Trump’s Inconvenient Racial Truth

By NIKOLE HANNAH-JONES
 Source: The New York Times

With the race for the presidency entering its last days, Donald J. Trump last Wednesday once again made his pitch to black America: a new deal aimed just at them. “I will be your greatest champion,” Trump said at a campaign rally in the battleground state of North Carolina. “I will never ever take the African-American community for granted. Never, ever.”

The hyperbolic remarks elicited the same collective eye roll among black Americans and white progressives that they have since Trump began regularly including black Americans in his platform in August. It was then, following days of unrest in Milwaukee after the police killed a black man there, that Trump flew to Wisconsin to give a speech on race. He headed not to the heavily black city where the embers of outrage still smoldered but instead, as his critics noted with glee, took the stage at the county fairgrounds of a bleached-out, deeply conservative Milwaukee suburb in order to address the problems of the “inner city.”

There was, of course, the usual and expected “law and order” and pro-police rhetoric that elicited hoots and cheers from the crowd. But then Trump, as he is known to do, added an unexpected twist.

“Our job is to make life more comfortable for the African-American parent who wants their kids to be able to safely walk the streets,’’ Trump said. ‘‘Or the senior citizen waiting for a bus, or the young child walking home from school. For every one violent protester, there are a hundred of moms and dads and kids on the same city block who just want to be able to sleep safely at night.”

He pointed out the high unemployment rate among black men in Milwaukee, the number of households run by single mothers who were living in poverty and the low high-school-graduation rates. “I am asking for the vote of every African-American citizen struggling in our country today who wants a different and much better future,” Trump told the crowd, which at times stood eerily silent. “It is time for our society to address some honest and very, very difficult truths. The Democratic Party has failed and betrayed the African-American community.” Trump went on to say that Hillary Clinton “panders and talks down to communities of color,” “seeing them only as votes, not as human beings worthy of a better future.” It was time, Trump proclaimed, that Democrats compete for black votes.

There was something utterly surreal about that moment. Trump had spent months whipping up his supporters, focusing on other so-called minority groups whom he labeled rapists and terrorists, and now he was telling the nearly all-white crowd that if they voted for him, he’d use his power to help black residents in the inner cities by bringing jobs back and improving their wages. Trump’s message did not seem to be directed at his audience (recent research by professors at the universities of Chicago and Minnesota showed that white Trump supporters are less likely to support government programs if they think they will help black people). As one resident of West Bend, the approximately 1-percent-black town where the rally was held, put it to The Times: “They think we owe them something. I don’t want to seem racist or anything, but the black heritage has been raised in a certain way that there’s no incentive to get out and work, because all of a sudden you have five kids and there are no dads around.” Nor was it directed to black people, who of all the nonwhite voters are the least poachable by the G.O.P. The message was presumably targeted at white moderates, the independents and disillusioned Bernie Sanders legions, whom Trump was most likely hoping to reassure that he was not racist despite his years of fueling the birther conspiracy theory and months of spewing bigotry about Muslims and Mexicans.

But in his speeches, Trump was speaking more directly about the particular struggles of working-class black Americans and describing how the government should help them more than any presidential candidate in years. Let that uncomfortable truth sink in.

Whatever his motives, Trump was talking about the black working class in a way that few national politicians do. By now it’s no surprise that when they talk about black Americans as at all, Republican politicians typically conflate blackness with poverty, and then quickly blame black people for their struggles. In March 2014, Speaker of the House Paul Ryan said that the problems in the “inner cities” Trump was talking about were rooted not in the loss of manufacturing jobs and the flight of businesses and the tax base to government-subsidized suburbs, but on an absence of a “culture of work.”

Liberals quickly lambasted Ryan for those remarks. But far too often, the way Democrats talk to, and about, black Americans is indistinguishable from the way their Republican counterparts do. And President Obama has been as guilty as anyone. A year before Ryan made his remarks, Obama delivered a commencement address at the historically black Morehouse College, where he warned the graduates at the prestigious all-male school that they shouldn’t use racism as an excuse, and to be good fathers.

Politicians regularly deploy this type of shaming when referring to, or even when addressing, black Americans. But it’s hard to fathom a politician, Democrat or Republican, standing before a predominately white crowd in a sagging old coal town, and blaming the community’s economic woes on poor parenting or lack of work ethic or a victim mentality. Those Americans, white Americans, are worthy of government help. Their problems are not of their own making, but systemic, institutional, out of their control. They are never blamed for their lot in life. They have had jobs snatched away by bad federal policy, their opportunities stolen by inept politicians.

It would have been easy, expected, for Trump in his speeches to recycle the same old personal-responsibility narrative for black voters. But Trump didn’t call for black people to stop lazing around and use a little more elbow grease on those bootstraps. He was pushing for more government — Republican-led government — to help black folks prosper, a racially specific new deal that included investing in schools, high-wage jobs and black entrepreneurs. And in doing so, Trump, at least rhetorically, did something the Democrats and Republicans have largely failed to do — he took black citizens into the ranks of “hardworking Americans” worthy of the government’s hand.

To be clear, I am not arguing that the man who called for the execution of the since-exonerated Central Park Five (and who still insists on their guilt) and who seeks nationwide implementation of the stop-and-frisk program ruled unconstitutional in New York City, and who warns that voting in heavily black cities is rigged, is a racial progressive who will enact policies that will help black communities. Nor am I saying black voters should buy what Trump is selling. (And they aren’t: A poll released last week by The New York Times Upshot/Siena College of likely voters in Pennsylvania found that “no black respondent from Philadelphia supported Mr. Trump in the survey.”)

What I am saying is that when Trump claims Democratic governance has failed black people, when he asks “the blacks” what they have to lose, he is asking a poorly stated version of a question that many black Americans have long asked themselves. What dividends, exactly, has their decades-long loyalty to the Democratic ticket paid them? By brushing Trump’s criticism off as merely cynical or clueless rantings, we are missing an opportunity to have a real discussion of the failures of progressivism and Democratic leadership when it comes to black Americans.

Trump is not wrong when he says that black Americans have suffered in a particular way in blue cities and blue states. (Of course, they suffer in red states as well.) The most segregated cities have long been clustered above the Mason-Dixon line and are Democratically run. Some of the most segregated schools in the country educate students in New York, Chicago, Boston, Philadelphia, Milwaukee. Efforts to integrate schools in these cities have met resistance from white progressives. Democrats did as much to usher in the era of mass incarceration as anyone else. And in these cities, with their gaping income inequality, black communities shoulder a terrible burden of gun violence, high unemployment, substandard schools and poverty.

Though black Americans these days consistently vote Democratic at higher margins than any other racial group, this wasn’t always the case. Before 1948, black voters were fairly evenly split between Republican and Democrats. Then President Harry S. Truman pushed a civil rights platform, and a majority of black voters swung Democratic, though a significant percentage still identified as Republican. That changed in the 1960s, when black voters moved en masse to the Democratic Party after Lyndon B. Johnson showed he was willing to lose the South in order to pass the most sweeping civil rights legislation since Reconstruction. Southern Democrats abandoned the party to become Republicans, and Richard Nixon won the presidency in 1968 on a Southern strategy of stalling forward movement on civil rights. And the party of Lincoln came to be considered anathema to black progress.

In the intervening years, modern Democrats have been far more likely to support social programs that help the poor, who are disproportionately black, and to support civil rights policies. But since Johnson left office, Democrats have done little to address the systemic issues — housing and school segregation — that keep so many black Americans in economic distress and that make true equality elusive. At the federal level, despite the fact that the National Fair Housing Alliance estimates that black Americans experiences millions of incidents of housing discrimination every year, Democrats, like Republicans, have avoided strong enforcement of federal fair-housing laws that would allow black families to move to opportunity-rich areas. Both Democrats and Republicans have failed to pursue school-integration policies that would ensure black children gain access to the good schools white kids attend. In the 1970s and ’80s, Trump battled housing-discrimination lawsuits, while Senator Clinton was noticeably quiet when Westchester County, N.Y., a county that twice voted decidedly for Obama, fought a court order to integrate its whitest towns, including Chappaqua, the 2-percent-black town she calls home.

Instead of seeking aggressive racial-equality initiatives, Democrats too often have opted for a sort of trickle-down liberalism. If we work to strengthen unions, that will trickle down to you. If we work to strengthen health care, that will trickle down to you. If we work to make all schools better, that will trickle down to you. After decades of Democratic loyalty, too many black Americans are still awaiting that trickle.

While Republicans rarely make any effort to court black voters, Democrats do reach out to them. But Democratic politicians have also shown again and again that they will sacrifice the needs of their most loyal constituents in order to win larger political points. I will never forget how in February 2013, President Obama flew to Chicago to give a speech that touched on gun violence. He spoke of the random shooting of Hadiya Pendleton, a Chicago teenager who had performed at his inaugural events. “There’s no more important ingredient for success, nothing that would be more important for us reducing violence than strong, stable families — which means we should do more to promote marriage and encourage fatherhood,” Obama told the predominantly black audience. But two months earlier, when he gave a speech about the Newtown shooting, he’d said no such thing about fathers and marriage, even though that violent act was carried out by a young white man from a broken home. Instead, he emphasized Congress’s inability to pass gun control. The message: Black killings are the black community’s fault; white killings are a failure of government.

Trump, in turning the usual rhetoric on its head — claiming that black people are living in inner-city hells and should therefore spurn the Democratic Party — has forced progressives, both black and white, into the uncomfortable position of arguing that things aren’t nearly as bad for black America as Trump would have us believe. In the weeks before Trump’s alleged sexual improprieties overtook everything else, writers dashed off thousands of words arguing that the “inner cities” are improving (gentrification!) and that poverty is not just in the inner city but in suburban America too, and that there are lots of middle-class black folks doing just fine, thank you. Writers pointed out that Trump was wrong when he said nearly half of inner-city black children are poor when it’s actually just one-third. If Trump had raised these statistics and said black people needed to simply work harder, these same people would be arguing that candidates needed to be talking about what they were going to do address the systemic causes of devastatingly high poverty and unemployment rates that black Americans experience. And they would have been right. 

Most black Americans live neither in poverty nor in the inner city. And even those of us who do live in inner cities aren’t living in hell. But the inequality that black Americans experience is stark. Black children are more segregated from white children now than at any point since the early ’70s. United States census data shows that a black middle-class family is more likely to live in a poor neighborhood than a poor white family. The wealth gap between white and black families is the widest it has been in nearly three decades. This is true in cities and states run by Republicans. This is true in cities and states run by Democrats.

Regardless of how you feel about Trump, on this one thing he is right: The Democratic Party has taken black Americans for granted. The problem is — and this is where Trump’s rhetoric is just that, rhetoric — black people aren’t loyal Democrats because they don’t know any better. They are making an informed decision. As Theodore R. Johnson, an adjunct professor at Georgetown University’s McCourt School of Public Policy and an expert on black voting behavior, points out in his research, black Americans are an electoral monolith out of necessity. Black people care about the environment and the economy and international issues, and they generally fall across the spectrum on a range of issues, just like all other human beings. But while the Democratic Party might be accused of upholding the racial status quo, the Republican Party has a long track record of working to restrict the remedies available to increase housing and school integration and equal opportunities in employment and college admissions. And most critical, Republicans have passed laws that have made the hallmark of full citizenship — the right to vote — more difficult for black Americans. Since first securing the right to vote, black Americans have had to be single-issue voters — and that single issue is basic citizenship rights. Maintaining these rights will always and forever transcend any other issue. And so black Americans can never jump ship to a party they understand as trying to erode the hard-fought rights black citizens have died to secure.

But it is also true that black Americans have not always been single-party voters, and they don’t have to remain so. If Democrats want to keep black voters, they need to work for those votes, because one day Republicans might wise up. Until then, when Trump asks what the hell do black Americans have to lose? Well, a hell of a lot.

President Barack Obama Weekly Address October 1, 2016 (Video/Transcript)

President Barack Obama
Weekly Address
The White House
October 1, 2016

There are a couple different stories you can tell about our economy.

One goes like this.  Eight years after the worst economic crisis of our lifetimes, our economy has created jobs for 71 straight months.  That’s a new record.  Unemployment has fallen below five percent.  Last year, the typical household saw its income grow by about twenty-eight hundred dollars – the biggest one-year increase ever.  And the uninsured rate is at an all-time low.

All that is true.  What’s also true is that too much of our wealth is still taken by the top – and that leaves too many families still working paycheck to paycheck, without a lot of breathing room.
There are two things we can do about this.  We can prey on people’s worries for political gain.  Or we can actually do something to help working families feel more secure in today’s economy.

Count me in the latter camp.  And here’s one thing that will help right away:  making sure more of our families have access to paid leave.

Today, having both parents in the workforce is an economic necessity for many families.  But right now, millions of Americans don’t have access to even a single day of paid sick leave.  So if you get sick, that sticks you with a lousy choice.  Do you go to work and get everyone else sick, too?  Or do you take care of yourself at the risk of a paycheck?  If your kid gets sick, do you send her to school anyway?  Or do you stay home to take care of her, lose a day’s pay, and maybe even put your own job at risk?

We shouldn’t have to make choices like that in America.  That’s why I’ve repeatedly called on the Republican Congress to pass a law guaranteeing most workers in America the chance to earn seven days of paid sick leave each year.  Of course, Congress hasn’t acted. But we’ve also worked with states, cities, and businesses to get the job done – and many have, pointing to research showing that paid leave actually helps their bottom line.  In fact, since I took office, another ten million private sector workers have gained paid sick leave – making up a record share of our workforce.

Unfortunately, there are still about 40 million private sector workers who don’t get a single day.  That’s why I’m doing what I can on my own.  Effective on January 1st, federal contractors will be required to give their employees working on new federal contracts up to seven paid sick days each year.  That’s happening.  It will help about one million workers when they or a loved one gets sick.  It will cover time you need for preventive care.  It will cover absences resulting from domestic violence or sexual assault.  And it means everyone else is less likely to catch what someone else has got – whether it’s a coworker or the person preparing or serving your food.

Paid sick leave isn’t a side issue, or a women’s issue, or something that’s just nice to have.  It’s a must-have.  By the way, so are economic priorities like child care, paid family leave, equal pay, and a higher minimum wage.  We need a Congress that will act on all these issues, too, because they’d make a meaningful difference in the lives of millions of Americans who are working hard every day.

It’s more than talk – it’s action.  And that’s what you should demand of every politician who wants the privilege to serve you.

