Income Inequality

You can have wealth concentrated in the hands of a few, or democracy, but you cannot have both." - Louis Brandeis

"American inequality didn't just happen. It was created." Joseph E. Stiglitz

“The American oligarchy spares no pains in promoting the belief that it does not exist, but the success of its disappearing act depends on equally strenuous efforts on the part of an American public anxious to believe in egalitarian fictions and unwilling to see what is hidden in plain sight.” — Michael Lind, To Have and to Have Not

"on average middle class incomes have grown about three times as fast under Democratic Presidents, working poor incomes ten times as fast." Larry Bartels: The Partisan Political Economy.

"We now see ourselves ruled by a remote class. They may not wear flowing robes, or carry mitres, but they are marked in their own way as separate and distinct. The distance between those who will be bailed out and those who will not is the ultimate social distance, and it has grown so vast it now strains the bonds or representation that hold the republic together." Chris Hayes: Twilight of the Elites, America After Meritocracy

"Income inequality in America really is about oligarchs versus everyone else. When the Occupy Wall Street people talk about the 99 percent, they're actrually aiming too low." Paul Krugman

"Pretending that the distribution of income and wealth that results from a long set of policy decisions is somehow the natural workings of the market is not a serious position. It might be politically convenient for conservatives who want to lock inequality in place." Dean Baker's book Rigged (download the free pdf).

The distributiion of wealth is not determined by nature. It is determined by public policy. Eric Schneiderman, New York State Attorney General

"Concentration of resources in the hands of the top one per cent depresses economic activity and makes life harder for everyone else -particularly those at the bottom of the economic ladder." Jeremy Hobbs, Executive Director of Oxfam

"Throughout my twelve years in Congress, alarming figures about the economic stagnation of middle and lower income Americans were readily available. The figures are worse today. From 1979 to 2005 the top 1 percent of American earners received more than one-third of all gains in national income, and the top one-tenth of 1 percent recieved over one-fifth of all after-tax income gains during that period. By contrast, the bottom 60 percent received only 13.5 percent of all gains in national income. As Hacker and Pierson point ou in their Winner-Take-All Politics." Tom Allen: Dangerous Convictions.

"The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976.  As Timothy Noah of slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela, and Guyana. " Nicholas D. Kristof, New York Times 11/7/2010

Economists who say we should relegate questions about inequality to philosophers often advocate policies, like tax cuts for the wealthy, that increase inequality substantially. That greater inequality causes real harm is beyond doubt. Robert H. Frank, New York Times, 10/17/2010

"... high levels of inequality strain the bonds that hold us together as a society. There has been a long-term downward trend in the extent to which Americans trust either the government or one another. In the sixties, most Americans agreed with the proposition that “most people can be trusted”; today most disagree.’ In the sixties, most Americans believed that the government is run “for the benefit of all”; today, most believe that it’s run for “a few big interests.” And there’s convincing evidence that growing inequality is behind our growing cynicism, which is making the United States seem increasingly like a Latin American country. As the political scientists Eric Uslaner and Mitchell Brown point out (and support with extensive data), “In a world of haves and have-nots, those at either end of the economic spectrum have little reason to believe that ‘most people can be trusted’ . ..social trust rests on a foundation of economic equality.” Paul Krugman, The Conscience of a Liberal pg 251

In the history of the modern world, inequality has only been ended through Communist revolution, war or deflationary economic collapse ... It's a disturbing question which of these three is going to happen today, or if there's a fourth way out." Peter Thiel

Question to Stump Republicans

Richest 62 people as wealthy as half of world's population, says Oxfam (1/18/2016)

Bernie Sanders Plan to Reduce Inequality

Top 1 percent own more than half of world’s wealth (10/14/2015)

35 Mind-Blowing Facts About Inequality (7/13/2015)

If Inequality Worries Republicans, Why Do They Keep Making It Worse? (4/17/2015)

The Shrinking American Middle Class (1/26/2015)

How Soaring Inequality May Lead the World Down the Path of Fascism (1/2/2015)

How the GOP Redistributes Wealth (12/26/2014)

How Inequality Is Killing the American Dream ... And What We Can Do About It (11/20/2014)

Janet Yellen on Income Inequality (10/17/2014)

Piketty's New Class (7/1/2014)

The wealthiest get 20 more years of life in good health than the most deprived (3/14/2014)

