The Key to the Brexit Backstory
How did Britain’s wealthy take the end of the British empire? Not well — and the rest of us are still paying the price.
What should Hillary Clinton say – and do – about inequality? Some ideas from a veteran chronicler of our unequal scene.
An editor’s note: James Lardner, one of the first American journalists to spotlight the wide and often hidden impacts of economic inequality, has no inside track on what Hillary Clinton’s acceptance speech in Philadelphia will have to say about America’s still growing divide between the rich and everyone else. But Lardner does have some thoughts on the acceptance speech he longs to hear her deliver. He shares them here. A version of these remarks has also appeared in Dissent.
When you run for president, you get a lot of advice. Let me tell you about some advice I’m not going to follow.
It’s about an issue I have raised often in this campaign. As far back as many Americans can remember, most of the rewards of our economic growth have been going to those who already had the most. Corporate CEOs and Wall Street bankers and traders have seen their incomes shoot up year after year. Meanwhile, average families have struggled and millions of Americans have found themselves stuck in jobs that don’t pay anywhere near a living wage. Last year, 25 hedge fund managers made more money – $13 billion – than the combined earnings of all the kindergarten teachers in our country.
Now that the general election campaign is underway, some people think it would be wise to put this whole troubling topic of conversation behind us. Let’s play it safe, they say, and keep our message simple. That means reminding voters of the disaster we inherited in 2009 and how much better the economy is today. It means talking about what we have done and will do to strengthen and broaden the recovery. It means pointing out that the Republican Party has nominated someone a great many Republicans – and other Americans – see as deeply unqualified to serve as President.
Why confuse the picture? Why run the risk of alienating people who may like the shape of our economy just the way it is?
Here’s why: The truth isn’t always simple or pleasing to all ears. But this is a problem we have played down for too long.
The United States is an enormously rich country. The stock market is booming. Corporate profits have never been higher. Some of our biggest companies are sitting on mountains of cash. Something is badly out of whack when alongside all this evidence of success we have restaurant workers, cashiers, customer service representatives, and office-building cleaners taking out triple-digit-interest payday loans to cover the rent or keep their families fed.
The income divide is extreme, the wealth divide even more so. The 20 richest Americans — you could fit them all on a Gulfstream luxury jet – hold more assets than the entire bottom half of the population; that’s 20 people with more wealth than 152 million people. And race is still a disturbingly large piece of the story. Half a century after the March on Washington, our executive class, whose spectacular gains have been driving this trend, is overwhelmingly white, while the low-wage workforce is disproportionately black and brown.
These two facts help explain why the typical African-American family has just 6 percent, and the typical Latino family just 8 percent, of the typical white family’s household wealth. [pullquote]Our best instincts tell us enormous gulfs in income and wealth cannot be right. [/pullquote]
Our faith traditions, our consciences, our best instincts tell us that these enormous gulfs in income and wealth cannot be right. And a large body of research tells us that they don’t make any better economic sense than moral sense or common sense. So I will not stop talking about economic justice. But more important, if I’m elected I will pour all my experience, my skills, my energy, and my heart into the task of making sure that every kind of work is properly respected and valued, and we have an economy and a society in which the rewards are broadly shared.
I do not mean to minimize all that our country has done – that Democrats have led the way in doing – to improve the fortunes of middle-class families and the economically disadvantaged. We are the party of Social Security, the G.I. Bill, Medicare, the 1964 Civil Rights Act, and the Affordable Care Act. We’re the party that fought for a minimum wage and a 40-hour week with guaranteed overtime.
We’re the party, led by President Obama, that despite the relentless obstructionism of Republicans in Congress took action to pull the economy out of a tailspin in 2009 and 2010. We saved the automobile industry, and more than 16 million Americans now have health insurance thanks to legislation that Democrats enacted without a single Republican vote.
We have a great deal to be proud of. Yet we have not done nearly as much as we could or should. And if we’re honest about it, Republicans have not been the only obstacles in our way. Democrats have too often been swayed by the wrong voices into supporting the wrong policies. And here’s one big reason why: for too long we told ourselves that our growing economic divide was somehow natural or inevitable, or, in any case, not important as long as the overall economy kept growing.
We were wrong. We were wrong in the first place about the causes of this trend. Let’s look back to its beginnings in the late 1970s and early 1980s. What else began to happen around then? Well, for one thing, we cut income tax rates on the highest earners and slashed taxes on investment income and inheritances. That’s also when the federal government turned its back on workers who were trying to organize.
