The Politics Of Income Inequality
Most Americans think that income inequality is a problem, but they don't all agree on what to do about it.
According to a new poll, Americans say that they are concerned about income inequality, but it’s unclear if that will have any impact on political races going forward:
Americans are broadly concerned about inequality of wealth and income despite an economy that has improved by most measures, a sentiment that is already driving the 2016 presidential contest, according to a New York Times/CBS News poll.
The poll found that a strong majority say that wealth should be more evenly divided and that it is a problem that should be addressed urgently. Nearly six in 10 Americans said government should do more to reduce the gap between the rich and the poor, but they split sharply along partisan lines. Only one-third of Republicans supported a more active government role, versus eight in 10 of Democrats.
These findings help explain the populist appeals from politicians of both parties, but particularly Democrats, who are seeking to capitalize on the sense among Americans that the economic recovery is benefiting only a handful at the very top.
Far from a strictly partisan issue, inequality looms large in the minds of almost half of Republicans and two-thirds of independents, suggesting that it will outlive the presidential primary contests and become a central theme in next year’s general election campaign.
“There is a small group of people in our country who own or control a vast majority of the wealth,” Stephanie Alteneder, 28, a Democrat and a high school teacher from Los Angeles, said in a follow-up interview. “There are a lot of systems set up so that the people who have money get to make more of it.”
The percentage of Americans who say everyone has a fair chance to get ahead in today’s economy has fallen 17 percentage points since early 2014. Six in 10 Americans now say that only a few people at the top have an opportunity to advance.
(…)
Seven in 10 Americans support an increase in the federal minimum wage to $10.10 from $7.2″People have to get a high school education and they have to go to college as well, and then they go out there and can only get a low-paying job,” said Betty Burgess, 70, a retired textile worker from Lincolnton, N.C., who is a Republican. 5 an hour, although Republicans are about evenly divided on the question.
Americans were also skeptical of free trade. Nearly two-thirds favored some form of trade restrictions, and more than half opposed giving the president authority to negotiate trade agreements that Congress could only vote up or down without amending, a White House priority.
Still, it was Americans’ views on the distribution of money and opportunity in the country that were most striking. More than half of higher-income Americans said that money and wealth should be more evenly distributed. Across party lines, most Americans said the chance to get ahead was mainly a luxury for those at the top.
“People have to get a high school education and they have to go to college as well, and then they go out there and can only get a low-paying job,” said Betty Burgess, 70, a retired textile worker from Lincolnton, N.C., who is a Republican.\
(…)
The poll also included a variety of intriguing findings about what Americans think should be done to reduce inequality.
Six in 10 Americans opposed requiring fast-food chains and other employers of hourly workers to raise wages to at least $15 an hour, the aim of a two-and-a-half year nationwide campaign led in part by a major union. (On Tuesday, Francis Slay, the mayor of St. Louis, threw his weight behind an effort to gradually raise the minimum wage there to $15 an hour by 2020, following similar moves in Los Angeles, San Francisco and Seattle in recent years.)
When asked about the other end of the income spectrum, two-thirds of Americans favored raising taxes on people with annual salaries exceeding $1 million. By 50 to 45 percent, they favored capping the income of top executives at large corporations, a measure that more than one-third of Republicans supported as well.
On some level at least, this result isn’t entirely surprising. It’s no secret that political messages that tap into economic anxiety and the perceived unfairness of people who make tremendous amounts of money, quite often thanks to sweetheart deals with government officials and legal protections for activity that at leas seems dishonest on the surface, can be successful. We can see that can of argument in American political rhetoric going all the way back to the Founding Era, and most especially at times of great economic dislocation such as during the late 19th Century and the Great Depression. It was one of the primary messages behind political movements ranging from the Jacksonian Democrats and the anti-immigration Know Nothings to the Populist and Progressive movements, and it still holds great force today although it manifests itself differently in each of the two major political parties. In today’s era, it’s a theme that can be found in the rhetoric of Elizabeth Warren and Bernie Sanders and, in different ways, in the messages you hear from Republicans like Rick Santorum, who based much of his 2012 campaign for the Republican nomination on a populist message that should have sent warning signs to the Republicans getting ready to put Mitt Romney at the top of their ticket. We are likely to see several candidates in both major parties hit on these issues as the 2016 Presidential campaign moves forward.
