The Sedition That Nobody’s Talking About

The sudden lurch from Trump to Biden is generating vertigo all over Washington, including the so-called fourth branch of government – CEOs and their army of lobbyists.

CEOs are being hailed – and hailing themselves – as guardians of democracy. That’s after saying they will no longer donate to the 147 Republican members of Congress who objected to the certification of Biden electors, on the basis of Trump’s lies about widespread fraud. 

Give me a break. For years, big corporations have been assaulting democracy with big money, drowning out the voices and needs of ordinary Americans, and fueling much of the anger and cynicism that opened the door to Trump in the first place.

Their assault hasn’t been as violent as the pro-Trump mob who stormed the Capitol. And it’s entirely legal. But it’s arguably more damaging over the long term.

A study published a few years ago by two of America’s most respected political scientists, Princeton professor Martin Gilens and Benjamin Page of Northwestern, concluded that the preferences of the average American “have only a minuscule, near-zero, statistically nonsignificant impact upon public policy.” Lawmakers respond almost exclusively to the moneyed interests – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

So now, in the wake of Trump’s calamitous exit and Biden’s ascension, we’re to believe CEOs care about democracy?

As Jamie Dimon, CEO of JPMorgan Chase, put it, “No one thought they were giving money to people who supported sedition.”

Yet Dimon has been a leader of a more insidious form of sedition. He piloted the corporate lobbying campaign for the Trump tax cut, deploying a vast war chest of corporate donations.

For more than a decade Dimon has driven Wall Street’s charge against stricter bank regulation, opening bipartisan doors in the Capitol with generous gifts from the Street. (Dimon calls himself a Democrat.)

When Facebook’s Mark Zuckerberg shut Trump’s Facebook account, he declared: “You just can’t have a functioning democracy without a peaceful transition of power.”

But where was Zuckerberg’s concern for a “functioning democracy” when he amplified Trump’s bigotry and lies for over four years?

After taking down Trump’s Twitter account, Jack Dorsey expressed discomfort about “the power an individual or corporation has over a part of the global public conversation.”

Spare me. Dorsey has fought all attempts to limit Twitter’s power over the “global conversation.” He shuttered Trump only after Democrats secured the presidency and control of the Senate.

Look, I’m glad CEOs are penalizing the 147 Republican seditionists and that big tech is starting to regulate social media content.

But don’t confuse the avowed concerns of these CEOs about democracy with democracy itself. They aren’t answerable to democracy. At most, they’re answerable to big shareholders and institutional investors who don’t give a fig as long as profits keep rolling in. 

If they were truly committed to democracy, CEOs would permanently cease corporate donations to all candidates, close their PACs, stop giving to secretive “dark money” groups and discourage donations by their executives.

And they would throw their weight behind the “For the People Act”, the first bills of the new Congress, offering public financing of elections among other reforms.

Don’t hold your breath.

The fourth branch is already amassing a war chest to stop Joe Biden and the Democrats from  raising corporate taxes, increasing the minimum wage, breaking up big tech and strengthening labor unions.

Make no mistake: These CEOs and their corporations don’t actually care about protecting democracy. They care only about protecting their bottom line.

I’ll save you the guesswork. On July 21, Donald Trump will become the Republican nominee for president of the United States. On July 28, Hillary Clinton will become the Democratic nominee.

Trump’s pending coronation is unsettling many Republican leaders – prompting Republican national chairman, Reince Priebus, to warn them that “if we don’t stick together as a party and stop her, then the only alternative is to get comfortable with the phrase President Hillary Clinton.” 

That’s about as enthusiastic an endorsement Trump is likely to get from the Republican establishment. 

It’s also unsettling many other Americans, some of whom will be demonstrating in downtown Cleveland to protest the nomination of a man who has gone out of his way to denigrate Latinos, blacks, Muslims and immigrants.

But barring a miracle, Trump will be nominated anyway. 

So will Clinton, whose nomination isn’t going down easily with many of Bernie Sanders’s supporters, even after his endorsement of her. 

So why have the conventions at all?

First, because they’re perks awarded to people who worked hard for candidates during the primaries — just as top sales reps in companies are awarded trips to national sales conventions. Delegates will have fun and spend money, which hotels and restaurants in downtown Cleveland and Philadelphia will sop up like dry sponges.

