Inequality is Fundamental to U.S. Capitalism: Tweaking the Edges Will Accomplish Nothing

The poorest Americans have no realistic hope of achieving anything that approaches income equality. They still struggle for access to the basics.

source: AlterNet

Author: Steven W. Thrasher/The Guardian

Emphasis Mine

The economic hoarding by those at the top has been termed “income inequality”, but that’s neither a strong nor accurate enough phrasing. I have never heard poor people complain about “income inequality”; poor people complain about being screwed out of housing , or about working more hours for less pay or about having to choose between medicine and food.

“Inequality” sounds like something that happens by accident and can be remedied by fiddling around the edges. It is not as if the rich are a little more equal and the poor a little less equal, and if we shift a bit we’ll all come out in the middle. What we’ve been calling “income inequality” might be better understood as a war waged by US political and economic policy on the poor.

A new report from the Institute for Policy Studies issued this week analyzed the Forbes list of the 400 richest Americans and found that “the wealthiest 100 households now own about as much wealth as the entire African American population in the United States”. That means that 100 families – most of whom are white – have as much wealth as the 41,000,000 black folks walking around the country (and the million or so locked up) combined.

Similarly, the report also stated that “the wealthiest 186 members of the Forbes 400 own as much wealth as the entire Latino population” of the nation. Here again, the breakdown in actual humans is broke down: 186 overwhelmingly white folks have more money than that an astounding 55,000,000 Latino people.

The disparities in wealth that we term “income inequality” are no accident, and they can’t be fixed by fiddling at the edges of our current economic system. These disparities happened by design, and the system structurally disadvantages those at the bottom. The poorest Americans have no realistic hope of achieving anything that approaches income equality; even their very chances for access to the most basic tools of life are almost nil.

President Lyndon Johnson’s so-called War on Poverty didn’t angle to take anything from the rich so that the poor could see equality. It was designed to keep some of the poor just alive enough that they wouldn’t rebel, and designed to let other poor people perish as an object lesson to the rest of us to keep scampering.

Income inequality is better termed structural racism. White people earn more money with less education than black people and consistently have half the unemployment of black people. And, as new research has shown, “family wealth” predicts outcomes for 10 to 15 generations. Those with extreme wealth owe it to events going back “300 to 450” years ago, according to research published by the New Republic – an era when it wasn’t unusual for white Americans to benefit from an economy dependent upon widespread, unpaid black labor in the form of slavery.

Income inequality is better viewed as structural sexism. Women earn 78 cents on the dollar overall compared to white men, but black women only earn 64 cents and Latinas 56. Women are also routinely discriminated against economically for bearing children.

Income equality is better viewed as structural child abuse. In the United States, one in five children needs government help to eat. As Aisha Sultan recently wrote in the Education Writers Association, if a 30-child classroom looked like the nation at large, seven of the children would be living in poverty, six would be victims of abuse and one would be homeless. These kids aren’t just unequal; they are never offered the opportunity to achieve equality.

Income inequality is better viewed as economic genocide, which shortens the lives of the poor. As the New York Times bluntly put it last year, “where income is higher, life spans are longer”. For one of the most jarring examples of how this plays out, look no further than the Ferguson Report, which shows how just in St Louis County, the average life expectancy ranges from 91 in the whitest neighborhood to 56 in the poorest, blackest neighborhood.

Too often, the answer by those who have hoarded everything is they will choose to “give back” in a manner of their choosing – just look at Mark Zuckerberg and his much-derided plan to “give away” 99% of his Facebook stock. He is unlikely to help change inequality or poverty any more than “giving away” of $100m helped children in Newark schools.

Allowing any of the 100 richest Americans to choose how they fix “income inequality” will not make the country more equal or even guarantee more access to life. You can’t take down the master’s house with the master’s tools, even when you’re the master; but more to the point, who would tear down his own house to distribute the bricks among so very many others?

See: http://www.alternet.org/economy/inequality-fundamental-us-capitalism-tweaking-edges-will-accomplish-nothing?akid=13741.123424.rHkGmA&rd=1&src=newsletter1046852&t=16

The Bernie Effect Puts Corporate Greed Center Stage at Dem Debate, and Hillary Holds Her Own

Source: AlterNet

Author: Steve Rosenfelt

Emphasis Mine

The Democratic Party’s first presidential debate of its 2016 candidates showed the country that the party has stronger candidates and a clearer common agenda than many people may have expected after a summer dominated by the antics of angry Republicans.

Despite what individual candidates may claim, there was not a clear winner. Bernie Sanders, after a nervous start in his first nationally televised debate, found his footing and demonstrated how he fundamentally has reshaped the Democratic Party, pushing all the candidates to embrace his strong views about income inequality and the need for dramatic responses to capitalistic excess. There has not been a presidential debate in recent memory with such a detailed economic discussion and the need for remedies that would boost wages, workplace benefits, healthcare and other pocketbook concerns. All the candidates supported a federal family leave law for mothers of newborns, for example. And all agreed that wealthy Americans should foot the bill.

Hillary Clinton also demonstrated why she is the front-runner and likely to remain so. Where Sanders was passionate and emphatic, she was poised and forcefully pushed policy specifics that she said could be enacted and make a difference. She firmly rejected the moderator’s characterizations that she took politically expedient positions and said she was proud to be a “progressive” who “wants to get things done.” On a string of issues, she was not a centrist Democrat in the mold of her husband, former President Bill Clinton, saying, for example that she supported stronger gun controls, criminal justice reform, comprehensive immigration reform, medical marijuana and opposed the latest international trade agreement.

The other three candidates were largely asterisks to the Sanders-Clinton interchange. Ex-Rhode Island Gov. Lincoln Chaffee, ex-Virginia Sen. Jim Webb, and ex-Maryland Gov. Martin O’Malley sought to distinguish their records and values—with O’Malley giving the most detailed prescriptions. But in most instances their comments lingered in the debate’s shadows, with the exception of O’Malley’s closing remarks where he said that unlike the two previous Republican presidential debates, no candidate denigrated women, made racist statements about immigrants or spoke ill of the other candidates.

There were important differences, however, between the positions taken by Sanders and Clinton on a half-dozen issues, which illustrates both how much Sanders has pushed the Democratic Party to the left—and how Clinton has staked out saavy positions that may sound more progressive to Sanders backers than would prove to be the case if elected. Without Sanders’ presence in the race, it is doubtful that Wall Street’s excesses, which is shorthand for where and how wealth is accumulated but not shared, would be targeted for reforms by all the candidates.

For example, Sanders wanted to increase Social Security retirement benefits and would pay for that by removing a cap that only taxes the first $118,000 of income. Clinton said that she would raise payments for impoverished seniors, especially women. Sanders said he favored a Nevada ballot measure legalizing recreational marijuana, while Clinton said she only favored legalizing medical marijuana. Sanders wants tuition at public colleges and universities to be free, saying he would pay for that with a Wall Street financial transaction tax. Clinton said that she would like free tuition too, but would include a weekly 10-hour work requirement. Only on gun control was Clinton to the left of Sanders, who did a poor job of responding to her attack on his stance—where he has opposed militarized weapons but supported hunters’ rights.

On the crucial issue of reigning in Wall Street’s excessive greed, Sanders said that he would break up the biggest banks and restore the Depression Era Glass-Steagall Act, which barred commercial banks from investing in speculative financial deals. Clinton said that she would not restore Glass-Steagall but instead spoke of regulating speculators and risky investments, jailing executives who break the law, and looking for the emerging threats posed by non-traditional firms. Sanders replied that she was “niave” if she thought Wall Street would do the right thing because a president was pressuring them.

Nonetheless, these stances by Clinton are shrewd, in so far as they show that she agrees with most of what Sanders is saying is the problem, but her solutions—while clearly left of center—aren’t as threatening to their targets and sound more moderate. While Democrats may be wringing their hands over these differences, saying that they represent a gulf between systemic and incremental reform, it’s noteworthy that there’s almost no crossover or common ground with the Republican candidates, with the exception of saying criminal justice reform for non-violent crimes was needed.

