Tag: inequality

Rising Inequality Is Far From Inevitable

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Source: American Prospect via Portside

Author:Robert Kuttner

Emphasis Mine

The latest study of deepening inequality by three of the most careful scholars of the subject, Thomas Piketty, Emmanuel Saens, and Gabriel Zucman, has prompted another round of shrugs [1] from economists that inequality is just in the nature of the advanced economy.

Supposedly, these inexorable trends reflect technology, globalization, and increasing rewards to more advanced skills. The poor are paid in correct proportion to their contribution to the national product, which alas, isn’t much.

A close look at political history suggests that this widespread inference is convenient nonsense—convenient to economic elites. In fact, the distribution of income and wealth has bounced around a lot in the past century and a half. It was extreme in the first Gilded Age of the late 19th century, a little less so in the Progressive Era, extreme again in the 1920s, and remarkably egalitarian in the period between the New Deal and the early 1970s—and now extreme again.

Does anyone seriously argue that these shifts reflected changes in technology or skills? No, they reflected changes in the political power to set the ground rules of capitalism. And that’s what should command our attention today.

The remarkable income equality of the postwar boom was built on a political transformation, which in turn allowed a suite of equalizing policies. It had little to do with shifts in the technical structure of the economy.

Most fundamentally, the power of finance was “repressed,” in the phrase of Harvard economists Carmen Reinhart and Kenneth Rogoff, both economically and politically. That in turn weakened both the ability of financial elites to capture such a large share of the total product, and to influence the rules of the game. Commercial banks and investment banks were tightly regulated, hedge funds and private equity were miniscule, and there were no complex synthetic financial products to enrich insiders, frustrate ordinary borrowers, or crash the system.

Trade unions were empowered, both by the Wagner Act of 1935, and more importantly by Roosevelt’s policies during the war, which made unions recognized partners in war production, and by extension partners in a broader social compact. Before corporations took the gloves off again, there was a brief era in which unions had broad legitimacy.

Unions, in turn, influenced wages, not just of their own members, who were about one third of the workforce in labor’s heyday during the ‘40s and ‘50s, but the structure of earnings and the terms of employment generally. Minimum wages were far higher in real terms.

In that era, the terms of globalization, created at the Bretton Woods Conference of 1944, deliberately created rules that allowed trade to expand, but not to destroy national social compacts. Bretton Woods was biased in favor of full employment economies and against the austerity that is newly fashionable and as perverse as ever.

All of this helps explain why the postwar era was a far more equal one than we have today. But what about skills? Well, the typical worker barely had a high school diploma—many did not—but one income was enough to support home ownership and a middle class standard of living. Despite low skills, the social compact of that era insisted on greater equality.

But can we ever get that back? Of course we can—the obstacles are political, not economic.

We could have much higher minimum wages. We could stop the union-bashing. We could restore a brand of globalization that promotes rather than undermines national social standards. We could invest massively in a green transition, modeled on the World War II mobilization that reduced unemployment from 14 percent to 2 percent in two years and produced tens of millions of good jobs.

As technology replaces human work, we could also give everyone a share of that new production, the way the Alaska Permanent Fund gives all Alaskans a share of that state’s oil revenues. Any advances created with the help of government—from subsidy of biomedical research to free-riding on the internet—could be subject to a share-the-wealth levy. Author Peter Barnes is the inspiration for this idea.

Is this broad vision crazy? It is far less crazy than the folly of supply-side economics that is back in fashion, which will only make America more needlessly unequal.

Will Donald Trump pursue any of these policies? Despite is fake populist rhetoric, he is on track to run the most corporate administration ever. Increasing inequality will follow.

Trump won, in part because previous Democratic administrations did not make living standards of ordinary working Americans a sufficiently high priority, either legislatively or on the ideology of what they stood for. Looking beyond Trump, that has to change.

Instead of accepting the counsels of despair, we should be reinventing the levers of the more equal economy and society that America once proudly displayed to the world.

Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at Brandeis University’s Heller School. His latest book is Debtors’ Prison: The Politics of Austerity Versus Possibility. He writes columns for The Huffington Post, The Boston Globe and the New York Times international edition.

 

See:https://portside.org/print/2017-01-06/rising-inequality-far-inevitable

Noble Bernie Sanders Defends Hillary From Trump’s Crude Woman-Hating Attacks

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Source: Occupy Democrats.com

Author: Colin Taylor

Emphasis Mine

It is said one must judge a man by how he treats his rivals, not his friends, and in this department Senator Bernie Sanders is once again setting the gold standard with his compassion and his civility,  a rare sight in the cut-throat and low-brow political elections our nation sees these days.

Donald Trump recently used a rally in Grand Rapids, Michigan, to have a misogynistic spasm where he insulted former Secretary of State Hillary Clinton for having normal biological functions and then using a gratuitous and wholly inappropriate term to describe her defeat to President Barack Obama in 2008. It showed for all the world to see , once again, what a crude and boorish buffoon he really is, and brought American politics to a low point from which we may never recover.

But Senator Sanders ignored the bad blood that the media has been trying to stir up over the past week’s brouhaha over voting data and stood up for Clinton during a speech in Council Bluffs, Iowa. Trump “has discovered that women go to the bathroom and it’s very upsetting for him!” mocked Sanders to a crowd of roaring college students. “He must have a very unusual relationship with women. I also went to the bathroom,” he said. “I’ve got to admit it.”

This is, of course, not the first time Trump has said reprehensibly offensive things to women; FOX anchor Megyn Kelly opened the first debate by asking him about the time he called women “fat pigs,” prompting a feud that would get ugly very quickly when Trump began insinuating that she was asking him tough questions because she was menstruating.

But with that said, Bernie returned to sharing the central message of his campaign that he has stuck with for the past thirty years – the need to rein in the disgusting level of income inequality and the power of multinational corporations who are slowly killing our middle class and making life harder for everyday Americans. It’s nice to know there’s still a gentlemen in this race.

See: http://www.occupydemocrats.com/noble-bernie-sanders-defends-hillary-from-trumps-crude-woman-hating-attacks/

10 Ways to Make The U.S. Economy Work for Everyone, By Bernie Sanders

A forthcoming book compiles Bernie’s words and solutions

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source: Chelsea Green  Publishing  via AlterNet

Author:Jonathan Tasini

Emphasis Mine

(This article is excerpted from The Essential Bernie Sanders and His Vision for America by Jonathan Tasini (Chelsea Green Publishing, September 2015) and is published here with permission of the publisher. The book will be available nationwide on September 8th, which is Sanders’ birthday. For more information.)

“What a lot of people are feeling [about Sanders] is that there is somebody speaking to their issues. I think that’s why you’re seeing so many people come out. People are sick and tired of corporate America, both Republican and Democrat.”

—Troy Jackson, a logger from Allagash and former majority leader of the Maine Senate

Everyone cares about how the government spends its money, especially people who embrace the idea that smart, progressive government is a force for good. From the time he was watching taxpayer money as mayor of Burlington right up through his service in the House and Senate, Bernie has always looked for the proper balance between, on the one hand, strong, effective programs that look out for the people and, on the other, financing those programs by asking people who earn more to pay their fair share.

Even before his current campaign for the White House, Bernie thought through, in ten easy steps, a plan to meet human needs by raising hundreds of billions of dollars from the wealthy and corporations, and by reducing wasteful spending. Not a single dime from the list below would come from working people. —J.T.

Ten Fair Ways to Reduce the Deficit and Create Jobs

At a time when we are experiencing more wealth and income inequality than at any time since the 1920s, and when Wall Street and large corporations are enjoying record breaking profits, I believe that we should be asking the very wealthiest people in this country to start paying their fair share of taxes. That way, we will not only lower the deficit but we will bring in enough revenue to invest in our economy and create the millions of new jobs we desperately need.

From both a moral and economic perspective, we must not balance the budget on the elderly, the children, the sick, working families, and the most vulnerable.

Here are 10 examples of how we can raise revenue and reduce spending in a fair way.

