Category Archives: Income Inequality

Income Inequality, Short & Sweet ... Short & Sour

Democratic Party to do list: close the chasm separating the super-rich from the rest of us

Annie Lowrey gets the decade exactly right (“The Decade in Which Everything Was Great But Felt Terrible“):

“… when the United States grew to its wealthiest point ever—and when the middle class shrank, longevity fell, and it became clear that a whole generation was falling behind. The central economic dynamic of the 2010s was that no matter how well the market was doing, no matter how long the expansion lasted, no matter how much the economy grew, families still struggled. It was a decade that strained America’s idea of what economic growth could do, and should do, because it did so little for so many.

. . .

In household terms: The rich had it great, growing richer than they have ever been and accounting for a greater share of American wealth than at any other point since the Gilded Age. The gaps between the 10 percent, the 1 percent, and the 0.1 percent grew. The difference between doctors and hedge-fund managers widened, just as the difference between doctors and janitors did. But everybody in the top 20 percent, roughly speaking, thrived in the 2010s—most of all, the richest of the rich. The country got its first centibillionaires.

At the same time, the Great Expansion did not do much for working families. Wages are at last growing quickly at the bottom end, after years of slack demand holding down earnings. Still, it would take years and years of that kind of growth to chip away at the country’s inequality and to improve the standing of the country’s hourly employees relative to all workers. Research by Emmanuel Saez of the University of California, Berkeley, shows that the top 1 percent of families captured half of all real income growth between 2009 and 2017. The incomes of the top 1 percent have grown nearly four times as fast as those of the bottom 99 percent since the Great Recession ended. Inequality is now a 50-year story.

Credit Ronald Reagan and the Republican Party for destroying the post-World War II economic consensus (embraced by Eisenhower and Nixon, but by no Republican President since then), and giving us an economy much nearer to the GOP ideal.

The Democratic Party has often failed to push back, but if ever there was a time for a change, this is it.

Democracy, Income Inequality

George Will, trolling Elizabeth Warren, asks the wrong question about billionaires

“Warren, whose profile in courage is to foment hostility toward a small minority (“billionaires”), should try an experiment — not at her rallies of the resentful, but with an audience of representative Americans. Ask how many in the audience own an Apple product? The overwhelming majority will raise their hands. Then ask: How many resent the fact that Steve Jobs, Apple’s innovator, died a billionaire? Few hands will be raised.” — George Will, “Elizabeth Warren is progressivissm’s Donald Trump”

He adds this for good measure:

Warren’s dependence on a wealth tax announces progressivism’s failure of nerve, its unwillingness to require anyone other than a tiny crumb of society’s upper crust to pay significantly for the cornucopia of benefits that she clearly thinks everyone wants — but only if someone else pays for them.

On the same morning Will’s wisdom about taxation, billionaires, and Americans with iPhones and other Apple merchandise appeared, a SurveyMonkey poll in the New York Times revealed the measure of popular support for Senator Warren’s proposed two percent tax on individual wealth above $50 million.

Sixty-three percent of Americans support this wealth tax; 77% of Democrats; 55% of Independents; and 57% of Republicans.

That’s right, even a clear majority of Republicans are in favor of imposing a 2 percent tax on this “tiny crumb of society’s upper crust.”

The Times reports: “Support for a wealth tax cuts across many of the demographic dividing lines in American politics. Men and women like it. So do the young and the old. The proposal receives majority support among every major racial, educational and income group.”

The survey found a single group that opposes this plan: College-educated Republican men, only 41.5% of whom endorse the proposed wealth tax.

Will’s reference to the popularity of stuff made by Apple is confirmed by the link he offers, which reports, “Sixty-four percent of Americans now own an apple product,” — virtually the same percentage that support a 2-cents on the dollar tax on assets over $50 million.

While George Will is focused on hostility and resentment and hand-wringing over the oppressed minority of the rich, Americans — including those of us (like Elizabeth Warren) with ample appreciation for the benefits of a competitive market economy — believe in the fairness of progressive taxation, just as the U.S. had back in the 1950s and 1960s, when everyone received a more equitable share of the nation’s wealth.

2020 Democratic Primary, Income Inequality

Michael Bloomberg has an expensive plan to win the Democratic presidential primary

“Running for the nomination without running in the early states is like defying gravity. That’s how hard it is,’’ Elaine Kamarck, a senior fellow at the Brookings Institution who wrote a book about the presidential nominating process, said ahead of Bloomberg’s announcement. “However, what has not been tried is defying gravity with a lot of money behind you.’’ — “Bloomberg Takes Untested Path to 2020, Skipping Key Contests,” by Mark Nigutte, Bloomberg News.

Add to that ‘however’ a second however: Donald J. Trump. He was nominated and elected even though conventional wisdom and political history both suggested that the chances of this outcome were slim to none.

The objection to the second however is: Democratic primary voters did not rally around Trump.

