Nicholas Kristof has important piece in NYT, entitled Equality, A True Soul Food
He summarizes the striking work that shows how corrosive extreme inequality is not simply to society, but to the health of individuals themselves.Extreme Inequality, he writes, feeds a “melancholy of the soul.”
In this country, the wealthiest 1% captured fully 2/3 of the increased income growth over the five years, before the financial collapse. They now control more wealth than the “bottom” 90% of Americans.
This inequality is devastating to the economy. The wealthy can’t provide the demand needed for a vibrant economy. A sinking middle class saps that demand. Companies start moving investmen ts abroad where demand is growing, or buying back stock in pump up stock prices and bonuses, while laying off workers, adding to the inequality.
That inequality is also poisonous to the democracy, as progressives at the turn of the last century demonstrated. Concentrated wealth has concentrated political power. The rich can buy protection of their privileges. There’s no greater evidence of that than incoming Speaker John Boehner travelling to Wall Street to offer his party up as the protectors of the big banks, and then hilarously urging their lobbyists not to be cowed by fierce Democratic legislative aides.
What Kristof reports, based on remarkable work of Wilkinson and Pickett, is that extreme inequality is dangerous to human health. It generates increased disease and depression among the less well off, feeding obesity, drug use, suicide, and a range of other human maladies. These too are corrosive to society. Extremely unequal societies like ours, now matter how rich or how poor, need more police and more prisons.
All this is important as the Congress and adminsitration turn to who pays the bill for the mess we are in. America has never done redistribution through taxes. At best our total effective tax rates are close to flat (except for the private equity guys who pay at lower rates than their secretaries). The best way to close inequaity is to empower workers to gain a fair share of increased profits and productivity, and roll back the deforms in everything from financial deregulation and corporate pay that allowed the few to rig the game.
But, that said, it would be simply perverse to lower top end tax rates, cut taxes on the wealthiest estates while rolling back Social Security and hiking fees and other taxes on working families. The celebrated tax deal of the lame duck session ended lowering taxes on the wealthiest Americans, while raising them on workers making less than $20,000 a year. If we keep going down that road, our society our democracy and our citizens will decline. More prisons and police won’t be enough.