Income/Wealth Inequality and Social Stability

The Princeton political scientist Carles Boix argued at at length that one of the things that makes democracy possible is that the better off perceive their privilege to be protected (in some measure) against egalitarian impulses of the less-well-off. In modern industrial democracies like the US, the wealthy enjoy constitutional protections and can also move their wealth elsewhere.

Fine. But two obvious questions arise.

1. Is there a point where inequality provokes a backlash among the less-well-off? The answer in the US for decades has been no. Americans are remarkably, stunningly indifferent to the gross inequalities of the US, hands down the most unequal of all the industrial democracies. The US has one of the lowest social mobility rates in the world, even compared to non-democracies and less-developed nations. It has fares most poorly among its peers on health, longevity, education, happiness — very nearly every index of comparison. (The only country that does roughly as badly is Britain. What a surprise — the nation that has done most to parrot the American example.)

Despite this, as John Kenneth Galbraith long noted (among many others), Americans didn't seem to care.... American exceptionalism. Speaking on The Charlie Rose Show, economist Kenneth Rogoff's comment echoes something I've heard elsewhere: Americans "expect to win the lottery." Americans are generally happy to see others enjoy billions because a remarkable percentage of Americans are deluded into thinking they too will win any day now — this despite the US having a dismal degree of social mobility.

Will this change? Can it change? Can Americans develop a measure of anger? Can they rally the way the French or Greeks have? The way anybody but Americans do?

This brings us to the second question:

2. How are the US government and oligarchs suppressing American egalitarian impulses or protecting themselves against the same? I suggest that the national security apparatus/state that has been developing for years and has accelerated under Obama will be used to contain any American social upheaval — should any develop, which seems unlikely given the level of Americans' apathy and ignorance. Under Obama, domestic spying has grown. Obama has viciously sought to suppress whistleblowers, as Glenn Greenwald has described repeatedly. Moreover, we have an educational system which borders on systematic indoctrination. From grade school through university (especially university) we have a host of institutions that endlessly trumpet the unalloyed glories of both unlimited greed and the infallibility of the American way of doing things. I am frequently astonished by the extent to which extraordinarily well-educated, intelligent people show absolutely no inclination or ability to challenge American orthodoxy.

The writings of H. L. Mencken, John Kenneth Galbraith, Noam Chomsky, Mark Twain, and many others go into this over the length of American history. Today, we have many new voices — Naomi Klein, Glenn Greenwald among them. Yet Americans remain impervious to even the most obvious truths.

The wealthiest and their willing slaves like Obama and Congress (those members who are not among the 1% already, that is) have obvious incentives for pressing the dogma. But why so many Americans prove so indifferent is a mystery.

Question: What Is the Biggest Problem with American Democracy?

This has been answered very nicely by Paul Krugman, Michael Kinsley, James K. Galbraith and many others on the liberal and progressive end of the spectrum. The US is already a de facto oligarchy. Clinton, Bush and now Obama have worked diligently to formalize American Oligarchy, with the unalloyed support of Wall Street and a huge percentage of corporate boards, Democrats, Republicans and American super-rich.

I emphasize that this issue has been expressly raised by many who are far less left-leaning than I am.

It's a possibly-encouraging feature of American democracy that some who could easily ride the wave among fellow oligarchs are vocally opposed to the decline (among them, George Soros).

By contrast, a deeply discouraging feature is the absolute failure of the vast majority of American journalists to do anything even remotely resembling the work they assert they do. Here is London Times editor Robert Lowe in 1851:

The first duty of the press is to obtain the earliest and most correct intelligence of the events of the time, and instantly, by disclosing them, to make them the common property of the nation... The Press lives by disclosures... For us, with whom publicity and truth are the air and light of existence, there can be no greater disgrace than to recoil from the frank and accurate disclosure of facts as they are. We are bound to tell the truth as we find it, without fear of consequences – to lend no convenient shelter to acts of injustice and oppression, but to consign them at once to the judgment of the world.

