Saturday, April 23, 2011

Inequalities and the ascendant right

The playing field seems to keep tilting further against ordinary people in this country -- poor people, hourly workers, low-paid service workers, middle-class people with family incomes in the $60-80K range, uninsured people, ....  75% of American households have household incomes below $80,000; the national median was $44,389 in 2005.  Meanwhile the top one percent of Americans receive 17% of total after-tax income.  And the rationale offered by the right to justify these increasing inequalities keeps shifting over time: free enterprise ideology, trickle-down economics, divisive racial politics, and irrelevant social issues, for example.

Here is the trajectory of US income by quintile since 1965 (link); essentially no change in the bottom three quintiles over that 40-year period. Plainly the benefits of growth and productivity change in the national economy have benefited the top 40% of the population, and disproportionately have flowed to the top 5%.

Just consider what has happened to income to the "middle" class versus the top 1% in the US economy. The 40-60% segment of earners have declined from 16.5% to 14.1% of after-tax income, while the top 1% has more than doubled its share, to 17.1%.

And here's a very graphic demonstration of the rapid increase in the percent of income flowing to the top percent of US income earners since the Reagan revolution (thanks to benmuse):

Meanwhile, the power of extreme wealth in the country seems more or less unlimited and unchallenged.  Corporations can spend as much as they want to further candidates -- as "persons" with freedom of speech rights following Citizens' United v. Federal Election Commission (link). Billionaires like the Koch brothers fund the anti-labor agendas of conservative governors. Right-wing media empires dominate the airwaves. Well-financed conservative politicians use the language of "budget crisis" as a pretext for harshly reducing programs that benefit ordinary people (like Pell grants). Lobbyists for corporations and major economic interests can influence agencies and regulations in the interest of their clients, more or less invisibly.  And billionaire lightweights like Donald Trump continue to make ridiculous statements about President Obama's birth status.

The political voice of the right, and the economic elite they serve, has never been louder.  And it is becoming more reckless in its attacks on the rest of society.  Immigrants come in for repressive legislation in Arizona and other states.  Racist voices that would never have been tolerated a generation ago are edging towards mainstream acceptability on the right. Self-righteous attempts to reverse health care reform are being trumpeted -- threatening one of the few gains that poor and uninsured people have made in decades.  And the now-systematic attack on public sector unions is visibly aimed at silencing one of the very few powerful voices that stand in the political sphere on behalf of ordinary working people.

The big mystery is -- why do the majority of Americans accept this shifting equation without protest? And how can progressive political organizations and movements do a better job of communicating the basic social realities of our economy and our democracy to a mass audience?  Social justice isn't a "special interest" -- it is a commitment to the fundamental interests and dignity of the majority of Americans.


Mark A. Sadowski said...

"The big mystery is -- why do the majority of Americans accept this shifting equation without protest? And how can progressive political organizations and movements do a better job of communicating the basic social realities of our economy and our democracy to a mass audience? Social justice isn't a "special interest" -- it is a commitment to the fundamental interests and dignity of the majority of Americans."

Don't give up hope!

The pendulum can only shift so far. It will shift back. You'll see. And if it doesn't it'll be the end of the world. so then everything will be all right.

Anonymous said...

The reason the abused don't rebel is that they have been duped by very clever propaganda. The super rich are smart enough to pay the right people to spread their ideas and they do this very well. It's difficult for the losers to think outside the intellectual box they are put into.

ken melvin said...

I believe that the numbers are much worse than those chosen, for example; the median for the lower 70% is around $35K, and that for the lower 50% some $27-28K.

Sufferin' Succotash said...

When you look at the top 20-percent you see a modest gain over last few decades. The political implication--if any--is that there are just enough voters out there who hope to get into that top 20-percent and who've bought into the notion that right-wing policies will help them get there. Add to that the notoriously bad election low turnouts of low-income voters plus those voters who can be snookered by cultural identity politics and you have a working popular majority favoring anti-egalitarian policies.

Rex said...

