Thomas Piketty on the rise of Bernie Sanders: the US enters a new political era The Vermont senator’s success so far demonstrates the end of the politico-ideological cycle opened by the victory of Ronald Reagan at the 1980 elections Bernie Sanders makes clear he wants to restore progressive taxation and a higher minimum wage. Photograph: Evan Vucci/AP Thomas Piketty for Le Monde Thomas Piketty is a French economist, and the author of Capital in the Twenty-First Century Tuesday 16 February 2016 11.13 EST Last modified on Thursday 12 May 2016 11.31 EDT How can we interpret the incredible success of the “socialist” candidate Bernie Sanders in the US primaries? The Vermont senator is now ahead of Hillary Clinton among Democratic-leaning voters below the age of 50, and it’s only thanks to the older generation that Clinton has managed to stay ahead in the polls. Because he is facing the Clinton machine, as well as the conservatism of mainstream media, Sanders might not win the race. But it has now been demonstrated that another Sanders – possibly younger and less white – could one day soon win the US presidential elections and change the face of the country. In many respects, we are witnessing the end of the politico-ideological cycle opened by the victory of Ronald Reagan at the 1980 elections. Let’s glance back for an instant. From the 1930s until the 1970s, the US were at the forefront of an ambitious set of policies aiming to reduce social inequalities. Partly to avoid any resemblance with Old Europe, seen then as extremely unequal and contrary to the American democratic spirit, in the inter-war years the country invented a highly progressive income and estate tax and set up levels of fiscal progressiveness never used on our side of the Atlantic. From 1930 to 1980 – for half a century – the rate for the highest US income (over $1m per year) was on average 82%, with peaks of 91% from the 1940s to 1960s (from Roosevelt to Kennedy), and still as high as 70% during Reagan’s election in 1980. This policy in no way affected the strong growth of the post-war American economy, doubtless because there is not much point in paying super-managers $10m when $1m will do. The estate tax, which was equally progressive with rates applicable to the largest fortunes in the range of 70% to 80% for decades (the rate has almost never exceeded 30% to 40% in Germany or France), greatly reduced the concentration of American capital, without the destruction and wars which Europe had to face. A mythical capitalism In the 1930s, long before European countries followed through, the US also set up a federal minimum wage. In the late 1960s it was worth $10 an hour (in 2016 dollars), by far the highest of its time. All this was carried through almost without unemployment, since both the level of productivity and the education system allowed it. This is also the time when the US finally put an end to the undemocratic legal racial discrimination still in place in the south, and launched new social policies. All this change sparked a muscular opposition, particularly among the financial elites and the reactionary fringe of the white electorate. Humiliated in Vietnam, 1970s America was further concerned that the losers of the second world war (Germany and Japan in the lead) were catching up at top speed. The US also suffered from the oil crisis, inflation and under-indexation of tax schedules. Surfing the waves of all these frustrations, Reagan was elected in 1980 on a program aiming to restore a mythical capitalism said to have existed in the past. Bernie Sanders gives New Hampshire victory speech: ‘nothing short of the beginning of a political revolution’ The culmination of this new program was the tax reform of 1986, which ended half a century of a progressive tax system and lowered the rate applicable to the highest incomes to 28%. Democrats never truly challenged this choice in the Clinton (1992-2000) and Obama (2008-2016) years, which stabilized the taxation rate at around 40% (two times lower than the average level for the period 1930 to 1980). This triggered an explosion of inequality coupled with incredibly high salaries for those who could get them, as well as a stagnation of revenues for most of America – all of which was accompanied by low growth (at a level still somewhat higher than Europe, mind you, as the old world was mired in other problems). A progressive agenda Reagan also decided to freeze the federal minimum wage level, which from 1980 was slowly but surely eroded by inflation (little more than $7 an hour in 2016, against nearly $11 in 1969). Again, this new political-ideological regime was barely mitigated by the Clinton and Obama years. Sanders’ success today shows that much of America is tired of rising inequality and these so-called political changes, and intends to revive both a progressive agenda and the American tradition