In a lot of discussions of income inequality, people note that the huge rise in inequality over the last 35 years happened in both before and after tax income. Thus, like Estragon in Waiting for Godot, they claim, “Nothing to be done!” Jacob S. Hacker and Paul Pierson in Winner-Take-All Politics discus income inequality entirely from a political standpoint. And this is the right way to look at it.
We already know that money makes money. If you have a bank, it does not take great skill to borrow money from the Fed for nothing and loan it out for more. Similarly, having lots of money is often a prerequisite for investing in the best opportunities. The Facebook IPO was for suckers with their hundreds and thousands of dollars. If you had tens of millions, like Bono, then you could have invested in Facebook a couple years earlier and made a billion.
So the question is how the government makes the rich even richer, so that they will have an even bigger advantage to collect even more. Winner-Take-All Politics describes it like this:
The authors talk in great depth about the two powers that balance a democracy: the wealthy trying to enrich themselves and the poor passing laws to redistribute wealth. In general, through its history, the United States oscillated with the waxing and waning of these forces. But over the last 35 years, we have seen our political system tip far toward the wealthy. They note that the decline in union power is most disturbing because unions provide the only real organized counterbalance to the power of rich corporate interests.
They also note that this idea is nothing new:
There is too much in this book to discuss. Whenever I read any book, I book dart interesting parts. My copy has over 100 book darts in it. I’m sure I’ll come back to it. In fact, this is not the first time I’ve written about the book. But if nothing else, we should all listen to the broad argument of Winner-Take-All Politics.
The rich have gotten very organized and the poorer classes simply cannot compete. That is, unless we organize. And it is in this way that Hacker and Pierson take a sobering book and pull off an inspiring ending. I’m not much a joiner, but I’ve decided that I need to join Common Cause. At least. And I think all of you should too.