A Note on Economic Growth (11/20/2013)

Inequality is a choice: Stiglitz (10/13/2013)

Ralph Nader on Income Inequality and the Minimum Wage (3/25/2013) C-SPAN video (43:)

The United States of Inequality (Bill Moyers 4/12/2013)

The Price of Inequality: Joseph Stiglitz (6/20/2012) See his Video (about an hour)

Free Market Outcomes are Not Fair and Not Free (12/2012)

Why The Economy can't get out of first gear: The Rich have sucked it dry : Reich (6/13/2012)

The American Dream is a myth: Stiglitz (6/5/2012)

Growing Income Gap May Leave U.S. Vulnerable (10/13/2011)

US Ranks Near the Bottom in Income Inequality (9/19/2011)

Plutonomy and the Precariat

Inequality and Democratic Responsiveness

Bernie

Income inequality is created by government policy, naturally tends to increase over time, and is much more extreme than most people realize. As it rises world-wide, democracy is in retreat. It is at the root of many problems: campaign finance, bought government, policy error, media distortion, market failure, social pathology, corruption, systemic malfunction, class warfare. As the wealthy game the system for themselves, the economy becomes unstable, unfair, and unsustainable. Government controlled by the funders, not the people, often does the wrong thing.

Government should limit it, otherwise in the extreme there is little social mobility, sham democracy, and wide discontent. Nordic countries are better at keeping it under control and that is why tehy have a strong social safety net.

A strong safety net can help to limit it and stabilize the economy: Welfare, Social security, health care, public education, child care, paid leave, secure retirement are all effective, humane policies. Universal voting rights, range voting, strong unions, worker representation in management, progressive taxation, inheritance taxes are all helpful. Republicans, fixated on money, oppose them all, and actually exacerbate the problem with austerity and massive tax cuts for the wealthy. The billionaires, like Trump, will get huge windfalls if they can repeal the inheritance tax.

When corporations consolidate, it is usually to reduce payrolls, and limit competition. They lobby for deregulation so that they are free to pollute. Oligarchs are created and paid astronomical sums. It was always a mistake for corporations to take on social responsibility. They bust unions,reduce wages and benefits like pensions, health care. Without effective anti-trust, whole industries, such as media, become dysfunctional or even predatory.

A weak economy moves people to right-wing (Republican) politics. When corporations control government that, by definition, is Fascism. Racism, nativism, and other discrimination are blamed for problems. A strong man becomes head of state declaring the nation is exceptional. The military and police are expanded to match rising paranoia. Money is no object to renew and expand the nuclear arsenal. Provocative actions are evident on the far-flung borders of the empire. Corporations ramp up arms production for assured profit from their one customer, the government(s). Don't think it is for the protection of the people.

This could be a Weimar moment.

Oxfam Report



Of the thirty-four countries in the Organisation for Economic Co-operation and Developent (OECD) only Turkey and Mexico have more unequal societies than the United States. Dodging Extinction: Anthony D. Barnosky

Income inequality is at the root of many problems: campaign finance, bought government, media distortion, market failure,  social pathology, corruption, systemic malfunction, class warfare, policy error. It's why government often does the wrong thing. It has a natural tendency to increase, and, as it does, renders most people powerless. It results in an economy that is unstable, unfair, and unsustainable; a political system that is corrupt and undemocratic; media that is untrustworthy; justice only for the wealthy, elections that can be purchased.

The Constitution rightly attempted to block concentration of public power, but not private. But wealth is power, and both have become extremely concentrated. The U.S. is an oligopoly.

The US Congress creates the environment that breeds oligarchs, and is now run by oligarchs. Media moguls control pretty much everything broadcast. Bankers get unlimited bailouts of taxpayer money without strings. The Congress often gets it wrong because it is money driven. Anti-trust enforcement is a forgotten relic. Democracy withers when income disparities are extreme. We have a strong-man Presidency, but, thanks to the Supreme Court, Corporations rule, not the people.  That is  a powerful force  for Fascism.

Concentration of wealth is a major cause of our difficulties and as it increased, which it undoubtedly has, we become less able to deal with our problems: Demand weakens, social mobility disappears, market volatility increases, large amounts of money game the system, government becomes dysfunctional because it is hooked on campaign money. Democracy withers away. Plutocracy rules. With Citizen's United, corruption is assured.


