Tax cuts for the rich – period
A new study from the LSE looks at the effects of tax cuts for the rich in 18 OECD countries over the 50-year period from 1965 to 2015. The conclusion:
We find that major tax cuts for the rich push up income inequality, as measured by the top 1% share of pre-tax national income. The size of the effect is substantial…. Turning our attention to economic performance, we find no significant effects of major tax cuts for the rich. More specifically, the trajectories of real GDP per capita and the unemployment rate are unaffected by significant reductions in taxes.
One more nail in the coffin of “supply-side economics”. Read more here.
Pollution brutality
The New York Times reports from Delhi:
Air pollution killed more Indians last year than any other risk factor, and Delhi is among the most polluted cities in the country. But the burden is unequally shared.
Read the story of two children here. For more on Delhi’s air pollution as a classic case of environmental injustice, see here.
Big money and ‘public opinion’
Tom Ferguson writes about a new study that highlights the congruence between public policy, public opinion, and the preferences of the rich:
Surveys of opinion at the level of the [richest] 1 or 2%, especially if they are trying to explain changes in policy, do not typically reflect anything as innocently vaporous as “opinion” at all. Their data are instead noisy by-products of the mobilization of big money with its comet-like trail of social networks, subsidized op eds, subservient think tanks, and journalists seeking applause and better positions. That is how the reality of money-driven political systems shows up in surveys.
This is the crucial point that economics and political science need to absorb. Refining models of voter behavior to take more account of voter ignorance is pointless if you systematically bypass what’s driving the system, especially when money speeds across state lines at the speed of light.
Read more here.
Some make money while they sleep… while others risk their lives
From a new report called “Billionaire Wealth vs. Community Health”:
As of November 17, 2020, the wealth of 647 U.S.billionaires has increased almost $960 billion since mid-March, the beginning of the pandemic, approaching $1 trillion in wealth increases.
Read more here.
America’s inequality crisis
Underlying the political crisis is a deeper one:
American inequality has reached a crisis moment. The 60 richest billionaires in America control as much wealth as the bottom 50 percent of Americans, according to the latest Fed data. To Collins, the Inequality.org editor, America is reaching an “oligarchic moment,” where the economy is increasingly hardwired to concentrate wealth and power at the very top. It is urgent to increase taxes on the wealthiest not only to generate revenue, he says, “but to put a brake on accretions of power. It isn’t is a class warfare,” he insists. “This is really, ‘How do you protect against such a levels of extreme inequality that it threatens basic democratic functioning?’”
Source: Tim Dickinson, “How Trump Took the Middle Class to the Cleaners,” Rolling Stone, October 26, 2020.
Productivity versus wages
A chart shows what’s happened in the USA – and it’s not a pretty picture:
Source: Economic Policy Institute.
Inequality: Bad for your health
Worried about Covid-19? Check this out:
Source: Institute for Policy Studies.
A risky trade
Outsourcing crucial industries in pursuit of lower wages and lower taxes puts corporate profits ahead of public health. Today the U.S. is paying the price:
Source: Global Development Policy Center, Boston University.
Globalization cover-up
Joe Stiglitz looks at how “globalization” concealed an agenda for fattening corporate profits at the expense of workers:
Source: INET.
Over to you
A remarkable – in its provenance, not its conclusions – new report from the US government’s Commodity Futures Trading Corporation concludes that “climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the U.S. economy.” It’s top recommendation:
This report begins with a fundamental finding—financial markets will only be able to channel resources efficiently to activities that reduce greenhouse gas emissions if an economy-wide price on carbon is in place at a level that reflects the true social cost of those emissions. Addressing climate change will require policy frameworks that incentivize the fair and effective reduction of greenhouse gas emissions. In the absence of such a price, financial markets will operate suboptimally, and capital will continue to flow in the wrong direction, rather than toward accelerating the transition to a net-zero emissions economy. At the same time, policymakers must be sensitive to the distributional impacts of carbon pricing and other policies and ensure that the burden does not fall on low-to-moderate income households and on historically marginalized communities. This report recognizes that pricing carbon is beyond the remit of financial regulators; it is the job of Congress.
Read the report here.