Thanks, and have a great weekend.

Study: Election Coverage Skewed By “Journalistic Bias”

by Sarah Childress Senior Digital Reporter, FRONTLINE

An analysis of news coverage from the 2016 primary races found that mainstream media outlets engaged in “journalistic bias” that led to over-coverage of the Donald Trump campaign and under-coverage of Democratic candidates, in particular Sen. Bernie Sanders.

The report, from Harvard Kennedy School’s Shorenstein Center on Media, Politics and Public Policy, underscores the role that the press can play in anointing — or sinking — a candidate, as well as keeping voters under-informed by focusing only on the horse race instead of the candidates or relevant issues.

It also highlights how the press helped to elevate Trump while contributing to the downfall of rival candidates, and paid relatively little attention to the Democratic nominating contest.

For the report, a content analysis firm, Media Tenor, examined statements from CBS, Fox, the Los Angeles Times, NBC,The New York Times, USA Today, The Wall Street Journal, and The Washington Post.

“Game-centered reporting has consequences,” the report said. “The media’s tendency to allocate coverage based on winning and losing affects voters’ decisions. The press’s attention to early winners, and its tendency to afford them more positive coverage than their competitors, is not designed to boost their chances, but that’s a predictable effect.”

Why the Bias?

The press doesn’t favor certain candidates because it’s engaged in a vast conspiracy, according to the report. It’s a lot simpler: reporters like a good story. It’s what their business is based on. And this year, Trump’s narrative seemed more novel than that of Clinton or Sanders.

This isn’t the first time the press has fallen for a candidate. Barack Obama received “outsized coverage” when he first ran in 2008, as did Sen. John McCain in 2000, when he invited reporters aboard his campaign bus, the “Straight Talk Express.” Trump, the report said, is now on that list.

The press’s extensive focus on the horse race also leaves less time for substantive coverage, the report said. It found that mainstream media primary coverage was almost entirely about the competition or the campaign process.

By comparison, only 11 percent of the primary coverage focused on the candidates’ policy positions, leadership abilities or personal and professional histories. “Substantive concerns got the least amount of attention,” the report found — on both sides of the aisle.

Trump’s “Press Advantage”

Even before the primaries began, Trump dominated media coverage. For the bulk of the campaign, Trump has received more press attention than any other candidate from either major party, the report found.

As he continued to win primaries, his story became about gaining momentum, a narrative that held fast. “Victory for Trump was also his path to positive coverage,” the report said. Sen. Marco Rubio, by contrast, was portrayed as consistently losing ground after he failed to win an early contest. Rubio never had, the report said, “a single week where his positive press outpaced his negative press.”

11%

 

Only 11 percent of coverage focused on candidates’ policy positions, leadership abilities or personal and professional histories.

 

-- Shorenstein Center on Media, Politics and Public Policy

Trump did receive more substantive coverage in the final month of the campaign, when there were no other competitors in the Republican race, the report said. References to his character and policies rose from 10 percent to 19 percent, and the tone was overwhelmingly negative.

Ultimately, the report attributed Trump’s candidacy in part to the coverage. “He might have won the Republican nomination in any case, given the confluence of factors working in his favor,” it said. “But one of his assets, certainly, was his press advantage.”

Clinton and Sanders, Overshadowed by Republican Race

On the Democratic side, the candidates generally received coverage on par with their primary results: Clinton received 54 percent of the press attention, versus Sanders’ 46 percent, until the middle stage of the campaign — mid-March to early May — when Clinton pulled ahead.

Sanders also received more positive media attention — the largest favorable margin of any candidate, 59 percent good press to 41 percent bad press — until the middle stage of the campaign, the report found.

At the same time, reports on Clinton were more critical because as the presumptive nominee, she was expected by the press to dominate the early contests. By the middle stage of the campaign, however, Clinton was eking out more favorable press, 51 percent positive to 49 percent negative.

But once she clinched the nomination, she received more criticism, with 49 percent positive statements to 51 percent negative, in part because Trump began to target her in speeches.

But no matter what the Democratic candidates did, the Republican contest continued to dominate the press coverage, even when Trump became the presumptive nominee. “Although Trump no longer had active opposition, he received more news coverage in the last month than did either Clinton or Sanders,” the report said, “a development that has no possible explanation other than journalistic bias.”

US gun control: What is the NRA and why is it so powerful?

Source:BBC
It is one of the most powerful players in one of the most hotly-debated issues in the US - gun control - but what exactly is the NRA? Here's a quick guide.

What is the NRA?

NRA stands for National Rifle Association. The group was founded in 1871 as a recreational group designed to "promote and encourage rifle shooting on a scientific basis".

The NRA's path into political lobbying began in 1934 when it began mailing members with information about upcoming firearms bills. The association supported two major gun control acts, the National Firearms Act of 1934 (NFA) and Gun Control Act of 1968 (GCA), but became more politically active following the passage of the GCA in the 1970s.

