Saturday, August 20, 2016

How Much Income Inequality Is Too Stressful On The Social Fabric?


One of the key premises behind Bernie's run for the presidency-- behind his entire career in fact-- is that economic inequality is too great-- dangerously great. This week, the Congressional Budget Office released a report showing that economic inequality has grown significantly since 1989. Short version:
Over the period from 1989 through 2013, family wealth grew at significantly different rates for different segments of the U.S. population. In 2013, for example:
The wealth of families at the 90th percentile of the distribution was 54 percent greater than the wealth at the 90th percentile in 1989, after adjusting for changes in prices.
The wealth of those at the median was 4 percent greater than the wealth of their counterparts in 1989.
The wealth of families at the 25th percentile was 6 percent less than that of their counterparts in 1989.
The distribution of wealth among the nation’s families was more unequal in 2013 than it had been in 1989. For instance, the difference in wealth held by families at the 90th percentile and the wealth of those in the middle widened from $532,000 to $861,000 over the period (in 2013 dollars). The share of wealth held by families in the top 10 percent of the wealth distribution increased from 67 percent to 76 percent, whereas the share of wealth held by families in the bottom half of the distribution declined from 3 percent to 1 percent.

Bernie addressed the report on his official Senate website: Rich Get Rich, Poor Get Poorer and his conclusions were far less sugar-coated than the CBO's had to be. "The reality, as this report makes clear, is that since the 1980s there has been an enormous transfer of wealth from the middle class and the poor to the wealthiest people in this country," he explained. "There is something profoundly wrong when the rich keep getting richer and virtually everyone else gets poorer. That is unacceptable, and that has got to change... If we are going to reduce wealth inequality in this country, we must make public colleges and universities tuition-free and substantially lower student loan interest rates so that millions of young people do not leave school with a mountain of debt that burdens them for decades."

Not everyone agrees with Bernie's perspective, of course. When he warned about the "billionaire class," he was talking about people like Señor Trumpanzee and the far right hedge fund crook Robert Mercer, a bizarre gun nut and climate change denier who helped finance Ted Cruz's aborted campaign and is now helping finance Sr. Trumpanzee. He brokered the deal that ousted Manafort and installed two of his own operatives, Steve Bannon and Kellyanne Conway. Mercer is the financial muscle behind Breitbart. Back in January, though, Zachary Mider, writing for Bloomberg, looked into what kind of person would spend the millions Mercer was spending to elect Cruz. Mercer, who Mider described as "one of the most enigmatic and powerful forces in U.S. politics," is no ordinary, garden variety Republican. He's a politically deranged fascist who wants to destroy both party establishments and has spent tens of millions of dollars on far right candidates and tens of millions of the Breitbart hate site and on the Heritage Foundation, candidates and infrastructure that is vehemently opposed to any kinds of moves in the direction of income equality. He pays the salaries of extremists Jim DeMint and Steve Bannon. The tax-dodging Mercer was one of the first of the Evil Billionaires, modern day robber barons, to take advantage of the Citizens United ruling to start buying up right-wing politicians to advance his murky neo-fascist ideological agenda. Cruz, who he has now publicly tossed away for Trump, was Mercer's golden boy, primarily because of the Texan's loathing for the GOP establishment. He was all in for Cruz a year before Cruz announced he would run for the nomination.

Josh Boak, writing about income inequality for the Associated Press this week, seems to see it more in line with how Bernie sees it: "the rich keep getting richer while more Americans are getting left behind financially," he wrote. "Income inequality has surged near levels last seen before the Great Depression. The average income for the top 1 percent of households climbed 7.7 percent last year to $1.36 million, according to tax data tracked by Emmanuel Saez, an economics professor at the University of California, Berkeley. That privileged sliver of the population saw pay climb at almost twice the rate of income growth for the other 99 percent, whose pay averaged a humble $48,768.
But why care how much the wealthy are making? What counts the most to any family is how much that family is bringing in. And that goes to the heart of the income-inequality debate: Most Americans still have yet to recover from the Great Recession, even though that downturn ended seven years ago. The average income for the 99 percent is still lower than it was back in 1998 after adjusting for inflation.

Meanwhile, incomes for the executives, bankers, hedge fund managers, entertainers and doctors who make up the top 1 percent have steadily improved. These one-percenters account for roughly 22 percent of all personal income, more than double the post-World War II era level of roughly 10 percent. One reason the income disparity is troubling for the nation is that it's thinning out the ranks of the middle class.

Hillary Clinton has highlighted inequality in multiple speeches, with her positions evolving somewhat over the past year. Bernie Sanders held her feet to the fire on that subject in the primaries. Clinton hopes to redirect more money to the middle class and impoverished. Clinton would raise taxes on the wealthy, increase the federal minimum wage, boost infrastructure spending, provide universal pre-K and offer the prospect of tuition-free college.

President Barack Obama has called rising inequality "the defining challenge of our time." And experts warn that it may be slowing overall economic growth. Greater inequality has created a festering distrust of government and of corporate leaders whose promises of better times ahead never fully materialized.

The result has been a backlash against globalization that many Americans feel tilted the economy against them. For the top 1 percent, the ability to move money overseas and reach markets worldwide concentrated pay for "superstars," according to economists. At the same time, factory workers now compete with 3 billion people in China, India, Eastern Europe and elsewhere who weren't working for multinational corporations 20 years ago. Many now make products for Apple, Intel, General Motors and others at low wages. This has depressed middle-class pay. These trends have contributed to a "hollowed out" labor market in the United States, with more jobs at the higher and lower ends of the pay scale and fewer in the middle.

Social factors have amplified the trend as well. Single-parent families are more likely to be poor than other families and less likely to ascend the income ladder. Finally, men and women with college degrees and high pay are more likely to marry each other and amplify income gaps.

Do you trust Hillary to fix the elevator?

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At 1:25 PM, Anonymous Anonymous said...


At 2:50 PM, Blogger Mike Austin said...

Concentrated wealth is concentrated power; concentrated power is tyranny.


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