Redistributing wealth upward by Harold Meyerson

Washington Post, September 25, 2012


Which is the more redis­tri­b­u­tion­ist of our two par­ties? In recent decades, as Repub­li­cans have devoted them­selves with laser-like inten­sity to redis­trib­ut­ing America’s wealth and income upward, the evi­dence sug­gests the answer is the GOP.

The most obvi­ous way that Repub­li­cans have robbed from the mid­dle to give to the rich has been the changes they wrought in the tax code — reduc­ing income taxes for the wealthy in the Rea­gan and George W. Bush tax cuts, and cut­ting the tax rate on cap­i­tal gains to less than half the rate on the top income of upper-middle-class employees.

The less widely under­stood way that Repub­li­cans have helped redis­trib­ute wealth to the already wealthy is by chang­ing the rules. Mar­kets don’t func­tion with­out rules, and the rules that Repub­li­can pol­i­cy­mak­ers have made since Ronald Rea­gan became pres­i­dent have con­sis­tently depressed the share of the nation’s income that the mid­dle class can claim….

The only time in U.S. his­tory when work­ers sub­stan­tially ben­e­fited from pro­duc­tiv­ity gains was the three decades that fol­lowed World War II, when median house­hold income and pro­duc­tiv­ity gains both increased by 102 per­cent. Not coin­ci­den­tally, that was also the only period of gen­uine union power in U.S. his­tory, and the time when the tax code was at its most pro­gres­sive. Dur­ing the past quarter-century, as pro­gres­siv­ity was less­ened and unions dimin­ished, all pro­duc­tiv­ity gains have gone to the wealth­i­est 10 per­cent, accord­ing to research pub­lished by the National Bureau of Eco­nomic Research. In 1955, at the height of union strength, the wealth­i­est 10 per­cent received 33 per­cent of the nation’s per­sonal income. In 2007, they received 50 per­cent, Eco­nomic Pol­icy Insti­tute data show. If that’s not redis­tri­b­u­tion, I don’t know what is.

Indeed, the United State­s has expe­ri­enced an upward redis­tri­b­u­tion so pro­found that it affects far more than incomes. Whole sec­tors of the econ­omy and regions of the coun­try have been dec­i­mated by these eco­nomic changes. The descent in all man­ner of social indexes is most appar­ent among poorly edu­cated whites…over the past 30 years? Many Democ­rats have been com­plicit in this calamity by their indif­fer­ence to the con­se­quences of dereg­u­la­tion and trade. But the tro­phy for pro­mot­ing the poli­cies that have redis­trib­uted wealth, fam­ily sta­bil­ity and longevity upward goes to the Repub­li­cans, whose standard-bearers are cham­pi­oning even more rad­i­cal ver­sions of these poli­cies today…

Full text

Which is the more redistributionist of our two parties? In recent decades, as Republicans have devoted themselves with laser-like intensity to redistributing America’s wealth and income upward, the evidence suggests the answer is the GOP.

The most obvious way that Republicans have robbed from the middle to give to the rich has been the changes they wrought in the tax code — reducing income taxes for the wealthy in the Reagan and George W. Bush tax cuts, and cutting the tax rate on capital gains to less than half the rate on the top income of upper-middle-class employees.

The less widely understood way that Republicans have helped redistribute wealth to the already wealthy is by changing the rules. Markets don’t function without rules, and the rules that Republican policymakers have made since Ronald Reagan became president have consistently depressed the share of the nation’s income that the middle class can claim.

Part of the intellectual sleight-of-hand that Republicans employ in discussions of redistribution is to reserve that term solely for government intervention in the market that redistributes income downward. But markets redistribute wealth continuously. In recent decades, markets have redistributed wealth from manufacturing to finance, from Main Street to Wall Street, from workers to shareholders. Rules made by “pro-market” governments (including those of “pro-market” Democrats) have enabled these epochal shifts. Free trade with China helped hollow out manufacturing; the failure to regulate finance enabled Wall Street to swell; the opposition to labor’s efforts to reestablish an even playing field during organizing campaigns has all but eliminated collective bargaining in the private sector.

The conservative counter to such liberal cavils is to assert that the market increases wealth, which will eventually descend on everyone as the gentle rains from heaven. Decrying such Keynesian notions as unions or federally established minimum wages, hedge fund guru Andy Kessler recently argued in the Wall Street Journal that “it is workers’ productivity that drives long-term wage gains, not workers’ wages that drive growth.”