They’ll enjoy circulating on the convention floors for five or six hours each night exchanging gossip and business cards, hugging old friends and meeting new ones, and taking selfies.

And they’ll feel important when they hear party leaders, heads of state delegations, members of Congress and occasional celebrities tell them how critical it is to defeat the opposing party in November, how strong their nominee will be, and what makes America great.

Second, the conventions generate prime-time TV infomercials featuring celebrities, heroes and former presidents (Bush 1 and 2 say they won’t appear at the Republican one) and, most importantly, the nominee on the last night. 

All will speak about the same three themes, although Trump will talk mainly about himself. These segments will be produced and directed by Hollywood professionals and marketing specialists whose goal is to get the major networks (or at least CNN, Fox News and MSNBC) to project stirring images into the living rooms of swing voters.

The third reason for these conventions will be hidden far away from the delegates and the prime-time performers: It’s to ingratiate the big funders — corporate executives, Wall Street investment bankers, partners in major law firms, top Washington lawyers and lobbyists, and billionaires.

The big funders are undermining our democracy but they’ll have the best views in the house. They’ll fill the skyboxes of the convention centers – just above where the media position their cameras and anchors and high above the din of the delegates. And they’ll feast on shrimp, lobster tails, and caviar. 

Each party will try to make these big funders feel like the VIPs they’ve paid to be,letting them shake hands with congressional leaders, Cabinet officers and the nominee’s closest advisers, who will be circulating through the skyboxes like visiting dignitaries. If they’re lucky, the big funders will have a chance to clench the hand of the nominee himself or herself.

The three conventions — for delegates, for prime-time audiences at home and for big funders — will occur simultaneously, but they will occupy different dimensions of reality.

Our two major political parties no longer nominate people to be president. Candidates choose themselves, they run in primaries, and the winners of the primaries become the parties’ nominees.

The parties have instead become giant machines for producing infomercials, raising big money and rewarding top sales reps with big bashes every four years.

That Donald Trump, the most unqualified and divisive person ever to become a major party’s nominee, and Hillary Clinton, among the most qualified yet also among the least trusted ever to become a major party’s nominee, will emerge from the conventions to take each other on in the general election of 2016 is almost beside the point.

If Donald Trump continues to implode, Hillary Clinton will win simply by being the presidential candidate who isn’t Trump.

But the prospect of a President Trump is so terrifying that Hillary shouldn’t take any chances. The latest match-up polls show her about 6 points ahead – a comfortable but not sure-fire margin.

What else can she offer other than that she’s also experienced and would be the first woman to hold the job?

So far, she’s put forth a bunch of respectable policy ideas. But they’re small relative to the economic problems most Americans face and to Americans’ overwhelming sense the nation is off track.

She needs a big idea that gives her candidacy a purpose and rationale – and, if she’s elected president, a mandate to get something hugely important done.

What could that big idea be? I can think of several big economic proposals. The problem is they couldn’t get through Congress – even if, as now seems possible, Democrats retake the Senate.

Nor, for that matter, could Hillary’s smaller ideas get through.

Which suggests a really big idea – an idea that’s the prerequisite for every other one, an idea that directly addresses what’s disturbing so many Americans today – an idea that, if she truly commits herself to it, would even reassure voters about Hillary Clinton herself.

The big idea I’m talking about is democracy.

Everyone knows our democracy is drowning under big money. Confidence in politics has plummeted, and big money as the major culprit.

In 1964, just 29 percent of voters believed government was “run by a few big interests looking out for themselves,” according to the American National Election Studies survey. In the most recent survey, almost 80 percent of Americans think so.

And because the free market depends on laws and rules, big money’s political influence has rigged the economic system in favor of those at the top.

Which has fueled this year’s anti-establishment rebellions – propelling Bernie Sanders’s “political revolution” that won him 22 states, and contributing to Donald (“I don’t need anybody’s money”) Trump’s authoritarian appeal.

A study published in the fall of 2014 by Princeton professor Martin Gilens and Professor Benjamin Page of Northwestern shows that big money has almost entirely disenfranchised Americans. Gilens and Page took a close look at 1,799 policy issues, determining the relative influence on them of economic elites, business groups, and average citizens.

