Consider: in 1928 the richest 1 percent of Americans received 23.9 percent of the nation's total income. After that, the share going to the richest 1 percent steadily declined. New Deal reforms, followed by World War II, the GI Bill and the Great Society expanded the circle of prosperity. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America's total annual income. But after that, inequality began to widen again, and income reconcentrated at the top. By 2007 the richest 1 percent were back to where they were in 1928—with 23.5 percent of the total.
-- Robert Reich in Unjust Spoils, The Nation, July 19, 2010
In a nation where revenue-strapped county governments are now grinding up paved roads and spreading gravel in the place of asphalt because they can no longer afford maintenance, and states like California are pondering the deep-sixing of adult education programs even though the less-educated populace suffers most from both chronic and acute economic problems, it's not impolite to tell the undiluted truth.
And the truth is that, despite sweetheart settlements with the likes of Goldman-Sachs, the United States is plagued by corporadoes whose premises should be surrounded, Michael Moore-style, with yellow police tape for class war-crimes.
Unfortunately, it's impolitic to tell the truth of class warfare when Glenn Beck draws blackboard arrows to prove Democrats are National Socialists and other hate-ragers spread the meme of ObaMao, the black-red-and-yellow peril wrapped up in a single soundbite. Intone the words "ruling class," and you're automatically a commie.
The most unfortunate consequence of the sinking of John Edwards's political career is that his powerful narrative about "Two Americas" got submerged along with it. In fact, just as the now nearly abandoned phrase "third world" didn't account for grimmer conditions in a fourth and even fifth world of impoverished nations, "Two Americas" also doesn't quite cover the reality of the economic inequality that has been worsening in the United States. The terminology nonetheless resonated. If only it could be revived without the taint of being connected to you-know-who.
But never mind. Skip the soundbites. The discussion, a nuanced, long-term, no-nonsense, deeply imagined, unclichéd, vision-driven discussion, is what matters now. Turning what emerges from this conversation into campaign themes comes later.
On that score, The Nation's recent six-author collection on inequality in America provides a good beginning - only a beginning - for a comprehensive debate to and fro about inequality, and, most importantly, what to do about it. Happily, Garrett, a seven-year veteran at Daily Kos, has used the Reich piece to kick off a series on inequality on Thursday evenings. If only we could accompany that with a weekly broadcast-and-streaming roundtable on MSNBC and NBC. Rachel Maddow could moderate, poke and provoke these authors and others with her trademarked brilliance. Then the impact of inequality might begin to make some inroads in the public consciousness. A pipe-dream, I know.
For now, the echo-chamber will have to do. To begin, look at a few visuals from the report of the Center for Budget and Policy Priorities, Income Gaps Between Very Rich And Everyone Else More Than Tripled In Last Three Decades, New Data Show [pdf]:
Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth (see Figure 1).
If all groups’ after-tax incomes had grown at the same percentage rate over the 1979-2007 period, middle-income households would have received an additional $13,042 in 2007 and families in the bottom fifth would have received an additional $6,010.
In 2007, the average household in the top 1 percent had an income of $1.3 million, up $88,800 just from the prior year; this $88,800 gain is well above the total 2007 income of the average middle-income household ($55,300).
From the Bureau of Labor Statistics (via Business Insider):
But income is less than half the picture. What's more telling is wealth. Using the word that the right wing always speaks with horror when it applies to rank-and-file Americans, wealth has been heavily redistributed upward in the past 31 years.
That's where we are. Dean Baker explains how we got there and offers The Right Prescription for an Ailing Economy:
rising inequality is at the center of the current economic crisis. And since that increase in inequality was not a natural process but the result of conscious policy, it can be reversed. Some of the remedies are well-known. Restoring some discipline to CEO pay would be a great first step. One way would be to change the rules on corporate governance and require that compensation packages be approved by stockholders, where only directly cast votes count.
A small tax on financial speculation would go a long way toward moderating the multimillion-dollar salaries on Wall Street. The tax rates being discussed in Congress would raise trading costs only back to the level of the late 1980s or early '90s, but they would take a huge bite out of profits from the short-term trading at which the Wall Street crew excels.
Trade and immigration policy have been structured to put non-college-educated workers in direct competition with low-paid workers in the developing world, thereby putting downward pressure on their wages. We can instead restructure trade and immigration policy so as to subject highly paid professionals (doctors, lawyers, dentists, etc.) to the full force of international competition. This will help to bring down the pay of those in the top 2 to 3 percent of wage distribution. It will also raise real wages for the rest of the workforce by lowering the price of the goods and services produced by these professionals.
Finally, unions have long been a major force in reducing inequality. Whatever can be done to protect the right to organize and allow workers the option of joining unions will help to reduce inequality.
It is not difficult to develop policies to reduce the inequality that has given us a crisis-prone economy. The problem is getting the political will.
And that's the continuing fly in our ointment. Even if Baker's and Reich's and other of The Nation's authors are right about their competing prescriptions - all in all, quite modest prescriptions - there is not yet enough political will to transform them from wishes into reality.
The destruction of the middle class has not been the product of one party's machinations. One connived, the other - or rather a portion of it - acquiesced as it leaned ever more rightward. The current economic situation - the acute one in which corporate profits and cash hoarding stand side-by-side with intolerable odds for job seekers as well as the chronic one we see in these measures of inequality - didn't start yesterday. And neither of them can be instantly rolled back.
Moving down that path will require progressives within the Democratic Party (and those who work with it because no other reasonable choice capable of winning high public office exists) to learn how better to influence the party's economic direction with an effective use of honey and vinegar. Emphasis on the word effective. So far, despite a few victories in the past 19 months - some good, some modest, some arguable - progressives are lagging in that influence. We are good at passing out blame for the situation but carefully avoid mirrors in the process.