Chronicles of Inequality {13 May 2013]

So “what then must we do”? The great Russian novelist Leo Tolstoy once asked that question in a moving essay on 19th-century inequality. A top U.S. historian is now asking the same question. This week’s Too Much explores his answer.

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Quote of the Week

“The number one minimum wage employer in this country is Walmart. Where the CEO makes more in an hour than most of his employees will make in a year.”
Robyn Pennacchia, Most minimum wage workers are adults who work for large corporations, Death and Taxes, May 10, 2013

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Real-Time Billionaires/Forbes magazine, with itsForbes 400, used to hold the unquestioned franchise on billionaire stats. Then Bloomberg started running adaily billionaire tally. NowForbes has countered with its own daily scorecard. This newForbes site updates, every five minutes during the stock-trading day, the level of wealth America’s richest hold in publicly traded assets.

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Say no to the billionaire Koch brother move to buy up eight major U.S. dailies.

The world’s 11 largest pharmaceutical firms last year paid their chief execs a combined $199.2 million, Health Care for America Now researchers have just reported, a total well over double their take-home in 2003. In 2006, the first year of the Bush administration’s Medicare prescription drug law, Big Pharma CEO pay jumped $58.9 million, the decade’s largest one-year increase.

Too harsh a judgment? Hardly. Current standard corporate operating procedures only make sense if we acknowledge that America’s biggest private enterprises have essentially become the private preserve of an elite executive class.

How else to explain today’s most routine corporate behaviors? The endless rush to mergers that create little more than chaos in newly consolidated workplaces. The ongoing corporate refusal to invest significantly in research and development and employee training. The billions of dollars corporations spend to “buy back” company shares of stock on the open market.

All these moves leave corporations less equipped to succeed in the long term. But all these moves generate multiple millions, sometimes even billions, in the here and now for the corporate executives who make them.

Corporations, of course, have always done well by the executives who run them. But a half-century ago the United States had institutions that kept this enrichment within somewhat reasonable bounds. Trade unions acted as a brake on executive greed grabs. A progressive tax system — with rates as high as 91 percent on income over $400,000 — discouraged the greed grabbing in the first place.

But both these institutions — trade unions and progressive taxes — have atrophied over recent decades. Income and wealth, without these institutional checks in place, have concentrated at America’s economic summit. Below that summit, daily life for average Americans has become ever more insecure.

The United States, in effect, has slid into what University of Maryland historian and political economist Gar Alperowitz calls a “systemic crisis.” For the nation’s vast majority, America has simply stopped working. Daily life has turned into an ever-faster treadmill. And no real relief looms anywhere on the near horizon.

In this dreary environment, an understandable disillusionment — with our political leaders — runs deep. So does a decapacitating cynicism. Why bother struggling against an unjust status quo when nothing ever changes?

Historian Alperovitz has a new book out that aims to rouse us from this suffocating political stupor. In his new What Then Must We Do? Straight Talk about the Next American Revolution, he endeavors to show that societies in “systemic crisis” can change. Revolutions do happen. Indeed, he suggests, “we may now be well into the prehistory of the next American revolution.”

Just what does Alperovitz mean by that? In any social order, he explains, political power reflects the ongoing distribution of wealth. Meaningful change only begins when that existing distribution starts coming under challenge.

Alperovitz sees the challenge needed today as much more any single campaign for a candidate or cause. He has something deeper in mind: an “evolutionary reconstruction” of our society, a decades-long shift that aims to democratize wealth, to build “a community-sustaining economy from the ground up.”

Pie-in-the-sky fantasy? We already, Alperovitz stresses, have the seeds of an alternate, wealth-democratizing economy in place. Well over 100 million Americans belong to credit unions and co-ops. Ten million Americans labor in worker-owned enterprises. Millions more Americans live in municipalities where public institutions generate electric power — or even provide Internet service.

Alperovitz envisions a steady expansion of wealth-democratizing institutions like these that creates new political constituencies for fundamental change. Over time, over decades, the people these institutions touch begin to see from their daily experiences that alternatives to our dominant corporate status quo do exist. They begin to hold “clear ideas” about what can be done.

In times of acute crisis — say another banking failure — people with clear ideas about democratizing wealth won’t let their tax dollars bail out billionaires. They’ll demand public banks. They’ll carve away at private corporate power, bit by bit.

What Then Must We Do? mixes these intoxicating visions of a future yet to be with concrete descriptions of wealth-democratizing efforts already underway all across the nation, from Cleveland and Chattanooga to Portland and Sacramento.

These descriptions can surprise. One example: In Texas, the heart of red-state America, Dallas has opted to build a city-owned convention center hotel. Quips Alperovitz: “Everyday socialism, all the time, American-style.”

The pages Alperovitz has penned here hold a promise that goes beyond the compelling clarity of his prose. National networks are already working to advancehis strategic vision, efforts like the community wealth-building initiative of the Maryland-based Democracy Collaborative and the New Economy Working Group, a center for both local and global thought and action.

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America, Alperovitz reminds us, has become the wealthiest nation in the history of the world. The nation’s annual income, if divided equally, would be enough to bring each family of four $200,000. We can, in other words, do far better for average Americans than we do today. Why not try?

Robert Scheer, Obama Did It for the Money. TruthDig, May 7, 2013. With billionaire Penny Pritzker’s nomination as Commerce secretary, the two Cabinet positions that address the chicanery of the financial community will now likely be occupied by people who’ve engaged in this chicanery.

Duncan Exley, Improving motherhood means reducing inequality, not just poverty, New Statesman, May 8, 2013. The message from the Mother’s Index.

Chrystia Freeland, Money Cuts Both Ways in Education, Reuters, May 9, 2013. Being groomed for the winner-take-all economy starting in nursery school turns out to exact a toll on children at the top.

A new review of Too Mucheditor Sam Pizzigati’s latest book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class,1900-1970.

You want background for a debate over tax reform? You’ll find plenty to chew over here. Over 400 pages that detail the ins and outs of the current U.S. tax code. About another 50 pages that spotlight tax reform plans advanced by an assortment of official commissions, think tanks, and members of Congress.

Add into the mix 80 more pages full of ideas from the general public that the House Ways and Means Committee invited this past March.

All in all, quite a reference. This volume has everything. Almost everything. Only one element appears missing. Context. This text has no references to what we can learn from America’s own tax past or the tax experience of other nations.

This amazing — and total — absence of context helps explain why America’s wealthy have nothing to fear from “tax reform,” the 2013 edition.

Not one page of this massive text notes that our most affluent once paid taxes at over twice the top rate they do now. Or that the nation’s rich face a tax burden significantly lower than the rich in America’s peer nations face.

We don’t need another “tax reform” debate on Capitol Hill. We need a “tax the rich” debate — and a reference book that helps all Americans understand why.