When looking at a poll result like this, though, it’s important to keep in mind what it doesn’t tell us as much as what it does tell us. The poll tells us, for example, that Americans consider income inequality to be a series issue, and that they believe that the cards are stacked against average Americans in the economy. What it doesn’t tell us, though, is how important this issue is to voters and how much it will influence them when the election rolls around. In the end, the most important economic question that individual voters ask themselves before they vote is whether they believe that one candidate or the other will be the one that most helps their own individual situation, not what might be best for the nation as a whole or for some anonymous group of people at the lower end of the economic question. The candidate that wins, usually, is the candidate that’s best able to connect on that personal level rather than the one who tries to turn his or her campaign into a crusade for some abstract economic principle like “income inequality.” Additionally, as the fact that most Americans oppose laws raising the minimum wage to $15 per hour suggests, the fact that the public agrees that something like “income inequality” is a problem doesn’t mean they’re going to support every policy proposal that would supposedly combat it.
Americans are concerned about “income inequality,” then, because it’s an issue that is reflective of their own concerns about their personal economic position and their children’s future. This poll is far from being the victory for progressive ideas that some observers will likely attempt to claim it to be.
You’re nuts.
Your analysis like your sub-header is ridiculous.
Uh, yeah they do agree. They want to raise the minimum wage, raise taxes on rich people, and limit CEO salaries. All three are excellent suggestions.
This is a huge subterranean issue that is about to break out. Thank you, Occupy. Hillary will have no choice but to make it a major element of her platform. She’ll tie it to “women’s” issues like equal pay and child care.
The libertarian dream is dead, Doug. Libertarianism is as outdated as Marxism-Leninism. The future is trending socialist.
You have somehow managed to completely miss the critical shift from “Gee, it’s not fair that some people have more stuff than others” to “Extremely unequal distribution of wealth, like we are seeing again in the US, is bad for the economy — and thus bad for everyone in the long run”.
When the comfortable sane fiscal responsibility Republicans are coming to believe that wealth inequality is a serious issue, it’s not about populism or envy any more.
@DrDaveT:
A man sees what he wants to see and disregards the rest, if I may misuse Paul Simon.
68% want to raise taxes on people earning over a million. 66% want a more even distribution of wealth. 57% want the government to do something about it. 71% want a $10.10 minimum wage. 74% think big business has too much power. Support for mandatory parental leave and paid sick leave break 80%.
And yet opinion is muddled, and unclear and what exactly are they saying? Hmm, let me just check my Magic 8 Ball.
2/3 of Americans are deeply concerned, want government to do more, and they want to start by raising taxes and minimum wage. That’s really pretty clear.
@michael reynolds:
The problem is that a good portion of the public supports a higher minimum wage, etc., but also oppose any Democratic efforts to do just that. They’ll vote for the GOP candidate who opposes the existence of the minimum wage and at the same time vote to increase the minimum wage.
A lot of the support in your 70% will quickly evaporate as soon as actual policies are proposed and the conservative entertainment complex reminds the GOP partisans what their positions really are.
What’s the evidence for this otherwise vague, unsubstantiated, and fact-free claim?
@David M:
“A lot of the support in your 70% will quickly evaporate as soon as actual policies are proposed and the conservative entertainment complex reminds the GOP partisans what their positions really are.”
I wish somebody with the analytic and storytelling skills of Robert Putnam would study this phenomenon. The last time I visited my home town, a bustling metropolis with six traffic lights, up from three when I was in high school in the early 50’s, I was bombarded with Tea Party rhetoric coming from people without the proverbial pot to piss in. I have a strong feeling that supporting the GOP line on social welfare policy is important emotionally to many people with modest means. I don’t know why, and I wish somebody could explain it in terms I can understand.
