The American system is rigged to favor the rich
All across America there are millions of people who live in the underground economy, fearful of the government. Thousands of them are people who are unable to pay legal bills, and face jail time if caught:
More than a third of all states now allow borrowers who don’t pay their bills to be jailed, even when debtor’s prisons have been explicitly banned by state constitutions. A report by the American Civil Liberties Union found that people were imprisoned even when the cost of doing so exceeded the amount of debt they owed.
Sean Matthews, a homeless New Orleans construction worker, was incarcerated for five months for $498 of legal debt, while his jail time cost the city six times that much. Some debtors are even forced to pay for their jail time themselves, adding to their financial troubles.
In contrast, when wealthy people like Donald Trump go bankrupt, they are allowed to keep many of their assets and obviously don’t go to jail. Here are some other ways that the system in America is rigged to favor the rich:
1. The poor are often jailed for drug crimes, while people like Rush Limbaugh get off scot-free. Or go into “rehab.”
2. The government allows big banks to borrow money (via deposits) at T-bond interest rates, due to government promises to repay the debt if the bank fails. The poor borrow from loan sharks.
3. The government shovels vast sums of money into healthcare, as they pick up the tab for Medicare, Medicaid, the VA, and even much of the cost of “private” health insurance. But they don’t regulate costs, allowing medical suppliers like doctors and big pharma to earn large incomes (by international standards.)
4. In addition to the medical subsidies, they severely restrict entry in medicine, allowing American doctors to earn far more than doctors in other countries.
5. They also restrict entry in law, and as if that isn’t enough, they set up tort laws in such a way that lawyers can skim massive profits from routine class action lawsuits. Meanwhile, there are no barriers to entry into picking peaches in the hot Georgia sun. That’s a “free market” in labor. The American dream.
6. In my field (higher education) they heavily subsidize spending, allowing me to earn a higher salary and lower teaching load than in a free market.
7. They have patent laws that give monopolies to the inventor of a product. But not just major new products with social externalities like the internet, or semi-major ideas like social media, but slight tweaking of existing platforms such as social media. This allows vast profits to be earned in knowledge-oriented industries that are winner-take-all and near-zero marginal cost of production. These rules also funnel vast sums into the finance industries that funds high tech companies, and the investors who pick the winners.
8. People who own auto dealerships are protected from competition from direct sales from auto companies.
