“We Built This Country On Inequality”: The Wealth Gap Didn’t Spring Up From Policy Gone Awry, It Is The Policy
I admit to tuning out most conversations surrounding income and/or wealth inequality in the United States. It’s not because I don’t find these conversations important; they are vital. The problem is that I always hear the issue of inequality situated around what has happened in the last thirty or forty years, which ignores the fact this is a nation built on inequality. The wealth gap didn’t spring up from policy gone awry—it is the policy. This country was founded on the idea of concentrating wealth in the hands of a few white men. That that persists today isn’t a flaw in the design. Everything is working as the founders intended.
The source of that inequality has changed, as the past thirty/forty years have been dominated by the financial class and rampant executive corruption, but the American economy has always required inequality to function. Even times of great prosperity, where the wealth gap decreased, inequality was necessary. The post-WWII period is notable for the lowest levels of inequality in the modern era, but the drivers of that prosperity (the GI Bill, construction of the highway system, low-interest home loans) deliberately left black people out, and the moments of robust public investment that have benefited racial minorities and women have always been followed by a resurgence of concern over government spending and “state’s rights.”
Our job, then, if we’re serious about forming a society of true equality, is to interrogate and uproot the ideologies that created the original imbalance. In other words, we can’t deal with income/wealth inequality without also reckoning with white supremacy and patriarchy.
So far, we haven’t done a very good job of that. Bryce Covert writes eloquently about the gender gap, while Matt Bruenig writes about the failure to address economic disparity along racial lines. Over at Salon, he says:
Although the Civil Rights Act, the landmark legislation which just reached its 50th anniversary, made great strides in desegregating the economy, economic discrimination is still widespread, and anti-discrimination legislation alone can never rectify the economic damage inflicted upon blacks by slavery and our Jim Crow apartheid regime.
He’s right, though I’d quibble with some of the other points in this piece. Later on, he says, “Even if racism were wiped out tomorrow and equal treatment became the norm, it would never cease being the case that the average white person has more wealth than the average black person.” Except that is racism. The persistence of inequality along racial lines is racism. It may seem to be a minor point, but it’s important in constructing a truer definition of racism, in order that we know what we’re fighting against. It’s important to remember that slavery was chiefly an economic enterprise that created a racial caste system out of necessity. Karen and Barbara Fields chart this history in their book Racecraft.
The larger point still remains, as Bruenig concludes:
Thus, those actually serious about righting the wrongs of enslavement and Jim Crow apartheid must support more drastic leveling efforts. Beefed up anti-discrimination, which is both necessary and good, will not be enough. Ideally, we could work towards reparations in the form of redistributing wealth along racial lines. With that an unlikely possibility though, we can at least think about ways to redistribute wealth more generally from those with wealth to those without it, something that would have a similar, albeit more attenuated, effect as reparations given who the wealthy and non-wealthy happen to be.
I would more than welcome a renewed discussion about reparations. It is, however, as Bruenig notes, a long shot. But there are other avenues to explore that would have a similar impact to reparations, like a jobs guarantee and universal basic income. Perhaps this is an opportunity to revisit A. Philip Randolph’s “Freedom Budget for All Americans.” But any conversation about inequality absent one of white supremacy (and patriarchy) isn’t one worth engaging.
By: Mychal Denzel Smith, The Nation, April 18, 2014
“Enough With Puff Pieces About Painting”: Bush Crew’s Deplorable Return, How Their Reemergence Sends A Deadly Message
It’s been more than five years since Dick Cheney left the White House and nearly eight years since Donald Rumsfeld was booted from the Pentagon. With the obvious exception of George W. Bush himself, no two men were more responsible for the United States’ disastrous and criminal invasion of Iraq, as well as its embrace of a counter-terrorism model built on the twin barbarities of indefinite detention and systematic torture. In the years that have passed since their departure from public office, both men have released best-selling memoirs, made countless media appearances and no doubt added substantially to their already considerable wealth.
In fact, to get a real sense of just how little these men have had to pay for their sins, consider three recent examples.
One is a recent comment from Dick Cheney, delivered in public — not in private, not on background, not via unknown insiders with intimate knowledge of the former vice president’s thinking, but in public — about whether he still supports waterboarding (or torture, as most people besides Cheney tend to call it): “If I had to do it all over again,” Cheney said, “I would.”
