Portside

Despite the growing revolt against the ruling class, it seems likely that the nominees in 2016 will be Jeb Bush and Hillary Clinton. After all, the ruling class still controls America. But the revolt against the ruling class won’t end with the 2016 election, regardless. Which means the ruling class will have to change the way it rules America. Or it won’t rule too much longer.

Just as with the American subprime crisis, and the current plight of many American cities, Wall Street’s predatory lending played an important although little-recognized role. Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman wasn’t an innocent bystander: It padded its profits by leveraging Greece to the hilt—along with much of the rest of the global economy.

“The idea is pretty simple behind this one,” Senator Elizabeth Warren said a few days ago, explaining her bill to resurrect Glass-Steagall. “If banks want to engage in high-risk trading — they can go for it, but they can’t get access to ensured deposits and put the taxpayers on the hook for that reason.”

Santa Cruz County’s Board of Supervisors recently suspended all business with the five giant banks, including JPMorgan Chase and Citicorp, who recently pleaded guilty to felony charges of criminal collusion. While the small California county’s portfolio is only valued at $650 million, Santa Cruz County Supervisor Ryan Coonerty says he’ll be contacting other local jurisdictions to urge them to follow Santa Cruz County’s lead.

The key to understanding the rise in inequality is not technology or globalization. It is the power of the moneyed interests to shape the underlying rules of the market.

When more and more can be done by fewer and fewer people, the profits go to an ever-smaller circle of executives and owner-investors. It may be that a redistribution of income and wealth from the rich to the rest of us becomes the only means of making the future economy work.

Economic statistics? Evolution? Climate change? If you don’t like the facts, make them up. Or have your benefactors finance “think tanks” filled with hired guns who will tell the public what you and your patrons want them to say. If all else fails, fire experts who tell the truth, and replace them with people who will pronounce falsehoods.

Carried interest allows hedge-fund and private-equity managers, as well as many venture capitalists and partners in real estate investment trusts, to treat their take of the profits as capital gains — taxed at maximum rate of 23.8 percent instead of the 39.6 percent maximum applied to ordinary income. So why didn’t Democrats close it when they ran Congress?

It used to be that economic expansions improved the incomes of the bottom 90 percent more than the top 10 percent. But starting with the “Reagan” recovery of 1982 to 1990, the benefits of economic growth during expansions have gone mostly to the top 10 percent. Since the current recovery began in 2009, all economic gains have gone to the top 10 percent.

American kids are getting ready to head back to school. But the schools they’re heading back to differ dramatically by family income. Which helps explain the growing achievement gap between lower and higher-income children. Thirty years ago, the average gap on SAT-type tests between children of families in the richest 10 percent and bottom 10 percent was about 90 points on an 800-point scale. Today it’s 125 points.