Wednesday, January 20, 2021

Debate: Does inequality matter? - by Sackerson and Paddington

Sackerson:

Today sees the inauguration of the 46th President of the US, Joe Biden. Bien-pensant media crapheads are rejoicing: a piece by Tom Leonard and Daniel Bates in the print edition of todays' Daily Mail begins 'Donald Trump will leave office today as officially the worst US President in history.' Already nonsense in the first sentence: there is no such official ranking. Elsewhere, in the online edition, Leonard is much more nuanced

The satirical Private Eye magazine's cover this week shows a still from the post-apocalyptic sci-fi film Planet Of The Apes, the Statue of Liberty mostly submerged in sand and speech-bubbling 'You can take over now, Mr Biden.' 

Oh, how we laughed. They know so much better, our media mavens and Press pundits.

As a foreign observer with no dog in the fight, it seems to me that the last four years have been little better than a bullfight, Trump being ragged by the Democrats but also very selectively supported by the Republicans that one would expect to be on his side. Some of the things Trump tried to get done, such as the Wall, couldn't be completed even though in 2016 he had Party majorities in both House and Senate; other things, especially tax cuts for the rich, have been Republican themes for decades.

The unpleasant atmosphere at the end of Trump's term in office seems to me the natural result of a prolonged bipartisan campaign to make America unworkable, at least as far as the long-term interests of the majority are concerned. British politics often echoes the American and the professional representatives on both sides, Left and Right, have appeared content to preside over the hollowing of the economy and the consequent.destabilisation of society. Perhaps over there, as here, they really believe that the system cannot be broken, no matter how much they jump up and down on the bed.

Trump's hick-brash, unapologetic personality has been a gift to his enemies and frenemies; focusing on the man ('Isn't he awful?') is a great way to bury what is really going on, and has been going on for a generation or two. The postwar crossparty consensus has broken down, as income inequality has soared back to pre-Wall Street Crash levels:

Source

The Democrat Party is, of course, definitively good - or is it? Some of the voters they have taken for granted have started to see things differently: for example poc's like Professor Thomas Sowell, or Candace Owens (initially anti-Trump) whose recent book 'Blackout' is a call for black people to detach themselves from the Democrats. There is a perception on both sides of the Atlantic that just as the Right is cold and mercenary, the official Left is happy to buy its own supporters with modest financial and service benefits without ever letting them free of their dependency.

Given those options, why else would so many people have voted in 2016 for a non-professional like Donald Trump? Long before Trump started to run, acerbic entertainer George Carlin gave us a clue. Back in 2005 he said the political system gave only the illusion of choice, and the audience's emphatic reactions to the last part of this clip must give us some idea of the groundswell of angry disillusion that was developing, even before the Global Financial Crisis of 2008/9:

For a while, I suppose, the media will support Biden, just as they puppy-followed Blair in 1997, all the way to Downing Street and the fake People's Celebration in the gated area outside Number Ten.

I fear that the four-year-long (and continuing) Two Minutes' Hate groupthink around Trump will blind the good-hearted, right-thinking commentariat to Biden's flaws and errors for some time yet, just as we move into a very dangerous phase in international relations and the world's fracturing economic system.

But let's start by tearing our eyes away from the great orange-haired narcissist and refocusing on the kind of people who now infest the establishment Republican Party. Paddington gives below a few scraps to indicate their Scrooge-like avarice and callous mean-heartedness.

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Paddington:

Mitch McConnell, then the Senate Majority leader, blocked a $2000 payment to Americans of average income during the COVID pandemic because he was “worried that someone might get the check who doesn't need it”. Meanwhile, the 2017 tax bill which he helped ram through gave a $1.3 billion tax break to the Koch family, who are worth $113 billion.

Jared Kushner, President Trump's son-in-law, was put in charge of the national distribution of PPE and other supplies. He reportedly decided that those supplies shouldn't go to the big cities, since most of the victims would be poor Democrats. When Democratic governors secured those supplies themselves at great cost, mysterious government agents often swooped in and seized them. Later reports indicate that many were then sold abroad.

