The fundamental “inclusive capitalism” argument is that business enterprises lose profit-making opportunities when consumers have little money to spend.
But there’s more:
Inadequate purchasing power among the many threatens corporations and poses a direct danger to the top 1 percent, and, indeed, to capitalism itself.
Thus writes Thomas Edsall in his piece for the New York Times. Yet, I have to wonder if the top 1 percent, who are on the verge of controlling as much wealth as the bottom 99 percent, are all that worried about the Rest of Us lacking sufficient income to buy goods and services.
These pages are no stranger to inequality and the relative halcyon days of the first post-war decades, days that now seem to be an anomaly in an otherwise normal state of the Haves getting more while the Have-nots just trying to scrape by.
Edsall is focused here on “inclusive capitalism,” a theme first articulated some years ago that is now emerging in respectable circles in several developed countries and most recently in a joint paper co-authored by Lawrence Summers et al. Edsall:
The most damaging contemporary American trend that the proposals seek to counter is the sharply declining share of national income flowing to labor, and the parallel increase in the share flowing to owners of capital.
He includes a chart produced by the White House.
The forces of greed have done a number on the Rest of Us, including purchasing the best Congress money can buy. Our putative legislative representatives can hardly turn down a proffered quid pro quo from their wealthy benefactors, who extract lower taxes, unfavorable conditions for labor, and generally lax regulatory schemain ex—change for pouring dollars into electoral campaign coffers.
However, academic papers and policy prescriptions rarely trigger effective change. Facts and reasoned arguments enjoy little status among the ranks of the bubbas, to use Mike Huckabee’s vernacular. And the bubbas are winning, with the nation awash in red.
Michael Kinsey, writing for Vanity Fair, points the finger back at us. Congress, state legislatures, and governors’ mansions are red because we are red, if you will. We, though not you or I, put these people in power. Moreover, the discord rampant in the halls of Congress, for example, mirror the present state of the body politic. He writes:
Of course, as many have pointed out, the bitterness, ugliness, and stupidity wouldn’t exist if the voters didn’t respond to them. And the bitterness, ugliness, and stupidity seem slightly, shall we say, unhinged from any particular complaint about what the government does and does not do. Americans have turned all their substantive complaints into one big procedural complaint: Washington (or Obama, or Congress) spends too much time bickering. But it takes two not to bicker. People bicker because they disagree, and the voters themselves are the ones who decide how much bickering they want. The politicians don’t bicker for exercise. They do it to please the voters, who have offered no sign that they are willing to give in on issues that are important to them in order to reduce the bickering.
The United States writ large is decidedly liberal, as attested by Obama’s victories at the polls. But there are these things called states and counties, which divide people into political and cultural tribes. There is very little in common between Vermont, say, and Mississippi or Washington and Texas. And, oddly enough, most of the nation’s population resides in urban centers that are socially and environmentally progressive. If we who live in these areas vote, we overwhelm the bubbas on issues decided across political divisions. However, there are more bubbavilles than Seattles and Bostons. So they compose the majority in most states.
The Republican Party has managed to marry the land of “God, guns, grits, and gravy” with the plutocrats. That marriage presently trumps urban progressives.
Ironically, the solution may be found in the hackneyed 60’s expression: think globally, act locally. In the context of this essay, focus on the cities to achieve desired outcomes. Keep urban wealth and production close to home, but make sure that it’s distributed fairly within metropolitan boundaries. Relying on bubbas is a fool’s errand.