Inequality And Democracy

The continuing arguments about Biden’s loan forgiveness program are shining a bright light on several ongoing issues of American governance.

The first and most obvious is the hypocrisy I’ve already addressed.  Somehow, tax law changes and generous subsidies (funded by all taxpayers) that enrich the already rich are fine. Only when there is an effort to lift the fiscal boot off the necks of the less fortunate do we hear about “unfairness.”

In addition to these examples of selective outrage, there have been more reasonable observations about debt forgiveness being a “band-aid.” I certainly don’t disagree with the pundits who have pointed out the multiple problems with American higher education–very much including the enormous costs. That said, the argument seems to be that , in the face of failure to revamp the entire system, we shouldn’t be  trying to relieve even a portion of the burden.

There’s a name for this argument:making the perfect the enemy of the good. In other words, if we can’t immediately perfect a situation, we should do nothing. This approach is self-evidently wrong, if for no other reason that we have inconsistent views of what “perfection” would look like, and considerable evidence that most lasting improvements  are partial and incremental.

Actually, the partial nature of Biden’s debt relief order highlights an overarching issue: the gridlock that currently keeps the federal government from functioning properly. (I would argue that what Biden and the Democrats have achieved legislatively is little short of miraculous, given the lockstep Republican opposition to virtually any measures  they propose.) Thanks to structural elements of American governance that are obsolete-everything from the Electoral College to the filibuster to the pervasive gerrymandering that has facilitated the election of ideologues and outright mental cases–Congress has become increasingly mired in partisan and cultural warfare. That legislative inability to function properly has led to the increasing use of Presidential authority to get anything done–and that reality threatens to legitimate an authoritarianism that is contrary to the Constitution and the Separation of Powers.

Translation: not a good thing.

All of these issues–highlighted as they are in the current arguments over debt relief– threaten American democracy. The Republican bias toward rewarding the wealthy (socialism for the rich; brutal capitalism for the rest) contributes to the already-huge disparities between haves (or have-a-whole-lots) and have nots, and that disparity (along with the growth of White Nationalist and all-out fascist groups) is a huge threat to social stability and democratic self-government.

The enormity of the economic gap was recently highlighted by an article in Common Dreams.

In the nearly three decades since 1995, members of the global 1% have captured 38% of all new wealth while the poorest half of humanity has benefited from just 2%, a finding that spotlights the stark and worsening gulf between the very rich and everyone else.

That’s according to the latest iteration of the World Inequality Report, an exhaustive summary of worldwide income and wealth data that shows inequities in wealth and income are “about as great today as they were at the peak of Western imperialism in the early 20th century.”…

“In the U.S., the return of top wealth inequality has been particularly dramatic, with the top 1% share nearing 35% in 2020, approaching its Gilded Age level,” states the report, whose contributors include prominent economists Thomas Piketty and Gabriel Zucman. “In Europe, top wealth inequality has also been on the rise since 1980, though significantly less so than in the U.S.”

There is copious research on the connection between political instability and economic inequality. As one study found,  long-term inequality has “strong empirical support as exogenous determinants of political instability.”

It isn’t just that research confirms what we all learned in Econ 101–that a broad and healthy middle class is an essential element of democratic stability–it turns out that political instability holds back financial development as well. “The findings indicate that inequality-perpetuating conditions that result in political instability and weak democracy are fundamental roadblocks for international organizations like the World Bank that seek to promote financial development.”

Or to put that into somewhat less “academic” terms: pigs get fed, but hogs get slaughtered.

The hogs who are screaming about debt relief and the dire consequences of helping middle class households (according to CNN: about 75% of the benefit will go to households making $88,000 or less per year) would be wise to consider just how much they benefit from programs costing far more–programs that take from the poor and middle-class to pad the pockets of the rich and connected–and how much their own longterm prospects depend upon political and social stability.

Being a hog is actually bad for the bottom line.


  1. It’s always painful to see the truth spread out like peanut butter on a slice of bread. The pain comes from the realization that Karl Marx was absolutely correct about capitalism. But there is also a socio-biological aspect to our “economics”. Hoarding. When our earliest hunter/gatherers realized that if they put some resources in a safe place for the hard times and low resource periods, they could survive and reproduce. And the more the tribe could squirrel away, the bigger and more powerful the tribe could become.

    Fast forward: Today’s capitalists turn themselves into pretzels to find new ways to hoard the diminishing resources and make their “tribe” more powerful. But instead of the human world consisting of a few hundred thousand beings scattered around continents in groups of fifty, or so, we now have almost 8 billion humans virtually blanketing any habitable land areas. One would think that pathological hoarding of resources and capital (money) would be counter to the survival of the species. And “one” would be correct.

