Readings in Inequality. September 2019 Links

Readings in Inequality. September 2019 Links

Each Sunday Tony Wikrent posts a list of links at Real Economics and Ian Welsh. Some are political, many lead to news about runaway inequality. This post borrows a few that seem to fit together very well.

The New York Times reported that inequality is getting worse, which for poor people means more sickness and an earlier death.

Peter Turchin, at Evonomics, discusses what it is that sometimes (like in the post World War II era) decreases inequality. Namely policy changes when disenchantment with inequality reaches a boiling point.

Bloomberg takes a look at the growing disenchantment with capitalism in the US and UK, with charts.

Chris Hedges demolishes the Business Roundtable’s efforts to rebrand their rapacious capitalism, which has led to the worst inequality since the 1920s, as benevolent leadership.

Pam and Russ Martens note that Bernie Sanders said the top three US billionaires (Gates, Bezos, Buffett) have more wealth than 160 million Americans, but he was using 2017 numbers. The inequality today is much worse.

You’ll find more excellent links from Tony at  Real Economics and Ian Welsh each Sunday. 

More Than a Trickle Up

More Than a Trickle Up

The People’s Policy Project is a think tank run by Matt Breunig, who previously worked as a lawyer for the National Labor Relations Board and as a policy analyst at the Demos Think Tank.

The 3P, as they refer to themselves, took a look at the recent Federal Reserve report that tracks the distribution of wealth in the US. You can get to the original data here.

By comparing the data from 1989, the first year they were collected, to 2018, the most recent set, and making adjustments for consumer durables (taking them out) and inflation (making all dollars equal over time), 3P shows that in the last 30 years the top one percent have increased their wealth by $21 trillion.

Over the same period the wealth of the bottom 50 percent has decreased (yes, decreased) by $900 billion.

You can read the 3P report here.

The Nitty Gritty Had This to Say About Runaway Inequality

RUNAWAY INEQUALITY—This is the most pressing issue that affects all working people and the poor. After World War II the US emerged as a super power because its economy built up a strong middle class. The system at that time saw the height of union involvement so workers could negotiate with business for improved wages and benefits. Government regulated businesses, banks and Wall Street. Corporations and the wealthy paid their fair share of taxes. Wages and productivity went up together, side by side. During those years, workers did a little better each year with raising wages and government programs began to reduce poverty.

But in the early 70’s, both political parties were sold on a new economic system. They were encouraged to do away with many regulations and cut taxes for corporations and the very rich. It doesn’t matter if you call it neoliberalism, the Better Business Model, or “Trickle Down Economics”. It has not worked for the benefit of workers in 40 years and it will never work. Money is not trickling down, it is gushing up and the inequality has become so bad that just 3 individuals at the top now have as much accumulated wealth as the entire bottom half. Shameful!

Runaway Inequality is a problem that will not correct itself without working people making some political changes while we still have a chance. The Southeastern NC Central Labor Council and the Alliance for Economic Justice is available to provide workshops or hour long presentations on this evil cancer in our economic system. Don’t be bedazzled by wedge issues. This is the most significant problem affecting all of us.

The SENC-CLC recently co-sponsored a series of presentations by Les Leopold across North Carolina. If you missed these presentations Southeastern NC Central Labor Council along with The Alliance for Economic Justice, The NC Alliance of Retired Americans and the NC NAACP are committed to making sure your group is supplied with a presentation and information on Runaway Inequality. While on his NC book tour Les Leopold met with Rev. Dr. T. Anthony Spearman, President of the NC NAACP. The NC NAACP is now a part of the outreach on Runaway Inequality and showed their commitment to this issue by  purchasing 6,000 volumes of Runaway Inequality.

         On Tuesday 11 June 19 President Harton will travel to Salisbury to deliver a presentation on “RUNAWAY INEQUALITY” to AFGE Local 1738 members.

If your local or group would like a presentation on Runaway Inequality or a workshop please contact:

Herb Harton — maguspics@aol.com — (910) 791-3643—(910) 620-1629 or George Vlasits — gvlasits@gmail.com  (910) 465-8871

What Swings the Swing Voter?

