… beneath the superficial red-blue divide they are hawking, a broad-based political rebellion against the Oligarchy and their Ruling Class nomenklatura is gathering momentum. People left, right and center are awakening to two painfully obvious realities:
1. the political-social-economic system no longer works for the bottom 95%
2. the system is intrinsically unfair–rigged to benefit the few at the expense of the many.
The bottom 95% lack the political influence of the Oligarchy, and so their only means of expressing their disapproval is at the ballot box, by rejecting the approved mainstream candidates in favor of candidates who might move the needle in a rigged system.
What are the core economic issues that people are trying to solve at the ballot box?
1. The systemic lack of fairness: the growing sense that opportunities are not being distributed as widely or fairly as they once were; ruling elites now have advantages the “rest of us” don’t.
This advantage is very basic: capital has accrued most of the gains of the past decade’s growth and asset appreciation, labor’s share of the GDP continues to slide.
Much of the wealth is controlled by corporate-state cartels operating rentier skims: prices rise while quality and quantity of goods and services remains the same or decline. This is more akin to extortion than a free-market competitive market.
The pathway to middle-class security that was viewed as a birthright no longer works: go to college, get a secure job, buy a house, etc. A university diploma now saddles students with the equivalent of a mortgage in many cases, while housing in strong job markets has soared out of reach of all but the top 5%.
2. In response, people seek a political solution to systemic unfairness. In general, there are two solutions being offered:
A. Establish political limits on globalization, which is viewed as rewarding the few at the expense of the many. Opponents of deglobalization label this “nationalism” to tar it with unsavory connotations but this misses the point: globalization can indeed be exploitive and benefit the few at the top. The notion that “a rising tide raises all boats” overlooks the asymmetric distribution of globalization’s gains.
B. Establish QE for the People policies, which broadly speaking are political policies designed to more fairly redistribute the nation’s wealth and income that’s increasingly concentrated in the hands of the top few.
QE for the People policies include higher infrastructure spending (as that creates jobs and benefits all of society), tax credits for the working poor, Universal Basic Income (UBI), and ideas such as publicly owned banks.
To pay for QE for the People policies, proponents seek higher taxes on the wealthy and higher public spending, even if it is funded by debt (selling bonds).
Political solutions to embedded unfairness / inequality / rigged systems / diminished opportunities (i.e. asymmetric gains and unfair advantages) may be politically sound but economically unsound, that is, these policies might have unintended consequences: for example, borrowing large sums to pay for UBI and other costly programs might create inflation, raising the government’s borrowing costs and squeezing social spending while reducing the purchasing power of household earnings.
If we conclude that asymmetric gains, unfair advantages and rising inequality are systemic, then political policies should address the fundamental structural problems: for example, anti-trust enforcement that breaks up the stranglehold of cartels and rentier arrangements in healthcare, higher education, media, Silicon Valley, national defense, etc.
When was the last time a monopoly or quasi-monopoly was broken up? A generation ago, or was it two generations ago? The Oligarchy now has such a tight grip on the centers of power, the traditional limits on concentrated wealth and power have been fatally enfeebled.
In response, the bottom 95% are rebelling. Loving your servitude sounds wonderful if you’re in the top 5% reaping the gains of aiding and abetting the Oligarchy’s tightening stranglehold on power, but the bottom 95% are sick and tired of a rigged, dysfunctional system that’s destroying the social contract to further enrich the few and their technocrat enablers.
In other words, policies that limit the exploitation/predation of the Oligarchy and their enforcers do more than redistribute income: they rebalance the tilted playing field and widen competition and opportunity rather than merely distribute “free money.”