    Some day soon, I predict, the United States and other capitalist nations will experience their Robin Hood era. Even the most cynical capitalists have to realize that the continued screwing of the less fortunate cannot last forever. Things will change when hunger, disease and despair reach a certain threshold – you know – like the story of Les Miserables. When enough people are miserable, they will rise up. It’s what humans do.

    In a way these so-called militias have a point. The “Deep State” isn’t the government, it’s in Wall Street. Too bad those gun crazies don’t have the courage to look just one more level up and into the mass deceit being perpetrated by the bankers and money people who are hoarding as much capital as they can as fast as they can. The final, rhetorical question is: WHY?

  2. It astounds me that in states like Indiana, where the reigning political party consistently puts policies into place that keeps the people they serve sick, poor, and uneducated, the voters keep electing the same people into office. What will it take for voters to realize that they (we) have been lied to and manipulated, and votes those people out of office for good?

  3. “There’s a name for this argument:making the perfect the enemy of the good. In other words, if we can’t immediately perfect a situation, we should do nothing. This approach is self-evidently wrong, if for no other reason that we have inconsistent views of what “perfection” would look like, and considerable evidence that most lasting improvements are partial and incremental.”

    Having two grandchildren with enormous student loan amounts ($50,000 and $55,000); both are working in their chosen careers but the staggering amount of student loans can prevent investing their income in the economy for years as they pay off these debts. It has been years since I lived in Las Vegas and enrolled in the Community Collage in two courses and purchased all books. My husband and I decided to separate and I moved back to Indianapolis; once settled I went to IUPUI to enroll in those same courses. The cost of tuition in ONE course was more than the total of two courses and all books in Las Vegas; thus ended my hopes of getting a higher education.

    Delving into the reasons for the higher cost of education and the price-gouging loan fees are part-and-parcel of the same problem which is not only preventing middle-class Americans from making progress in their standard of living but preventing access to higher education for many. I don’t believe it is the “hogs” who are screaming the loudest about debt relief and who is being helped; the majority of Americans need – and deserve – debt relief in maintaining our basic cost of living to meet monthly bills, keep food on our tables and meet rising costs of medical bills which is the “bottom line” for the majority.

    “…a broad and healthy middle class is an essential element of democratic stability…” No need for higher education to know this fact.

  4. Missing from this argument is holding institutions of higher education accountable for performance in achieving highest rates for graduation with the lowest rate of reliance on student loans at the same time exceeding expectations for diversity and inclusion.

  5. James, they keep voting them back into office because the party of said office-holders have convinced millions of voters over many years that everything wrong with the world today is the result of liberal (woke) policies as well as tax (or print) and spend programs. As destructive as it has been, I believe historians will regard the political accomplishments of movement conservatives (and more recently MAGA) over the last 50 years among the most profound in human history. And especially if it achieves its logical conclusion – that of replacing the US democratic republic form of government with some kind of authoritarian-monarchy hybrid.

    As for loan forgiveness, it’s a policy decision whose full merits cannot be evaluated until we see what happens in how post-secondary education is funded in the future. If nothing changes then the loan-forgiveness program is nothing more than a one-off attempts to buy votes from a fairly large but distinct group of Americans who happen to have been at the right place at the right time. In other words, business as usual.

    For loan forgiveness to represent an effort towards meaningful social change federal policies must be changed to ensure that public universities and state legislatures are held accountable for past and future rampant tuition and fee increases along with decreased state funding. The only tool available to them is the purse….that means that universities that provide better value to their students (i.e. require less debt to finance) should reap rewards in terms of access to research grants from the various federal agencies as well as the number and total amounts loaned to students of a given university. This can all be done on a data-driven basis although states like Indiana will still cry that it’s purely political.

    Some time ago I had compared what I paid in tuition at IU Bloomington in the early 70’s and plugged that into the USBLS CPI calculator and came up with $2,345.00 per semester. But today, according to IUB’s website, tuition and mandatory fees are $11,446.00, nearly FIVE times higher that the rate of inflation over 50 years!! We often attribute the evils of wealth-inequality to the billionaire class but the fact is that much of our inequality is baked into all our social and economic institutions, just as the oligarchs & corps who own our state and federal legislatures designed them.

    So, yeah, three cheers for loan forgiveness, but it’s only the first inning of a 9-inning game. Play ball!