On matters of war and peace, while the candidates had some differences—all were opposed to the kind of adventuristic foreign policy of the Bush Administration, which launched a war of choice in Iraq and ignited chaos in the region that continues. They did not want to send ground troops into Syria, nor did any of them believe that Russia’s Putin was trustworthy. They praised President Obama’s restraint for what Sanders termed a “quagmire within a quagmire.”

The candidates, especially Sanders and Webb, said that none of their progressive agenda items would become a reality unless there were changes to the current campaign finance system, where several hundred of the wealthiest Americans are bankrolling most of the presidential campaigns and congressional contests. While Webb pointedly told Sanders that his grassroots “revolution” was not going to happen, Sanders repeatedly said that a record high voter turnout and public protests would force Congress to respond.

Stepping back from the debate stage, it was a good night for all the Democrats. Nobody made any mistakes. All the candidates gave strong presentations of their positions, even if Sanders got off to a somewhat tense start and Clinton showed right off the bat that she was comfortable on the stage. There were even moments of levity, such as when Sanders told the audience and country that everyone was tired of hearing about Clinton’s private e-mail server when she was the Secretary of State—for which she thanked him. And Sanders, unlike any of the other candidates, mentioned the name of African-Americans killed by police in an answer that strongly supported the Black Lives Matter movement.

Another big takeaway is that this debate will probably prompt Vice President Joe Biden to recconsider his presidential ambitions. With Sanders setting the domestic agenda and Clinton embracing much of what he says, but presenting it in a smoother way that likely to have greater appeal across the country—outside its liberal epicenters—there seems to be no void that a Biden candidacy could fill. if anything, Clinton is running to defend Obama’s record and legacy, while Sanders is running to take it to a new orbit, where federal safety net programs would be expanded to assist working- and middle-class Americans.

As the candidates continue to campaign in coming weeks, it clearly helps Clinton that Sanders is a strong campaigner and revving up the Democratic base. If she continues to be the front runner, she will have to find ways to bring Bernie’s base into her fold. That will be worth watching. In the meantime, Sanders has made a career of confounding expectations and has the stamina of a long-distance runner. The contest for the 2016 Democratic nomination isn’t over by any means, but it’s getting more compelling.

Steven Rosenfeld covers national political issues for AlterNet, including America’s retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008).

 

see: http://www.alternet.org/election-2016/bernie-effect-puts-corporate-greed-center-stage-dem-debate-and-hillary-holds-her-own?akid=13573.123424.VMHO9O&rd=1&src=newsletter1044031&t=2

Trump Tax “plan”

Source:ThinkProgress

Author:Bryce Covert

Emphasis Mine

On Monday, Republican presidential candidate Donald Trump will unveil a detailed tax reform plan — and he is already positioning it as a populist proposal. In a press alert about the plan, the campaign states, “Essentially, the plan is a major tax reduction for almost all citizens and corporations, in particular, those in the middle and lower income classes.”

And already, the portion of the plan that affects low-income Americans, which would impose a zero percent tax rate on individuals who make less than $25,000 and married couples who make less than $50,000, is generating headlines. “Trump promises a ZERO per cent tax rate for millions: He plans to cut tax for the poor, middle classes and corporations, soak the rich,” the Daily Mail headline reads. “Mr. Trump’s plan appears designed to help him, as the GOP front-runner, cement his standing as a populist,” the Wall Street Journal article previewing the details states.

But the plan has a number of provisions that will overwhelmingly help the already well off.

Lower taxes for corporations

Trump proposes the lowest corporate tax rate of the entire Republican presidential field so far. He would reduce the rate to just 15 percent; by contrast, Sen. Marco Rubio (FL) would reduce it to 25 percent, while Jeb Bush would impose a top 20 percent corporate rate. That would be the on-paper tax rate; American companies already pay relatively low tax rates in reality, however. Thanks to their ability to take advantage of loopholes, tax breaks, and aggressive accounting schemes, the effective rate they pay is already under 20 percent. Meanwhile, although Trump says his tax reform plan will “create jobs and incentives of all kinds while simultaneously growing the economy,” lower corporate taxes don’t tend to go hand in hand with higher growth. There is no evidence that high rates hurt the economy; rather, those that pay the highest effective rates actually create more jobs than those that find ways to pay less.

And he would also impose a one-time, mandatory 10 percent tax on the profits American corporations hold overseas, which could be paid over a few years, to entice them to bring them back here and in theory create more jobs. A similar although slightly different plan, called a “repatriation holiday,” has been tried before, where corporations were offered a low, temporary tax rate on offshore profits to bring them home. When it was imposed in 2004, companies largely used the profits they brought back to give money to shareholders, rather than invest it in hiring or equipment, and many laid off large number of workers at the same time.

Lower taxes for the rich

It’s not just the poorest who would get a tax cut under Trump’s plan. The wealthy would get a hefty reduction too. The highest individual tax bracket, which would apply to married couples who make more than $300,000, would be lowered from the current 39.6 percent rate to 25 percent. That’s an even lower top tax rate than under Bush’s plan, which proposes a top 28 percent on income; yet analysis of Bush’s plan found that the top 1 percent of earners would get the overwhelming benefit of his tax cuts, with an 11.6 percent increase in after-tax income compared to 1.8 percent more for the poorest and between 2.3 and 3.1 percent for the middle class. As with lowering the top corporate tax rate, there’s little evidence that lower income taxes help spur job growth, as it’s historically been stronger under higher rates. Some economists have found that the optimal tax rate for the wealthiest is closer to 90 percent.

Giveaways to the wealthiest

Trump’s plan would also get rid of the estate tax, which only affects the wealthiest 0.14 percent of Americans. Thanks to reductions in the rate over the years and creative methods of getting around it, those who owe it only pay an effective 16.6 percent rate, and less than 10 percent of the $60 trillion that will get passed down to wealthy heirs and charities over the next half century will be paid in estate tax. Nevertheless, it is a significant and progressive source of government revenue, since it only impacts those most able to pay yet will generate $246 billion over the next decade.

And while Trump would follow through with his rhetoric calling out the lower tax rate hedge fund managers pay on the income they earn from doing their jobs by ending the carried interest loophole, he would also cut the top capital gains tax rate to 20 percent. The current code already means that income made from investments enjoys a much lower 23.8 percent rate than income made from work, which is taxed at a top 39.6 rate. And those who enjoy the benefits of a lower capital gains rate are mostly the rich: 70 percent of the money saved through a lower rate goes to the top 1 percent of earners, while just 7 percent goes to the bottom 80 percent. The lower capital gains tax rate is one of the biggest contributors to growing income inequality.

See: http://thinkprogress.org/economy/2015/09/28/3706197/trump-tax-proposal/?utm_source=newsletter&utm_medium=email&utm_campaign=tptop3&utm_term=4&utm_content=5

35 Mind-Blowing Facts About Inequality

Bernie Sanders realizes that runaway inequality is a critical issue. How come the other candidates don’t?

Source: AlterNet

Author: Larry Swartz

Emphasis Mine

While Hillary Clinton occasionally gives some lip service to the problem of extreme inequality, Bernie Sanders is the only candidate really hammering away at it. He has even blasted the orthodoxy of economic growth for its own sake, saying according to Monday’s Washington Post that unless economic spoils can be redistributed to make more Americans’ lives better, all the growth will go to the top 1% anyway, so who needs it? Sanders might know his history, but the rest of the candidates could use a little primer.

The United States was not always the most powerful nation on Earth. It was only with the end of World War II, with the rest of the developed world in smoldering ruins, that America emerged as the free world’s leader. This coincided with the expansion of the U.S. middle class. With the other war combatants trying to recover from the destruction of the war, America became the supermarket, hardware store and auto dealership to the world. Markets for American products abounded and opportunity was everywhere for American workers of all economic means to get ahead. America had a virtual monopoly on rebuilding the world. Combined with the G.I. Bill of 1944, which provided money for returning veterans to go to college, and government loans to buy houses and start businesses, the middle class in America boomed, as did American power, wealth and prestige. Between 1946 and 1973, productivity in America grew by 104 percent. Unions led the way in assuring wages for workers grew by an equal amount.

