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Tuesday, June 18, 2024

Guest Opinion: Now or never

In his last column, titled “I love the rich,” Rob Olson describes his fascination for the rich and seems shocked by the taxes paid by the richest. But he should be shocked by something else.

If you search “It’s the inequality, stupid” on Google, you will find interesting statistics delivered by the journal Mother Jones: The top 1 percent of people holds more than a third of the wealth in the United States, so it’s not surprising that they pay a similar percentage of what the IRS takes in.

Then Rob argues that nobody can really prove that the “trickle-down” argument is discredited, this argument saying that the rich spend all kinds of money in our society and their wealth “trickles” down without the heavy hand of Uncle Sam.

Well, I will recommend him to check Vanity Fair (available online) and read a paper titled “Of the 1%, by the 1%, for the 1%” and written by Joseph Stiglitz. For instance, Stiglitz points out that while those in the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. What does that mean? Well, the richest become even richer but the rest of the society does not – indeed, the poorest become even poorer. It is clear that the “trickle-down” trick does not work at all. Indeed, it makes things worse.

This excessive concentration of wealth is not only unfair, but also creates economic instability. The middle class has to borrow in order to catch up to the lifestyle of the richest or just to make a decent living. The consequence is a growing bubble of debt, which is very dangerous when combined with speculative finances (see the documentary Inside Job).

Unfortunately the worst is to come. Instead of trying to share the pie, our leaders want to make it bigger in order to give hope to the middle class. Unfortunately, we do not make money out of thin air; we use natural resources that are consumed faster than they are produced by the biosphere: in 2007, humanity’s footprint exceeded the Earth’s biocapacity by 50 percent. Global warming is another consequence of our incapacity to have sustainable development.

What can we do to prevent the coming disaster? Let us learn the lessons of history: the solutions to the problems of the past can inspire the solutions for the future.

The financial crisis of 2008 has common patterns with the crash of 1929 (excessive concentration of wealth, accumulation of debt and unregulated finance). To lead the United States out of the big depression, Roosevelt created the New Deal, which was based on Keynesian economics (big stimulus plan funded by higher taxes on the wealthiest). And it worked: the unemployment rate was divided by two between 1933 and 1940, before the entrance of the United States in World War II (check the statistics on Wikipedia). Nowadays, the government can invest in energy-efficient infrastructures (like railways for high-speed trains) and renewable energies. It will create jobs and cut the dependence on the oil.

Moreover, the economy is not supposed to be a huge casino, so it must be seriously regulated. Then it may be worth questioning the way we measure our economic performances. The gross domestic product counts human production, but not the production of Mother Nature. If we add the evaluation of natural resources to the GDP, it will be clear that we are already in a general decline: the economic growth does not compensate for the destruction of our ecological system.

It is really time to react, because this is now or never.

Frédéric E. Vincent

Staff Research Associate, Ph.D. candidate

Department of applied science


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