But Kessler assumes — and this is the very essence of the “trickle-down” argument — that workers reap the rewards of productivity gains. Believing and asserting that requires either ignorance or willful denial of economic history. The only time in U.S. history when workers substantially benefited from productivity gains was the three decades that followed World War II, when median household income and productivity gains both increased by 102 percent. Not coincidentally, that was also the only period of genuine union power in U.S. history, and the time when the tax code was at its most progressive. During the past quarter-century, as progressivity was lessened and unions diminished, all productivity gains have gone to the wealthiest 10 percent, according to research published by the National Bureau of Economic Research. In 1955, at the height of union strength, the wealthiest 10 percent received 33 percent of the nation’s personal income. In 2007, they received 50 percent, Economic Policy Institute data show.

If that’s not redistribution, I don’t know what is.

The problem is not just that everyone but the wealthy is claiming a smaller share of the nation’s income; the absolute amount of income they’re getting is declining as well. Median household income has dropped to the levels of the mid-1990s, according to Pew analysis of census data, while the income of the 400 wealthiest Americans rose by a tidy $200 billion last year, according to data released this month by Forbes magazine.

If that’s not redistribution, I don’t know what is.

Indeed, the United Stateshas experienced an upward redistribution so profound that it affects far more than incomes. Whole sectors of the economy and regions of the country have been decimated by these economic changes. The descent in all manner of social indexes is most apparent among poorly educated whites. Conservative commentator Charles Murray has documented in his new book the decline in marriage rates and family stability within the white working class. And now, as the New York Times’ Sabrina Tavernise has reported, that decline includes longevity as well. While other Americans’ life expectancy has advanced, the life expectancy of whites without high school diplomas has declined since 1990 — by three years among men and five years among women.

The market is not just redistributing income in theUnited States, then. It is redistributing life.

So, which party can claim credit for this — the real redistribution this nation has experienced over the past 30 years? Many Democrats have been complicit in this calamity by their indifference to the consequences of deregulation and trade. But the trophy for promoting the policies that have redistributed wealth, family stability and longevity upward goes to the Republicans, whose standard-bearers are championing even more radical versions of these policies today.

A pro-life party? More like its opposite.


Gar Alperovitz’s Green Party Keynote: We Are Laying Groundwork for the “Next Great Revolution” By Amy Goodman

Democracy NOW! 16 July 16, 2012

We’re proud to be serializing weekly installments of Gar Alperovitz’s visionary book “America Beyond Capitalism,” also available to order with a donation to Truthout. 

AMY GOODMAN: We turn now to the 2012 election. The Green Party has officially nominated Massachusetts physician Jill Stein and anti-poverty campaigner Cheri Honkala as its presidential and vice-presidential contenders. Dr. Stein’s ticket easily won with over 190 delegates, compared to 72 for her closest competitor, the comedian Roseanne Barr. Stein and Honkala are running on a platform called a Green New Deal.

AMY GOODMAN: Dr. Stein and Cheri Honkala accepted their nominations on Saturday, and then the keynote address was given by—-at the Green Party’s National Convention, in Baltimore—-by Gar Alperovitz. Gar Alperovitz is a professor of political economy at the University of Maryland, co-founder of the Democracy Collaborative, author, most recently of “America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy.”

GAR ALPEROVITZ: First I want to say is I am from Wisconsin. Some Wisconsin people back there. Wisconsin knows something about third parties. The Republican Party, original Republican Party, was a party to end slavery started in Ripon, Wisconsin and it got lost along the way, but it showed one big push on the really important issue of slavery in its early days. Fighting Bob La Follette from Wisconsin. Another historical issue that you may remember coming out of that state and starting very small and making a powerful impact. Third, if you look closely at what became the best parts of the New Deal, the labor law legislation, some parts of Social Security, some parts of health care and some parts of the other welfare programs, a lot that came up and was was incubated in Wisconsin. I am proud to be a Wisconsin guy, but the bottom line there is not about Wisconsin, it is about historical change. How you begin fighting small and you expand when the time is right, and you make an impact because the other things are failing. That is what has happened in many, many cases. Revolutions are as common as grass and world history, and they begin in rooms like this.

