The Nuns On A Bus Tour, a protest against spending cuts mandated by the House GOP budget, stopped yesterday outside the district offices of Rep. Paul Ryan (R-WI), the budget’s author. The stop, the second of 10 that the nine-state tour will make, followed an event at Rep. Steve King’s (R) Iowa office on Monday.

The nuns were greeted by “a couple hundred” people, according to the Huffington Post. Sister Simone Campbell, who organized the tour, called Ryan’s budget “irresponsible” for cutting food assistance and other safety net programs. Here are photos from the stop outside Ryan’s Janesville, Wisconsin office:

(Photo via Phil Haslanger, Huffington Post)

(Photo via Phil Haslanger, Huffington Post)

Ryan issued a brief statement in response to the protest but, like King, did not mention the nuns. Instead, Ryan returned to his standard line about the budget, saying it sought to solve “growing dependency on government assistance” and a looming “debt crisis.”

Thanks in large part to the Occupy Wall Street movement, the debilitating effects of income inequality have been hoisted into the national spotlight. But in addition to killing economic growth and economic mobility, income inequality also exacerbates political inequality.

Today, ThinkProgress spoke with MIT economist Daron Acemoglu, whose new book, Why Nations Fail (co-written by James Robinson), looks at the effect politics and policy have on economic growth and prosperity. Acemoglu said that he believes the most “pernicious” effect of income inequality is that it drains political power from lower- and middle-class Americans and allows the richest to then begin “changing the rules in their favor”:

I think there’s a lot of debate about the economic impact of income inequality. There’s literature on how greater inequality might slow economic growth because it creates a less conducive environment for consumer demand or credit. But at the end, my view, and that of our book with James Robinson, is that the more pernicious effect of economic inequality comes indirectly through its impact on political inequality. it’s a general pattern throughout history, and we see around today, that when economic inequality increases, the people who have become economically more powerful will often attempt to use that power in order to gain even more political power. And once they are able to monopolize political power, they will start using that for changing the rules in their favor. And that sort of political inequality is the real danger that’s facing the United States.

Watch it:

Acemoglu added that the Supreme Court’s decision in Citizens United and the growth in Super PAC spending are only going to make this problem worse by increasing the importance of money in politics. “We already had a very serious problem,” he said. “Instead of trying to stem that tide, we’ve done the opposite and we’ve now opened the sluice gate and said you can use that money with no restrictions whatsoever.” According to calculations by Council of Economic Advisers chairman Alan Kruegar, the shift in income inequality over the last three decades has been the equivalent of moving $1.1 trillion of income from the 99 percent to the top 1 percent every single year.

Tomorrow, South Carolina will hold its First in the South primary to determine the state’s pick for the GOP nomination. But while most of the state’s focus is on who people will be voting for, what about those who are actually doing the voting?

With the state’s unemployment rate well above the national average and more than 18 percent of residents living in poverty, economic security is certainly a driving concern for the majority of voters. But, given the GOP field’s stances, it doesn’t seem to be a concern candidates are taking to heart.

Here’s a look at how the GOP candidates’ positions would affect the vulnerable populations of South Carolina, by the numbers:

–Over 3,000,000: There are at least at least 3,380,000 eligible voters in South Carolina, but many students, seniors, low-income voters, and minority voters may find it difficult to actually cast a ballot thanks to the state’s new voter ID law. Rick Santorum called it a “common-sense anti-fraud” measure that prevents the vote of “people who probably shouldn’t be voting.” Newt Gingrich blasted President Obama’s rejection of the law as trying to “steal elections.”

–Over 200,000: There are at least 213,000 unemployed South Carolinians contributing to the state’s 9.9 percent unemployment rate. While those receiving unemployment insurance actually work harder to find a job, according to studies, Gingrich equates joblessness with laziness and demands that any benefits come through a work-training program — or a drug test.

–Over 400,000: There were at least 408,000 veterans living in South Carolina in 2009. veterans increasingly need to be treated for traumatic brain injury, PTSD, and other health consequences of war. While Mitt Romney briefly flirted with turning the VA into a voucher system, Gingrich adopted the idea wholesale, stating we should “find a way to have a voucherized system for those who want it.”

–Over 650,000: In 2009, there were over 650,000 people in the state participating in the food stamp program, and the economic recession has no doubt only increased those numbers. Rather than address the need of vulnerable South Carolinians, Gingrich and Santorum traffic in “ugly, racial stereotypes” to justify calls to drug test recipients and cut funding for the needy.

