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  Over at the NY Times, David Leonhardt lays it out: Inequality Has Been Going On Forever ... but That Doesn’t Mean It’s Inevitable  He interviewed Piketty to get a better understanding of just how capital tends to grow more quickly than income, concentrating wealth, and found out why historically this has been true. But he also found it doesn't have to be.

...To say that something is likely, or even natural, is not to say that it is inevitable. Not so long ago, the rich owned a much smaller share of this country’s resources and made a smaller share of its income than many of their predecessors. Perhaps more important, even though inequality has risen abroad, it has done so far less rapidly. Other developed economies (see charts at right), are not more equal simply because they lack success stories, like Warren Buffett, or have fewer investment bankers or hedge-fund executives. Instead, their middle class and poor have enjoyed more aggressively rising incomes, all while their economies grow as rapidly as this country’s in recent years. A more equal society does not mean a less dynamic one....
        Simply put, once one gets past a critical threshold of wealth, the ability to make investments not available to others with lesser amounts is an advantage that continues to widen the gap. (The BBC has an article spelling out how this works in today's economy with some examples.)

emphasis added

       Leonhardt suggests that increased taxation on wealth, while one obvious answer to growing inequality, is not likely to get much traction in our political environment. He notes that America once emphasized the distribution of another kind of capital: education. It made America the best educated nation on earth and gave us a huge advantage. He suggests that we consider this problem:

...As the economists Claudia Goldin and Lawrence Katz have written, “The 20th century was the American century because it was the human-capital century.” Education continues to pay today, despite the scare stories to the contrary. The pay gap between college graduates and everyone else in this country is near its all-time high. The countries that have done a better job increasing their educational attainment, like Canada and Sweden, have also seen bigger broad-based income gains than the United States.

Yet the debate over our schools and colleges tends to exist in a separate political universe from our debate over inequality. Liberals often shy away from making the connection because they worry it holds the struggling middle class and poor responsible for their plight and distracts from income redistribution. Many conservatives fear the implicit government spending involved. And so, our once-large international lead in educational attainment has vanished, and our lead in inequality has grown.

     NPR recently looked at how college costs are spiraling out of control. Indeed NPR has an entire series of recent takes on the problem of paying for a college education.

This makes Leonhardt's observations more than a little relevant to the economic debate, especially at this time of year when High School Seniors face an uncertain future. Read the whole thing.

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Comment Preferences

  •  Tip Jar (13+ / 0-)

    Leonhardt's suggestion is not the entire answer - we have a whole range of government policies skewed to advantage the super rich - but it's one place where we might be able to get some leverage.

    There's a growing recognition that college costs and student loan debts are crippling our society, and it goes further. The predatory education for profit industry is trying to gobble up the seed corn of our future by cannibalizing public education. The flat-earther bible bangers dumbing down curricula aren't helping either.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Sat May 03, 2014 at 07:01:15 AM PDT

  •  Interesting.. (2+ / 0-)
    Recommended by:
    xaxnar, lehman scott

    another kind of capital: education.

    The more I think about that, the more I agree.

    Be the change you want to see in the world. -Gandhi

    by DRo on Sat May 03, 2014 at 07:42:09 AM PDT

  •  Thanks for this helpful bit of reduction to render (1+ / 0-)
    Recommended by:

    copious data accessible.

  •  I found Galbraith's critique of Pickety (5+ / 0-)


    Which, on my reading boils down to:  Pickety didn't do enough to highlight institutional biases.

    So good to see him addressing this.

    •  Yes, that was one of the best ones, katiec. (1+ / 0-)
      Recommended by:

      But I'd bet if you thought Galbraith Jr.'s was good, this ought to knock you off anything you're sitting on right now: Mandatory reading for widespread dissemination, imho.

      Pessimism of the intellect; optimism of the will. - - Antonio Gramsci

      by lehman scott on Sat May 03, 2014 at 09:14:37 AM PDT

      [ Parent ]

        •  You are welcome! (2+ / 0-)
          Recommended by:
          flowerfarmer, katiec

          I'd love to hear your reaction to it.  I was very inspired.

          Who should we read? I don’t know exactly. ... I think the real literature is now to be written...

          There is now more momentum behind change, and we have the vehicle – one of many to be sure – to help facilitate that change. We have journals that could be dedicated to such things. We have conferences that could feature such things. And we have access to thousands of people who can advocate such things. We can, therefore, help establish an economic democracy.

          First we need to communicate with our neighbors.