1. Stop corporations from using offshore tax havens to avoid U.S. taxes. Each and every year, the United States loses an estimated $100 billion in tax revenues due to offshore tax abuses by the wealthy and large corporations. The situation has become so absurd that one five-story office building in the Cayman Islands is now the “home” to more than 18,000 corporations.

The wealthy and large corporations should not be allowed to avoid paying taxes by setting up tax shelters in Panama, the Cayman Islands, Bermuda, the Bahamas or other tax haven countries. The first bill that I introduced in the Senate (the Corporate Tax Dodging Prevention Act) would raise more than $580 billion over the next decade by eliminating the most egregious corporate offshore tax haven abuses.

2. Establish a Robin Hood tax on Wall Street speculators. Both the economic crisis and the deficit crisis are a direct result of the greed and recklessness on Wall Street. Creating a speculation fee of just 0.03 percent on the sale of credit default swaps, derivatives, options, futures, and large amounts of stock would reduce gambling on Wall Street, encourage the financial sector to invest in the job-creating productive economy, and reduce the deficit by $352 billion over 10 years, according to the Joint Committee on Taxation.

3. End tax breaks and subsidies for big oil, gas and coal companies. If we ended tax breaks and subsidies for big oil, gas, and coal companies, we could reduce the deficit by more than $113 billion over the next ten years. The five largest oil companies in the United States have made over $1 trillion in profits over the past decade. ExxonMobil is now the most profitable corporation in the world. Large, profitable fossil fuel companies do not need a tax break.

4. Establish a Progressive Estate Tax. If we established a progressive estate tax on inherited wealth of more than $3.5 million, we could raise more than $300 billion over 10 years. [I] introduced the Responsible Estate Tax Act that would reduce the deficit in a fair way while ensuring that 99.7 percent of Americans would never pay a penny in estate taxes.

5. Tax capital gains and dividends the same as work. Taxing capital gains and dividends the same way that we tax work would raise more than $500 billion over the next decade. Warren Buffett has often said that he pays a lower effective tax rate than his secretary. The reason for this is that the wealthy obtain most of their income from capital gains and dividends, which is taxed at a much lower rate than work. Right now, the top marginal income tax for working is 39.6%, but the top tax rate on corporate dividends and capital gains is only 23.9%.

6. Repeal all of the 2001 and 2003 Bush tax breaks for the top two percent. In January, Congress finally repealed the Bush tax breaks for the top one percent—households making more than $450,000 a year. But the Bush tax breaks have been continued for the top two percent—households with incomes between $250,000 and $450,000 a year. Repealing the Bush tax breaks for all of the top two percent would reduce the deficit by about $400 billion over the next decade. After President Clinton increased taxes on the top two percent, the economy added over 22 million jobs. After President Bush reduced taxes for the rich, the economy lost over 600,000 private sector jobs.

7. Eliminate the cap on taxable income that goes into the Social Security Trust Fund. If we are serious about making sure that Social Security can pay all of the benefits owed to every eligible American for the next 50 to 75 years, we don’t do that by cutting benefits, we do that by scrapping the cap on taxable income so that a millionaire and a billionaire pay the same percentage of their income into Social Security as someone making $40,000 or $50,000 a year. Right now, someone who earns $113,700 a year pays the same amount of money in Social Security taxes as a billionaire. This makes no sense. Applying the Social Security payroll tax on income above $250,000 would ensure that Social Security remains solvent for the next 50 years. This plan would only impact the wealthiest 1.3 percent of wage earners; 98.7 percent of wage earners in the United States would not see their taxes go up by one dime.

8. Establish a currency manipulation fee on China and other countries. As almost everyone knows, China is manipulating its currency, giving it an unfair trade advantage over the United States and destroying decent paying manufacturing jobs in the process. If we imposed a currency manipulation fee on China and other currency manipulators, the Economic Policy Institute has estimated that we could raise $500 billion over 10 years and create 1 million jobs in the process.