of egalitarianism. Hillary Clinton, who fought to the left of Barack Obama in 2008 on topics such as health insurance, appears today as if she is defending the status quo, just another heiress of the Reagan-Clinton-Obama political regime. Live Trump and Ryan: meeting was a 'very positive step' toward GOP unity – live Presumptive GOP nominee meets with congressional leaders including House speaker, who has said he wants to be part of the party’s ‘unifying process’ Read more Sanders makes clear he wants to restore progressive taxation and a higher minimum wage ($15 an hour). To this he adds free healthcare and higher education in a country where inequality in access to education has reached unprecedented heights, highlighting a gulf standing between the lives of most Americans, and the soothing meritocratic speeches pronounced by the winners of the system. Meanwhile, the Republican party sinks into a hyper-nationalist, anti-immigrant and anti-Islam discourse (even though Islam isn’t a great religious force in the country), and a limitless glorification of the fortune amassed by rich white people. The judges appointed under Reagan and Bush have lifted any legal limitation on the influence of private money in politics, which greatly complicates the task of candidates like Sanders. However, new forms of political mobilization and crowdfunding can prevail and push America into a new political cycle. We are far from gloomy prophecies about the end of history. This piece was first published in Le Monde on 14 Febrary 2016 The English version appeared in The Guardian: http://www.theguardian.com/us-news/...homas-piketty-bernie-sanders-us-election-2016
conveniently leaves out those years prior to Reagan. The whole reason Reagan was so popular is because socialism sucks. Spare me the socialism for the rich. True, the pendulum may have reached it's apex, but he bought us some time to watch Europe become more and more socialist, and ther chicken is coming home to roost. We have never really had true conservatism, or true socialism, but of the messed up versions the world has tried, conservatism is a lot easier to explain, namely, you can't spend more than you make for ever. If Keynes was in charge we could do it for a while. I know I'm rambling, but if Picketty can put out his pie in the sky the USA is embracing Bernie crap and the times they are a changing, I can answer with been there done that (almost.) You can't have it both ways. USA is no longer the leader and other European countries are much more advanced than us? Then why is our job to lead? Show us a successful socialist country and we will gladly follow.
Pikettey is a fraud. He used phony statistics to make his case. There must have been a reason he needed to phony them. But it doesn't matter to the left. In the great tradition of Dan Rather and all the race crime hoaxes, they just pretend it doesn't matter and declare that it's 'fake, but accurate'. Thomas Piketty’s book is declared Fake But Accurate A scammer's gotta scam http://www.redstate.com/streiff/2014/05/23/thomas-pikettys-book-declared-fake-accurate/ "When the Financial Times looked into Piketty’s work, they could not replicate his results---" "Piketty had a political agenda and manipulated his data to arrive at his preordained and politically driven destination"
from your link... When Piketty was contacted for comment he said “Sacre bleu.” "Let me also say that I certainly agree that available data sources on wealth are much less systematic than for income. In fact, one of the main reasons why I am in favor of wealth taxation and automatic exchange of bank information is that this would be a way to develop more financial transparency and more reliable sources of information on wealth dynamics (even if the tax was charged at very low rates, which you might agree with). For the time being, we have to do with what we have, that is, a very diverse and heterogeneous set of data sources on wealth: historical inheritance declarations and estate tax statistics, scarce property and wealth tax data, and household surveys with self-reported data on wealth (with typically a lot of under-reporting at the top). As I make clear in the book, in the on-line appendix, and in the many technical papers I have published on this topic, one needs to make a number of adjustments to the raw data sources so as to make them more homogenous over time and across countries." Yadda yadda weasel weasel This work by Piketty is a polemic against capitalism, not a serious work of scholarship. It is obvious that, in addition to inadvertent errors, that Piketty had a political agenda and manipulated his data to arrive at his preordained and politically driven destination.
This article reads like it was written by a starry-eyed high school student who supports Bernie Sanders. I would expect more, even from the economist/ political pundit du jour.