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Taking On Inequality

In December, I wroteabout Robert Greenwald's attempt to mobilize outrage against GildedAge-like inequality and the hedge-funders with his War on Greedseries of short films. Now, another creative effort is being led by theService Employees International Union, with July 17 protests scheduled in 100 cities in twenty-five countries.

Stephen Lerner, the director of the SEIU's private equity project, toldthe New York Times, "We think the buyout industry and the way it operates are systematicof what's wrong in this economy. We want to make them responsiblecorporate citizens."

The SEIU is focused on the Carlyle Group and Kohlberg Kravis Roberts,and how they game the systemto take over companies with little of their own money, lay off workers,reap the profits when they resell, and pay a lower tax rate than theirown secretaries do.

Katrina vanden Heuvel

June 6, 2008

In December, I wroteabout Robert Greenwald’s attempt to mobilize outrage against GildedAge-like inequality and the hedge-funders with his War on Greedseries of short films. Now, another creative effort is being led by theService Employees International Union, with July 17 protests scheduled in 100 cities in twenty-five countries.

Stephen Lerner, the director of the SEIU’s private equity project, toldthe New York Times, “We think the buyout industry and the way it operates are systematicof what’s wrong in this economy. We want to make them responsiblecorporate citizens.”

The SEIU is focused on the Carlyle Group and Kohlberg Kravis Roberts,and how they game the systemto take over companies with little of their own money, lay off workers,reap the profits when they resell, and pay a lower tax rate than theirown secretaries do.

I called closing this tax loophole that allows mega-billionaires to betaxed at 15 percent–lower than most working Americans–a litmus testfor Democrats on whether the party stands for working people, andleading Senate Democrats failed.

The good news is that Democratic presidential nominee, Senator BarackObama, quickly spoke outagainst the decision by Democratsnot to take on the loophole after more than twenty lobbying firms worked topreserve it. At the time the campaign issued a statement saying, “Ifthere was ever a doubt that Washington lobbyists don’t actuallyrepresent real Americans, it’s the fact that they stopped leaders ofboth parties from requiring elite investment firms to pay their fairshare of taxes, even as middle-class families struggle to pay theirs.When I’m President, the American people won’t have to spend recordamounts on lobbying to get their voice heard in Washington. I will closetax loopholes for big corporations….”

But it will take a lot more than closing an obscene tax loophole toreverse thirty years of tax cuts for the rich, union-busting, andderegulation that promoted corporate interests at the expense ofconsumers–all of this bankrolled by conservatives and corporations toinstill blind faith in the market as a magic elixir that can solve anyproblem.

The result is that we now live in a Second Gilded Age. (And The Nationwill hold a name Name Our Epoch! contest starting next week. The winnerwill be selected by our all-star progressive panel of judges–historianHoward Zinn, journalist Barbara Ehrenreich and novelist Walter Mosley.)The richest 1 percent of Americans currently hold wealth worth nearly$16.8 trillion, $2 trillion more than the bottom 90 percent. Accordingto the Center for American Progress, since 1979 the average income for the bottom half of American households has grown by 6 percent. In contrast, the top 1 percent of earners have seen their incomes rise by 229 percent during that same period.

With less money available, Americans are forced to make toughchoices on how to spend diminishing disposable incomes. The largestincreases in consumer spending between 2006 and 2007 was on necessities:fuel, food staples, and medical bills. Medical bills now account foralmost one-fifth of average family income. The divide is so huge, theWall Street Journal now dedicates a full-time reporter to cover what thereporter calls “Richistan.”

In January 2007, Congressman Barney Frank said dealing with incomeinequality was his top priority as chairman of the House FinancialServices Committee. He summarized the impact of conservative,free-market ideology run amuck this way: “The rising tide lifts allboats has always been a problem. If you think about that analogy, therising tide is a very good idea if you have a boat. But if you are toopoor to afford a boat and you are standing tiptoe in the water, therising tide goes up to your nose.”

Next week, The Nation will publish a special issue on income inequality,exploring how rising extreme inequality is undermining our common good. It will include a 12-step blueprint for action for citizens and smartelected officials who care about reducing concentrations of wealth,reducing poverty and rebuilding our infrastructure.

Those who believe in the promise of this country–that more perfectunion–need to advance, unflinchingly, a program that explicitly aimsto reduce concentrated wealth and power. Early this spring, a nationalcoalition of organizationsput forward a bold set of proposals to cut poverty in half over the next decade. But this effort may well go nowhere so long as concentrated wealth defines our nation’s political and spending priorities. Until we seriously tax the holders of thatextreme wealth (the upcoming issue reminds people that under RepublicanPresident Dwight Eisenhower the highest marginal tax rate was 91percent, compared to the current 35 percent) we’ll lack the fundingresources necessary to undertake any bold poverty-fighting, middle-class promoting, initiative.

Be sure to read The Nation‘s special upcoming issue. And on July 17, be a part of SEIU’s Take Back the Economy effort.

Katrina vanden HeuvelTwitterKatrina vanden Heuvel is editorial director and publisher of The Nation, America’s leading source of progressive politics and culture. She served as editor of the magazine from 1995 to 2019.


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