How the few choose inequality for the many

And this is what I mean when I say our politics are now profoundly undemocratic:

The U.S has become a less equal society over the past 30 years, but it didn’t just happen. Inequality in the U.S. happened by design, not by chance. It is the direct result of government policy. David Cay Johnston writes that the top 1 percent had just 10 percent of all reported national income. By 1999 the top 1 percent claimed 20 percent of national income. Since 2000, they have claimed about 1 fifth of national income. During the recovery, from 2009 to 2011, 121 percent of gains in income went to the top 1 percent.

Tax cuts for the wealthy are have driven the wrist in inequality in two ways. The report cited by Johnston and Callahan says that “tax cuts may have led managerial energies to be diverted to increasing their remuneration at the expense of enterprise growth and employment.” That means CEOs are padding their portfolios at the expense of the companies they run. Tax policy not only made the “vulture capitalism” practiced and practically invented by Bain Capital possible, it incentivized and rewarded it.

What we know about tax cuts now is pretty straightforward. Tax cuts of the wealthy won’t stimulate the economy, won’t create jobs, and won’t spread prosperity, because the wealthy don’t spend their tax cuts. Instead, the wealthy save their tax windfalls, to invest when the stock market is booming.

Thus the money represented by tax cuts for the wealthy doesn’t get invested in jobs (outside of Wall Street hedge funds, that is). Much of it gets invested in creating more wealth, detached from actual work.

Besides investing their money in creating more wealth (known as “letting your money make money for you), the wealthy also invest their money in public policies that safeguard and/or further increase their wealth. Callahan writes, “The United States has chosen to become a less equal society over the past generation, and that choice has been made by an electoral and policy system dominated by private money and wealthy interests.”

Go read the rest.

5 Responses to How the few choose inequality for the many

  1. coloradoblue June 13, 2013 at 1:37 pm #

    Well, all of that money doesn’t go into just making more money, some of it…

    “The most coveted baseball card of all-time proved its worth once again early Saturday morning, as the 1909-11 T206 Honus Wagner card sold for $2.1 million in an online auction.”

    A piece of f*cking cardboard.

  2. guest June 14, 2013 at 1:53 am #

    “Much of it gets invested in creating more wealth, detached from actual work”
    Way to adopt the conservative and neoliberal framing! It does not get invested in *creating* wealth, it gets invested in *extracting* wealth, i.e. extracting it from the lower classes and the government. It’s called rent seeking. They create nothing, they are just chiselers. And their best investment opportunities are not when the markets are booming, but when there is blood running in the streets, Rothschild-style.

  3. someofparts June 14, 2013 at 12:24 pm #

    the link doesn’t go to the story under discussion

  4. jawbone June 14, 2013 at 12:36 pm #

    Link goes to SCOTUS human gene ruling.

  5. jawbone June 14, 2013 at 1:18 pm #

    Is this the correct link?

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