In 1975, it began attempting to influence policy directly via a newly formed lobbying arm, the Institute for Legislative Action. In 1977 it formed its own Political Action Committee (PAC), to channel funds to legislators.



The NRA is now among the most powerful special interest lobby groups in the US, with a substantial budget to influence members of Congress on gun policy. It is run by executive vice president Wayne LaPierre.

How big is its budget?

The NRA spends about $250m per year, far more than all the country's gun control advocacy groups put together. But the NRA has a much larger membership than any of those groups and disburses funds for things such as gun ranges and educational programmes.

In terms of lobbying, the NRA officially spends about $3m per year to influence gun policy - the recorded spend on lobbying in 2014 was $3.3m. That is only the recorded contributions to lawmakers however, and considerable sums are spent elsewhere via PACs and independent expenditures - funds which are difficult to track.

Analysts point out that the NRA also wields considerable indirect influence via its highly politically engaged membership, many of whom will vote one way or another based on this single issue. The NRA publicly grades members of Congress from A to F on their perceived friendliness to gun rights. Those ratings can have a serious effect on poll numbers and even cost pro-gun control candidates a seat.

How big is the NRA?

Estimates of the NRA's membership have varied widely for decades. The association claimed that membership surged to close to five million people in response to the mass shooting at Sandy Hook school, but some analysts put the figure at closer to three million. The organisation has been accused of artificially inflating the figure.

The NRA has boasted some high-profile members over the years, including former President George HW Bush. Mr Bush resigned from the group in 1995 after Mr La Pierre referred to federal agents in the wake of the Oklahoma City bombing as "jack-booted thugs".

Current members include former vice-presidential candidate Sarah Palin, and actors Tom Selleck and Whoopi Goldberg. The late actor Charlton Heston was president of the NRA between 1998 and 2003. Heston famously held a rifle over his head at an NRA convention following the Columbine High School massacre and told gun control advocates they would have to take it "from my cold, dead hands".

Why is it controversial?

The NRA has lobbied heavily against all forms of gun control and argued aggressively that more guns make the country safer. It relies on, and staunchly defends, a disputed interpretation of the Second Amendment to the US Constitution, which it argues gives US citizens the rights to bear arms.

The association faced criticism from both sides of the political spectrum in the wake of the Sandy Hook shooting, when Mr La Pierre said that the lack of an armed guard at the school was to blame for the tragedy.


It staunchly opposes most local, state and federal legislation that would restrict gun ownership. For example, the NRA recently has lobbied for guns confiscated by the police to be resold, arguing that destroying the weapons is, in effect, a waste of perfectly good guns.

Likewise, it strongly supports legislation that expand gun rights such as "open-carry" laws, which allow gun owners to carry their weapons, unconcealed, in most public places.

 

President Barack Obama Weekly Address August 22, 2015 (Video/Transcript)

President Barack Obama  

Weekly Address
The White House
August 22, 2015

Hi, everybody.  Seven years after the worst economic crisis in generations, our economy continues to grow and create jobs.  In fact, our businesses have created 13 million new jobs over the past five and a half years.

But if we want to keep this momentum going – to make sure that working families feel like their hard work is being rewarded with a basic sense of security – then we all need to do our part.

That’s why my Administration has been partnering with states and cities to help grow the middle class.  Over the past few years, nearly 20 cities and counties have implemented paid sick days.  Six states have enacted paid sick days or paid family leave.  Seventeen states, and more than two dozen cities and counties, have raised their minimum wage.  All of this will help working families.  And across the country, folks are proving that preparing all our kids for the future doesn’t have to be a partisan issue.  Seattle, a city with a Democratic mayor, just passed universal pre-k, while Indianapolis, a city with a Republican mayor, is starting citywide preschool scholarships.  All told, 34 states have increased funding for preschool.  And that’s good for all of us.

Now, we need Congress to do its part to boost the economy, as well.  Unfortunately, Congress left town for five full weeks – and they left behind a stack of unfinished business.  For the first time ever, Congress failed to reauthorize the Export-Import Bank.  That left thousands of business owners and their employees at a serious disadvantage compared to their competitors overseas.  That’s not good for jobs. It's not good for our economy.  When it returns from recess, reauthorizing the bank ought to be a top agenda for members of Congress. 

Congress also hasn’t passed a budget – and when they return from vacation, they’ll only have a few weeks to do so, or shut down the government for the second time in two years.  They’ve had all year to do this.  Months ago, I put forward a detailed plan to strengthen our economy and our national security in a fiscally responsible way.  And for months, I’ve said I will veto any budget that locks in the sequester—those senseless cuts to domestic and national security priorities.  Remember, we can’t cut our way to prosperity.  We should be investing in things that help our economy grow today and tomorrow, like education or infrastructure or scientific research.

Democrats in Congress have made it clear they’re ready to sit down and work with Republicans to find common ground on this.  After all, Americans expect Congress to help keep our country strong and growing – not threaten to shut down our government.  When Congress gets back, they should prevent a shutdown, pass a responsible budget, and prove that this is a country that looks forward – a country that invests in our future, and keeps our economy growing for all Americans.

