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Welcome to Income Inequality Kos.

Join us Thursdays, at 9:00 p.m. eastern. We discuss income inequality, concentration of wealth, and related issues.

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Community Statement

The shared community value is a belief that income inequality is a political issue of high importance. Otherwise, all takes on the issue, from within the general Daily Kos community, are welcome.

Our Wedge Issue

     Wedge issues are social or cultural issues used to split voters off, to drive a wedge between them and the party they traditionally vote with. The original wedge issue, the Grandaddy of 'em all, is racism. It first showed up in Nixon's "Southern Strategy". The idea was to use racism, white backlash against the Civil Rights movement, to split southern white voters off from the Democratic party. Racism is still, to this day, a fundamental element of conservative rhetoric. Someone on this site put it this way: "They only call him Muslim because they can't call him n***er." I agree entirely and anyone who denies the importance of racism to the Republican base is just not being honest.

     On economic issues, Richard Nixon would be considered a socialist by today's conservatives. Let's look at how Ronald Reagan used the "social issues". Reagan used the wedge issues with a vengeance. They were all there, Christian fundamentalism, anti-intellectualism, gun control and, of course, coded racism. Do you suppose his supporters were thinking of white women when he railed against "welfare queens" ? He was able to split off large numbers of white working-class voters, the "Reagan Democrats". He used his victories to launch a vicious, and still ongoing, top-down class war. Deregulation, union-busting, tax-cuts for millionaires; the whole gamut of Friedmanite "free-market" economic policies were instituted under Reagan. The results of this economic extremism ? Every measure of income inequality and concentration of wealth begins to rise in the early 1980s. It's all there in the charts.

     There has been some good coverage of income inequality in the mainstream press of late. (Better late than never, I suppose.) Robert Reich had this in the New York Times on Sept. 2. He cites the work of economists Emmanuel Saez and Thomas Piketty who used IRS tax data to track income inequality from 1913 to 2008. He links to these charts from the Center on Budget and Policy Priorities:



     There's a very good set of charts at Slate in a series on income inequality by Timothy Noah that began on the 3rd of this month. And there's this, by Louise Story from the New York Times back on August 21. Story cites the work of David A. Moss of the Harvard Business School. Moss overlayed charts of income inequality, bank failures, and deregulation, as follows :

     This last one says it all, doesn't it ? In the Times article, Story questions whether income inequality could be the cause of financial crises. Moss himself is coyly non-committal on possible causal connections among the three factors. Maybe it's that course in inductive logic I had so many years ago, but it seems to me that to say that inequality causes bank failures is to commit the Fallacy of the Common Cause. It is obvious to me that deregulation causes both income inequality and financial crises. This brings us back to politics since deregulation is political. The people we elect to represent us in Congress pass, or block, the laws which govern economic activity. The President we elect appoints people to write regulations implementing the laws. He also appoints the people who enforce those laws and regulations, or not. The management of the economy is a political issue. In fact, it may very well be the political issue.

     So, we've seen how Republicans have used wedge issues to institute economic policies that have proven disastrous for the vast majority of Americans. My suggestion is that we use Income Inequality as our own wedge issue to peel off working-class Republican voters. I remember seeing a story in the MSM claiming that Tea Partiers were of above average education and income. I don't believe that at all. I've seen their misspelled signs and I've seen interviews with them. You can't tell me that those folks are the top 1% Hell, they think anyone with a 4-year degree is a member of the "elite". They appear to understand nothing at all about income inequality or concentration of wealth. I'll bet they're anxious about the future and scared to death. They know they've been screwed they just don't know how or by who. It is our duty to point it out to them. The corporate media won't do it. It's their job to hide income inequality, to muddy the waters. We have to keep hammering away: Income Inequality, Income Inequality, face to face and in any forum we have access to. We have to help them to understand that no matter what they think a campaign is about, no matter which social issues the Republicans are using, once in office, all Republicans try to increase income inequality. It's what they're all about, it's what they do, always.  

     

     

 

Originally posted to Azazello on Thu Sep 09, 2010 at 05:58 PM PDT.

Also republished by Income Inequality Kos.

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Comment Preferences

  •  It seems such a shame that we need to (15+ / 0-)

    write diaries explaining that water is wet, or ice cold. But we do. Thanks for such a clear cut presentation.

    Pancho needs your prayers it's true, but save a few for Lefty, too. Townes van Zandt

    by DaNang65 on Thu Sep 09, 2010 at 06:10:03 PM PDT

  •  We need a Wealth Tax as part of Solution (9+ / 0-)

    Targeting HHs with a net worth over 50M, at 1% a year.  The Buffets and Ellisons of the US would contribute 8% of their net holdings EACH year.

    Some Kossacks have said that many of the target group would simply leave the country.

    I say, BS.

    I once had a client in Monterrey, Mexico, who decided to buy a stake in a Cuban telecom company.  The State Department told him that he has the right to do so, but if he didn't divest, the State Department would revoke his US visa as well as that of his dependents.

    Within one year, he sold the stake.

    The wealth tax would prohibit any citizen from ever entering the US again if they were to renounce US citizenship.

    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

    by PatriciaVa on Thu Sep 09, 2010 at 06:11:21 PM PDT

    •  I really like your train of thought here...n/t (4+ / 0-)

      " In our every deliberation,we must consider the impact of our decisions on the next seven generations" From the great law of the Iroquois confederacy.

      by flatford39 on Thu Sep 09, 2010 at 06:14:45 PM PDT

      [ Parent ]

    •  We can't tax wealth.... (1+ / 0-)
      Recommended by:
      PatriciaVa

      because of constitutional restrictions on "direct taxes".  However we can tax unrealized capital gains, which are basically the same thing. Depending on the study, it seems that 50% to 90% of unrealized capital gains are never taxed because upon owner's death, capital gains are wiped when the property passes to the heirs (the so-called "stepped up tax basis").

      William Vickrey, Alan Auerbach (who figured out a way to tax accrued capital gains equitably even if taxes aren't actually paid until sale and/or death of owner... basically the taxpayer has to pay interest for all the years they haven't paid the tax) and even supply sider Arthur Laffer have proposed ways of taxing "accrued gains".

      Here's a link to the section of Laffer's new book that begins, "the potential addition to the U.S. tax base from taxing unrealized capital gains is enormous".

  •  Thanks for this diary. We are in a class war (9+ / 0-)

    and no one is admitting it. The GOP wants to destroy the middle class and go back to a have, have not society that this country had prior to the depression of the 30's.

    The social programs of the FDR administration have been under attack by the GOP since they where put in place since the late 30's.

    They are lusting for a total destruction of the middle class so they, the GOP can replicate the economies of Mexico, China & India.

    The GOP is only about corporations. If you vote for them you are brain dead.

    " In our every deliberation,we must consider the impact of our decisions on the next seven generations" From the great law of the Iroquois confederacy.

    by flatford39 on Thu Sep 09, 2010 at 06:11:21 PM PDT

  •  The last graph is an especially powerful one. n/t (2+ / 0-)
    Recommended by:
    Alexandra Lynch, Azazello
  •  I found this stunning. (9+ / 0-)

    How to End the Great Recession By ROBERT B. REICH

    Money quote, so to speak:

    ‎"In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income."

    We need to teach people that the environment has a direct bearing on our own benefit. Dalai Lama

    by maggiejean on Thu Sep 09, 2010 at 06:14:50 PM PDT

    •  Much resistance, even among Dems, to address... (7+ / 0-)

      ..the problem by going after the UberWealthy.

      And the problem won't be solved with a 40% federal income tax rate on bankers and attorneys.  

      It's well beyond that.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

      by PatriciaVa on Thu Sep 09, 2010 at 06:20:24 PM PDT

      [ Parent ]

      •  Capital is globalized now, (6+ / 0-)

        we've got to do the same thing. I favor international treaties on tax avoidance. I'll bet very few countries are down with the Cayman Islands thing.

        •  Guy Hands and the UK (3+ / 0-)
          Recommended by:
          Alexandra Lynch, DaNang65, Azazello

          There's a PE general partner, Guy Hands, of Terra Capital, who hasn't been able to travel to the UK for awhile now, because he's in a tax dispute with the UK authorities.  Instead, his wife and kids need to travel to a nearby tax haven, Guernsey, to see him.

          He also hold meetings once a week in that island with his colleagues from Terra Capital.

          If the UK needs the money, I wouldn't be surprised if they revoked the citizenship of his wife and kids, to pressure him to come to some sort of arrangement with the UK.

          Of course, they could opt to leave, and never return to England.

          Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

          by PatriciaVa on Thu Sep 09, 2010 at 06:32:49 PM PDT

          [ Parent ]

      •  that's not true although Robert Rubin may blame (4+ / 0-)

        others.

        Larry Summers
        Dick Durbin
        and a guy name Barack Obama have all been tackling this issue head on for some time.

        •  I'd suggest, as a possible diary for this series, (3+ / 0-)

          a rundown on Barack Obama and his statements and positions and policies on income inequality.

          The topic might be an informative and important one.

          If you are interested, the series signup sheet is here.

          •  let me think on it. (4+ / 0-)

            Sen. Obama, who made the growing U.S. wealth chasm a pillar of his campaign from the start, argues for more-progressive tax policies that would shrink that gap and allow more Americans to share in the country's economic gains. Campaigning in Florida last week, he said Sen. McCain's tax plans -- like President George W. Bush's -- would "give more and more to those with the most, and hope prosperity trickles down to everyone else."

            http://online.wsj.com/...

            •  Also health care reform is tied in to it (2+ / 0-)
              Recommended by:
              joedemocrat, Azazello

              For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal government's biggest attack on economic inequality since inequality began rising more than three decades ago.

              Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.

              Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reform's effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan.

              http://finance.yahoo.com/...

