Home

By Robert A. Vella

This week, Bill Moyers concluded his interview with Nobel Prize-winning economist Joseph Stiglitz who said America’s worsening income inequality can be fixed through tax reform.  The underlying problem is a political one which both created the rise in inequality and stands as an obstacle to remedial solutions.  As he stated:

It’s amazing. And Americans have not yet grasped the reality of where we are. That our economic system has not been delivering for most Americans. And the fact that this has been true and that we have no longer a country where there’s opportunity, where the life prospects of a young person are so dependent on the income and education of his parents means that our view of the way our economic system works has to change.

My view is that these are not inevitable. These are not just the result of the laws of economics. You know if it were just inevitable, just the laws of economics, you’d say, as an economist, you’d say, well, that’s the way it is. You know, that’s, nature didn’t deal us a good hand.

But it’s our policies and our politics that have shaped our economy, and shaped it in ways that have not served most Americans. And an important part of those policies are our tax policies.

In conclusion, Stiglitz got to the heart of the matter:

Well, what I was referring to at that moment was there had been two periods in our history where inequality had risen to what I thought was an unconscionable level. The Gilded Age, the end the 19th-century. And the Roaring Twenties, right before the Great Depression. In both of those instances we stepped back from the brink. We realized where we were going as a country. We said, that’s not where we want to go.

And the Gilded Age was followed by the Progressive Era, anti-trust policies trying to get at the monopolies, getting at the, some of the sources of the inequality that was undermining our society. The Roaring Twenties was followed by the legislation creating social security, created labor legislation that, minimum wages, maximum hours. Lots of things that we take for granted now but are a part of the social fabric.

The question I asked was inequality has now gotten back to the level, that peak that it had back in 1928 before the Great Depression. Got back to that same level back 2008.

So, the question I posed at that point was will we, again, pull back from the brink like we did at the end of the 19th-century, like we did in the Roaring Twenties? I’m hopeful. But there’s one note of caution.

And that is, have our politics changed? Have decisions like Citizens United changed the power of money so that the inequalities in income and wealth that are so great today translate into more political inequality than they did? That’s an open question. And in my mind that’s what this battle is about.

Ironically, and not coincidentally, that same political dynamic which lays at the root of this problem is also generating tremendous public distrust in American governance, and therefore, further stifling any chance for reform through the democratic process.  In other words, the plutocrats have learned from history and deliberately sabotaged the only part of the system which could undermine their power (achieved previously at least two times) – populist activism and high voter turnout.

To illustrate the self-defeatism of an apathetic and disillusioned populace, take a look at Initiative 1329 in Washington state which seeks to overcome the corrupting influence of big money in politics by amending the U.S. Constitution.  300,000 signatures are required by June 25th to get it on the November 2014 ballot (see:  WAmend).  The petition drive faces an uphill battle, and if my personal experience at a signing station is any indication, its prospects for success don’t look too good.

A fellow signee told me she had tried to get her neighbors to sign the petition, but to no avail.  I asked her why they had refused.  She said they made excuses such as “I’m too busy,” “my vote doesn’t count,” “the system is rigged,” “It wouldn’t make any difference,” and “I am protesting by not voting.”  I replied that those were ridiculous reasons.  She agreed and expressed her frustration thusly:

It was like trying to explain climate change to a drunk in a library.  You could put the text books in front of him, but he was incapable of reading them and not at all interested even if he could.

15 thoughts on “Fixing America’s problems, and the ‘Drunk in the Library’

  1. I watched the Stiglitz interview last night and am very excited that he seems to understand the roots of our economic problems, including income inequality. I think a big part of why our economic problems haven’t been solved yet is because some of the people who already know what’s going on, like economists and politicians, haven’t been forthcoming with the public. But Stiglitz has bravely voiced his views and cut through a lot of the false and/or confusing information we get from mainstream sources. I have so much respect for Bill Moyers.

    The only thing to do now is take his ideas and put them into action, such as reforming the tax code. He makes a very logical point that if people are given tax incentives to do bad things (like use tax havens, outsource jobs, etc), then they’ll keep doing those things. But if you give people incentives for doing good things, like creating good paying jobs in America, they’ll do those good things. Right now, we’re rewarding people for doing horrible things to our economy!

    Have you read any of his work? I’m definitely planning on it!

    Like

    • Hi Tanya,

      Considering the dysfunctional state of our politics, HOW to put these kinds of ideas into action IS the problem.

      Bill Moyers is truly special; and yes, I have read summaries of Stiglitz’ work.

      Like

  2. You also make an extremely important point- choosing not to participate in politics and social issues is SELF DEFEATING.

    Like

  3. I don’t think tax reform will be enough to resolve inequality so long as we grant private banks the ability to create as much or as little money as they like out of thin air. The ability to control the money supply needs to return to government as our founding fathers intended.

    So long as private banks control the money supply, they can expand or shrink the amount of money in circulation to cause inflation and depression and even start wars. For the last four centuries, banks have used this power to force democratic government to repeal tax reform every time they have tried to enact it.

    Like

    • If you are referring to the U.S. Federal Reserve system and its close association with Wall Street and international banking interests, then I completely agree. No public policy measures to redress economic inequality are likely to succeed unless the corrupting influence of money is removed from our political systems. Stiglitz speaks to this indirectly. Many people are now correctly referring to America as an “oligarchy” or “plutocracy.” The other western nations allied with it are not far behind.

      Like

  4. Re “and deliberately sabotaged the only part of the system which could undermine their power (achieved previously at least two times) – populist activism and high voter turnout.” I believe this is why the freedom/‘neutrality’ of the internet (where ‘everything is happening’) is now under threat. Can you imagine an America, at the end of the day, in which the internet would be considered something you’re all entitled to? Something that no one makes a personal profit from?(too much like ‘socialism’ for America!) If there is any possibility of people becoming more aware and taking action to change things, it’ll be through the internet. I guess that’s obvious to the powers and stakeholders competing for control. ☹

    Like

Comments are closed.