          This starts at the bottom, because ... the top isn’t listening.

          It's time we all became economists, because the economy and the planet it is a subset of is too important and in too dire a need for radical change for that "practice" to be left to the economists.

          Pessimism of the intellect; optimism of the will. - - Antonio Gramsci

          by lehman scott on Sat May 03, 2014 at 09:56:25 AM PDT

          [ Parent ]

          •  I agree re "we should all become economists". (1+ / 0-)
            Recommended by:
            lehman scott

            I'm trying to figure out how to reach people locally, especially concerning how our monetary system works, since we're daily mislead by both our politicians and talking heads.

            And it begins, in my opinion, with realizing that money is whatever we want it to be.

            I'm glad you're feeling inspired.  I have a more difficult time conjuring up such feelings.  But if you were my neighbor, I'd allow your optimism to wear off on me :)

            I'll have to read the link this evening.  But I'll get back to you.  It might be nice to have a conversation with an optimist.

            •  Ooo! I have just the book for you, then, katiec! (0+ / 0-)

              It's by Bernard Lietaer.  Very readable with lots of great background info on our current monetary system and the explosive growth of Complementary Currencies.  Amazon link to: Rethinking Money: How New Currencies Turn Scarcity into Prosperity.  CCs are our future! :)

              Pessimism of the intellect; optimism of the will. - - Antonio Gramsci

              by lehman scott on Sat May 03, 2014 at 11:20:54 AM PDT

              [ Parent ]

              •  Hey. Yeah I've read a bit about Comp Currencies (1+ / 0-)
                Recommended by:
                lehman scott

                and read a review of Lietaer's book a while back.

                Are you familiar with Modern Monetary Theory?

                Are you an economist?

                •  I am unfamiliar with MMT, and actually, the (1+ / 0-)
                  Recommended by:

                  entire monetary aspect of economics is an area where my eyes tend to glaze over when the subject arises. ;) Maybe that's why I'm so attracted to CCs and timebanking, it's all local and based on real economic transactions.  Anything above that level and my brain more or less heads for the hills, unfortunately.  Oh well.

                  And no, I am an economist only of the armchair variety, by trade and formal education an Environmental Engineer.  But since losing my job in that field a few years ago (thank you very much, GM) I've been spending all my time doing independent economic research (which I hope you'll be reading more about shortly in forthcoming set of diaries I'm working on).  I've also been working with Stephanie Rearick on this project.  It's really exciting, we are in the early stages of building a network of these Mutual Aid Networks.  One CC that is launching in France right now, the SYMBA, is involved, so we've got our sights set on going global with this thing.  

                  Heh.  I should say, Stephanie is the one with the sights!  I feel so fortunate to be able to be a part of this and to be working with her, I've never worked with someone with more energy and vision in my life.  OK, might as well shamelessly plug her - - she's got albums to sell!  ;)  Here's my favorite vid of hers:

                  And here she is speaking at Occupy Madison:

                  And here's her website.

                  OK, enough of this blabbering and promotion.  I have to finish my paper for this thing that is due in a few days.

                  Have a great evening, katiec!  :)

                  Pessimism of the intellect; optimism of the will. - - Antonio Gramsci

                  by lehman scott on Sat May 03, 2014 at 03:53:01 PM PDT

                  [ Parent ]

          •  P.S. It would be great if DKos had an ongoing (1+ / 0-)
            Recommended by:
            lehman scott

            series of diaries about the finer points of economics.

            With all the brains in this place, DKos could have a "lecture" series on the history of economic thought, right up to Pickety.

  •  Even the college-educated are getting paid less... (4+ / 0-)
    Recommended by:
    xaxnar, lehman scott, a2nite, katiec

    ... and now they're displacing the non-degreed workers from lower end jobs.

    Making college affordable for lower-income students certainly increases social mobility, but does little to solve the structural problem of income inequality... which really should be called "income insecurity".

    One must try to distinguish the effects of the ReDepression from long-term structural problems in the U.S. economy. They are entangled, of course, but they demand different responses.

    I see it this way: too much wealth has been captured by the "investment" economy, and not enough is circulating in the "payroll and purchase" economy.

    I don't see any way to fix this other than to tax and regulate the investment economy down to a point where it still produces a healthy number of millionaires, but far fewer multi-millionaires and almost no billionaires.

    “It is useless to attempt to reason a man out of a thing
    he was never reasoned into” - Jonathan Swift

    by jjohnjj on Sat May 03, 2014 at 09:29:42 AM PDT

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