              I think one of the problems that "issues group" progressives have had with Obama is that he's really abandoned that model of politics for a more global view. So while e.g. "public option" was a line-in-the-sand for some issues groups, Obama is looking at the totality of stimulus + health care reform + financial reform on larger directions in the US system.

              •  Non-profit health care is critical. (2+ / 0-)
                Recommended by:
                Garrett, joedemocrat

                The corporate, for-profit system is sucking billions out of the economy, 60% of it from governments, i.e.taxpayers. Another rotten example of "American Exceptionalism".

                •  so from their point of view (2+ / 0-)
                  Recommended by:
                  joedemocrat, Azazello

                  i believe, that any reduction of income inequality depends on pushing back on the FIRE sector and growing manufacturing. So you look at the student banking reform, hcr, auto rescue, direct funding of factories all as interlocking components reinforcing each other along with finreg and this enormous attack on republicanomics becomes visible. Because they have a systems view, and came into office with that systems view, they can make multiple pawn sacrifices while improving the board position.

                  I don't see them as having a very radical POV, just exactly what Summers articulated as rescuing capitalism from its own excesses.

                  •  G-20 news conference (2+ / 0-)
                    Recommended by:
                    PatriciaVa, Azazello

                    I think that there's always been a spectrum of opinion about how unfettered the free market is.  And along that spectrum, I think there have been some who believe in very fierce regulation and are very suspicious of globalization, and there are others who think that it's always -- that the market is always king.  And I think what we've learned here, but if anybody had been studying history they would have understood earlier, is that the market is the most effective mechanism for creating wealth and distributing resources to produce goods and services that history has ever known, but that it goes off the rail sometimes; that if it's completely unregulated, that if there are no thoughtful frameworks to channel the creative energy of the market, that it can end up in a very bad place.

                    Barack Obama, G-20 financial crisis summit, April 2, 2009

    •  That's what's happened since Reagan in 1980.. (2+ / 0-)
      Recommended by:
      Garrett, Azazello

      But the wealth gap has gotten about as big as it can, at least from a historical perspective. We have gone back to 1920's levels of inequality..

      "Comfort the afflicted and afflict the comfortable" - Dorothy Day

      by joedemocrat on Thu Sep 09, 2010 at 07:54:53 PM PDT

      [ Parent ]

  •  Without meaning to detract from the income (6+ / 0-)

    inequality mess, are we really looking for "wedge issues"?
    I, for one, have had more than enough of the politics of divide and conquer. I'd much prefer to see it presented as an issue we, the have nots, could unite Democrats and Republicans alike  around. It's probably simple framing, and the electoral goals would be the same, just a change from looking at what divides us and seeing what binds us together.

    Pancho needs your prayers it's true, but save a few for Lefty, too. Townes van Zandt

    by DaNang65 on Thu Sep 09, 2010 at 06:33:09 PM PDT

  •  Very illuminating. (4+ / 0-)
    Recommended by:
    Garrett, joedemocrat, Azazello, Miep

    Thanks!  ...and yes, that last graph says it all.  :(

  •  What to add? (2+ / 0-)
    Recommended by:
    Garrett, Azazello

    I don't know.  Your graphical analysis of economic disparity seems to be felt even by those we consider ignorant obstructionists, the teabaggers.  Their incoherent anger may have started with the wealth transfer engineered by the financial sector as an economic crisis, and abetted by the government even as they saw their lives stressed by long standing repub policies, but it was channeled destructively.  So, are we just stirring the pot unless Democrats start to actually act upon the fact of economic disparity as a quality of life issue and embrace its correction?

    Distrust of authority should be the first civic duty. - Norman Douglas

    by Fossil on Thu Sep 09, 2010 at 07:11:43 PM PDT

  •  Class War - Let's fight back (5+ / 0-)

    Great idea for diaries.

    SOme ideas

    1. Some clever econometricians need to start backing the top 3% out of all the monthly statistics on income growth, etc. Reported as a whole, the stats mislead people even in "good" times (remember those?) into thinking that things are improving for most people when they're not. If the results for the top 3% were backed out, we'd  suddenly start hearing - each month - how incomes are stagnating, falling, etc.  for most of us, and soaring for the uber-rich.
    1.  We need to shout loudly about the fact that some people like inequality of wealth and income.  Not only do they think it's in their interest, but it jazzes them, they like the idea that modern-day nobility lord it over mere wage serfs.  It suits their send of internal drama, or need for control, or whatever.  If people understood that twisted emotiona rather than economic analysis lies behind right-wing conomics, it would open some eyes.

    All for now.  Let the games begin!

  •  Tipped and Recommended.. (2+ / 0-)
    Recommended by:
    Garrett, Azazello

    I'd never heard of this series..now on to read :)..

    Sure sounds interesting..

    "Comfort the afflicted and afflict the comfortable" - Dorothy Day

    by joedemocrat on Thu Sep 09, 2010 at 07:42:19 PM PDT

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