What does the pandemic have in common with income inequality? Both target the same low-income people, and enrich the already-wealthy.
According to Inequality.org, U.S. billionaires have seen their wealth jump over $930 billion since mid-March alone.
If this interminable election season finally ends, and if–as polls suggest is possible (I’m too superstitious to say “likely”)–Democrats take the White House and Senate, that first hundred days is going to be busy. At a minimum, the latest “gift” to the billionaire class, Trump and McConnell’s unconscionable tax act, needs to be reversed. But that’s the minimum.
A September essay in Time Magazine by Nick Hanauer and David Rolf considered just how much that billionaire class has taken from the rest of America.
In this essay, Hanauer and Rolf begin by setting out the extent to which income inequality has hampered America’s ability to deal with the pandemic.
Like many of the virus’s hardest hit victims, the United States went into the COVID-19 pandemic wracked by preexisting conditions. A fraying public health infrastructure, inadequate medical supplies, an employer-based health insurance system perversely unsuited to the moment—these and other afflictions are surely contributing to the death toll. But in addressing the causes and consequences of this pandemic—and its cruelly uneven impact—the elephant in the room is extreme income inequality.
How big is this elephant? A staggering $50 trillion. That is how much the upward redistribution of income has cost American workers over the past several decades.
Hanauer and Rolf go on to explain that the 50 trillion dollar number isn’t some
“back-of-the-napkin approximation.” A working paper by Carter C. Price and Kathryn Edwards of the RAND Corporation, demonstrated that–had the more equitable income distributions of the three decades following World War II (1945 through 1974) simply held steady–the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in the year 2018 alone. Since 1945, that number is $50 trillion.
That’s $50 trillion that would have gone into the paychecks of working Americans had inequality held constant—$50 trillion that would have built a far larger and more prosperous economy—$50 trillion that would have enabled the vast majority of Americans to enter this pandemic far more healthy, resilient, and financially secure.
Nearly all of the economic growth of the past 45 years was captured by those at the very top of the income distribution. And as Hanauer has repeatedly argued, that extreme disproportion has left millions of Americans with very little disposable income, a situation that hobbles economic growth overall.
It also made us much more vulnerable to the pandemic.
Even inequality is meted out unequally. Low-wage workers and their families, disproportionately people of color, suffer from far higher rates of asthma, hypertension, diabetes, and other COVID-19 comorbidities; yet they are also far less likely to have health insurance, and far more likely to work in “essential” industries with the highest rates of coronavirus exposure and transmission…. Imagine how much safer, healthier, and empowered all American workers might be if that $50 trillion had been paid out in wages instead of being funneled into corporate profits and the offshore accounts of the super-rich. Imagine how much richer and more resilient the American people would be. Imagine how many more lives would have been saved had our people been more resilient.
The article goes through the numbers, including numbers that answer the question “What if American prosperity had continued to be broadly shared?—how much more would a typical worker be earning today? They set out their conclusions in graphs embedded in the article. On average, they concluded that extreme inequality is costing the median income full-time worker about $42,000 a year.
Remember, these calculations would result from keeping former income inequalities static–not engaging in redistribution down, but simply refraining from engaging in redistribution up.
The top 1 percent’s share of total taxable income has more than doubled, from 9 percent in 1975, to 22 percent in 2018, while the bottom 90 percent have seen their income share fall, from 67 percent to 50 percent. This represents a direct transfer of income—and over time, wealth—from the vast majority of working Americans to a handful at the very top.
This situation is bad for the economy, bad for our health and very bad for our democracy. It needs to be reversed.
25 thoughts on “A Trillion Here, A Trillion There…”
“According to Inequality.org, U.S. billionaires have seen their wealth jump over $930 billion since mid-March alone.”
And now we are seeing the release of the medication which was at least in part what Trump claims is his almost instant “cure” of Covid. Those desperate for a vaccine may misunderstand that this medication treats the SYMPTOMS of Covid, NOT the virus. This medication will be another source of profit for Big Pharma and the “already wealthy” who will benefit by the Covid-19 Pandemic.