Today,  a similar common denominator unites every identity group with every economic populist: All have much to gain from policies that address rising inequality

by Les Leopold

According to conventional wisdom, the Democrats must appeal to middle-of-the-road swing voters in order to defeat Trump in 2020. Supposedly these voters want a moderate who “crosses the partisan divide,” “finds common ground with all classes and income groups,” “removes barriers to advancement,” “builds public/private partnerships,”  “works for the common good against all special interests,” “avoids the extremes of the right and the left,” and “shuns costly pie-in-the-sky programs.”

Wrong.

Mounting evidence suggests that the swing voter is one who faces the stark daily realities of rising inequality and all its related issues — expensive or non-existent health care, astronomical student debt, unaffordable housing, and a generation’s worth of wage stagnation. As the New York Times recently reports (“For Democrats Aiming Taxes at the Superrich, ‘the Moment Belongs to the Bold’”)

The soak-the-rich plans — ones that were only recently considered ridiculously far-fetched or political poison — have received serious and sober treatment, even by critics, and remarkably broad encouragement from the electorate. Roughly three out of four registered voters surveyed in recent polls supported higher taxes on the wealthy. Even a majority of Republicans back higher rates on those earning more than $10 million, according to a Fox News poll conducted in mid-January.

This observation is further confirmed by a fascinating chart prepared by Lee Drutman, (“Political Divisions in 2016 and Beyond“) based on survey data from 8,000 Clinton and Trump voters compiled by the Voter Survey Group. A significant split emerged around two main clusters of opinion — economic populism and identity politics. (Unlike exit polls this survey is more than 10 times larger a sample and contains many more questions, and therefore should not be dismissed as just another poll.)

The horizontal axis shows the strength of the responses based on economic populism. The further left you are on that axis, the more you worry about inequality and favor redistributive policies.    

The vertical axis measures beliefs on what could be called cultural issues like gun rights, abortion, women’s equality, immigration, LGBTQ rights and attitudes towards African-Americans. The higher you are on that axis the more uncomfortable you are with these kinds of cultural issues.

Let’s call the bottom left quadrant, “Progressive Populists” who want both liberal social and economic policies. The top left are the “Culturally Conservative Populists,” who lean right on social issues and left on economic issues.  The top right contains all “Arch Conservatives” who are both socially and economically conservative. And the bottom right are the media darlings — “Culturally Liberal/Fiscally Conservatives.” (For more about this quadrant see “Beware of the Moderate Democrat.”)

https://www.voterstudygroup.org/assets/i/uploads/reports/Graphs-Charts/1101/figure2_drutman_e4aabc39aab12644609701bbacdff252.png

Here are the 2016 voter percentage breakdowns:

  • Progressive Populists account for 44.6 percent of the electorate according to this study.
  • 28.9 percent are Culturally Conservative Populists.
  • Arch Conservatives account for another 22.7 percent.
  • And a miniscule 3.8 percent for the Culturally Liberal/Fiscal Conservatives.

Dig in or Reach Out?

Jamelle Bouie, New York Times opinion writer, argues that Democrats should not be “fighting on the president’s terrain, trying to cast themselves as the authentic representatives of white working-class America.”

But if the Voter Survey chart is correct, that’s where the swing voters (of all colors) are, and that’s precisely where the battle will be waged again.

Every Democratic candidate will claim to fight both for social and economic justice. But this could become problematic for Biden, Booker, Gillibrand and Harris, who want to maintain their close fundraising ties with corporate Democrats.  As the New York Times puts it:

The left-leaning Ms. Ocasio-Cortez, Ms. Warren and Mr. Sanders are all viewed as less business-friendly than Ms. Gillibrand, Mr. Booker and Ms. Harris, who have not made taxes on the rich a centerpiece of their public pitches. In that sense the latter trio is following the example set by Hillary Clinton in the 2016 campaign and President Barack Obama before her, with comparatively establishment-minded thinking on progressive taxation.