What else? We allowed the minimum wage to lag far behind the cost of living, and we let many companies get away with paying even less. We empowered big banks and corporations to speak for America in the global negotiations that set trade practices. Our courts, regulators, and lawmakers signed off on a brand of corporate management that put shareholder gains – and short-term stock market plays – above any ties of corporate responsibility to employees, communities, or the public good.[pullquote]Let’s be honest: Real markets aren’t free. [/pullquote]
We cut back on funding for public colleges and universities, and we forced students from low- and-middle income families to take out huge loans that would hang over their lives for years. We deregulated Wall Street, letting executives at giant banks and shadow banks gamble for their own enrichment with tax subsidies and government-guaranteed funds. We gave predatory lenders license to exploit our most vulnerable families, especially families of color.
None of this was inevitable. We cannot blame our increased inequality on the impersonal forces of globalization or new technology, or, for that matter, on the natural workings of the so-called “free market.” Let’s be honest: Real markets aren’t free. Markets can’t function without laws, courts, and systems of trade and corporate governance – without infrastructure and public institutions. They depend on a structure of rules which evolve and change; and within our lifetimes, the rules have been drastically rewritten to favor the few over the many.
When income and wealth gaps get out of hand, fairness becomes an elusive goal not just in the economy but in every realm of life. In education, for example. We like to think of education as a tool of opportunity, but if we don’t watch out it can turn into a reinforcer of inequality. That’s what happens when African-American and Hispanic kids get dumped into schools with metal detectors and police officers — but no counselors. It’s what happens when college students from low- and middle-income families have to hold down jobs or meet family obligations that drain the time and energy needed for schoolwork, while affluent kids get to go to college full-time.
Huge differences in income and wealth translate into advantages and disadvantages that too often pass seamlessly from one generation to the next. The United States became a rich country by rejecting the rigid class distinctions and entrenched privilege of the Old World. Throughout history, civilizations have grown and flourished by empowering more of their people; and civilizations have decayed and declined by treating a few people as all-important and others as interchangeable.
Companies, like countries, get into trouble when they operate that way. Many of our big corporations now pay their CEOs 300, 400, or even a thousand times as much as their average workers. Runaway pay at the top encourages short-term bets that juice up share prices and generate windfall gains for executives. That kind of leadership breeds cynicism and opportunism up and down the line. And worse: corporate gambling and short-term thinking can have disastrous consequences for all of us, as Americans will not soon forget.[pullquote]Extreme inequality is very bad for democracy. [/pullquote]
Extreme inequality is bad for opportunity, bad for business, and very, very bad for democracy. It is hard to win elected office nowadays without trolling for contributions from mega-millionaires and billionaires. Individual candidates may tell themselves they have not been compromised, but no one can credibly make that claim about our political process as a whole. If money had no influence, it is hard to imagine Congress voting again and again to slash inheritance taxes, even after 99.85 percent of Americans – all but the handful of families with estates of ten million dollars and more – had been totally exempted. Meanwhile, this same Congress cannot find the time to even debate an issue of wide concern like the lack of affordable child care.
Money does not win every election or every legislative battle, thankfully. But it wins far too often, and many people without much money end up deciding that the game is rigged and voting is not worth the trouble – which only magnifies our democracy deficit.
It is customary in speeches like this to cover a wide array of issues. I’m going to depart from custom. Tonight I want to focus on this question of economic justice and shared prosperity. That’s because it is deeply important in its own right, but also because it has implications for our ability to deal with a great many of the other problems facing us.
Democracy depends on people coming together to solve common problems. Extreme inequality drives people apart, robbing them of their ability to recognize common problems. Rising college tuition? Not an issue for wealthy families that can afford whatever the market will bear. Underfunded pension plans? Not a concern for those who have hefty investment accounts or assets that can be liquidated in a pinch. Lead in the water system or asbestos in school buildings? Not such a big deal for those who don’t have to live in the neighborhoods afflicted with these hazards.
When economic differences are less extreme, more people get engaged in the political process, and we’re more likely to work together. In a more just America, we would be taking better care of our economic infrastructure – our bridges, roads, airports, and our power and water supply. We would be doing a better job of looking out for the next generation and confronting long-term challenges like climate change. People of color would get more respect from the police, and the police – and other public servants – would get more respect from all of us.
As rivals during the primaries, Senator Sanders and I kept coming back to questions of economic fairness and concentrated wealth and power. Perhaps one reason we both care about these issues so deeply is that we are old enough to recall an America that was on a different path. We grew up in the decades right after World War Two, when millions of families rose out of poverty into a middle class that was the envy of the world. [pullquote]The greater equality of the 1950s and 1960s did not happen by chance.[/pullquote]
The nineteen-fifties and sixties should not be held up as a golden age: Minorities, women, the disabled, and the LGBT community had to contend with injustice far worse and more systematic than they face today. There were serious differences of income and wealth then, too. But many Americans took inspiration from the sense that we were moving toward the fulfillment of our founding ideal of a land where nobody lords it over anybody else, and children get a fair start in life regardless of their origins or ancestry. We had our compass set in the direction of what Bruce Springsteen has called the country we hold in our hearts.