9. Reduce unnecessary and wasteful spending at the Pentagon, which now consumes over half of our discretionary budget. Much of the huge spending at the Pentagon is devoted to spending money on Cold War weapons programs to fight a Soviet Union that no longer exists. Lawrence Korb, an Assistant Secretary of Defense under Ronald Reagan, has estimated that we could achieve significant savings of around $100 billion a year at the Pentagon while still ensuring that the United States has the strongest and most powerful military in the world.

10. Require Medicare to negotiate for lower prescription drug prices with the pharmaceutical industry. Requiring Medicare to negotiate drug prices, similarly to what the VA currently does, would save more than $240 billion over 10 years.

Bernie Facts:

• Bernie is a longtime critic of wasteful Pentagon spending and is pushing to save taxpayer money by cutting tens of billions of dollars from the military budget.

• Bernie has been perhaps the Senate’s most passionate voice for making sure corporations and the wealthy pay their fair share in taxes. The leading organizational advocate for fair taxes, Citizens for Tax Justice, says that in many cases Bernie “has been the lone voice in the Senate fighting for legislation that would ensure that corporations and the wealthy pay their fair share.”

• As part of his advocacy for a sane health care system, Bernie wants to enable Medicare to negotiate lower prices for drugs—which would save the country tens of billions of dollars.

is the National Writers Union president. For more information about the National Writer’s Union or its collective- licensing agency, Publication Rights Clearinghouse, visit .

See: http://www.alternet.org/election-2016/10-ways-make-us-economy-work-everyone-bernie-sanders?akid=13360.123424.5LRQLA&rd=1&src=newsletter1040491&t=3

Why America’s Inequality Problem Is About a Lot More Than Money

We have chosen our extreme inequality and all of its awful consequences.

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Source: AlterNet

Author: David Kay Johnson

Emphasis Mine 

Inequality is about much more than the growing chasm of income and wealth between those at the very top and everyone else in America. It’s also about education, environmental hazards, health and health care, incarceration, law enforcement, wage theft and policies that interfere with family life over multiple generations.

In its full dimensions, inequality shapes, distorts and destroys lives in ways that get little attention from politicians and major news organizations. How many of us know that every day 47 American babies die, who would live if only our nation had the much better infant mortality rates of Sweden?

“Poverty is not natural,” Nelson Mandela once said. “It is man-made and it can be overcome and eradicated by the actions of human beings.”

The man-made disparities between the rich and the poor are a threat to the liberties of the people. Plutarch, the Greco-Roman historian, observed more than 2000 years ago that, “an imbalance between rich and poor is the oldest and most fatal ailment of all republics.”

For more than two decades I have been documenting the widening gaps in income and wealth in America in articles, books and essays. My first few years of reports in the New York Times drew complaints from some readers who asserted I had no idea what I was doing and skepticism from more than a few editors. But I felt confident because the trends I distilled from the official data were clear and because the fine print in government rules — which few journalists ever read — revealed that Congress was creating a system that takes from the many to give to the already rich few.

While the passage of time has shown that I was right, I must confess I paid scant attention to something else very important: disparities in wealth and income are primarily symptoms of a insidious social disease. This is a national ailment we can cure, but only if we first understand the broad dimensions of the problem. With knowledge comes insight, focus and the power to effect change.

To make up for my own shortcoming I spent a very useful, if unprofitable year putting together a collection of essays on the broad dimensions of inequality and the terrible toll it takes on human lives. From stacks of books, academic papers and blogs I created an anthology for a little nonprofit publisher called The New Press, founded by the late André Schiffrin, one of the most important book publishers ever.

DIVIDED: The Perils of Our Growing Inequality comes out in paperback this week. My hope is that college professors and even high school teachers will use it to introduce young people to the full nature of inequality and what we can do to reduce it.

“American inequality didn’t just happen – it was created,” wrote Joseph Stiglitz, the Nobel Prize-winning economist who is among the 44 contributors. Their brief essays are intended to reduce a complex problem to easily digested pieces, all written in plain English.

