Category Archives: Income disparity

Satyajit Das: The Art of Destructive Capital

In truth, art and money have never been far apart. The wealthy have always collected art. Joseph Henry Duveen, the legendary dealer who in the early twentieth century masterminded the sale of Old Masters to wealthy Americans with little knowledge of art, observed that: “Europe has plenty of art while America has plenty of money and large empty mansions and I bring them together.” Richard Rush in his 1961 book Art as an Investment doubted that “collectors have ever been unmindful of the investment value of art”.

But the market rather than the art itself is now the centre of this universe.

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Why is No One Fighting the New Robber Barons?

Last week, Bill Moyers interviewed historian Steve Fraser on what he calls our Second Gilded Age. Despite the anodyne title of the segment, The New Robber Barons, it was really about why the American public has been so quiescent in the face of rapidly rising income inequality, while during the first Gilded Age, a wide range of groups rebelled against the wealth extraction operation. I encourage you to watch the segment in full or read the transcript.

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Joseph Stiglitz: Economics Must Address Wealth and Income Inequality

Yves here. This interview with Joesph Stiglitz is pretty subversive for a talk with a Serious Economist. Stiglitz doesn’t simply talk about the problem of inequality, but the drivers that most mainstream economists choose to ignore, such as the rise of monopoly/oligopoly power, worker exploitation, and how central banks have allowed banks to engage increasingly in speculative rather than productive lending.

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Peter Temin: Lessons From the Great Depression

In this video, Peter Temin, a highly respected expert on the Great Depression*, discusses some of the revealing parallels between that era and our current financial and economic plight with Marshall Auerback. Don’t be deceived by the leisurely pacing of this conversation and Temin’s soft-spoken manner. Temin in his measured way sets the stage for discussing how the trajectory we are on, which is undoing more and more social safety nets and job security, which are fundamental to trust, does not merely lead to lower productivity and hence hurts everyone, including the wealthy, but also puts us on a trajectory towards a dystopian future.

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Quiet Distress Among the (Ex) Rich

While the wealthy don’t get much sympathy on this website, the restructuring of the economy to save the banks at the expense of pretty much everyone else has hurt some former members of the top 1% and even the 0.1%. And it’s also worth mentioning that some of the former members of the top echelon occupied it when the distance between the rich and everyone else was much narrower than it is now.

The fact that economic distress has moved pretty high up the food chain is a sign that this recovery isn’t all that it is cracked up to be.

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Bill Moyers on The Lives of the Very Very Rich

Yves here. While this site talks regularly about the 1% and the 0.1%, we don’t often give a more specific idea of who they are. A recent Bill Moyers show gave a vignette of the super-rich, not just the 0.1%, but the 0.01%, who as we know all too well are playing a vastly disproportionate role in reshaping politics and our society.

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Suit on Animator Wage Suppression Shows Another Face of How Capital Squeezes Labor

Mark Ames reports on the latest revelations in a major anti-trust case against Silicon Valley giants including Disney, Sony, Dreamworks, Lucasfilm, and Pixar. For tech titans, enough is apparently never enough.

The earlier chapters of this sorry saga exposed a long-standing scheme by which major tech companies including Apple, Google, Adobe, Intuit, Intel, Lucasfilm and Pixar colluded to suppress wages of an alleged one million workers. The collusion was agreed at the CEO level of all the participants and memorialized through written agreements.

A related private suit was filed last September by animator against nine movie industry heavyweights including Walt Disney Animation, Dreamworks Animation, Sony Pictures, LucasFilm and Pixar. It alleged similar conduct to the bigger Silicon Valley wage-suppression suit. Among other things, the companies not just compared pay levels but agreed to fix them, and also signed agreements not to recruit from each other.

An amended complaint in the animator suit added two studios to the complaint and far more important, exposed that the wage-fixing scheme was far longer standing that previously thought. K

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Workers vs. Undocumented Immigrants: The Politics of Divide & Conquer

Yves here. Obama’s plan to give 4 million illegal immigrants temporary suspension from deportation has amped up the intensity of the already-heated debate over immigration and competition for US jobs from foreign workers.

This Real News Network interview with Bill Barry, who has organized documented and undocumented workers in the textile industry, makes an argument at a high level that many will find hard to dispute: that the fight over immigration reform and the status of undocumented immigrants diverts energy and attention from the ways in which a super-rich class is taking more and more out of the economy, to the detriment of laborers.

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High Marginal Tax Rates on the Top 1%

Optimal tax rates for the rich are a perennial source of controversy. This column argues that high marginal tax rates on the top 1% of earners can make society as a whole better off. Not knowing whether they would ever make it into the top 1%, but understanding it is very unlikely, households especially at younger ages would happily accept a life that is somewhat better most of the time and significantly worse in the rare event they rise to the top 1%.

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Masaccio: Piketty Shreds Marginal Productivity as Neoclassical Justification for Supersized Pay

Yves here. One of the main agendas of neoclassical economics is to give Panglossian defenses of the current order a veneer of intellectual legitimacy. If our system is the result of individuals and businesses behaving in logical ways, at least in the minds of economists, surely the outcome is inevitable, and therefore virtuous, or else those operators would do things differently. The Big Lie in all of this is that neoclassical economics takes power completely out of the equation. While it does assume selfishness, in that everyone is out or himself to maximize his utility, it also assumes atomized actors who lack the power to influence markets.

One instructive way to see how these arguments break down is by looking at neoclassical economists justify large disparities in pay. Piketty shows that the idea that people are paid what they are worth, or in neoliberal-speak, according to their marginal productivity, to be a sham

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