As a growing number of Americans slip out of the middle-class into economic insecurity, they are increasingly vulnerable to predatory lending schemes like the payday loan. Each year, about 12 million Americans incur long-term debt by taking out a short-term loan that’s intended to cover a borrowers’ expenses until they receive their next paycheck. Payday lending takes “unfair advantage of lower-income borrowers,” with most taking out nine repeat loans per year with an interest rate as high as 400 percent. Forty-four percent of borrowers ultimately default, even after paying back their loans several times over, and thus are pushed ever closer to poverty.

But, as a new National People’s Action report shows, one borrower’s poverty is a payday lender’s profit. The report finds that lenders “take at the very least $3.4 billion” from low-income communities every year in fees alone. Titled “Profiting Off Poverty,” the report describes how payday lending companies open in areas isolated from traditional banking options to ensure they are the only available line of credit. Faith and Public Life reports:

While payday lenders prey on the most vulnerable and drive the poor into never ending cycles of indebtedness, the lending institutions reap huge profits by borrowing from big banks like Wells Fargo, JPMorgan Chase, US Bank and Bank of America at extremely low interest rates, “which they in turn lend out as payday loans charging between 260% and 570% APR”.

As the “Profiting off Poverty” report details, these companies continue to make record-breaking profits by setting up in neighborhoods isolated from traditional banking options. With more payday lending locations than McDonald’s restaurants in the U.S., these companies gladly admit that they are often the only available line of credit for people in poverty.

Major banks like Bank of America, JPMorgan Chase, and Wells Fargo finance about 42 percent of the entire payday loan industry in the U.S. Those loans strip $3.1 billion in wealth from low-income, working poor who are literally trying to pay bills from paycheck to paycheck. This kind of scheme exemplifies the need for an agency like the Consumer Financial Protection Bureau, and indeed is the subject of the bureau’s first public hearing today in Alabama.

Newly-appointed bureau head Richard Cordray intends to research the industry and its enforcement actions that pose “immediate risk to consumers and are clearly illegal.” Endeavoring to answer whether regulation of the industry is necessary or whether the practice should be “explicitly restricted,” Cordray said that the goal will be “to develop a more vibrant, competitive market for small consumer loans.”

It’s well known that America’s obesity epidemic disproportionately affects poor and minority children because of the country’s glut of cheap, unhealthy foods. Soft drinks are such a major culprit in the childhood obesity epidemic that some local governments have tried to levy taxes on them to reduce consumption. The Obama administration announced a plan to ban candy and sweetened beverages from schools.

Now, a new study reveals that soda companies have been targeting black and Latino children in high numbers, diminishing parents’ attempts to encourage their kids to eat right:

A new report from Yale’s Rudd Center for Food Policy and Obesity has found that beverage companies are aggressively targeting black and Latino kids with ads to promote sports, fruit and energy drinks. The products that are promoted to kids of color happen to be among the least healthy of the 644 products studied by researchers at the university.

Black children and teens saw 80 percent to 90 percent more ads compared with white youth, including more than twice as many for Sprite, 5-hour Energy, and Vitamin Water.

From 2008 to 2010, Latino children saw 49 percent more ads for sugary drinks and energy drinks on Spanish-language TV. Latino preschoolers saw more Spanish-language ads for Coca-Cola Classic, Kool-Aid, 7 Up, and Sunny D than older Latino children and teens did.

Colorlines notes that the two largest soda companies, Pepsi and Coca-Cola, have repeatedly promised to market less to children, who are more susceptible to advertising: “Coca-Cola, for example, has previously stated publicly that they wouldn’t market ads in TV, radio and print programming aimed at kids under the age of 12.”

But the report found that soda companies have just shifted to using more sophisticated and insidious forms of advertising that promise kids rewards for purchasing sugary drinks. Kids are exposed to these messages “often without their parents’ awareness.”

Companies’ targeting of minority children is a social justice issue as well as an economic one. Just like mortgage companies that focused their predatory lending on minority communities, soda companies are preying on a particularly vulnerable group (poor children) who are already suffering the ill effects of their product and have the most to lose from consuming more. For instance, these children are less likely to have health insurance to cover the numerous medical problems associated with obesity.

Stephen Schwarzman

Last summer, mega-investor and Blackstone CEO Stephen Schwarzman — who has a net worth of about $4.7 billion, according to Forbes — said Democratic efforts to close a pernicious tax provision known as the carried interest loophole was akin to Nazi invasions during World War II. “It’s a war,” Schwarzman said. “It’s like when Hitler invaded Poland in 1939.”