Elizabeth Warren, Barack Obama, Barbara Ehrenreich, Paul Krugman, Steelworkers leader Leo Gerard, journalists Gary Rivlin and Neil deMause and scholars who are highly regarded in their fields like epidemiologist Ernest Drucker, education theorists Linda Darling-Hammond of Stanford and Mike Rose of UCLA, as well as physicians Olveen Carrasquillo, Mary E. O’Brien and Stephen Bezruchka are among the deeply informed who contributed chapters. Insights also come from the past: Plato, Adam Smith, Studs Terkel, the 19th-century reformer Henry George and the American president who called out “malefactors of great wealth,” Teddy Roosevelt.

Part of the problem with inequality is that our culture and our intellectual constructs obscure simple, verifiable facts. And those who benefit from inequality pay others to confuse us.

Biased to the Rich

Moshe Adler, who teaches economics at Columbia University, provided a chapter called “How Economics Is Biased Toward the Rich.”

Even people who have never taken an economics course can learn from Adler how neo-classical economics favors the haves over the have-not-enoughs.

What Adler shows certainly is not what I was taught between 1967 and 1975 when I studied economics and public policy at seven colleges including our most influential center for manufacturing economic policy, the University of Chicago. At best, suggestions of bias in economic theory got lip service.

The ways in which race impedes access to health care in America and the price of our “medical apartheid” are explained by Dr. Carrasquillo and by Jaime Torres, who founded Latinos for National Health Insurance, which advocates for a single-payer health care system.

Education is equally infected with discrimination, as Stanford University professor sean f. reardon (who does not use capital letters in his name) explains in a chapter called “No Rich Child Left Behind.”

In the last few decades, reardon shows, “differences in educational success between high-and lower-income students have grown substantially,” a disparity that those who are willfully blind to inequality try to explain away with clever arguments and by abusing the data.

Unable to find what I wanted about two issues, I wrote the chapters.

One asks why married men are not in the forefront of demanding equal pay for women, since most of them have working wives. Nonprofit tax filings show that gender discrimination in pay in the same position is not only verifiable, but gets progressively worse as organizations grow in size.

The other chapter puts in simple language the painful cost of our inefficient non-system of sick care versus a modern health care system.

America could have eliminated the federal income tax in 2010 if we had spent the same and much smaller share of our economy on health care as France and Germany. Those countries provide very different systems, but both provide universal care and are among the best in the world.

The next time you look at your paycheck, think about what could be if we had a universal, single-payer health care system providing top-quality care with little or no out-of-pocket expense. You could have kept all the income taxes you paid in 2012. Today we could end the income tax for all except the top 2 percent just from reducing health care costs.

Let’s Face the Music

The awful truth is this: Americans have chosen our extreme inequality and all of its awful consequences in the politicians we elected in the last 35 years. We can make better choices, not that it will be easy, but then nothing that really matters ever is.

Presidents John Adams and James Madison (the primary author of our Constitution) warned us that what would doom our experiment in democracy was not a foreign invader, but economic inequality and its consequences.

Adams, living in an agrarian age, feared that “monopolies of land” would destroy the nation. He foresaw a business aristocracy born of inequality and legions of workers with no assets who just lived on their wages. The business aristocrats, he predicted, would manipulate voters, creating “a system of subordination to all… [by] the capricious will of one or a very few.”

Adams also warned that “the rich and the proud” would wield such economic and political power that it “will destroy all the equality and liberty, with the consent and acclamations of the people themselves.”

Madison thought extreme inequality evil, saying government should prevent “an immoderate, and especially unmerited, accumulation of riches.” He favored “the silent operation of laws which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigents towards a state of comfort.”

Even Alexander Hamilton, who championed business while serving as the first Treasury secretary, said in 1782 that widespread ownership of assets was crucial because “whenever a discretionary power is lodged in any set of men over the property of their neighbors, they will abuse it.”

We live in the second American Republic under a Constitution adopted to ensure the power to tax and regulate commerce. It is based on six noble principles listed in the preamble including the duty of government to “promote the general Welfare.” (That capital W is in the original.)