@Stan:
It’s not hard to understand. It’s the same phenomenon that had Soviets praising Stalin even as he rounded them up for the firing squad, or convinces poor white Southerners to fight for the slave owners who keep them trapped in misery: most people are naturally subservient. Most people want to be led. And they look to some version of aristocracy to do the leading. In this country the rich are the aristocrats. So the peasants want better pay, but they also want to tug their forelocks and obey.
However, this phenomenon, while present in older people and particularly in poorly-educated people, is I believe much less prevalent in rising populations.
So, in this case, I don’t believe support will fade. On the contrary, I expect it to grow.
@Stan: Anybody remember who to credit with this explanation?
Half the electorate would cheerfully live in a packing crate cooking pigeons over an open fire with a curtain rod spit as long as they know the Black guy in the packing crate down the road doesn’t even have a curtain rod.
As Corey Robin points out, for them the important thing about a hierarchy isn’t who’s above them, but that there be somebody below them.
@michael reynolds: I disagree, not about Soviet citizens praising Stalin, but about many American working and middle class men. I think their need to be self-reliant is important, perhaps more important than their material needs. Placed in Walter Whites’s situation, they’d rather peddle dope than accept charity. But I’m just guessing. That’s why I wish some scholar without an ax to grind would study the phenomenon.
Why the scare quotes on ‘income inequality’? It is not a difficult, abstract concept. Or are you trying imply that’s not real – a left wing version of Fox talking points? The data contradicts you if that’s the case.
Possibly it’s right to be cynical as to whether voters will consider it a motivating issue, but it is important. Historically, republics do not survive the sort of disparity between richest and poorest that we are seeing. In fact, even authoritarian govts often fall when you start getting too many people far at the bottom who see no hope of anything better for themselves or their children. So when you read something like “Across party lines, most Americans said the chance to get ahead was mainly a luxury for those at the top.” you should be worried.
“We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”
—Supreme Court Justice Louis Brandeis
@bookdragon: Interesting that you quote Brandeis, who was alive and working during the last time (late 1800s, early 1900s) there was a great gap between rich and poor and, as a result, he supported progressive policies.
And it is more than just wages. People are finding benefits being squeezed whether it be retirement pensions, healthcare, sick leave, working hours etc. People are finally waking up to the fact that managing your own pension (401K), being given Paid Time Off rather than sick leave, flex time, etc is not giving you more freedom but tying you into a system of less benefits and infinite worry. We need to remember that of the Four Freedoms, Freedom from Want and Freedom from Fear are just as important as Freedom of Speech and Religion.
I just happened to have recently reread “The Proud Tower” by Barbara Tuchman which surveyed the world scene in the decade prior to WWI. Vast income and wealth inequality, horrific working conditions, extreme patriotism and exceptionalism were all part of the international milieu. There were enough parallels with today and you would sit up and say “hmm”.
Will today follow the same pattern? I don’t know. As far as a return to progressive policies, I hope so. Return to world war, I hope not!
My stance has always been that strongly progressive taxation is insurance for the rich against getting dragged out and hanged from lampposts.
But of course, they think that it will never happened to them. Louis XVI wrote in his diary the day the Bastille fell: “Nothing much happened today.”
A favorite from 2011, how Americans would want wealth to be distributed, how they perceive it to be distributed, and how it ACTUALLY is distributed.
They think that the top 20% have about 60% of the wealth and think that they should only have about 30% of the total wealth, but the top 20% actually have about 85%.
They think that the bottom 20% have about 4% of the wealth and think that they should have about 10% of the total wealth, but the bottom 20% actually have less than 1%.
They think the middle 60% have about 40% of the wealth and think they should have about 60% of the total wealth, but the middle 60% actually only have 15% of it.
So while they are concerned about inequality, they are also totally clueless.
And to whom does on go to get their fair share of this evenly divided wealth? Pet peeve, I hate passive voice in writing.
With the exception a a very small minority, 99% of the wealthy have EARNED that wealth and should be permitted to do with it what they will.
@Jack: Doing a quick Google search, apparently the issue of inherited vs earned wealth is not that easy to figure out.