  6. Yes, James, it is mentally a strain to watch Hoosiers repeatedly vote against their self-interests. Sadly, the low educational attainment of the remaining Hoosiers locks this in. I don’t even think the gerrymandering is needed. Hell, the Koch network barely spends a dime in Indiana.

    Luckily, we are a far cry as a representation of the country.

    Europeans are quickly learning that the system created at Bretton Woods is failing fast. The “leaders” throwing the citizens under the bus to save Ukraine riddled with Neo-Nazis will be a wake-up call like any other. BBC’s reputation is crumbling.

    It will take a while to permeate the USA, but last night’s speech was beyond embarrassing. If that doesn’t wake up folks, nothing will.

  7. I really think this blog post really missed the mark today (and this is something that I have never really thought before)… Unless this is a political stunt, a way to get Rs to vote against it or sue to stop it, this is just terrible policy. Just terrible. For some with this debt, this will be an ok adjustment but for most who are suffering, it is a mere band aid – a band aid for a severed limb. Not only does this not address, in the least, the underlying problem, it distracts the overall argument about higher education in our society. The policy discussion needs to start with the VALUE of an educated workforce. It is a public good. We NEED highly educated people to compete on the world economic stage. This policy plays into the hand of those who are hell-bent on destroying education at all levels. I sure hope this policy ends up helping a few people – even if it a temporary reprieve – because this is going to kill the broader discussion on the education overall – a total distraction from providing real change and permanent relief.

  8. Marx may have hit the nail on the head in terms of capitalism, but he misjudged the proletariat by about a million miles. It seems today’s working man doesn’t really want everyone to prosper and believes strongly in,: “If I had to struggle then you should, too.” They don’t do the enlightened self interest thing that would be required for Marx’s theories to work. That’s why the only examples of functioning communism are found in cloistered convents.

    I would recommend that President Biden immediately cancel the student debt of anyone who has been a teacher in public schools for four years or more. It would serve to reward public service and it just might help solve the teacher shortage.

    P.S. The only Marx I don’t find funny is Zeppo.

  9. James – a sadder version – when I ran for Council here in Indy, I spoke with a voter. He agreed that I was not a lobbyist, like my opponent, and that my opponent had shafted the city by casting the deciding vote for the 75-year parking meter lease, but, he told me, “I don’t know you. Maybe you won’t be different.” So, I guess he voted to keep the guy who shafted the city.

    Bringing this bad to today’s post – and we still keep Reagan’s name on National Airport.

  10. James – re your question “ What will it take for voters to realize that they (we) have been lied to and manipulated, and votes those people out of office for good?”

    They will keep believing the lies by Fox personalities until we demand that the federal government / Congress passes legislation that requires fox and other opinion only media outlets to make it known that they are not reporting news, but are only passing on the opinions of their wealthy and corporate sponsors.

  11. Today’s blog missed several points about the “debt relief”. First, and most importantly, it again extends bad precedence for presidents using emergency powers for non-emergencies, especially in spending money that only Congress is authorized to do. Wait until the one in ’24 goes further with this…

    Second, it is arbitrary and capricious, families making 250,000 a year (83rd percentile) get a handout, folks who have scrimped to pay off their debt get none, folks taking on debt next year get none, etc. The overall optics are more bad messaging for DEMs and almost like a pre-election stunt. Why are DEMs so darn dumb??

  12. This deserves discussion on the topic.

    “The rationale for this catastrophe is quite simple. The race to the bottom is an essential part of the corporate drive to keep Americans desperate. The living wage work that is the holy grail for college students is less likely to exist. The international capitalist overlords want the system to be this way, and they have created a system which keeps everyone, including the educated, in a grip of stagnant wages, insecure employment, and a diminishing social safety net.

    Senator Joe Biden played a role in creating these terrible conditions. In 2005 he and 17 other democrats joined republicans in voting for the Bankruptcy Act, which made it all but impossible to discharge student loan debt in bankruptcy. The Delaware senator was beholden to the consumer credit industry, like all of that state’s elected officials. They were the drivers in ensuring that filing for bankruptcy for any reason would become very difficult and they were always among Biden’s biggest campaign contributors.”

    More here:

  13. I think Vern’s analysis is correct except that it treats our “diminishing resources” as a static statistic. Those “pointy-headed liberals” in their labs (so named by the Koch status quo propaganda machine) are creating new resources for distribution, so it seems to me that the pace of such creation in the struggle of more people for diminishing resources is in play. If so, then we need more such pointy heads in state legislatures and fewer Republican insurance agents and used car salesmen in order to once again live up to the legislature’s constitutional duty to provide resources to higher education instead of saving such tax funding for distribution to their campaign contributors while laying the burden of higher education (and the creation of new resources) on prospective pointy head students via student loans, which guarantees that many budding Einsteins are working second shift at 7-11s, a tragic waste of human resource and an irretrievable loss to the common good.

