Inequality or Opportunity: The Classic False Choice

[O]n July 4, The Washington Post published an article “reporting” that President Obama has “abandoned talk” of inequality this election year, focusing instead on the “politically palatable theme of lifting the middle class.”

This represents, writer Zachary Goldfarb charged, “a striking pivot” away from the left of the party that wants a “more combative” focus on the income gap and towards less divisive centrists who want to focus on aiding the middle class.

Anonymous sources “close to the White House” suggested Democratic polling “found talking about income inequality does not register strongly with the American public and risks accusations of class warfare.”

Jim Kessler of the Third Way, one of the legions of New Democrat arm-chair pundits, was trotted out to pronounce that “income inequality seems like it’s on the back burner now, at least in terms of their rhetoric,” revealing little more than that his operation was probably the source of the entire story.

The Wall Street wing of the party that Kessler represents wants to draw a distinction between inequality and opportunity. Elizabeth Warren Democrats, they argue, are focused on class warfare, on bringing down the rich, whereas the self-described “centrists” are for lifting the middle class. The president briefly strayed into a focus on inequality, but now has regained his footing.

This is, of course, pernicious nonsense. It is grounded on the assumption that inequality just happened, driven by globalization and technology – anonymous forces. We can only ameliorate this, with greater emphasis on education and training, by raising the minimum wage and requiring equal pay for equal work.

This passive-voice populism is attractive to politicians because it absolves them of responsibility for the Gilded Age inequality that is crushing the middle class, and it enables them to stand for reform without ruffling the tender sensitivities of their deep-pocket donors. And, of course, platoons of Beltway opinionators are funded to help propagate these fine distinctions.

The problem is, this gets the diagnosis wrong so it can’t get the prescription right.

Sure, Americans really don’t care much that the rich are richer than Midas. They care that this economy doesn’t work for them or for the vast majority. Coming out of the Great Recession, the richest 1 percent captured an obscene 95 percent of the income growth of the “recovery,” while typical household incomes fell.

Sen. Elizabeth Warren gets this right. This isn’t about natural phenomena like the weather. The problem is that the game is rigged. The rich, the entrenched corporate interests, Wall Street, the multinationals didn’t just happen to do well. They fixed the rules so they got the gold and the rest of us got the shaft.

Inequality and the sinking middle class aren’t simply the natural result of technology or globalization. They are the result of how the rules got written to benefit the few.

Our tax and trade policies — written by and for multinational banks and corporations – give companies incentives to move jobs and report profits abroad, while driving down wages here at home. Our income tax policies leave billionaires paying lower taxes than the police who guard their mansions, while basic public investments in education, infrastructure, research and development are starved.

Corporate lobbies have left Americans with the most threadbare social contract of the industrial world – shorn of guaranteed annual paid vacations, paid family leave, paid sick leave, decent pensions, and affordable health care. Predatory industries like the drug companies fix the laws so that Americans pay the highest prices in the world for the prescription drugs that our tax dollars largely pay to invent.

Wall Street bankers deregulated finance, opened the speculative casino, pocketed multimillions by taking on bigger and bigger risk in a wilding that finally blew up the global economy. CEOs waged relentless war on unions, trampling labor laws, while rigging the rules to give them multimillion-dollar personal incentives to plunder their own companies.

None of these things just happened. They were actions that were committed by powerful people and lobbies who benefited from them. Gaggles of richly rewarded lobbyists and lawyers pocket seven-figure incomes by rigging the rules for the few, and blocking efforts to challenge them. Elizabeth Warren didn’t start the class war, as Warren Buffett said, “Actually, there’s been class warfare going on for 20 years, and my class has won.”

No one expects politicians to attract votes by braying against the wealthy. (Although contrary to the article, the reform that gains consistently high support from American voters in Democratic polling is the call to make the rich and the multinationals pay their fair share of taxes. Full stop, period.)

Americans want to know what will be done to make this economy work for the many again. But any honest answer to that won’t be rhetorical pablum about lifting the middle class. Any honest answer – as senators like Warren, Sanders, Brown, Merkley, Baldwin, Whitehouse and others have argued – will involve taking on the rigged game and changing the rules. And that inevitably will require curbing Wall Street, taxing the wealthy and making vital public investments, closing the tax havens and dodges of the multinationals, requiring the Federal Reserve to favor a full employment economy for workers rather than an austerity regime for bankers, and much more.

Passive-voice populism won’t cut it anymore. Both trickle-down Reaganomics and Rubinomics, its Democratic lite version, have failed. The supposed contrast between inequality and opportunity is a false choice. The question is one of power. And whether Americans will elect leaders like Warren who are prepared to take on the entrenched interests that have stacked the deck against the vast majority. You can dine well in Washington pretending this isn’t so, but you can’t deal with the realities that are driving this country apart.