By the way; what is the status of Kodak and their $750 million transition to testing laboratories researching an actual vaccine while producing and selling Trump’s original snake oil cure of Malaria medication to cure coronavirus? What is the status of the insider trading which which halted that transaction and where is our $750 million?
Income inequality, coupled with the Covid-19 Pandemic, is quickly moving this nation to a caste level condition which may take years to reverse. But only for those who survive the Pandemic.
The world has always had those who profited from the misery of others. Greed being the fuel driving the behaviors we abhor.
From Les Misérables
But he knew just what to do
Crawling through the mud
So I heard it said
Picking through the pockets
Of the English dead
He made a tidy score
From the spoils of war
One could apply these lyrics to any number of national and international corporations and their boards of directors. This week I think mostly of the Sackler family and those who work for ICE. Lots of greed out there. Lots of greed.
How much is enough? Every time I ask that question, the answer I get is that there is never enough. Trickle down has given us an upward deluge of wealth with no end in sight.
Yes, Theresa and the Sacklers paid a fraction of what they made being a drug pusher and contributing to the opioid crisis. What can the government do when we are the biggest heroin dealers in the world?
I think Nick is a student of Thomas Picketty who attributes much of our problems today with what others coin, neoliberalism. Ronald Reagan and Margaret Thatcher adopted these practices. Milton Friedman and the economic fraud, Art Laffer (who is the chief economist for ALEC – the Koch funded apparatus). Don’t forget, Roger Ailes was a chief adviser for Ronny before gaining employment with Rupert Murdoch’s Fox News.
Picketty says, “We want capitalism and market forces to be the slave of democracy rather than the opposite.”
The World Economic Forum is doing amazing work globally, but of course, we’ve been detached from the world because our Narcissist in Chief got offended by the intelligent people involved. He made a fool of himself numerous times on the world’s stage. Also, the far-right has been fear-mongering so they could advocate the Me First campaign.
The changes Biden needs to start making is going to cause panic for 35% of Americans. They will absolutely lose their shit fueled by heavy doses of gasoline by the Koch network. Biden’s changes only move us back toward the middle, and we need to go much further to align with the world.
Todd posted the most correct line so far: Picketty says, “We want capitalism and market forces to be the slave of democracy rather than the opposite.”
There should be no surprise to the inequality of everything either directly or indirectly associated with the corporatists and other capitalists who work for the sole purpose of making the 1% richer and richer. The mindset with these people is one of not caring a single damn about anything else except the bottom line of each quarterly report. They don’t care that poverty exists in this country at third-world levels. They don’t care that their employees in the Senate are screwing around with relief for the unemployed middle class.
I suppose one could even classify those money people as domestic terrorists, because people are becoming increasingly afraid of STARVING and/or LIVING ON THE STREET. The rules have to change. A Democratic Senate is critical to making those changes before we descend further into our third-world economy.
As long as the election campaigns of ‘our’ elected officials are funded by the Wealthy Few, America will remain a democracy in theory but a plutocracy in fact. What can ‘We the People’ do about this?
Can we all finally agree that the trickle down theory not only doesn’t work but that in fact was a public policy designed — with intent — to profit the rich, the little guy be damned?
Your are spot on. Friedman/Reagan/Regan/Thatcher did their best to pull a fast one. Scalia, Roberts, Thomas and Alito were there to perpetuate the fraud. ALL Republicans. All Republican initiatives.
I know people here are tired of me pointing my finger at Republicans as the root of the destruction of our democratic republic, but their total whoring to the corporatists has been allowed by Citizens United v. FEC. Naomi Klein’s fears in “Shock Doctrine” are coming true at an accelerating rate.
Quoting from another Blog:
“Of course, the best people at mucking up our elections aren’t Russian or Iranian, they’re American. From gerrymandering to voter intimidation to closed polling sites and lengthy lines in disadvantaged neighborhoods, Americans need no help from foreigners to interfere with our democracy.”