Their conclusion: “The preferences of average Americans appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” Instead, lawmakers respond to the policy demands of wealthy individuals and big business.

The super wealthy account for a growing share of both parties’ funds. In the presidential election year 1980, the richest 0.01 percent gave 10 percent of total campaign contributions. In 2012, the richest 0.01 percent accounted for an astounding 40 percent.

Adding to the cynicism is the revolving door. In the 1970s only about 3 percent of retiring members of Congress went on to become lobbyists. In recent years half of all retiring senators and 42 percent of retiring representatives have done so.

This isn’t because recent retirees have fewer qualms about making money off their government contacts. It’s because so much money has inundated Washington that the financial rewards of lobbying have become huge.  

Meanwhile, the revolving door between Wall Street, on the one side, and the White House and Treasury, on the other, is swiveling faster than ever.

Clinton should focus her campaign on reversing all of this. For a start, she should commit to nominating Supreme Court justices who will strike down “Citizen’s United,” the 2010 Supreme Court case that opened the big-money floodgates far wider.

She should also fight for public financing of general elections for president and for congress – with government matching small-donor contributions made to any candidate who agrees to abide by overall spending limits on large-donor contributions.

She should demand full disclosure of all sources of campaign funding, regardless of whether those funds are passed through non-profit organizations or through corporate entities or both.

And she should slow the revolving door – committing to a strict two-year interval between high-level government service and lobbying or corporate jobs, and a similarly interval between serving as a top executive or director of a major Wall Street bank and serving at a top level position in the executive branch.

Will Hillary Clinton make restoring democracy her big idea? When she announced her candidacy she said “the deck is stacked in favor of those at the top” and that she wants to be the “champion” of “everyday Americans.”  

The best way to ensure everyday Americans get a fair deal is to make our democracy work again.

Third parties have rarely posed much of a threat to the dominant two parties in America. So how did the People’s Party win the U.S. presidency and a majority of both houses of Congress in 2020?

It started four years before, with the election of 2016.

As you remember, Donald Trump didn’t have enough delegates to become the Republican candidate, so the GOP convention that summer was “brokered” – which meant the Party establishment took control, and nominated the Speaker of the House, Paul Ryan.

Trump tried to incite riots but his “I deserve to be president because I’m the best person in the world!” speech incited universal scorn instead, and he slunk off the national stage (his last words, shouted as he got into his stretch limousine, were “Fu*ck you, America!”)

On the Democratic side, despite a large surge of votes for Bernie Sanders in the final months of the primaries, Hillary Clinton’s stable of wealthy donors and superdelegates put her over the top.

Both Republican and Democratic political establishments breathed palpable sighs of relief, and congratulated themselves on remaining in control of the nation’s politics.

They attributed Trump’s rise to his fanning of bigotry and xenophobia, and Sanders’s popularity to his fueling of left-wing extremism. 

They conveniently ignored the deeper anger in both camps about the arbitrariness and unfairness of the economy, and about a political system rigged in favor of the rich and privileged.

And they shut their eyes to the anti-establishment fury that had welled up among independents, young people, poor and middle-class Democrats, and white working-class Republicans.

So they went back to doing what they had been doing before. Establishment Republicans reverted to their old blather about the virtues of the “free market,” and establishment Democrats returned to their perennial call for “incremental reform.”

And Wall Street, big corporations, and a handful of billionaires resumed pulling the strings of both parties to make sure regulatory agencies didn’t have enough staff to enforce rules, and to pass the Trans Pacific Partnership.

Establishment politicians also arranged to reduce taxes on big corporations and simultaneously increase federal subsidies to them, expand tax loopholes for the wealthy, and cut Social Security and Medicare to pay for it all. (“Sadly, we have no choice,” said the new President, who had staffed the White House and Treasury with Wall Streeters and corporate lobbyists, and filled boards and commissions with corporate executives).

Meanwhile, most Americans continued to lose ground. 

Even before the recession of 2018, most families were earning less than they’d earned in 2000, adjusted for inflation. Businesses continued to shift most employees off their payrolls and into “on demand” contracts so workers had no idea what they’d be earning from week to week. And the ranks of the working poor continued to swell.

At the same time, CEO pay packages grew even larger, Wall Street bonus pools got fatter, and a record number of billionaires were becoming multi-billionaires.