This particular loophole lets private equity executives and hedge fund managers, who are some of the wealthiest people on the planet, pay exceedingly low tax rates. As billionaire investor Warren Buffet explained, “Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as ‘carried interest,’ thereby getting a bargain 15 percent tax rate.”

And it seems that Schwarzman has found his man in the 2012 election: the former private equity executive Mitt Romney:

Stephen Schwarzman, chairman of the world’s largest private-equity firm, will host a fundraiser for Mitt Romney at his Park Avenue apartment next month, a sign that Romney is closing the sale with Wall Street’s wealthiest donors.

The event marks Schwarzman’s inaugural step to help Romney secure the Republican presidential nomination, according to a person familiar with Schwarzman’s plans who spoke on condition of anonymity. He will follow up with efforts to persuade colleagues in the financial industry to get behind Romney’s presidential bid, the person said.

Schwarzman, for the record, is so wealthy that his personal chef “often spends $3,000 for a weekend of food for Mr. Schwarzman and his wife, including stone crabs that cost $400, or $40 per claw.” Yet he has vociferously fought against equalizing the tax treatment of investors like himself and the working Americans whose income is taxed at normal income tax rates.

Romney, of course, has already come out against the “Buffett rule,” the Obama administration’s proposal to ensure that millionaires and billionaires can’t pay lower tax rates than middle-class families. Romney’s net worth is about $250 million and he won’t release his tax returns (despite having previously called on his opponents to do so). However, a Citizens for Tax Justice analysis estimated that Romney pays a tax rate of about 14 percent.

Even before grabbing Schwarzman’s endorsement, Romney had been hauling in Wall Street cash. But does Romney agree with Schwarzman that asking billionaires to pay their fair share is akin to Hitler invading Poland?

A new study concludes that speedy economic growth without an accompanying rise in income transfers fails to help low-income households. The study, conducted by Lane Kenworthy, a professor at the University of Arizona, looked at low and middle income households in 17 countries between 1979 and 2005 and found that in countries with increased growth but no boost in income transfers, low-income households saw little benefit.

However, in countries where programs benefiting the poor accompanied growth, living standards for the poor increased. The Financial Times reports:

“Growth does not automatically trickle down to the bottom,” said James Plunkett, secretary to Resolutions’s Commission on Living Standards.

The study looked not just at what happened to post-tax incomes during periods of faster and slower growth but also the effects of the transfer of a variety of benefits of cash or near-cash benefits.

All of the countries that saw living standards rise for lower income groups – the UK, Norway, Sweden, Finland and Denmark – had programmes in place when economic activity was strong that benefited low-earning households.

However, in countries that had few or no transfer programmes in place during high-growth periods – the US, Canada and Switzerland – low-earning households saw little benefit. This finding means “that as a general rule, growth has not trickled down to low income households through wages or employment”, the report concludes.

Last week, Rep. Paul Ryan, the chairman of the House Budget Committee, released a response to the Congressional Budget Office’s recent report on income inequality. In it, Ryan advocates for a growth-centered strategy to helping the poor, exactly the kind of strategy the report rejects. As Ezra Klein notes, not only would Ryan’s plan fail to help the poor, it would actually increase inequality. The top 1 percent of income earners would save $350,000 under the plan while the bottom 20 percent would lose $393.

– Karl Singer

The preferable treatment that investment income receives in the tax code is one of the factors driving the income inequality and galvanizing the Occupy Wall Street movement. Because the capital gains tax is capped at 15 percent, “anyone making more than $34,500 a year in wages and salary is taxed at a higher rate than a billionaire is taxed on untold millions in capital gains.”

The reason this low rate helps create an income divide is that capital gains are made almost exclusively by the wealthy. In fact, “over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people.” And the concentration is actually far greater than that, as half of all capital gains are made by the richest 0.1 percent of Americans:

Income and wealth disparities become even more absurd if we look at the top 0.1% of the nation’s earners– rather than the more common 1%. The top 0.1%– about 315,000 individuals out of 315 million– are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.

It’s crystal clear that the Bush tax reduction on capital gains and dividend income in 2003 was the cutting edge policy that has created the immense increase in net worth of corporate executives, Wall St. professionals and other entrepreneurs.

This is why the various Republican plans floated to reduce or eliminate the capital gains tax are folly. Doing so only benefits the very wealthy, who have already been the main beneficiaries of the tax cuts package enacted by the Bush administration. Remember, it was President Reagan — the patron saint of today’s conservatives — who completely equalized the tax treatment of capital gains and wages, taxing them at the same exact rate. Since then, the capital gains tax has been steadily eroded, as the richest Americans have steadily increased the gap between themselves and the rest of the country.