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What's not to like about The Republican Tax Bill

December 10, 2017

Tags: income inequality, labor unions, competition, automation

I asked Wise Elder what he thought of Your financial shock wealth: Understanding money, inequality, and why the tax bill is important by Yonatan Zunger. He replied:

Overall it makes sense.* The tax bill is indeed a naked power grab by the wealthy and powerful to become even more wealthy and powerful, even though they tell us (and themselves) they are doing it for our own good. I was surprised that he didn't say anything thing about the role of unions in the reduction of inequality between 1945 and 1970; the unchallenged economic power of the US at a time when Europe and Japan were prostrate was the main factor, but the unions helped make sure that a lot of the benefit went to labor.

The thing that changed in the '70s was mainly the competition from our recovered allies. Hardly anyone owned a Toyota before then, now American cars are hard to find in our neighborhood. A huge part of the effect on inequality was that capital was free to move overseas or partner internationally whereas labor was tied to its homeland. So that seems more like a matter of unequal ability to take advantage of an opportunity than weather a shock, but maybe it amounts to the same thing.

Ironically, the communities hardest hit by globalization and automation were rural ones that had previously gained strength from their traditional close ties (people who were related and shared religion and history) were most vulnerable in a new world that values flexibility and rootlessness. The vaunted strength of the miners' unions stemmed in part from the fact that fathers and sons worked together, so solidarity was instinctive.

The dismay at seeing this slip away mixed with xenophobia led to blaming trade deals and immigrants when automation was more responsible. This led to voting for Trump. Trump and the GOP for decades before him also masterfully played on social conservatism to reinforce this but in the end created an unstable coalition. How this will play out once the rubes realize they have been had is unclear. In the absence of leadership from the Democratic Party, and they have shown very little so far, the disaffected may turn to outright fascist forces being whipped up by Bannon et al.

*The writing is annoyingly imprecise at points. I know Stokes' Theorem - that's not Stokes' Theorem.


  1. December 10, 2017 2:53 PM EST
    The next step will be cuts in all the social programs that will hit seniors, working class, minorities. As long as the Democrats are tied to Wall St., they will not provide the muscle in the opposition. Chuck Schumer is the Senator from Wall St.;and our Senator (Cardin) supports Trump's explosive decision to move our embassy in Israel..and he's the Senior Dem. on Foreign Relations Committee! Dem. Party needs a Elizabeth Warren or Bernie Sanders.
    - Mark Berman
  2. December 10, 2017 9:07 PM EST
    Also important: Global Peoplesí Movements Stop the TPP (Citizens Trade Campaign, working together for social and environmental justice in trade policy).
    - JG