The 1970s, however, brought a screeching halt to the expansion of the American middle class. The Arab oil embargo in 1973 marked the end of cheap oil and the beginning of the middle-class decline. The Iranian Revolution in 1979, with more resultant oil instability, combined with the rise of Ronald Reagan’s conservative revolution at home, accelerated the long and painful contraction of the middle class. CCuts in corporate taxes, stagnant worker wage growth, the right-wing war on unions, and corporate outsourcing of work overseas greased the wheels of the middle-class decline and the upper-class elevation. Cuts in taxes on the wealthy, under the guise of trickle-down economics, have resulted in lower government revenue and cuts to all kinds of services. All of which has led to today, an era of national and international inequality unparalleled since the days of the Roaring ’20s. 

Here are 35 astounding facts about inequality that will fry your brain.

1. In 81 percent of American counties, the median income, about $52,000, is less than it was 15 years ago. This is despite the fact that the economy has grown 83 percent in the past quarter-century and corporate profits have doubled. American workers produce twice the amount of goods and services as 25 years ago, but get less of the pie.

2. The amount of money that was given out in bonuses on Wall Street last year is twice the amount all minimum-wage workers earned in the country combined.

3. The wealthiest 85 people on the planet have more money that the poorest 3.5 billion people combined.

4. The average wealth of an American adult is in the range of $250,000-$300,000. But that average number includes incomprehensibly wealthy people like Bill Gates. Imagine 10 people in a bar. When Bill Gates walks in, the average wealth in the bar increases unbelievably, but that number doesn’t make the other 10 people in the bar richer. The median per adult number is only about $39,000, placing the U.S. about 27th among the world’s nations, behind Australia, most of Europe and even small countries like New Zealand, Ireland and Kuwait.

5. Italians, Belgians and Japanese citizens are wealthier than Americans.

6. The poorest half of the Earth’s population owns 1% of the Earth’s wealth. The richest 1% of the Earth’s population owns 46% of the Earth’s wealth.

7. More locally, the poorest half of the US owns 2.5% of the country’s wealth. The top 1% owns 35% of it.

8. Inequality is a worldwide problem. In the UK, doctors no longer occupy a place in the top 1% of income earners, London plays host to the largest congregation of Russian millionaires outside of Moscow, and also houses more ultra-rich people (defined as owning more than $30 million in assets outside of their home) than anywhere else on Earth.

9. The slice of the national income pie going to the wealthiest 1% of Americans has doubled since 1979.

10. The 1% also takes home 20% of the income. This figure is the most since the 1920s era of laissez faire government (under Republicans Warren Harding, Calvin Coolidge and Herbert Hoover).

11. The super rich .01% of America, such as Jamie Dimon, CEO of JP Morgan, take home a whopping 6% of the national income, earning around $23 million a year. Compare that to the average $30,000 a year earned by the bottom 90 percent of America.

12. The top 1% of America owns 50% of investment assets (stocks, bonds, mutual funds). The poorest half of America owns just .5% of the investments.

13. The poorest Americans do come out ahead in one statistic: the bottom 90% of America owns 73% of the debt.

14. Tax rates for the middle class have remained essentially unchanged since 1960. Tax rates on the highest earning Americans have plunged from an almost 70% tax rate in 1945 down to around 35% today. Corporate tax rates have dropped from 30 percent in the 1950s to under 10 percent today.  (N.B.: the maximum tax rate was 91% from WWII until the early 1960’s)

15. Since 1990, CEO compensation has increased by 300%. Corporate profits have doubled. The average worker’s salary has increased 4%. Adjusted for inflation, the minimum wage has actually decreased

16. CEOs in 1965 earned about 24 times the amount of the average worker. In 1980 they earned 42 times as much. Today, CEOs earn 325 times the average worker.

17. Wages, as a percent of the overall economy, have dropped to an historic low.

18. In a study of 34 developed countries, the United States had the second highest level of income inequality, ahead of only Chile.

19. Young people in the U.S. are getting poorer. The median wealth of people under 35 has dropped 68% since 1984. The median wealth of older Americans has increased 42%.

20. The average white American’s median wealth is 20 times higher ($113,000) than the average African American ($5,600) and 18 times the Hispanic American ($6,300).

21. America’s highest income inequality is located in the states surrounding Wall Street (New York City) and the oil-rich states.

22. Since 1979, high school dropouts have seen median weekly income drop by 22 percent. Ethnically, the highest dropout rates are among Hispanic and African American children.

23. In 1970, a woman earned about 60% of the amount a man earned. In 2005 a woman earned about 80% of what a man earned. Since 2005, there has been no change in that figure. African-American women earn just 64% of what a white male earns, and Hispanic women just 56%.

24. Over 20 percent of all American children live below the poverty line. This rate is higher than almost all other developed countries.

25. Union membership in the US is at an all-time low, about 11% of the workforce. In 1978, 40 percent of blue-collar workers were unionized. With that declining influence has come a concurrent decline in the real value of the minimum wage.

26. Four hundred Americans have more wealth, $2 trillion, than half of all Americans combined. That is approximately the GDP of Russia.

27. In 1946, a child born into poverty had about a 50 percent chance of scaling the income ladder into the middle class. In 1980, the chances were 40 percent. A child born today has about a 33 percent chance.

28. Despite massive tax cuts, corporations have not created new jobs in America. The job creators have been small new businesses that have not enjoyed the same huge tax breaks.

29. More than half of the members of the United States Congress, where laws are passed deciding how millionaires are taxed, are millionaires.

30. Twenty five of the largest corporations in America in 2010 paid their CEOs more money than they paid in taxes that year.

31. In the first decade of the 21st century, the U.S. borrowed $1 trillion in order to give tax cuts to households earning over $250,000.

32. In 1970, there were five registered lobbyists working on behalf of wealthy corporations for every one of the 535 members of Congress. Today there are 22 lobbyists per congressperson.

33. In 1962, the 1% household median wealth was 125 times the average median wealth. In 2010 the divide was 288 times.

34. During the Great Recession, the average wealth of the 1% dropped about 16 percent. Meanwhile the wealth of the 99% dropped 47 percent.

35. Between 1979 and 2007, the wages of the top 1% rose 10 times more than the bottom 90 percent.

Larry Schwartz is a Brooklyn-based freelance writer with a focus on health, science and American history. 

See: http://www.alternet.org/economy/35-mind-blowing-facts-about-inequality?akid=13299.123424.f5Kr9w&rd=1&src=newsletter1039283&t=3

America Is Ready for Socialism! Massive Majorities Back Bernie Sanders on the Issues and Disdain Donald Trump

Trump channels the right’s angry Fox News id. But Sanders speaks to America’s soul — and our values.

Source: Salon, via Alternet

Author: Paul Rosenberg

Emphasis Mine

Donald Trump is throwing the GOP primary into chaos by channeling the GOP’s id, spinning out wild fantasies of the Mexican government deliberately sending a flood of rapists and murderers across the border. But Bernie Sanders is disrupting Hillary Clinton’s coronation on the Democratic side by channeling the party’s soul, with a specifically issue-based focus.

In a way, both men are vividly illustrating a basic asymmetry that runs through American politics—between left and right, liberal and conservative, Democrat and Republican—which was first comprehensively described by public opinion researchers Lloyd Free and Hadley Cantril in their landmark 1967 book, The Political Beliefs of Americans: A Study of Public Opinion, and which political scientist Matt Grossman discussed in a recent Salon interview. Free and Cantril found that half the population was ideologically conservative, in the sense of preferring a smaller, more limited government, while about two-thirds was operationally liberal, in the sense of wanting to spend more on specifically identified government programs.

Subsequent research has intensified this division. Conservatives win by making broad, sweeping appeals, which can often have little relationship with the facts (Iraq’s WMDs, “voter fraud,” global warming denialism, etc.). Liberals win by focusing on how to fix specific problems. Thus “government spending” in general is seen as a negative, but spending on most specific programs is strongly supported. The pattern is clear: The more practical the question, the more liberal the answers. That’s just how U.S. politics works.

