The Lesson We Need to Teach Our Nation’s Rich
We will not let your wealth come at the expense of our children’s future.
The Commission on Inclusive Prosperity, a project of the Washington, D.C,-based Center for American Progess, has just released what journalists like to call a “blue-ribbon panel report.”
This Commission certainly rates — by any standard — as “blue-ribbon.” The commissioners range from Larry Summers, a former treasury secretary under Bill Clinton, to current and former high-ranking treasury officials in the UK, Sweden, and Australia.
Also serving on the panel: the president of the Rockefeller Foundation, assorted transatlantic business and labor leaders, two influential journalists, and various top-flight academic analysts.
A distinguished collection, in other words, of public policy heavyweights. But not a random collection. Most of the Commission’s panelists appear to circle in the Clinton orbit. The report they’ve produced, a New York Times analysis observes, amounts to “the first draft” of an agenda for Hillary Clinton’s presidential campaign.
This “first draft” offers a good deal of useful insight on the developed world’s “toxic combination of too little growth and rising inequality.” Among the report’s most welcome contributions: a series of well-designed graphs that chart the deterioration of average people’s economic status across the developed world — and nowhere more so, over recent decades, than in the United States.
The flip side of that deterioration: a swelling of good fortune for those at the developed world’s economic summit, most markedly, once again, in the United States. The report neatly spells out this swelling as well.
But growing inequality, the report suggests, may actually endanger our political well-being — our democracy — even more than our economic well-being. Indeed, the report argues, democracies that don’t deliver higher living standards for their people may simply not survive as democracies. Our contemporary “economic troubles” are serving to “erode support the democratic idea.”
The Commission on Inclusive Prosperity report, unfortunately, never stops to ponder a deeper question: What kind of democracy lets wealth concentrate into so few pockets and does so precious little, decade after decade, to help its struggling democratic majority?
Could the answer simply be that we here in the United States don’t really live in a democracy anymore? Our contemporary United States does boast, to be sure, all the trimmings of democracy. But democracies don’t spend decades privileging the few at the expense of the many. Plutocracies do.
Has the United States become a plutocracy? Do our rich rule? The Commission report shows no interest in this question. The word “plutocracy” appears nowhere in the report’s 160-plus pages.
Now this absence could, of course, just reflect a matter of tone. The word “plutocracy” strikes some as overly polemical. Fine. You don’t have to use the word “plutocracy” to describe how the wealthy dominate American politics. But if you’re trying to explain why the United States has become so unequal — and what we need to do to overcome that inequality — you do need to explore the economic rule changes that have allowed the wealthy to snatch up so much of America’s treasure.
This report doesn’t explore in some obvious places. You won’t find here, for instance, any damning detail about the banking deregulation that paved the way for Wall Street’s great turn-of-the-century greed grab — and the subsequent Great Recession that decimated the net worths of America’s middle-income households.
Nor will you find here any discussion of how NAFTA and other “free trade” agreements have so weakened the bargaining power of American workers.
You will find here plenty of words of praise for the Bill Clinton presidency in the United States and the Tony Blair years in the UK. The report hails the “the success of both the Clinton and Blair administrations in slowing inequality growth in the years around the turn of the century.”
But that success never took place. Incomes for working families did increase during the Clinton years. But incomes at the top increased far faster. America’s top 0.1 percenters, the World Top Income Database shows, averaged 70 times more income than household in America’s bottom 90 percent the year Bill Clinton took office. They took in 112 times more income in Clinton’s last year.
This increasing inequality didn’t just “happen.” Deregulation, corporate-friendly trade pacts, and other rule changes pushed along by Clinton officials helped this inequality along. These new rules left the wealthy with more wealth — and more power — and set the stage for the economic ugliness of our 21st century.
If you ignore or softpedal these rule changes, as this report largely does, you end up with reform proposals that leave concentrated wealth and power inconvenienced but still intact. We need to do better
The Commission on Inclusive Prosperity report, in one fine rhetorical flourish, quite accurately identifies achieving “shared prosperity” as the premiere “challenge for our time.” But we’ll never achieve that sharing until we directly confront the wealth and power of those who have grabbed far more than their due — and don’t want to share it.
Sam Pizzigati edits Too Much, the Institute for Policy Studies monthly on excess and inequality. His latest book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970.