"Commencement this morning for my students here at Berkeley. While recent college graduates continue to earn higher wages than young people without college degrees, their wages are no longer rising. Since 2000, the real average hourly wages of young college graduates have declined 7 percent, adjusted for inflation. Yet according to a study in yesterday’s Times, the pay of America’s 200 top CEOs has been rising 12 percent a year, to an average of $21 million now. While young people are saddled with student debt and poor job prospects, CEOs have the lowest effective tax rates since World War II; many are paying less than 15 percent.
When I graduated college 47 years ago, my peers talked about a pending revolution. But in those days, jobs were plentiful, tuition was low (zero at many state universities), median wages were rising, CEO pay was only 25 times the pay of average workers (now it’s 300 times), and the top tax rate was 70 percent (the top effective rate, after deductions and credits, was still higher than 50 percent)."
-Robert Reich
1. The so-called “free market” doesn’t exist in nature. Its rules (property, liability, contract, monopoly, taxes and subsidies) are created and continuously revised by politicians, judges, and agency administrators.
2. These officials don’t make decisions in a vacuum. They are influenced, directly or indirectly, by powerful people and institutions.
3. Power and money are inseparable. Money buys political influence directly through campaign donations and lobbying; indirectly through manipulating public opinion via the marketing of ideas, purchase of “expert” opinion, and control over certain media.
4. In recent years, as almost all economic gains have gone to the richest Americans and to big corporations and Wall Street banks, that’s where the power has moved as well.
5. In this way, the “free market” has become rigged in favor of the wealthy, big corporations, and the largest banks.
6. As a result, upward pre-distributions within the market are larger than the downward redistributions outside the market.
7. The only way to unrig the market is to limit the political power of big money.