Large disparities in income are bad for democracy, bad for the general welfare, bad for the economy. They lead to social pathologies, inequity in the Courts, destroy domestic tranquility, suppress economic activity, and because we have ignored it, we experienced yet another economic collapse.

Republicans ignore this problem because they are on the wealthy side of the class struggle. Their religious hypocrisy is on full display with their harsh policies for the poor. (See the Ryan budget.) The end result of relentless concentration is extreme inequality followed by financial collapse, in which everyone is a loser.

James Gilligan, formerly at the Harvard Medical School, Director of Mental Health Services for Massachusetts prisons, and now Professor of Psychiatry at the New York University has written a book "Why Some Politicians are more Dangerous that Others”. In it, he finds that violent deaths (murder and suicides) are strongly correlated with Republican Presidencies.

There is evidence that high levels of income inequality, as in the US, are highly correlated with corruption. (1, 2)

Republicans brought on the financial crisis with deregulation that allowed markets to go out of control, privatization that removed the public from the process, tax cuts that in effect directed massive public debt into deep private pockets (banana republic), civil service destruction and cronyism placed incompetents in public office;  regressive, anti-labor policies led to a general decline in consumption; a determination to build an empire for world domination requires unlimited budget for the military; a contempt for international law covered up illegal activities including torture, renditions, secret prisons;  Congress did no oversight during the Bush years; regulatory agencies were captives of the industries they were supposed to regulate; industry migrated to low wage countries and not much was done to mitigate the damage; but there was war enough for everyone. War is profitable, and in its chaos pallet loads of shrink wrapped money just disappeared. Civil liberties here in the good old US of A were cut down to size by chicken hawks who built the profitable national security state. PayGo left.

There is a relatively simple way damp down obscene compensation, to pay our bills (which we are not), to reduce inequality and to keep up our infrastructure, and that is to restore a stiff graduated income tax. Continue the estate tax to be sure that we do not create an aristocracy, and to break up extreme concentrations of wealth with a renewal of anti-trust oversight. Anti-trust should preserve competition where it can.

The Constitution has an inherent warning about concentrated power, but it has little to say about private power. Anti-trust efforts faded away. We are seeing media that is too concentrated, banks that should be broken up, insurance companies that can kill health care reforms, oil companies that successfully deny climate change. We have allowed the military to become too large and it now threatens our civil liberties. You no longer have fourth or sixth amendment rights. When corporations run government, that is the very definition of fascism. Do we not have that ?

In 1929 inequality reached new heights, the market crashed, and there was widespread misery. It has happened again and we have not yet recovered. Worse, those banks that were too big to fail got bailed out by taxpayers. As Larry Lessig pointed out, this is the stupidest form of socialism ever invented.

Wide income inequality leads to market volatility, lack of demand, little competition among big corporations, widespread misery, anti-social behavior, environment devastating, corporate behavior. Institutional racial bias keeps minorities in prisons in much larger proportions, which in turn excludes them from voting.

Concentrated wealth becomes aristocracy when there is low social mobility. Wages go down, necessities become more expensive, education out of reach for most, and wealthy build gated communities to protect themselves from growing chaos. Students and many others are driven into debt servitude. Republican policy is hastening the process.

Many of the social pathologies are identified in The Spirit Level, Why Greater Equality Makes Societies Stronger:  Richard Wilkinson and Kate Pickett.

Through history, economic cycles are strongly correlated with levels of concentrated wealth. There are at least 3 known ways to fix it:

  1. FDR proposed a Second Bill of Rights, which would have provided a social safety net for everyone. This is the mildest and most humane way to damp down inequality, but Republicans would never favor it. They are in control and the military state is in ascendance.

  2. Economic turmoil can easily produce a fascist state as the Germans learned. The Bush family helped finance the Nazis. Republicans seem to crave a Fascist State. At the extreme, like Rome, we become an empire, which requires a large standing military. That is the direct cause of the loss of civil liberties, and ultimately results in a dictatorship, because representative government cannot deal with an empire. Since empire is ruinously expensive, people's standard of living must necessarily fall. Official activity must be carried out in secret. Media cannot reveal the truth. In history, every empire collapses. A World War devastates the country, as happened in Germany, and reduces income inequality.

  3. The other way, as seen in France, Russia, early America and other countries, is revolution. When people beome sufficeintly dissatisfied and desperate, they will throw off the ruling elite.

