Pulitzer Prize winner David Cay Johnston tells Salon how America's economic story could end -- and it isn't pretty
David Cay Johnston (Credit: The New Press/Cheryl Amati Martin)
Long before anyone knew the name Thomas Piketty, Pulitzer Prize-winning journalist David Cay Johnston was plumbing the hidden depths of the American tax code, revealing the myriad ways it privileges the interests of corporations and the wealthy ahead of those of the 99 percent. Indeed, while it may sometimes feel as if economic inequality is the new trend, Johnston’s career reminds us that the great gulf that separates the rich from the rest in the contemporary United States didn’t happen overnight, but over a course of decades.
Despite coming out during the same year as “Capital in the Twenty-First Century
,” and “The Divide
,” Johnston’s newest release, “Divided: The Perils of Our Growing Inequality
,” is a different kind of inequality book. Rather than a sweeping overview of centuries of economic history, or an on-the-ground examination of how our justice system ignores the powerful while brutalizing the rest, Johnston’s book is a collection of essays, speeches and excerpts — a kind of inequality reader. Featuring insights from philosophers, economists, journalists, researchers and even politicians, “Divided” reminds us how inequality is one of those rare problems that truly matters to all of us, no matter what our interests or chosen field.
Earlier this week, Salon reached Johnston via telephone to discuss “Divided,” whether American democracy can survive such great economic disparities, and how returning to a more equal society is literally a matter of life and death. Our conversation follows, and has been slightly edited for clarity and length. In addition, Johnston followed up with further thoughts via email.
What inspired you to create this book?
I had done a trilogy on hidden aspects of the American economy, “Perfectly Legal
,” which was about how the rich benefit from taxes, “Free Lunch
,” about all the subsidies people didn’t know about that go to rich people and corporations, and “The Fine Print
,” which was about restraint of trade and monopolies. And in speaking for the last 10 years around the country, one of the things I learned is that people didn’t understand that this isn’t just a function of numbers and whatnot; they didn’t understand there’s a whole structure that affects families, health, healthcare — which are different things — incarceration, opportunity, exposure to environmental hazards, wage theft and so, there was really a need here to give people a broad understanding of, well, “How did this come about, this incredible inequality that we didn’t have in this country until recent years?”
[After the interview, Johnston emailed to add: “My trilogy on the American economy explained many of the little-known, and often deceptive, laws, regulations and official practices. But inequality involves much more than what I had written about in the trilogy. I wanted to provide people with a broad understanding of the issues, ranging from limited opportunity and obstacles to achieving a modicum of prosperity, to the remarkably cruel and thoughtless policies of the Reagan era.”]
In your introductory essay, you make a point of arguing that inequality is not natural, that it’s something we created and, by extensions, we can undo. But what would you say to those who, say, have read their Piketty and are thinking this kind of inequality is endemic to capitalism?
Well, Piketty — whose work I relied on for years and who substantiates a lot of things that I’ve written with his research — argues that the concentration of wealth will just continue and continue and continue. As Herbert Stein, Richard Nixon’s chief economic adviser, famously said, a trend will only continue as long as it can. We will either, through peaceful, rational means, go back to a system that does not take from the many to give to the few in all these subtle ways, or we will end up like 18th century France. And if we end up in that awful condition, it will be the bloodiest thing the world has even seen. So I think it’s really important to get a handle on this inequality. After all, since the end of the Great Recession, one-third of all income increases in this country went to just 16,000 households, 95 percent of it went to the top 1 percent, and the bottom 90 percent’s incomes fell, and they fell by 15 percent. So we need to recognize that there is a very, very serious problem here that has to get addressed. But it won’t just go on forever because if you follow that to its logical absurdity, one person ends up with 90 percent of the wealth in the world. And that’s not going to happen.
[In the aforementioned email, Johnston also followed up on this point, writing: “While I certainly am worried that we could end up in a violent revolution somewhere in the future, sparked by extreme inequality, I’m [an] indictable optimist and believe that [if] the American people have access to explanations and information they will, over the long run, make smart choices.”]
So when you say it will be very bloody, I know you’re speaking of a wild hypothetical to some degree, but do you really think we’re on track for violent social upheaval?
Oh, yes. I’ve written about people on the far right and the far left since the ’60s. Back in the ’60s, I was in the homes of people who built bombs, both left and right. And we live in a country now where we have members of Congress who have either questioned, or ignored questions about, killing the president of the United States. We are seeing all these laws passed allowing people to carry guns openly. We are coming apart as a society, and inequality is right at the core of that. When the 90 percent are getting worse off and they’re trying to figure out what happened, they’re not people like me who get to spend four or five hours a day studying these things and then writing about them — they’re people who have to make a living and get through life. And they’re going to be swayed by demagogues and filled with fear about the other, rather than bringing us together.
When you mention demagogues, are there people currently on the scene that give you a shiver up your spine in that regard, or are you speaking hypothetically?
I think it would be easy for someone to arrive in the near future and really create forces that would lead to trouble in this country. And you see people who, they’re not the leaders to pull it off, but we have suggestions that the president should be killed, that he’s not an American, that Texas can secede, that states can ignore federal law, and these are things that don’t lack for antecedents in America history but they’re clearly on the rise. In addition to that, we have this large, very well-funded news organization that is premised on misconstruing facts and telling lies, Faux News (formerly Fox News), that is creating, in a large segment of the population — somewhere around one-fifth and one-fourth of it — belief in all sorts of things that are detrimental to our well-being. President Theodore Roosevelt said we shall all rise together or we shall all fall together, and we need to have an appreciation of that.
So, no, I don’t see this happening tomorrow, but I have said for many years that … if we don’t get a handle on this then one of these days our descendants are going to sit down in high-school history class and open a textbook that begins with the words: “The United States of America was …” and then it will dissect how our experiment in self-governance came apart. By the way, the Founders were very worried about this. John Adams said his fear was that instead of having yeoman farmers who owned their own land, and workers who owned their own tools and therefore were independent, that we would become a country in which a business aristocracy would arise, and the mass of people would simply work for wages and the business aristocrats would persuade the wage-earners to support those policies that were actually against their interest and favor the business aristocrats and, when that happened, we would lose our liberties and our democracy.
And he wasn’t exactly the proto-lefty bomb-thrower of the group …
No, but Madison and Monroe and Jefferson — there was a lot of concern about this. They were fearful not just of a hereditary aristocracy but a business aristocracy. And I’ve had my research assistants at Syracuse Law working on this for the last two-and-a-half years and there was an abundance of material written in that era that was concerned about extreme inequality. And that’s what we have in America, is extreme inequality.
To turn from how bad things are getting to how we can make them better, I’d like to ask you what solutions you’d like to see people organize around in terms of reducing inequality?
Number one, we’ve got to change the makeup of Congress. The Democrats got 1.4 million more votes than the Republicans [in 2010] but they have a minority [in Congress] because of gerrymandering. So we need to have state legislatures — and we may need a constitutional amendment to make districts evenly divided between the parties — that will get us more centrist candidates rather than extremists on both left and right.
Secondly, we’ve got to restore unions. If you believe in market economics, you’ve gotta believe in unions. Now, unions aren’t perfect, but neither are corporations, or the government or, for god’s sake, the clergy. Unions allow people as a group to negotiate for reasonable pay, and without unions you have big corporations, and individuals who have no bargaining power, such as a lot of unemployed workers. Our competitors all have unions. The Germans even have unions for executives. So we need to get back to unions if we’re going to improve people’s economics.
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