The second is the new documentary, “The Unknown Known,” by Errol Morris and about Donald Rumsfeld. Estimations of the film’s quality vary, but all reviewers are unanimous in at least one regard: Rumsfeld, as he comes off in the film, truly has no regrets. Asked by Morris if invading Iraq for the second time, causing hundreds of thousands of innocent deaths and turning millions more into refugees, was worth it, Rumsfeld shrugs off the question and settles for a fittingly cold and glib answer: “Time will tell.”
The third story is, to my mind, the most disturbing. It’s a piece in the New York Times, published Friday, about a third man, a man who ignored warnings of a terrorist attack, plunged his country into two disastrous wars, invaded a sovereign nation without sanction from the United Nations and on false pretexts, signed off on the implementation of a worldwide torture regime, secretly initiated domestic surveillance on an unprecedented scale, oversaw the destruction of one of the world’s greatest cities, and cut taxes for, and thwarted regulations against, the Wall Street power-players who destroyed the global economy and consigned millions of people to lives of poverty, unemployment and deferred dreams. That man is George W. Bush, and the article is a puff piece about his kitschy paintings.
Obviously, the fact that these men continue to live charmed lives offends our sense of fairness. But it has a more tangible consequence, too. Consider the state of foreign policy thinking within the Republican Party today. Granted, with the recent ascendance of the relatively isolationist Sen. Rand Paul, the GOP’s view of foreign policy is somewhat in flux. But Paul is still an outlier, and a quick glance of the Mitt Romney campaign’s foreign policy experts is enough to show that neoconservatives like Cheney, Rumsfeld, Wolfowitz, Feith and the rest of that ghoulish clique still call the foreign policy shots for national Republicans. Despite their abject failures — both technocratically and morally — Bush, Cheney and Rumsfeld remain in good standing with the people who run one of America’s only two serious political parties. If Mitt Romney were president right now, with Dan Senor by his side, the United States could be ramping up for war with Iran or Russia, preparing to once again spread freedom from the barrel of a gun as if Fallujah and Abu Ghraib never happened.
There’s next to no chance any of these men will ever be officially held accountable for their crimes. All three clearly harbor no regrets. These are the fruits of belonging to the American elite in an era of widespread inequality, when not only the economy, but many pieces of the state itself, act to reinforce and perpetuate the divide separating those who have from those who do not.
Of course, Cheney, Rumsfeld and Bush are hardly the first American war criminals to escape justice. Richard Nixon, in whose administration the former two men served, immediately comes to mind. Henry Kissinger, too. As was the case for Nixon and Kissinger, Bush and Cheney and Rumsfeld have benefitted from a decision of the political ruling class — and, to a lesser degree, of the general public— that it’s best not to dwell too much on the nastier bits of America’s recent history. Back when some touchingly naïve souls thought it a possibility, President Obama used to dismiss the notion of holding his predecessors accountable for torture by urging America to “look forward.” This was an order that the vast majority of Americans showed themselves willing to follow.
This same dynamic, this resistance on the part of the powerful to hold their fellow elites to account — as well as the general public’s silent acceptance of these different, looser ethical standards — was also a key driver of the government’s response to the financial meltdown of 2008. After the crisis had passed and the Obama administration had begun reconstituting the financial sector (mostly in its prior form, sadly), there were public demands that some of the Wall Streeters responsible be prosecuted for the damage they wrought. But these flashes of public discontent were mostly ignored by the White House, and here we are, five years later, with essentially no Wall Street villain having had to worry about seeing the inside of a jail cell. Jamie Dimon and Lloyd Blankfein are richer and more powerful than ever.
I’m hardly the first to notice the difference between how not only society, but also the state, treats the powerful and the rest of the public. Salon alum Glenn Greenwald has made the same point, as has MSNBC’s Chris Hayes. But while it’s a point well worth repeating, I don’t bring it up in order to shed light on the past but rather to sound a warning about the future. Because as bad as accountability norms have already become in the United States, there’s ample reason to worry that they’re soon to get even worse.
