04/27/2014 10:33 pm ET Updated Dec 06, 2017

Extreme Inequality: Is the Market Rigged or Fair?


By: Mark Green


With three best-sellers saying markets are rigged -- Piketty, Warren, Lewis -- Shrum & Lowry debate economic and then racial inequality. Can tax policies mitigate a 400-1 ratio of top to average pay? 4000-1? Does bias against blacks = against whites, per Roberts Court?

Economic Inequality: On Piketty's Capital. What do our panelists think of Krugman's comment that this Amazon #1 is a "eureka" moment that'll permanently change the way we view economics and politics?

Bob agrees that it's a major book whose analysis of our new Gilded Age could lead to a TR-Wilson next progressive era. And critics trying to marginalize him as Marxist are wrong since Das Capital thought that "excessive returns on capital were self-destructive not self-perpetuating."

Rich doesn't contest Piketty's empirical conclusions about levels of inequality but thinks that a) it's fanciful for him to predict 100 years into the future, b) he exaggerates the level of immobility since Gates. Buffetts, and hedge-funders didn't inherit their wealth and c) in any event, inequality is the result of market forces and enot eternal.

Bob pushes back, citing studies showing immobility in the US to be worsening and blaming a decline in unionization and taxes on the rich (along with compliant boards of directors) as contributing factors. Lowry is asked: since top-to-average wages were 40-1 in the 50s and 400-1 today, would it bother you if it went to 4000? Any level bother you? He replies that that can't and won't happen in dynamic capitalism and, in any event, higher taxation on the super-rich can always be evaded by shrewd accountants and tax lawyers.

Lowry argues that if you care about inequality better to talk more about education, family structure, training. Then he puckishly asks -- do liberals ever reject a better paying job because it contributes to inequality? Shrum jumps through the microphone: "that's a ridiculous comparison." Of course an economy will have some inequality but the issue is massive inequality afflicting entire classes of Americans. And it's not either/or - more tax revenue from the super-rich can fund better education and safety net programs helping families cope.

There's agreement that anti-equality policies like tax hikes on the top .1%, increases in capital gains rates or a small financial transactions tax that could generate hundreds of billions can't now happen because of GOP instransigence. But what if it became a political issue in 2016 or beyond - could a ground-up reaction turn the impossible into the inevitable? Bob hopes so and thinks so, citing Obama's win over Mr. 47% as one example.

What about the Princeton Study of 1779 policies showing that economic elites invariably defeated average citizens despite 80% majority sentiment on climate, minimum wage, immigration, gun safety, single-payer etc. We losing our democracy? Rich thinks that conclusion silly since, when Democrats had a working majority in 2009-2010, they did enact significant progressive legislation

Host: Piketty should chime in here. He wrote that only economic ideology could conclude that paying $10-50 million annually is necessary to motivate CEOs when $5 million would probably do the job. Piketty also notes, dryly, that trickle-down economics might have worked, but didn't.

Two things now hold back a new populist electoral tide. As argued previously in this blogpost,, the money unloosened by Citizens United and now McCutcheon can be a circuit-breaker interrupting how votes not dollars guide policy. Also, metaphors matter. Remember how "dominoes" paralyzed thinking about the Vietnam War, leading to hundreds of thousands of casualties - or how "states rights" fronted for racism and "trickle down" and "a rising tide lifts all boats" justify programs that shaft the middle class and profit financial elites.

Eventually, will a Pope asserting that "inequality is the root of all social evil" and the reality of one percent grabbing 90 percent of all income gains - and one party urging yet more tax cuts for the rich even as inequality worsens -- motivate average voters to be driven more by facts than phrases? Happened before.

Racial Inequality: On Affirmative Action Decision. We listen to LBJ's famous observation 50 years ago that you don't take the chains off someone and then tell them to hobble to the starting line along with everyone else...and to Charles Krauthammer say that we can't have affirmative action in perpetuity.

Rich agrees with the majority in the 6-2 Court decision allowing a referendum to ban affirmation action in Michigan because the 14th Amendment sanctifies equality not inequality, or as Chief Justice John Roberts put it, "the way to end discrimination by race is to end discrimination by race."

Shrum counters that that phrase glibly ignores 300 years of slavery, a Civil War, Jim Crow. While affirmative action by race can't be in perpetuity, it is necessary to undo the affects of this history, which Justice O'Connor earlier had thought might last another 25 years...though her replacement, Justice Alito, surely doesn't

Now what? States that previously prohibited affirmative action saw dramatic declines in minority enrollment in their public universities. Rich says that is no longer the case in California and that criteria valuing extra effort in disadvantaged communities could work to get the diversity everyone wants.

Last: Bob says court rulings previously concluded that it violates the 14th Amendment to eliminate some preferences, like affirmative action, while keeping others intact like athletic scholarships and alumni legacies...not to mention the irony of those opposed to programs for racial minorities citing the great Civil War Amendment designed to help African Americans. And Rich notes how Justice Sotomayor's scathing dissent never mentioned Asian Americans perhaps because they'd be hurt by racial preferences that keep their numbers down in higher education. Bob answers: that's a sad political argument to try win back immigrants offended by GOP anti-immigrant policies.

Quick Takes: Consensus on Ginsberg, Bundy and Lying. After such sharp earlier disagreements, there's a three-for-three consensus!

The two agree that it'd be ok for 83 year-old Justice Ginsburg to time her retirement to make it more likely that a simpatico president would get appoint her successor. Rich adds that, given her liberal philosophy, she should do it right away before the Senate turns Republican and 2017 when there could be a Republican President. Question for Rich: would Senate GOP really have the cajones to filibuster an Obama nominee to succeed Ginsburg for two years? "Well, two years would be a long time..."

There's no debating Cliven Bundy's comment that "the negro" was better off in slavery than now. But why did Fox News and some leading Republicans adopt him and his cause? Rich allows that it's legitimate to question BLM policies generally but not in Bundy's case since "he didn't have a leg to stand on" when it came to taxes owed under existing rules about grazing on public land. "And the rule of law is a core conservative principle."

Bob thinks it exceedingly dumb for some leading conservatives to align with a wacko like Bundy against "jack-booted authoritarians" (Cruz).

Host: Let's stipulate there are nuts in all parties. But do we often or ever see a Democratic senator embrace, say, Truthers who blame Bush for 9/11? How come? The problem for the GOP is not that its base includes some nuts but millions of them who have bought into birtherism and climate denialism and racism. (Of course it's as ridiculous to imply that this is true of all or most Republicans as to deny it's true of many.) So Fox can't resist citing Bundy 400 times in April - and remember their early assaults on Shirley Sherrod -- seeking ratings and revenues. Note: mainstream conservatives at National Review and Weekly Standard did not embrace Bundy pre-racist rant.

Again consensus: while it'd be nice to prohibit lying in elections, Justices Shrum and Lowry agree that it's impossible to figure out standards and who decides. Criminalizing politics isn't left or right but truly nutty.

Mark Green is the creator and host of Both Sides Now.

You can follow him on Twitter @markjgreen

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