The greater equality of that time, like the increased inequality of more recent decades, did not happen by chance. It happened by choice. It was fueled by laws and regulations that honored the right of workers to organize and bargain collectively; by programs to help veterans go to college and young families buy homes; by strong financial regulation and higher taxes on the wealthy and the corporations they run.
These were policies enacted by Democrats but often embraced by business leaders and Republicans. During the presidency of Dwight Eisenhower, tax rates on high incomes were more than double what they are now. President Eisenhower did not set out to cut taxes on the wealthy. He did not attack Social Security or question the value of public investment in technology and infrastructure. He wanted the Republican Party to remain the party of Abraham Lincoln, which had championed the building of canals, roads, and railroads, and given us the Homestead Act and land-grant colleges. The Eisenhower Administration set America to building the interstate highway system, one of the greatest public-investment initiatives in our history, and a source of jobs and opportunities for Americans up and down the economic ladder.
Today’s Republican leaders, sadly, have left those values far behind. They take their instructions from the most short-sighted and self-interested elements of Wall Street and the corporate world. They have become the paid political operatives of an alliance of wealthy companies and families promoting an ideology that insists that the profit motive is always good and government is always bad – but with an asterisk: government is always bad except when it is handing out favors to those who denigrate it.
Republican leaders do not recognize economic inequality as a problem. How can they when Republicans in the White House and Congress have again and again been the authors of tax cuts for the rich and benefit cuts for others; of deregulation measures that let giant Wall Street banks and multinational corporations set their own rules; of special-interest giveaways dressed up in the nonsense of trickle-down economics?
To expect anything better from the Republicans in 2016 would be the height of folly. Yes, it’s been a strange year for their party in some respects. But not in all respects. Set aside for the moment the ignorant and disparaging things that Donald Trump has said about women, Latinos, immigrants, and Muslims. The Republicans have chosen a presidential candidate who inherited a fortune, and whose only proven skill as a businessman is a knack for extracting personal profit from deals that turn out badly for everybody else. Wherever he goes, he leaves a trail of laid-off workers, bankrupt companies, dissatisfied customers, and unpaid contractors in his wake. The Trump position on inequality is simple: He’s for it. He’s done everything he can to create more of it.[pullquote]During the Eisenhower presidency, tax rates on high incomes more than doubled today’s rates. [/pullquote]
The Republicans have left Americans in no doubt about where they stand. Let us be just as clear. Let’s stand with the fast-food worker, the preschool teacher, the warehouse shipper, the secretary, the EMT technician, the school bus driver – with all the Americans who have been systematically devalued in our massively unequal economy.
Let’s make our party the organized voice of the part-time worker who can’t find a steady, full-time job; of the two-earner couple who live paycheck-to-paycheck and don’t have enough time to spend with their children — or enough money to think about having children. Let’s do right by the teachers, police officers, and firefighters who cannot afford to live within a reasonable distance of the communities where they work because a few people with heaps of money have bid up the price of housing far beyond their reach.
Let us commit ourselves to building an economy that works for all Americans, not just for an overprivileged few. And let’s declare our readiness to fight for policies big and brave enough to get us there.
None of this will be easy. We can expect to face intense and well-funded opposition on issue after issue. The Republicans will accuse us of “class warfare” and socialism. We’ll hear objections from some in our own party, too. Old political hands will caution us to think smaller. They’ll tell us to avoid controversy and make do with the carefully measured proposals and time-tested applause lines of election years past.
Could we win that way? Is it truly necessary for us, in 2016, to confront the issue of America’s growing economic divide? Let’s ask ourselves a different question: does our country face any problem that is more important or far-reaching? I think we know in our bones that it doesn’t. So let’s set the bar higher than victory in November. Let’s aim to be worthy of the moment and of the offices we seek.
We won’t succeed in everything we attempt. We’ll make mistakes. We’ll make enemies. But if we are sure of our purpose and keep our shoulders to the wheel, I’m confident that most Americans – Democrats and Independents and many Republicans as well – will respect us more for it. In fact, many who count themselves among the economic winners of recent decades will join us in this struggle, because they, too, understand that our economy has taken a wrong turn.
In a more equal America, there will be rewards for all: less stress, less preoccupation with money and material gain; more time and capacity to be parents and siblings, friends and neighbors; a healthier attitude toward work life and the rest of life.
We will draw strength in this fight from the engagement of those who have been called apathetic but were really just waiting for a sign that the political process mattered. We will be nourished by the activism of young people who have been forcefully prodding our party to take on this cause and be its best possible self. There will be joy in this struggle, too – the joy that comes from doing what we know is right, making a difference, improving people’s lives, and leaving America a better place, much more like the country we hold in our hearts.
Writer and activist James Lardner founded the Inequality.org online presence nearly two decades ago.