Must-Read: : Angus Deaton and the Dodd-Frank Election: “Angus Deaton has won the Nobel, which is wonderful…
…a fine writer with important things to say about political economy. Cardiff Garcia excerpts a passage in which he explains why we should care about the concentration of wealth at the top:
[T]here is a danger that the rapid growth of top incomes can become self-reinforcing through the political access that money can bring. Rules… set not in the public interest but in the interest of the rich, who use those rules to become yet richer…. To worry about these consequences of extreme inequality has nothing to do with being envious of the rich and everything to do with the fear that rapidly growing top incomes are a threat to the wellbeing of everyone else…
Confessore, Cohen, and Yourish documents… that campaign finance this election cycle is dominated by a tiny number of [the] extremely wealthy… overwhelmingly flowing to Republicans…. The biggest piece of the super-rich-super-donor story is money from the financial sector. And there has… been a huge swing of finance capital away from Democrats to Republicans that began… after the passage of financial reform…. the people who brought you the financial crisis trying to buy the chance to do it all over again.
Note that “finance” as a whole was split 50-50 in the money it gave in 2008, and split 75-25 Republican in the money it gave before 2008–Tom Ferguson of U.Mass is the Master of All Who Know on these issues. “Hedge funds” are (or were) people who were not terribly invested in the pre-2009 structure of Wall Street, were relatively young, and were much more Democratic than finance as a whole even before 2008. Their swing to the Republicans is very bad news. You would think that after Arthur Burns’s inflation, Ronald Reagan’s deficits, and Ben Bernanke’s financial crisis that they would be wary. Economic regulation is onerous. But macroeconomic mismanagement is disastrous.
But no…