What? You didn't know that? Well, certain "professional" economists have proved it is true.
You may wonder, when you drive around your town, why formerly occupied strip malls lie abandoned, and the only local businesses are Cash-For-Gold, Payday Loans, Dollar Stores, and tattoo parlours. You may ignore the people standing near freeway exits with signs begging for work or money (these have exploded where I live), or the people rolling around shopping carts with all their worldly possessions, or the people living in their cars. It's all an illusion. Detroit? Chicago? Merely a mirage.
You may wonder at all the empty, shuttered factories, or the fact that the Wal-Mart Super Store is the town's biggest employer, or that "help wanted" signs seem to appear only in the local Arby's or Home Depot (or my favorite "owner operators wanted"). You may puzzle at the foreclosed homes stripped of copper and being overgrown with weeds that litter towns from coast to coast. The entire neighborhoods that lie empty and abanadoned? Another mirage, silly. The crumbling roads and local governments "tightening their belts?" Not happening.
Not happening. Nope, none of it.
You may have heard stories about people thirty or forty years ago with high-school educations being able to get jobs that supported families, allowed them to buy a house and save money. You may have heard about people able to save up enough to go to college by just working a summer job. You may have heard of people twenty or thirty years ago with full-time jobs that had benefits such as paid vacations and health care, which are now being stripped away job by job. You may have heard about something called a "union."
False. All false. The world is getting more equal every day thanks to globalized corporate capitalism. The economists told me so.
You may even know people who have lost their job and are unable to find another one because employers discriminate against the unemployed. You may know someone with huge debt burdens because the cost to train workers is borne entirely by the workers themselves, and you have to go tens of thousands of dollars into debt just to get a job at all. Or you may know someone who was foreclosed upon, or drowning in debt due to an unforeseen circumstance or medical emergency. You might know people who've had to take jobs with much lower pay and benefits than the ones they had before. You may know people working brutally long hours, or denied extra work time so that they don't qualify for health care benefits. You may know people who have used food stamps to feed themselves or their families, even though they work full time jobs. You may know older people who have to work because they can't afford to retire.
They all deserve it. All of them. They're all lazy. Laziness has exploded since 2008, don't you know. Everyone gets exactly what they deserve. It's never been better time to be a worker under capitalism.
You may look on the outrageous fortunes spend by the rich and conclude that they are reaping more and more benefits by breaking wages and shipping jobs overseas. Don't you believe it! Their riches are making everyone better off. Just look at Bill Gates! He gives money to poor people in Africa. And Steve Jobs. He invented the iPod in his basement, or something. Soaring CEO salaries are great. The bailouts were all paid back. And the soaring stock market prices will make everyone rich! Don't worry about the costs for food, housing, education and transport. The "free market" will take care of it all and unleash abundance, but only if the "job creators" don't have to pay taxes. Those trust fund kids getting unpaid internships and getting jobs downtown - that's just a natural part of capitalism, it has nothing to do with inequality. The fact that entire cities are unaffordable for people making less than six figures? College and health care costs? Forget about it. Nothing to do with inequality, which, by the way, has been going down, not up. Besides, even if it were going up, inequality doesn't matter, what matters is that life is getting better even for people even at the bottom. They love being in debt and working for minimum wage! And besides, the life for the average person is getting better and better the more riches the wealthy and powerful accumulate. After all we have smart phones. SMART PHONES!!!
All those people protesting around the world? They just don't understand capitalism.
You may even have read books and articles asserting that we are a "winner-take-all" economy, a "servant economy," or something like that. Not true! Those books and articles were all written by "leftists" and "liberals" who don't understand science and statistics. Articles like this are just sensationalism by liberals who hate our freedom:
76% of Americans are living paycheck-to-paycheck (CNN)
The Middle Class Is Steadily Eroding. Just Ask the Business Community (NYT)
The Financial Vulnerability of Americans (House of Debt)
Employment Down, Profits Up: The Aftermath of the Financial Crisis in 1 Graph (The Atlantic)
‘Happy Days’ no more: Middle-class families squeezed as expenses soar, wages stall (Wall Street Journal)
A Dozen Facts about America’s Struggling Lower-Middle-Class (Brookings)
America’s Sinking Middle Class (NYT)
Why So Little Media Coverage of How the Rich Are Becoming Richer and the Middle Class Wages are Being Squeezed? (Naked Capitalism)
RIP, the middle class: 1946-2013 (Salon)
Yep, Being a Young, American Adult Is a Financial Nightmare (The Atlantic)
Ripping Off Young America: The College-Loan Scandal (Rolling Stone)
Median CEO Pay Just Topped $10M for the First Time (Slate)
Upgrade or Die (George Packer)
San Francisco’s Income Inequality Rivals that of Developing Nations (Vanity Fair)
Gap Between Rich And Poor In Manhattan "Rivals Sub-Saharan Africa" (Gothamist)
How did the economists come to this conclusion, you ask? Well, Piketty made a few spreadsheet errors. And thanks to that, the professional economist caste can breathe a sigh of relief that all of the things I named above don't exist, and happily go back to their blackboards and spreadsheets in their corporate-funded free-market think-tank cubicles and university offices.
