Thread by @doctorow

The K-shaped recovery - where the rich got richer and the poor got poorer - wasn't inevitable. It is the outcome of hard lobbying by the investor class to turn on floods of money to the rich, while starving the poor of money, rent-relief and debt-relief.

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This has enabled wealthy people to increase their fortunes through asset inflation (STONKS) and financial engineering (buybacks, tax refunds, and bonuses) and cash-transfers (personal LLCs taking in vast PPP loans).

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It also drove poor people into unsafe working conditions as the only alternative to homelessness and starvation, which let the rich keep their businesses open and supplied a pool of "essential worker" labor to deliver food and even serve in-person diners.

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Thomas Piketty's 2013 CAPITAL IN THE 21ST CENTURY documents how inequality is a self-reinforcing policy: markets drive capital accumulation (that is, they make rich people richer), and capital is mobilized to buy wealth-favoring policies.

memex.craphound.com/2014/06/24/tho…

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But he also documents how unstable this whole arrangement is: for a society to tolerate inequality, there must be a broadly accepted narrative of fairness, some story that explains why the desperately precarious should tolerate the smugly comfortable.

pluralistic.net/2021/01/18/pea…

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The worse the inequality, the thinner the narrative. As (im)morality plays go, the pandemic is pretty on the nose. The K-shaped recovery saw high mortality among racialized, precarious people, while the wealthy are mostly upset about missing their holidays.

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Add to that the iron grip that the wealthy maintain on policy, on relief, insisting that $2,000 checks are beyond our means, pretending that they're not making these claims from the jacuzzis they've filled with free government money.

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The status quo WILL collapse. In Piketty's 1789, that meant guillotines. In Argentina, they're trying for a peaceful resolution: they're taxing wealth. Any fortune of $3.4m faces a one-time Robin Hood tax of 3.5%.

thehour.com/news/article/S…

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That is to say, they're allocating the tip of the top leg of the K-shaped recovery to the bottom leg.

Bolivia has created a Piketty-compliant annual tax on fortunes of more than $4.3m. Morocco's trying out a one-time tax on vast fortunes.

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It's not just the global south: the UK's independent Wealth Tax Commission recommended a one-time levy. Canadian PM Justin Trudeau wants to "tax extreme wealth inequality."

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Wealth-tax opponents say that they don't work - that wealth-taxes result in deceptive asset revaluations and offshoring to financial secrecy havens and so become costly boondoggles. But that's an incomplete account of how the situation plays out.

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It's more true to say that when a wealth tax is set to pass, the wealthy mobilize their capital to create loopholes in the rules that guarantee these boondoggles.

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This is not the inevitable outcome of a wealth-tax. As @gabriel_zucman has demonstrated, it's certainly possible to design effective wealth-taxes.

bloomberg.com/news/features/…

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The investor class demanded a system that squeezed and squeezed, and now we're facing a rupture. The Robin Hood tax advocates are trying to manage an orderly, peaceful transition to a fairer system. The alternative is not business as usual.

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ETA: here's an unrolled link to share and read, on my surveillance-free, ad-free, tracker-free blog, pluralistic.net:

pluralistic.net/2021/02/21/pal…