When I had the privilege of studying at Harvard during 2017, I focused much of my study on economic inequality. I had previously decided inequality is the greatest problem facing the world today–greater than climate change, greater than drug prices, greater than opioids and many other also legitimate concerns facing the US and most other countries around the globe.
Why? Because human existence depends on a safe level of income. Without sufficient income to provide for one’s family, decent housing, health care, education, and healthy food, without these fundamental basics, how can one hope to advance even minimally on Maslow’s ladder? Every day for many of our workers is all about survival, and only survival. It’s immoral and also dangerous (for all of us) for us to allow such conditions to exist widely throughout our country.
Inequality has now risen to the level equal to that of the Robber Baron era of the 1920’s. All the gains from WWI and Lyndon Johnson’s Great Society began to be erased with the neo-liberal economic era begun with the Presidency of Ronald Reagan in the US and Margaret Thatcher in the UK. Decades of both Democratic and Republican administrations have failed to arrest the steady advance of inequality. Inequality in the US is the highest among developed countries.
High levels of inequality slow economic growth, expose vulnerable populations on the bottom to dangerous levels of crime, drugs, pollution, and health, reducing longevity. Inequality at this level results in homeless camped outside gated communities, children without housing or available parents.
No Liberal wants total equality, not even Bernie Sanders. But we need a significant adjustment. There’s a lot of room for that, without reducing motivation for innovators and investors to take risk.
If we do not reverse the pendulum, the nation will face a revolution–perhaps in the next generation–ala the French Revolution or the Chinese Revolution. No one should welcome that solution to the problem, least of all our wealthy.
in my year of study, one thing was clearly indisputable: It is virtually impossible to fix (even to just measurably reduce) inequality without economic growth. The Trump administration doesn’t appear to care much about inequality, but at today’s 2% GDP growth, they couldn’t do much anyway.
I am asking our 12 Democratic candidates to focus on inequality. Fixing it with higher taxes on the wealthy financing more in government welfare for the working class is not the solution: (1) it won’t sell to the voters; (2) workers don’t want handouts–they want work with living wages; and (3) the welfare approach is not sustainable fiscally and economically.
Fixing it means creating faster gdp growth. The fillip to growth from the Trump tax cut has now burned out, so Democrats must show a way to stronger economic growth. In fact, the history of the last 70 years shows Democratic administrations have consistently generated greater growth than Republican administrations.
Then, fixing it means creating a new environment of work in the US, braced against the winds of technology replacing workers and foreign countries offering better sources of some of our simpler and less complex goods and services. This means much more than Trump’s trumpeted low unemployment rate. Unemployment rates do not translate into wages, and wages for the working class are far short of “living wages.”
It’s nice and good to raise taxes on the wealthy and corporations, add a wealth tax and estate tax, use the money to pay for better health care and more affordable education. This is all good, but it’s not sufficient to win the election or to reverse 40 years of job and wage degeneration in the US.
DEMOCRATS: Your challenge is to lay out a plan involving communities, educational institutions, employers, and government motivation, to spawn the beginning of a new work paradigm for American workers.
3 thoughts on “Critical 2020 Issue for Democrats”
Thank you for the insights, particularly the observation that reducing income and wealth inequality is more politically feasible when the economic pie is growing. I’d like your thoughts on two questions please:
1) If inequality causes economic sluggishness, as we believe it does, and if inequality is increasing, as we know it is, can we reasonably expect an economic boom during which to enact such changes? I’m not sure we can, unless we deficit spend through more tax cuts, through a Green New Deal, or, God forbid, through war.
2) In my opinion, among those choices, the Green New Deal is the only acceptable option. What do you think of the Green New Deal as a means to address income and wealth inequality? Maybe not in its entirety, but at least in part?
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To clarify, I meant perhaps not the entirety of the Green New Deal, but at least some elements of it.
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I think accelerating growth is possible. Higher taxes on the wealthy and corporations will not slow growth, and will help finance infrastructure and investment in clean energy. We need to lower taxes only on the working class. But I think the biggest problem is building a new capitalism which will eventually enable most Americans to enjoy a living wage. But, tell me more about how you see it, Bev! Thanks!