The BP economy

Sam Smith

There is no reason not to be angry with BP and its CEO Tony Hayward, but contrary to most news reports, the oil spill is far from the greatest catastrophe of the moment. It is vastly outweighed by an economic spill that will kill far more people, destroy far more of their jobs, and leave far more businesses in a desperate condition.

Yet, unlike the oil spill, we have few villains for the economic collapse, little talk of criminal investigation, and little sense that it was instigated by the same sort of greed, carelessness and arrogance that is now ruining the Gulf of Mexico.

Instead, the same media that helped enable the fiscal crisis through its sycophantic coverage of a rightwing economic revolution is now treating the problem almost as if it were an act of God, rather than of its advertisers and most favored sources. The Financial Times recently even ran a headline – “Praise for tough and austere measures” – as if making ordinary folk suffer for the rapacious indulgences of the rich was a noble cause.

While there is no single figure as prominent as Tony Hayward, there is a long list of economists, politicians, columnists, business schools and other powerful voices whose advice and encouragement directly led us to this disaster. You won’t read about it, however, because the very media that helped cause the problem is now directing your attention away from its causes.

With a few exceptions like Dean Baker and Paul Krugman, the major media has been devoid of voices saying the obvious: an economic policy that increasingly feeds the rich at the expense of everyone else can lead to nothing but trouble. Call it the free market or whatever other cute name you want, but at its heart it was a vicious con perpetrated against the majority of America.

The evidence is endless and endlessly ignored but here are a few examples:

– Percent of workers with defined benefits pension plan down 50% since mid 1980s

– According to the Center on Budget and Policy Priorities, the gap in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and Taken together with prior research, the new data suggest greater income concentration at the top of the income scale than at any time since 1928. Here’s what the change looks like:

– In 1950 the ratio of the average executive’s paycheck to the average worker’s was about 30 to 1. Since 2000 that average has ranged from 300 to 500 to one.

– According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases between 2002 and 2007 went to the wealthiest 1% of society, a higher share of income than at any time since 1928.

This is not economic theory put into practice but state sponsored robbery. So when you complain about Tony Hayward, save a little time for all those economists, columnists and politicians who told you to just let the free market be and it would all work out fine.

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