How to Really Rein In the Super Rich
Thomas Piketty is right—inequality is on the rise. But until Wall Street gets out of Washington, neither the French economist nor regular Americans will be able to shift the status quo.
Thomas Piketty, meet Bobby Tolbert.
Piketty is the French economist who rocked the worlds of social and economic policy with his new book, Capital in the Twenty-First Century. In it, Piketty documents with meticulous detail—and data—how we are returning to an era of extreme inequality where a few dynasties amass great fortunes through inheritance and everyone else withers and suffers. Such gross inequality, Piketty argues, is not an accident but inherent in capitalism and can only be addressed through government intervention.
All of which is plainly true. As Paul Krugman has pointed out, conservatives chomping at the purse to refute Piketty have come up with nothing more than name-calling.
Pretty much everyone else agrees gaping inequality is a massive problem in the world and that something has to be done about it. Heck, even the Pope tweeted, “Inequality is the root of social evil.” Not the devil. Inequality!
What the vast majority, who agree inequality is a crisis, do not agree on is what to do about it. Piketty proposes a global wealth tax as well as a progressive income tax that approaches rates, at the top end, closer to what the United States had in place when prosperity was more broadly shared during the ’50s and ’60s. They’re good ideas, but only a start. What they’re missing is a Bobby Tolbert.
Bobby Tolbert is member of the community organization VOCAL NY—a grassroots organization that builds political power among New Yorkers affected by HIV/AIDS, drug use and mass incarceration. Tolbert was in Washington, D.C., this weekend to speak at the annual meeting of National People’s Action, a network of community organizations made up of groups like VOCAL.
Tolbert spoke eloquently about how gross inequality is destroying communities across America. [Full disclosure: I was at the event to help Tolbert and other grassroots leaders practice and deliver their speeches.] Tolbert shared his own story, one only made possible by state-funded HIV medications that are constantly threatened by budget cuts. Tolbert works as a peer health educator but is paid so little that he qualifies for public supports. Recently, even those few public benefits were taken away because Tolbert transitioned from supportive housing to independent living—a move you would think everyone would be in favor of, but which meant Tolbert’s government health benefits being jeopardized. He’s currently fighting to have them reinstated.
“Big corporations and the rich are fine with people like me dying,” said Tolbert. “The only problem with that is I’m not ready to die.”
And while for Bobby Tolbert, public supports literally make the difference between life and death, the situation is pretty much as dire for millions of Americans who increasingly rely on food stamps and Medicaid and housing assistance to survive. At the same time our deliberately and aggressively unequal economy has pushed millions more Americans toward poverty and they need more help than ever, conservative corporate elites are pushing for public assistance to be slashed. Tolbert agrees with Piketty—and the majority of American voters—about taxing the wealthy to spread assistance and opportunity to the poor and working class.
But Tolbert argues for something that Piketty and most of the academic and political debate about inequality seem to miss—that the nature of our economy, the rules of the game that currently incentivize unequal distribution, will never change unless the people making those rules, the people seated at the tables of power, change as well. In other words, as long as economic policy decisions are made by Wall Street and their proxies (see, e.g., Treasury Secretaries Robert Rubin, Henry Paulson and Timothy Geithner) then Thomas Piketty’s ideas won’t be included in the discussion, let alone Bobby Tolbert’s.
“We need a new political system,” Tolbert said, “one that takes money out and puts people in.” Yes, that means campaign finance reform and reducing the barriers to voting, rather than increasing them. That would help get more everyday Americans into positions of power. But Tolbert’s vision also includes participatory budgeting in which communities, not special interests, set the government funding agenda—which is already happening in New York. And it means people’s organizations commanding and being given equal input with business interests and the rich in the smoke-filled rooms where policy deals are cut. It means that when the Federal Reserve is weighing interest rates and the Senate Budget Committee is evaluating banking regulations, they should as a matter of habit meet with economists and CEOs and the everyday Americans whom their decisions affect most.
In his speech, Tolbert pointed to the diversity of the thousand-plus community leaders from around the country gathered in the auditorium in front of him. “We represent every race, every gender, every sexual orientation—in fact, we represent America better than the people who are running it.” In front of Tolbert were family farmers and immigrants and folks on welfare and small-business leaders—all of whom have stories to share about the ravages of inequality and solutions to offer. Academic debates and data are useful and important, but until Bobby Tolbert and other everyday people like him are included in the discussion and political process, nothing will ever truly change.