So, so I say that really as a historian, not trying to blow smoke in your ear. That is how it works. That is how it works. When I say I take you all seriously, first, I’m talking to the person in your personal seat. So when I say I take you seriously, you, maybe more seriously than you take yourself, I mean to say that the beginnings of the next great historic change come from a us taking ourselves that seriously. So, I urge—-and I think many people here do—-but I urge that you sit back and say, am I up to that or am I just doing politics, or am I really up to that. Now the that is transforming the most powerful corporate capitalist system in the history of the world. That is what it is about. And to say that I take you seriously is to say that that is what you’re stepping up to, not simply a gesture, not simply a new party, not simply a green movement. It is that, and that is the challenge. Now, I am very cold eyed realist. I did run House and Senate staffs, I’ve even done stuff for my pains and for my sins, planning U.N. policy in the State Department before I left that world many years ago. I have been involved in the nitty gritty of ugly politics. I am no naive guy. And I say again that we have the possibility, if we look at the stage we are at and what is happening to the era and who we are existentially—-I am talking to the person in your chair—-and if we know who we are and take ourselves that seriously, we have that possibility. So, let me go on. The second thing I want to say is, I don’t think that is always true. But I do think that the emerging era of history into which we are living our lives, the era into which we are living, may well be the most important period of American history bar none. Now, I say it as a historian and others would disagree, but I don’t say it lightly. And when I say bar none, I mean including the American Revolution and including the 1960′s and the Civil War. Whoa, that is a heavy rap, as we to say in the 1960′s. What I mean is that in many ways, the system is running out of options, and we are beginning to see more and more people aware of the difficulties that cannot be managed the old way.

Very briefly, all too briefly, in the 19th century when you ran into problems, you threw land at it, and took more and more land when there was a problem until you’d taken the whole continent, killing a lot of Indians and others on the way, but managing a system that was a tiny sea-board colony and then took over a continent as it tried to solve problems, and they ran out of land at the end of the 19th century. In this century, not by design, in the first quarter of the century there was the beginning of a major recession, probably a depression in 1914 and World War II solved the problem in the first quarter of the century. I am not offering a conspiracy theory, that is just what happened. In the second quarter of this century, it collapsed again, and World War II bailed out the system but not by design. That is how it worked in the second quarter of the century. And in the third quarter of the century, having defeated the Germans, having defeated the Japanese and having lost the productive power of many other corporate competitors plus the Cold War, plus the Korean War, plus the Vietnam War, plus high defense expenditures, that boom third quarter of the century was run that way. We are in a different era. Think about it this way. It is all but impossible to have massive industrial scale war like the first and second world wars, land wars, 42% of the economy spending on war expenditures, and the reason is, nuclear weapons now make that impossible. It isn’t going happen that way, we my blow ourselves up. But, we’re not going to have that massive injection of economic power into the economy to solve the problems. In fact, big/small wars are also getting less and less powerful; people don’t like them, they don’t like sending their kids, they don’t like spending money on that. It isn’t just us. And if you look at those expenditures, they are very big. But, as a percentage of the economy, they are declining to 3% already and going down. A lot of waste there. But you are not solving economic problems that way. I could go into great detail, but I won’t; globalization, etc., competitors, of all sorts of problems coming up that are economic. The bottom line is, you cannot solve the problem any more by throwing land at it, and we are running out of war, which means lots of problems grow because the political system can’t manage it the way it is structured, and the opposition that can’t get themselves together to make things happen, and the Republicans stopping and Tea Party stopping and you know all the contradictions, but the bottom line is, you can’t solve problems. That is obvious.

Most people know Washington is broken. They have not quite realized that the systemic problems are coming to the surface, that it’s a systemic crisis. You may get ripples of increased gain and jobs and so forth, but you can’t deal with climate change, you can’t deal with unemployment, you can’t deal with poverty, and we keep getting more and more decay. That’s light bulb time. That’s when people begin to asking very serious questions. Now, remember, when I say that I come at it as a historian. You got to throw a couple of decades of your life on the table, not a couple of weeks and not a couple elections. But, there is growing sentiment on all sides that either we transform the system or profound difficulties, violence, probably repression, possibly something like fascism when the violence begins, there is great danger. But lots of folks sense something is wrong. The first in my adult life that you find millions of people responding. Listen to the response; Occupy. Occupy was critical, far more important. The American people responded to Occupy. They got it, they know, they know who runs this game. It’s no secret, and it’s a new kind of awareness that something is going on with those big banks and something’s going on with these corporations that don’t quite know how to get a handle on it, but it is not like if we just elect a Democrat it’s all going to be fine and the progressive era will start again. There is a sense that is very deep, and in my view, given the inability to solve the problems, that’s going to be worse, and the pain is going to increase and the number of people saying, there has got to be a better way, something different has got to happen, somehow we’ve got to start in a different place, somehow either we build something new or this thing is a sham. That’s a big deal in history. That’s a big deal when people begin asking those kinds of questions. Now, it takes a long, painful process, but notice this system probably does not reform in the old liberal way for all the reasons we know including the labor movement has collapsed from 35% to down to 7% in the private sector. But, probably it doesn’t have a classic revolution, because government is 30% of the big floor under the economy. You get decay and stagnation, pain and difficulty. That is a very unusual moment in history because it goes on and gives time for people to be aware and to build democratically from the bottom up. If it collapsed tomorrow, the right wing would take over. And if it collapsed to the left, we wouldn’t be prepared. And above all, we wouldn’t know from the bottom of our own experience how to build and run and change and transform the system. This is an era where things are beginning to open up over time. Time for us. Including the person standing here and in your seat. Let me put it another way—-the third thing I want to say—-systems in history are defined above all by who controls the wealth; no secret. In the feudal era, land was the critical piece. If you had the land and you were the lord, you commanded.

