As the noted economist 50 Cent has pointed out, everyone wants to get rich or die tryin’. And that’s one of the reasons conservatives have been able to get away with their tax-cut trickle-down scam for so long: most of us fantasize that someday, we too will be rich, just like the oligarchs who’ve helped bankrupt the country for almost 40 years.
The fact is, of course, that we have a better chance of being struck by lightning after winning the Powerball than we do of becoming rich. That’s because income and wealth inequality in the United States is a result of economic immobility.
The great American myth involves bootstraps, hard work and, eventually, wealth. But the most important word in that sentence is “myth.”
The great American myth involves bootstraps, hard work and, eventually, wealth. But the most important word in that sentence is “myth.” As a landmark study from Stanford University and Stockholm University showed back in 2006, social and income mobility in America is not nearly as good as other countries. They found that of people born into the bottom 20 percent in terms of household wealth and income, 40 percent stay there, as opposed to around 25 percent in the Scandinavian countries.
Lack of educational opportunities, lack of bank accounts and access to capital, lack of skills, and lack of the work connections that lead to social and income advancement are the main reasons the United States in the 21st century is starting to look a lot like Great Britain in the 19th century: the lower classes remain mired in poverty through generations, while the upper classes pull farther ahead due to inherited wealth and economic connections.
French economist Thomas Piketty has written a pair of groundbreaking books that pretty well explain what’s been going on. His books “Capital in the 21st Century” and “The Economics of Inequality” demonstrate clearly what most of us have lived through: since Reagan, the rich have gotten richer at the expense of the rest of us. In the 1960s, the top one percent in the United States accounted for eight percent of total earnings. In the Age of Trump, that one percent controls over 20 percent of all income.
There are lots of reasons for that, but among the two biggest are falling tax rates for the rich, and conservative attacks on organized labor that saw union membership shrink. Not surprisingly, as unions diminished, wages stagnated and benefits disappeared, making it even harder for working Americans to make even modest inroads into the middle class.
Economic stagnation became a full-scale implosion during the Great Recession, as millions of previously middle-class Americans lost their jobs and their homes due to a home mortgage and credit crisis engineered by Wall street types, who created risky financial instruments that promised fat-cat investors serious gains with almost no oversight. A blizzard of layoff notices and an avalanche of foreclosures destroyed the savings of working people at a rate unparalleled since the Great Depression, while the rich waltzed off with their wealth and low taxes intact.
After all, we’ve been told since Reagan that the rich are like oxygen: they make life itself possible. Cutting taxes for the rich would trickle-down to we mere mortals. The rich would take that extra money and hire workers, creating a rising tide that would lift all boats.
Even the language changed. Conservatives assured us the rich weren’t rich. They were “job creators.” The right wing took that trope and ran with it. If the rich are virtuous, the non-rich were not virtuous. So the GOP talking about “the makers”—the rich—versus “the takers”—pretty much everybody else.
Starbucks magnate Howard Schultz, who is exploring a run for president as a “moderate,” said that billionaires shouldn’t be called billionaires. They should be called “people of means” or “people of wealth.” By that logic, maybe we should call murderers “people with self-control issues.”
That kind of language perversion, coupled with decades of propaganda from conservative media blowhards, shifted the ground under the economic debate in America, convincing voters that somehow, in some unicorn universe, what was good for the rich was good for the rest of us. The Reagan tax cuts, George W. Bush’s tax cuts and Trump’s tax cut starved basic services while fattening both defense contractors and the portfolios of the rich-who-shall-not-be-called-that.
But a funny thing happened amid the debris of the 2016 election and the low-wage, no-benefits gig economy. Progressive Democrats were elected and began pushing ideas like a 70 percent top income tax rate, a surtax on the richest households in America, raising corporate and estate taxes, and a Medicare for all idea that would require significant tax hikes on the wealthy to pay for it.
This time around, though, the conservative blather about raising taxes on the rich being “socialism” fell flat. In a new Harris poll, 59 percent of Americans support raising the top tax rate on the wealthy to 70 percent. But slapping an additional two percent surtax on the wealthiest households is even more popular. A recent poll from the Morning Consult group find the wealth surtax supported by 61 percent of all voters including – brace yourself – half of all Republicans. Half.
What this tells us is that even among the pro-Trump America-First crowd of (white) nationalists, there is a feeling that we’ve been screwed by the rich. They vote Republican because of guns, racism, and abortion, not because of economics.
What all this means is fairly simple. Anger against the wealthy gaming the system and not paying their fair share while schools, roads, bridges, and many communities collapse has reached a tipping point. Taxing the wealthy to lower the debt and/or repair infrastructure and/or pay for single-payer medical care is mainstream. The lie that making the rich richer benefits anyone but the wealthy has finally been exposed.
Now it’s up to progressives to make those proposals into law eventually, no matter what Republicans or timid Democrats may think.
St. Louis American