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News + PoliticsUS Senate committee takes on economic inequality

US Senate committee takes on economic inequality

It's a defining issue -- but the news media don't seem to be paying attention, and half the members didn't bother to show up.

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I’m a local-government reporter. I go to (these days, watch) hearings of the Board of Supes and its committees, the Planning Commission, the Police Commission, the School Board, the Community College Board, the SF Democratic County Central Committee … you get the picture.

I don’t usually spend my afternoons watching a hearing of the US Senate Budget Committee. It’s out of my beat – and for the most part, over the past few years, it’s been too painful.

But now Sen. Bernie Sanders is the chair, and some really cool stuff is happening, so I watched the entire March 17 hearing on income and wealth inequality.

So should you.

I also read the entire testimony of Robert Reich, economist, author, and UC Berkeley professor.

So should you.

This is where the Trump/GOP money went, and where the Biden money will go.

The fact that this hearing even happened is critically important. Republicans feared that a Democratic takeover of the Senate would put Sanders in charge of this critical committee, and they were right: It did, and he’s taking full advantage of it, putting issues on the Senate agenda that very few members wanted to talk about just a few years ago.

It showed, of course, the GOP position on inequality (either it isn’t real or it doesn’t matter, depending on the senator). But it also allowed speakers to explain why a wealth tax – which is now on the agenda in California — is not only reasonable but fundamental to the future of the country.

And Reich was able to talk, to the US Senate, about how the growth in economic inequality since the 1970s wasn’t an accident but happened by and for political reasons – and how it has poisoned not just the economy but the entire political system:

While the explanation I offered three decades ago for what has happened is still relevant – and indeed has become a standard explanation — I’ve come to believe it overlooks a critically important phenomenon: the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs, and the steady weakening of the countervailing power of average workers. The initiatives I recommended 30 years ago, while still useful, are in some ways beside the point because they take insufficient account of the government’s more basic role in setting the rules of the economic game. Worse yet, the ensuing debate over the merits of the “free market” versus an activist government has diverted attention from how the market has come to be organized differently from the way it was a half-century ago, and why its current organization is failing to deliver the widely shared prosperity it delivered then.

More:

In 1980, the top 1 percent’s share of total income was about 10 percent in both Western Europe and the United States. But since then, the two have sharply diverged. By 2016, the top 1 percent in Western Europe had about a 12-percent share of income, compared to 20 percent in the United States. And in the U.S., the bottom 50 percent’s income share fell from more than 20 percent in 1980 to 13 percent in 2016.3

Why have globalization and technological change widened inequality in the United States to a much greater degree than in Europe?

Nor can the standard explanation account for why the compensation packages of the top executives of big companies has soared from an average of 20 times that of the typical worker 40 years ago to 320 times today. Or why the denizens of Wall Street, who in the 1950s and 1960s earned comparatively modest sums, are now paid tens or hundreds of millions annually. Are they really “worth” that much more now than they were worth then?

A deeper understanding of what has happened to American incomes over the last 30 years requires an examination of changes in the organization of the market. These changes stem from a dramatic increase in the political power of large corporations and Wall Street to change the rules of the market to enhance their share of economic gains, and a simultaneous decline in the countervailing power of the working middle class to maintain their share.

Reich noted that this is happening not just at the federal level but at the state and local level. He mentioned how Amazon poured money into Seattle City Council races to end a tax the company didn’t like.  He could also have mentioned how Big Tech, led by plutocrat Ron Conway, did the same in San Francisco, over and over – and many elected officials who happen to be Democrats went along with it.

So while the hearing was in Washington, the impact plays out right here at home. I hope our elected members of the state Legislature watch and listen and pay attention.

You could see a few Democrats moving to left on the issues  — particularly the importance of helping organized labor expand in the private sector. Among the speakers was Jennifer Bates, who works in the Amazon warehouse in Bessemer, Alabama, where a unionization vote is underway. Several Democratic senators appeared to support her efforts.

 You could see the truly progressive, if imperfect, direction of the Biden Administration COVID recovery bill.

Sen. Tim Kaine, D-Virginia, made a critical point. We’ve had two years (even setting COVID aside) to look at the economic impact of the Trump tax cuts and pro-rich policies. Now we will have two years to look at the impacts of the Biden approach. “We have seen the difference in the philosophy of the two parties,” he said. “Now we can see what the effect is on the economy, and see which works better.”

The Senate Budget Committee holding a major hearing on economic inequality ought to be big news. But it wasn’t.

As far as I can tell, only one major national newspaper (the Washington Post, owned by Jeff Bezos, who was a target of the hearing and who refused to show up) even covered it. And the Post tagged it “technology,” which was hardly the point of the hearing.

I know, COVID: But at least half the committee, including many Democrats, didn’t bother to show up, even remotely.

Because what Sanders is talking about is upending so much of how this country has operated for the past 50 years that the news media and the political power structure would rather it just went away.

I don’t think it will.

48 Hills welcomes comments in the form of letters to the editor, which you can submit here. We also invite you to join the conversation on our FacebookTwitter, and Instagram

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.

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