Disconnect 3: Between what Obama says the problem is and the policies he pushes to cure it. The trends toward income inequality are the results of tectonic global shifts in capitalism. It’s not easy to figure out what actual government policies might “reverse” them–kind of like trying to “reverse” an earthquake. I don’t think even a) Swedish-level effective tax rates at the top, b) a shocking revival of unionism and c) a massively subsidized retraining program would do the job. (When I looked at this n 1992, for example, it would have taken an effective tax rate of somewhere around 57 % on the top one percent to get their share of after tax income back to where it was in 1977. The rich have only gotten richer since then, while the effective federal tax rate on the top 1%, even after Obama’s recent hike, is only around 36%.)
But Obama isn’t going to out-Sweden Sweden on taxes, and unionism isn’t going to surge back..
What’s certain, instead, is that nothing the President is currently promoting comes even close to reversing “the forces that have conspired against the middle class for decades.”