But here is one site: http://moneytipcentral.com/self-made-vs-inherited-billionaire-fortunes
It shows about 31% of US wealth is inherited. Not too bad compared to Europe.
I’m sure there is other statistics out there to debate over.
And, of course, there is the debate whether policies, tax or otherwise, fairly or unfairly tilt the playing field. And whether it should be tilted one way or another.
@Stan:
To clarify, I think their need TO SEE THEMSELVES AND BE SEEN as self-reliant, rather than actually being self-reliant, is what’s most important.
It’s their self-image, not their reality, that anchors them. That’s why the greatest calls for self-reliance echo from Western farmers and ranchers and oil men whose whole income basically derives from cashing farm subsidy checks and living off federal land and water and mineral leases. That’s wy there’s no more rugged individualist than a retiree who’s spent his whole career in the US military or a union police job and who now lives off his government provided pension and disability and Social Security.
@Jack:
Whether or not they have earned it really doesn’t have any bearing on the issue.
@Jack:
A guy I know earned about $2.5 billion — yes, with a “b” — last year. How exactly do you earn that?
@Rafer Janders:
Heh, there’s someone on the thread who resembles that.
Highest food stamp using states?
The county in the USA with the highest food stamp use?
Anyone see a pattern? Looking at this, it’s hard not to shout, “Wake up, sheeple!”
All this proves to me is the power of right wing propoganda to convince working class people to vote against their interest. That has to be broken before we see true progress
Please free my comment from moderation, thx.
@Stan:
They wish. In actuality, placed in Walter White’s situation, they’d accept charity, claim it wasn’t actually charity because they earned their benefits,damnit, and then rail against all the poor people and blacks who are unfairly taking so much charity that there’s not enough left for hardworking and deserving people like themselves.
@Jack:
So, high inheritance taxes on large estates, so people who haven’t EARNED their wealth would be good? Ok, it’s a start.
@Gustopher:
It seems a little contradictory for someone to oppose the minimum wage, parental leave, sick time, etc because they haven’t “earned it”.
@James P:
Actually I’m one of the people who’d be paying those taxes.
@Jack: http://www.forbes.com/families/list/#tab:overall
Notice something about that list? The majority of these families made it big a generation or two (sometimes farther) before.
Meaning unless you’re a complete idiot being born into one of these families means you’re going to be rich beyond the wildest dreams of 99% of the USA. The only thing they did to “achieve” this was to be born.
Donald Trump is a classic example of how you can’t fail as a rich person as long as you have connections from daddy or mommy. I mean seriously Trump managed to go bankrupt while running a casino. I can’t remember what the other bankruptcies were over. If some nobody schmuck had been in Trumps place they would of ended up truly broke.
I can’t remember where I saw it, but there was a recent study where the poor achievers from rich families are more likely do well than overachievers from poor families. Kind of blows a hole in the conservatives claims on this issue.
@Jack:
Hey Jack, some data:
The rich for the most part make the money the old fashioned way: they inherit it, then invest it..
@James P:
@James P:
You do know that social-economic mobility in the US is nothing compared to the social-economic mobility in the socialist hell holes of Denmark, Norway, Finland, and Sweden, Germany, and Canada?
That is, the American Dream(tm) is dead.
If a man or woman born poor in the US wants to become a millionaire he or she better move to Copenhagen first.
Better hold off on that trip to Europe to make your fortune!
According to Robert Frank CBC:
America may have a dysfunctional political system, but it continues to lead the world in significant wealth creation.
A new report from Credit Suisse shows that 1.7 million of the 1.8 million millionaires added to the ranks in the past year were created in the U.S., which now boasts 13.2 million millionaires. Rising stock markets, the housing rebound and a broader increase in asset values have fueled the surge.
@mannning:
That’s kind of the point. The economy is improperly tilted to advantage the 1%, and needs a serious correction.
@mannning:
Did you read the article and think beyond the absolute numbers?
Here’s a clue, the US has a higher population, including a higher population of millionaires.
Percentage-wise, the number of millionaires in the US increased by 14.58% between the year 2012 and 2013.
