Paul Krugman: Obama’s War on Inequality

Elections matter:

Obama’s War on Inequality, by Paul Krugman, NY Times: There were two big economic policy stories this week that you may have missed... Each tells you a lot about both what President Obama has accomplished and the stakes in this year’s election. ...

Donald Trump... — who has already declared that he will, in fact, slash taxes on the rich... — once again declared his intention to do away with Dodd-Frank... Just for the record, while Mr. Trump is sometimes described as a “populist,” almost every substantive policy he has announced would make the rich richer at workers’ expense.

The other story was about a policy change achieved through executive action: The Obama administration issued new guidelines on overtime pay, which will benefit an estimated 12.5 million workers. ...

Now, America isn’t about to become Denmark... But more has happened than you might think.

Most obviously, Obamacare provides aid and subsidies mainly to lower-income working Americans, and it pays for that aid partly with higher taxes at the top. That makes it an important redistributionist policy — the biggest such policy since the 1960s.

And between those extra Obamacare taxes and the expiration of the high-end Bush tax cuts... the average federal tax rate on the top 1 percent has risen quite a lot. In fact, it’s roughly back to what it was in 1979, pre-Ronald Reagan, something nobody seems to know. ...

Dodd-Frank actually has put a substantial crimp in the ability of Wall Street to make money hand over fist. It doesn’t go far enough, but it’s significant enough to have bankers howling, which is a good sign.

And while the move on overtime comes late in the game, it’s a pretty big deal, and could be the beginning of much broader action.

Again, nothing Mr. Obama has done will put more than a modest dent in American inequality. But his actions aren’t trivial, either.

And even these medium-size steps put the lie to the pessimism and fatalism one hears all too often on this subject. No, America isn’t an oligarchy in which both parties reliably serve the interests of the economic elite. Money talks on both sides of the aisle, but the influence of big donors hasn’t prevented the current president from doing a substantial amount to narrow income gaps — and he would have done much more if he’d faced less opposition in Congress.

And in this as in so much else, it matters hugely whom the nation chooses as his successor.