More thoughts and evidence about income inequality.
Timothy Noah, prize winning journalist and senior writer for Slate magazine (Slate.com) explored this subject in his September 2010 ten part series titled The United States of Inequality.
He reported that we have for three decades seen a growing disparity in income and wealth not seen since just prior to the Great Depression. Then the top 10 percent of our people received nearly 50 percent of total income. During the depression and World War II (1928 to 1943) the trend reversed and inequality decreased steadily to 33 percent. It remained in that range for three decades before what Paul Krugman labels the Great Divergence began. Income inequality grew back to 50 percent in 2007. The top 10 percent captured an inordinately large share of the growing income while the middle class remained stagnant.
Noah assesses 8 possible causes for this Great Diversion. He attributes 80 percent to the decline of labor unions, excesses in executive salaries, and our underperforming educational system. He asserts that the government and by extension we the voters influence these developments.
Joseph Stiglitz, Nobel Prize winning economist, covers some of the same ground in the May issue of Vanity Fair magazine in an essay titled Of the 1%, by the 1%, and for the 1%. He identifies long-term threats to our democracy because of the increasing income inequality.
In summary Stiglitz cites the consequent decrease in opportunity, the growing inefficiency of the economy, and our inability to adequately invest in critical infrastructure and education as threatening the future for our children and grandchildren.
While there is general agreement about the evidence supporting the idea of the Great Diversion, there is a stark difference of opinion about its meaning exemplified by a recent discussion between Columbia University Professor Jeffrey Sachs, and Bob McConnell the Republican Governor of Virginia.
Sachs pointed out the dangers of the growing inequality. The governor saw it as a positive development worth celebrating.
Further, the policy difference is clearly evident as we look at the Ryan budget, recently passed in the House, reducing spending for social programs and infrastructure while lowering the taxes on the wealthy.
As Stigliz has written, our democracy is in trouble. For the first time in my lifetime, it seems that the generations following us will have fewer opportunities than we have enjoyed.
But when I find myself slipping into pessimism I am reminded of another one percent of our population, the military forces and families who are fighting and bearing the burdens of our wars. I am humbled by the sacrifices they are making for our democracy.
Can we be inspired by their example and have an adult conversation about how to accept the financial sacrifices needed to strengthen our democracy?
Re: Income and wealth equality
You are on the cusp of having your wish. In our dysfunctional congress and executive branch we have the makings of all being equally poverty stricken.
We are at the brink of disaster.
Posted by: Don Tadken | May 19, 2011 at 07:06 AM