For an example of how this might be, consider the recent, much-talked-about essay in the Wall Street Journal by billionaire industrialist and right-wing donor Charles G. Koch. The piece is an odd one, residing somewhere between a talking-points-filled press release and a list of conservative maxims that are too hoary for all but the dullest politicians and the most thoughtless ideologues (despite his political activities, Koch is much more the latter). It’s littered with pablum about liberty and “the principles of a free society,” and is defined by the kind of sloppy, lazy thinking that lays claim to “dignity, respect, equality before the law and personal freedom” without acknowledging that, in the real world, disagreements over the proper application of these universally agreed upon values is the essence of democratic politics.
As Koch goes on, however, it begins to make quite a bit of sense, his inability to recognize the basic mechanics of American democracy. It’s not merely that he’s an unsophisticated and unoriginal thinker (though he certainly is), it’s that he truly doesn’t understand what democracy even is. Nowhere is this more obvious than in the brief, passive-aggressive section of the essay in which Koch defends himself against unnamed “collectivist” bullies. Responding to a fusillade of criticism sent his way by Senate Majority Leader Harry Reid, Koch complains that “collectivists” reject “a free and open debate” and “strive to discredit and intimidate opponents” like himself with “character assassination,” just as “so many despots” and Saul Alinsky did before. (Small consolation, I suppose, that Koch is self-aware enough not to actually call his opponents Hitler, choosing instead to merely make the implication.)
Beyond his comically exaggerated sensitivity, what Koch’s mini jeremiad shows is that the man can’t quite fathom the idea that free speech is not the same thing as freedom from critical speech. At no point in his many attacks has Harry Reid — or any other Democrat of significance, for that matter — said anything about Koch’s private life or soul. Throughout, the criticism has been directed toward his politics and the groups he pays to promote them. Reid has said that Koch wishes to establish a political status quo that shields his power and wealthy from scrutiny or competition. Reid cannot authoritatively speak to what goes on inside Koch’s brain, but his interpretation of Koch’s motives is hardly outside the realm of acceptable discourse in American politics. Keep in mind that ours is an era in which politicians malign the the poor as having bad values, bad habits, bad families and bad minds. People infinitely less influential than Charles Koch, in other words, routinely suffer much worse.
Then again, Koch, in so many ways, isn’t like most people. Unlike most people, he can directly reach any Republican politician in the country by simply picking up the phone. Unlike most people, he can spend hundreds of millions of dollars on misleading attack ads and cynical, quixotic campaigns to persuade young people to forego health insurance. Unlike most people, he can take advantage of Citizens United in order to funnel countless millions through shadowy outside groups, largely obscuring his political activities and denying Americans the right to know whose interests are being represented when a politician swears to fight higher taxes on the wealthy and roll back regulations on industrial pollution. Unlike most Americans, Koch can now take advantage of McCutcheon, the Supreme Court’s sequel to Citizens United, which lifted aggregate caps on political donations and took us one more step closer to having no limits whatsoever on how America’s wealthiest citizens can use their largesse to influence the political process.
And that, from all appearances, is how Koch and his ilk like it. With Republicans in Congress stymying any attempt to make political donations transparent, so people at least can follow the money, and with the conservative Supreme Court widely considered to be far from finished destroying campaign finance law from within, Koch can rest easy knowing that his power will remain not only overwhelming but also little understood. He can go on supporting politicians who thwart Medicaid expansions one minute and funding outside groups who castigate Obamacare for not covering more people the next. He can keep bankrolling anti-Obamacare ads that stretch the truth so thin as to render it translucent. He can keep polluting our air, contaminating our water and destroying our environment without having to even pay for the privilege.
He can keep being unaccountable.
By: Elias Isquith, Salon, April 5, 2014
“Rhetoric Won’t Patch The GOP Up”: It’s Hard To Patch Things Up When You Have Diametrically-Opposed Goals
Over at the National Review Kevin Williamson has penned a column we are all familiar with. It’s a rallying cry for conservatives to get over their differences and rally behind the Republican Party. In the aftermath of the 2004 presidential election, there were countless articles of this type written by pragmatic liberals. All you have to do is reverse the names, and it looks completely familiar.
And though I reject the notion that Mitt Romney wasn’t good enough for true-believing conservatives, let’s say, arguendo, that that was the case. Unless you are ready to give up entirely on the notion of advancing conservative principles through the ballot box, you might consider looking at things this way: Even if you do not think that it matters much whether Republicans win, it matters a great deal that Democrats lose.