In the same time, the number of millionaires increased by 24.63% in the socialist hellhole of Sweden.
16.45% in Belgium, 14.92% in France, 14.60% in Germany.
So, they all did better than the US while also having better safety nets, free health care, free education, lower income inequality, etc.
So, the number of millionaires in Europe is quite close to the number in the US, while, again, still having better safety nets and a higher chance for social-economic mobility…
@mannning:
And while we are at it, that report isn’t new, there’s one that’s newer.
Between 2013 and 2014:
The number of millionaires in the US increased by 13%.
During the same time, the number of millionaires in Germany increased by 14%, in France by 14.5%, in Italy by 15.6%, in Spain by 23.7%, and in the UK by 30.5%.
Now, the social-economic mobility in the UK is as bad as it is the US, but the conservatives are now planning to make the NHS a seven day service. So, clearly a socialist hellhole, Margaret Thatcher must be rotating in her grave…
@Jack:
I’m starting to believe that this is the key lie that answers Stan’s question up above .
We went through this in a recent thread.
What counts as EARNED for you? If someone else (like a parent) pays for my college, and I become an engineer or surgeon or attorney, is my wealth earned? If I inherit $100,000 in a trust fund, and passively let it grow to $2M by the time I’m 45 (and $5M by the time I’m 60), did I earn that?
If your definition of EARNED is “starting with what people in the bottom quintile typically have, made it to the top quintile by legal means”, you’ll find that your 99% number is about two orders of magnitude too high. Most wealth is the compounded interest on inheritance. This is obvious if you just look at the arithmetic of compounding — it’s very difficult to NOT turn a lot of money into orders of magnitude more money. You’d have to be a compulsive gambling cokehead who keeps his money in a mattress. The proceeds from last generation’s wealth will always dominate newly-created wealth.
@Rafer Janders:
Mow an unbelievable number of lawns?
@Jack:
The modal member of the 1% is either a doctor, or a financial services person. After 2008, the absurdity of the position tha the latter earn their money by their hard work is clear, and doctors, while clearly less products of a parasitic system than the financiers, are still trained by the public, earn most of their living of Medicare, and are dependent on publicly funded research.
Try again!
@Rafer Janders:
Even better example: nearly every story about Appalachian culture always talks about their “rugged independence.” The region with the highest utilization of welfare, disability, and, with the ACA, Medicaid expansion, is Appalachia.
@mannning:
And that fact alone should put the BS Jack sprouts to sleep permanently: the only reason we have functioning money markets now is due to the bailouts of 2008, the implicit guarantee of future bailouts provided by those bailouts, and expansive monetary policy. Every single millionaire who made their millions on the markets ever since is basically at the same level of public dependence as someone on SSDI.
I always wondered why people who dig ditches out in the hot sun or move heavy furniture get paid less than someone who sits all day in a cool office.
I also have wondered, a lot, why some guys are better looking than me and some people come out better in poker games.
@humanoid.panda:
Indeed. I tried to post about this earlier, but my post is in moderation limbo. I’ll just note again that the county with the highest rate of food stamp use in the nation is a county in Kentucky that is 98 per cent white-and votes 84 per cent Republican.
Why do those people vote consistently against their interest? FSM knows- but a big part of it is their swallowing mythology repeated constantly by the right wing BS machine.
@michael reynolds:
By pure random chance, you addressed that to perhaps the one regular poster here who knew that was a riff on “The Boxer” even before you mentioned Paul Simon.
At one point in my life, I knew all of the lyrics to every Simon and Garfunkel song. Not anymore; I blame the scotch.
The problem is that none of the solutions proposed to income inequality — capping CEO pay, raising taxes on “the rich” or raising minimum wage — has shown much efficacy in reducing income inequality. Inequality — at least as measured by the flawed methods of Picketty – has been rising everywhere, including countries with much higher taxes and minimum wages. In fact, inequality is only rising that sharply if you use pre-tax income; that is if you ignore all the taxes and social spending that are supposed to level things out. Inequality has become the latest excuse for whatever policy someone wants to push.
