It is difficult to get a man to understand something, when his salary depends upon his not understanding it!
- Upton Sinclair
There is nothing magic about a statist economy. It needs to be managed by those who are motivated to reduce economic inequality. It also needs to be managed by capable people.
Both of these conditions existed during the Roosevelt Administration. The result was an unprecedented increase in prosperity for ordinary Americans.
Exactly what was done with the Reinhart Rogoff error a year or so back. What was some very wonky marginal stuff was blown out of proportion to undermine the entire concept. We had pieces all over the media, from John Stewart to serious news items.
I dont have the economic expertise to say whether or not this seriously undermines Picketty. Yet I suspect neither did many of the media outlets have the same economic knowledge when they threw out the Reinhart Rogoff conclusions.
What’s really bizarre about the FT allegations are that they largely agree with Piketty about the historical data but have issues with the most recent 30 years, where you think the data would be the strongest and we are most certain about the conclusions. I look forward to the work by Saez and Zucman which purports to come to much the same conclusions as Piketty via independent means.
I personally have a hard time seeing how the FT can claim that wealth inequality hasn’t grown in the last 30 years. All of the other data has been indicating income inequality has been growing and wealth inequality grows faster than income inequality so it would seem extraordinary if wealth inequality turned out to be stable.
If wealth inequality has been stable, it would only be because of the 2008 crash.
That those who wield great economic power also wield political power out of proportion to their numbers, and that matters WRT public-policy outcomes.
There are many groups that wield political power out of proportion to their numbers. The wealthy are just one group of many with outsized influence. It should not be the goal of tax policy to weaken a group for political purposes. It’s corrupt, for one thing.
There we have it. Trying to reclaim democracy from the oligarchy is corrupt. I should really put this in my sig.
If you were a) trying to reclaim democracy, and b) battling ALL the groups that wield disproportionate power, you’d have something.
What’s actually happening is that some want to reduce the political power of their opponents while strengthening the power of their allies. That’s not reclaiming democracy, that’s just taking the ball from one side so that one you like better can run with it. That is the corrupt part of it. I don’t accuse you of this, because perhaps you aren’t aware of the diversity of groups that wield outsized influence. But the politicians certainly are aware, and their motivations are deeply corrupt.
Groups that wield disproportionate political power: the rich(duh), the gun lobby, the Israel lobby, the Taiwan lobby, the Cuba lobby, the farmer lobby, public employee unions, environmental groups, the AARP, and the Chamber of Commerce.
I cite all these groups because all have been successful in getting legislation passed or executive action taken that the public opposes. So if we’re “reclaiming democracy” we have to defang all these groups. Or, we could acknowledge that there is no conflict between democracy and outsized influence. There has never been a democracy in history built where everyone had an equal voice outside their vote.
Yeah, fuckin’ liberals and their unenumerated righ…
oh . . . fuckin’ liberal Founding Fathers and their view of the Constitution as guaranteeing rights that aren’t even written down there!
CMC fnord!
Be fair, he’s a Tenther, not a Ninther.
I’m both a 9ther and a 10ther. My issue was with seeing things not enumerated as more non-negotiable than things that are.
Example: the Constitution says, “Congress shall pass no law abridging the freedom of the speech, or the press.”
It does not say: “Speech shall be equal, influence shall be equal, and Congress can restrict freedom of speech and the press to those ends.”
Oh come on. So no efforts to battle disproportionate power are legitimate unless they go after every single group that wields disproportionate power? That seems awfully convenient to those with the power.
You make a fair point. Here’s why the powers that be trying to make this happen are disingenous: they know who the real powers in DC are, but they only want to deal with one particularly powerful constituency that is mostly allied with their political opponents.
Also, you can’t reclaim democracy portrayed as everyone having an equal voice when such a thing has never existed. That’s not ‘reclaiming’, that’s founding an entirely new system. It really is nothing more than taking the ball from people they don’t like to give it to people they do. It’s like cheering for the Cowboys when they recover a fumble from the Giants. They are still millionaires and you’re still a dope in the stands. You are exactly where you were before the ref gave the ball to the Cowboys.
. . . nonexistent.
If only.
However, at the risk of this turning into another campaign finance thread, let me say that I agree with some of Piketty’s thesis. Capital does grow faster than wages, and inequality has been growing in the last 30 years all over the West.
However, world inequality might be dropping. Does he address that, and if it is dropping, doesn’t that mean that free markets are in fact working? Just not necessarily to the benefit of Western workers until an equilibrium is reached.
According to this cite, world income inequality is dropping:
http://siteresources.worldbank.org/EXTPOVERTY/Resources/Inequality_in_Focus_April2012.pdf
So if that’s the case, is anything really broken?
According to Wikipedia, the world gini coefficient dropped from 2002 to 2005, after decades of rising:
Globalization and free trade seem to be lifting up the incomes of the world’s poor.
No, economic inequality between nations might be dropping as Third World countries catch up with industrializing, but that is an entirely different subject. What we’re talking about here is economic inequality between classes, which is not dropping.
Lots of things are broken – just because things are improving by one metric doesn’t mean the system isn’t still broken.
Perhaps, but world poverty is definitely way down, with a billion people lifted out of poverty in the last 10 years. Again, that is not a sign of a broken free market system. In fact, I’d say it’s a repudiation of decades of foreign aid. Governments and NGOs spent decades trying to alleviate poverty, to no end. Then in the 90s and 00s, corporations went into these countries and started employing people and poverty plummeted.
India in particular is set to see its poverty rate fall by half:
**The report, launched on Friday, finds that India was able to reduce its poverty rate from 49 per cent in 1994 to 42 per cent in 2005 and 33 per cent in 2010. **