Why Greater Equality Makes Us StrongerRomney Hood

Residential Income Segregation in America (11/16/2011)

Ten Reasons to Care About Economic Inequality (10/24/2011)

New Study of Income Inequality (10/2011)

The More Inequality, the Less the Sustained Growth (9/16/2011)

Inequality Has Wrecked The Economy (9/5/2011)

Plutocracy Now

Look Out, Are You About to Join the White Underclass?
By Joe Bageant, JoeBageant.com
"We're starting to hear a little discussion about the white underclass... Mainly because so many middle class folks are terrified of falling into it." Read more »


What to do about inequality

Economic Recovery for the Few (8/1/2010)

Origins of the overclass

The Impact of Income Inequality

Too Much: A Commentary on Excess and Inequality

We are not in this together (4/11/2009)E

This Is What the Class War Looks Like (3/24/2009)

Distributing Our Technological Inheritance: Gar Alperovitz

The Evidence

“Chances of achieving the ‘American Dream’ are almost two times higher in Canada than the United States,” showing slide with data to back up the claim." Raj Chetty (Boston Globe)

UN: Financial Inequality Rapidly Grows in US

A United Nations report has revealed major US cities, including New York, Washington, Atlanta and New Orleans, have levels of economic inequality that rival cities in Africa. The report found that the United States had the highest inequality and poverty after Mexico and Turkey, and the gap has increased rapidly since 2000. The life expectancy of African Americans in the United States is about the same as that of people living in China and some states of India. http://www.democracynow.org/2008/10/27/headlines#16

Steve Kangas on inequality in the Reagan Years

Links

The Rules

Video

Inequality for All

Joseph Stiglitz: The Price of Inequality (video ) 2012

The End of Poverty ? 2008. 105 minutes narrated by Martin Sheen. View it on-line.

Bibliography

"There are many other ways in which the government structures the market to redistribute income upward. Read my non-copyright protected book, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer to get more of the picture." Dean Baker (read it on line.)

The Anatomy of Inequality, Its Social and Economic Origins and Solutions: Per Molander

Affluence and Influence: Economic Inequality and Political Power in America: Martin Gilens

Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer: Dean Baker (download the free pdf)

Uneqal Democracy, the Political Economy of the New Gilded Age: Larry Bartels

The Spirit Level, Why Greater Equality Makes Societies Stronger: Richard Wilkinson and Kate Pickett

Wages of Rebellion, Chris Hedges

Runaway Inequality, an Activists' Guide to Economic Justice: Les Leopold

How to Slide Down the Great Gatsby Curve:

Our Kids, The American Dream in Crisis: Robert Putnam

The Price of Paradise: David Trout

Screwed: Thom Hartmann

Inequality in America: Stephen M. Caliendo

Divided, the Perils of our Growing Inequality: Edited by David Cay Johnson

Winner Take All Politics: Jacob Hacker and Paul Pierson (!) Makes the case that politics is the primary driver of inequality in the US. Started in 1978.

Capital in the Twenty-First Century: Thomas Piketty.

The divide : American injustice in the age of the wealth gap / Matt Taibbi

Divided: The Perils of Our New Inequality: David Cay Johnston

The Price of Inequality: Joseph E.Stiglitz

Capital as Power. A Study of Order and Creorder: Nitzan, Jonathan and Bichler, Shimshon. (2009) pdf

The Cost of Inequality: Stewart Lansley

The Great Divergence: Timothy Noah

99 to 1: Chuck Collins

With Liberty and Justice for Some: Glenn Greenwald

Pinched: Don Peck

Ill Fares the Land: Tony Judt

Deer Hunting With Jesus: Dispatches From America's Class War: Joe Bageant (an excerpt)

Nickel and Dimed: On (Not) Getting By in America: Barbara Ehrenreich

THE WORKING CLASS MAJORITY America's Best Kept Secret: Michael Zweig

Unjust Deserts: Gar Alperovitz and Lew Daly

Retirement Insecurity: Edward N. Wolff

Politics of Rich and Poor: Kevin Phillips

Winner Take All Society: Robert Frank and Philip Cook

The Cost of Talent: Derek Bok

Boiling Point, Democrats, Republicans and the Decline of Middle Class Prosperity: Kevin Phillips

Obamanomics, How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economics: John R. Talbott

A People's History of the United States: Howard Zinn

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