The only thing I can see that my really address this is ending the unceasing rent-seeking going on in the halls of power at every level: special tax dispensations for favored businesses, publicly-financed stadia for billionaires, bailouts for politically-powerful business, regulations that favor powerful business.
@Hal_10000:
Or, more importantly, wealth inequality.
It’s a fair cop. Even people who agree that high wealth inequality is a bad thing cannot agree on what to do about it. Whatever you do has to counter the strong general tendency of wealth to concentrate, without punishing success to the point of disincentive or rewarding sloth to the point of disincentive. Reasonable people can reasonably disagree about what works and what doesn’t.
Personally, I don’t weigh those errors equally. If we accidentally redistribute too much, economic growth is dampened and a generation underperforms, until we can tune the system. If we redistribute too little, people starve and a generation is wasted.
@Scott:
As were the Anarchists.
(I have that book, and while I don’t re-read it as often as The Guns of August, A Distant Mirror or The March of Folly, I still think it’s quite informative)
@Hal_10000:
First of all, as DrDaveT notes, Picketty is talking about wealth inequality, not income inequality ( Fr a primer on Picketty, try Krugman’s book review here). Picketty’s weath inequality solution has yet to be tried.
Secondly, there is no need for a counsel of despair here. Those solutions do in effect work to reduce inequality. After WW2, we did have high tax rates on the rich-no need for scare quotes, btw- and a relatively high minimum wage, and we had 25 years of economic prosperity , and declining inequality. Europe has much higher taxes on the rich, high minimum wages, and more generous welfare states, and they have less income inequality-and higher social mobility. Japan has de facto, customary limitations on CEO pay, and income inequality is much less there as well. So these solutions do seem to work. Just because they’re not complete solutions don’t mean they don’t work at all. It’s like the conservative critique of the New deal and Great Society programs-“they didn’t eliminate poverty, so they didn’t work at all.” BS. They alleviated poverty, so they are a step in the right direction. In the same way, the above named solutions are a step in the right direction in reducing income equality.
All these sound great, but we will have to completely revamp the current system of campaign finance and lobbying, which is tailor made for the rent seekers. You might want to talk to your Republican colleagues about that. I’m in favor of such reforms, along with trying the solutions above. Note that the people that would fiercely oppose solutions aimed at reducing inequality would also fiercely oppose campaign finance and lobbying reforms. You might want to think about that.
@rachel:
The book I’d recommend the Kennedy’s ” Freedom From Fear: the American People in Depression and War.” It covers the American crisis years of 1929 to 1945, in which the the US prevailed in the two greatest challenges of the 20th Century. Among other things, he makes it clear that great political leadership does matter. FDR really does earn his no.3 spot in the list of US Presidents, although it’s clear in the book that he is far from perfect.
Unfortunately, we don’t have an FDR today to lead us out of this crisis. Obama is not quite the politician FDR was. FDR understood that he had enemies , both in the US and abroad, and worked to undermine those enemies , often in calculated and clandestine fashion. Obama was far more idealistic and his misplaced idealism played into the hands of his enemies, both here and abroad.
Clinton is no FDR either, but at least she understands from the get go that she has implacable enemies who have no intention of cooperating with her. In particular, they would say, like the original poster, that inequality isn’t a major issue at all, and that the cure for all economic problems is further privileges for the rich. Can Clinton rally the American people to face the challenge of reducing inequality? Only time will tell, but at least she and the Democrats see that there is a problem and are proposing solutions. That’s a start.
I would like to thank Michael Reynolds, admitted math dummy and first commenter in the thread, for providing the most obviously and quantitatively impotent set of suggestions to ever grace these pages. This has been the standard prescription for so long it boggles the mind. Look around and observe how things have gone under your hero’s watch.
Back to your idle dreams of torches and pitchforks folks, and I’ll see you ten years from now when you all, once again, plaintively ask “what happened?”