Trump takes the conservative side of this formula to an extreme, making broad, ludicrous false claims in his narcissistically self-confident manner. What’s grabbing headlines now are his false claims about illegal immigrant crime, but he remains completely detached from reality regarding Obama’s citizenship as well—an act of broad stigmatization that also typifies conservative thought. When NBC’s Katy Tur brought up his birtherism, Trump treated her with disdain: “Well, I don’t know. According to you it’s not true.” When she responded straightforwardly, “He released his birth certificate,” Trump doubled down on the disdain, “You know, if you believe that, that’s fine. I don’t care. It’s an old subject.”

Bernie Sanders is the exact opposite of Trump. As a proud self-described democratic socialist, he willingly makes himself a target for the kind of demonization that Trump hands out like candy, and he responds to attacks—actual and potential—by doubling down on policy specifics, where he correctly feels he’s on very firm ground. In a recent interview with John Nichols in the Nation, Sanders sketched out his response to such attacks, which are now routinely leveled indiscriminately: Mitch McConnell, the Republican leader in the Senate, often criticizes President Obama, incorrectly, for trying to push “European-style socialism,” and McConnell says the American people don’t want it. First of all, of course, Obama is not trying to push European-style socialism. Second of all, I happen to believe that, if the American people understood the significant accomplishments that have taken place under social-democratic governments, democratic-socialist governments, labor governments throughout Europe, they would be shocked to know about those accomplishments. One of the goals of this campaign is to advance that understanding…. How many Americans know that in virtually every European country, when you have a baby, you get guaranteed time off and, depending on the country, significant financial benefits as well. Do the American people know that? I doubt it. Do the American people even know that we’re the only major Western industrialized country that doesn’t guarantee healthcare for all? Most people don’t know that. Do the American people know that in many countries throughout Europe, public colleges and universities are either tuition-free or very inexpensive?

I have always believed that the countries in Scandinavia have not gotten the kind of honest recognition they deserve for the extraordinary achievements they have made.

Sanders is right to think that Scandanavian socialism would be popular here in the U.S., if only people knew more about it. And he’s right to make spreading that awareness a goal of his campaign. In fact, on a wide range of issue specifics Sanders lines up with strong majorities of public opinion—and has for decades.

You can get a strong sense of this from the results of the “Big Ideas” poll commissioned by the Progressive Change Institute in January, which has thus far gotten far less attention than it deserves. (Full disclosure: I’m a former blogmate with Adam Green, co-founder of PCI’s affiliate, the Progressive Change Campaign Committee.) PCI first solicited ideas online through an open submission process (more than 2,600 specific proposals were submitted) and then let people vote on them (more than a million votes were cast). This bottom-up process was then tested out in a national poll. The following all received 70% support or more:

Allow Government to Negotiate Drug Prices (79%)
Give Students the Same Low Interest Rates as Big Banks (78%)
Universal Pre-Kindergarten (77%)
Fair Trade that Protect Workers, the Environment, and Jobs (75%)
End Tax Loopholes for Corporations that Ship Jobs Overseas (74%)
End Gerrymandering (73%)
Let Homeowners Pay Down Mortgage With 401k (72%)
Debt-Free College at All Public Universities (Message A) (71%)
Infrastructure Jobs Program — $400 Billion / Year (71%)
Require NSA to Get Warrants (71%)
Disclose Corporate Spending on Politics/Lobbying (71%)

Medicare Buy-In for All (71%)
Close Offshore Corporate Tax Loopholes (70%)
Green New Deal — Millions Of Clean-Energy Jobs (70%)
Full Employment Act (70%)
Expand Social Security Benefits (70%)

All of the above are in line with Bernie Sanders’ politics and all are extremely popular, with support across the political spectrum. For example, the infrastructure jobs program (a key element of Sanders’ platform) had 91% support from Democrats, 61% from independents and even 55% support from Republicans—compared to only 28% who were opposed. Donald Trump can only dream of being that popular among Republicans.

One could easily write a whole story about Sanders’ strength on issues based on this one poll alone. It’s astonishing to see all these ideas brought together which have strong support among the American people, but which can barely get the time of day in the top-down world of U.S. politics today. And that, arguably, goes straight to the heart of what the Sanders campaign is all about—opening up the political process to popular ideas that just happen to be not so popular with the billionaire class, and the political system that caters so slavishly to them.

But that’s not to say there’s no other evidence of how popular Sanders’ views are. At the American Prospect, Peter Drier recently pulled together a broad sampling of the evidence that Sanders represents majority views on a core set of issues. For example, one of the European-style socialist practices that’s particularly popular is paid leave:

Eighty percent of Americans favor requiring employers to offer paid leave to parents of new children and employees caring for sick family members. Even more (85 percent) favor requiring employers to offer paid leave to employees who are ill.

Drier broke the issues down as follows: big business, progressive taxation, inequality and poverty, money in politics, minimum wage and workers’ rights, health care and social security, higher education, same-sex marriage. His general method was to cite a number of different sources illustrating different aspects of the issue.

Regarding big business, to take one example, Drier notes that 74 percent of Americans believe corporations have too much influence on American life and politics today (New York Times/CBS News), 60 percent of Americans—including 75 percent of Democrats—believe that “the economic system in this country unfairly favors the wealthy” (Pew), and 58% of Americans said they support breaking up “big banks like Citigroup” (the PCI poll, cited by the Wall Street Journal), which Drier points out is “a key plank of Sanders’ platform and the goal of a bill that Sanders sponsored in the Senate.” He also notes that 73% of Americans favor tougher rules for Wall Street financial companies (Lake Research), and finally, that 64% favor regulating greenhouse gas emissions and requiring utilities to generate more power from “clean” low-carbon sources (Duke University).

What this shows is that Sanders is not simply cherry-picking a few popular ideas here and there. He’s tapping into a broadly shared set of inter-related attitudes and ideas about closely related issues Although these views and ideas are usually sidelined in most political discourse, the convergence of attitudes into a coherent policy texture is remarkably consistent. And this gets to a primary problem with America’s political system: liberal policy views form a coherent whole, every bit as much as conservative ones do, but they are far less publicly recognized, articulated, discussed and explored—despite the fact that they are wildly popular!

As I’ve noted before here at Salon, Free and Cantril commented on this situation in the last section of their book “The Need for a Restatement of American Ideology” almost 50 years ago:

The paradox of a large majority of Americans qualifying as operational liberals while at the same time a majority hold to a conservative ideology has been repeatedly emphasized in this study. We have described this state of affairs as mildly schizoid, with people believing in one set of principles abstractly while acting according to another set of principles in their political behavior. But the principles according to which the majority of Americans actually behave politically have not yet been adequately formulated in modern terms

There is little doubt that the time has come for a restatement of American ideology to bring it in line with what the great majority of people want and approve. Such a statement, with the right symbols incorporated, would focus people’s wants, hopes, and beliefs, and provide a guide and platform to enable the American people to implement their political desires in a more intelligent, direct, and consistent manner.

That restatement has never come about, but on-the-ground support for liberal policies remains as strong as ever, despite decades of mostly unanswered ideological assault in the media. Part of the problem is that conservative ideology expresses an idealized sense of individual possibility, so it’s relatively easy for people to access. Liberal ideology comes from a much more reflective place, one that encompasses thinking about society as a whole, and seeing oneself as part of a larger social fabric. Shortly after Free and Cantril wrote, the philosopher John Rawls proposed thinking in terms of a society conceived behind a “veil of ignorance”: if we had no idea where we were to fall in the scheme of things, what kind of social order would we consider fair and just? Such a framework makes perfect sense when we act as citizens, and openly invites us to act philosophically, in a way that promotes the flourishing of our whole society.

In 2011, Michael I. Norton of and Harvard Business School and Dan Ariely of Duke University published a study (which Drier cites) that took a Rawlsian perspective. “Following the philosopher John Rawls (1971), we asked Americans to construct distributions of wealth they deem just,” they wrote. The results were a resounding confirmation of Bernie Sanders’ politics. As they explained in their abstract, they aimed to insert the desires of “regular” Americans into policy debates about the optimal level of wealth inequality by asking them first to estimate the current wealth distribution, and then construct their ideal. As they explained their results:

First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups—even those not usually associated with wealth redistribution, such as Republicans and the wealthy—desired a more equal distribution of wealth than the status quo.

