The 1% at Their Finest

The Super Rich and US

BBC (2015)

Film Review

The Super Rich and Us features casual cameos of British billionaires openly displaying their narcissistic indulgence in trophy assets. There is also a brief appearance by economist and author Thomas Piketty (Capital in the Twenty-First Century). The goal of the documentary is twofold: to debunk trickle down theory and to critique government policies that have made Britain one of the most unequal nations on the planet.

The filmmakers maintain that Britain’s top 1% generates and consumes all the so-called growth the UK has experienced over the last five years. None of it derives from increased investment, job growth, wages or productivity.

The British 1% has doubled their income between 1980 and 2015, while income for everyone else has stagnated or declined. Likewise the Conservative government’s 80 billion pounds in austerity cuts is roughly equal to the bonuses banks paid out to CEOs.

Why Britain Has the Most Billionaires

The UK has more billionaires per head (104) than any other country. This stems largely from a policy decision to compensate for factories moving overseas by making the country a tax haven for rich colonials seeking to avoid taxes in their own country – under the delusional belief it would make everyone else richer.

In the 1980s, Margaret Thatcher significantly reduced taxes on Britain’s native millionaires and billionaires. She argued, as Reagan did in the US, that taxing the rich made society poorer. These policies, which have changed little over thirty years, have made Britain the world’s favorite tax haven, as international pressure forces other traditional tax havens (Switzerland, Luxemburg, Cayman Islands, etc) to shut up shop.

Trickle Up vs Trickle Down

Thanks to the wholesale repeal of banking and corporate regulations, none of this surplus wealth trickled down to the rest of the population the way Thatcher claimed it would. Instead the super rich have been sucking up shrinking lower and middle classes resources into their vast reservoir of private wealth. The main reason trickle down doesn’t work is that the 1% spends their surplus wealth on diamond jewelry, yachts, sports cars and other luxury goods that generate income for only a handful (if any – most of these goods are imported) of working people.

The film contrasts British tax policies with those of Sweden and Denmark, which the rich pay a fair share of taxes. Not only do both have GDPs equal to or higher than the UK’s, with numbers that reflect genuine improvement in productivity and job and wage growth. When polled, eighty-eight percent of Danish people are perfectly happy with their tax rate because they see it reflected in generous government services.

TV3 Tackles Income Inequality

Video

income inequality

The American Pubic Broadcasting Service used to have fabulous, hard hitting documentaries when PBS first got going in the 1970s. Fast forward to 2013, and all the documentaries that seriously challenge the political establishment have all but vanished from free-to-air TV (except, perhaps, for Frontline and Bill Moyers’ specials).

 Although it first aired on commercial TV, the New Zealand documentary Mind the Gap reminds me a lot of the PBS documentaries I used to watch on Friday night in the late seventies. It dissects the alarming rate at which New Zealand’s wealthy elite are sucking up wealth from our working class families.

While New Zealand’s political and economic dynamics are somewhat different from those of the US, there are common factors at play. Moreover the New Zealand economy is somewhat easier to unpack. In addition to being smaller, for the most part it’s uncomplicated by taxpayer funded corporate subsidies.

Zombie Economics

Mind the Gap is highly critical of “neoliberalism” (I don’t think I’ve ever heard that word on American TV), which the program refers to as zombie economics. The presenter also briefly interviews John Quiggins, the author of the 2012 book Zombie Economics.

Neoliberalism is the technical term for Reaganomics and the New Zealand version Rogernomics. Mind the Gap describes, in gory detail, how Roger Douglas’s neoliberal reforms of the 1980s virtually destroyed New Zealand’s economy. It did so mainly by destroying this country’s manufacturing sector and offshoring the majority of our manufacturing jobs.

The documentary offers a number of potential solutions to New Zealand’s current “trickle up” economy. In my mind, all would go a long way towards ending America’s growing income divide.

Suggestions offered include a financial transaction on banks (aka the Robin Hood Tax), a fairer tax policy and a clampdown on tax evasion, an end to aggressive privatization of public resources, and more cooperatives and “social enterprises” (corporations formed for the good of society rather than profit).

Enjoy.

*”Mind the Gap” is an expression borrowed from the British tube (subway) system.

photo credit: Stewf via photopin cc