@Guarneri:
I love how things have gone under “my hero’s watch.” We still have an auto industry that you, Drew, loudly and confidently predicted would fail. The banks still stand. The dollar is absurdly strong, too strong probably, but with me heading off to Europe later this summer it’s kinda great.. If I needed to borrow I could and nearly for free. If I needed a job here in Marin County, I could get one just by raising my hand.
I now have an Obamacare policy that protects me far, far better than my old policy and costs me $6000 a year less. I can keep my son on that policy as he goes to college.
My children will grow up in a world where they can love who they want, be themselves.
Unlike you, Drew, I love this country. And in years where I break a million if I have to pony up an extra 10 or 20% of that overage, I am prepared to do so with only a minimal amount of whining. Unlike you, greed and selfishness are not my main motivators. Unlike you, I’m not a pig at the trough grunting for more, more, more.
@Guarneri:
The patient refused to take the pills. I assume that’s what you meant, anyway.
Every time the US has tried the prescription Michael cited, it has worked.
seattle raises min wage, unemployment goes down.
in other news the GOP is still stupid and more interested in screwing over poor people than doing anything positive.
@stonetools:
And strong unions, quality public education including good, inexpensive state universities, and somehow corporate governance that favored loyalty to the institution over next quarter stock price.
We became the strongest, richest country on Earth. And Republican policy is consistently to undue everything that got us there.
I think what we ought to do is trumpet great jobs reports for political purposes, what with all those minimum wage bartender and retail clerk jobs……….and then scratch our heads in wonderment at growing income inequality.
For all of you who want to site tiny microcosms of the economy with freshly minted policy prescriptions yet to play out, suit yourself. You fool only yourselves. But if you really want to look at real policy such as you describe in action look at the fortunes of the MI, IL, OH etc. here in IL we have done all you suggest and more for years on end. We are flat damned broke, and people are looking to,the exits. But I guess you guys like going at your own pace.
@Guarneri:
You know who else is flat damn broke? Kansas, where Governor Brownback instituted every Republican economic policy and killed his economy.
In the last fifty years Illinois has had 9 governors, 5 of them Republicans. You currently have a Republican governor. So exactly how is the Illinois mess the sole property of Democrats?
You have one of the lowest state income tax rates in the country – far lower than ours here in California. Your top rate is a pitiful 3.7%, ours is a whopping 13%, and yet our bonds are solid, our books are balanced, our unemployment is dropping, and we’re managing all this despite being in the middle of a record drought. Our entire ag sector is in the crapper because of water shorter and we still kick your butts.
In fact, Drew, our biggest problem – aside from the drought – is that things are so good here it’s getting impossible for people to afford to stay here. In the last four years the place where I live has appreciated by more than the cost of an entire four-bedroom home in Illinois. You know about supply and demand, right? Well, the demand to live in California is so high the billionaires are driving out the millionaires.
People are leaving your state because the weather sucks and because Illinoisans are evidently incapable of self-government. Maybe you could stop electing crooks, that might help.
@michael reynolds:
Limiting CEO salaries is kind of pointless, because CEOs have armies of lawyers at their disposal who will find ways to cash in. You have to go to the heart. Pass laws that force publicly-held American companies to keep their P/E ratios low. Make profits go back into employee salaries and R&D. Try to give employees enough capital to buy their companies, and then control how they are run.
All impossible, of course. The 1920s progressives proposed similar laws about stock prices, and they were never heard of again.
@teve tory:
So the conservative doctrine about minimum wage increases has been proved wrong once again. Now will the conservatives admit they were wrong about that? Well, of course not. They will ignore it, or simply repeat zombie lies about the minimum wage raising unemployment.
The sad thing about this that liberals seem to have no counterpoint to this, except to announce-ONCE- that they are right.
A real flaw with the American political system is that conservatives can get away, repeatedly, with being dead wrong for decades. Mean while, liberals just seem to be unable to capitalize on being right-possibly, because liberals, unlike conservatives, don’t seem to recognize that propaganda really does work. Zombie lies can’t be just ignored: they have to be debunked, every time they are repeated. When conservatives get it wrong, liberals have to point it out , loudly, and repeatedly.
