Welcome to Income Inequality Kos.
Join us Thursdays, at 9:00 p.m. eastern. We discuss income inequality, concentration of wealth, and related issues.
Guidelines for Diarists
- Diaries come from the community.
- Volunteers for the next diary make two commitments:
- They will publish the next week's diary.
- They will find a volunteer for the diary after that.
- A good way to find the next week's volunteer is to ask and handle it in a comment thread in your diary.
- If you can't find a volunteer, email the series originator, email address in profile. Something will be worked out.
- Copy for this introduction is available in a google doc. Copy and paste it as your diary Intro.
- Use "Income Inequality Kos" in your diary title, and add the same tag, that people can find it.
Community Statement
The shared community value is a belief that income inequality is a political issue of high importance. All takes on the issue, from within the general Daily Kos community, are welcome.
Source: Saez 2009.
Series Introduction
Income inequality is at an all-time high in America, and has been getting steadily worse. The problem is now worse than it was before the Great Depression.
2007 was an incredibly good year for the super rich.
Saez
Income Inequality Kos is a weekly series, published every Thursday evening, at about 9:00 p.m. eastern.
The series discusses income inequality, concentration of wealth, and related issues. It seeks to generate community, awareness, visibility, and discussion for the issue.
The series is self propagating. Diarists volunteer to handle the next week. Each week's diarist is responsible for finding the diarist for the week after that.
Diary format is flexible. It can be personal take, fact, opinion, analysis, or information and resource collection. It can focus on government policy, partisan messaging, or media discussion. It can be whatever approach the weekly diarist wishes to take.
First Diary: Robert Reich in the Nation
Robert Reich was Bill Clinton's first Secretary of Labor. His blog is here. His books are here. His human vulnerabilities are, perhaps, here.
Reich has an article, "Unjust Spoils", in the July 19 Nation. He ties the financial collapse and the current economic troubles directly to concentration of wealth.
Wall Street's banditry was the proximate cause of the Great Recession, not its underlying cause. Even if the Street is better controlled in the future (and I have my doubts), the structural reason for the Great Recession still haunts America. That reason is America's surging inequality.
The two graphs at the top of this diary tell a clear story. Concentration of wealth in America was brought down sharply by the New Deal. From World War II, up till the election of Ronald Reagan, concentration of wealth was moderate, and held remarkably steady.
From Reagan on, concentration of wealth has been on its increasing upward trend, and we recently got back to the 1929 levels. This analysis works whether the view is of the well-to-do (90%+ income bracket), or the super rich (99.99%+).
Each of America's two biggest economic crashes occurred in the year immediately following these twin peaks—in 1929 and 2008. This is no mere coincidence.
Barack Obama can be considered a technocrat. Reich essentially argues that the fix for the financial collapse was proper (it stemmed the problem) but insufficient (it didn't address the underlying structural causes).
The crash of 2008 didn't turn into another Great Depression because the government learned the importance of flooding the market with cash, thereby temporarily rescuing some stranded consumers and most big bankers. But the financial rescue didn't change the economy's underlying structure. Median wages are continuing their downward slide, and those at the top continue to rake in the lion's share of income. That's why the middle class still doesn't have the purchasing power it needs to reboot the economy, and why the so-called recovery will be so tepid—maybe even leading to a double dip. It's also why America will be vulnerable to even larger speculative booms and deeper busts in the years to come.
The financial collapse was caused by concentration of wealth, same as for the Great Depression. The underlying structural causes have not been addressed. We are vulnerable to future collapse.
Reich has a somewhat nuanced take on why concentration of wealth began its increase under Ronald Reagan. Technological factors in the late 1970s caused a loss of jobs. Corporate pay at the top levels soared.
Government policy could have addressed this. Government policy did not.
It deregulated and privatized. It increased the cost of public higher education and cut public transportation. It shredded safety nets. It halved the top income tax rate....
Reich cites the increasing influence of money on politics as a reason concentration of wealth has grown under Republicans and Democrats alike. Money is power. Concentrated money is concentrated power. The modern big money campaigns make this problem worse.
It's too facile to blame Ronald Reagan and his Republican ilk. Democrats have been almost as reluctant to attack inequality or even to recognize it as the central economic and social problem of our age. (As Bill Clinton's labor secretary, I should know.) The reason is simple. As money has risen to the top, so has political power. Politicians are more dependent than ever on big money for their campaigns.
High concentration of wealth led to economic collapse, in 1929, and recently. The New Deal brought concentration of wealth sharply down. Government policy kept it at moderate and steady levels, for a very long time. It began to rise again, with the election of Ronald Reagan, and policies of deregulation. It has been rising steadily since.
Current government policy fails to address underlying system issues with concentration of wealth.
Because it does not, we are vulnerable to further economic collapse.
Further Reading
The Nation issue has a number of online articles focusing on income inequality and the current economic troubles:
Robert Reich substantively blogs on matters relating to income inequality. This is just a small selection of his recent posts:
Some recent Kossack diaries touching on issues related to income inequality: