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The Political Calculations Behind Growing Inequality

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- 1718 days ago -
Why haven't the American people, through these institutions, been able to undo the public policies that squeeze the bottom 99 percent and lavishly reward the crew at the top?

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Kit B (276)
Sunday September 8, 2013, 8:02 am
Image Photo Credit: marsmet531/Flickr

Fifty years ago, average Americans lived in a society where less than $10 of every $100 in personal income went to the nation’s richest 1 percent.

Our top 1 percent are now grabbing just under 20 percent of America’s income, double the 1963 level.

How did this happen? We Americans certainly never voted for this upward redistribution. In all the years since Martin Luther King, Jr.’s “I Have a Dream” speech, no candidates ever campaigned on a platform that called for enriching America’s already rich.

Yet the rich have been enriched. And they keep getting even richer while America’s 99 percent face an economic insecurity that never lets up.

This doesn’t make sense. Americans, after all, live amid democratic institutions. Why haven’t the American people, through these institutions, been able to undo the public policies that squeeze the bottom 99 percent and lavishly reward the crew at the top?

Why, in other words, hasn’t democracy slowed rising inequality?

Four political scientists take a crack at answering exactly this question in the current issue of the American Economic Association’s Journal of Economic Perspectives.

The four analysts — Stanford’s Adam Bonica, Princeton’s Nolan McCarty, Keith Poole from the University of Georgia, and New York University’s Howard Rosenthal — lay out a nuanced reading of our political scene that explores everything from the partisan gerrymandering of legislative districts to voter turnout by income level.

But one particular reality dramatically drives their analysis: Societies that let wealth concentrate at enormously intense levels, the four show, will quite predictably end up with a wealthy class who can concentrate enormous resources on getting their way.

These wealthy underwrite political campaigns. They spend fortunes on lobbying. They keep politicians and bureaucrats “friendly” to their interests with a revolving door that promises lucrative employment in the private sector.

Just how deeply have America’s super-rich come to dominate our political process? Bonica and his co-authors offer up a revealing anecdote: Back in 1980, no American gave out more in federal election contributions than Cecil Haden, the owner of a tugboat company. Haden contributed what would, in today’s dollars, amount to about $1.72 million, almost six times more than any other political contributor in 1980.

In the 2012 election cycle, by contrast, just one deep-pocket couple alone, gaming industry giant Sheldon Adelson and his wife Miriam, together shelled out $103.4 million to bend politics in their favored wealth-concentrating direction.

The Adelsons sit comfortably within the richest 0.01 percent of America’s voting-age population. Over 40 percent of the contributions to American political campaigns are now emanating from this super-rich elite strata.

In the 1980s, campaign contributions from the top 0.01 percent roughly equaled the campaign contributions from all of organized labor. In 2012, America’s top 0.01 percent all by themselves outspent labor by more than four-to-one.

Donors in this top 0.01 percent, Bonica and his colleagues point out, “give pretty evenly to Democrats and Republicans” — and they get a pretty good return on their investment. Both “Democrats as well as Republicans,” the four analysts observe, have come to “rely on big donors.”

What has this reliance produced? Nothing good for average Americans. Back in the 1930s, for instance, Democrats championed the financial industry regulations that helped create a more equal mid-20th century America. In our time, significant numbers of Democrats have joined with Republicans to undo these regulations.

Conventional economists, the new paper by Bonica and his fellow analysts adds, tend to ascribe rising inequality to broad trends like globalization and technological change — and ignore the political decisions that determine how these trends play out in real life.

But new technologies, the four political scientists counter, don’t automatically have to concentrate wealth — and these new technologies wouldn’t have that impact if our intellectual property laws, a product of political give-and-take, better protected the public interest.

But too many lawmakers and other elected leaders can’t see that “public interest.” Cascades of cash — from America’s super rich — have them conveniently blinded.

By: Sam Pizzigati | In Other Words |

Sam Pizzigati is an Institute for Policy Studies associate fellow. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.

Ben O (171)
Sunday September 8, 2013, 8:09 am
It's not that bad in Sweden, but we are closing in... : ~ (

Sheila D (194)
Sunday September 8, 2013, 11:49 am
What hope can we little pople have when our pennies, nickels, and dimes won't come near to what these ultra rich are giving away...I'll keep fighting in my own way but it can get disheartening once in a while - until I get up and kick myself in the rear. Self-pity gets us nowhere - Fear can also be a motivator. Thanks.

Angelika R (143)
Sunday September 8, 2013, 12:18 pm that is why there won't ever be any "Tax the rich"..we've known it all along. I am surprised the word corruption was totally avoided here.