In the 19th century, there was the kind of capitalism that was sort of free enterprise. Most of the free enterprise small business capitalists of the 19th century were actually farmers. They ran a small business called a farm. That was a different, maybe a free time in some ways, but a very different time. State socialism was a different way to own capital throughout the system. That is another way to go about it, and we live now in essentially what is called corporate capitalism. And if you look at who owns the system and the power, you all know the income number distribution numbers, they’re pretty obvious. It’s gone from about—-the top 1% has gone from about 10% to 22% and then bobbling around given the recession in the 20% range. Think of that, it’s gone from 10% to 20% in 30 years. Who lost that money? But wealth is even worse.

The way you define the system is who owns the capital wealth, and 1% owns just about half all the investment business capital, 1%. 5% owns 70%. And the top—-this is a number you got to get your head around, really odd and I checked many times—-think about this, the top 400 people, not percent, people, 400 own more wealth now than the bottom 185 million Americans taken together. That is a medieval structure. I don’t mean that rhetorically, I mean that technically that is the way you concentrated wealth in the medieval era, really. So, the question becomes—-and here is the third thing I think a lot about we do a lot with—-is there any sign if you don’t like state socialism, you don’t like corporate capitalism that we can build a democratic system from the bottom up that also changes the ownership of capital and is also inherently Green? How do we do that? We—-we. One of the things happening, and this is exciting stuff going on, and the press simply does not cover, they don’t have an interest. If they had any interest, they’d be able to look at the other way because they—-but they don’t have any money to do it. The press is being stripped of all capacity to report. But on the ground there are now, what, 10 million people involved a worker owned companies. Did you know that? 10 million, in America. 130 Million are involved in co-ops and co-op credit unions. 40% of society. Four or five thousand neighborhood owned corporations, thousands of social enterprises. Odd bits and pieces here and there like Sarah Palin’s Alaska; they use the oil revenues as a matter of legal right, everybody gets a piece; it’s a maverick country but there it it. They don’t do that in Texas. We’re going to do that a lot elsewhere when we get to where we’re going to get.

If you look carefully on the ground, there are these social enterprises popping up, credit unions, etc., etc. and there are many, many more experiments. Something like 20 states now have legislation before them like the Bank of North Dakota, a state owned bank, and many other states, another 20 approximately are considering single payer. And here is the issue, as the pain deepens—-that’s why the era is critical—-as the pain deepens and we have time to build, and we work to build, more and more people begin to see, you’ve got to come up with a new answer. My judgment is—-and I think I’m not blowing smoke—-those kinds of experiments are the only way to build the popular base with the politics and the projects, with the politics and the projects.

There is a really beautiful thing going on in Ohio in Cleveland, we have been involved with. I was involved with the Youngstown workers in 1977 when the first big steel closing occurred, the workers tried to take over and they got clobbered. But, they organized their politics and got a lot of people involved. So, in Ohio, the idea of worker ownership is a bigger idea. Lot’s of people understand it. And in Cleveland, building on the Mondragon model, we know about the Mondragon model and other ideas, there are a series of worker owned integrated co-ops in Cleveland in a neighborhood where the average income is $18,000 per family. And they have these co-ops not just standing alone, but linked together with a non-profit corporation and a revolving fund. The idea is to build the community and worker ownership, not just make a couple workers richer, to say the least, not just rich but to build a whole community, and to use the purchasing power of hospitals and universities, tax money in there, Medicare, Medicaid, education money, buy from these guys and build the community. That model, and it’s the greenest—-for one of the things—-the greenest laundry in that part of the country, that uses about one-third of the heat, about a third of the and electricity and about a third of the water. They’re on track now to put in more solar capacity that exists—-one of the other worker owned companies that exists in the entire state of Ohio; these are not little thinking co-ops.