Maybe you were not that excited that 2012 gave you a choice between Mitt Romney and Barack Obama. I sympathize — I liked Rick Perry. But how is President Romney vs. President Obama a hard choice? How is Senate Majority Leader Mitch McConnell vs. Senate Majority Leader Harry Reid a hard choice? How is Speaker of the House John Boehner vs. Speaker of the House Nancy Pelosi a hard choice?
It isn’t.
I don’t think these types of columns are ever very convincing, but that doesn’t mean that they are incorrect. If we were to give this genre a name, it would be Vote-for-the-lesser-evil essays. They don’t exactly get people fired up and ready to go.
And it’s not a great sign that people feel that they are necessary to write because it indicates that there are some rather strong divisions. Back in the 2005-6 period, Democrats became unified, and they did an adequate job of patching things up after the 2008 primaries. The divisions among Republicans are more fundamental. There’s a glaring generation gap on gay rights. There’s a yawning gulf between the businessmen who want comprehensive immigration reform and the nativist base that wants an end to all non-white immigration, whether it is legal or illegal. There’s a growing chasm between the libertarian non-intervention wing of the party and the John McCain bomb-em-first-ask-questions-later wing of the party. There’s also a Main Street/Wall Street divide over tax policy and social/religious issues.
In all these cases, important factions within the GOP simply want different things. It’s hard to patch things up when you have diametrically-opposed goals.
Interestingly, Mr. Williamson says he quit his membership in the Republican Party during the Bush years because he couldn’t abide belonging to the same club as Arlen Specter. He also says that “the Affordable Care Act, [is] the worst domestic defeat for the cause of limited government in a generation,” which is a nice admission. It shows the real reason that conservatives keep bad-mouthing a law that is working very well and is already covering seven million people. We can understand, now, why conservatives have fought the law with so much fury. They believe, correctly, that the mere existence of the law is a tremendous ideological defeat. Whether it works well or not is completely beside the point for these folks.
Going forward, that’s going to be an increasingly suicidal political position to take. There will be divisions on that, too.
By: Martin Longman, Washington Monthly Political Animal, March 30, 2014
“Like Sands Through The Hourglass”: Gov. Christie’s Wife Works At Firm Managing State Pension Funds
Last week, The Nation published my piece exploring how Gov. Chris Christie — a champion of so-called “pension reform” — has presided over a massive transfer of state retiree money into the hands of hedge funds and other high-fee investment managers, including to Wall Street titans who have boosted the governor’s political career with hefty donations to the Republican Governors Association.
As part the piece, we noted that this shift came as perhaps somewhat of a surprise to those who followed Christie’s first campaign for statewide office. In 2009, Christie and his surrogates bashed Democratic Governor Jon Corzine for the same practice of moving large amounts of pension money into so-called “alternative investment” managers. “Jon Corzine made it easier for his friends from Wall Street to manage New Jersey’s pension fund,” blasted a “Christie for Governor” press release. In fact, Christie suggested that Corzine’s personal investments with a fund that had won New Jersey pension contracts reeked of corruption — and demanded that he divest.
Well, it appears that Christie’s wife, Mary Pat Christie, also has a financial interest in a firm that invests money on behalf of New Jersey retirees. Mary Pat joined the alternative investment firm Angelo Gordon in 2012, where “she works full time on strategic planning and marketing, focusing on bank debt and distressed funds,” according to Bloomberg. Disclosures from the New Jersey Division of Investment, the agency that oversees the state pension, reveal that Angelo Gordon continues to manage money on behalf of the fund, though they have wound down some of the investments over the years. The particular fund is called “AG Garden Partners,” one of many investment vehicles owned by Angelo Gordon.
A request for comment from the Division of Investment and to Angelo Gordon has not been answered.
Now, the contact between the New Jersey pension plan and Angelo Gordon began in 2006, well before Christie became governor. But as the Christie campaign, including then-campaign surrogate Bill Baroni, charged, such potential conflicts of interest opens ”up the door to the perception of politics.”
Will Mary Pat Christie’s employment with Angelo Gordon influence continued investments from the New Jersey pension fund into her firm?
