Economist, professor, author and political commentator Robert Reich. (photo: Richard Morgenstein)
04 April 14
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wealth and income weren’t already so concentrated in the hands of a
few, the shameful “McCutcheon” decision by the five Republican
appointees to the Supreme Court wouldn’t be as dangerous. But by taking
“Citizen’s United” one step further and effectively eviscerating
campaign finance laws, the Court has issued an invitation to oligarchy.
Almost limitless political donations coupled with
America’s dramatically widening inequality create a vicious cycle in
which the wealthy buy votes that lower their taxes, give them bailouts
and subsidies, and deregulate their businesses – thereby making them
even wealthier and capable of buying even more votes. Corruption breeds
more corruption.
That the richest four hundred Americans now have more
wealth than the poorest 150 million Americans put together, the
wealthiest 1 percent own over 35 percent of the nation’s private assets,
and 95 percent of all the economic gains since the start of the
recovery in 2009 have gone to the top 1 percent — all of this is cause
for worry, and not just because it means the middle class lacks the
purchasing power necessary to get the economy out of first gear.
It is also worrisome because such great concentrations
of wealth so readily compound themselves through politics, rigging the
game in their favor and against everyone else. “McCutcheon” merely
accelerates this vicious cycle. As Thomas Piketty shows in his
monumental “Capital in the Twenty-First Century,” this was the pattern
in advanced economies through much of the 17th, 18th, and 19th
centuries.
And it is coming to be the pattern once again.
Picketty is pessimistic that much can be done to
reverse it (his sweeping economic data suggest that slow growth will
almost automatically concentrate great wealth in a relatively few
hands). But he disregards the political upheavals and reforms that such
wealth concentrations often inspire — such as America’s populist revolts
of the 1890s followed by the progressive era, or the German socialist
movement in the 1870s followed by Otto von Bismarck’s creation of the
first welfare state.
In America of the late nineteenth century, the lackeys
of robber barons literally deposited sacks of money on the desks of
pliant legislators, prompting the great jurist Louis Brandeis to note
that the nation had a choice: “We can have a democracy or we can have
great wealth in the hands of a few,” he said. “But we cannot have both.”
Soon thereafter America made the choice. Public outrage gave birth to
the nation’s first campaign finance laws, along with the first
progressive income tax. The trusts were broken up and regulations
imposed to bar impure food and drugs. Several states enacted America’s
first labor protections, including the 40-hour workweek.
The question is when do we reach another tipping point, and what happens then?
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