How to change this? The top 1 percent in particular dominates dividend and capital gains income, along with those salaries of 7-plus figures. High top tax bracket marginal rates for them (at least 50 percent, but as high as 70 percent) encourages use of this money for investment for future growth rather than immediate gratification, and appropriate investment incentives for businesses and corporations can strengthen these incentives. So as a starting point, elect people who thought Reagan's 50 percent top bracket was a good idea, and the Bradley-Gephardt bill was a huge mistake.

C Hatten said...

Well, political scientists are starting to pay this issue the attention it deserves. Larry Bartell's Unequal Democracy focuses on the short-term horizon of voters; they vote for the presidential candidate based on what the economy is doing in the last six months before the election, not the likely effects of their choice on economic equality over the long haul. Similarly, Hacker and Pierson (see their Winner Take All Politics) have made a strong case for the power of elite influence whoever wins elections, and the power of drift, that is, non-change in response to changing situations, as important parts of elite domination. All this makes sense, but it leaves out a Gramsci-like sense of how elites capture the terms of the debate, the ruling narratives of our society. Were they not able to do so, the fairly transparent strategies Hacker, Pierson and Bartell see in elite dominance wouldn't work as well as they do. Smart social scientists, and progressives, need to give this problem some serious thought so we can challenge the elite dominance of politics.

Kreditanstalt said...

It's NOT a strict 'class' division, to be broken down by income. That's too simplistic.

It's a division between those in control of the machinery of government and those without. Certainly the financial elites, the banking industry and the military-industrial complex have the ear of government. Even the "middle" and "lower" classes, as you would term them, clamour for control of the government gun.

indeed, everyone wants to seize and redistribute the earnings and savings of others.

Sometimes it also seems to be a contest between solvent CAPITAL and indebted LABOUR. On this score, capital SHOULD have the whip hand here: it is in great demand and short supply, while the world is faced everywhere with a massive oversupply of sweat labour. Capital deserves to come to the fore after decades of artificially low returns courtesy of government/central bank chicanery and monkeying with interest rates. Debt, similarly, will either default or be paid back through reduced living standards.

So my heart does not bleed or go out to the unemployed, the pensioner or the impoverished. They are unavoidable casualties of worldwide systemic change - change which is beyond the control of any government, any class or any interest. We are all in a dog-eat-dog fight to maintain our living standards.

I suspect that lack of REAL productivity and resource scarcity will eventually be found to be at the root of today's troubles.

Mind you, I count a good deal of the corporate and banking sector as debt-loaded deadbeats, along with most of the masses.

But, then again, the Great Game of the twentieth century and beyond has been the wrestle for control of the coercive power of the state, hasn't it?

Tom Hickey said...

It seems that for the most part people are not paying attention and are also misinformed. A recent study shows that most Americans across the demographic spectrum prefer an income and wealth distribution similar to Sweden's, and they grossly misjudge the present state of inequality in the US.

Building a Better America – One Wealth Quintile at a Time by Michael I. Norton and Dan Ariely (Forthcoming in Perspectives on Psychological Science)

Anonymous said...

It's because of the complete capitulation to the vocabulary of the right. It's heresy to suggest that taking a non-confiscatory (of course the devil is in the details...) portion of income through taxes is not the same thing, morally, as stealing. It's heresy to suggest that the fortunate are fortunate, and not fundamentally better or more deserving than the less fortunate masses. It's heresy to suggest that even the propensity to work 12 hours a day and hoard capital is genetic, and not the mark of a more holy soul. If you say these things, you're a hippy or a communist. Or, worse, a hippy communist.

Anonymous said...

WHat a bunch of pablum and nonsense.
The left xcontrols all the majort Media wirth the exception of Fox and that may be controlled and just tolerated.
Liberalism/scialism/progressivismhave been completely debunked.
Capitalism produces all measurabnble value.
The worker class has plenty of opportunity to enjoy more by only looking at others for example.
I have had numerous friends and aquantences over a 50 plus year business career
from many ethnic backgrounds and most started dirt poor and ended with very substantial asets.
Why doesn't the left stop it's parasite pandering to the poor and go get a JOB and leave them alone.