Then, of course, came the recession, along with bank losses requiring another round of bailouts. The Treasury Secretary, a former managing director of Morgan Stanley, expressed shock and outrage, explaining the nation had no choice and vowing to “get tough” on the banks once the crisis was over.

Politics abhors a vacuum. In 2019, the People’s Party filled it.

Its platform called for getting big money out of politics, ending “crony capitalism,” abolishing corporate welfare, stopping the revolving door between government and the private sector, and busting up the big Wall Street banks and corporate monopolies.

The People’s Party also pledged to revoke the Trans Pacific Partnership, hike taxes on the rich to pay for a wage subsidy (a vastly expanded Earned Income Tax Credit) for everyone earning below the median, and raise taxes on corporations that outsource jobs abroad or pay their executives more than 100 times the pay of typical Americans.

Americans rallied to the cause. Millions who called themselves conservatives and Tea Partiers joined with millions who called themselves liberals and progressives against a political establishment that had shown itself incapable of hearing what they had been demanding for years.

The rest, as they say, is history.

Not a day passes that I don’t get a call from the media asking me to compare Bernie Sanders’s and Hillary Clinton’s tax plans, or bank plans, or health-care plans.

I don’t mind. I’ve been teaching public policy for much of the last thirty-five years. I’m a policy wonk.

But detailed policy proposals are as relevant to the election of 2016 as is that gaseous planet beyond Pluto. They don’t have a chance of making it, as things are now.

The other day Bill Clinton attacked Bernie Sanders’s proposal for a single-payer health plan as unfeasible and a “recipe for gridlock.”

Yet these days, nothing of any significance is feasible and every bold idea is a recipe for gridlock.

This election is about changing the parameters of what’s feasible and ending the choke hold of big money on our political system.

I’ve known Hillary Clinton since she was 19 years old, and have nothing but respect for her. In my view, she’s the most qualified candidate for president of the political system we now have.

But Bernie Sanders is the most qualified candidate to create the political system we should have, because he’s leading a political movement for change.

The upcoming election isn’t about detailed policy proposals. It’s about power – whether those who have it will keep it, or whether average Americans will get some as well.

A study published in the fall of 2014 by Princeton professor Martin Gilens and Northwestern’s Benjamin Page reveals the scale of the challenge.

Gilens and Page analyzed 1,799 policy issues in detail, determining the relative influence on them of economic elites, business groups, mass-based interest groups, and average citizens.

Their conclusion: “The preferences of the average American appear to have only a minuscule, near-zero, statistically nonsignificant impact upon public policy.”

Instead, lawmakers respond to the moneyed interests – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

It’s sobering that Gilens and Page’s data come from the period 1981 to 2002, before the Supreme Court opened the floodgates to big money in its “Citizens United” and “McCutcheon” decisions. Their study also predated the advent of super PACs and “dark money,” and even the Wall Street bailout.

If average Americans had a “near-zero” impact on public policy then, their impact is now zero.

Which explains a paradox I found a few months ago when I was on book tour in the nation’s heartland: I kept bumping into people who told me they were trying to make up their minds in the upcoming election between Sanders and Trump.

At first I was dumbfounded. The two are at opposite ends of the political divide.  
But as I talked with these people, I kept hearing the same refrains. They wanted to end “crony capitalism.” They detested “corporate welfare,” such as the Wall Street bailout.

They wanted to prevent the big banks from extorting us ever again. Close tax loopholes for hedge-fund partners. Stop the drug companies and health insurers from ripping off American consumers. End trade treaties that sell out American workers. Get big money out of politics.

Somewhere in all this I came to see the volcanic core of what’s fueling this election.

If you’re one of the tens of millions of Americans who are working harder than ever but getting nowhere, and who understand that the political-economic system is rigged against you and in favor of the rich and powerful, what are you going to do?

Either you’re going to be attracted to an authoritarian son-of-a-bitch who promises to make America great again by keeping out people different from you and creating “great” jobs in America, who sounds like he won’t let anything or anybody stand in his way, and who’s so rich he can’t be bought off.

Or you’ll go for a political activist who tells it like it is, who has lived by his convictions for fifty years, who won’t take a dime of money from big corporations or Wall Street or the very rich, and who is leading a grass-roots “political revolution” to regain control over our democracy and economy.