Democrats are not all liberals, many oppose Bernie Sanders’ revolution and Elizabeth Warren’s plans to address income inequality, and many more may be too anxious to take a chance on any nominee perceived as too far from the center because they think it makes Trump’s reelection more likely.

But it’s hard to see Democrats rallying around Bloomberg, no matter what his “unique set of experiences in business, government and philanthropy,” especially since his opposition to candidates on his left appear to be focused on shielding his $50+ billion fortune (and that of every other billionaire). In an era of unprecedented income inequality, this seems to be an unlikely time for Democrats to embrace a billionaire with no intention of campaigning in the first four primary states or standing on a debate stage with other Democratic candidates, choosing instead to spend a fortune on advertising.

Of course, as the Trump experience shows, slim to none is not definitive. And Bloomberg’s fortune increases his odds at least a bit.

Image: FDR signing the Social Security Act.

Democrats, Income Inequality

Blue collar wages (inflation adjusted) finally recovered after Reagan era slide

Graph courtesy of Kevin Drum at Mother Jones. Blue collar wages hit a peak in the early ‘seventies. That was followed by a long slide downward, especially during the Reagan years and into the mid-nineties.

Sarah Jones at New York magazine reports that 40 Senate Democrats have introduced the PRO Act – Protecting the Right to Organize – to boost workers’ rights to organize, strike, and sue employers who violate those rights.

For the life of me, I don’t understand why Bill Clinton and Barack Obama weren’t all over legislation along these lines.


2020 General Election, Democrats, Income Inequality, Republicans, Short & Sweet ... Short & Sour

“Democrats should court the economically anxious Trump voters who don’t exist”

While the headline, from an Eric Levitz post at New York magazine, expresses the point ironically, I am in complete agreement with the argument. Politics – and winning elections – is a pragmatic endeavor. Taking back the White House in 2020 is a crucial goal; disparaging voters who opted for Trump 2016 is not. A couple of key quotes:

“The politician and the public intellectual have two very different jobs. The latter is tasked with telling the best approximation of the truth they can muster — especially when said truth is uncomfortable or unpopular. We need political scientists willing to overturn our most cherished presumptions about actually existing democracy, historians eager to recover our republic’s most violently suppressed memories, and commentators who illuminate our collective complicity in contemporary injustice.
In certain contexts, on certain subjects, we need elected officials to do the same. But the politician’s primary vocation isn’t to speak truth to power — it is to win power, and then exercise it in a manner that advances the greater good. In a representative democracy, that typically means rallying the largest possible coalition behind you, your party, and its governing priorities. Depending on one’s definition of the greater good, that task may well involve a great deal of uncomfortable truth telling. But any politician who cares more about expressing (what she perceives in a given moment to be) the unvarnished truth than about using state power to improve people’s lives has chosen the wrong line of work.”

And:

“Many progressive policies and value propositions enjoy majoritarian support. But the percentage of Americans who hold the liberal position on each and every political question is tiny (as is the percentage that espouses uniformly conservative views). For progressives, there is no alternative to finding ways to make common cause with the unenlightened.”

(Image: Wage Inequality, Economic Policy Institute, from inequality.org)

Income Inequality, Republicans, Tribalism

News Flash: Fox News doesn’t force Tucker Carlson to oppose higher taxes on the rich

Dutch historian Rutger Bregman recently offered his view to the attendees at Davos, “It feels like I’m at a firefighters’ conference and no one’s allowed to speak about water, right? … Just stop talking about philanthropy and start talking about taxes … We can invite Bono once more, but we’ve got to be talking about taxes. That’s it. Taxes, taxes, taxes. All the rest is bullshit in my opinion.”

When he was booked on Fox News, he told Tucker Carlson:

“The vast majority of Americans, for years and years now, according to the polls – including Fox News viewers and including Republicans – are in favor of higher taxes on the rich. Higher inheritance taxes, higher top marginal tax rates, higher wealth taxes. It’s all really mainstream.

But no one’s saying it at Davos, just as no one’s saying it on Fox News, right?

And I think the explanation for that is quite simple, is that most of the people in Davos, but also here on this channel, have been bought by the billionaire class. You know? You’re not meant to say these things.

So I just went there, and I thought, you know what, I’m just going to say it, just as I’m saying it right here on this channel.”

But Bregman didn’t get to say it on that channel. Carlson took exception with what he had to say and replied with insults. (“Why don’t you go fuck yourself, you tiny brain. And I hope this gets picked up, because you’re a moron. I tried to give you a hearing, but you were too fucking annoying.”)

After the video emerged, Carlson clarified the indulgence of his employer: “Whatever my faults or those of this channel, nobody in management has ever told us what positions to take on the air. Never. Not one time. We have total freedom here and we’re grateful for that.” 

Good to know that Fox News Channel’s rich on-air personalities are permitted to oppose higher marginal tax rates of their own volition.