What better way to keep the 1% and Wall Street in power and their puppets and stooges in elected offices. Make voting like climbing Mt. Everest. There is of course the big bear in the room which is campaign donations which the wealthy elite can lavish on their selected political hacks.
It is not only a tax the uber wealthy and big corporations, America must rebuild somehow it’s manufacturing base and infrastructure.
Todd brought up the Sacklers and Purdue Pharma. The fines are one thing. Justice would require the Sackler family and those corporate vampires who are in fact white collar drug pushers spend some serious time behind bars.
I doubt that jail time is in their futures, that is not the way AmeriKan Justice works.
“if– . . . Democrats take the White House and Senate, that first hundred days is going to be busy.”
~ ~ ~ ~ ~
This is becoming, more and more, simple standard operating procedure:
1] A Republican vacates the White House and a Democrat steps in.
2] The yeoman’s work of repairing the damage left behind begins. Usually hampered by one
or both houses of Congress due to the American penchant for split government.
3] Before the myriad tasks are completed, the American people do not learn the lesson and
install another Republican in the White House.
4] The cycle begins again.
This is the reason for our one-step-forward-two-steps-back pattern of late.
There was a time when Republicans were conscientious stewards of America but those days are long past. By my estimation it began in 1972 and has continued unabated since. And yes, that includes the time of the Republican God, Ronald Reagan, by whose time the upward shift of wealth was already well underway — and which he did nothing to curb.
Let’s not forget that Democrats were in charge a good deal of this time. “ If” (fingers crossed) they take back the White House and Senate, will anything be different?
It seems to me we are living in the world of Ayn Rand’s “Atlas Shrugged” which praises the idea that selfishness is the highest virtue. Her economic philsophy creates the income inequality we see and monopolies.
First things first. This is an attitude I wish the Senate Republicans would adopt. Then maybe they would work harder on a COVID relief bill instead of rushing through the nomination of Amy Barr.
I wish this country could become more like the Scandanavian countries. I think they decided that people are more important than things and that they needed to have a check on the potential greed and selfishness of capitalism.
Obama had to clean up after George Bush and now Biden will have to clean up the big mess that Trump has made. There are so many issues he will have to face ie reversing the “tax reform” bill, immigration, police brutality, health care. If elected, I will be praying for him often and doing what I can to serve the greater good. Right now for me that means wearing a mask even when I hike at Eagle Creek and sheltering in place as much as possible.
What else is new, in the land of greed and bigotry?
America’s cage needs rattling. Or its bubble needs bursting. Or pick your preferred analogy. It all comes down to the reality that we have an economic system perfectly designed to favor a small number of people and let the remainder exist. Until recently, that is. Now the president and his legion of allies have forgotten to allow the remainder to slice off enough of the pie to sustain themselves. In this morning’s Post and Courier, for example, Charleston’s new “affordable” housing – all of which are rental units – costs at least $1100+ per month. I’ve lived in some great houses and never paid a mortgage close to that number. So capitalism hasn’t always been weaponized against the poor (which is what Sheila’s column today seems to me to be about).
Thanks to anti-union and pro big business crusaders beginning with Reagan and Thatcher, that is no longer true. Abetted by the Supreme Court, the prevailing flavor of capitalism in America is perverted in ways that only the owners and controllers of the system (the Kochs, the Icahns, the Murdochs, the Adelsons, the Waltons and their ilk) stand to grow wealthier. Yes, there are some wealthy philanthropists (Gates, Buffet, Michael Dell, etc.) but even they depress the American economy by keeping hundreds of billions of the nation’s net worth in unproductive locations. We don’t have to build road blocks to wealth in order to adopt an economy that impedes using that wealth for the benefit of a much wider swath of deserving people. Capitalism tried to commit suicide when Bob Nardelli left Home Depot in disgrace and failure taking $210 million with him, but its many fans refused to let it die.
