throughout the globe. His most significant contribution, both in terms of money and in terms of enduring influence, was the establishment of several endowed trusts or institutions bearing his name. "
http://carnegie.org/about-us/
Skepticus_Rex
5 / 5 (1) Dec 31, 2013
"Only the very rich benefit from today's anti-majoritarian, gridlocked government."

What a coincidnenc, then, that a disproportionally large number of congressmen/women are of the very rich caste.

What more evidence does anyone need that politics/politicians have nothing to do with serving the people (and this state of affairs is not exclusive tothe US)?

This is due to the election system itself as well as use of the Media used to run and sway said elections in American society. People watch a lot of TV and this expensive means of trying to win over voters costs a lot. It now costs a great deal of money to run for office. Only the rich can afford to win an election in the majority of instances in the current US system of politics.
Benni
5 / 5 (2) Dec 31, 2013
Thus you have the insane corporatism that is the USA today: emergent open fascism


A better term is "corporate cronyism", something that established political institutions love because it funds their aspirations for hanging onto to power. Money is the mother's milk of all politics across the entire ideological spectrum.

Pernicious politics is what keeps so many in perpetual poverty, phony promises that government can provide wealth through confiscation (taxes) of other people's income. Then the same liars jump right into bed with their corporate crony allies at Goldman Sachs, etc, perpetuating the same cycle they criticize as Tim Geitner recently has done, Robert Rubin before him & on & on goes the political class list, however these same are opposed to the idea that you confiscate their millions. So long as this type of Wall St corporate cronyism continues, the well connected political class rich will continue to get richer, & the poor slip even deeper into poverty.

Benni
not rated yet Dec 31, 2013
. Knowledge is the root of all power. In a society that values leisure over the pursuit of knowledge, those who are willing to acquire knowledge, and the skills to use it, will always rule over those who pursue simple entertainment


So very true rdk12......My oldest is 14 & is already knowledgeable about how to trade stock in a Roth IRA. I started teaching him about such things when he was 12. He is learning what non-crony capitalism can do for him, while at the same time learning how the value of that capital can improve the lifestyle of all who are properly educated. It's only a shame that some of the company's whose stock he trades are often involved in so much crony capitalism, but unfortunately it comes with the territory. Right now he's out back splitting firewood & getting his hands dirty & blistered so we can have some New Year's Eve fun tonight around the fireplace.