Also, we have to build our own counterpart to the right wing propaganda machine that does such a great job of drowning out the truth and promoting the right wing alternate reality.
All of this is going to take hard work, and will cause controversy among liberals who seem to think that the mainstream media will do the work for liberals. Unfortunately we have found out in the last 30 years that the liberal ideal of an unregulated “marketplace of ideas” in which good ideas inevitably triumph over bad doesn’t work. The “marketplace of ideas” has been subverted by a right wing propaganda machine which simply drowns good ideas and good speech in an unending torrent of bad speech, calibrated to appeal to the worst instincts of a public fearful of the modern world.
Circling back to inequality, the right wing propaganda machine will simply continue to repeat what Doug and conservative commenters have said above: that inequality doesn’t matter, that any attempts to combat that it will fail because liberal reforms never work, and that the only economic policy that works is tax cuts for billionaires ( “tax reform” in conservative newspeak). Liberals have to figure out how to refute that message.
@Modulo Myself:
Some ideas on limiting executive compensation here.
Again, I think these reforms are doable. No need for despair. Liberals will have to message it right, though-which is their ongoing problem.
@Modulo Myself:
Our billionaire overlords want us to believe we are helpless. We are not. And we should not let our cynicism and disillusionment cripple us and aid our opponents.
We keep hearing we can’t raise effective tax rates on the rich, and yet those same “invulnerable” rich hire platoons of lobbyists and spend millions of dollars to stop us from raising the very rates they say are irrelevant. Why? Because it’s bullsh!t that we can’t do anything. They know damned well we can.
And here’s Picketty himself, reviewing a book on what to about inequality, by a British economist. Excerpt:
Most of his program sounds hopelessly unrealistic right now, but so did New Deal reforms in 1920 and civil rights reforms in 1930. At least people are doing hard thinking about the issue and coming up with policy ideas.
@Guarneri:
I’ve made as much as 70K at at “minimum wage bartender” job, and that was many years ago. You can do better than that now.
@Guarneri:
While you are at it, why don’t you look at the economies of all the red welfare states and tell us how conservative economic theory is working out in them?
Well, you can also reduce income inequality by getting rid of crony programs, like those loan programs for failed solar panel factories.
Or how about the biggie. The jack up the price of food while doing nothing for the environment program known as biofuels
Way to give more money to rich land owners and biofuel producers. No worries, the poor, the third world emaciated poor, can just pay more for food while upper middle class in the West feel the smug.
Oops, don’t even get the environmental benefits. But they sure breath in the smug.
@JKB:
You ninny. You think environmentalists are the big force behind ethanol? Because that’s what you’re talking about if you’re talking “biofuels.” Ethanol is pork for American farmers. Big Ag is the muscle behind ethanol. Maybe check in with either the GOP or Dem caucuses in Iowa, you’ll see.
@JKB:
What makes you think the regulars here support biofuel production from food crops? I certainly don’t — it’s an idiotic idea. You’re going all Emily Litella on us, JKB.
(And it’s wealth distribution that’s the problem…)
@Stan: “That’s why I wish some scholar without an ax to grind would study the phenomenon.”
Why do you assume that this hasn’t already happened?
If anyone is still reading this thread, there are some good recent papers on the topic of wealth distribution and how it changes over time. Authors to look for are Saez, Zucman, and Piketty (in various combinations, and with others).
In particular, with regard to my assertion up above that wealth grows faster for the wealthy, and that most wealth is inherited, there are now formal refereed papers addressing those questions. There is also some interesting historical work on how things evolved during the previous Gilded Age, from ~1870 to ~1920, in France. The proportion of wealth due to returns on inheritance was over 70% by the end.
Quick fact: from 1986 to 2012, the US real growth rate of family wealth was
0.1% for the bottom 90% (i.e. nil)
2.7% for the top 10%
3.9% for the top 1%
By 2010, the real growth rate for the top 1% was well over 5%
I did some easy simulations of what happens over time in a situation like this. As you would expect, even “fair” initial allocations of wealth lead to extreme wealth inequality in a few decades when the growth rate differential is that high.