The Power of Piketty's 'Capital' - Eric Alterman (The Nation)

[Bill USA]

http://billmoyers.com/2014/04/25/the-power-of-piketty%e2%80%99s-capital/

...Piketty’s Capital is simultaneously intellectually rigorous, historically grounded, culturally nuanced and, in important respects, politically visionary. Even nitpicky economists who take issue with some of his interpretations of the mountains of data he and his colleagues assembled feel compelled to shower the book with praise beforehand — and frequently after as well. Paul Krugman credits Piketty with inspiring “a revolution in our understanding of long-term trends in inequality.”

Piketty’s central thesis presents a profound challenge to our political system and its response to the economic crisis of the past decade. As he puts it, an “apparently small gap between the return on capital and the rate of growth can in the long run have powerful and destabilizing effects on the structure and dynamics of social inequality.” Moreover, “there is absolutely no doubt that the increase of inequality in the United States contributed to the nation’s financial instability.
Piketty’s central thesis presents a profound challenge to our political system and its response to the economic crisis of the past decade.The reason is simple: one consequence of increasing inequality was virtual stagnation of the purchasing power of the lower and middle classes in the United States, which inevitably made it more likely that modest households would take on debt, especially since unscrupulous banks and financial intermediaries, freed from regulation and eager to earn good yields on the enormous savings injected into the system by the well-to-do, offered credit on increasingly generous terms.”

While edifying intellectually, all this attention to inequality raises the question of what comes next — or, to borrow a phrase from another famous student of capital, what is to be done? Surprisingly for an academic economist, Piketty does not demur. On an entirely utopian plane, he imagines the effect of a progressive global tax on capital. “Such a tax would also have another virtue: it would expose wealth to democratic scrutiny, which is a necessary condition for effective regulation of the banking system and international capital flows.” On a minutely less unrealistic level, he argues for confiscatory tax rates on the wealthy of up to 80 percent. And on an ever-so-slightly more imaginable plane, he calls for boosting the minimum wage and improving the education and training opportunities of the poor and middle class, who are increasingly priced out of our faux-meritocracy, which is itself shaped by economic inequality.

But to be brutally honest, it’s hard to imagine any measurable impact from Piketty’s work on the problem it seeks to address — at least insofar as it relates to America today. “Inequality is not just the result of economic forces,” notes economist Joseph Stiglitz, “but political processes themselves are affected by the level and nature of inequality.” Stiglitz and others may treat this fact as cause for optimism. I do not. The chances that significant national action will be undertaken to improve the lives of the vast majority of our citizens have fallen to nearly zero, should such action be perceived to conflict with the interests of any subset of the super-rich, regardless of how small their number or how trivial its cost.
(more)

[cantbeserious]

1. The Oligarchs, Corporations And Banks Own And Control The Politicians That Own And Control Us

Nothing Will Change.

[Warpy]

2. I've just started it

and it's surprisingly readable when you're used to the usual crap generated by great experts. It's denser than the average potboiler, but not much.

This is one book that will actually be read and that's a damned good thing.

Piketty is spot on.