Monday, January 1, 2007

Not an economic populist? You will be.

Or so says Robert Reich:
I'm reminded of a philosophical conversation I had several years ago with my good friend and cabinet colleague Bob Rubin, over lunch in the White House mess. [...]

It started as a discussion of a particular policy then being debated inside the Clinton White House but then became more theoretical. It came down to two simple questions. Suppose a proposed policy will increase the incomes of some people without decreasing the incomes of any others. Should it be implemented? Bob and I agreed it should. But suppose the people whose incomes will rise are already wealthier than everyone else. Although no one will lose ground, inequality will widen. Should it still be implemented? I won’t tell you where he and I came out on that second question. But we agreed that people who don’t share in such gains feel relatively poorer. Widening inequality also further tips the balance of political power in favor of the wealthy.
And it's the political power gap, an inevitable consequence (and, for many of the "haves" an indisputable motive) of the wealth gap, that's especially troubling.

By and large, the problems of the top 1% of the wealthy in America don't concern me. With the exception of omnipresent media figure and short-fingered vulgarian Donald Trump, they're as far off my radar screen as I am from theirs, and we're probably all the happier for it.

But the ever-widening gap between the ultrarich and the rest of America isn't really a matter of watching the ultras worry about how to water ski behind three yachts at the same time. When you have that much money, it's a rare bird whose thoughts don't soon turn to using wealth to manipulate the political system to lock in current advantages and guarantee future gains. (If I never completley got that fact before, I'm unlikely to forget it again after reading Kevin Philips' Wealth and Democracy.)

There are lots of ways--too many ways--to illustrate the importance of this, but let's pick one
Molly Ivins uses the week after Christmas to remind us that locking in gains is not--or at least shouldn't be--a problem for the upper crust alone:
[B]y the mid-1990s, women were earning roughly three quarters of what men were.

But a funny thing happened on the way to equality. High school graduates got stuck in the 75-cent range. College educated women started moving backward.

That's right, backward.

The pay gap for women with college educations has actually increased in the last decade. As more women go to college, the ones who do make less, relatively speaking.

Forget about the symbols and tokens, the Nancy Pelosis and Hillary Clintons, whose presence could almost convince you, and do some, that discrimination is dead. According to Labor Department data, women with college degrees who are between 36 and 45 earned 74.7 cents on the dollar last year, DOWN a penny from 10 years ago.

Progress? The figures are measured in pennies, but the gap is not a matter of small change. Put it this way: Women are 25 percent behind, and falling. The more you earn, the bigger the gap between what women and men make. The closer you get to the top, the further behind women are. Equality at the top is more elusive than ever.

Pay differentials between the sexes is only part of it. Reich points out that some favorite conservative (and "centrist" Democratic) themes--like top-end tax cuts, trade agreements, and immigration (and we could add some lefty themes like media access, net neutrality, and health care)--are ruled by the same wealth-power calculus, concluding:
As inequalities of income and wealth continue to widen, the social cost of adding to them will continue to grow. Even if you are not an economic populist now, if present trends continue eventually you will be.

1 comment:

Kari Chisholm said...

I think Robert Reich is brilliant, but this is absurd: But suppose the people whose incomes will rise are already wealthier than everyone else. Although no one will lose ground, inequality will widen.

It's simply not possible to create such an environment. Anytime one group of people sees rising income, then everyone else's income - by definition - decreases. Perhaps not in absolute numbers, but certainly in buying power.

It's a theoretical dilemma that actually proves Reich's point: Maybe you implement such a policy, and maybe you don't, but let's not pretend that rising inequality doesn't hurt the people at the bottom. Even if they're moving up too. If they're moving up slower, then that hurts their buying power.