In their study, they gave people a choice between three alternatives, broken down into quintiles: the current wealth distribution in the U.S., a completely equal wealth distribution, and between the two, a wealth distribution equal to the income distribution of Sweden—one of those Scandinavian socialist countries that Bernie Sanders loves to share information about. Lo and behold, as the authors wrote in a section heading, “Americans Prefer Sweden.”

More precisely, Americans preferred Sweden over the U.S. by 92-8%. They also preferred complete equality, but less overwhelmingly: 77-23%. And they preferred Sweden over complete equality—but just barely, 51-49%. Not surprisingly, with such landslide numbers, it included everyone, the authors noted. “In addition, this overwhelming preference for the Sweden distribution over the United States distribution was robust across gender (females: 92.7%, males: 90.6%), preferred candidate in the 2004 election (Bush voters: 90.2%; Kerry voters: 93.5%) and income (less than $50,000: 92.1%; $50,001–$100,000: 91.7%; more than $100,000: 89.1%).” As the reference to Bush and Kerry gives away, although published in 2011, the original research was done well before the financial collapse—so this emphatically was not a response to the Great Recession.

If the overwhelming majority of Americans thinks that Sweden represents a better social order than America, then it’s hardly surprising that large numbers of them also agree with Sanders on a broad range of economic issues, as both PCI and Peter Drier lay out. And it’s not surprising that they agree on broader policies related to wealth and the exercise of political power, as well as policies making life better for the middle class, and helping more people to get into it. In fact, the only thing surprising about Bernie Sanders’ popularity is that people find it surprising.  After all, the evidence has been all around us for a very long time now.

Does that mean Bernie Sanders ought to be taken a lot more seriously than he has been so far? Absolutely. Does it mean he’ll be president? Matt Grossman doesn’t think so. “Bernie Sanders has a long and uphill battle and, if history is any guide, little chance to win the Democratic nomination,” Grossman said. “It is true that he has focused on specific issue positions that are popular with the American public and an enduringly appealing Democratic message of taking on the rich and big business, but no candidate has won the Democratic nomination by avowedly running to the left of the other candidates since George McGovern. Democratic leaders are traditionally more concerned about maintaining a moderate image than Republicans (and more convinced that it matters for electability).”

But the question of why that asymmetric response has been so—much less if it is right—is well worth contemplating. Indeed a 2013 paper by Adam Bonica, Nolan McCarty, Keith T. Poole, and Howard Rosenthal underscored the broader underlying question:Why Hasn’t Democracy Slowed Rising Inequality?” They present a sophisticated analysis, which considers five possible explanations:

first, an ideological shift toward free market capitalism; second, the combination of immigration and low turnout of the poor has produced an electorate more wealthy than the population as a whole; third, rising affluence has reduced the share of the public that’s attracted to government for social insurance; fourth, the rich have been able to increasingly influence politics “through campaign contributions, lobbying, and revolving door employment of politicians and bureaucrats;” and fifth, the political process is distorted by institutions that reduce accountability, such as gerrymandering and a multitude of institutional veto/pivot points.

Just reading through this brief summary of their explanation is enough to make the average voter tune out—which is precisely the point. The political system is anything but transparently responsive to the majority will. In the end, they conclude, “Overall, the kinds of government policies that could have ameliorated the sharp rise in inequality have been immobilized by a combination of greater polarization, lack of voter participation, feedback from high-income campaign contributors, and political institutions that must overcome a series of key pivots before making significant changes.”

What this means, in effect, is that the political system is in a state of drift, so far as the needs, interests and values of most ordinary Americans are concerned. All the super majority issue positions that Sanders may hold are irrelevant, because the American people as a whole are irrelevant. Such is the sorry state of our democracy.

This was further confirmed by a 2014 paper, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens” by Martin Gilens and Benjamin I. Page. In it, they used a dataset measuring key variables for 1,779 policy issues, and concluded that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”

That is what’s meant by “politics as usual,” and that’s precisely what Bernie Sanders has spent his whole life working to change. As the campaign unfolds, and more and more people become aware of how

Eighty percent of Americans favor requiring employers to offer paid leave to parents of new children and employees caring for sick family members. Even more (85 percent) favor requiring employers to offer paid leave to employees who are ill.

Drier broke the issues down as follows: big business, progressive taxation, inequality and poverty, money in politics, minimum wage and workers’ rights, health care and social security, higher education, same-sex marriage. His general method was to cite a number of different sources illustrating different aspects of the issue.

Regarding big business, to take one example, Drier notes that 74 percent of Americans believe corporations have too much influence on American life and politics today (New York Times/CBS News), 60 percent of Americans—including 75 percent of Democrats—believe that “the economic system in this country unfairly favors the wealthy” (Pew), and 58% of Americans said they support breaking up “big banks like Citigroup” (the PCI poll, cited by the Wall Street Journal), which Drier points out is “a key plank of Sanders’ platform and the goal of a bill that Sanders sponsored in the Senate.” He also notes that 73% of Americans favor tougher rules for Wall Street financial companies (Lake Research), and finally, that 64% favor regulating greenhouse gas emissions and requiring utilities to generate more power from “clean” low-carbon sources (Duke University).

What this shows is that Sanders is not simply cherry-picking a few popular ideas here and there. He’s tapping into a broadly shared set of inter-related attitudes and ideas about closely related issues Although these views and ideas are usually sidelined in most political discourse, the convergence of attitudes into a coherent policy texture is remarkably consistent. And this gets to a primary problem with America’s political system: liberal policy views form a coherent whole, every bit as much as conservative ones do, but they are far less publicly recognized, articulated, discussed and explored—despite the fact that they are wildly popular!

As I’ve noted before here at Salon, Free and Cantril commented on this situation in the last section of their book “The Need for a Restatement of American Ideology” almost 50 years ago:

The paradox of a large majority of Americans qualifying as operational liberals while at the same time a majority hold to a conservative ideology has been repeatedly emphasized in this study. We have described this state of affairs as mildly schizoid, with people believing in one set of principles abstractly while acting according to another set of principles in their political behavior. But the principles according to which the majority of Americans actually behave politically have not yet been adequately formulated in modern terms …

There is little doubt that the time has come for a restatement of American ideology to bring it in line with what the great majority of people want and approve. Such a statement, with the right symbols incorporated, would focus people’s wants, hopes, and beliefs, and provide a guide and platform to enable the American people to implement their political desires in a more intelligent, direct, and consistent manner.

That restatement has never come about, but on-the-ground support for liberal policies remains as strong as ever, despite decades of mostly unanswered ideological assault in the media. Part of the problem is that conservative ideology expresses an idealized sense of individual possibility, so it’s relatively easy for people to access. Liberal ideology comes from a much more reflective place, one that encompasses thinking about society as a whole, and seeing oneself as part of a larger social fabric. Shortly after Free and Cantril wrote, the philosopher John Rawls proposed thinking in terms of a society conceived behind a “veil of ignorance”: if we had no idea where we were to fall in the scheme of things, what kind of social order would we consider fair and just? Such a framework makes perfect sense when we act as citizens, and openly invites us to act philosophically, in a way that promotes the flourishing of our whole society.

In 2011, Michael I. Norton of and Harvard Business School and Dan Ariely of Duke University published a study (which Drier cites) that took a Rawlsian perspective. “Following the philosopher John Rawls (1971), we asked Americans to construct distributions of wealth they deem just,” they wrote. The results were a resounding confirmation of Bernie Sanders’ politics. As they explained in their abstract, they aimed to insert the desires of “regular” Americans into policy debates about the optimal level of wealth inequality by asking them first to estimate the current wealth distribution, and then construct their ideal. As they explained their results:

First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups—even those not usually associated with wealth redistribution, such as Republicans and the wealthy—desired a more equal distribution of wealth than the status quo.