Thanks, everybody and have a great weekend.

New thoughts on capital in the twenty-first century

Source: TED 

 

It's very nice to be here tonight.

  So I've been working on the history of income and wealth distribution for the past 15 years, and one of the interesting lessons coming from this historical evidence is indeed that, in the long run, there is a tendency for the rate of return of capital to exceed the economy's growth rate, and this tends to lead to high concentration of wealth. Not infinite concentration of wealth, but the higher the gap between r and g, the higher the level of inequality of wealth towards which society tends to converge.

 

0:48 So this is a key force that I'm going to talk about today, but let me say right away that this is not the only important force in the dynamics of income and wealth distribution, and there are many other forces that play an important role in the long-run dynamics of income and wealth distribution. Also there is a lot of data that still needs to be collected. We know a little bit more today than we used to know, but we still know too little, and certainly there are many different processes — economic, social, political — that need to be studied more. And so I'm going to focus today on this simple force, but that doesn't mean that other important forces do not exist.

So most of the data I'm going to present comes from this database that's available online: the World Top Incomes Database. So this is the largest existing historical database on inequality, and this comes from the effort of over 30 scholars from several dozen countries. So let me show you a couple of facts coming from this database, and then we'll return to r bigger than g.

  So fact number one is that there has been a big reversal in the ordering of income inequality between the United States and Europe over the past century. So back in 1900, 1910, income inequality was actually much higher in Europe than in the United States, whereas today, it is a lot higher in the United States. So let me be very clear: The main explanation for this is not r bigger than g. It has more to do with changing supply and demand for skill, the race between education and technology, globalization, probably more unequal access to skills in the U.S., where you have very good, very top universities but where the bottom part of the educational system is not as good, so very unequal access to skills, and also an unprecedented rise of top managerial compensation of the United States, which is difficult to account for just on the basis of education. So there is more going on here, but I'm not going to talk too much about this today, because I want to focus on wealth inequality.

So let me just show you a very simple indicator about the income inequality part. So this is the share of total income going to the top 10 percent. So you can see that one century ago, it was between 45 and 50 percent in Europe and a little bit above 40 percent in the U.S., so there was more inequality in Europe. Then there was a sharp decline during the first half of the 20th century, and in the recent decade, you can see that the U.S. has become more unequal than Europe, and this is the first fact I just talked about. Now, the second fact is more about wealth inequality, and here the central fact is that wealth inequality is always a lot higher than income inequality, and also that wealth inequality, although it has also increased in recent decades, is still less extreme today than what it was a century ago, although the total quantity of wealth relative to income has now recovered from the very large shocks caused by World War I, the Great Depression, World War II.

So let me show you two graphs illustrating fact number two and fact number three. So first, if you look at the level of wealth inequality, this is the share of total wealth going to the top 10 percent of wealth holders, so you can see the same kind of reversal between the U.S. and Europe that we had before for income inequality. So wealth concentration was higher in Europe than in the U.S. a century ago, and now it is the opposite. But you can also show two things: First, the general level of wealth inequality is always higher than income inequality.

  So remember, for income inequality, the share going to the top 10 percent was between 30 and 50 percent of total income, whereas for wealth, the share is always between 60 and 90 percent. Okay, so that's fact number one, and that's very important for what follows. Wealth concentration is always a lot higher than income concentration.

  Fact number two is that the rise in wealth inequality in recent decades is still not enough to get us back to 1910. So the big difference today, wealth inequality is still very large, with 60, 70 percent of total wealth for the top 10, but the good news is that it's actually better than one century ago, where you had 90 percent in Europe going to the top 10. So today what you have is what I call the middle 40 percent, the people who are not in the top 10 and who are not in the bottom 50, and what you can view as the wealth middle class that owns 20 to 30 percent of total wealth, national wealth, whereas they used to be poor, a century ago, when there was basically no wealth middle class. So this is an important change, and it's interesting to see that wealth inequality has not fully recovered to pre-World War I levels, although the total quantity of wealth has recovered. Okay? So this is the total value of wealth relative to income, and you can see that in particular in Europe, we are almost back to the pre-World War I level.

  So there are really two different parts of the story here. One has to do with the total quantity of wealth that we accumulate, and there is nothing bad per se, of course, in accumulating a lot of wealth, and in particular if it is more diffuse and less concentrated. So what we really want to focus on is the long-run evolution of wealth inequality, and what's going to happen in the future. How can we account for the fact that until World War I, wealth inequality was so high and, if anything, was rising to even higher levels, and how can we think about the future?

  So let me come to some of the explanations and speculations about the future. Let me first say that probably the best model to explain why wealth is so much more concentrated than income is a dynamic, dynastic model where individuals have a long horizon and accumulate wealth for all sorts of reasons. If people were accumulating wealth only for life cycle reasons, you know, to be able to consume when they are old, then the level of wealth inequality should be more or less in line with the level of income inequality. 

