Category Archives: Inequality

New Article: “The Anti-Oligarchy Constitution”

New Article: Joseph Fishkin & William E. Forbath, The Anti-Oligarchy Constitution, 94 B.U. L. Rev. 671 (2014).  Abstract below:

America has awakened to the threat of oligarchy. While inequality has been growing for decades, the Great Recession has made clear its social and political consequences: a narrowing of economic opportunity, a shrinking middle class, and an increasingly entrenched wealthy elite. There remains broad agreement that it is important to avoid oligarchy and build a robust middle class. But we have lost sight of the idea that these are constitutional principles.

These principles are rooted in a tradition we have forgotten – one that this Article argues we ought to reclaim. Throughout the nineteenth and early twentieth centuries, generations of reformers responded to moments of mounting class inequality and crises in the nation’s opportunity structure with constitutional claims about equal opportunity. The gist of these arguments was that we cannot keep our constitutional democracy – our republican form of government – without constitutional restraints against oligarchy and a political economy that maintains a broad middle class, accessible to everyone. Extreme class inequality and oligarchic concentrations of power pose distinct constitutional problems, both in the economic sphere itself and because economic and political power are intertwined; a “moneyed aristocracy” or “economic royalists” may threaten the Constitution’s democratic foundations. 

This Article introduces the characteristic forms of these arguments about constitutional political economy and begins to tell the story of anti-oligarchy as a constitutional principle. It offers a series of snapshots in time, beginning with the distinctive political economy of the Jacksonian Democrats and their vision of equal protection. We then move forward to Populist constitutionalism, the Progressives, and the New Deal. The Constitution meant different things to these movements in their respective moments, but all understood the Constitution as including some form of commitment to a political economy in which power and opportunity were dispersed among the people rather than concentrated in the hands of a few. We conclude with a brief discussion of how this form of constitutional argument was lost, and what might be at stake in recovering it.

Robert Reich (The Four Biggest Right-Wing Lies About Inequality)

Robert Reich (The Four Biggest Right-Wing Lies About Inequality).

New Article: “A Court for the One Percent: How the Supreme Court Contributes to Economic Inequality”

New Article: Michele E. Gilman, A Court for the One Percent: How the Supreme Court Contributes to Economic Inequality, Utah L. Rev. (forthcoming 2014).  Abstract below:

This Article explores the United States Supreme Court’s role in furthering economic inequality. The Occupy Wall Street movement in 2011 not only highlighted growing income and wealth inequality in the United States, but also pointed the blame at governmental policies that favor business interests and the wealthy due to their outsized influence on politicians. Numerous economists and political scientists agree with this thesis. However, in focusing ire on the political branches and big business, these critiques have largely overlooked the role of the judiciary in fostering economic inequality. The Court’s doctrine touches each of the major causes of economic inequality, which includes systemic failures of our educational system, a frayed social safety net, probusiness policies at the expense of consumers and employees, and the growing influence of money in politics. In each of these areas, the Court’s deference to legislative judgments is highly selective and driven by a class-blind view of the law that presumes that market-based results are natural, inevitable, and beneficial. For instance, the Court rejects government attempts to voluntarily desegregate schools, while deferring to laws that create unequal financing for poor school districts. The end result is that poor children receive subpar educations, dooming many of them to the bottom of the economic spectrum. Similarly, the Court overturned Congress’s attempt to rein in campaign financing, while upholding state voter identification laws that suppress the votes of the poor. These decisions distort the electoral process in favor of the wealthy. In short, the Court tends to defer to laws that create economic inequality, while striking down legislative attempts to level the playing field. While a popular conception of the Court is that it is designed to protect vulnerable minorities from majoritarian impulse, the Court, instead, is helping to protect a very powerful minority at the expense of the majority. This Article is one step toward understanding how law intertwines with politics and economics to create economic inequality.

There’s a Class War Going On and the Poor Are Getting Their Butts Kicked |

There’s a Class War Going On and the Poor Are Getting Their Butts Kicked |

Inequality Article and Charts from the New Yorker

By John Cassidy: Here.

-Thanks to Jeff Selbin for the heads up!