In other words, either a dictator who promises to bring power back to the people, or a movement leader who asks us to join together to bring power back to the people.

You don’t care about the details of proposed policies and programs.

You just want a system that works for you.

I’ve just returned from three weeks in “red” America.

It was ostensibly a book tour but I wanted to talk with conservative Republicans and Tea Partiers.

I intended to put into practice what I tell my students – that the best way to learn is to talk with people who disagree you. I wanted to learn from red America, and hoped they’d also learn a bit from me (and perhaps also buy my book).

But something odd happened. It turned out that many of the conservative Republicans and Tea Partiers I met agreed with much of what I had to say, and I agreed with them.

For example, most condemned what they called “crony capitalism,” by which they mean big corporations getting sweetheart deals from the government because of lobbying and campaign contributions.

I met with group of small farmers in Missouri who were livid about growth of “factory farms” owned and run by big corporations, that abused land and cattle, damaged the environment, and ultimately harmed consumers.

They claimed giant food processors were using their monopoly power to squeeze the farmers dry, and the government was doing squat about it because of Big Agriculture’s money.

I met in Cincinnati with Republican small-business owners who are still hurting from the bursting of the housing bubble and the bailout of Wall Street.

“Why didn’t underwater homeowners get any help?” one of them asked rhetorically. “Because Wall Street has all the power.” Others nodded in agreement.  

Whenever I suggested that big Wall Street banks be busted up – “any bank that’s too big to fail is too big, period” – I got loud applause.

In Kansas City I met with Tea Partiers who were angry that hedge-fund managers had wangled their own special “carried interest” tax deal.

“No reason for it,” said one. “They’re not investing a dime of their own money. But they’ve paid off the politicians.”

In Raleigh, I heard from local bankers who thought Bill Clinton should never have repealed the Glass-Steagall Act. “Clinton was in the pockets of Wall Street just like George W. Bush was,” said one.

Most of the people I met in America’s heartland want big money out of politics, and think the Supreme Court’s “Citizens United” decision was shameful.

Most are also dead-set against the Trans Pacific Partnership. In fact, they’re opposed to trade agreements, including NAFTA, that they believe have made it easier for corporations to outsource American jobs abroad.

A surprising number think the economic system is biased in favor of the rich. (That’s consistent with a recent Quinnipiac poll in which 46 percent of Republicans believe “the system favors the wealthy.”)

The more conversations I had, the more I understood the connection between their view of “crony capitalism” and their dislike of government.

They don’t oppose government per se. In fact, as the Pew Research Center has found, more Republicans favor additional spending on Social Security, Medicare, education, and infrastructure than want to cut those programs.

Rather, they see government as the vehicle for big corporations and Wall Street to exert their power in ways that hurt the little guy.  

They call themselves Republicans but many of the inhabitants of America’s heartland are populists in the tradition of William Jennings Bryan.

I also began to understand why many of them are attracted to Donald Trump. I had assumed they were attracted by Trump’s blunderbuss and his scapegoating of immigrants.

That’s part of it. But mostly, I think, they see Trump as someone who’ll stand up for them – a countervailing power against the perceived conspiracy of big corporations, Wall Street, and big government.

Trump isn’t saying what the moneyed interests in the GOP want to hear. He’d impose tariffs on American companies that send manufacturing overseas, for example. 

He’d raise taxes on hedge-fund managers. (“The hedge-fund guys didn’t build this country,” Trump says. “They’re “getting away with murder.”)

He’d protect Social Security and Medicare.

I kept hearing “Trump is so rich he can’t be bought.”

Heartland Republicans and progressive Democrats remain wide apart on social and cultural issues. 

But there’s a growing overlap on economics. The populist upsurge is real.

I sincerely hope Donald Trump doesn’t become president. He’s a divider and a buffoon. 

But I do hope the economic populists in both parties come together.

That’s the only way we’re going to reform a system that’s now rigged against most of us.  

Some inequality of income and wealth is inevitable, if not necessary. If an economy is to function well, people need incentives to work hard and innovate.

The pertinent question is not whether income and wealth inequality is good or bad. It is at what point do these inequalities become so great as to pose a serious threat to our economy, our ideal of equal opportunity and our democracy.

