From Eric Alterman’s “Why We Are Liberals” (excerpted at Alterman’s blog, Altercation, yesterday):
In 2005, the wealthiest 1 percent of the country earned 21.2 percent of all income, according to IRS data, while the bottom 50 percent of all Americans earned just 12.8 percent of all income, down from 13.4 percent, a year earlier. Together, these two figures define a new postwar record for American economic inequality, which is believed by many economists to be greater today than at any other time since the 1920s.
Note, this was merely the disparity in declared income. It doesn’t include a comparison of the value of assets held by those wealthiest Americans v. everyone else. Still these are staggering figures, and highlight a gap in income that has likely increased over the past three years. Think about it: a mere 1% of all Americans make almost double what 50% of their fellow citizens do. Those are the types of disparities one finds in third world countries. And now, thanks to the miracle of the Republicans’ voodoo economic policies from Ronald Reagan to Bush (including those enacted while Clinton, a nominal Democrat, was President) we have joined their ranks. From Alterman, again:
In fact, among major world economies, the United States in recent years has had the third-greatest disparity in incomes between the very top and everyone else; only Mexico and Russia are worse.
The Republicans will claim that Obama wants to redistribute wealth to the lower classes. The truth? Conservative Movement Republicans have been actively redistributing the wealth of this nation from the middle class to the super rich ever since they regained power in 1980. This has been done by the emasculation of the Labor movement, tax cuts for the rich and other corporate welfare benefits, deregulation, the rejection of antitrust laws in favor of policies which encourage industry consolidation, monopolies and monopsonies, “free trade” agreements which have cost many Americans the higher paying jobs necessary to maintain their status in the middle class, and an increasing use of the public purse to privatize governmental services and functions (i.e., to selling them off to the highest, or best connected bidder). In short, Disaster Capitalism.
It has resulted in the following. The neglect of essential infrastructure much of which is now crumbling, literally. Corruption on an unprecedented scale. An ever expanding national debt (both by government and individuals). Unending and ever increasing trade deficits. A negative savings rate among Americans (even when you factor in that top 1%). A marked rise in Americans living below the poverty line (up by one third since Bush took office). An educational system in crisis, from elementary education to college, one that is too expensive, too inefficient and a failure at educating our children to the same standards met in other developed countries. A health care system that is the laughingstock of the world, both for its outrageous costs and its gross disparity in providing services to all our citizens. Increased Unemployment and underemployment, statistics which are masked by the manner in which our government decides who to count as employed. A dollar rapidly losing its value. Gas and food prices spirally out of control. A financial system on the verge of collapse.
So, the next time someone accuses Obama and Democrats of being socialists for wanting to redistribute income, just inform them of a few of these facts, and then pose these questions: Which party has been the real re-distributer of wealth in America? Which party has robbed the poor to give to the rich? And which party’s policies have truly been most responsible for ruining our nation’s economy?
In short, ask them if they really want more of the same voodoo economics ruining their lives? Because that’s what that great reformer, John McCain and his party are promising. Not change. Just more of the same failed policies that got us into this mess in the first place.
Thanks for posting these data about something we do not here enough about. Income inequality tends to follow wealthy inequality.
These paragraphs are from an interview with Edward Wolff, NYU professor of economics in May 2003. The data discussed are from 1998, ten years ago, and before the Bush tax cuts, especially the tax cut of 15% on capital gains and dividends. One can only imagine where wealth inequity is today.
Multinational Monitor May 2003 – VOLUME 24 – NUMBER 5
The Wealth Divide The Growing Gap in the United States Between the Rich and the Rest
Boo Man, this is such a powerful piece. How, in god’s name did we get in this situation? How did we ever get so far away from the tenets of the New Deal? Of a fair minded government caring for all of its citizens. I feel a deep sadness, indeed, a shame at even being a citizen of this misguided and dangerous nation, dangerous to the health and welfare of so many other people in the world.
Are money and power and pleasure the only things that now matter in the land of the poor and the home of the dispossessed? The republicans are like cancer cells metastasizing through the body politic which is not even aware that it is ill. Woe to the republic.
How, in god’s name did we get in this situation?
Names like Reagan, Clinton, Bush II immediately come to mind, with Bush II as we all recall even going so far as attempting to dismantle Social Security. Still, no president has been more successful as Bush II in providing an economic program to benefit the “have-mores.” Contrary to all the bad press, Bush II has been the most successful Republican president of all time, outdoing Reagan who had a Democratic congress to deal with.
And you wonder why they even want Social Security. All isn’t enough. After they eat you they want to break your bones and suck the marrow.
That’s why with my po’ little ass drinks and plays the lotto.
It is possible that the “have-mores” wouldn’t mind if we took our economic system back to the period of mid19th/early 20th century English and American Capitalism, when there were just two classes: the rich and the working or enslaved poor. Look at how Unionism has diminished since Reagan’s administration, with a lot of poor workers today foolishly applauding the trend. When you can get ordinary workers on your side, you know you are succeeding.
