Category Archives: Occupy Wall Street

The first rule of plutocracy is . . .

So, a couple of weeks ago, Eleonora came up with this line, and she asked me to put together a poster to accompany it. Finally, yesterday, I had a chance to take a stab at it. Or, you know, spray it in the face at close range with weaponized capsaicin, as the kids are calling it these days.

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Katehi responds re: pepper spraying students

So, Chancellor Linda Katehi has released an open letter in response, presumably, to criticism in the wake of the UC Davis police brutality that resulted as a direct consequence of her orders.

If you really want to read the whole thing, you can find it here, but I don’t particularly recommend it, as it is the usual mishmash of bureaucratic double-speak and expressions of regret and sadness that are carefully worded so as to avoid admitting any blame.

She is calling for a task force, though, so, um, yay?

UC Davis Pepper Spraying and Call for Chancellor’s Resignation

So, I’m posting here the astounding 8-minute video of UC Davis police pepper spraying student protesters, and the crowd reaction afterwards. If you follow the Occupy movement at all, you’ve probably already seen it, but if not, watch the whole thing.

And keep in mind, these students are there protesting the police brutality that occurred at previous protests, where UC students were beaten with batons and hospitalized.

[UPDATE (via Mother Jones): Just FYI, the main pepper sprayer is Lieutenant John A. Pike, who received a salary of $110,243.12 in 2010.]

And here’s a shorter video (with the spraying, but without the crowd reaction) taken from a different angle.

Here are a few of the things that I take away from these videos:

  1. The police are being used to brutalize and intimidate protesters. Note that the cops went out of their way to spray protesters who were way off to the side, who were not actually blocking the path. This is about physically punishing people for dissent.
  2. A few of the police (here and elsewhere) seem to take an attitude towards inflicting pain on other people that is at best indifferent, and at worst psychopathic. The vast majority of the police, I think, are not like this, but nor do they seem to be doing anything to stop their colleagues from brutalizing the students.
  3. Peaceful, non-violent confrontation can work. It seems fairly clear in the first video that the protesters won the day. And they did it by taking the high road, while at the same time not backing down.
This morning, Nathan Brown, an Assistant Professor, posted this open letter calling for the resignation of Chancellor Linda Katehi. In the letter, he details the events captured in the video, as well as incidents of police brutality leading up to this particular protest. Here’s an excerpt describing the police dismantling of the tents on the UC David Quad:

Without any provocation whatsoever, other than the bodies of these students sitting where they were on the ground, with their arms linked, police pepper-sprayed students. Students remained on the ground, now writhing in pain, with their arms linked.

What happened next?

Police used batons to try to push the students apart. Those they could separate, they arrested, kneeling on their bodies and pushing their heads into the ground. Those they could not separate, they pepper-sprayed directly in the face, holding these students as they did so. When students covered their eyes with their clothing, police forced open their mouths and pepper-sprayed down their throats. Several of these students were hospitalized. Others are seriously injured. One of them, forty-five minutes after being pepper-sprayed down his throat, was still coughing up blood.

The whole letter is well worth reading. And if you have any association with UC (e.g., as faculty, staff, student, or alum), add your voice.

Inequality and Occupy Wall Street

So, I just discovered the blog of Miles Corak, an Economics Professor at the University of Ottawa (via this short piece in The Atlantic Wire). He has been doing a series of posts about wealth and income inequality that are really interesting and accessibly written. At this time, there are five posts in the series (here, here, here, here, and here).

If you’re interested in a thoughtful, nuanced, and readable discussion of the economic factors underlying the Occupy Wall Street protests, check it out.

The most striking image comes from the post on nepotism, where Corak presents a graph from one of his own papers from the Journal of Labor Economics (accessible version available here) that shows the fraction of sons who work in the same firm as their fathers, as a function of income percentile. (Data for Canada)

Corak notes:

Connections matter. And for the top earners this might even be nepotism. This is not a bad thing if parents pass on real skills to their children, skills that might even be specific to particular occupations, industries, or even firms. If this is the case then it makes economic sense to follow in your father’s footsteps.

Wayne Gretzky often talked about the role his father played in developing his skating and stick handling skills. He spent hours and hours with Walter on the backyard rink. But not all top earners got to where they are because of this sort of good nepotism. I somehow doubt that James Murdoch is the Wayne Gretzky of the publishing world.

Bad nepotism promotes people above their abilities by virtue of connections, and it erodes rather than enhances economic productivity.