We are near or have already reached that tipping point. As French economist Thomas Piketty shows beyond doubt in his “Capital in the Twenty-First Century,” we are heading back to levels of inequality not seen since the Gilded Age of the late 19th century. The dysfunctions of our economy and politics are not self-correcting when it comes to inequality.

But a return to the Gilded Age is not inevitable. It is incumbent on us to dedicate ourselves to reversing this diabolical trend. But in order to reform the system, we need a political movement for shared prosperity.

Herewith a short summary of what has happened, how it threatens the foundations of our society, why it has happened, and what we must do to reverse it.

What has Happened

The data on widening inequality are remarkably and disturbingly clear. The Congressional Budget Office has found that between 1979 and 2007, the onset of the Great Recession, the gap in income—after federal taxes and transfer payments—more than tripled between the top 1 percent of the population and everyone else. The after-tax, after-transfer income of the top 1 percent increased by 275 percent, while it increased less than 40 percent for the middle three quintiles of the population and only 18 percent for the bottom quintile.

The gap has continued to widen in the recovery. According to the Census Bureau, median family and median household incomes have been falling, adjusted for inflation; while according to the data gathered by my colleague Emmanuel Saez, the income of the wealthiest 1 percent has soared by 31 percent. In fact, Saez has calculated that 95 percent of all economic gains since the recovery began have gone to the top 1 percent.

Wealth has become even more concentrated than income. An April 2013 Pew Research Center report found that from 2009 to 2011, “the mean net worth of households in the upper 7 percent of wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”

Why It Threatens Our Society

This trend is now threatening the three foundation stones of our society: our economy, our ideal of equal opportunity and our democracy.

The economy. In the United States, consumer spending accounts for approximately 70 percent of economic activity. If consumers don’t have adequate purchasing power, businesses have no incentive to expand or hire additional workers. Because the rich spend a smaller proportion of their incomes than the middle class and the poor, it stands to reason that as a larger and larger share of the nation’s total income goes to the top, consumer demand is dampened. If the middle class is forced to borrow in order to maintain its standard of living, that dampening may come suddenly—when debt bubbles burst.

Consider that the two peak years of inequality over the past century—when the top 1 percent garnered more than 23 percent of total income—were 1928 and 2007. Each of these periods was preceded by substantial increases in borrowing, which ended notoriously in the Great Crash of 1929 and the near-meltdown of 2008.

The anemic recovery we are now experiencing is directly related to the decline in median household incomes after 2009, coupled with the inability or unwillingness of consumers to take on additional debt and of banks to finance that debt—wisely, given the damage wrought by the bursting debt bubble. We cannot have a growing economy without a growing and buoyant middle class. We cannot have a growing middle class if almost all of the economic gains go to the top 1 percent.

Equal opportunity. Widening inequality also challenges the nation’s core ideal of equal opportunity, because it hampers upward mobility. High inequality correlates with low upward mobility. Studies are not conclusive because the speed of upward mobility is difficult to measure.

But even under the unrealistic assumption that its velocity is no different today than it was thirty years ago—that someone born into a poor or lower-middle-class family today can move upward at the same rate as three decades ago—widening inequality still hampers upward mobility. That’s simply because the ladder is far longer now. The distance between its bottom and top rungs, and between every rung along the way, is far greater. Anyone ascending it at the same speed as before will necessarily make less progress upward.

In addition, when the middle class is in decline and median household incomes are dropping, there are fewer possibilities for upward mobility. A stressed middle class is also less willing to share the ladder of opportunity with those below it. For this reason, the issue of widening inequality cannot be separated from the problems of poverty and diminishing opportunities for those near the bottom. They are one and the same.

Democracy. The connection between widening inequality and the undermining of democracy has long been understood. As former Supreme Court Justice Louis Brandeis is famously alleged to have said in the early years of the last century, an era when robber barons dumped sacks of money on legislators’ desks, “We may have a democracy, or we may have great wealth concentrated in the hands of a few, but we cannot have both.”

As income and wealth flow upward, political power follows. Money flowing to political campaigns, lobbyists, think tanks, “expert” witnesses and media campaigns buys disproportionate influence. With all that money, no legislative bulwark can be high enough or strong enough to protect the democratic process.