It’s painfully obvious what Trump will and must do. There are not enough Arch Conservatives to elect him dog catcher. So he needs win over again the culturally conservative economic populists (top left quadrant). And the only way to do so is by fanning the flames of division, stomping all over social issues, and provoking the Democrats to debate Confederate monuments and bathrooms.  And then red-bait to hell any Democrat who dares propose big economic reforms.

Which way do we go?

The Democratic Party can never, and should never, abandon its deep commitment to the full range of social justice issues. Despite the Trump-led rise of racism, homophobia, and nativism, the rights of women, minorities and the LGBTQ communities have increased enormously over the past half century.  The Democrats should be given significant credit for the promotion and enhancement of these human rights. But the Democratic Party also must become, once again, the party of working people, and this requires taking on Wall Street and the billionaire class with bold economic programs – from Medicare for All to a Green New Deal.  

Those who worry about going too far on economic issues should remember the fire that FDR brought to the Democratic Party when in 1936 he took on the oligarchs:

We had to struggle with the old enemies of peace–business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me–and I welcome their hatred.

I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.

Today,  a similar common denominator unites every identity group with every economic populist: All have much to gain from policies that address rising inequality, the stagnation of wages, the lack of true universal health care, the obscene levels of student debt and the ways in which both the economy and government are rigged by bankers and billionaires.

Forty years of runaway inequality have taken their toll. We voters are not a happy bunch. We long for candidates with FDR’s passion for fairness and justice, and we are hungry for the big ideas to get us there.

Les Leopold, the director of the Labor Institute in New York is working with unions, worker centers and community organization to build a national economics educational campaign. His latest book, Runaway Inequality: An Activist’s Guide to Economic Justice (Oct 2015), is a text for that effort. All proceeds go to support this educational campaign. (Please like the Runaway Inequality page on Facebook.) His previous book is The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It (Chelsea Green/2009).

Beware the Moderate Democrat

By Les Leopold

He’s a “moderate.”

Such a soothing political word. It conjures up a reasonable, considerate person who seeks the middle ground between ideological extremists: Works well with others, crosses the aisle to make good policy, knows how to win incremental change rather than issuing jarring proclamations that jump too far ahead of the electorate. A moderate is pragmatic, gets things done and doesn’t let the perfect become the enemy of the good.

Oh, in these troubled times, aren’t such moderates desperately needed?

Get ready to hear more and more of that from mainstream media pundits as the Democratic Party moves more towards the kind of progressive populism put forward by the Sanders/Beto/AOC wing of the party. We’ll be asked by centrist journalists to take a careful look at more reasonable moderates like Gillibrand, McAuliffe, Bloomberg, Biden, Landrieu and many more. (e.g. “Is There Room in 2020 for a Centrist Democrat?” NYT 1/31/19).

But what is the substance of all this centrism and moderation?

First and foremost, these moderates are united by their unwillingness to take on Wall Street. And because of that unwillingness, they are unable to confront the defining problem of our era – runaway inequality.  They cannot face up to the fact that the wages of the average worker have been stagnant for an entire generation. Meanwhile the pay gap between the top 100 CEOs and the average worker has risen from 40 to 1 in 1980 to an obscene 800 to 1 today.

The centrists run away from this problem in large part because they are in a desperate race to win the very first primary — the fundraising primary. And it is no secret that victory goes to the candidate who garners the most financial support from Wall Street/corporate Democrats. 

Rather than discussing runaway inequality and ways to ameliorate it through Medicare for All, free higher education, and higher taxes on the super-rich, these moderates will instead stress enhancing “opportunity,” and removing “barriers” to race/gender advancement.  Rather than confronting billionaire oligarchs they want to “partner with business” and, in some vague way, tame their excesses, while also building a robust and fair economy with “opportunity for all.” No conflict needed. No diatribes against the billionaire class. Hear the melodious tones of the moderation.