But there is even a larger cost. If the rich leverage economic power to gain political power they can also skew broader public policy choices—from the tax system to the education system—to the benefit of their offspring. This will surely start eroding the belief that labour markets are fair, and that anyone can aspire to the top.

He also notes that the United States is among the most unequal of the world’s rich countries, as well as one of the most elastic. Elasticity, in this context, is the extent to which a person’s income is determined by the income of their parents.

Corak goes on to write:

These facts are finally starting to percolate into the American consciousness. Joseph Schumpeter, the Harvard University economist who taught during the 1930s, is often cited as saying that recessions are like cold showers: they clear the economy of inefficiencies, make the existing structures more apparent, and set the conditions for change.

But recessions have social as well as economic consequences. The current recession has shaken some people awake, and Occupiers signal the decline of the American Dream in our consciousness, a manifestation of underlying realities, and the demand for a change in the way of doing business.

Here’s hoping that there will be many more installments coming in this series.

Corak, M., & Piraino, P. (2011). Intergenerational Transmission of Employers Journal of Labor Economics, 29 (1), 37-68 : 10.1086/656371

Fate of the People’s Library, Updated

So, as of right now, it looks as if Dev and El were right the first time:

The claim from the NYPD that the books and other belongings had been safely stored turns out to be, well, not so much true. Some books were at the Sanitation Garage, but most were not, and many that were had been damaged or destroyed.

America’s Plutocrats: protecting you from the dangers of literacy!

Dev and El and the Occupy Library go to jail

So, last night Mayor Bloomberg sent the NYPD in to evict the Occupy Wall Street protesters under cover of darkness, excluding any press coverage (and physically assaulting and/or arresting any press who tried to actually cover the eviction).

Most of the characters from Darwin Eats Cake were able to evacuate from Liberty Plaza before things got out of hand, but Dev and El were among those who wound up getting arrested. They posted this report:

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The thing about the library was based on this early report. The NYPD later stated that the books had not been thrown away, but were in storage, and could be reclaimed on Wednesday. They posted this, which looks to me suspiciously like a hostage photo:

Anyway, seeing as they were in jail, Dev and El did not have good real-time access to information today, so I hope you won’t hold their statements against them.

If you want to see what’s going on now, The Other 99 has been doing an awesome job of livestreaming events from Occupy Wall Street, and Global Revolution has a livestream that covers many of the different occupy sites.

What power laws actually tell you about wealth and the 1%

So, there’s an article published in yesterday’s Guardian titled, “The mathematical law that shows why wealth flows to the 1%,” which is fine, except for the fact that the “law” is not really a law, nor does it necessarily show “why” wealth flows anywhere.

To be fair, it’s a perfectly reasonable article with a crap, misleading headline, so I blame the editor, not the author.

The point of the article is to introduce the idea of a power law distribution, or heavy-tailed distributions more generally. These pop up all over the place, but are something that many people are not familiar with. The critical feature of such distributions, if we are talking about, say, wealth, is that an enormous number of people have very little, while a small number of people have a ton. In these circumstances it can be misleading, or at least uninformative, to talk about “average” wealth.

The introduction is nicely done, and it represents an important part of the “how” of wealth is distributed, but what, if anything, does it tell us about the “why”?

To try to answer that, we’ll walk through three distributions with the same “average,” to see what a distribution’s shape might tell us about the process that gave rise to it: Normal, Log Normal, and Pareto.

The blue curve, with a peak at 300, is a Normal distribution. The red curve, with its peak around 50, is a Log Normal. The yellow one, with its peak off the top of the chart at the left, is a Pareto distribution.
In each case, the mean of the distribution is 300.

The core of the issue, I think, is that there are three different technical definitions that we associate with the common-usage term “average,” the mean, the median, and the mode. This is probably familiar to most readers who have made their way here, but here’s a quick review:

The mean is what you usually calculate when you are asked to find the average of something. For instance, you would determine the average wealth of a nation by taking its total wealth and dividing it by the number of people.
The median is the point where half of the distribution lies to the right, and half lies to the left. So the median wealth would be the amount of money X where half of the people had more than X and half had less than X.
The mode is the high point in the distribution, its most common value. In the picture above, the mode of the blue curve is at about 300, while the mode of the red curve is a little less than 50.
The Normal (or Gaussian, or bell-curve-shaped) distribution, represented in blue, is probably the most familiar. One of the features of the Normal distribution is that the mode, median, and mean are all the same. So, if you have something that is Normally distributed, and you talk about the “average” value, you are probably also talking about a “typical” value. 
Lots of things in our everyday experience are distributed in a vaguely Normal way. For instance, if I told you that the average mass of an apple was 5 ounces, and you reached into a bag full of apples, you would probably expect to pull out an apple that was somewhere in the vicinity of 5 ounces, and you might assume that you would be as likely to get an apple that was bigger than that as you would be to get one that was smaller. Or if I told you that the average height in a town in 5 feet, 8 inches, you might expect to see reasonable numbers of people who were 5’6″, fewer who were 5’2″, and fewer still who were 4’10”.
So what sorts of processes lead to a Normal distribution? The simplest way is if you have a bunch of independent factors that add up. For example, it is thought that a large number of genes affect height, with the specific variants of each gene that you inherited contributing a small amount to making you taller or less tall, in a way that is close enough to additive.

What would it mean, then, if we were to find that wealth was Normally distributed? Well, it could mean a lot of things, but a simple model that could give rise to a Normal wealth distribution would be one where the amount of pay each person received each week was randomly drawn from the same distribution. Maybe you would flip a coin, and if it came up heads, you would get $300, while tails would get you $100. Pretty much any distribution would work, as long as the same distribution applied to everyone. After many weeks, some people would have gotten more heads, and they would be in the right-hand tail of the wealth distribution. The unlucky people who got more tails would be in the left-hand tail. But most people’s wealth would be reasonably close to the mean of the wealth distribution.
Image from Alex Pardee‘s 2009 exhibition “Hiding From The Normals”
Now, it’s important to remember that just because a particular mechanism can lead to a particular distribution, observing that distribution does not prove that your particular mechanism was actually at work. It seems like that should be obvious, but you actually see a disturbing number of scientific papers that basically make that error. There will typically be whole families of mechanisms that can give rise to the same outcome. However, looking at the outcome (the distribution, in this case) and asking what mechanisms are consistent with it is an important first step.
Alright, now let’s talk about the Log Normal distribution (the red one). Unlike the Normal, the Log Normal is skewed: it has a short left tail and a long right one. This means that the mean, mode, and median are no longer the same. In the curve I showed above, the mean is 300, the median is about 150, and the mode is about 35. 
This is where talk about averages can be misleading, or at least easily misinterpreted. Imagine that the wealth of a nation was distributed like the red curve, and that I told you that the average wealth was $30,000. What would you think? Well, if I also told you that the wealth was Log Normally distributed, and I gave you some additional information (like the median, or the variance), you could reconstruct complete distribution of wealth, at least in principle.
The problem is that we tend to think intuitively in terms of distributions that look more like the Normal. In practice, we hear $30,000 average wealth, and we say, “Hey, that’s not too bad.” We probably don’t consciously recognize that (in this example), half of the people actually have less than $15,000, and that the typical (i.e., modal) person has only about $3500.
What type of process can give rise to a Log Normal distribution? Well, again, there are many possible mechanisms that would be consistent with a Log Normal outcome, but there is a class of simplest possible underlying mechanisms. We imagine something like the coin toss that we used in the Normal case, but now, instead of adding a random quantity with each coin toss, we multiply.
This is sort of like if everyone started off with the same amount of money invested in the stock market. Each week, your wealth would change by some percentage. Some weeks you might gain 2%. Other weeks you might lose 1%. If everyone is drawing from the same distribution of multipliers (if we all have the same chance of a 2% increase, etc.), the distribution of wealth will wind up looking Log Normally distributed.
Vilfredo Pareto, who grew a very long beard in order to illustrate the idea of a distribution with a very long tail.
Finally, we come to the Pareto distribution. This is sort of like the Log Normal, but much more skewed. In the graph we started off with, the yellow Pareto distribution has a mean of 300, just like the Normal and Log Normal. But where the Normal had a median of 300, and the Log Normal had a median of 150, the Pareto had a median of only about 20. 
In our wealth example, we could say that that average wealth in a nation was $30,000, but if that wealth was distributed like the yellow Pareto curve, half of the people in that nation would have less than $2000. Furthermore, 97% of the people in that nation would have less than that $30,000 average.
With a Pareto, the mode is as far left as we set the minimum value. In this case, it was set at 10. Under such a distribution, the “typical” person has as little wealth as possible.
The fact is, this extremely skewed sort of distribution, a Pareto or something like it, is what real-world wealth distributions tend to look like. [UPDATE: This is true of the rich, right tail of the distribution. The body of wealth distributions are more Log Normal. H/T Cosma Shalizi.]
The greatest success so far of the Occupy Wall Street movement may be that it is starting to make people understand just how skewed the distributions of wealth and income are, in this country and around the world. A graph posted Friday on Politico shows the dramatic increase in the discussion of “income inequality” in the news over the past several weeks:
Dylan Byers plotted the number of times “income inequality” was mentioned in print news, web stories, and broadcast transcripts each week. The graph reveals a five-fold increase over the past two months.
Consider that along with this graph, which is part of a nice set of illustrations of American inequality put together by Mother Jones:  
This graph reveals two things. First, that Americans think that wealth should be more equally distributed. Second, and more importantly for the sake of the current discussion, they dramatically underestimate the extent of the inequality that actually exists. 
In the terms that we have been using here (and speaking very loosely), Americans think that wealth should be somewhat Normally distributed. They think that it is more Log Normally distributed. They fail to recognize that, in reality, it is more like Pareto distributed. 
What types of processes can give rise to a Pareto distribution? Again, lots. What are the simplest models, though? Generative models that give rise to this sort of distribution tend to have some sort of positive feedback mechanism. Basically, the more money you have, the more leverage you have to make money in the future. In the simple models, you can start off with a bunch of things that are identical (like our nation of people who all start off with the same amount of money to put in the stock market). But now, if you do well, it increases your chances of doing well in the future: the people whose coins come up heads in the first few rounds are given new coins, which come up heads more than half of the time. 
It is easy to list the features of our current economic system that lead to this sort of positive feedback loop: successful companies have the resources to undermine and disrupt smaller competitors, the rich have the ability through advertising and lobbying to steer public opinion and write public policy. If you didn’t read it when it came out, or haven’t read it recently, the Vanity Fair piece from May, “Of the 1%, by the 1%, for the 1%” provides an excellent overview of how increasing inequality leads to reduced opportunity, which leads, in turn, to further increases in inequality. 
Power laws and Pareto distributions don’t show how or why wealth flows into the hands of the few. However, the nature and magnitude of wealth inequality hint at truths that we already know from experience: that wealth begets wealth, that the playing field is not always level, and that when inequality becomes great enough, hard work and ingenuity may have a hard time competing with privilege and access.
In the “real” world of empirical data, there are two kinds of power laws: things that are actually power laws, and things that are not really power laws, but get called power laws because science thinks that’s sexier.
I think someone once said, “God grant me the the serenity to accept the things that are not power laws, the appropriate statistical tools to fit those that are, and the wisdom to know the difference.”
If the God thing doesn’t work out for you, a good back-up plan starts with this paper:

