Home > Uncategorized > Piketty et al. and Trumpism

Piketty et al. and Trumpism

from Edward Fullbrook

It seems generally agreed that populism tends to rise up after a prolonged period in which governing elites have blocked from public discussion the declining economic welfare of a significant proportion of the population. These declines take two forms, usually simultaneously and interdependently:

  1. A decline of income and wealth in absolute terms and/or relative to the elites and their agents.
  2. A decline in key characteristics of employment through time (quality, security, real and relative wage levels) creating persistent high level of unemployment.

Though the latter is interdependent with the former, the real level of unemployment can be hidden. Elected elites and their patrons have a strategic interest in holding back public awareness and discussion of both declines for fear of losing elections and for fear that the upward redistributions of income and wealth will be stopped or even reversed.

Until three years ago the ruling elites in the United States were extremely successful at keeping the severe upward income and wealth redistribution that had been “progressing” since the early 1970s out of public view. GINI coefficients and graphs showing from 1970 onwards median income levels and relative shares of the bottom 90% and bottom 50% were never part of public discussion and but rarely of economics. Instead income discussion focused tightly on GDP and GDP per capita, which with rare exceptions increased year by year.  

True, from the early 2000s the Real-World Economics Review featured numerous papers calling attention to the long-term upward redistributions taking place in the United States, and in other venues Saez and Piketty did the same. But it was not until the publication of Piketty’s empirical blockbuster, Capital in the Twenty-First Century, that a substantial hole was opened in the public wall of silence regarding the 40-year relative income and wealth decline of a large proportion of the American population in particular. This cultural breakthrough has made it marginally acceptable for the declining fortunes of the majority of citizens to be mentioned in corporate media and even in some neoclassical journals. Without Piketty’s book the rise of Trumpism would have been for our era’s overriding neoliberal narrative even more of an unexpected and inexplicable historical phenomenon.

from Trumponomics: Causes and Consequences

  1. Nancy Sutton
    July 21, 2017 at 4:14 pm

    Piketty/Saez … and maybe ‘Occupy Wall Street’… “1% vs the 99%” created a dramatic ‘picture’ in the average mentality that enabled the obvious to be ‘seen’.

    • Mark Johnson
      July 21, 2017 at 6:49 pm

      Yes, it was definitely the Occupy Movement even more than Piketty, that put inequality in the public conversation. I suppose that is why it was suppressed by all levels of government.

  2. July 21, 2017 at 5:03 pm

    And one of the more laughable dynamics from the late phases of this great maldistribution of income and wealth – laughable if it was not also at the same time of intensifying cruelty – is the notion that as GDP and Productivity growth stall in the West – the answer surely must be even greater financial incentives to try to get the “producers” …in the “mood” to invest here as opposed to “over-there.” At the same time, the desperation to get the economy growing more robustly also serves to blot out any consideration of the ecologically destructive manner of the means – and the ends. Trumpism being the logical, increasingly absurd culmination of these tired old Neoliberal tropes.

    • July 22, 2017 at 8:05 pm

      Yes, thank you. And we know that the progression soon reaches government troops tutning on their own populations.

      Your second to the last sentence is a good outline for a good fiction story. I promise to read it if you write it.

  3. July 24, 2017 at 5:55 am

    “Until three years ago the ruling elites in the United States were extremely successful at keeping the severe upward income and wealth redistribution that had been “progressing” since the early 1970s out of public view.”

    This may be correct for economists. But for “ordinary working stiffs” it is not. In work with labor unions, community centers, community banks, credit unions, food banks, etc. my conclusion is that most working people knew things were not right long before 2000. Many had to work multiple jobs to make ends meet, had to cut back on food or clothing spending due to shortages, were keenly aware their wages were not meeting their needs, had access to fewer and fewer good paying jobs, were forced to work only part-time, were saving less, and taking on more debt to meet ordinary living costs. This began to affect their lives significantly in the early 1990’s. And has gotten progressively worse ever since. These folks may not know all the technical names or follow the research (what little of it there is), but they know they are being abused, and they don’t like it. The real issue is that most believe there is little they can do to change the situation. George H.W. Bush promised to help them. He did not. Bill Clinton promised to help them. He did not. George W. Bush promised to help them. He did not. Barack Obama promised to help them. He tried. But the things he did were largely rejected by the people they were intended to help. In a word, then members of the so-called ‘middle-class” are angry with just about everyone now.

    • robert locke
      July 24, 2017 at 6:11 am

      Another symptom that people were well aware of was increasing private debt in credit cards subprime real estate loans, and education. Keen and some other might have got it right, but economists generally ignored it. Average jane and joe knew it, because they carried it. Economics did not even have this penetrating glimpse into the obvious. What a bunch!

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