Half a Century of Skillfully Engineered Inequality. Now The Results Are In.
Joe Stiglitz knows a few things about inequality. It was the focus of his doctoral thesis and the mainstay of a career that saw him rise to chief economist for the World Bank and, eventually, the Nobel Prize in economics.
Doctor Stiglitz knows more than a few things about inequality, why so many are impoverished while so few enjoy riches beyond most people's comprehension. He summed it all up in his brief 2012 book, "The Price of Inequality: How Today's Divided Society Endangers Our Future." (It's available free in PDF. format online.)
Stiglitz details how modern inequality is neither market nor merit-based. It is primarily legislated. That's right. The people we elect to high office routinely put the narrow, privileged interest ahead of the public interest. You might have noticed their handiwork in the rise of such things as the destruction of organized labour, the ascendancy of the "gig economy," and the malignant spread of what Alan Greenspan called (with approval) "the precariat," workers who live without financial security, paycheque to paycheque, job to job, never far from falling between the cracks.
Even Canada's Liberal government is in on it. That much was made painfully clear when then finance minister, Bill Morneau, blithely warned lesser-order Canadians, the likes of you and me, that we had to prepare for a future of "job churn." A future of hopping from job to job, usually with neither protections nor benefits, willing to do whatever was necessary to keep clothes on our kids' backs, a roof over their heads and food in their stomachs. Morneau said that and it didn't raise an eyebrow among the Liberal caucus much less the prime minister.
Financial dystopia, you'll get used to it.
When it comes to inequality, America leads the way. Disgraceful as it was, Congressional Republicans drove through a two trillion dollar tax cut, almost entirely for the richest of the rich, in the runup to the 2018 midterms. Lindsey Graham warned his legislative colleagues that the "donor class" had laid it on the line - no mega-tax cut, no more campaign donations. They heard that dog whistle and they delivered. And Trump's Gullibillies? Oh, it was just part of MAGA.
A study was released this week out of the London School of Economics. Researchers went back to the introduction of America's great confidence game, the racket known as "trickle down economics" that Ronald Reagan used to scam the American people. They looked at records going back 50 years and found - wait for it - there is no "trickle down."
"Based on our research, we would argue that the economic rationale for keeping taxes on the rich low is weak," Julian Limberg, a co-author of the study and a lecturer in public policy at King's College London, said in an email to CBS MoneyWatch. "In fact, if we look back into history, the period with the highest taxes on the rich — the postwar period — was also a period with high economic growth and low unemployment."
One solution, for the UK at least, suggested by the researchers is something I have touched upon in the past - a wealth tax, some degree of confiscatory taxation.
Our leaders, in Canada also, are working from the same dog eared playbook issued during the Reagan era as conservatives ushered in the neoliberal order. The nice thing is that it spares our leaders from the chore of original, critical thinking. Think that's not true? Think that's unfair? Ask yourself why these leaders, Liberal or Conservative, still cling to the destructive notion of perpetual, exponential growth? It's because thinking on the logical contradiction, dwelling on the future that perpetual exponential growth portends, is just too damned scary for them.