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Mobile billboards call for a higher tax rate on America’s mega rich, in New York on July 27. Photo: EPA-EFE
Opinion
Jeffrey D. Sachs
Jeffrey D. Sachs

US must address political corruption and social inequality, or risk the return of Trump in 2024

  • Opposition to Biden’s much-needed welfare expansion plan shows America is still being run by the rich, for the rich
  • The US must end its 40-year class war on the poor that has resulted in lowered life expectancy and a rise in depression
Almost a year after Joe Biden’s narrow presidential election victory over Donald Trump, the United States remains on a knife-edge. Many political outcomes are possible.
These range from the gradual economic and political reform that Biden is seeking to the subversion of elections and constitutional rule that Trump attempted last January.

It’s not easy to diagnose exactly what ails America at its core so deeply that it incited the Trump movement.

Is it the ceaseless culture wars that divide America by race, religion and ideology? Is it the increase in inequality of wealth and power to unprecedented levels? Is it America’s diminishing global power and the repeated disasters of US-led wars?

All of these factors are at play. Yet, in my view, the deepest crisis is political – the failure of America’s political institutions to “promote the general welfare”, as the US Constitution promises.

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Is the US economy an oligarchy?

Is the US economy an oligarchy?

Over the past four decades, America’s politics have become an insider’s game to favour the super-rich and corporate lobbies at the expense of the overwhelming majority of citizens.

Warren Buffett homed in on the essence of the crisis in 2006. “There’s class warfare, all right,” he said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

The battlefield is Washington, DC; the shock troops are the corporate lobbyists. The ammunition is the billions of dollars spent annually on federal lobbying (an estimated US$3.5 billion in 2020) and campaign contributions (an estimated US$14.4 billion in the 2020 election), while the pro-class-war propagandists are the corporate media, led by mega-billionaire Rupert Murdoch.

America’s class war on the poor is not new but was launched in earnest in the early 1970s.

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Following the Great Depression of the 1930s, America was generally on the same development path as post-war western Europe, becoming a social democracy.

Income inequality was declining, and more social groups were joining the mainstream of economic and political life.

Then came the revenge of the rich. In 1971, a corporate lawyer, Lewis Powell, laid out a strategy to reverse the social democratic trend. Under president Richard Nixon, Powell was sworn in to the US Supreme Court in 1972, enabling him to put his plan into operation.

Under Powell’s prodding, the court opened the floodgates to corporate money in politics. In 1976, it struck down federal limits on campaign spending as violations of free speech.

When Ronald Reagan became president in 1981, he reinforced the Supreme Court’s assault on general welfare by cutting taxes for the rich, attacking organised labour and rolling back environmental protections.

Protesters gather in Chicago, US, on October 22, 2011, as part of the widespread Occupy movement against social and economic inequality. Photo: AP
As such, while Europe generally continued on the path of social democracy and sustainable development, the US charged ahead on a path marked by political corruption, oligarchy, an ever-widening gap between the rich and the poor, disdain for the environment and a refusal to limit human-induced climate change.

A few numbers spell out the differences. Governments in the European Union raise revenues averaging roughly 45 per cent of GDP, while US government revenues amount to only around 31 per cent of GDP. European governments are thus able to pay for universal access to health care, higher education, family support and job training, while the US is not.

As of 2019, the share of the richest 1 per cent of households in national income was around 11 per cent in western Europe, compared with 18.8 per cent in the US. In 2019, the US emitted 16.1 tons of carbon dioxide per person, compared with 8.3 tons in the EU.

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In short, the US has become a country of the rich, by the rich and for the rich.

The resulting social cleavages have led to declining life expectancy (even before Covid-19) and rising rates of depression, especially among young people.
Politically, these derangements have led in varied directions – most ominously, to Trump, who offered faux populism and a cult of personality.
This is the situation Biden is trying to address, but his successes so far have been limited and fragile.
The fact is that all congressional Republicans and a small but decisive group of Democrats are intent on blocking any meaningful increase in taxes, preventing the growth in federal revenues urgently needed to create a fairer and greener society.

Thus, we are arriving at the end of Biden’s first year with obstacles in every direction regarding fair taxation, increased social spending, protection of voting rights and urgently needed environmental safeguards.

Biden could still eke out some modest wins, and then build on them in the coming years. The public wants this. Roughly two-thirds of Americans favour higher taxes on the rich and corporations.

Yet there is a real possibility that Biden’s setbacks in 2021 will help the Republicans win control of one or both chambers of Congress in 2022.

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That would put an end to legislative reforms until at least 2025, and could even presage the return of Trump in 2024.
With America in domestic disarray, politicians of both parties have escalated their anti-China rhetoric, as if a new cold war could somehow soothe America’s home-grown angst.
The only thing it will produce, alas, is more global tension and new dangers of conflict (over Taiwan, for example).

The US is not back, at least not yet. It is still in the throes of a struggle to overcome decades of political corruption and social neglect. The outcome remains highly uncertain, for both the US and the world.

Jeffrey D. Sachs, University Professor at Columbia University, is director of the Center for Sustainable Development at Columbia University and president of the UN Sustainable Development Solutions Network. Copyright: Project Syndicate
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