The threat to our democracy also comes from the polarization that accompanies high levels of inequality. Partisanship—measured by some political scientists as the distance between median Republican and Democratic roll-call votes on key economic issues—almost directly tracks with the level of inequality. It reached high levels in the first decades of the twentieth century when inequality soared, and has reached similar levels in recent years.

When large numbers of Americans are working harder than ever but getting nowhere, and see most of the economic gains going to a small group at the top, they suspect the game is rigged. Some of these people can be persuaded that the culprit is big government; others, that the blame falls on the wealthy and big corporations. The result is fierce partisanship, fueled by anti-establishment populism on both the right and the left of the political spectrum.

Why It Has Happened

Between the end of World War II and the early 1970s, the median wage grew in tandem with productivity. Both roughly doubled in those years, adjusted for inflation. But after the 1970s, productivity continued to rise at roughly the same pace as before, while wages began to flatten. In part, this was due to the twin forces of globalization and labor-replacing technologies that began to hit the American workforce like strong winds—accelerating into massive storms in the 1980s and ’90s, and hurricanes since then.

Containers, satellite communication technologies, and cargo ships and planes radically reduced the cost of producing goods anywhere around the globe, thereby eliminating many manufacturing jobs or putting downward pressure on other wages. Automation, followed by computers, software, robotics, computer-controlled machine tools and widespread digitization, further eroded jobs and wages. These forces simultaneously undermined organized labor. Unionized companies faced increasing competitive pressures to outsource, automate or move to nonunion states.

These forces didn’t erode all incomes, however. In fact, they added to the value of complex work done by those who were well educated, well connected and fortunate enough to have chosen the right professions. Those lucky few who were perceived to be the most valuable saw their pay skyrocket.

But that’s only part of the story. Instead of responding to these gale-force winds with policies designed to upgrade the skills of Americans, modernize our infrastructure, strengthen our safety net and adapt the workforce—and pay for much of this with higher taxes on the wealthy—we did the reverse. We began disinvesting in education, job training and infrastructure. We began shredding our safety net. We made it harder for many Americans to join unions. (The decline in unionization directly correlates with the decline of the portion of income going to the middle class.) And we reduced taxes on the wealthy.

We also deregulated. Financial deregulation in particular made finance the most lucrative industry in America, as it had been in the 1920s. Here again, the parallels between the 1920s and recent years are striking, reflecting the same pattern of inequality.

Other advanced economies have faced the same gale-force winds but have not suffered the same inequalities as we have because they have helped their workforces adapt to the new economic realities—leaving the United States the most unequal of all advanced nations by far.

What We Must Do

There is no single solution for reversing widening inequality. Thomas Piketty’s monumental book “Capital in the Twenty-First Century” paints a troubling picture of societies dominated by a comparative few, whose cumulative wealth and unearned income overshadow the majority who rely on jobs and earned income. But our future is not set in stone, and Piketty’s description of past and current trends need not determine our path in the future. Here are ten initiatives that could reverse the trends described above:

1) Make work pay. The fastest-growing categories of work are retail, restaurant (including fast food), hospital (especially orderlies and staff), hotel, childcare and eldercare. But these jobs tend to pay very little. A first step toward making work pay is to raise the federal minimum wage to $15 an hour, pegging it to inflation; abolish the tipped minimum wage; and expand the Earned Income Tax Credit. No American who works full time should be in poverty.

2) Unionize low-wage workers. The rise and fall of the American middle class correlates almost exactly with the rise and fall of private-sector unions, because unions gave the middle class the bargaining power it needed to secure a fair share of the gains from economic growth. We need to reinvigorate unions, beginning with low-wage service occupations that are sheltered from global competition and from labor-replacing technologies. Lower-wage Americans deserve more bargaining power.

3) Invest in education. This investment should extend from early childhood through world-class primary and secondary schools, affordable public higher education, good technical education and lifelong learning. Education should not be thought of as a private investment; it is a public good that helps both individuals and the economy. Yet for too many Americans, high-quality education is unaffordable and unattainable. Every American should have an equal opportunity to make the most of herself or himself. High-quality education should be freely available to all, starting at the age of 3 and extending through four years of university or technical education.

4) Invest in infrastructure. Many working Americans—especially those on the lower rungs of the income ladder—are hobbled by an obsolete infrastructure that generates long commutes to work, excessively high home and rental prices, inadequate Internet access, insufficient power and water sources, and unnecessary environmental degradation. Every American should have access to an infrastructure suitable to the richest nation in the world.

