The K-shaped recovery - where the rich got richer and the poor got poorer - wasn't inevitable. It is the outcome of hard lobbying by the investor class to turn on floods of money to the rich, while starving the poor of money, rent-relief and debt-relief.

This has enabled wealthy people to increase their fortunes through asset inflation (STONKS) and financial engineering (buybacks, tax refunds, and bonuses) and cash-transfers (personal LLCs taking in vast PPP loans).


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It also drove poor people into unsafe work as the only alternative to homelessness and starvation, which let the rich keep businesses open and supplied a pool of "essential worker" labor to deliver food and even serve in-person diners.

Piketty's 2013 CAPITAL IN THE 21ST CENTURY documents how inequality is a self-reinforcing policy: markets drive capital accumulation (that is, they make rich people richer), and capital is mobilized to buy wealth-favoring policies.


But he also documents how unstable this whole arrangement is: for a society to tolerate inequality, there must be a broadly accepted narrative of fairness, some story that explains why the desperately precarious should tolerate the smugly comfortable.


The worse the inequality, the thinner the narrative. As (im)morality plays go, the pandemic is pretty on the nose. The K-shaped recovery saw high mortality among racialized, precarious people, while the wealthy are mostly upset about missing their holidays.

Add to that the iron grip that the wealthy maintain on policy, on relief, insisting that $2,000 checks are beyond our means, pretending that they're not making these claims from the jacuzzis they've filled with free government money.


The status quo *will* collapse. In Piketty's 1789, that meant guillotines. In Argentina, they're trying for a peaceful resolution: they're taxing wealth. Any fortune of $3.4m faces a one-time Robin Hood tax of 3.5%.

That is to say, they're allocating the tip of the top leg of the K-shaped recovery to the bottom leg.


Bolivia has created a Piketty-compliant annual tax on fortunes of more than $4.3m. Morocco's trying out a one-time tax on vast fortunes.

It's not just the global south: the UK's independent Wealth Tax Commission recommended a one-time levy. Canadian PM Justin Trudeau wants to "tax extreme wealth inequality."


Wealth-tax opponents say that they don't work - that wealth-taxes result in deceptive asset revaluations and offshoring to financial secrecy havens and so become costly boondoggles. But that's an incomplete account of how the situation plays out.

It's more true to say that when a wealth tax is set to pass, the wealthy mobilize their capital to create loopholes in the rules that guarantee these boondoggles.


This is not the inevitable outcome of a wealth-tax. As Gabriel Zucman has demonstrated, it's certainly possible to design effective wealth-taxes.

The investor class demanded a system that squeezed and squeezed, and now we're facing a rupture. The Robin Hood tax advocates are trying to manage an orderly, peaceful transition to a fairer system. The alternative is not business as usual.


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