Just Right Inequality –

Just Right Inequality –

New Article: “Redistribution, Inequality, and Growth”

New Article: Jonathan D. Ostry et al., Redistribution, Inequality, and Growth, IMF (Feb. 2014).  Abstract below:

The Fund has recognized in recent years that one cannot separate issues of economic growth and stability on one hand and equality on the other. Indeed, there is a strong case for considering inequality and an inability to sustain economic growth as two sides of the same coin. Central to the Fund’s mandate is providing advice that will enable members’ economies to grow on a sustained basis. But the Fund has rightly been cautious about recommending the use of redistributive policies given that such policies may themselves undercut economic efficiency and the prospects for sustained growth (the so-called “leaky bucket” hypothesis written about by the famous Yale economist Arthur Okun in the 1970s). This SDN follows up the previous SDN on inequality and growth by focusing on the role of redistribution. It finds that, from the perspective of the best available macroeconomic data, there is not a lot of evidence that redistribution has in fact undercut economic growth (except in extreme cases). One should be careful not to assume therefore—as Okun and others have—that there is a big tradeoff between redistribution and growth. The best available macroeconomic data do not support such a conclusion.

New Article: “Inequality in America: Challenges for Tax and Spending Policies”

New Article: Eric M. Zolt, Inequality in America: Challenges for Tax and Spending Policies, 66 Tax L. Rev. 1101 (2013).  Abstract below:

The goal of this article is to provide a guide to addressing tax and spending policies in an era of increasing inequality of income and wealth. This is challenging because it requires a good understanding of inequality and economic mobility, the changing role of taxes and government social spending, the constraints on policy options, and the possible misconceptions that may influence tax and spending policies.

Inequality in the United States has increased dramatically over the last 30 years. Perhaps even more troubling than the rise in inequality may be the persistence of high levels of poverty and the decline in economic mobility. The same thirty-year period during which inequality has increased, poverty levels have not declined, and economic mobility has decreased has seen major changes in fiscal policy. Tax law changes have altered the relative tax rates, the relative revenue contributions from different tax instruments, and the tax burdens of different income groups. Government spending on social programs has increased substantially, but perhaps not in ways one might expect. The United States likely has a smaller percentage of government social spending going to the needy than other developed countries. In recent decades, an increasingly larger percentage of social spending has been directed to the elderly (without regard to need) and to the upper-half of the income distribution through tax subsidies for healthcare, education, housing, and retirement savings.

The essential first step in shaping fiscal policy is to identify clearly the relative priorities among reducing inequality, reducing poverty, and increasing economic mobility. Tax and spending policies will differ depending on the weight given each of these objectives, and especially in a world of relatively limited resources, the government needs to make difficult choices. Perhaps the most significant implication of this reality is that it may be time to stop thinking about increasing the income tax burden on the wealthy as the only, or perhaps even the primary, way to increase funding for social spending programs. The United States may need less progressive (or even regressive) taxes to fund more progressive spending programs.

New Article: “A New New Property”

New Article: David A. Super, A New New Property, 113 Colum. L. Rev. 1773 (2013).  Abstract below:

Charles Reich’s visionary 1964 article, The New Property, paved the way for a revolution in procedural due process. It did not, however, accomplish Reich’s primary stated goal: providing those dependent on government assistance the same security that property rights long have offered owners of real property.

As Reich himself predicted, procedural rights have proven largely ineffectual, especially for low-income people. In the half-century since he wrote, growing wealth inequality and repeated cutbacks in antipoverty programs have produced the pervasive disempowerment he predicted, but concentrated in one segment of society. This is incompatible with a healthy democracy.

Reich found that government largesse had become functionally equivalent to more traditional forms of property. Other analogies to property concepts can also protect low-income people, supporting recognition of the most important assets low-income people have, many of which are relational rather than tangible.

Like long-time trespassers obtaining ownership rights through adverse possession, families that have long lived together in this country should be able to continue doing so despite the unlawful immigration status of some of their members. The law should value the communities that offer mutual support to low-income people in much the same way as it does common interest communities. Principles of equity that long shielded less sophisticated people against sharp operators should be revived to protect low-income people’s homes against abusive foreclosures. And modern Takings Clause doctrine should recognize subsistence government benefits as property.

A regime of property law that secures that which is most essential to the well-being of a broad swath of society, rather than just those items disproportionately held by the wealthy, will best promote social, economic, and political participation by all people.

Two New Articles on Inequality and Mobility in the United States

Two new articles are getting a significant amount of media attention:

1. Raj Chetty et al., Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States, NBER Working Paper 19843 (2014).

2. Raj Chetty et al., Is the United States Still the Land of Opportunity? Recent Trends in Intergenerational Mobility?, NBER Working Paper 19844 (2014).

The authors have a nice website, The Equality of Opportunity Project, with links to executive summaries, slides, maps, and the extensive media coverage.  [The media coverage includes helpful summaries as well as some misleading takes or choices of what to emphasize.]