5) Pay for these investments with higher taxes on the wealthy. Between the end of World War II and 1981 (when the wealthiest were getting paid a far lower share of total national income), the highest marginal federal income tax rate never fell below 70 percent, and the effective rate (including tax deductions and credits) hovered around 50 percent. But with Ronald Reagan’s tax cut of 1981, followed by George W. Bush’s tax cuts of 2001 and 2003, the taxes on top incomes were slashed, and tax loopholes favoring the wealthy were widened. The implicit promise—sometimes made explicit—was that the benefits from such cuts would trickle down to the broad middle class and even to the poor. As I’ve shown, however, nothing trickled down. At a time in American history when the after-tax incomes of the wealthy continue to soar, while median household incomes are falling, and when we must invest far more in education and infrastructure, it seems appropriate to raise the top marginal tax rate and close tax loopholes that disproportionately favor the wealthy.

6) Make the payroll tax progressive. Payroll taxes account for 40 percent of government revenues, yet they are not nearly as progressive as income taxes. One way to make the payroll tax more progressive would be to exempt the first $15,000 of wages and make up the difference by removing the cap on the portion of income subject to Social Security payroll taxes.

7) Raise the estate tax and eliminate the “stepped-up basis” for determining capital gains at death. As Piketty warns, the United States, like other rich nations, could be moving toward an oligarchy of inherited wealth and away from a meritocracy based on labor income. The most direct way to reduce the dominance of inherited wealth is to raise the estate tax by triggering it at $1 million of wealth per person rather than its current $5.34 million (and thereafter peg those levels to inflation). We should also eliminate the “stepped-up basis” rule that lets heirs avoid capital gains taxes on the appreciation of assets that occurred before the death of their benefactors.

8) Constrain Wall Street. The financial sector has added to the burdens of the middle class and the poor through excesses that were the proximate cause of an economic crisis in 2008, similar to the crisis of 1929. Even though capital requirements have been tightened and oversight strengthened, the biggest banks are still too big to fail, jail or curtail—and therefore capable of generating another crisis. The Glass-Steagall Act, which separated commercial- and investment-banking functions, should be resurrected in full, and the size of the nation’s biggest banks should be capped.

9) Give all Americans a share in future economic gains. The richest 10 percent of Americans own roughly 80 percent of the value of the nation’s capital stock; the richest 1 percent own about 35 percent. As the returns to capital continue to outpace the returns to labor, this allocation of ownership further aggravates inequality. Ownership should be broadened through a plan that would give every newborn American an “opportunity share” worth, say, $5,000 in a diversified index of stocks and bonds—which, compounded over time, would be worth considerably more. The share could be cashed in gradually starting at the age of 18.

10) Get big money out of politics. Last, but certainly not least, we must limit the political influence of the great accumulations of wealth that are threatening our democracy and drowning out the voices of average Americans. The Supreme Court’s 2010 Citizens United decision must be reversed—either by the Court itself, or by constitutional amendment. In the meantime, we must move toward the public financing of elections—for example, with the federal government giving presidential candidates, as well as House and Senate candidates in general elections, $2 for every $1 raised from small donors.

Building a Movement

It’s doubtful that these and other measures designed to reverse widening inequality will be enacted anytime soon. Having served in Washington, I know how difficult it is to get anything done unless the broad public understands what’s at stake and actively pushes for reform.

That’s why we need a movement for shared prosperity—a movement on a scale similar to the Progressive movement at the turn of the last century, which fueled the first progressive income tax and antitrust laws; the suffrage movement, which won women the vote; the labor movement, which helped animate the New Deal and fueled the great prosperity of the first three decades after World War II; the civil rights movement, which achieved the landmark Civil Rights and Voting Rights acts; and the environmental movement, which spawned the National Environmental Policy Act and other critical legislation.

Time and again, when the situation demands it, America has saved capitalism from its own excesses. We put ideology aside and do what’s necessary. No other nation is as fundamentally pragmatic. We will reverse the trend toward widening inequality eventually. We have no choice. But we must organize and mobilize in order that it be done.

[This essay appears in the current edition of “The Nation.”]