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Thursday, September 23, 2021

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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.

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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8 COMMENTS

  1. Biden has modest tax increases planned although Mitch McConnell and the others may try to commit hari-kari on the senate floor to prevent it. Like I said progress is slow and I don’t think there will be a Bernie wealth tax right away nationally. . Interestingly Sanders is one of the most popular politicians in the US and some of the people who voted for Trump would have voted for Sanders. Like I said, you have to give him credit for not giving up .

    The real seismic election may be 2024 because this is when the millenial generation will gain control of the government to do what they want. If I were a Republican I would be more worried about the next generation of leadership – who are the up and coming stars of the Republican party? If its Josh Hawley and Ted Cruz I don’t think they are going to be able to gain national support

  2. simba, A 50-50 US Senate is hardly a ringing endorsement or mandate for a progressive agenda. And the Dems managed to lose votes in the House. Your revolution may be a while coming.

    Oh, and the only Recovery Acts have been the ones specifically to deal with the sub-prime mortgage crisis and Covid. They were not exercizes in socialism, If they had been they would have been accompanied by big tax increases to pay for them, and they were not. They were paid for with more debt.

    This idea is DOA on the Senate and you know it. Even Tim knows it.

  3. Progress occurs slowly in this country but at least it is going in the right direction. 20 years ago when George W Bush was elected and re elected people actually believed a lot of the voodoo economics crap, that Dick Cheney needed to reduce his tax burden and invade Iraq. In the recent election we had the highest voter turnout in over 100 years to create a referendum for the Democrats. The American Recovery Act is the most progressive legislation passed since the New Deal. So all is not lost, and you have to give Bernie some credit for never giving up.

  4. “Getting there demands organizing and mobilizing. Since organizers can rarely prevail on local government for minor asks, nothing on the field now is remotely capable of raising those energies.”

    As Tim notes, not even half the Democrat Senators could be bothered to show up for this. My guess is that they figured having Sanders as the Chair inevitably meant that there would be these dog and pony shows, signifying nothing.

    There are nowhere close to the votes for this to go anywhere. The great unwashed are too fat and happy to care.

  5. The US has chosen to subsidize Wall Street and the firms hooked up to the Pentagon while leaving most to fend for themselves with possible access to some sub-modest stipends on occasion.

    Incomes in real terms for most people have fallen along with the standard of living leading to an over reliance on Wall Street’s debt.

    Broadly shared prosperity along the Swiss model would be possible if the US diverted subsidy for Wall Street and the empire to pay for health, retirement and education security. This is not rocket science. Power is not unaware. Getting there demands organizing and mobilizing. Since organizers can rarely prevail on local government for minor asks, nothing on the field now is remotely capable of raising those energies.

  6. Mark Zuckerberg may have had good intentions funding hospitals but that doesn’t even make a small dent in solving the health care problems in this country except in a very small community. Sometimes you need to get the government involved

  7. Tom
    If you ask Jeff bezos he would probably say that Amazon pays $15 per hour even though the country can’t pass $15 per hour minimum wage, and Amazon has created millions of jobs. He has a point. However Buffet doesn’t believe that inheritance of billions is a good idea and most of his billions go to philanthropy run by the gates foundation. Some of this philanthropy has achieved great things particularly in Africa. However it may be hard to believe but in some cases the government is a better manager of money when it comes to human services particularly in areas like health care and education and emergency management. Case in point: the United States spends more money per capita than any other country in the world and American life expectancy is among the lowest in the developed world. Also we are the only country in which millions of young people are debt slaves for life after getting an education. These are problems that can’t be solved by the private sector.

  8. If you are concerned about poverty, then there are things you can do to help the poor. And it is the poor who should be the focus of that discussion.

    The problem with instead focusing on “inequality” is that instead of most of the discussion being about the poor, it becomes about the rich, as if it is somehow the rich who are the problem.

    Now, if Warren Buffett moved into a house in Bernal Heights, there is no question that your neighbourhood would becomes more “unequal”. But it does not follow from that, that you or your neighbors would become poorer as a result. At worst, it would make no difference. At best, WB would spend some of his billions on local goods and services, he would hire local people, he would pay SF taxes and he would probably do what Benioff and Zuckerburg did and fund a few hospitals.

    It is unhealthy to focus on the successful because it cultivates an atmosphere of envy, which distracts from what should be a focus on the poorest people.

Comments are closed.

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