Tony Wikrent said...

In the course of sorting through the historical debate of implied powers versus enumerated powers, I read, for the first time, James Madison's notes of the defects of the Articles of Confederation which Madison made as he prepared for the Constitutional Convention: Vices of the Political System of the United States.

Recall that in the Federalist Papers No. 10, Madison discussed the problem of factions, and noted that they most often arise based on economic interests. Now, look at this section of Madison's notes:

"6. Want of Guaranty to the States of their Constitutions & Laws against Internal Violence.

"The confederation is silent on this point and, therefore, by the second article the hands of the federal authority are tied. According to republican theory, right and power being both vested in the majority, are held to be synonimous. According to fact and experience, a minority may in an appeal to force, be an overmatch for the majority: 1. If the minority happen to include all such as possess the skill and habits of military life, & such as possess the great pecuniary resources, one third only may conquer the remaining two thirds."

I added emphasis to show that one scenario Madison feared was that accumulated wealth would achieve so much political power that republican rule would be subverted or obstructed. That pretty much sums up where we have arrived at today, with a horrible skewing of income and wealth inequality.

Article Four of the United States Constitution guarantees to each state a republican form of government. Reading the source material, there is no question that the framers sought to provide a strong enough central government that it could intervene in the affairs of a state that had fallen into thralldom to an anti-republican faction; i.e., an oligarchy. This is exactly what happened in the Civil War.

The problem we face today is that the entire republic has fallen into thralldom to the financial oligarchy.

The Citizen's United decision overturns Madison's conception of, and concern about, factions, by elevating the most concentrated form of economic faction, a corporation, to the same status in rights as human beings.<

The left, imho, is getting slaughtered on its flanks because of a silly belief that "dead white males" don't matter. Everything good in our polity, including Social Security and Medicare, environmental and safety regulations - depends on the "implied powers" interpretation of the Constitution. But google the term and see if you can find any decent liberal commentary. The wrong-wing is winning by default in its campaign to replace "implied powers" with "enumerated powers."

Michael Bishop said...

The quality of most people's argumentation falls as the subject matter becomes more political.

A few points:

Comparing income-quintiles is misleading because they aren't the same people over time. Immigrants come into the country poor and make gains over time.

Government spending as a share of the economy continued on an upward trajectory even when Bush was president. Regulations tend to become more numerous.

Immigrants benefit the rich more than the poor.

You make some good points, but they are lopsided.

russell1200 said...

The majority of the poor are native born. They are likely to resent the allowing into the country impoverished immigrants who will compete with them for jobs.
Whites are either the majority (by number not percentage) of the poor or very close to it. They are very likely to resent perceived policies of racial preference that would work against them.
The South has an over abundance of the poor. The South (including African Americans who make up the most socially conservative wing of the Democratic party) is generally viewed as the most socially conservative area of the country. They are likely to resent views that work against this social conservatism (gay rights particularly come to mind).
Thus, the party that in theory is the most protective of the underclass, and at least vocally is so, the Democrats, has a number of policies that various groups witin the poor would not be supportive of.
IMO, having come to the assumption that they cannot possibly loose the class warfare folks, nor the African American portions of the poor vote to the Republicans, the Democrats actually have very little real interest in policies that are particularly helpful to the larger impoverished class as a whole. Thus the group, as a whole, has very little allegiance to the Democrats.
There is obvious room for a more populist approach that would span across these groups and well into the economically stressed middle class, but from your post, I doubt you would like many of the policies that they would came up with.
Of course, if you simply take a cyclical (or irregular wave) view of history, you might see a lot of this as the typical Malthusian (or at least Goldstone) infighting of the elites as the overall population begins to outstrip the productivity of the land. Given that Malthus was at least partially banned by the industrial revolution, we may see the U.S. style of democracy getting it first taste of this problem. IMO the “democracy” that is within the system so far has acted as an effective break to greater discord. But of course when there is tension in a system, there is certainly the potential that the big rubber band holding it all together will break.