There’s another one they’re just about to open which is a greenhouse; 3.25 acres. The greenhouse hydroponic will be the largest in the United States in an urban area, the largest in a worker co-op, worker-owned, in a community building structure, capable of producing something like 5 million heads of lettuce a year. A— capable of producing something like 5 million heads of lettuce a year. That’s happening. You could do that, and you could force the politicians to help you do that. They’re pointing out I’m getting limited time so I’m going to go quickly. All I wanted to say is there is a website,, put the dash in, and you will find thousands of things that are happening on the ground that change the ownership of wealth and begin to green the economy, and it is part of the new deal that we’re going to build forward as we go on through the decay. That’s the direction.

So, let me say a few—-given the time available—-just a couple of other things. Those are the kinds of things that are the prehistory of the next great revolution. That is how you build it. You generate the ideas and then you begin to protect national ideas out of real experience and out of real commitment. So, did you happen to notice, we did not nationalize the two big auto companies when those crises came, and we pretty much nationalized the banks before we gave them back. So when those crises come, and they will come, if we’re prepared with a highly democratic vision and if we know something and if we build the politics, I’m not just talking about communities, that’s is critical; if you don’t have democratic experience in local communities you’ve got nothing. But, the ideas like Wisconsin pointing to the New Deal, those ideas also generate vision for the long, larger scale when time goes on and we build forward.

So, now that’s also a heavy wrap. I am saying that we are laying the foundations bit by bit in an extremely unusual period of history, the most important moment in history because we’re running out of options, in my view. And mine is suggesting we can take it forward in a positive way. He says I got one minute left so let me tell you. I want to say something far more radical than I have said before. This is the most radical thing you’re going to hear. I think there is hope. I’m no Utopian. I don’t mean it is going to be hard and tough and a lot of stuff is going to go wrong and a lot of pain and a lot of difficulty, but I don’t think they’ve got all the answers and I don’t think that they’ve got all the power and I don’t think they can solve it. And I do believe—-the person in your chair, why I take you seriously—-can you wrap your heads around, really, I mean, really, that we are in a position to lay down the foundations for the next great transformation? Really? Not just doing token politics, not just building the party. All that is critical. Not just laying the foundations. But really laying the groundwork for transformation into a highly democratic new system beyond the old traditions, one that is sustainable, one that give a climate change, but also alters the ownership and democratizes wealth. That is our question.

One last thing, because she’s waving me down and I’m trying to be good about this. I give you just a little fragment more of the book. Two fragments, actually. this is a really interesting one. They have been polling under people, not people my age, but people in the range of 18-29. These are people who really will build the next politics; a lot of them in this room. Now, it turns out that in the latest polls, it turns out that when you look at it, about 45%, 43% have a positive reaction to the word capitalism and 49% of a positive reaction to the word socialism. I don’t know that any of those folks actually know what the word socialism means, but the idea that they understand something different really that has got to happen is embedded in those politics. But, one last one I saw just the other day, I did a piece for Sojourn Magazine, one of the real radical activists group of religious Christians. One of the pieces of poll data I saw was this, said that 36% of all Americans polled—-one of the big polling agencies, not a side one, not a biased one—-36% decided and were quite sure that capitalism, Christianity and capitalism cannot be reconciled. So, my urging, I am pleased to be here, but I don’t think anybody moves the ball like people in this room when they get serious. I urge you to remember this Wisconsin kid who has all this weird history of Gaylord Nelson and these parties that actually did something and all these precedents actually built and laid foundations, my suggestion to you is that we together are in fact capable if we rise to that level of existential self awareness; real hard, real hard. People want to do projects, they want to do politics, they don’t want to get as serious as it takes to really transform the system. So, that I think that is our challenge and I see a lot of people in this room up and ready to do it. Thank you for having me.

AMY GOODMAN: That was Gar Alperovitz delivering the keynote speech at the Green Party’s 2012 national convention in Baltimore, Maryland where the party nominated Massachusetts physician Jill Stein and anti-poverty campaigner Cheri Honkala as its presidential and vice-presidential candidate. Visit for our interviews with Stein and Honkala. Gar Alperovitz is Professor of Political Economy at the University of Maryland and his latest book, “America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy.” In the coming days, we’ll look at the largest worker cooperative in the world, Mondragon, in Spain where Democracy Now! broadcasted earlier this month. Tune in Tuesday for our interview with Chris Hayes, host of the MSNBC show Up With Chris, and author of a new book “Twilight of the Elite, America After Meritocracy.”