How to Stop the One-Percenters From Stealing Everything From the Rest of Us

 

This isn't about Paul Krugman, except to the extent that it covers points he's been making for more than a decade. But that poster just says it all. 

Kathleen Geier at Political Animal, on how to stop the parasitical rich stealing and hoarding every last dime in the economy:

What, then, must be done? It’s worth emphasizing that since, according to Bivens and Mishel, the gains to the 1 percent have been rent-driven, by definition, the 1 percent are being rewarded on a scale that is disproportionate to their economic performance. In other words, relative to their compensation, the 1 percent are not adding value to their firms or to the economy as a whole. Therefore, we have the ability to apply policy fixes that will stop or even reverse gains to the 1 percent, without hurting economic growth.

Here are some of the ways we can do that. First, the authors say, we must directly attack the ability of the one percenters to extract rents. Some ways to to do this include:

— Reforming corporate governance to give shareholders and other stakeholders much more power over executive pay decisions;

— Discouraging rent-seeking shenanigans in the financial sector by instituting stricter regulations there;

— Increasing the bargaining power of low- and middle-income workers by significantly raising the minimum wage and reforming labor law to make it easier for workers to form labor unions;

— Vigorously pursuing full employment policies throughout the economy; and

— Reforming intellectual property law to eliminate rent-seeking monopolies in the pharmaceutical industry, entertainment, and the like.

Secondly, the authors say, we must reduce the one percenters’ incentives for rent-seeking. The way to do this, they argue, is simple: by significantly raising marginal tax rates for high incomes, and by eliminating corporate tax loopholes (such as the provision that allows firms to deduct “performance-based” pay) that encourage rent-seeking behavior.

It will be very difficult, politically, to bring about these reforms, and to make sure they have teeth. But what’s encouraging is that we are not helpless. Contrary to conservative propaganda, inequality and stagnating wages are not things that “just happened” because of impersonal processes over which we’ve allegedly had little or no control, such as “technology” or “globalization.” They occurred because of political decisions that increased opportunities and rewards for rent-seeking at the top, and eroded worker bargaining power at the middle and bottom. Nevertheless, we have the power to start making different political choices. As is often the case, the answers are relatively simple — but not easy.