Wealth Inequality a slippery slope to the right

Wealth inequality is roughly measured by the gini coefficient (GC), which Thomas Picketty, a leading economist, observes has a natural tendency to increase. It has been tracked in the US for decades and is now higher than it was even in 1929 when the market crashed beginning the great depression.

As GC increases, it shows a few people have most of the wealth, which translates to power used to game government. They lower their own taxes, capture regulatory agencies and even the Supreme Court, assault unions, corrupt government. Corporations extract wealth from people for stock buybacks, obscenely rewarding CEOs, and others. Excess money finances private equity which profits by running companies out of business, and is driving new home owners out of the market.

GC measures the unfairness of the economy, a persistent problem of capitalism.

Studies show that the US has become an oligopoly. Wealth accumulates to a new aristocracy that has different values than the large majority of people, opposing Social Security, Medicare, and passionately opposed to unions. In 2013 Jimmy Carter observed US has no functioning democracy.

As the gini coefficient increases to high levels, labor share decreases. Insecurity increases, immiseration lowers life expectancy, increases deaths of despair, and results in social chaos. Mass shootings even in schools, gay venues, and racial violence are everyday occurrences as people exercise their new, SCOTUS expanded, gun rights. The US has become a shooting gallery for which several countries have issued travel advisories.

As GC increases, politics slips ever more to the right. Right wing government tends to replace experts, experienced civil service, with incompetent party loyalists, institutions become dysfunctional: government, healthcare, education, public health, Politicians get rich while in public office. Corruption is rampant. Real problems ignored. The GOP is the farthest right major party of the developed world.

Media, owned by the corporate elite, broadcast propaganda to distract and divide the populace. Tribalism fractures by race, religion, sex, and class. The ‘other’ is to blame for problems. The GOP hides reality with the culture war, an assault on the truth.

The Republican party has always had a fascist fringe that has now become mainstream. They never liked the New Deal, tried to overthrow FDR more than once, and are still thinking about reducing Social Security, Medicare and other US inadequate social supports to reduce their own taxes.

At extreme levels of gini, the result is fascism, a demagogue emerges, acts out of the authoritarian playbook, and may violently take over government. The US has an eerie resemblance to the 1933 Wiemar republic, so far unable to hold insurrectionists accountable.

Republicans are a cult-like following of a demagogue who would be a dictator. He could go to jail for motivating insurrection, but remember that Hitler went to jail before becoming Germany’s premier. Gini has probably reached an unsustainable level.

The US Constitution, originally designed for the minority rule of property owners and slave holders, is so hard to change that it is a kind of prison preventing escape from our own self-destruction. Collapse of government, social order, and climate is in sight.

One way to hold down wealth inequality would be to implement progressive taxes like the US had after WWII, where the top marginal rate was over 90%. An appropriate inheritance tax could prevent a new aristocracy from rising. Together, such taxes could eliminate the sales tax, property taxes, and fund social programs like health care, child care, k-16 education, elder care, and more. Republicans would never let that happen. Strong social programs would improve the general welfare, as in Nordic countries. Republicans would rather cut all social programs than tax wealthy donors.

The sales tax is in fact regressive and, no doubt, so is the property tax, but bad taxes are the direct result of bad politics.

We probably have lost WWII, and the Civil War as well. Here is a forecast.

From 1989 to 2019, the richest 1% of families increased their share of total national wealth from 27% to 34%.

At the same time, families in the bottom 50% saw their share drop from 4% to 2%.

When I say trickle-down economics is a hoax, this is what I mean.
— Robert Reich (@RBReich) August 18, 2023

Links

Why Does Everyone Feel So Insecure All the Time? by Astra Taylor (8/18/2023) New York Times

Bibliography

Capital in the Twenty-First Century: Thomas Piketty.

It’s OK to Be Angry About Capitalism by Bernie Sanders

The Crisis of the Middle Class Constitution, Why Wealth Inequality Threatens Our Republic by Ganesh Sitaraman

The Spirit Level, Why Greater Equality Makes Societies Stronger: Richard Wilkinson and Kate Pickett

Winner Take All Politics: Jacob Hacker and Paul Pierson (!) Makes the case that politics is the primary driver of inequality in the US. Started in 1978.

The divide : American injustice in the age of the wealth gap / Matt Taibbi

"There are many other ways in which the government structures the market to redistribute income upward. Read my non-copyright protected book, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer to get more of the picture." Dean Baker (read it on-line.)

Inequality, What Can Be Done? Anthony B. Atkinson

A BRIEF HISTORY OF EQUALITY By Thomas Piketty

Requiem for the American Dream: The Principles of Concentrated Wealth and Power, Noam Chomsky

LET THEM EAT TWEETS, How the Right Rules in an Age of Extreme Inequality By Jacob S. Hacker and Paul Pierson

Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer: Dean Baker (free to download)

The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century: Walter Scheidel

THE CRISIS OF THE MIDDLE-CLASS CONSTITUTION, Why Economic Inequality Threatens Our Republic: Ganesh Sitaraman

Plutocrats United, Rick Hasen

The Vanishing Middle Class: Peter Temin

Inequality - What Can Be Done? Anthony B. Atkinson

The Anatomy of Inequality, Its Social and Economic Origins and Solutions: Per Molander

Affluence and Influence: Economic Inequality and Political Power in America: Martin Gilens