We must recognize that the pie can grow significantly larger if money circulates in productive ways, as it almost always does in the hands of people on the lower rungs of the economic ladder. We must also accept that the fundamental assumption of capitalism – infinite growth – is one of the most intrinsically flawed constructs economists have ever come up with, and that rational economic planning means finding a new set of basic assumptions and rules.
Is capitalism salvageable? Maybe, if we extract its strengths and remove its most vicious weaknesses and continue to call the result by that name. It is not sustainable in its present form, given its current assumptions and its openness to abuses and political and financial and criminal chicanery. Too many people are too often irreparably damaged to allow it to continue in the winner-take-all form that is its essence. We fix it or we perish.
As my fellow contributors know, I have repeatedly called wage inequality our numero uno domestic issue – and it’s not just the inequality per se but all the bad things that come from such a wellspring, i.e., poverty, lack of health care etc. etc. etc., and as for Piketty, his writingsare my secular bible. These terminal capitalists in America today are inviting socialism since capitalism as currently practiced isn’t working for perhaps 90% or more of us what with a federal minimum wage of $7.25 an hour, rampant right to work laws, undertaxed historic profits, bought senators, and a laundry list of wrongdoings too many to repeat here, both immoral and economic. What’s it going to take to right all these wrongdoings by the rich and corporate class, a president to the left of Bernie? Today’s capitalists are asking for an economic Bastille (sans guillotines).
What terminal capitalists fail or don’t want to understand is the Econ 101 proposition that they would make bigger profits by paying living wage rates to their proles since the enhanced aggregate demand for their goods and services would result in greater sales volume and less resistance to per unit price by a prosperous clientele. I have come to the conclusion that they do know but that it has come to a matter of power-wielding in the workplace. I have also concluded that we need more Keynes and less Friedman in making our economy work for all the people.
Since such capitalists persist in underpaying their help and rely on campaign contributions and ALEC to hold off paying their fair share of taxes and thus leaving the tax load for their underpaid workers to pay, it is clear that after Biden takes over one of his first orders of business (along with the Paris Accord and the federal minimum wage) is the reversal of the Trump-Ryan tax giveaway to the rich and corporate class (and to themselves as incidental beneficiaries), a theft in plain view approved by a then all-Republican House and Senate, whose members paid off their corporate benefactors with a view toward their own political futures.
The median wage scale and the Dow moved in tandem during New Deal days, but this perfect alignment was trashed by Reagan and hasn’t been corrected since as the median wage has either not moved or has even gone backwards while the Dow has gone stratospheric. The wages not thus paid are to be found in shareholders’ dividends, capital gains and executive compensation, and as for minimum wages, I note that Geneva, Switzerland, has a minimum wage of $25.00 an hour, and that if our median wage rate had continued to move in tandem with the Dow as it did during New Deal Days, our minimum wage today would be higher than that. We have not had a raise in the federal minimum wage for over 11 years, so with intervening price inflation our minimum wage workforce is earning far less than that in today’s purchasing power. So $15.00 an hour? Big Deal! Think Geneva.
Maybe there’s a method to the madness. Is it the Wealthy Few’s way of imposing population control on the “great unwashed?”
And to quote Pogo: “We have met the enemy and they are us.”
From the referenced Time article. “The iron rule of market economies is that we all do better when we all do better: when workers have more money, businesses have more customers, and hire more workers.”
If made possible by our actions at the polls, this is what the people who we elect on Nov 3 need to do after Jan 20, 2021. Not only return to that true market economy but to start to redistribute back what’s already been stolen.
Fortunately this doesn’t take a lot of legislation. Merely an adjustment of tax rates.
BTW, Sheila, I like the new option of selecting from contributors which ones I want to read. 🙂
Well done. Let’s form a League of Fix-Capitalism Crusaders.
Wow! I admit I had no comprehension of how much of our nation’s wealth had floated to the top. My head was playing with maybe 5 trillion. This actually taught me something. However…
Hanauer and Rolf from Sheila’s post, regarding the possibilities had massive income inequality been avoided in the USA: “Imagine how much richer and more resilient the American people would be. Imagine how many more lives would have been saved had our people been more resilient.”
