WHY WE MUST END UPWARD PRE-DISTRIBUTIONS TO THE RICH
You often hear inequality has widened
because globalization and technological change have made most people less competitive,
while making the best educated more competitive.
There’s some truth to this. The tasks
most people used to do can now be done more cheaply by lower-paid workers
abroad or by computer-driven machines.
But this common explanation overlooks
a critically important phenomenon: the increasing concentration of political
power in a corporate and financial elite that has been able to influence the
rules by which the economy runs.
As I argue in my new book, “Saving
Capitalism: For the Many, Not the Few” (out this week), this transformation has
amounted to a pre-distribution
Intellectual property rights—patents,
trademarks, and copyrights—have been enlarged and extended, for example,
creating windfalls for pharmaceutical companies.
Americans now pay the highest
pharmaceutical costs of any advanced nation.
At the same time, antitrust laws have
been relaxed for corporations with significant market power, such as big food
companies, cable companies facing little or no broadband competition, big
airlines, and the largest Wall Street banks.
As a result, Americans pay more for
broadband Internet, food, airline tickets, and banking services than the
citizens of any other advanced nation.
Bankruptcy laws have been loosened
for large corporations—airlines, automobile manufacturers, even casino magnates
like Donald Trump—allowing them to leave workers and communities stranded.
But bankruptcy has not been extended
to homeowners burdened by mortgage debt or to graduates laden with student
debt. Their debts won’t be forgiven.
The largest banks and auto
manufacturers were bailed out in 2008, shifting the risks of economic failure
onto the backs of average working people and taxpayers.
Contract laws have been altered to
require mandatory arbitration before private judges selected by big
corporations. Securities laws have been relaxed to allow insider trading of
CEOs now use stock buybacks to
Originally appeared at: http://robertreich.org/post/129996780230