Our Economy Rewards Billionaires. How Could We Change That?
What is to blame for America’s growing economic inequality and how do we go about fixing it?
The COVID-19 pandemic has wreaked havoc on the American economy, ravaging small businesses and creating mass unemployment. The current health crisis and subsequent economic fallout has left many feeling financially insecure and left behind. But even in the best of economic times America has grappled with unprecedented levels of inequality.
“We’ve structured the economy to allow people to get extremely rich, and we don’t have to structure it that way.” – Dean Baker, senior economist, Center for Economic and Policy Research.
On Detroit Today, Stephen Henderson and guests talk about billionaires, wealth inequality and what can be done to make the economy fairer and spread opportunity more equally.
Click on the audio player above to hear economist Dean Baker and Evil Geniuses author Kurt Andersen talk about economic fairness on Detroit Today with Stephen Henderson
Guests:
Dean Baker is senior economist and co-founder of the Center for Economic and Policy Research (CEPR) and author of the book “Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.” He says that through explicit policy implementations, the American economy has been structured to allow for massive wealth.
“Copyrights and patents are government-sponsored monopoly,” says Baker. “We’ve structured the economy to allow people to get extremely rich, and we don’t have to structure it that way.”
Proposed remedies to the current system often come in the form of various tax reforms, like wealth taxes. But Baker says that may be focusing on the wrong problem.
“We want a progressive tax code, and I think our system should be more progressive. But I think that’s the less important question. Most of it has to be on the before-tax side,” says Baker.
Raising wages at the bottom and creating a progressive tax system are all important things, but Baker says the key step in managing inequality is changing the institutional structures that allow for so much wealth to go to the top.
“We and the other rich countries in the world were pretty similar up until the 70s — and we turned right…and it wasn’t just an accident.” – Kurt Andersen, author of “Evil Geniuses.”
Kurt Andersen is the author of “Evil Geniuses: The Unmaking of America: A Recent History.” He tells Henderson that the decimation of unions, shifts in economic policy and changes in American mentality all contributed to the economic inequality we see today.
“We and the other rich countries in the world were pretty similar up until the 1970s — and we turned right…and it wasn’t just an accident,” says Anderson on the shift in American economic policy.
According to Anderson, other wealthy countries with broad welfare policy also embrace their free market economy. He says it doesn’t have to be one way or the other.
“Our per-capita number of billionaires is lower than in Norway, Sweden and other Nordic countries,” Anderson says.
This post was written by Detroit Today student producer Clare Brennan.