Mitch McConnell also blocked support for the falling tax revenues that states and cities are experiencing, in the hope that this would cause all of the public pension systems to fail, especially in Democratic states.

Social Security is funded through a separate income tax, even though the revenues are thrown into the same pool. Up until 2018, the system brought in more money than it spent, every year. A simple increase in the ceiling of income subject to the tax, from $125,000 to $250,000 would keep it solvent for decades after the anticipated shortfall in around 2030. A couple of years ago, Mitch McConnell declared that Social Security was the cause of the huge deficits, and the Senate would look into cutting it.

Ivanka Trump and Jared Kushner refused to allow members of their Secret Service detail to use any of the 6 bathrooms in their house, requiring the government to pay $3,000 per month to rent a local house so that the agents could take a shit.

Governor Walker of Wisconsin, based on his personal record of becoming a rich businessman without a college degree, declared that education was useless. He slashed funding for all education, including the state's previously outstanding university system. He also made other changes, such as not requiring college degrees for substitute teachers, and not requiring any education certification for regular teachers.

In Virginia in 2018, faced with an incoming Democratic governor, the Republican legislature stripped the governor of most of the power of the office.

From https://www.salon.com/2017/03/20/donald-trumps-war-on-the-poor-has-historical-precedent-and-its-not-pretty/:

'The notion of "useless eaters" must be implemented within the United States' current social values and political system. Under the logic of neoliberalism (in which human worth is reduced to a person's value in terms of economic activity), American conservatives deems the poor, the unemployed, the homeless, people on Social Security, those who need help from programs such as food stamps and ultimately anyone who is not "economically self-sufficient," that is rich, to be expendable.'

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For further discussion: 

Does the fact that some people are extremely rich, matter?
What is to become of the poorer element?
Can the welfare systems of the West survive a prolonged global depression?

2 comments:

Nick Drew said...

Does the fact that some people are extremely rich, matter?

First of all, I suspect your graph understates matters if (as it seeems to say) it plots income. If you add capital into that - which is extremely relevant for some purposes - (a) I have to think the %'s are even higher; and (b) the red (0.1%) line will be relatively even higher still - while some top salary-earners don't (yet) have all that much capital, almost all in the top 0.1% will have absolutely stonking amounts. And not all of it just in paper (shares, options), either.

It's a puzzle, isn't it. The simplest answer is: depends what power they wield. Nobody, even in egalitarian Sweden, seems to mind the Rausings too much - and they only power they seem to wield is a plan to reintroduce wild lynx to the Scottish highlands. Likewise in Germany, with a handful of monstrously wealthy family business empires. You can be sure they all get left alone, but they don't seem to lead the interfering lives of even British, let alone Russian or US oligarchs.

The man in the street rarely seems to care much about this class, either. As is often said, the British working man gets on famously with the aristocrat because they both talk about horses and dogs. Ditto, nobody seems much to care about sportsmen or popstars getting filthy rich.

In fact it's often also said that the people who resent the top 0.1% the most, are the top 1%; and them, the top 10% in turn. When you've made level x, you feel life at level x+1 is what you really deserve. Two houses and three cars, yes, but I don't have an ocean-going yacht!. And who cares about that kind of resentment?

So I'm not sure a priori reasoning gets at the heart of the simple attitudinal stuff. But I do believe there is empirical work suggesting that a range of societal goods are eroded by large-scale inequality, and perhaps that should be the main focus. (That said, 1973 - the perigee of those (in)equality curves - was a pretty shitty time by several other measures: unions completely out of control / manufacturing production qualities awful, architecture etc etc)

Finally, inequity before the law is a seriously bad thing, for sure. I'm sure we can be a bit self-delusional about former (postwar) times; but as regards wealthy, *entitled* scofflaws - string 'em up, as far as I'm concerned.

Sackerson said...

Hi Nick, and thanks for your contribution. I think the inequality may have one or two effects;

- driving up asset prices because even the rich can only drink so much, and so making houses unaffordable
- starving the economy of circulating cash and so exacerbating the decline in the velocity of money

Which 'scofflaw' cases are you thinking of?