We can choose better. Indeed, we can solve any problem we have if we choose to and do the work. We got rid of slavery (at a cost of at least 638,000 lives). Women got the right to vote after eight decades of struggle. More than a century ago we got child labor laws despite the clergymen who fought against them. We won, but are now losing, worker protection laws, a woman’s right to control her body and reliable pensions.

Understanding is the first step toward change, toward moving closer to our ideals of liberty, equality and happiness. I created Divided so we could understand where we are and how we got here. That knowledge can then empower us to make a better America.

See: http://www.alternet.org/hard-times-usa/why-jon-stewart-walked-away-new-behind-scenes-details-daily-show-abdication?akid=13352.123424.onHRay&rd=1&src=newsletter1040341&t=5

Robert Reich: There’s a Revolt Against the Ruling Class Brewing — Elites Don’t See It Coming

In two very different ways, Trump and Sanders are agents of this revolt.

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Source: AlterNet, RobertReich.org

Author: Richard Reich

Emphasis Mine

“He can’t possibly win the nomination,” is the phrase heard most often when Washington insiders mention either Donald Trump or Bernie Sanders.

Yet as enthusiasm for the bombastic billionaire and the socialist senior continues to build within each party, the political establishment is mystified.

They don’t understand that the biggest political phenomenon in America today is a revolt against the “ruling class” of insiders that have dominated Washington for more than three decades.

In two very different ways, Trump and Sanders are agents of this revolt. I’ll explain the two ways in a moment.

Don’t confuse this for the public’s typical attraction to candidates posing as political outsiders who’ll clean up the mess, even when they’re really insiders who contributed to the mess.

What’s new is the degree of anger now focused on those who have had power over our economic and political system since the start of the 1980s.

Included are presidents and congressional leaders from both parties, along with their retinues of policy advisors, political strategists, and spin-doctors.

Most have remained in Washington even when not in power, as lobbyists, campaign consultants, go-to lawyers, financial bundlers, and power brokers.

The other half of the ruling class comprises the corporate executives, Wall Street chiefs, and multi-millionaires who have assisted and enabled these political leaders — and for whom the politicians have provided political favors in return.

America has long had a ruling class but the public was willing to tolerate it during the three decades after World War II, when prosperity was widely shared and when the Soviet Union posed a palpable threat. Then, the ruling class seemed benevolent and wise.

Yet in the last three decades — when almost all the nation’s economic gains have gone to the top while the wages of most people have gone nowhere –– the ruling class has seemed pad its own pockets at the expense of the rest of America.

We’ve witnessed self-dealing on a monumental scale — starting with the junk-bond takeovers of the 1980s, followed by the Savings and Loan crisis, the corporate scandals of the early 2000s (Enron, Adelphia, Global Crossing, Tyco, Worldcom), and culminating in the near meltdown of Wall Street in 2008 and the taxpayer-financed bailout.

Along the way, millions of Americans lost their jobs their savings, and their homes.

Meanwhile, the Supreme Court has opened the floodgates to big money in politics wider than ever. Taxes have been cut on top incomes, tax loopholes widened, government debt has grown, public services have been cut. And not a single Wall Street executive has gone to jail.

The game seems rigged — riddled with abuses of power, crony capitalism, and corporate welfare.

In 2001, a Gallup poll found 77 percent of Americans satisfied with opportunities to get ahead by working hard and 22 percent dissatisfied. By 2014, only 54 percent were satisfied and 45 percent dissatisfied.

The resulting fury at ruling class has taken two quite different forms.

On the right are the wreckers. The Tea Party, which emerged soon after the Wall Street bailout, has been intent on stopping government in its tracks and overthrowing a ruling class it sees as rotten to the core.

Its Republican protégés in Congress and state legislatures have attacked the Republican establishment. And they’ve wielded the wrecking balls of government shutdowns, threats to default on public debt, gerrymandering, voter suppression through strict ID laws, and outright appeals to racism.

Donald Trump is their human wrecking ball. The more outrageous his rants and putdowns of other politicians, the more popular he becomes among this segment of the public that’s thrilled by a bombastic, racist, billionaire who sticks it to the ruling class.