Democrats, Donald Trump, Income Inequality

The Howard Schultz campaign is already helping Donald Trump

“After this week’s CNN town hall, it’s more and more clear that any money Howard Schultz might spend on an independent presidential bid would function as an in-kind campaign contribution to Donald Trump.” – Ronald Brownstein

“To win a majority of electoral college votes, which Schultz says would be his goal, he would have to ultimately replace the Democratic nominee as the favored choice of voters who do not want Trump to win a second term.” – Michael Scherer

Schultz has praised the “thoughtful analysis” of a conservative commentator who fears the Democrats will nominate a “hard-left” candidate and – in the course of the column – demeans Kamala Harris (“shrill … quasi-socialist promising pie in the sky”), Elizabeth Warren (“Fauxcahontas … playing a game of socialist one-upmanship”), and “supposedly centrist” Joe Biden. The critic also name-checks Bernie Sanders and, of course, Alexandria Ocasio-Cortez. 

Schultz, who claims to be a “lifelong Democrat” – but not a very attentive one (“Schultz voted in just 11 of 38 elections dating back to 2005”), took back the praise he had offered after folks actually read the “thoughtful analysis” he was promoting;  he deleted the tweet when he was asked about it by the Washington Post, and blamed someone else for posting the link on his personal Twitter account.

Nonetheless, he embraces the conservative views expressed in the deleted column. It’s the “hard-left,” “quasi-socialist” Democrats that Schultz fears and, most scary and objectionable of all, the proposal (broached by conservatives’ favorite new Democratic Member of Congress, Ocasio-Cortez) to raise the marginal tax rate for incomes over $10 million to 70% (the level in the United States in 1980).

When asked at his CNN Town Hall what he thinks his personal income tax rate – as a billionaire – should be, Schutz concedes that he “should pay more taxes,” but tap dances for more than a minute (with platitudes about corporate taxes, the Republican tax bill, comprehensive tax reform, as well as personal income tax rates for millionaires) without giving an answer, at which point the moderator Poppy Harlow reminds him of the question and asks, “Give me a sense. Are you talking about you should pay 2% higher? Ten percent higher, twenty percent higher federal income tax?”

He stammers and says, “I don’t – Poppy, I don’t know what the number is….”

“Ballpark it for people,” she asks.

He won’t. He finally gets to the heart of his concern, “I think that what’s being proposed at 70% is a punitive number. And I think there are better ways to do this.”

Better ways. In other words, instead of significant increases in the personal tax rates of billionaires, we should seek revenue increases somewhere else.

Brownstein notes that on issue after issue, Schultz’s positions align with Democrats, while alienating Trump’s Republican base.

“To obscure his tilt toward the Democrats on almost all issues, Schultz has quickly settled on a strategy of loudly criticizing ideas popular on the party’s far-left flank.”

Brownstein perceives in Schultz’s strategy echoes of the (now defunct) centrist group, the Democratic Leadership Council, which Bill Clinton embraced in his trek to the White House.  But there’s a huge difference in the two strategies. The DLC and Clinton worked for years “inside the Democratic Party.” Regardless of what you think of Clinton or his policies, he sought to “rebuild a political majority that would allow Democrats to regain control of the national agenda from the increasingly militant conservatism within the GOP.”

Schultz seeks to do the opposite: to split the Democrats and peel off Democratic voters to his independent campaign.

‘Exaggerating the power of the left in the Democratic coalition, he’s portraying the party as beyond redemption for anyone holding centrist views. To make that case, Schultz is echoing claims from Trump and other Republicans that Democrats have become radical. At times, Schultz has even called some of the Democratic ideas he opposes “un-American” or “not American,” not to mention “punitive” and “ridiculous.”

By validating the Republican efforts to portray Democrats as outside the mainstream, Schultz is helping Trump already.’

Democrats, Income Inequality, Polls, Republicans

Poll: A majority of Americans support raising the top tax rate to 70 percent

The media’s favorite democratic socialist, Alexandria Ocasio-Cortez – sorry, Bernie Sanders – has proposed raising the marginal tax rate on income above $10 million to 70%. (That’s where it was when Ronald Reagan was elected; it was 28% when Reagan left office.)

It turns out that most voters agree with the Congresswoman from the Bronx:

In the latest The Hill-HarrisX survey, which was conducted Jan. 12 and 13 after the newly elected congresswoman called for the U.S. to raise its highest tax rate to 70 percent, found that a sizable majority of registered voters, 59 percent, supports the idea.

…

Women support the idea by a 62-38 percent margin. A majority of men back it as well, 55 percent to 45 percent. The proposal is popular in all regions of the country with a majority of Southerners backing it by a 57 to 43 percent margin. Rural voters back it as well, 56 percent to 44 percent.

Republicans oppose the idea by 55% to 45%.

(Wikipedia photo of Reagan at home in California in 1976, four years before his election as president.)