In their study, they gave people a choice between three alternatives, broken down into quintiles: the current wealth distribution in the U.S., a completely equal wealth distribution, and between the two, a wealth distribution equal to the income distribution of Sweden—one of those Scandinavian socialist countries that Bernie Sanders loves to share information about. Lo and behold, as the authors wrote in a section heading, “Americans Prefer Sweden.”

More precisely, Americans preferred Sweden over the U.S. by 92-8%. They also preferred complete equality, but less overwhelmingly: 77-23%. And they preferred Sweden over complete equality—but just barely, 51-49%. Not surprisingly, with such landslide numbers, it included everyone, the authors noted. “In addition, this overwhelming preference for the Sweden distribution over the United States distribution was robust across gender (females: 92.7%, males: 90.6%), preferred candidate in the 2004 election (Bush voters: 90.2%; Kerry voters: 93.5%) and income (less than $50,000: 92.1%; $50,001–$100,000: 91.7%; more than $100,000: 89.1%).” As the reference to Bush and Kerry gives away, although published in 2011, the original research was done well before the financial collapse—so this emphatically was not a response to the Great Recession.

If the overwhelming majority of Americans thinks that Sweden represents a better social order than America, then it’s hardly surprising that large numbers of them also agree with Sanders on a broad range of economic issues, as both PCI and Peter Drier lay out. And it’s not surprising that they agree on broader policies related to wealth and the exercise of political power, as well as policies making life better for the middle class, and helping more people to get into it. In fact, the only thing surprising about Bernie Sanders’ popularity is that people find it surprising.  After all, the evidence has been all around us for a very long time now.

Does that mean Bernie Sanders ought to be taken a lot more seriously than he has been so far? Absolutely. Does it mean he’ll be president? Matt Grossman doesn’t think so. “Bernie Sanders has a long and uphill battle and, if history is any guide, little chance to win the Democratic nomination,” Grossman said. “It is true that he has focused on specific issue positions that are popular with the American public and an enduringly appealing Democratic message of taking on the rich and big business, but no candidate has won the Democratic nomination by avowedly running to the left of the other candidates since George McGovern. Democratic leaders are traditionally more concerned about maintaining a moderate image than Republicans (and more convinced that it matters for electability).”

But the question of why that asymmetric response has been so—much less if it is right—is well worth contemplating. Indeed a 2013 paper by Adam Bonica, Nolan McCarty, Keith T. Poole, and Howard Rosenthal underscored the broader underlying question: “Why Hasn’t Democracy Slowed Rising Inequality?” They present a sophisticated analysis, which considers five possible explanations: first, an ideological shift toward free market capitalism; second, the combination of immigration and low turnout of the poor has produced an electorate more wealthy than the population as a whole; third, rising affluence has reduced the share of the public that’s attracted to government for social insurance; fourth, the rich have been able to increasingly influence politics “through campaign contributions, lobbying, and revolving door employment of politicians and bureaucrats;” and fifth, the political process is distorted by institutions that reduce accountability, such as gerrymandering and a multitude of institutional veto/pivot points.

Just reading through this brief summary of their explanation is enough to make the average voter tune out—which is precisely the point. The political system is anything but transparently responsive to the majority will. In the end, they conclude, “Overall, the kinds of government policies that could have ameliorated the sharp rise in inequality have been immobilized by a combination of greater polarization, lack of voter participation, feedback from high-income campaign contributors, and political institutions that must overcome a series of key pivots before making significant changes.”

What this means, in effect, is that the political system is in a state of drift, so far as the needs, interests and values of most ordinary Americans are concerned. All the supermajority issue positions that Sanders may hold are irrelevant, because the American people as a whole are irrelevant. Such is the sorry state of our democracy.

This was further confirmed by a 2014 paper, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens” by Martin Gilens and Benjamin I. Page. In it, they used a dataset measuring key variables for 1,779 policy issues, and concluded that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”

That is what’s meant by “politics as usual,” and that’s precisely what Bernie Sanders has spent his whole life working to change. As the campaign unfolds, and more and more people become aware of how well Sanders represents their views on fundamental issues, the focus on changing political structures of power will inevitably come to deepen—as Sanders, of course, already knows that it must.

In the Nation interview referred to above, Sanders began by responding to the question, “Are we at one of those pivot points—as we saw in the 1930s—where our politics could open up and take the country in a much more progressive direction?” And he responded as follows:

Obviously, we’re not in the midst of a massive depression, as we were in the 1930s. But I think the discontent of the American people is far, far greater than the pundits understand. Do you know what real African-American youth unemployment is? It’s over 50 percent. Families with a member 55 or older have literally nothing saved for retirement. Workers are worried about their jobs ending up in China. They’re worried about being fired when they’re age 50 and being replaced at half-wages by somebody who is 25. They’re disgusted with the degree that billionaires are able to buy elections. They are frightened by the fact that we have a Republican Party that refuses to even recognize the reality of climate change, let alone address this huge issue.

In 1936, when Roosevelt ran for reelection, he welcomed the

hatred of what he called “the economic royalists”—today, they’re the billionaire class—and I’m prepared to do that as well. That’s the kind of language the American people are ready to hear.

Ultimately, the question is not “Will Bernie Sanders be elected president?” We’ve had many men elected president who have done little to impact the long arc of our nation’s course through history. The real question is, “Will the Sanders campaign change the course of American history?” And that question is one that every citizen can help answer, by how they engage in the months ahead.

 

Paul Rosenberg is a California-based writer/activist, senior editor for Random Lengths News, and a columnist for Al Jazeera English. Follow him on Twitter at @PaulHRosenberg.

See: http://www.alternet.org/election-2016/america-ready-socialism-massive-majorities-back-bernie-sanders-issues-and-disdain?akid=13298.123424.NqSiKA&rd=1&src=newsletter1039265&t=5

A Practical Vision of a More Equal Society

the spectacular lowering of top income tax rates has sharply contributed to the rise of inequality since the 1980s, without bringing adequate corresponding benefits to society at large

Source/Author: Thomas Piketty, The New York Review of Books

Emphasis Mine

Anthony Atkinson occupies a unique place among economists. During the past half-century, in defiance of prevailing trends, he managed to place the question of inequality at the center of his work while demonstrating that economics is first and foremost a social and moral science. In his new book, Inequality: What Can Be Done?—more personal than his previous ones and wholly focused on a plan of action—he provides us with the broad outlines of a new radical reformism.

There’s something reminiscent of the progressive British social reformer William Beveridge in Atkinson’s reformism, and the reader ought to enjoy his way of presenting his ideas. The legendarily cautious English scholar reveals a more human side, plunges into controversy, and sets forth a list of concrete, innovative, and persuasive proposals meant to show that alternatives still exist, that the battle for social progress and equality must reclaim its legitimacy, here and now. He proposes universal family benefits financed by a return to progressive taxation—together, they are intended to reduce British inequality and poverty from American levels to European ones.

He also argues for guaranteed public-sector jobs at a minimum wage for the unemployed, and democratization of access to property ownership via an innovative national savings system, with guaranteed returns for the depositors. There will be inheritance for all, achieved by a capital endowment at age eighteen, financed by a more robust estate tax; an end to the English poll tax—a flat-rate tax for local governments—and the effective abandonment of Thatcherism. The effect is exhilarating. Witty, elegant, profound, this book should be read: it brings us the finest blend of what political economy and British progressivism have to offer.

To fully appreciate this book and its proposals, we should first place it in the larger setting of Atkinson’s career, for he has mainly produced the work of an infinitely cautious and rigorous scholar. Between 1966 and 2015, Atkinson published fifty or so books and more than 350 scholarly articles. They have brought about a profound transformation in the broader field of international studies of the distribution of wealth, inequality, and poverty. Since the 1970s, he has also written major theoretical papers, devoted in particular to the theory of optimal taxation, and these contributions alone would justify several Nobel Prizes. But Atkinson’s most important and profound work has to do with the historical and empirical analysis of inequality, carried out with respect to theoretical models that he deploys with impeccable mastery and utilizes with caution and moderation. With his distinctive approach, at once historical, empirical, and theoretical; with his extreme rigor and his unquestioned probity; with his ethical reconciliation of his roles as researcher in the social sciences and citizen of, respectively, the United Kingdom, Europe, and the world, Atkinson has himself for decades been a model for generations of students and young researchers.

