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January 25 - February 14, 2018
While tuition and fees in public colleges and universities increased, on average, by a sixth between 2005 and 20103—understandable given the cutbacks in government budgets4—median income continued to shrink.5
Tuition icrease
All of the wealth accumulation in this country has gone to the top. If the bottom had shared equally in America’s increase in wealth, its wealth over the past two decades would have gone up by some 75 percent.
Wealth eqality not shared by middle and lower class .
Educational attainment, which is often tied in with income and race, is a large and growing predictor of life span.
Education and life span.
There was no reason to believe that giving more money to America’s wealthy would lead to more investment in the United States: money goes to where returns are highest, and with America’s downturn, returns often look higher for investments in the emerging markets. And even when there is investment in the United States, it’s not necessarily investment related to job creation: much of the investment is in machines designed to replace labor, to destroy jobs.
Trickle down mistakes.
What we have seen quite clearly is that a common use of wealth is to gain advantage in rent seeking, perpetuating inequalities through the political process. Later in this preface I’ll describe some of the telling examples of rent seeking that have come to light just in the past year.
Use of wealth to attain greater political influence .
But fully addressing a problem of the magnitude, depth, and duration of inequality in the United States will take comprehensive actions, of a kind that will require bipartisan support.
Inequality requires bipartisan solution.
But increasingly, and especially in the United States, it seems that the political system is more akin to “one dollar one vote” than to “one person one vote.” Rather than correcting the market’s failures, the political system was reinforcing them.
One dollar, one vote.
Given a political system that is so sensitive to moneyed interests, growing economic inequality leads to a growing imbalance of political power, a vicious nexus between politics and economics.
Nexus between money and politics.
By 2007, the year before the crisis, the top 0.1 percent of America’s households had an income that was 220 times larger than the average of the bottom 90 percent.3
Top .1 220 times more than bottom 90 percent.
recent research has shown that by far the largest fraction of personal bankruptcies involve the illness of a family member.38
Illness can lead to bankruptcy.
Technology and scarcity, working through the ordinary laws of supply and demand, play a role in shaping today’s inequality, but something else is at work, and that something else is government.
Government in inequality .
