New Orleans Many are looking at the wealth transfer in America in coming years from baby boomers to their heirs as the largest in history, given the trillions of dollars that generation holds now. Unsurprisingly, given the current state of social and political affairs, this transfer is likely to exacerbate inequality, rather than decreasing it. Reading the piece in the Times was interesting and all that, until the last section entitled “The Future of Inequality” when it suddenly turned deeply depressing.
One cynic may have come closest to gripping reality. The chief economist for a consulting company called RSM was brutally clear, saying “changes would come – but only when high-income salaried workers, who still seem to be managing, can no longer comfortably afford families, housing, elder care and leisure. Once white-collar workers left out of the wealth transfers feel the burn, ‘large companies will back’ a bigger welfare state…’ because they’ll want the government to subsidize it’ rather than paying to provide more benefits themselves.” That has the ring of truth, but is miles away from dealing with inequality, and in fact given the demographic trends that show mobility away from big ticket cities; it may already be happening. His argument is actually a way for the middle and upper classes to redline themselves to buffer against even greater inequality. It’s the opposite of raising the bottom up. It’s a hedge against the better paid going too far down. He knows it too, observing that “It’ll have nothing to do with social justice, nothing to do with right or wrong, and everything to do with the bottom line.” Goodness, talk about how we all live in terror under the iron heel of late-stage capitalism!
The Biden administration has proposed a wealth tax to pay for social spending at 25% of annual wealth for households worth more than $100 million. Such taxes were normal 70 years ago, but the conservative and neoliberal giveaway to the rich has pretty much made this dead-on arrival in Congress. The current spit fight around the debt ceiling is a perfect example of the oceans between the various political poles of thinking, as one side just tries to pay our bills and the other tries to use it to bargain away social services and climate change mitigations.
In the way that first come tragedy, then farce, when the reporter talks to a big whoop at J.P. Morgan who poo-poos a wealth tax, he tries to gaslight the problem, saying the “real question is not ‘why are the rich rich?’ or what to do about that…It is ‘why are the poor poor?’ and what to do about that.” Of course, he sees inequality and status quo as acceptable and likely to widen, but is claiming there may be “cost-effective ways to raise the baseline standards of living….” Translated from Mr. Wealth Management, he’s just saying, “my peeps will be fine, dude” and the rest “is just not my problem.”
Basically, the takeaway on all of this is simple. This will be a historic wealth transfer, but economists, bankers, and the rest are clueless about what to do about equality, if they care about it at all. Sure, they’ll pay lip service, because that costs nothing. Otherwise, for the vast majority of Americans at the bottom, their message is loud and clear: we’re out of luck.