JL A (281)
Sunday September 8, 2013, 12:37 pm
Undoing Citizens United and a few other tweaks could reverse a big chunk of it and the international initiatives to force corporate tax cheats to pay their share may benefit the US more than many countries and be a better hope than the current Congress.

Roger Skinner (14)
Sunday September 8, 2013, 1:09 pm
What this article doesn't mention is that unions were a big part in the growth of the American middle class, but have been degraded and undercut by the rich in collaboration with the government to the point where they no longer can give the 99% equal footing. Greed is winning over equality.

Mike M (40)
Sunday September 8, 2013, 1:56 pm
Changing the status quo will not be done without much sacrifice from the little people and is exactly what the elite want so as to clamp down and end freedom for all.

jan b (5)
Sunday September 8, 2013, 2:20 pm
It is well known that the level of income inequality stretches much higher in the United States than in the other developed countries of Europe and North America. Now a report from the International Labour Organization shows that U.S. inequality has literally gone off the chart.
Income inequality in the United States is soaring so high, in fact, that the authors of the ILO’s new 2013 World of Work report couldn’t even place the United States on the same graph with the other 25 developed countries their new study examines.
My own opinion is this inequality was a real--plan....."the rich need an abundant supply of the poor."


Past Member (0)
Sunday September 8, 2013, 5:12 pm

pam w (139)
Sunday September 8, 2013, 6:00 pm
Oligarchy is attractive to ''corporate personhood,'' and we've been taken unaware...

Vallee R (280)
Sunday September 8, 2013, 7:14 pm
Great comments - thanks.

Theodore Shayne (56)
Monday September 9, 2013, 1:40 pm
Give me control of the nation's money and I care not who makes the laws. That was said by old man Rothschild.
Reinstituting Glass-Steagall is a step but it needs to be followed by the collapse and nullification of the Delaware tax loopholes. These should be followed by doing away with the Money Act signed into law in 1980. The FED was never supposed to be political but since 1980 it certainly has. It gave control of all the nation's money and allowed them to set policy for both public and private banks.
The 17% tax issued on every dollar that Americans handle doesn't benefit the American people. It only benefits those at the FED and those to whom they answer to. The US Treasury is subservient to the FED and it should be the other way around.
Lastly, eradicate all forms of campaign finance and influence peddling. While we're at it why not eradicate the wanton spending found in the cross country stump speeches and in the Party Conventions themselves. This is nothing more than an ego fest where the money could be used for such useful things as social reform and paying down the debt. Why not teleconference the nation with teleconference debates aired over CNN and other media outlets. Present the issues; present your campaign platform as to how you plan to solve these issues. Do that and you've got my vote. I won't hold my breath.

Theodore Shayne (56)
Monday September 9, 2013, 1:42 pm
I always said that if I wanted to go to a revival meeting I would attend an Assembly of God or a Southern Baptist meeting. It's sad that politics have become religious.

Kit B (276)
Monday September 9, 2013, 1:59 pm

A rewrite of Glass-Stegall so that it encompasses the many changes in banking since the 1930's. Most of the regulations that were dumped as being out dated just needed addendum's to bring them up to date. Untangling this mess is not going to be easy, if that's even possible.

Mitchell D (87)
Monday September 9, 2013, 6:28 pm
SO!! How many times have I commented about the re-distribution of wealth upwards!!????
This is why the right loves Saint Ronald soo much. He kicked it into high gear.
Read "Democracy for the Few," by Michael Parenti, and "Capitalism Hits the Fan," by Richard Wolff, an economist at MIT.
All the de-regulation, including the banking de-regulation in Clinton's time, killing of Glass-Stegal.
SAdly, the conservatinve drive to wipe out the impact of the New Deal, is working.
Stop the process of expanding "Right to Work States." It's not "Right to work," it's "Right to Fire."l

Robert B (60)
Monday September 9, 2013, 6:53 pm
What's happening is a subtle shift to a ONE PARTY system, the party of the rich. They have made a mockery of Democracy. The Robber Barons are back, only this time they stay behind the scenes and use the Republican and Democratic parties as "dummy hands" in their evil shell game. We all know that a one party system is merely a DICTATORSHIP. We MUST reinstate a new Glass Stegal Act and we MUST overturn Citizens United. They hate registered voter, because they know that is one way to defeat them. We have to keep registering voters and we must keep getting the facts out. We HAVE TO pry the fingers of GREED from the throat of OUR Democracy.
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