by Robert Reich

HOW NOT TO READ THOMAS PIKETTY DEPARTMENT. Eduardo Porter in Wednesday's New York Times analyzed the politics of income inequality in light of Thomas Piketty’s data showing inequality heading back to levels we last saw in the Gilded Age -- and concludes, pessimistically, that "maybe this means that, in the absence of war, democracy can't do much more." Baloney. Neither Porter nor, for that matter, Piketty, seems to remember that in the first three decades AFTER World War II inequality shrank, the middle class expanded, and the economy grew faster than it has since. This wasn't because the war eroded huge incomes, but because in the three decades after the war unions gained strength, the rate of taxes on the wealthy were above 70 percent, civil rights were expanded, and the nation invested a larger portion of GDP in education and infrastructure than before or since.

Our collective amnesia about this period is dangerous, particularly in combination with Piketty’s apparent economic determinism as stoked by popular columnists. Pessimism is a self-fulfilling prophesy. If we don’t believe we can do much about inequality in the absence of war, we won’t.