Whatâs Wrong Today: Mr. Obama stuck his toe into the political waters about inequality at the SOTU address on Tuesday. For some perspective on income inequality, Igor Volsky at Think Progress reports that: (emphasis by the Wrongologist) From 1979 to 2007, the top 1% of families experienced a 278% increase in their real after-tax income, while families in the middle 60% saw an increase of less than 40%. During this period, many blue collar jobs become automated by advances in technology, American workers started competing against cheaper overseas labor, and the number of workers represented by unions dropped from 20% in 1983 to 11% today. As the earnings of lower and middle income Americans stalled, however, CEOsâŚbegan paying some of the lowest tax rates in the countryâs history The US ranks third among all the advanced economies in the amount of income inequality. The top 1% of Americans control nearly a quarter of all the country’s income, the highest share controlled by the top 1% since 1928 In 2011, at an annual dinner he holds at the White House with American historians, he asked the group to help him find a language in which he could address the problem of growing inequality without being accused of class warfare I perceive a rising tide of hatred of the successful 1%. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them⌠This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendant “progressive” radicalism unthinkable now? I donât feel personally threatened, but I think a very important part of America, the creative 1%, are threatenedâŚI think rich as a class are threatened by higher taxes and higher regulation Our elected officials listen to their [the 1%] opinionsâŚtheir jobs depend on not recognizingâŚhow stupid [their opinions] are. It is impossible to get elected president without the backing of a cadre of multimillionaires. It is nearly impossible to get elected to the US Senate without a couple in your corner âŚmultimillionaires and billionaires fund every effective political interest group in the country, from gun rights to gay rights groups. What makes the wealthy persecution fantasy so risible is that our political class is responsive almost solely to the priorities and views of the rich If a study last March by political scientists Benjamin Page, Larry Bartels, and Jason Seawright at Northwestern University is any indication, the rich have little interest in solving Americaâs inequality problem. According to the reportâwhich surveyed a sampling of the richest 1% of Americansâthe wealthy are almost categorically opposed to efforts to reduce inequality and improve material conditions for working- and middle-class people. Some findings: By contrast, the general public is much more supportive of all of these positions. What the rich do support, however, are policies that would shift burdens to individuals, or introduce some nebulous âcompetitionâ into the commons. That includes charter schools (90% support), vouchers (55%), Social Security privatization (55%), and merit pay for teachers (93%). The Daily Beast editorialized: If this agenda looks familiar, itâs because itâs basically identical to the one pushed by âcentristâ deficit hawks in Washington, who have devoted themselves to the consensus positions of business and other economic elites Never in modern times have taxes on the rich been so low, subsidies so large, legal forbearance so complete, regulations so meaningless, and the state so fully at the beck and call of the rich. Our entire government is oriented around making the rich richer and protecting them from consequences of their actions. Even though there has not been a better time to be rich in more than a century, it is NOW that the rich complain about taxes and regulation and a hostile business environment. Is this a cynical, self-aware ploy to press their advantage? Or are we getting a glimpse of the narcissistic pathology that underlies the thinking of so many members of the ultra-rich? Now that the middle class has largely been destroyed, we have the poor, the working class and the investment class. There are fewer people to contribute revenues to the government that is continuing to provide massive support to the investment class. So, the ultra-richâs idea is to let the working class and the poor twist in the wind, the roads deteriorate and the schools fall to ruin. But they say, we gotta keep funding the military and keep militarizing local police in case the lower classes get the idea that this way of governing is unfair.
Stanford University reports on Americaâs global ranking in income inequality: (emphasis by the Wrongologist)
The Wrongologist has written previously about inequality here and here.
Mr. Obama has been reluctant to talk about income inequality. In the New Yorkerâs long piece about President Obama by David Remnick, there was an illuminating quote: (emphasis by the Wrongologist)
Democrats are afraid of saying anything that can be construed as class warfare, which seems to be the sole property of conservative pundits. Democrats are afraid that they will be portrayed as socialists or worse. The fantasy is that Democrats and progressives canât even mention inequality and the solutions to inequality.
Even Mr. Romney in 2012 attacked Mr. Obama about âredistributionâ of wealth whenever increased taxes on the 1% were raised during the campaign. Yet, last week one billionaire, Tom Perkins, the founder of the fabulously successful venture capital firm Kleiner Perkins, tripped over his own dough when he wrote a letter to the Wall Street Journal: (emphasis by the Wrongologist)
Kristallnacht?? His comments were treated with both criticism and snark, so he took to Bloomberg TV to amplify his thinking: (emphasis by the Wrongologist)
Alternate read: The rich are different. They have class interests, they know it, and they act on them. But you progressives canât or we will attack you.
Perkins transgressed the unwritten law: You never talk about class in America, because that would be âclass warfare.â You especially canât do it in the SOTU if youâre a two-term âprogressiveâ Democratic President who is exquisitely attuned to the rules of what can and canât be said.
Lambert Strether tells us: (brackets and emphasis by the Wrongologist)
Strether goes on to say:
The âwe are a classless societyâ fantasy serves a purpose: It prevents Congress from actually acting to address economic inequality. As long as the rich perceive even ineffectual social opprobrium as an existential threat, politicians will be afraid to advance any actual agenda that might hint at redistribution.
