No, the answer isn’t more asset building for the 99%. The answer is boosting wages over assets
by David Atkins
If you want your day’s fill of poorly thought-out, plutocrat-friendly pieces, Politico Magazine has become a great place to go. Andrea Levere and Ezra Levin’s neoliberal answer to Piketty deserves an honored mention in the tradition.
They acknowledge the reality of Piketty’s argument that asset returns grow faster than incomes, leading to increasing inequality. They also acknowledge that the wealthy control the vast majority of the assets. But they reject the call for taxation on the assets of the super-rich in favor of…increasing the assets and savings of the poor, instead of providing income (wage) support. No, really:
In other words, government spends to help low-income families just get by, and it spends to help high-income families get further ahead. Piketty found that concentrated wealth is the driving force behind income inequality, and federal policy is actively concentrating that wealth.
Some may argue that working families do not receive benefits for saving and investments because these families are unable to save or invest. But decades of research proves otherwise. The American Dream Demonstration, for instance, a nationwide research project on savings for working families, showed that even the lowest-income families will save toward their goals of college, home and business ownership if provided with the right opportunities and incentives. And a rigorous study of New York City’s $aveUSA program has found that low-income tax filers will save a significant portion of their refund to serve as a personal safety net.
There’s no shortage of ideas for new asset-based policies. Children’s Savings Account programs, which help children start building assets early in life, have launched throughout the country and congressional leaders have committed to supporting legislation to provide every child born in the country with a savings account.
Other asset-based proposals would expand and make refundable the Saver’s Credit — a rare retirement savings tax expenditure targeted to low- and moderate-income households. Policymakers are also working to remove asset limits from public benefit programs so families don’t have to choose between building wealth and receiving benefits that help them make ends meet. (In many states, a parent who saves as little as $1,000 or $2,000 in a savings account for themselves or for their kids risks getting kicked off of public benefits.)
So instead of doing something about radical inequality, the new neoliberal answer is to give the 44% of Americans living paycheck to paycheck more savings vehicles and incentives to stash away money to pay for those increasingly impossibly high mortgage and tuition costs.
As the inequality problem becomes more and more severe and as Piketty’s arguments gain increasing influence, look for all the neoliberal asset addicts to make ever more preposterous arguments to defend incentivizing boosting assets over boosting wages.
It’s all they know, and doing anything else would turn their worlds inside-out and hurt all their very asset-heavy bank accounts.
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