With the rekindling of Black Lives Matter, there has been a flurry of articles about structural inequality in the USA. Many quote the statistic of median family wealth for white and black families, with whites up in six figures and blacks essentially at zero. I am also struck by the extent of the historical abuses, not just the well-known Jim Crow ones but more recent restrictions of housing zones and job biases.
The debate is eye opening and makes me weep. As a European, I am also reminded of discrimination in my own country, obvious while I was a child but still in existence in much of society. It is past time to fix this.
The Economist occasionally tries to defend the policies of the last forty years by demonstrating how inequality in developed countries has been broadly static, as measured by the share of income and wealth of the top 1% or 5%. This may be true, but it is far from acceptable. From before the days of Downton Abbey, inequality of opportunity has been a scourge, and the period from 1945-80 was exceptional in enacting policies to reduce it. The fact that inequality has been static since then shows how policy has been ineffective; anything less than a gradual decline is a calumny.
Inequality is often portrayed as a race issue, but I think this is another simplification. It is worse than that. I have not read Casteby Isobel Wilkerson, but her basic premise is that societies remain stratified, with many layers. Yes, most African-Americans are near the bottom, but there are other factors in play, and focusing solely on race may lead to suboptimal remedies.
Focus on race also gives an uncomfortable argument to racists. Most Asian Americans and Jews also arrived in America with nothing and were discriminated against, yet these groups have largely escaped poverty. It is a good question as to why, because putting similar conditions in place for groups that have not escaped might be good policy, but the question can drift into racist territory. Thinking of castes can help.
There is no doubt that the Trump administration has damaged the cause of equality like few before it, and they fully deserve their comeuppance from the pandemic and race protests, hopefully throwing them out of office soon. But there is a lot of shoddy journalism on this topic like so many others.
It is shoddy to equate the equality issue with race. It is shoddy to define equality of outcome as a goal, when equality of opportunity should be the true measure. And many are shoddy in analyzing which neo-liberal nationalistic policies are the worst culprits.
A great example was in Time a couple of weeks ago. They tried to come up with a list of the administration’s ten most damaging actions regarding (poorly defined) equality. I can only assume this was delegated to some kids on a Friday afternoon. The list was a perfect example of how The Economist is superior when it comes to rigorous numerical analysis. The list included a decision to outlaw Trans people from the military, but failed to mention the 2018 tax package. The former was indeed a terrible choice, but the impact on equality is surely minimal given the number of people affected. The latter affected everybody, significantly and in a lasting way.
So I have tried to make my own list. Arguably I have cheated in that I have included inactions as well as actions. I have also not made big efforts to quantify impacts. Nonetheless, an incoming administration might use the list when defining its policies to restore the necessary trend towards equality of opportunity.
The tax package must be number one. Reagan (and Thatcher) rebalanced fiscal policy away from equality. At least in Europe future governments have been more balanced, but in the US Bush 43 added fuel to the fire and Trump’s only legislative accomplishment set things ablaze further. The impact has been to allow the already wealthy to take rent from the economy, embedded inequality, removing resources for a generation from other reforms and even stifling consumption and growth.
My number two is also a tax matter, but more specific. The main reason that wealth inequality persists across generations is the effective absence of an estate tax. Bush/Cheney did an impressive job of gutting estate taxes in the US, by reframing them as death taxes. It is true, that is what they are, but surely kids of wealthy people have enough advantages already without allowing them to simply inherit the wealth of their parents. I think I would set estate taxes for inheritances above $1 million at close to 100%, and eliminate foundations and other loopholes too. Use it or lose it.
My third item is also an omission and relates to gun control. Every so often an incident, usually a school shooting, offers an opportunity to enact gun reforms, not to eliminate hunting rifles, but to strengthen background checks, eliminate weapons of war and enact an effective register. Trump missed his chance after Parkland, because many of his party remain wedded to the NRA. And we always equate this is issue with white school kids, while the overwhelming majority of victims are from poor black neighbourhoods. Tackling gangs without tackling guns cannot be effective, and reforming the police would be much easier if the streets were not full of guns. It is easier not to be trigger-happy and to avoid unconscious racist profiling if you are not in fear for your life.
None of these three items made the list in Time. Criminal justice did, and ironically it is the area of Trump’s greatest achievement, the bill that started to correct the ridiculous levels of incarceration in the US. How can a black community hope to create any wealth while so much of its male population is behind bars?
Next on my list comes housing, and once again it is a sin of omission. Eviction Remains one of my favourite books, and 2021 will see a terrible tide of evictions across the US as temporary programs taper off while unemployment continues to rage. Housing support is criminally underfunded by congress while city rents continue to skyrocket and little new public housing is constructed. Minimum wages are creeping up in some cities but are full of loopholes, most notably for tipped workers, whose minimum wage in some states remains around $2 per hour. It is hard indeed to escape poverty in these conditions. More subtly, I believe co-ops are a source of continuing racial bias.
There are many candidates to round out the list. Perhaps next would come the relentless prioritisation of capital over labour. Consumer rights have been gutted, and the stock market used as an awful proxy for growth. The stock market makes people with wealth wealthier, at the expense of those without. It should not grow faster than median earnings, but that has almost been a policy of the administration. Listen also to McConnell: his top priority in the next relief package is liability protection for businesses. It is a valid item, but it betrays his priorities – the donors and lobbyists he meets every day, rather than the struggling people he doesn’t.
The list must include failure to rebalance school finance per pupil so that poorer areas do not lose out compared to richer ones. The lack of any infrastructure investment harms the poor most, especially public transit and Internet availability. We must also include allowing the number of people without health insurance to grow and the attempt to link Medicaid with employment.
Packing the Supreme court, bloating the military (as opposed to social programs), protecting clannish religions, the trade disaster (harming poorer consumers), linking immigration entitlement to wealth and the general incompetence of the virus response could all the added to the list. And then there is the rhetoric, stoking caste supremacy daily.
The list is long and reform will take many generations. But crafting good policy is not helped by poor framing of the issue, misstating the goal or woefully lazy lists.
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