1 review for The Crisis of Democratic Capitalism

1. 

   Rated 5 out of 5

   ocs111 (verified owner) – 04/30/2025

   Are you concerned that some people make significant money without much risk and yet pay a capital gains rate on the income, such as with carried interests? Do you like it that many people with huge incomes pay a lower income tax rate than most salaried people? What about the huge political contributions that wealthy people make to elect people to promote their tax and social agenda? Do you like it that the IRS is denied funding adequate to require wealthy people to pay income taxes under current law? Have you noticed that representatives elected with wealthy support pass mandatory statewide requirements advancing the social agenda of their supporters. How about such laws denying local choice? If any of the above upsets you, this recent book of only 344 pages is for you.The author is an editor and chief economics commentator at the Financial Times of London, and he has authored other books. He has closely watched American business and politics in addition to those of England and elsewhere. His opinions have been altered as the world has unfolded, but his values have not changed (page 11 of book). Financial and other instabilities have caused ruling elites to lose credibility in the eyes of the public (15). Identity politics of both left and right and a loss of the notion of truth have both become prominent (18). People facing economic inequality blame others and want to restrict the movement of capital and workers (22). A frightened and angry population is bad for democracy (86)Citizens must be entitled to express their opinions while also tolerating opinions they disagree with. It is essential to a democracy the parties accept the legitimate political defeats (25, 54). Nor can politics or the economy function without a substantial degree of honesty, truthfulness, and loyalty (27). Where democracy has disappeared in the world, it has resulted in unbridled corruption and self-dealing (61).A market economy requires the right of individuals to change jobs, create businesses and to spend how and where they wish (41). Wealth must flow beyond those politically or economically powerful (45-46). However, recent times have not benefited people without such power (91-101). Productivity has also stagnated since 2010 (102). Debt has exploded while real income (after inflation) has declined for most families (103-5, 159). The world has an overhang of private sector debt because it is favored over equity in almost all systems of corporate and personal taxation (227). Financial crisis has shaken public trust in those running financial and political systems (105-7).The rise of demagogic nationalism and authoritarianism in high-income democracies can be attributed in significant part to these economic failures causing those affected to blame elite institutions and people (108-9). Racism is another variable that moves in line with economic conditions (112).Regional inequality has arisen with such centers as London, New York and Silicon Valley becoming hubs of immensely productive businesses while other areas of the world decline economically (120). Multinational companies and employees located in many countries have a global perspective over local ones (131). Immense wealth has been generated for a small number of people in those cities resulting in a still more financially unequal population (159). Jealousy of London’s success was a factor in the vote for Brexit (150). Investment managers in the United States pay capital gain tax rates on carried interests awarded for performance, as compared to higher rates paid for salaries and bonuses by the middle class who are thus frustrated and angry (155-6). Wealthy people and companies in America significantly contribute to and benefit from the political process; campaign contributions are fifty times larger in the USA than in EU members (156-7). The top .01 percent of individual donors make 40 percent of all American contributions (190). Taxes must rise and be fair. The US ultra-rich barely pay a 20 percent income tax rate. (275-7).In normal times politics remain bounded by conventions and norms. When the legitimacy of democracy is weak and anger is great, a would-be dictator may be voted into power. Populism is an exclusionary form of identify politics that poses a danger to democracy. By denying the legitimacy of opposing political parties and of independent courts, a leader can put himself or herself above the law and remain in office. Winners may feel entitled to reject competence, and even facts, and so destroy the effectiveness of government. (164-5). We need a shared attachment to place, history and values to have a shared identity of patriotism (335).Democracy cannot operate without high-quality media that speaks to an agreed set of facts. There now too often is no such agreement on facts. Too many US media outlets are mere echo chambers resulting in people feeling that their political opponents are not just wrong but treacherous (308-9). The biggest threat to our survival of democracy is domestic, coming from poor political and policy responses to changes (314).