Because inequality is entirely dependent upon r being greater than g. That is, the rate of return to capital (yes, let's just argue about what constitutes "capital," that will make this whole thing go away), must be greater than g, the rate of growth of the economy. Because, heaven knows, it's not like workers could ever get paid less than the growth of the economy, right?
Because of this focus, Piketty may have unwittingly set back the arguments about inequality in this country and around the world.
Now every smug libertarian and right-wing FOX News listener can simply say "Piketty was wrong!" and with that phrase, wave away all inequality in America at a stroke. All of the things above don't exist. Yes, that's right, they don't exist. There was an error in Piketty's data series. His 600+ page book is totally discredited. Stupid liberal!
Outsourcing, H1B visas, insourcing, mass immigration? Doesn't exist. Union-busting? Doesn't exist. Wage theft? Doesn't exist. Unemployment? Doesn't exist. Soaring college tuition as a tollboth to the middle class? Doesn't exist. Gentrification and home foreclosures? Don't exist. A decent education being based on your ZIP code? Doesn't exist. Most new jobs being minimum wage jobs? Doesn't exist. Wal-Mart and McDonalds as the nation's largest employers? No longer true. CEO's and corporations buying politicians and getting millions in raises every year in good times and bad? Not happening. Lower tax rates on capital gains than income, offshore tax havens, loopholes, and major corporations getting rebates instead of paying taxes? Don't exist. Come on now, as Groucho said, who are you going to believe, me or your own lying eyes?
Things like social democracy and decent working conditions? All irrelevant. It's all about r > g. End of story.
What really pisses me off about the whole debate is that it just boils down to an intellectual argument among the wealthy chattering classes in their privilege bubble about whether "inequality" as an abstract concept is a good or a bad thing without acknowledging that the country is rapidly turning into a shithole for most people. It doesn't acknowledge the increasing desperation and hopelessness of Americans living in a disintegrating society, which can be easily be seen in our political debates. Instead it's all reduced to an abstract mathematical equation, because for economists nothing exists with some abstract theory about the Market to back it up.
Who gives a fuck if r is greater than g? The damn country is falling apart!
Piketty made an error taking about inequality. He broke from the high priesthood of economics. He didn't understand that the entire purpose of economics is to rationalize the arrangements of the modern world. To justify the divine right of capital and the job creators. To perpetrate the all-knowing and perfect nature of the Market, and to rationalize away it's capriciousness and growing impoverishment of the masses through mathematics and sophistry.
He turned on his masters. And for that, he is a modern-day Giordano Bruno, being symbolically attacked and burned at the stake. There are some things you simply don't say. Reinhart and Rogoff told the wealthy and powerful what they wanted to hear, and their work was taken as gospel and used to set actual policy around the world until their spreadsheet errors were uncovered by a graduate student who wasn't even trying to prove them wrong. In contrast, Piketty, whose work is not and will not be used to set policy, has been attacked from day one by the economic gendarmerie of the the wealthy and powerful (and still the errors they found were minor). Yet economics still claims to be a "science" and not a sophisticated propaganda operation. As a commenter to one of the links below noted:
"But I suspect the opponents to Piketty did win, in the sense of accomplishing their objective. They've now created an atmosphere in which those who would prefer to say that inequality is not a problem can claim that "the facts are in dispute", "even economists disagree", "Piketty cherry-picked his data", etc., and even if most of the issues raised are red herrings (which was my impression on reading some of the back-and-forth, it doesn't matter. They've done enough to cause the low-information reader/voter to throw up his hands and say "the experts don't agree". Cf climate change."Now that the usual suspects can write off his book, they can airbrush away all inequality. It doesn't exist. It's all a figment of your imagination. The economists told me so.
Everything You Need to Know About Thomas Piketty vs. The Financial Times (NYT)
That Old-Time Inequality Denial (Paul Krugman)