Together with Simon Kuznets, Atkinson more or less single-handedly originated a new discipline within the social sciences and political economy: the study of historical trends in the distribution of income and property. Of course, the question of distribution and long-term trends already lay at the heart of nineteenth-century political economy, particularly in the work of Thomas Malthus, David Ricardo, and Karl Marx. But these writers could draw only on limited data, and were frequently obliged to limit themselves to purely theoretical speculation.

It was not until the second half of the twentieth century and the research of Kuznets and Atkinson that analyses of distribution of income and property could actually be based on historical sources. In his 1953 masterwork, Shares of Upper Income Groups in Income and Savings, Kuznets combined the first systematic records of American national income and property (records that he himself had helped to create) and the data produced by the federal income tax (established in 1913, in the aftermath of a prolonged political battle), to establish the very first historical account of year-by-year income distribution. While he was at it, he produced a piece of good news: that there had been a decline in inequality.

In 1978, in Distribution of Personal Wealth in Britain, a fundamental book (cowritten with Allan Harrison), Atkinson outstripped and overtook Kuznets: he made systematic use of British probate records from the 1910s to the 1970s to analyze in magisterial fashion the extent to which different economic, social, and political forces can help us understand the developments observed in the distribution of income, a distribution that was particularly under scrutiny during this period of exceptional turbulence.

All subsequent work on historic trends in income and property inequality to a certain extent follow in the wake of Kuznets’s and Atkinson’s groundbreaking studies. Leaving aside his historic and pioneering writings, Atkinson has been for decades one of the leading international specialists doing comparative investigations on the measurement of inequality and poverty in contemporary society. He has also been the tireless architect of projects for international cooperation on these subjects.

An Engaged and Mordant Book

In Inequality: What Can Be Done?, Atkinson leaves the terrain of scholarly research and ventures into the realm of action and public intervention. By so doing, he returns to the role of public intellectual that he has never really abandoned since the beginning of his career. Before his historic work in 1978 on the distribution of wealth in Britain, he had already written several other books that in their way were public interventions. In particular, we can mention Poverty in Britain and the Reform of Social Security (1969) and Unequal Shares—Wealth in Britain (1972). With Atkinson, the dividing lines between history, economics, and politics have never been strict: he has always tried to reconcile the scholar with the citizen, often discreetly, occasionally in a more forthright manner.

All the same, Inequality: What Can Be Done? goes much further in that direction than any of his earlier books. Atkinson takes risks and sets forth a genuine plan of action. In it we find his customary stylish prose, his distinctive way of offering a fair hearing to every argument and author, presenting them all in the best light, with simplicity and clarity. But in this book Atkinson makes distinctions and takes positions in a far more drastic way than his natural caution generally inclines him to do. While he has not written a funny book, we find in it the mordant irony that his students and colleagues know so well, an irony that does not always appear with such clarity in his more academic publications.

One such case is the section in which he evokes the historic events of 1988, when Nigel Lawson, Margaret Thatcher’s chancellor of the exchequer, led the British Parliament in voting for a reduction of the top marginal income tax rate to 40 percent (that rate was 83 percent when the Iron Lady first came to power in 1979). One Conservative MP got so carried away that he is reported to have said that “he did not have enough zeroes on his calculator” to measure the size of the tax cut that he had just helped to approve for himself. It was a grim moment and fully merits the use of Atkinson’s sharp talons.

This break with a half-century of progressive tax policy in the United Kingdom was Thatcherism’s distinctive achievement (just as the Tax Reform Act of 1986, which cut the upper tax rate in the US to 28 percent, was the distinctive achievement of Reaganism). It would never really be called into question by New Labour during the years of Tony Blair (for whom Atkinson has no special fondness), any more than Reagan’s tax cuts were by the Democrats during the Clinton or Obama years. Nor can we expect that the rate will be seriously called into question under the newly elected Tory government.

Another telling story, which may surprise many of his students and colleagues: on the occasion of that historic vote in 1988, Atkinson himself was in the House of Commons, busily working away on his PC and his tax microsimulator in the Shadow Cabinet Room. With the aid of his colleague Holly Sutherland, he was in fact able to finish calculating the proposed budget before the chancellor of the exchequer was able to complete his speech—wry evidence that scientific research and computer codes can give rise to new forms of participatory democracy.

The Battle for Fiscal Progressivity and National Insurance

The idea of going back to a more progressive tax structure clearly has a major part in the plan of action that Atkinson sets forth. The British economist leaves no doubt about it: the spectacular lowering of top income tax rates has sharply contributed to the rise of inequality since the 1980s, without bringing adequate corresponding benefits to society at large. We must therefore waste no time discarding the taboo that says marginal tax rates must never rise above 50 percent. Atkinson proposes a far-reaching reformation of the British income tax, with top tax rates raised to 55 percent for annual income above £100,000 and 65 percent for annual income above £200,000, as well as a hike in the cap on contributions to national insurance.

All of which would make it possible to finance a significant expansion of the British social security and income redistribution system, notably with a sharp increase in family benefits (doubling and even quadrupling them in one of the variants proposed), as well as a rise in retirement and unemployment benefits for people with lower resources.* Atkinson presents a series of variants of these measures and scenarios for reform, while advocating those measures that make it possible to return to a policy of universal social safety nets (i.e., that would be open to everyone), as opposed to conditional transfers of resources.

If these proposals, statistically accounted for and fully financed from taxes, were to be adopted, there would be a significant drop in British levels of inequality and poverty. According to the simulations done by Atkinson and Sutherland, those levels would fall from their current quasi-American levels to the point where they would come close to European and OECD averages. This is the central goal of Atkinson’s first set of proposals: you can’t expect everything from fiscal redistribution, but that nonetheless is where you have to begin.

Radical Reformism: A New Philosophy of Rights

But Atkinson’s plan of action hardly stops there. At the core of his program is a series of proposals that aim to transform the very operation of the markets for labor and capital, introducing new rights for those who now have the fewest rights. His proposals include guaranteed minimum-wage public jobs for the unemployed, new rights for organized labor, public regulation of technological change, and democratization of access to capital. This is only a sampling of the many reforms he recommends.

Instead of saying more in detail about these proposals, I’d like to focus particularly on the question of wider access to capital and ownership. Atkinson here makes two especially innovative suggestions. On the one hand, he calls for the establishment of a national savings program allowing each depositor to receive a guaranteed return on her capital (below a certain threshold of individual capital). Given the drastic inequality of access to fair financial returns, particularly as a consequence of the scale of the investment with which one begins (a situation that has in all likelihood been aggravated by the financial deregulation of the last few decades), this proposal strikes me as particularly sound. In Atkinson’s view, it is intimately bound up with the larger issue of a new approach to public property and the possible development of a new form of sovereign wealth fund. The public authority cannot resign itself merely to go on piling up debt and endlessly privatizing everything it possesses.

On the other hand, alongside this national guaranteed and insured savings program, Atkinson proposes establishing an “inheritance for all” program. This would take the form of a capital endowment assigned to each young citizen as he or she reached adulthood, at the age of eighteen. All such endowments would be financed by estate taxes and a more progressive tax structure. In concrete terms, Atkinson estimates that, with current revenue from the British estate tax, it would be possible to finance a capital endowment of slightly more than £5,000 for each young adult. He calls for a far-reaching reform of the system of inheritance taxation, and especially for greater progressivity with regard to the larger estates. (He proposes an upper rate of 65 percent, as with the income tax.) These reforms would make it possible to finance a capital endowment on the order of £10,000 per young adult.

