Why America must fix income inequality – and do it fast

Cross-posted from skyislandscriber.com

FACT: Economic inequality in America has been on a steep rise for over 40 years.

FAC T: The inequality curve persisted regardless of which political party controlled Congress and regardless of which political party controlled the White House.

FACT: CEO compensation has risen dramatically while worker wages have stagnated or declined.

THEORY: America is about to have a second Civil War.

Back in Feb 2016 I posted on a Politico essay by a very rich guy named Nick Hanauer: Read this one (again):The pitchforks are coming … and are central to the 2016 election.

Now yesterday morning (Aug 30 2017), NPR’s 1A interviewed Nick Hanauer on inequality and what the 1% can do to prevent the pitchforks from coming (Zillionaire To Other Zillionaires: “Pay Up”).

Billionaires: Pay up or else...
Nick Hanauer to Billionaires: It’s this or the pitchforks

You probably don’t know Nick Hanauer, but he has more money than you. As a self-proclaimed “unapologetic capitalist,” Hanauer deals in millions the way many Americans deal in hundreds … or tens.

A few years ago, Hanauer called on his fellow one percenters to address America’s growing income inequality.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

Hanauer’s advice hasn’t exactly been heeded. And he’s now telling the super-wealthy to pay workers more to avoid an uprising.

Thing is, is anyone listening?

The short answer is “no”.

Here is a 2017 update in Politico, To My Fellow Plutocrats: You Can Cure Trumpism. Pay your workers a decent wage and maybe you can stave off the pitchforks that are still coming for us. by NICK HANAUER, July 18, 2017.

My own ideas about the effect of inequality on social instability align with the work of social scientist Peter Turchin. He and his collaborators use mathematical models to study the rise and fall of societies—an analysis that postulates a new American civil war arriving as soon as 2021 (and in a highly-armed nation already suffering from an epidemic of gun violence, he doesn’t mean “civil war” metaphorically). For the first time in history, polls show that most Democrats and Republicans identify Americans from the opposing party as the biggest threat to our country. So yes—if you have a deep sense that something is very wrong with our nation, you are almost certainly correct.

This is stunning. If you want a look at what this might mean, check my post from yesterday about the American War. If the prediction about the timing is even close, it means that we have four years to correct the economic misdeeds of four decades – 40 years. I’m taking on as a project reading Turchin’s book and writing a précis of it. Stay tuned.

America can be fixed. But Trumpism is not the answer – it is the symptom of the social/political consequences of gross inequality. If you want to know what Trumpists are doing about the fear of an impending revolt, see AZBlue Meanie’s post yesterday on An authoritarian vision of ‘law and order’. Trump has just renewed the flow of military grade hardware to local police departments. Exactly who do you think such arms will be used against? Hint: it ain’t the 1%. Hanauer explains: “You show me a highly unequal society, and I will show you a police state.”

America can be fixed but, ironically, the folks best positioned to do something about it are Hanauer and his real audience – the other multi-multi-millionaires and billionaires. The solution, according to Hanauer, is to immediately raise the minimum wage. That may not be cake, but it sure as hell would put more bread on the table of millions of working Americans. Consult Hanauer’s essay for data on the effects of raising the minimum wage. In all cases studied, increasing the minimum wage proved good for the economy.

Hanauer identifies what won’t work.

President Trump promises to restore the middle class to its former glory by bringing back old industrial-era jobs—as if slashing environmental regulations could somehow make coal competitive again with plummeting solar prices, let alone our fracking-induced glut of cheap natural gas. This is magical thinking. Manufacturing as a percentage of the overall economy, and of jobs, has been declining globally for decades. This trend will not reverse. Trump cannot restore the middle class with empty promises to bring manufacturing jobs back from the dead.

Many of us wealthy folks are laudably philanthropic; we feel like we are already doing our part to improve the lives of our fellow citizens. And this is true, to some extent. But if my thesis is correct—if the only cure for what truly threatens our democracy and our capitalist economy is to enact laws and standards that ensure that businesses pay people enough to lead secure, dignified lives—then some of our effort may be misdirected. Philanthropy is useful, but only about $100 billion per year is spent on helping disadvantaged folks. Raising the minimum wage to $15 would increase income for the bottom 60 percent of Americans by about $450 billion per year. No philanthropy comes close to the scale of that one policy.

So let’s get on with fixing America. If you are reading this, you are a progressive or Democrat or Berniecrat and you most likely belong to some related organization. If your organization does not have as its top priority addressing income inequality now, your organization is part of the problem. You can quote me on that.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s