The French economy is as modern as ours. It is even more exposed to the global market place: Exports in France account for 30 percent of its GDP compared to only Because it must compete even more rigorously, France must use the highest levels of technology and automation. So if competitive global markets, new technology and automation cause rising inequality, then France should be its poster child. Inequality is far less extreme in France.
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The bottom 50 percent saw their incomes grow by 39 percent from Social and economic policies, not blind market forces, determine the degree of inequality. Here are a few obvious differences:. This is the direct result of the failed neo-liberal policies that erroneously claim that cutting regulations always makes the economy run better.
In the case of finance the picture is crystal clear. When we had our foot on the neck of Wall Street from the New Deal to the late s the economy became more egalitarian with real wage increases for working people of all kinds. As the recent Piketty study puts it:. The good news is that millions are taking to the streets, organizing meetings, challenging their congressional representatives, and in general raising hell. Except for a handful, however, most of these actions are aimed at protecting the status quo from an impetuous, childish autocrat. However, we are unlikely to win back Obama-to-Sanders-to-Trump voters until we rekindle the spirit of Occupy Wall Street and the Sanders campaign.
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The social democratic platform Sanders put forth attacked runaway inequality. That kind of agenda needs to become part of the work of Indivisible and the thousands of groups that are holding town meetings all over the country. To reach the Obama-to-Sanders-to-Trump voters we need to organize a new set of protests with a clear set of pro-active demands.
To go from resist to reversing runaway inequality requires a movement educational process to spread the word. The economy needs to serve the people, rather than the people serving the economy. Also ending stock buybacks by reinstating the rules that were thrown out in They have a wealth tax in Switzerland, Spain, France, and Norway. Right now Americans are taxed only on income, and the super-rich are experts at dodging income taxes. They want a world that works for them, that gives them a chance, where they can go to college without being stuck with hundreds of thousands of dollars in debt.
They want a more just society. They want a pathway to citizenship for immigrants and an end to mass incarceration. They want to reverse runaway inequality and stop financial strip-mining. The problem is how to get the word out and build a movement around these issues. Leopold: The healthcare sector has three financial strip-mining operations: medical technology, pharmaceuticals, and insurance. Our per capita healthcare costs in the U. The reason for this is that so much wealth is being extracted by these three giant sectors of the healthcare industry.
In those European countries, the whole population has comprehensive healthcare. Leopold: Our healthcare system is designed to extract as much money as possible from sick people and put it into the hands of executives in the insurance, pharmaceutical, and medical-technology industries. With Medicaid and Medicare we have some protection for the poorest of the poor and the elderly, but the system sucks money out of the rest of us through deductibles, co-pays, premiums, and so on.
The poor quality of our healthcare is a byproduct of this wealth extraction. Frisch: How is Wall Street connected to the rise of mass incarceration? In we had a couple of hundred thousand Americans in prison. Now we have more than 2 million. As runaway inequality took off, we created an unemployable underclass. There are no decent jobs for people at the bottom of the ladder.
Most people who go to prison are poor.
And the growth of financial inequality and the growth of the prison population mirror one another: they both went up at the same rate after Incarceration is becoming a profitable business. At this point only about 8 percent of all prisons are for-profit, but there are a lot of feeder industries that supply public prisons. To build new prisons, states sometimes borrow money from Wall Street, and the interest paid on those loans is another way to rob the public till. Frisch: Is financial strip-mining colorblind, or does it reinforce racism? Predatory lenders go door-to-door in lower-middle-class black communities, looking for elderly homeowners.
They try to move them from a safe, traditional mortgage to a risky, adjustable mortgage. They do this again and again, despite complaints to the Federal Reserve. The two have to come together, and that requires building a multiracial alliance. We need that kind of movement across the country. For me the foundational question is: Why does the richest country in the world have any poor people whatsoever? The idea was to transform the inner cities, the roads, the electrical grid, the water systems, and other crucial public assets by attracting private funds. Of course, if this sort of infrastructure project were a prime profit-making opportunity, the private sector would already be there.
Runaway Inequality & The Strip And Flip Selection of
Frisch: One of the arguments for the partnership approach is that government has been cash-starved for so long. Then you sell the department to a private entrepreneur. It runs better than the decapitated service that was there before, but it also costs much more. The Obama administration bought the budget-cutting argument and cut back federal employment. As a result, more public institutions are understaffed and not operating properly. Anytime something is understaffed, you can convince the taxpayer it will run better under private ownership.
Frisch: What about climate change? Is our slowness to roll back carbon emissions related to deregulation?
Leopold: Runaway inequality, financial strip-mining, and climate change are all deeply connected. You can see it in a corporation like General Motors. GM was a victim of the — financial crisis. We can argue about whether this was worth it or not, but there it is.
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In making the deal, he learned a lot about GM. To me this is an utter betrayal. The American people more or less expected that if we bailed out GM , the automaker would use its profits to create more jobs, increase wages, and invest in research and development.
Environmentalists also thought GM would build the best green cars in the world, as a public service, since the public had helped it survive. But instead of that money going to control carbon emissions, it went to Wilson and his co-investors. This is happening everywhere.
We might be able to establish a market for carbon reduction, and maybe it would work. Why would they want to? And all the Republicans and many of the Democrats will agree to it. Once you have a deregulated financial sector, it becomes incredibly difficult for any government to pass regulations. With a flick of a computer key, a bank can move its money to another country. Billions of dollars can flee.
If enough large financial entities do that, it forces the country to deregulate. Nobel laureate James Tobin said in the s that a financial-transaction tax could slow down the departure of capital by making it more costly to move large amounts of money. If the big banks think a country is going to create a more robust social safety net and pay for it with taxes on the rich, swoosh , the money goes out of the country so rapidly that it destabilizes the economy and forces the politicians to give up trying to pass legislation on climate change or a living wage or much of anything else.
Leopold: With both parties advocating for deregulation or public-private partnerships, the public is going to think those are our only options. We need to promote an alternative vision.
People are ready for one. Occupy Wall Street was the first sign that Americans are pissed off about the way things are. And they are responding to what Bernie Sanders and others are saying. The corporate Democrats are having a difficult time dealing with him and his supporters. Frisch: Republicans tell us that the U. Is this true? Leopold: No. Because of financial strip-mining, many corporations are loaded up with debt and deduct the interest payments on that debt from their taxes. As a result, corporate contributions to taxes have been cut in half over the last thirty years.
Super-rich individuals also have the ability to move their money offshore and shelter it in myriad ways. The richer you are, the smaller the percentage of your income you actually pay in taxes. The poorer you are, the higher the percentage you pay. The tax burden is falling mostly on middle-income people. I was talking to a software salesperson from Finland recently. Here in the richest country in the world, the standard of living for most people has gone down.
Traffic is worse. Infrastructure is worse. Schools are worse. Your twenty-something son or daughter is still living at home. Frisch: Why are you such a strong champion of public banks, like the one in North Dakota? Leopold: Let me ask you this: When you pay your state and local taxes, where is the money deposited?