    Used car salesman can’t see beyond the end of their political noses and are ill-suited to adopt policies that will increase “diminishing resources” and their fair sharing down the road, so let’s hear it for the pointy heads who are creating new resources in their labs, failing which, Vern’s dire analysis of our future will turn out to be 100% correct.

  14. Gerald,

    Thanks for the nod. What I meant – and should have stated – is that the diminishing resources include fossil fuels, clean water, clean air and various minerals. Maybe this European drought will uncover enough sunken German warships that they can re-cycle the steel to make cars and such.

    My point here is not meant to be snarky, but to show that the constant economic growth model will not last forever. Add to that the smooth brains that still embrace “trickle-down” stupidity as an economic model. Some economists clutch their pearls and wring their hands that the largest output of our global financial economies is DEBT. How does “debt” get paid back if the oil runs out? Who receives the payments on debt when the banks fail?

    Some of these guys need to get serious about certain mushrooms so they won’t be disappointed.

  15. Capitalism redistributes wealth up and depends on tax policy to redistribute the appropriate amount back to the labor who actually creates the wealth.

  16. I just posted on my FB page this Guardian article (link below) by “evil socialist” Sen. Bernie Sanders on this very subject. Something must be in the air. Long, long before the “threat to Democracy ” came along with Fasicist Trumpism (as articulated by Biden last night in his Philadelphia speech), we have (ironically) had 4-5 DECADES of Economic Fascism. There is ZERO “democracy” in Capitalism. NONE!!! We have a very large “serfdom working class” in America who make poverty wages, live paycheck to paycheck and who have NO VOTE, NO VOICE within their employer’s financial and corporate kingdoms. In fact, the 1% (Corporate Class and Wall Street represented in BOTH Democrat and GOP parties) control not only the oligarch economy, they control the corporate media (what THEY want us to get anxious and pissed about) AND THEY CHOOSE who will show up on any given ballot in America through their financial buy-outs of politicians! Democracy? Ha. Hardley.

    Another irony is that this anti-democratic economic system is what drove voters to Trump by the millions after Obama bailed out Wall Street and left the workers of serfdom to fend for themselves!!! There was NOTHING about “Democracy” in the loss of millions of good jobs, homes and saving in the infamous “salvation” of our Wall Street economy in 2008. The serf taxpayers, as usual, paid for the “miscues” of the 1%, they got richer and bigger, and more shit jobs were added to the non-democracy work force. As bad as Trumpism is (and it is VERY dangerous and bad), the Oligarch running our economy and government for decades is also killing our planet and paying virtually no taxes. A win-win. “Democracy” has been in peril decades before Trump went down the golden escalator in 2016 to run. We have had 40 years of BOTH parties screwing the working class. Trumpism may (I doubt it) subside or be blunted somehow this fall and in 2024, but the 40 plus years of ANGER from the working class will STILL be with us. And I am one of them!!! Until democracy enters the workplaces in America, it will NEVER be a true democracy at the voting booth. Period.

    see following for more details-

  17. PS – Make no mistake, there are TWO different forms of government in America: First, the Corporate/Wall Street Oligarchy who own and control our economy and 99% of politicians and, second, we the peasant paycheck to paycheck workers (aka We The People) who get to “vote” for whoever the 1% allow on our ballots. That’s it.

  18. I Believe You, Look no further than Mississippi where the republicans have redirected federal welfare funding to the rich and famous.
    Or Missouri where the republicans have failed to invest in the infrastructure to support a thriving majority black city.
    The Maga republicans have control over the Republican Party and have no moral, ethical, patriotic or compassion compass, and they are taking the once GOP down the political toilet faster than the tank can refill.
    That’s why I left them years ago, they no longer stand for the America I believe in.

  19. Capitalism distributes wealth up, and tax policy, in order to make capitalism sustainable, rebalances the flow back down to a functional degree.

    Education is necessary infrastructure for the entire country. That’s why public education is necessary, but only through high school has gone from sufficient to insufficient. Biden’s student loan rebate program is supplementing tax policy in rebalancing the economy and restoring public education back towards sufficient.

    For a tribe to prosper, the tribe needs to know the degree of resource supply variability and hoard enough during the good times to cover the bad times. The conservative mantra of individual hoarding of wealth is dysfunctional for their and our tribe.

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