But it will be very difficult to explain why you have so much more wealth inequality than income inequality with a pure life cycle model, so you need a story where people also care about wealth accumulation for other reasons. So typically, they want to transmit wealth to the next generation, to their children, or sometimes they want to accumulate wealth because of the prestige, the power that goes with wealth. So there must be other reasons for accumulating wealth than just life cycle to explain what we see in the data. Now, in a large class of dynamic models of wealth accumulation with such dynastic motive for accumulating wealth, you will have all sorts of random, multiplicative shocks. So for instance, some families have a very large number of children, so the wealth will be divided. Some families have fewer children. You also have shocks to rates of return. Some families make huge capital gains. Some made bad investments. So you will always have some mobility in the wealth process. Some people will move up, some people will move down. The important point is that, in any such model, for a given variance of such shocks, the equilibrium level of wealth inequality will be a steeply rising function of r minus g. And intuitively, the reason why the difference between the rate of return to wealth and the growth rate is important is that initial wealth inequalities will be amplified at a faster pace with a bigger r minus g.

  So take a simple example, with r equals five percent and g equals one percent, wealth holders only need to reinvest one fifth of their capital income to ensure that their wealth rises as fast as the size of the economy. So this makes it easier to build and perpetuate large fortunes because you can consume four fifths, assuming zero tax, and you can just reinvest one fifth. So of course some families will consume more than that, some will consume less, so there will be some mobility in the distribution, but on average, they only need to reinvest one fifth, so this allows high wealth inequalities to be sustained.

  Now, you should not be surprised by the statement that r can be bigger than g forever, because, in fact, this is what happened during most of the history of mankind. And this was in a way very obvious to everybody for a simple reason, which is that growth was close to zero percent during most of the history of mankind. Growth was maybe 0.1, 0.2, 0.3 percent, but very slow growth of population and output per capita, whereas the rate of return on capital of course was not zero percent. It was, for land assets, which was the traditional form of assets in preindustrial societies, it was typically five percent. Any reader of Jane Austen would know that. If you want an annual income of 1,000 pounds, you should have a capital value of 20,000 pounds so that five percent of 20,000 is 1,000. And in a way, this was the very foundation of society, because r bigger than g was what allowed holders of wealth and assets to live off their capital income and to do something else in life than just to care about their own survival.

Now, one important conclusion of my historical research is that modern industrial growth did not change this basic fact as much as one might have expected. Of course, the growth rate following the Industrial Revolution rose, typically from zero to one to two percent, but at the same time, the rate of return to capital also rose so that the gap between the two did not really change. So during the 20th century, you had a very unique combination of events.  

First, a very low rate of return due to the 1914 and 1945 war shocks, destruction of wealth, inflation, bankruptcy during the Great Depression, and all of this reduced the private rate of return to wealth to unusually low levels between 1914 and 1945. And then, in the postwar period, you had unusually high growth rate, partly due to the reconstruction. You know, in Germany, in France, in Japan, you had five percent growth rate between 1950 and 1980 largely due to reconstruction, and also due to very large demographic growth, the Baby Boom Cohort effect. Now, apparently that's not going to last for very long, or at least the population growth is supposed to decline in the future, and the best projections we have is that the long-run growth is going to be closer to one to two percent rather than four to five percent.

  So if you look at this, these are the best estimates we have of world GDP growth and rate of return on capital, average rates of return on capital, so you can see that during most of the history of mankind, the growth rate was very small, much lower than the rate of return, and then during the 20th century, it is really the population growth, very high in the postwar period, and the reconstruction process that brought growth to a smaller gap with the rate of return. Here I use the United Nations population projections, so of course they are uncertain. It could be that we all start having a lot of children in the future, and the growth rates are going to be higher, but from now on, these are the best projections we have, and this will make global growth decline and the gap between the rate of return go up.

Now, the other unusual event during the 20th century was, as I said, destruction, taxation of capital, so this is the pre-tax rate of return. This is the after-tax rate of return, and after destruction, and this is what brought the average rate of return after tax, after destruction, below the growth rate during a long time period. But without the destruction, without the taxation, this would not have happened. So let me say that the balance between returns on capital and growth depends on many different factors that are very difficult to predict: technology and the development of capital-intensive techniques. So right now, the most capital-intensive sectors in the economy are the real estate sector, housing, the energy sector, but it could be in the future that we have a lot more robots in a number of sectors and that this would be a bigger share of the total capital stock that it is today. Well, we are very far from this, and from now, what's going on in the real estate sector, the energy sector, is much more important for the total capital stock and capital share.

