Rising Wealth Inequality In America: A Broken and Unsustainable System

Professor Krugman this morning:

Yet before we dismiss the report as nothing new, let’s think about what it means that these 25 men (yes, they’re all men) made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America.

First, modern inequality isn’t about graduates. It’s about oligarchs. Apologists for soaring inequality almost always try to disguise the gigantic incomes of the truly rich by hiding them in a crowd of the merely affluent. Instead of talking about the 1 percent or the 0.1 percent, they talk about the rising incomes of college graduates, or maybe the top 5 percent. The goal of this misdirection is to soften the picture, to make it seem as if we’re talking about ordinary white-collar professionals who get ahead through education and hard work.

But many Americans are well-educated and work hard. For example, schoolteachers. Yet they don’t get the big bucks. Last year, those 25 hedge fund managers made more than twice as much as all the kindergarten teachers in America combined. And, no, it wasn’t always thus: The vast gulf that now exists between the upper-middle-class and the truly rich didn’t emerge until the Reagan years.

Second, ignore the rhetoric about “job creators” and all that. Conservatives want you to believe that the big rewards in modern America go to innovators and entrepreneurs, people who build businesses and push technology forward. But that’s not what those hedge fund managers do for a living; they’re in the business of financial speculation, which John Maynard Keynes characterized as “anticipating what average opinion expects the average opinion to be.” Or since they make much of their income from fees, they’re actually in the business of convincing other people that they can anticipate average opinion about average opinion.

This is about a tiny, tiny sliver of the population that have hijacked our system for their own benefit.  With the GOP as a wholly owned subsidiary and a minority stake in the Democratic Party, they have skewed tax policy and regulatory policy to their own benefit - at the expense of all of us.  They have a legion of pundits (see,e.g., the execrable David Brooks) constantly shilling for their preferred policy choices.  And now that they have acquired a majority stake in the Supreme Court, not only are corporations considered people, but money is considered speech.

We are on the precipice.  With a seemingly insatiable avarice, our 0.001%ers don't seem to understand that some share of society's wealth must pay for society.  For the Kochs and the Waltons and the Pete Petersons of the world too much is never enough.  They want it all, every last penny.  And it's not enough to have every material thing they could ever want.  They need to see the poor suffer for their crime: being poor.  It is pathological.

We are approaching Bastille and guillotine territory. We need some significant policy changes, now, or this will end very badly.  I call it . .  . the Aristocrats!