Marx did not just appear out of no where.
Lay off the cynicism, stop drinking, and start acting.
The business elite is trying to destroy the middle class by mining it for every dollar they can, hence the stagnation in wages for the past what? 15 years?
you should give Steve the love.
I think most of us know where Steven’s heart is and for whom he is fighting.
Why are posters surprised at this? This kind of feudal behavior of the business elite has been going on from the beginning of American history — the vaunted Alexander Hamilton was our first and foremost proponent of establishing a plutocracy of the wealthy elite. If there was no Jefferson, we’d be far into a monarchy/plutocracy, not the dying cheeze-hole democracy that’s breathing it’s last breaths now, as lobbyists strangle it.
Average Americans have been endowed by their Creator — marketing departments — with the desire to also become one of the 2%. We don’t demand downward distribution of wealth because all of us have been sold the bill of goods that someday, I too will become one of the 2%. “When I arrive, I want my tax breaks and elitist priviledge . . . ” We won’t tamper with wealth creation or preservation. We’ve been taught that looking at disparities of income is Marxist, neé, Communist, and everything Communist is BAD, EVIL.
Don’t be shocked folks, distributions like this happen when we are too afraid as a people to empower ourselves to keep the government for the people, all people, not just the wealthy who have arrived.
Great post, Isis, and Steven, kudos for a tremendous diary. Keep punching, all members of the pond, you are truly the salt of the earth.
Together we will change this nation. We must look at our own motivations as well as those of others, and change our own lives. “Peace starts in the kitchen.”
What you are saying is essentially that people will be people: greedy if permitted to be so. Who cannot agree. The downfall of Unionism can easily be attributed, in part, to the greed of the workers, no less than to the greed of management and the stock holders (by and large, the wealthy) it represents.
Is this possibly a flaw in our school systems which teach competition rather than cooperation, self-interest rather than community interest? When one looks at the success of social democracies (another name for liberal-socialism of the New Deal variety), one wonders if that success doesn’t begin with education. Remind me to delve into the school systems of Sweden, as one example. They have the lowest income and wealth inquality among Western industrialized nations, and the highest unionization rate, 90%.
Where have we gone wrong in establishing a decent and fair liberal-socialist (social democratic) society, if not with what we teach our children in public school?
I don’t agree that it comes from education in the schools, as you seem to imply here — that these values are instilled in the classroom. I think these ideals come from the heart of adults as they interact with each other, in their desire to see the whole benefit more than the individual, and the sense of community building and benefit of subduing personal ambition to the collective whole of the society.
I believe what is different in Scandinavia is that they allow high taxes that actually operate for the benefit of the whole (as opposed to earmarks and pork) because they love each other from the heart, not from the solar plexus of low desires.
Appreciate your view, but I have not ever heard about a course taught in public school that reflected social democratic principles or liberal-socialism.
Competition is embedded in the way school systems teach, which is probably best summarized in the concept of the “ACHIEVEMENT SOCIETY,” the title of a book I read too many years ago to even remember its author. But competition through achievement, perhaps best typified by grades, is what gets people ahead, and allows others to fall behind. If you tinge this principle with even a modicum of social Darwinism, you have justified greed and inequality. That’s just the way it is. Some of us are born to lead (get rich, or inherit wealth), and others are not.
Most of our so-called poor have enough to eat and a place to live. Isn’t that enough? This is not Africa we are talking about.
You bring up a very poignant fact: that competition is fostered over cooperation.
We were right when we chanted at Congress in the Vietnam days that our plight of the draft should be shared with the Congress by raising the draft age to 55.
And I wonder today if the upper crust were to be faced with 16% of their income going to fill their SUV’s if they might get a clue. Democracies are supposed to be the best defense against insulating any one class from pain or opportunity. But these days it seems we are seeing Democracy in action without the people.
And every time one of my dear underinformed friends votes to shoot themselves, and me in the process, in the foot I’m talkin to the wind.
This is a great post and an important subject. But I have to quibble with the claim that it is the Republicans that are solely responsible. “Conservative Movement Republicans have been actively redistributing the wealth of this nation from the middle class to the super rich ever since they regained power in 1980.” This would be true if you also defined the Clintonites as Republicans, which they basically are. But the Democratic leadership certainly has profited as much, if not more, than the Republicans. Look at the Clintons, wealth over $100 million (that we know about; probably much more, but Bill refuses to say how much he’s taken in for his “library”); Al Gore, wealth well over $100 million and growing rapidly, all acquired since he sold out the country in 2000; Kerry, a billionaire, no less; Kennedy, a multi-millionaire at least, possibly a billionaire). And on and on. Feinstein, Pelosi, et al., all within that 1%. It’s both parties folks, and if we ever want to address the problem we have to deal with that fact.