On the left are the rebuilders. The Occupy movement, which also emerged from the Wall Street bailout, was intent on displacing the ruling class and rebuilding our political-economic system from the ground up.

Occupy didn’t last but it put inequality on map. And the sentiments that fueled Occupy are still boiling.

Bernie Sanders personifies them. The more he advocates a fundamental retooling of our economy and democracy in favor of average working people, the more popular he becomes among those who no longer trust the ruling class to bring about necessary change.

Yet despite the growing revolt against the ruling class, it seems likely that the nominees in 2016 will be Jeb Bush and Hillary Clinton. After all, the ruling class still controls America.

But the revolt against the ruling class won’t end with the 2016 election, regardless.

Which means the ruling class will have to change the way it rules America. Or it won’t rule too much longer.

Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama’s transition advisory board. His latest book is “Aftershock: The Next Economy and America’s Future.” His homepage is www.robertreich.org.

 

See: http://www.alternet.org/election-2016/robert-reich-theres-revolt-against-ruling-class-brewing-elites-dont-see-it-coming?akid=13352.123424.onHRay&rd=1&src=newsletter1040341&t=3

Robert Reich: The Wealthy Have Pulled America Back to the 19th Century

Wall Street and enormously rich individuals have gained political power to organize the market in ways that leave most Americans behind.

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Source: AlterNet

Author: Robert Reich

N.B.: Marx: correct in the 19th century, and still correct today.

Emphasis Mine

My recent column about the growth of on-demand jobs like Uber making life less predictable and secure for workers unleashed a small barrage of criticism from some who contend that workers get what they’re worth in the market.

A Forbes Magazine contributor, for example, writes that jobs exist only  “when both employer and employee are happy with the deal being made.” So if the new jobs are low-paying and irregular, too bad.

Much the same argument was voiced in the late nineteenth century over alleged “freedom of contract.” Any deal between employees and workers was assumed to be fine if both sides voluntarily agreed to it.

It was an era when many workers were “happy” to toil twelve-hour days in sweat shops for lack of any better alternative.

It was also a time of great wealth for a few and squalor for many. And of corruption, as the lackeys of robber barons deposited sacks of cash on the desks of pliant legislators.

Finally, after decades of labor strife and political tumult, the twentieth century brought an understanding that capitalism requires minimum standards of decency and fairness – workplace safety, a minimum wage, maximum hours (and time-and-a-half for overtime), and a ban on child labor.

We also learned that capitalism needs a fair balance of power between big corporations and workers.

We achieved that through antitrust laws that reduced the capacity of giant corporations to impose their will, and labor laws that allowed workers to organize and bargain collectively.

By the 1950s, when 35 percent of private-sector workers belonged to a labor union, they were able to negotiate higher wages and better working conditions than employers would otherwise have been “happy” to provide.

But now we seem to be heading back to nineteenth century.

Corporations are shifting full-time work onto temps, free-lancers, and contract workers who fall outside the labor protections established decades ago.

The nation’s biggest corporations and Wall Street banks are larger and more potent than ever.

And labor union membership has shrunk to fewer than 7 percent of private-sector workers.

So it’s not surprising we’re once again hearing that workers are worth no more than what they can get in the market.

But as we should have learned a century ago, markets don’t exist in nature. They’re created by human beings. The real question is how they’re organized and for whose benefit.

In the late nineteenth century they were organized for the benefit of a few at the top.

But by the middle of the twentieth century they were organized for the vast majority.

During the thirty years after the end of World War II, as the economy doubled in size, so did the wages of most Americans — along with improved hours and working conditions.

Yet since around 1980, even though the economy has doubled once again (the Great Recession notwithstanding), the wages most Americans have stagnated. And their benefits and working conditions have deteriorated.

This isn’t because most Americans are worth less. In fact, worker productivity is higher than ever.

It’s because big corporations, Wall Street, and some enormously rich individuals have gained political power to organize the market in ways that have enhanced their wealth while leaving most Americans behind.