Seems to me the quoted material obliges too much the Me-First inclinations of individuals, but the resilient word hints at something more importan.
So, instead, IMAGINE HOW MUCH STRONGER OUR NATION WOULD BE, but of course almost no one thinks about that anymore. When it comes to curing our national problems, Democrats are way too concerned with bedside manners than fixing the problem, way too concerned with babying individual players than with building a great team.
Imagine how much more influential a stronger, healthier, happier Team America would be in international competition for business opportunities and jobs and resources and brilliant scholars.
Imagine how much more our representative democracy would appeal to the 7 billion people of the world if it were a more egalitarian society.
Imagine how much more difficult it would be for Russia’s and China’s and Iran’s and North Korea’s propagandists to con other nations into hating the US.
Imagine how much more difficult it would be for Trump to become President and for lower class misfits to become a threat.
Robin Riebsomer @ 11:56am
Let us not forget, Robin, that the success of the Scandinavian states depends in large part that their people enjoy a SOCIALIST system which they support and do not denigrate. Canada can be mentioned too where SOCIALISM provides for the needs of Canadians which they accept as part of life in Canada. We too, here in the USA have some benefits of SOCIALISM handed down to us from FDR and HST plus LBJ, (all DEMOCRATS) systems now enshrined in US law which, if the Republicans were to attempt to overturn, would be victims of our retribution (Social Security and Medicare plus Obamacare are just three examples). Hey! GOP Just try it!! VOTE
I’ve read that Ayn Rand who made a living grandising competitive capitalism, ended up unapologetically on welfare in her final years. She’s a true example that chasing profit at any cost is not realistic or sustainable, or maybe that was just an exaggerated guise to sell books? I think US would do itself a favor by underwriting citizens healthcare & taking the burden off of businesses. Let business pay their employees in higher dollar amounts for their labor and give employees more freedom determining where & how long to work. A healthy sustainable workforce in the market place seems like a win/win. Quality of care would be assured by hospitals/providers competing for business. Glad to hear Biden talk about public option/not for profit in the mix. Getting pure profiteers out of some of our basic transactions would go a long way in making life better for all of us!
Since Ayn Rand has been brought up, here, that darling of the redistribute wealth up/I only care about me, philosophers – my favorite quote (although this may be a repeat)
“There are two novels that can transform a bookish 14-year-kid’s life: The Lord of the Rings and Atlas Shrugged. One is a childish daydream that can lead to an emotionally stunted, socially crippled adulthood in which large chunks of the day are spent inventing ways to make real life more like a fantasy novel. The other is a book about orcs.”
– This quote is attributed to screenwriter/comedian John Rogers. Via Tikkun Daily
Twocrows – Reagan didn’t start the transfer up, but he sure accelerated it and promoted the idea that all taxes are bad, as is government.
Joy in Indy – the trouble with the Democrats, is that they abandoned FDR and embraced Reagan – that is the essence of the DLC. Obama is still a center-right politician; he just looks more liberal compared “greed is good” Reagan, “waterboard for thee but not for me” Bush, and “pussy grabbing, Glorious Leader” Trump.
We still have this bad business idea that the “executive” runs everything, so he/she (usually he) deserves most of the money; there would be no business if there wasn’t a sale, so the salespeople get the next most; actually building the products — interchangeable parts – you should be lucky you have a job, and at the first sign of trouble, you’re fired.
Contributors like Gerald have had it right for a long time – we have been redistributing the income for years, just not the way the Republicans has said – wages and restoring workers power are top of the list in repairing the damage.
Amplifying this – Henry Ford only paid higher wages because he had an enormous turnover rate for employees – no one wanted to work on a factory assembly line – He later discovered that by paying higher wages to keep people (and producing the cheap Model T instead of the expensive Model K), that his workers would buy his cars, increasing his sales, and his wealth.
To obtain a rx for pain,one needs a prescription from a doctor. why are those incompetents being sued for malpractice?every first year student is taught that narcotics are the last drugs to use in chronic pain!
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