Agitate, America!: Inequality can be deadly

May 28, 2014

Nancy Churchill

Nancy Churchill

By Nancy Churchill
A Progressive Visionary

A conservative friend of mine questions how inequality harms anyone, arguing that the poor in America make more than the middle class in European countries, while dismissing the role of the “Big Banks” in the Great Recession. As I searched for an answer, I snagged a back-ordered copy of Thomas Piketty’s Capital in the Twenty-First Century, an almost 700-page book still third on the New York Times’ bestseller list as of this writing.

That is astounding. The level of detail, accounts and extrapolation from 1700 to today is no easy read, indicating a wide audience of intelligent people hungry for authenticity in this ideologically divided and politically charged debate.

Piketty asks: “What do we really know about how wealth and income have evolved since the 18th century, and what lessons can we derive from that knowledge for the century now under way? … Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands? … Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes?

When the rate of return on capital exceeds the rate of growth of output and income,” Piketty says, “… capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based. There are nevertheless ways democracy can regain control over capitalism and ensure that the general interest takes precedence over private interests. …” OK, inequality exists, but is it harmful?

Two stories about the oil industry shed light on this question. First, a report by the Center for American Progress last November titled, “Big Oil, Big Profits, Big Tax Breaks.” The five biggest oil companies “earned $23 billion in the third quarter, yet they continue to receive billions of dollars in tax breaks. Big Oil is swimming in an endless river of profits and continues to invest millions of dollars to lobby Congress against eliminating their special tax breaks.” (www.americanprogress.org/issues/green/news/2013/11/05/78807/big-oil-big-profits-big-tax-breaks/)

And May 22, Rachel Maddow reported on an oil industry response to Department of Transportation guidelines issued to correct defects in out-of-date oil tankers that have been exploding in towns across America and Canada for decades. “Oil industry denies rail risks with ‘report’” headlined the show exposing “the pushback by the oil industry against evidence of the dangers of moving Bakken crude by rail, in which lobbyists are [advancing] … media industry-funded reports denying elevated safety risks.” (www.msnbc.com/rachel-maddow-show/watch/oil-industry-denies-rail-risks-with-report-263830083849)

So, an industry awash in profit won’t voluntarily upgrade tankers to prevent explosions, but instead thumbs its nose at the DOT with a report that everything is fine, no risk, no danger, while lobbying Congress to keep its tax breaks because profit is more important than preventing towns from blowing up.

That’s called “making a killing.” And yeah, it can be deadly.

Nancy Churchill was raised in the D.R.C. (Congo), raced stock cars on short dirt tracks for 25 years, and is a proud, lifelong member of “We, the People.” She lives in Oregon, Ill.

From the May 28-June 3, 2014, issue

One Comment

  1. Innocent

    May 28, 2014 at 7:53 am

    Okay… How to explain this… In capitalism there is a risk reward scenario. It examines cost, the result of damage to property, and decides if the ask is worth the return.

    In the very case of the tankers you are talking about the industry was already in the process of phasing them out with new ones. The push back comes from the time table that Government has created is now simply arbitrary with no real REASON behind it except that there was an accident of which this was one factor of the issues at hand.

    So you have an industry that was already on a path of ‘fixing’ the very problem that you are talking about. That it is not on the time table ‘you’ want. So a story is about how greedy the ‘deadly’ the oil industry is versus your self righteous understanding of how people should operate.

    I would suggest that your understanding of capitalism is shallow. That you do not understand profits, or how industry works from your very statements of ‘Awash in profits’ you defiantly have a shallow understanding of oil and gas exploration and the reason for those subsidies. Now in my OPINION at this time I find those subsidies superfluous but at least I can see some wisdom in keeping them in place.

    So I would suggest you come to a better understanding of the issues at hand rather than simply dogmatically believe foolish things like this. Actually look at what the industry is DOING and was DOING before writing something like this. They had a time table of removing ALL of these tankers by 2021 Government now wants their time table changed to 2017. You may not understand time value of money, business plans, and capital allocations but the people running these businesses do and act in a methodical and thoughtful way to move forward. Not saying they are right or not but I know that Government is a little like chicken little most of the time. The sky is falling and moving from one crisis to the next is how politics works.

    Can you imagine Walt Disney trying to start up Disney land today? It would have taken him 5 – 10 years to break ground because of all the regulation that exists now. He had a park open in one year from when he got money to when it was fielding riders.

    I would suggest we do not by the way have capitalism any longer and have not since the late 60’s. We now have a state sanctioned and regulated industry sector. There are more rules and regulations than you could POSSIBLY read in just about every sector. Heck have you looked at the specification manual for the creation of a NEW tanker? And do you understand that the regulations are ADDED TO EACH YEAR just about? That means as a business you have a moving target that you have to hit ANYWAY.

    I am sure all of this is falling on deaf ears. You believe what you believe and there will be little convincing you otherwise. I would end with the following. The greatest deprivations in the past 100 years have not come from capitalism but from socialism. It has been the instrument in creating misery, death, and destruction.

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