On the Rationalization of Inequality

Voltaire observed, “One day everything will be well. Everything is fine today. That is our illusion.” Illusion is the ability to manipulate how other people perceive reality. What began in September 2011 as a small group of protesters camping out in Manhattan’s Zuccotti Park ignited a national and global movement calling out the ruling class of elites by connecting the dots between corporate and political power. Its main message is the fact the economic system is rigged for the very few while the majority continue to fall further behind. This was an effort to educate the middle class on what was really happening. The singular success of the Occupy Wall Street protest is to put inequality on the political agenda.

Since the Great Recession, shareholder profits, CEO pay, and corporate tax breaks have soared while average household wealth continues to sink, college debt skyrockets, living costs increase, real wages decline, and the middle class struggles to survive. Ted Cruz admitted “the top 1 percent earn a higher share of our income nationally than any year since 1928.” In a true trickle-down economy, the benefits of productivity and innovation would be shared fairly by all stakeholders, not just the select few with authority to dictate compensation and how the profits of a company are distributed.

Republicans love touting the benefits of trickle-down economics and are still doing it in the big debate over tax cuts for the wealthy. The idea is simple: The more money the people on top make, the more the people below will benefit from the dripping down of that prosperity. The hidden agenda here, of course, is the rationalization of inequality. By linking the welfare of working-class Americans directly to the prosperity of the rich, the Republicans can protect the insulated interests of corporations and the wealthy without the fear of backlash.1

Rationalization is a product of scientific study and technological advances in the Western world. By reducing tradition’s hold on society, rationalization led to new practices. Instead of human behavior being motivated by customs and traditions, rationalization led to behaviors that were guided by reason and practicality. Max Weber believed that rationalization not only transformed modern society, it played an important role in the development of Western society and capitalism. Rationalization of the economy created the mindset that the economy requires less and less engineering (regulations), and would be capable of fixing itself. This, in turn, created the notion that there exists an inherent natural law unaffected by human endeavor and weakness that drives the economy. Some contemporary philosophers have argued that rationalization, as falsely assumed progress, has a negative and dehumanizing effect on society, moving modernity away from the central tenets of enlightenment.

The bubble universe of trickle down economics into which conservatives recruit others involves ‘groupthink’. Groupthink is a pattern of thought characterized by self-deception, created by a faulty group decision-making process, which is not critical of each other’s ideas. Groups experiencing groupthink do not consider all the alternatives and they desire unanimity at the expense of quality decisions. Members believe in the rightness of their cause and therefore ignore the ethical or moral consequences of their decisions. The group applies selective bias in processing information at hand leading to collective rationalization.

The economic debate during the November 10, 2015 fourth Republican presidential debate of the campaign season featured groupthink. All candidates have a plan to cut taxes to the rich in order to create well-paying jobs for the middle class. There is unanimity that the economy is worse under President Obama. Inequality will be addressed under their various economic plans; basically, as the rich get richer prosperity will return for all.

However, there were signals during the debate from the candidates that the system has other problems. Some of these came out during discussion on the big banks. John Kasich identified a need to establish ethical values, as greed is rampant on Wall Street. Jeb Bush identified a shortcoming in that the big banks required more capitalization in order to reduce risk to depositors. Carly Fiorina launched several rants against big government. If only one of the journalists could have directed her to discuss the Wall Street-Washington corridor and its effect on big government. Ted Cruz criticized the Fed expansionary money policy, the oversupply money props up the market, but most sits in big banks and keeps interest rates down which affects the ability of average person to save.

None of the three journalists, Maria Bartiromo, Neil Cavuto, both anchors on Fox Business, nor Gerard Baker the editor-in-chief of the Wall Street Journal, who were moderating the debate, followed up any of these leads. There was an opportunity to probe ‘crony capitalism’ and problems with Dodd Franks, in particular, the influence of lobbyists in combination with lawyers from the big banks in gutting the intent of the original bill. Where was the debate on a requirement for a 21st Century Glass-Steagall Act that would separate investment banking from commercial banking?

In addition, the moderators carefully avoided the elephant in the room, how to address the existing oligarchy. This would include the candidates identifying policies to end big money’s grip on politics, an issue that lies at the core of the debate on the economy. This is not a novel concept. US Senator Bernie Sanders identified the issue in a speech at the Brookings Institution in February 2015 in Washington. “[W]e are moving rapidly away from our democratic heritage into an oligarchic form of society,” Sanders said. “Today, the most serious problem we face is the grotesque and growing level of wealth and income inequality. This is a profound moral issue, this is an economic issue and this is a political issue.”2

The media creates cognitive dissonance, the feeling of uncomfortable tension, which comes from holding two conflicting thoughts at the same time. The cult of individualism makes us particularly prone to cognitive dissonance because our personal identity is very important. We see ourselves as stable self-contained beings. However, advertising that we may be missing something, or not fitting in creates anxiety. Television tends to feed an information diet (of self-approval) similar to consuming too much sugar inducing short-term euphoria and happiness while distracting from reality. The weakness of the mass media remains an inability to transmit tacit knowledge and an inability to deal with complex issues, so there is a need to simplify. Consequently they tend to focus on the unusual or sensational, and the promotion of anxiety and fear.

Our beliefs can dictate what we see. Cognitive dissonance is the uncomfortable feeling people experience when confronted by things that “should not be, but are.” Some react to the situation with anxiety, but others will develop even stronger convictions of their previous belief. The drive to avoid cognitive dissonance can be so strong that people sometimes react to discomforting evidence by strengthening their original beliefs and creating rationalizations to dismiss the discomforting evidence.

Cognitive dissonance also occurs in the pairing of unrelated facts to create correlation. An example of this is President George W Bush’s speech in which he mentioned Iraq and the September 11th attacks in the same sentence. The close proximity of the mentions is designed to create a correlation in people’s minds when the reality is different. By insinuating, people subconsciously take the idea and turn it into a possibility. This information is fed into the conservative echo chamber of which Fox News is the centerpiece, and through repetition, the correlation becomes fact based on misinformation. As a result, in 2013, two years after the terrorist’s strike against the US 70% of Americans believed that Iraq was involved. The belief in the connection persists even though there has been no proof of a link between the two.

During the fourth Republican debate we heard the mantra repeated over and over again – linking the welfare of working-class Americans directly to the the need to cut the size of government and taxes of the rich. This is an example of taking an idea and turning it into a possibility. Through repetition, the correlation between cutting taxes and good jobs becomes a fact based on misinformation. The uncomfortable feeling is created by the fact that 40 years of minimal government and deregulation has lead to increasing economic inequality with fewer and fewer opportunities for individuals to live the American Dream.

A dream does not necessarily need to be “real” to work as social glue; all that is necessary is for enough people to believe in the illusion. During the Fox Business televised Republican debate information was manipulated how people perceive the ‘American Dream.’ The illusion is cutting taxes for the rich will actually create well paying jobs for the rest of society. The singular success of the Fox Business Network debate is to have more people believe in this illusion by spreading misinformation based on the rationalization of inequality.

1Sanghoee, Sanjay. (12 July 2012). America’s Trickle “Up” Economy and the Rationalization of Inequality. http://www.huffingtonpost.com/sanjay-sanghoee/americas-trickle-up-economy_b_2258110.html

2Prupis, Nadia. (10 Feb 2015) Bernie Sanders: Keeping US from Becoming Oligarchy Is ‘A Struggle We Must Win’. http://billmoyers.com/2015/02/10/bernie-sanders-keeping-us-becoming-oligarchy-struggle-must-win/

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