Yesterday New York Times
columnist Paul Krugman pointed out
that income inequality is increasing so rapidly that "the income of
families in the top 1 percent was 10 times that of typical families in 1979,
and 23 times and rising in 1997."
To that I might add: in 1980 the typical CEO of a large
corporation earned 40 times what a factory worker did. By 1998, that ratio had
ballooned to 419 (yes, four hundred nineteen)
times. (In Great Britain, by contrast, the ratio is still 35
times, and in Japan 20 times). And of course, during this entire
time period, the taxes on the wealthy have been reduced again and again, far
more so than for any other income group.
Krugman then asked "You might
have expected the concentration of income at the top to provoke populist
demands to soak the rich." Then he posed the $64,000 question:
Why has the response to rising
inequality been a drive to reduce taxes on the rich? Good question. It's
not a simple matter of rich people voting themselves a better deal: there
just aren't enough of them. To understand political trends in the United
States we probably need to think about campaign finance, lobbying, and the
general power of money to shape political debate.
"Campaign finance, lobbying, and
the general power of money to shape political debate" is, for Krugman,
an uncharacteristically opaque, if not euphemistic way to answer the
question he posed.
I'd put it a little more bluntly:
politicians need increasingly large campaign contributions from the wealthy
elite in order to wage the type of expensive, media-heavy campaigns now
required to be elected to office. The campaigns (otherwise known as
brainwashing) are cleverly designed to convince the mass of voters that
these elected officials will govern in the interest of the mass of voters,
not the wealthy elite who are funding the campaigns.
Apparently it works. Masses of
U.S. voters seem convinced that wealthy people finance campaigns in
order that the economic interests of the non-wealthy will be given first
priority. But once the politicians are elected, it is invariably the
economic interests of the wealthy which guide American tax and trade policy.
There's another line of thought among
voters I find amazing. Readers sending me comments whenever I write
something about income inequality sometimes admit that the non-rich are
getting the short end of stick, but insist that they don't mind if
the rich get the benefit of economic policies now, because the writer hopes
to eventually become rich, and wants taxes low for when he achieves that
In his column, Krugman also mentions
that the Republicans have moved so far right that
focus groups literally refused to
believe accurate descriptions of the stimulus bill that House Republican
leaders passed on a party-line vote back in October.
That's the bill that would not only
have repealed the corporate alternative minimum tax, but would have refunded
to corporations all of the billions of such taxes they paid in the last 15
Well, I bet after a
spin-doctor-fashioned campaign replete with heavy television advertising and
appropriate sloganeering, a majority of voters would not only have no
trouble believing such a bill existed, but would enthusiastically support
Some voters would succumb to the
argument that such an economic atrocity would benefit the average
American. Other members of the American electorate would probably
apply the "well, I'll be rich some day, so it will benefit me
In any event, I'm reminded here of
Abraham Lincoln's remark that "You can fool some of the people some of
the time and all of the people some of the time, but you can't fool all of
the people all of the time." Politicians don't have to
fool all of the people all of the time. Apparently they can fool
enough of the American people enough of the time so that the public
repeatedly votes into office elected officials who rob them blind.