Here is part of Heather Cox Richardson’s post of Jan 16. You can listen to the whole podcast here.
substack.com/@heathercoxrichardson/p-155033845
From Heather Cox Richardson:
In his final address to the nation last night, President Joe Biden issued a warning that “an oligarchy is taking shape in America of extreme wealth, power, and influence that literally threatens our entire democracy, our basic rights and freedoms, and a fair shot for everyone to get ahead.”
It is not exactly news that there is dramatic economic inequality in the United States. Economists call the period from 1933 to 1981 the “Great Compression,” for it marked a time when business regulation, progressive taxation, strong unions, and a basic social safety net compressed both wealth and income levels in the United States. Every income group in the U.S. improved its economic standing.
That period ended in 1981, when the U.S. entered a period economists have dubbed the “Great Divergence.” Between 1981 and 2021, deregulation, tax cuts for the wealthy and corporations, the offshoring of manufacturing, and the weakening of unions moved $50 trillion from the bottom 90% of Americans to the top 1%.
Biden tried to address this growing inequality by bringing back manufacturing, fostering competition, increasing oversight of business, and shoring up the safety net by getting Congress to pass a law—the Inflation Reduction Act—that enabled Medicare to negotiate drug prices for seniors with the pharmaceutical industry, capping insulin at $35 for seniors, for example. His policies worked, primarily by creating full employment which enabled those at the bottom of the economy to move to higher-paying jobs. During Biden’s term, the gap between the 90th income percentile and the 10th income percentile fell by 25%.
But Donald Trump convinced voters hurt by the inflation that stalked the country after the coronavirus pandemic shutdown that he would bring prices down and protect ordinary Americans from the Democratic “elite” that he said didn’t care about them. Then, as soon as he was elected, he turned for advice and support to one of the richest men in the world, Elon Musk, who had invested more than $250 million in Trump’s campaign.
Musk’s investment has paid off: Faiz Siddiqui and Trisha Thadani of the Washington Post reported that he made more than $170 billion in the weeks between the election and December 15.
Musk promptly became the face of the incoming administration, appearing everywhere with Trump, who put him and pharmaceutical entrepreneur Vivek Ramaswamy in charge of the so-called Department of Government Efficiency, where Musk vowed to cut $2 trillion out of the U.S. budget even if it inflicted “hardship” on the American people.
News broke earlier this week that Musk, who holds government contracts worth billions of dollars, is expected to have an office in the Eisenhower Executive Office Building adjacent to the White House. And the world’s two other richest men will be with Musk on the dais at Trump’s inauguration. Musk, Amazon founder Jeff Bezos, and Meta chief executive officer Mark Zuckerberg, who together are worth almost a trillion dollars, will be joined by other tech moguls, including the CEO of OpenAI, Sam Altman; the CEO of the social media platform TikTok, Shou Zi Chew; and the CEO of Google, Sundar Pichai.
At his confirmation hearing before the Senate Committee on Finance today, Trump’s nominee for Treasury Secretary, billionaire Scott Bessent, said that extending the 2017 Trump tax cuts was “the single most important economic issue of the day.” But he said he did not support raising the federal minimum wage, which has been $7.25 since 2009 although 30 states and dozens of cities have raised the minimum wage in their jurisdictions.
There have been signs lately that the American people are unhappy about the increasing inequality in the U.S. On December 4, 2024, a young man shot the chief executive officer of the health insurance company UnitedHealthcare, which has been sued for turning its claims department over to an artificial intelligence program with an error rate of 90% and which a Federal Trade Commission report earlier this week found overcharged cancer patients by more than 1,000% for life-saving drugs. Americans championed the alleged killer.
It is a truism in American history that those interested in garnering wealth and power use culture wars to obscure class struggles. But in key moments, Americans recognized that the rise of a small group of people—usually men—who were commandeering the United States government was a perversion of democracy.
(The balance of her post gives historical evidence of some of those key moments.)
Barbara