Clauset, A., Shalizi, C., & Newman, M. (2009). Power-Law Distributions in Empirical Data SIAM Review, 51 (4) DOI: 10.1137/070710111

Free version of the article available on the ArXiv, here:

"Leaderless" Occupy Denver has elected a leader

So, key to the success of the Occupy protests have been their the decentralized nature and lack of leadership. Why then would Occupy Denver have elected a general leader? According to this report, the move was prompted in part by statements from the Denver police, who have expressed frustration with the lack of a leader with whom they can negotiate. The precipitating event, however, was the blowhard-esque appearance of Michael Moore, who refused to follow the established guidelines for participation in the General Assembly:

“(Moore) walked in with security and made everyone listen to him in the center of the circle with a bullhorn like he was our leader, even though he said out loud it’s a leaderless movement,”

 In a landslide, Occupy Denver elected Shelby, a border collie / cattle dog mix:

Shelby, newly elected leader of Occupy Denver, has been coming down from her home in Boulder every other day to participate in the protests with her “bodyguard,” Al Nesby.

Peter John Jentsch was quoted as saying, “Are you the new leader? Are you, girl? Are you?”

Oakland PD will shoot you if you film them

So, here is yet more incredibly disturbing footage from Occupy Oakland. The video is footage someone was shooting late Wednesday night / early Thursday morning. It seems to be a line of riot police. Then, for no apparent reason, one of the police casually raises his gun and shoots the cameraman. Fortunately, it was just a rubber bullet.

This, along with reports (and more footage) of arrests of reporters and legal observers. Seriously, what the hell is wrong with the Oakland PD? Do they have an arrest quotient? Do they just have complete disdain for the people of Oakland? Do they have such an overwhelming sense of entitlement that they feel completely justified in arresting or shooting anyone who dares to observe them? Or are they secretly trying to drum up sympathy for the occupiers?

In related news, here’s the most recent Darwin Eats Cake:

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