Another question this relationship raises is, how will the many hedge fund and private equity business deals at stake in 2014 influence Christie’s chairmanship of the Republican Governors Association, the organization responsible for ensuring Republicans win gubernatorial races. In most states, governors have wide latitude in managing how state pension funds are run. Angelo Gordon manages pension money for the Nebraska and New Mexico state plans — two states where Republicans are hoping to retain power, and where Christie and the RGA are likely to play a role.
By: Lee Fang, Republic Report, March 24, 2014
“The Timidity Trap”: The Best Lack All Conviction, While The Worst Are Full Of Passionate Intensity
There don’t seem to be any major economic crises underway right this moment, and policy makers in many places are patting themselves on the back. In Europe, for example, they’re crowing about Spain’s recovery: the country seems set to grow at least twice as fast this year as previously forecast.
Unfortunately, that means growth of 1 percent, versus 0.5 percent, in a deeply depressed economy with 55 percent youth unemployment. The fact that this can be considered good news just goes to show how accustomed we’ve grown to terrible economic conditions. We’re doing worse than anyone could have imagined a few years ago, yet people seem increasingly to be accepting this miserable situation as the new normal.
How did this happen? There were multiple reasons, of course. But I’ve been thinking about this question a lot lately, in part because I’ve been asked to discuss a new assessment of Japan’s efforts to break out of its deflation trap. And I’d argue that an important source of failure was what I’ve taken to calling the timidity trap — the consistent tendency of policy makers who have the right ideas in principle to go for half-measures in practice, and the way this timidity ends up backfiring, politically and even economically.
In other words, Yeats had it right: the best lack all conviction, while the worst are full of passionate intensity.
About the worst: If you’ve been following economic debates these past few years, you know that both America and Europe have powerful pain caucuses — influential groups fiercely opposed to any policy that might put the unemployed back to work. There are some important differences between the U.S. and European pain caucuses, but both now have truly impressive track records of being always wrong, never in doubt.
Thus, in America, we have a faction both on Wall Street and in Congress that has spent five years and more issuing lurid warnings about runaway inflation and soaring interest rates. You might think that the failure of any of these dire predictions to come true would inspire some second thoughts, but, after all these years, the same people are still being invited to testify, and are still saying the same things.
Meanwhile, in Europe, four years have passed since the Continent turned to harsh austerity programs. The architects of these programs told us not to worry about adverse impacts on jobs and growth — the economic effects would be positive, because austerity would inspire confidence. Needless to say, the confidence fairy never appeared, and the economic and social price has been immense. But no matter: all the serious people say that the beatings must continue until morale improves.
So what has been the response of the good guys?
For there are good guys out there, people who haven’t bought into the notion that nothing can or should be done about mass unemployment. The Obama administration’s heart — or, at any rate, its economic model — is in the right place. The Federal Reserve has pushed back against the springtime-for-Weimar, inflation-is-coming crowd. The International Monetary Fund has put out research debunking claims that austerity is painless. But these good guys never seem willing to go all-in on their beliefs.
The classic example is the Obama stimulus, which was obviously underpowered given the economy’s dire straits. That’s not 20/20 hindsight. Some of us warned right from the beginning that the plan would be inadequate — and that because it was being oversold, the persistence of high unemployment would end up discrediting the whole idea of stimulus in the public mind. And so it proved.
What’s not as well known is that the Fed has, in its own way, done the same thing. From the start, monetary officials ruled out the kinds of monetary policies most likely to work — in particular, anything that might signal a willingness to tolerate somewhat higher inflation, at least temporarily. As a result, the policies they have followed have fallen short of hopes, and ended up leaving the impression that nothing much can be done.
And the same may be true even in Japan — the case that motivated this article. Japan has made a radical break with past policies, finally adopting the kind of aggressive monetary stimulus Western economists have been urging for 15 years and more. Yet there’s still a diffidence about the whole business, a tendency to set things like inflation targets lower than the situation really demands. And this increases the risk that Japan will fail to achieve “liftoff” — that the boost it gets from the new policies won’t be enough to really break free from deflation.
You might ask why the good guys have been so timid, the bad guys so self-confident. I suspect that the answer has a lot to do with class interests. But that will have to be a subject for another column.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 20, 2014
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