Similar thoughts have been voiced by H. L. Mencken, Mark Twain, Studs Terkel, and others. But today, we hear prominent members of the American news establishment explicitly reject this journalistic duty. The torrent of condemnation of and vile misreporting on Julian Assange is a perfect example of this (by, among others, the New York Times, including 'star reporter' John Burns).

Equally discouraging is the deeply delusional state of the American people. Economist Ken Rogoff was recently on Charlie Rose (Rose usually dismally middle-of-the-road to conservative). In response to a question on why Americans support the Republican campaign to cut taxes for millionaires and billionaires, Rogoff — absolutely on-target — said something to the effect, "Because everyone expects to be rich." I've heard this on the street myself — people with no prospects of any kind asserting with total confidence that they are going to win the lottery. I heard this twenty years ago in Massachusetts when it was reported, during widespread opposition to a modest tax increase proposal, that many lottery ticket buyers spent more on the lottery each year than they paid in their state taxes. (Dollar for dollar, which do you think returned more value to them? Hint: Expected gain on a one dollar lottery ticket is less than a penny.)

The US may very well have the most ill-informed, poorly-educated, deluded population of any country on Earth. (But China seems determined to best us on that count.)

Bill Moyers Interviews Matt Taibbi and Robert Kuttner

Below, my response to Bill Moyers's interview with Matt Taibbi and Robert Kuttner on Friday, 18 December. I'll post a link to the video when it is available.

Robert Kuttner is wrong in his assessment of Obama.

1. Obama is not so intelligent, at least not in the way that the US needs. (Obama is very smart when it comes to pleasing those in power.) As Tony Judt notes in the current New York Review of Books, the principle (perhaps only) criterion of policy evaluation is economic -- will the policy serve/make money (to put it a little too simply). Obama is squarely inside this school of 'thought'. He does not consider whether a policy is morally right or wrong. He just doesn't.

2. I believe that the largest private donor to Obama's campaign is not Goldman Sachs, but Harvard University. Granted, Harvard probably doesn't donate with the single-mindedness that Goldman does, but this does point to a largely unexamined component in the current disaster -- the role of Harvard Business School (More than Chicago, these days, the center of right-wing economics) and Harvard Law School (where Obama learned his 'obedience to authority').

The role of 'leading' universities in indoctrinating people into patterns of obedience to power cannot be overstated. This is no conspiracy theory but simply an observation of social fact.

3. In May 2008, Penn professor Adolph Reed wrote of Obama (whom he knew personally in Chicago) as a "vacuous opportunist, a good performer with an ear for how to make white liberals like him." This strikes me as right on the mark. Frankly, I think Obama is ripe for Freudian analysis. His father abandoned him when he was very young. He no doubt blamed himself, as children do. Now he is stuck in a pattern of endlessly trying to please those he perceives as superiors. In this regard, he bears a striking similarity to Bill Clinton.

4. From a vaguely scientific standpoint, the question is: What explains Obama's unbroken pattern of saying one thing to the public and doing another in private, of caving to power and wealth (if it really is caving, as opposed to Obama carrying out what was always his intended program).

5. Unlike Matt Taibbi and Robert Kuttner, I have almost no confidence that a social movement will rise up to force change. The US is a strange combination of the beaten down peasantry of 18th Century Eastern Europe and the violently jingoistic nationalism of Russia, China, Israel and (of course) the US itself. Dissent, especially public assembly, is — de facto — being criminalized in the US. Rights guaranteed us by the Constitution are being taken away by the Patriot Act, the Military Commissions Act, by police forces and local policies across the country, by ever-growing and oppressive surveillance of our daily activity. We have a Supreme Court and a lower court structure that systematically rules in favor of power at the expense of The People.

The US is in very serious trouble. It really cannot be overstated. And this says nothing of equal or greater troubles on the environmental front, where Obama is also failing terribly.

My feeling is that the US is exiting its Age of Democracy. In the future, people will think of the US as a "Constitutional Democracy" in much the way we today speak of Britain being a Constitutional Monarchy. The US will be a democracy in a minimally legal sense, but it will be an oligarchy in practice and fact. Arguably, this is already the case.