The Inequality-Corruption Feedback Loop That Describes America
In today’s political climate, it is easy to focus on each day’s new flood of awfulness and lose sight of The Big Problems. But rest assured, the biggest problem of all—inequality—is still getting worse. And now it’s getting worse in a more malignant way.
Economic inequality has been growing in America for 40 years. It is going to take us decades to meaningfully turn it around. Once we start trying. Which we haven’t yet. Even the Obama administration’s modest efforts came to a halt the day that Donald Trump took office. On a purely policy level—as exemplified by the Republican tax cut bill, the deregulation of industry, the determination to enact “entitlement reform,” and the hostility towards organized labor—the Trump administration is busy doing everything it can to funnel more money towards the rich and less to the poor. Inequality, which is already a crisis, will be getting worse under Donald Trump. The numbers plainly demonstrate that.
But beyond explicit economic policies, there another, more sinister way in which inequality is being exacerbated. We know that Donald Trump is not just any Republican president—he is the most self-regarding, narcissistic, norm-busting president in modern history. He refused to release his tax returns. He refused to fully divest from his considerable business interests. He chose family members as top advisors. He got rich by engaging in tax fraud. He owns hotels that are rented by foreign government officials. He passed tax cuts that will directly benefit him and his family. He lies routinely. And so far, he has gotten away with all of it. He is boldly corrupt, and he has reaped only success as a result. He is the human embodiment of a nation that does not take fighting corruption seriously.
What does that mean for inequality? In Scientific American, Bo Rothstein writes about research on the connection between public perceptions of government corruption and inequality—how a loss of public trust in the ability of the government to be fair and competent can worsen the gap between the haves and the have-nots. Not only does trust in public institutions tend to be lower in very unequal nations, but even in nations where the public wants to pursue policies that fight inequality, they tend to be unwilling to support things like tax increases if they don’t trust the government to administer them fairly. Nobody wants to put their faith in a government they perceive to be corrupt.
A half-century ago, more than 70% of U.S. citizens said they trusted the federal government. By 2014, that figure had fallen to “less than 20 percent.” It is hard to whip up the political support for a massive federal program like the New Deal when people don’t trust the federal government. And a prime reason why people don’t trust the federal government is that the Republican Party has made mistrust of the federal government a key part of its platform and messaging ever since the Reagan era—coincidentally, around the same time when our modern age of growing inequality began.
The Republican Party pursues corporate-friendly policies of deregulation, hostility to labor power, and slashing of taxes on the wealthy. The rich get richer. The rich invest some of their growing capital in increasing the political power of officials who will pursue policies in their interest. As inequality grows, so too does the political power of the rich. The Republican Party sows suspicion of the federal government. Public support for measures to fight inequality declines. When blatant corruption appears at the highest levels of the government, the nation has already been primed with cynicism. They react tepidly. Corruption increases. Inequality grows. The rich get richer. Wash, rinse, repeat.
New income data released this week shows that the top 1% of earners in America had a higher income in 2017 than they ever have before.