That includes trade agreements protecting the intellectual property of large corporations and Wall Street’s financial assets, but not American jobs and wages.

Bailouts of big Wall Street banks and their executives and shareholders when they can’t pay what they owe, but not of homeowners who can’t meet their mortgage payments.

Bankruptcy protection for big corporations, allowing them  to shed their debts, including labor contracts. But no bankruptcy protection for college graduates over-burdened with student debts.

Antitrust leniency toward a vast swathe of American industry – including Big Cable (Comcast, AT&T, Time-Warner), Big Tech (Amazon, Google), Big Pharma, the largest Wall Street banks, and giant retailers (Walmart).

But less tolerance toward labor unions — as workers trying to form unions are fired with impunity, and more states adopt so-called “right-to-work” laws that undermine unions.

We seem to be heading full speed back to the late nineteenth century.

So what will be the galvanizing force for change this time?

Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama’s transition advisory board. His latest book is “Aftershock: The Next Economy and America’s Future.” His homepage is www.robertreich.org.

 

See: http://www.alternet.org/robert-reich-wealthy-have-pulled-america-back-19th-century

What Recovery? You Probably Became Poorer In the Last 10 Years

From 2003-2013, ordinary Americans lost a third of their wealth.

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Source: AlterNet

Author: Lynn Stuart Parramore

 You sense it when you look at your retirement account. You feel it when the bills come in. According to new research supported by the Russell Sage Foundation, your instinct is right: you are very likely getting poorer.

For the study, researchers gathered information on families in the middle of the wealth distribution continuum. What they found is that in 2003, the inflation-adjusted net worth for the typical household was $87,992. Fast-forward 10 years: that figure is down to a mere $56,335.

Ordinary Americans got 36 percent poorer in just a decade.

The Great Recession and the bursting of the housing bubble did their damage, but a long list of additional factors have helped funnel money out of the hands of regular Americans and into the pockets of the rich, including deregulation, high unemployment and job insecurity, the shareholder value trend in which corporations focus on manipulating stock prices while throwing workers under the bus, the reduced influence of unions, the shredding of the social safety net, privatization, and tax structures which favor the rich.

And once the inequality train leaves the station, it only gathers speed until something stops it. As Thomas Piketty has recently emphasized, the rich get richer faster than you and me because of the rate of return on their wealth.

Underlying all of this is the spread of faulty economic thinking throughout academia, political circles and the mainstream press. Neoclassical economics, or so-called free-market ideology, essentially serves as the official justification for inequality, promoting mythologies about the rich as the great job creators (when they are actually job destroyers), the presumed benefits of inequality such as innovation (check the Scandinavian countries to debunk that one, where innovation thrives but inequality does not), and a host of similar nonsense.

The upshot is that regular people have endured one of the worst periods in recent memory. It will not surprise you to learn that during the same decade of 2003-2013, the rich were partying down. In the 95th percentile of wealth distribution, people got 14 percent richer.

To put all this in perspective, let’s take a look at another 10-year period, from 1937 to 1947. This decade witnessed something called the “Great Compression,” when income inequality in America plunged. The tax structure was addressed so that the rich paid their share, unions became a powerful force and regulation helped stabilize the financial sector and corporate America. Workers won protections and America’s middle-class blossomed and Americans enjoyed a period of low inequality for the next three decades.

By the 1970s, what’s known as the “Great Divergence” kicked off, with the rich gradually gobbling up more and more of the country’s wealth.

The authors of the Russell Sage study do not have much hope that America’s wealth disparity will get better any time soon: “The American economy has experienced rising income and wealth inequality for several decades, and there is little evidence that these trends are likely to reverse in the near term.”

As we can see from the Great Compression, it doesn’t have to be this way. Things won’t get better on their own, however: Inequality needs an intervention.

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.

Emphasis Mine

See:http://www.alternet.org/economy/what-recovery-you-probably-became-poorer-last-10-years?akid=12061.123424.FdFn1w&rd=1&src=newsletter1013200&t=5Lynn Stuart Parramore