Writing Project 2

Michael Soliman

ENG 112

Writing Project 2

Sunday, December 14, 2014

Economic Inequality in the United States

Economic inequality is described as the gap between the rich and the poor in income and wealth in other words economic inequality is called wealth gap. President Obama defines economic inequality as the “challenge of our time” (RUGABER). There are many debates about economic inequality, and how bad it is. Some people say that economic inequality is a growing social problem. Other people say that inequality is important for investment. Other opinions argue that too much inequality is destructive, and it can prevent long term economic growth. This essay would explain the problem of economic inequality, and its bad effects on the society. In addition, it would propose solutions to the problem. Moreover it would offer justification for the proposed solutions.

 Three decades ago, people of the United States of America experienced symmetric growth in their income. No matter how much they made, their income experienced the same growth rate, but since 1980, people who are richer experienced high growth in their income while the income growth dropped for the poorest 20 percent. The richest one percent of the country experienced an economic growth of 31 percent from 2009 through 2012 while the economic growth for the average person was 0.4 percent only (RUGABER).

The top one percent of the country consists of lawyers, bankers, and the founders of successful companies. The average income for an individual from the top one percent was at least $394,000 in 2012 with economic growth of 22.5 percent. The average middle class made about $56,080 in 1999 and it dropped to $51,017 by 2012 (RUGABER). Some economists argue that economic inequality is important to reward people who work hard and show talent, but the wealth gap that we are experiencing now is too wide that it introduces threats to the economy. Economic inequality can slow the economic growth of the country because the richer save more than other do. Also economic inequality causes carless borrowing. Studies show that “gross household debt was relatively stable the 1960s and the 1970s and since the 1980s has jumped out of proportion with real activity, rising between 1981 and 2003 from 66% to 113% of disposable personal income” (Lacoviello 930).

 In addition economic inequality limits social mobility. Limited social mobility means that if one is born in a poor family, one will likely be poor throughout one’s entire life and the opposite is true so if one is born in a rich family, one will likely become rich. Countries that show economic equality such Sweden and the Scandinavian countries have more social mobility than the United States. In the United States, “A child born in the 20 percent poorest families has only nine percent chance to reach top 20 percent as an adult” (RUGABER). Studies show that inequality leads to stress and status anxiety which might lead to depression, and stress related health issues (Booth). Also studies show that economic inequality decreases the trust between the individuals. People experience more trust between each other when there is economic equality (Brown).

There are many solutions to the economic inequality problem. One of the solutions to the economic inequality problem would be raising tax rates for wealthy people. In 2013, President Barack Obama made economic equality a priority. He succeeded in imposing higher tax rates on income above $398,350 (Rugaber). Economists Emmanuel Saez and Thomas Piketty argue that raising tax rates for the wealthy people up to 50 percent, or 70 percent or even 90 percent would solve the economic inequality problem (Lowrey).

Another solution for economic inequality would be raising the minimum wage. In 2013, President Barack Obama proposed raising the minimum wage in order to decrease the gap between the rich and the poor by suggesting a higher minimum wage rate of $10.10 per hour. The Economic Policy Institute recommends this proposal by arguing that “Raising the minimum wage would help reverse the ongoing erosion of wages that has contributed significantly to growing income inequality” (Cooper). The economist argued that despite the small increase in the minimum wage, it would hike pay, and it would not introduce any threats to jobs.

One of the solutions would be passing a maximum wage law which “would limit the amount of compensation an employer could receive to a specified multiple of the wage earned by his or her lowest paid employees” (Hanley). Hanley argues that in 2011 the average income of a company CEO was 380 times the average income of American worker which was $34,053, however, in 2010, the average income of the American worker was $26,364. Hanley argues that the increase in income of the average American worker was because the rich’s income was going up, but the gap between the employers and the employees also increased. As an example of application of maximum wage, if the law required the employer not to earn more than 100 times his lowest paid employee, and if the lowest employee earn $25,000 per year, the employer should not make more than $2.5 million per year (Hanley).

Another solution to the economic inequality is to impose general limitations on rent-seeking and to raise the taxation on rent-seeking. Rent-seeking means that people are competing to increase their share in existing wealth without creating wealth. For example, a college want to give away $10,000 scholarship to a student who writes the best essay. The amount of giveaway which is $10,000 is called a rent. Suppose the college has 100 students, and each student is competing with the other students for the best essay. If the student worked on the essay for 15 hours, and the pay rate per hour is $8, then the total amount of effort lost in seeking the rent is $12,000.

The best solution for the economic inequality problem would be applying maximum wage law, and raising taxation on the wealthy people. The maximum wage law binds the income of the employer with the income of the employee by a factor. The average income of employee increases because the average income of the employer increases, and they will experience the same growth rate. Raising taxes on the wealthy people would mean putting money in the pockets of the middle class, and more money for the middle class would mean higher demand on the goods that business sell. More demand would mean more supply for these goods, and more supply of goods would mean that these goods such as staples would be better in quality, and they would be cheaper.

Economic inequality introduces many threats to the society. It harms the economy and slows its growth. Inequality has many harms on society such as social immobility which means that one has little chances to change one’s economic condition as an adult. Inequality reduces the trust between the individuals as researches shown that people trust each other in measures of their capital. Countries that shows economic inequality have higher rates of crimes and homicides, and their habitats experience psychological problems such as depression. There are many solutions to the economic inequality such as imposing higher taxes on wealthy people, raising the minimum wage, implementing maximum wage, and limiting rent seeking, but the most effective solution would be combining the implementation of maximum wage and raising taxes on wealthy people. Raising taxes on wealthy people would help the economy to move as money goes to the middle class and that means that the common goods would be cheaper and better. Also implementing the maximum wage ties the average income of the employer with a factor to the average income of the employee, and that would help greatly in imposing economic equality.

Works Cited

Booth, Robert. "The Spirit Level: How 'ideas Wreckers' Turned Book into Political Punchbag." The Spirit Level: How 'ideas Wreckers' Turned Book into Political Punchbag | Books | The Guardian. Theguardian, 13 Aug. 2010. Web. 1 Nov. 2014.

Brown, Mitchell, and Eric M. Uslaner. Inequality, Trust, and Political Engagement (2002): n. pag. Worldbank. Worldbank.org, 29 Aug. 2002. Web. 1 Nov. 2014.

Cooper, David, and Doug Hall. "Raising the Federal Minimum Wage to $10.10 Would Give Working Families, and the Overall Economy, a Much-needed Boost." Economic Policy Institute. Economic Policy Institute, 13 Mar. 2013. Web. 02 Nov. 2014.

Hanley, Lawrence J. "A Maximum Wage Law?" The Huffington Post. TheHuffingtonPost.com, 03 Aug. 2012. Web. 02 Nov. 2014.

"The Logical Floor." The Economist. The Economist Newspaper, 14 Dec. 2013. Web. 02 Nov. 2014.

Lowrey, Annie. "For Two Economists, the Buffett Rule Is Just a Start." The New York Times. The New York Times, 16 Apr. 2012. Web. 02 Nov. 2014.

Rugaber, Christopher S., and JOSH BOAK. "Wealth Gap: A Guide to What It Is, Why It Matters." The Big Story. Ap.org, 27 Jan. 2014. Web. 01 Nov. 2014.

Lacoviello, Matteo. "Household Debt And Income Inequality, 1963–2003." Journal Of Money, Credit & Banking (Wiley-Blackwell) 40.5 (2008): 929-965. Business Source Complete. Web. 1 Nov. 2014.

Writing project 1

Michael Soliman

Michele Marits

ENG 112 – Writing Project 1A

October 25, 2014

Internet regulation

We use internet on daily basis for different purpose such as education, shopping and reserving appointments... Internet has become an integral part in our lives. As engineering student, one uses internet in many things such as taking one’s online courses. As computer electrical engineer, one downloads datasheets to view the specifications of the electronic components, and also one uses internet for collaborating with other programmers over the internet for software engineering. One is against internet regulation because nowadays internet penetrates every area in our lives. In some countries internet access is considered a human right. For example, “In June 2009, the Constitutional Council, France's highest court, declared access to the Internet to be a basic human right” (“Top French Court Declares Internet Access 'Basic Human Right'”). Internet regulation will limit our freedom. The only way to protect ourselves is by education and having ethics. In addition to a major technical reason which will make any kind of internet filtering or censorship fail which is cryptography or data encryption.

            In 2012 two bills were proposed, the protect intellectual property act (PIPA) and the stop online piracy act (SOPA), those bills require internet service providers (ISPs) to block websites that are suspected in distributing copyrighted materials which would affect three-fourth of Americans who use the internet on daily basis for different purposes.

There are two controversial points. Some people argue that internet regulation keeps their children from viewing adult material online. It also helps against terrorism, and it prevents hacking their computers. It will also help in cutting the distribution of illegal copyrighted materials like movies and songs. On the other hand some people argue that Internet regulation would automatically mean limiting the flow of information, as well as its exchange. It would prevent people from being expressive and communicative. In addition, internet regulation might be used as an excuse to practice further censorship in the name of protecting our safety.

Music and film makers want to protect their copyrighted material. There is no technical method up till this moment to prevent the distribution of illegal copyrighted materials.