The other important issue is that there are scale effects in portfolio management, together with financial complexity, financial deregulation, that make it easier to get higher rates of return for a large portfolio, and this seems to be particularly strong for billionaires, large capital endowments. Just to give you one example, this comes from the Forbes billionaire rankings over the 1987-2013 period, and you can see the very top wealth holders have been going up at six, seven percent per year in real terms above inflation, whereas average income in the world, average wealth in the world, have increased at only two percent per year. And you find the same for large university endowments — the bigger the initial endowments, the bigger the rate of return.

Now, what could be done? The first thing is that I think we need more financial transparency. We know too little about global wealth dynamics, so we need international transmission of bank information. We need a global registry of financial assets, more coordination on wealth taxation, and even wealth tax with a small tax rate will be a way to produce information so that then we can adapt our policies to whatever we observe. And to some extent, the fight against tax havens and automatic transmission of information is pushing us in this direction. Now, there are other ways to redistribute wealth, which it can be tempting to use. Inflation: it's much easier to print money than to write a tax code, so that's very tempting, but sometimes you don't know what you do with the money. This is a problem. Expropriation is very tempting. Just when you feel some people get too wealthy, you just expropriate them. But this is not a very efficient way to organize a regulation of wealth dynamics. So war is an even less efficient way, so I tend to prefer progressive taxation, but of course, history — (Laughter) — history will invent its own best ways, and it will probably involve a combination of all of these.

  Thank you.

  (Applause)

  Bruno Giussani: Thomas Piketty. Thank you.

 

 Thomas, I want to ask you two or three questions, because it's impressive how you're in command of your data, of course, but basically what you suggest is growing wealth concentration is kind of a natural tendency of capitalism, and if we leave it to its own devices, it may threaten the system itself, so you're suggesting that we need to act to implement policies that redistribute wealth, including the ones we just saw: progressive taxation, etc. In the current political context, how realistic are those? How likely do you think that it is that they will be implemented?

 

 Thomas Piketty: Well, you know, I think if you look back through time, the history of income, wealth and taxation is full of surprise. So I am not terribly impressed by those who know in advance what will or will not happen. I think one century ago, many people would have said that progressive income taxation would never happen and then it happened. And even five years ago, many people would have said that bank secrecy will be with us forever in Switzerland, that Switzerland was too powerful for the rest of the world, and then suddenly it took a few U.S. sanctions against Swiss banks for a big change to happen, and now we are moving toward more financial transparency. So I think it's not that difficult to better coordinate politically. We are going to have a treaty with half of the world GDP around the table with the U.S. and the European Union, so if half of the world GDP is not enough to make progress on financial transparency and minimal tax for multinational corporate profits, what does it take? So I think these are not technical difficulties. I think we can make progress if we have a more pragmatic approach to these questions and we have the proper sanctions on those who benefit from financial opacity.

 

 BG: One of the arguments against your point of view is that economic inequality is not only a feature of capitalism but is actually one of its engines. So we take measures to lower inequality, and at the same time we lower growth, potentially. What do you answer to that?

 

 TP: Yeah, I think inequality is not a problem per se. I think inequality up to a point can actually be useful for innovation and growth. The problem is, it's a question of degree. When inequality gets too extreme, then it becomes useless for growth and it can even become bad because it tends to lead to high perpetuation of inequality over time and low mobility. And for instance, the kind of wealth concentrations that we had in the 19th century and pretty much until World War I in every European country was, I think, not useful for growth. This was destroyed by a combination of tragic events and policy changes, and this did not prevent growth from happening. And also, extreme inequality can be bad for our democratic institutions if it creates very unequal access to political voice, and the influence of private money in U.S. politics, I think, is a matter of concern right now. So we don't want to return to that kind of extreme, pre-World War I inequality. Having a decent share of the national wealth for the middle class is not bad for growth. It is actually useful both for equity and efficiency reasons.

 

 BG: I said at the beginning that your book has been criticized. Some of your data has been criticized. Some of your choice of data sets has been criticized. You have been accused of cherry-picking data to make your case. What do you answer to that?

 

 TP: Well, I answer that I am very happy that this book is stimulating debate. This is part of what it is intended for. Look, the reason why I put all the data online with all of the detailed computation is so that we can have an open and transparent debate about this. So I have responded point by point to every concern. Let me say that if I was to rewrite the book today, I would actually conclude that the rise in wealth inequality, particularly in the United States, has been actually higher than what I report in my book. There is a recent study by Saez and Zucman showing, with new data which I didn't have at the time of the book, that wealth concentration in the U.S. has risen even more than what I report. And there will be other data in the future. Some of it will go in different directions. Look, we put online almost every week new, updated series on the World Top Income Database and we will keep doing so in the future, in particular in emerging countries, and I welcome all of those who want to contribute to this data collection process. In fact, I certainly agree that there is not enough transparency about wealth dynamics, and a good way to have better data would be to have a wealth tax with a small tax rate to begin with so that we can all agree about this important evolution and adapt our policies to whatever we observe. So taxation is a source of knowledge, and that's what we need the most right now.

 

 BG: Thomas Piketty, merci beaucoup.

 Thank you. TP: Thank you. (Applause)