Personally speaking, I must say that I’ve always had certain reservations about the idea of an individual financial endowment. I’ve generally preferred a focus on guaranteed access to certain fundamental goods—education, health, culture among them. But whichever approach you may prefer, the idea of directly linking the estate tax to the allocation of rights that would be underwritten by such a tax seems to me extremely pertinent. The immense advantage of the solution set forth by Atkinson is that it makes it possible to clearly express the notion that the purpose of the estate tax is to underwrite “inheritance for all.” By directly linking the sum given to each person with estate tax rates, we may perhaps hope to change the terms of the democratic debate on this subject.

The Return of the Poll Tax and the Question of a Wealth Tax

One of the most interesting sections of the book focuses on the British debate over the poll tax. This is a notoriously forfeitary tax, or lump-sum tax, as economists say it—one pays the same sum in pounds sterling whether one is rich or poor. It was imposed by Margaret Thatcher in 1989–1990 in place of the old rates tax, which was a proportional tax levied on housing, with the sum due increasing in rough proportion to the value of one’s home. The poll tax therefore resulted in a sharp tax hike for the poorest taxpayers, and a drastic drop for the richest ones. To say that this reform was unpopular is to put it mildly: urban rioting and parliamentary insurrection ensued, while the Iron Lady stubbornly dug in her heels until she was finally voted out of power by the Conservative MPs in November 1990 and quickly replaced by John Major, who promptly abolished the poll tax. It was a clearly unacceptable reform.

What is less widely known is that the new local “council tax” that replaced the poll tax in 1993 and is still in effect today is actually almost as regressive as the poll tax. Here the data gathered by Atkinson are particularly striking. Individuals whose real estate holdings are worth about £100,000 pay on average a council tax of some £1,000, while those whose property is worth about £1,000,000 pay approximately £2,000–2,500. While this is evidently a less harshly regressive system than the one envisioned by Thatcher, it still remains extremely regressive. In fact, the tax rate drops from 1 percent for the poorest taxpayers to 0.2–0.25 percent for the richest ones, with an average tax rate of 0.54 percent for the United Kingdom as a whole in 2014–2015. In most European countries, as well as in the United States, local taxes are generally proportional to the value of real estate property.

Quite reasonably, Atkinson proposes that the same approach be introduced in the United Kingdom. Such a reform, carried out consistently, might be a first step toward the establishment of a progressive tax on real estate, and even, eventually, toward a progressive tax on net wealth (including financial assets and debts). In this regard, it is striking to note that the tax on real estate transactions in the UK (“stamp duty”) is already quite progressive, and that it has become even more so over the last few years. The rate paid on a transaction is currently 0 percent if the property is worth less than £125,000, and 1 percent if the property is worth between £125,000 and £250,000, rising thereafter to 3 percent between £250,000 and £500,000, 4 percent between £500,000 and £1,000,000, 5 percent between one and two million pounds (a new rate introduced in 2011), and 7 percent on properties worth more than two million pounds (introduced in 2012).

It’s worth noting that the 5 percent rate, introduced by a Labour government, was at first strongly criticized by the Conservatives. Once they came to power, however, they introduced the 7 percent rate. This makes it clear that in a larger national situation of growing inequality, and especially of upward concentration of wealth and the steep challenges facing younger generations in gaining access to property, the need for a more progressive system for taxing wealth is being felt above and beyond partisan political affiliations. This likewise points to the need, advocated by Atkinson, to rethink the overall system of taxes on property in a coherent manner: it’s hard to see why the tax on transactions should be so sharply progressive if the annual property tax is going to be regressive.

The United Kingdom, Europe, the World

The only criticism that can be brought to bear on Atkinson’s plan of action is its excessive concentration on Great Britain. All of his social, fiscal, and budgetary proposals are conceived for a British government, and the space devoted to international matters is relatively limited. For instance, he briefly brings up the idea of a minimum tax on large multinational corporations but then the possibility of such a tax is remanded to the category of “ideas to pursue,” not solid proposals. In view of the central part played by the United Kingdom in European tax competition, as well as on the world map of tax havens, one might expect a more prominent treatment of proposals for the establishment of common taxation on profits, or the development of a worldwide registry—or at least a Euro-American one—of financial securities. Atkinson clearly alludes to such issues as well as the creation of a “World Tax Authority,” and the possible increase of international aid to 1 percent of GDP. But they are given less attention than the strictly British proposals.

This same criticism, however, also constitutes the book’s main strength. Basically, Atkinson is telling us that timorous governments have no real excuse for inaction, because it’s still possible to act on a national basis. The heart of the plan of action that Atkinson sets forth could be implemented in Britain without bothering to wait for elusive prospects of international cooperation. For that matter, they could also be adapted and applied to other countries.

No doubt, reading between the lines, we can glimpse a certain disenchantment on Atkinson’s part with the European Union, though he reminds us that he has been a longtime supporter of that institution, especially when the United Kingdom joined in 1973. In that era, he reminds us, many member states called into question the financing of the British welfare state (especially the National Health Service) through taxes. This was seen as an unacceptable form of competition by those countries where the cost of the welfare state rested on employers. A substantial proportion of the British left at the time saw in Europe and its obsession with “pure and perfect” competition a force that was hostile to social justice and the politics of equality. “At the time, these suspicions were not justified,” Atkinson tells us. He seems to want to add that they might be more so nowadays, but he never quite goes that far, because he wants to keep the flame of hope for the European Union alive. This is a book written by an optimist and a citizen of the United Kingdom, Europe, and the world: the broad sense it conveys of a more just economy is one of its many appealing qualities. It will stand as a model whatever the outcome of one election or another.

—Translated from the French by Antony Shugaar

 

See: http://readersupportednews.org/opinion2/277-75/30617-focus-a-practical-vision-of-a-more-equal-society

Awful: Wages Dropped for Almost All American Workers in First Half of 2014

The last year has been a bad one for people who work for a living.

Source: AlterNet

Author: Lynn Stewart Paramore

Emphasis Mine

 Think your money’s not going very far this year? It’s not your imagination. According to new research by the Economic Policy Institute, real hourly wages declined for almost everybody in the U.S. workforce in the first half of 2014. Thanks, so-called recovery.

Economist Elise Gould pored over data from the government’s Current Population Survey and determined that workers at the 20th, 30th, 40th, 50th, 60th, 70th, 80th, 90th, and 95th percentiles all saw declines in their real wages in the first half of 2014 compared with the same period last year. This was true whether you had no high school degree, a high school diploma, some college, a college degree, or an advanced degree. In fact, people with advanced degrees saw the biggest drop (2.7 percent).

EPI reveals this isn’t just a blip. Real wages dropped 4.9 percent for workers with a high school degree and 2.5 percent for workers with a college degree from the first half of 2007 to the first half of this year.

Gould explains in the report that “the last year has been a poor one for American workers’ wages.” She states that “on the whole, the broad wage trends by education level over the last decade and a half make clear that wage inequality cannot be readily explained by stories about educational credentials and technology; wage inequality has increased steadily, yet even those with a college diploma or advanced degree have experienced lackluster wage growth.”

Gould adds, “It’s an indication of the fact that no one — not even educated workers — is able to bargain for anything.” Employers have the power and they are using it to pay their workers less.

The only workers who saw real wages go up over the past year were workers at the10th percentile of income, but only two cents an hour, from $8.36 an hour to $8.38. Two pennies! Don’t spend it all in one place. That paltry increase happened because of minimum wage increases in 13 states. The lack of wage growth harms society and the economy in a whole host of ways. When workers don’t have enough money in their pockets to spend on goods and services, businesses can’t hire and they fail, which increases unemployment. Unable to keep up with the growing expenses of things like healthcare and college tuition, the middle class shrinks. For those less well off, life becomes a daily struggle for survival. The increasing gap between the very rich and everyone else produces a wide range of social ills, from mental illness to addiction to chronic diseases. The social fabric becomes unraveled.

Not a very promising reflection for Labor Day, is it?

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of “Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.” She received her Ph.D. in English and cultural theory from NYU. She is the director of AlterNet’s New Economic Dialogue Project. Follow her on Twitter @LynnParramore.

 

See:http://www.alternet.org/labor/awful-wages-dropped-almost-all-american-workers-first-half-2014?akid=12191.123424.yk2XIo&rd=1&src=newsletter1017648&t=4