In 2012 Hollywood supported two bill proposals in Congress aimed at fighting the unlicensed use or reproduction of movies, recorded music, TV shows and other copyrighted material. Such pirating, which typically occurs on foreign-based dishonest websites, has flourished into a global enterprise costing the entertainment industry and others billions of dollars a year in lost revenues and royalties. (Clemmitt)

But opponents of the proposed bills argued they were so ambiguous that they would force any website carrying user-generated content perceived to violate copyright laws to shut down at nearly a moment’s notice. What’s more, opponents said, the bills would efficiently prevent search engines from connecting to those sites and allow copyright owners to stop advertisers from doing business with them. (Clemmitt)

The very simple internet network is formed when one connects two computers together by using a cable or wireless. The computers are able to change information between each other. Going to a larger scale, one connects more than two computers together, and then one has formed a local area network (LAN). Going further, all the computers in the world are connected together by the help of internet service providers (ISPs) and forming wide area network (WAN). An ISP is a company that provides one with internet access such as COX. Each computer on the internet has an address called (IP) works the same way as a telephone number. When one wants to view a website, one’s computer tell the ISP that one wants to visit that website, and one gives the ISP the website address. Then the ISP goes to the website and brings the data back from the computer that hosts the website (Tyson).

ISPs play very important rule in the internet. Their biggest rule is providing internet access to customers. As a service provider, the ISP can control everything one can do on the internet. Because the ISP works as a data carrier, the ISP knows about all the websites that one has visited, all the movies that one has watched, and it can track all one’s activity on the internet. In other words the ISP knows about everything one does on the internet, and it can control what one can do, and what one cannot do. There is only one thing that ISPs cannot do which is controlling an encrypted connection (Frink).

Encryption is an integral concept in any communication process. Communication and encryption are two correlative words. One of the earliest form of ciphering or encryption is Caesar cipher. When Caesar wanted to send a very private mail to one of his army officials, he encrypts it, gives it to a solider, and then the solider gives it to the army official. The solider or the carrier of the message does not know what does it contains, but the endpoints, the sender and the receiver, only knows how to decipher the message.

The highest level of internet filtering can be achieved by forcing an ISP not to bring data from certain computers and blacklisting their IP addresses which means if one who is connected to that ISP requested data from a certain computer that is blacklisted by the ISP, the ISP will refuse to bring the data back. Also if the data is not encrypted, the ISP can intercept the data and block it if it contains certain words. One can bypass ISP filters by simply asking one’s ISP to connect one to another computer that exist on the internet network. The other computer may be in another country that does not block this website. One can initiate an encrypted connection with the other computer on the internet and ask the other computer to fetch the data for one. Since the data is encrypted, the ISP has no idea about what being transferred or what is one doing on the internet. It is like two people are speaking Latin in front of a person who is speaking English. The person who is speaking English has no idea about what is being said (“Tor: Overview”).

 Passing laws the supports internet regulation might lead to invention of sophisticated software such as Freenet Project and higher security standards that will make it harder to track criminals and terrorists.

Internet regulation does not give any solution to the problems stated before. It will not help in cutting terrorist attacks. Increasing our security measures will do. It’s an industry standard to have encrypted communications between computers or peers. The free and popular software Skype is always using an encrypted connection between the communicating peers.

One does not need internet regulation to protect one’s children from viewing adult material. By the help of parental control software, one can keep one’s children from visiting websites that contains materials for adults only.

Internet regulation does not help against hackers. Hackers are intelligent. They are expert users of computer. They know their victims well. One can protect oneself from hackers by installing an antivirus software and a firewall. One must have a strong password to keep one’s private data secure. One must not login to a website that holds one’s personal information such as your bank account or your social media account unless one sees the URL begins with “https://” and the browser gives one no warnings about the site.

Passing laws that supports internet regulation will not help in cutting the distribution of illegal materials. Most of the traffic of illegal file sharing is decentralized and lots of foreign peers are involved. There is no central authority or server that holds these materials that we can shut down. Besides other countries have different laws regarding sharing files, and they are not required to apply U.S laws. It’s very easy for the computers inside the U.S to initiate encrypted connections to computers in foreign countries, use them as a proxy, and download illegal materials. Any kind of censorship will not help in this case because the endpoints, the sender and the receiver, of the encrypted connection can only decipher and understand the data.

One is against internet regulation because nowadays internet penetrates every area in our lives ranging from entertainment to research. With much progression and advancement in technology, electronics, and computer industry, censorship is not the answer for our problems. Internet regulation will not protect us against hackers nor terrorists because they are expert users of computer, and they know how to bypass any kind of censorship and cipher their communications. Instead, lawmakers should support the FCC’s net-neutrality rules which require ISPs to treat all data equally because an open Internet is important to societal interactions, political discourse, innovation, commercial transactions, entrepreneurship and job creation (Clemmitt).

Works cited

Clemmitt, Marcia. "Internet Regulation." CQ Researcher 13 Apr. 2012: 325-48. Web. 19 Oct. 2014.

Frink, Lyle. "What Does Your ISP Know About You." Hotspotshield. hotspotshield.com, 24 Apr. 2013. Web. 25 Oct. 2014.

"Top French Court Declares Internet Access 'Basic Human Right'" Fox News. FOX News Network, 12 June 2009. Web. 24 Oct. 2014.

"Tor: Overview." Tor Project. Torproject.org, n.d. Web. 23 Oct. 2014.

Tyson, Jeff. "How Internet Infrastructure Works." HowStuffWorks. Howstuffworks.com, 03 Apr. 2001. Web. 25 Oct. 2014.