From this coziness with Wall Street flows the trope about being “socially liberal” and “fiscally conservative.”  The moderate centrists, and their Wall Street donors, support LGBTQ rights, the advancement of women in business, immigration and criminal justice reform, gun control, and abortion rights.  At the same time, they believe the entire progressive runaway inequality platform is an affront to economic reason: High taxes on the rich will discourage initiative and innovation; Single-payer health care and free higher education will bankrupt the country; Breaking up the big banks will cripple investment and jobs.  

Of course, the moderates must ignore the reams of data from all over the world that show that these progressive reforms would reduce inequality and enhance the well-being of nearly everyone, though it is true that reducing inequality would harm the precious privileges of the very few. The super-rich would have to pay more. They would no longer be able to financially strip mine the rest of us through wasteful stock buy-backs.  Their billions would be reduced a bit. But most alarming would be their deflated egos: No longer could they bask in the false narrative that what is so very good for them is good for all of us.  

But do these “moderates” represent anyone other than their Wall Street donors? Is there a mass base for the kind of moderation they are putting forwards?

Let’s take a look at the eye-popping data from the 2016 presidential election, put together by the Voter Survey Group, which polled 8,000 Americans (a very large sample which is eight to fifteen times larger than most of the surveys we usually see in the news.) A study of these voters showed that they could be divided into four major groups.  (See Lee Drutman, “Political Divisions in 2016 and Beyond”).

·       The first group, Left Populists, are those who are both social and economic progressives. They support immigration, women and minority equality, LBGTQ rights and immigration.  They also worry about rising inequality and support proposals that would attack it.

·       The second group, Nativist Populists, also worry about rising inequality and support proposals that attack it. But they are more comfortable with traditional gender roles, have qualms about abortion, see immigration as a problem and are not particularly supportive about LGBTQ rights.

·       The third group are the Arch Conservatives who are not interested in reversing economic inequality or social inequality.

·       And finally we have the Socially Liberal/Fiscal Conservatives.  This is the home base for the “moderate” politicians who are wooing Wall Street and see themselves as the sensible alternatives to the extremist populists.

Each quadrant represents one of the four major groups.

So more or less, that’s who we are.  If the electorate were equally divided among these four groups, the “moderates” might have an argument. The facts tell a different story.

·       Left Populists account for 44.6 percent of the electorate according to this study.

·       28.9 percent are Nativist Populists. This means that nearly three-quarters of all voters fear runaway inequality and want to reduce it. But these economic populists are divided on identity issues.

·       Arch Conservatives account for another 22.7 percent.

·       And that leaves a miniscule 3.8 percent for the Socially Liberal/Fiscal conservatives. 

How pathetic! It goes to show how out of touch these billionaire and their accolades are from political reality. They have no base. Nada. There’s no one there….except very rich Wall Street/Corporate funders and centrist pundits who feel compelled to find a judicious balance between left and right.

Danger Ahead

The data shows why Trump’s nativist, race-baiting, immigrant-bashing base-building makes some electoral sense. If he can hold both the Nativist Populists and the Arch Conservatives he can win again. And he can do that most easily against a candidate with virtually no natural base — the “moderate” — the Socially Liberal/Fiscally Conservative Democrat.

Given enough financial support, a “moderate” might be able to buy her or his way through the Democratic primaries, especially if many candidates split the progressive populist vote. One could imagine one of the “moderates” becoming a media darling of the center, which might further enhance his or her status.

But should one of them squeak through to become the nominee, we might have a Democratic debacle. The nativist economic populists on the right might flock back to Trump along with the Arch conservatives who will never leave him. Trump may look incredibly weak now, but a Wall Street-backed Democratic “moderate” with a natural base of 3.8 percent could give the worst president in American history a real chance.

Jim Hightower, the great Texan populist, turned a phrase that comes to mind every time a Wall Street “moderate’ is touted:

“There’s nothing in the middle of the road but yellow stripes and dead Armadillos.”

Les Leopold is the director of the Labor Institute and author of Runaway Inequality: An Activist Guide to Economic Justice. All book royalties go building a new “reversing runaway inequality” educational movement. For more information, contact runawayinequality.org.