Welcome to Income Inequality Kos.
Join us Thursdays, at 9:00 p.m. eastern. We discuss income inequality, concentration of wealth, and related issues.
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Community Statement
The shared community value is a belief that income inequality is a political issue of high importance. Otherwise, all takes on the issue, from within the general Daily Kos community, are welcome.
Eyes on the Prize
Eyes on the prize ? You bet, and don't let nobody turn you 'round. But what, exactly, is the prize ? Why are we in this ? Why are we progressives ? If it's about inclusion, diversity, then we have already won. We have elected a black man to the highest office in the land. A Latina sits on the Supreme Court. The fight is over, we won, right ?
Well, not exactly. Unemployment is through the roof and we all know that blacks are the first to be fired and the last to be hired. Having a black president doesn't really do much for most black people. The issue of economic vs. identity politics is something I've been thinking about for a long time. Robert Kuttner wrestles with it in the current issue of The American Prospect. It's their 20th anniversary issue and here is some of what he has to say:
A 20-year liberal scorecard shows that the era's greatest liberal gains have been in the politics of inclusion - setting the stage for an African American president.
But ...
The economy today is more unequal, more precarious, and more prone to catastrophe than it was in 1990 - or for that matter in 1960. The counterweights to raw capitalism - a strong labor movement, effective economic regulation, valued public institutions - are on the defensive. Though a Democratic president has won partial reforms to restore public investment, revive economic regulation, and repair an unjust and inefficient private health-insurance system, the very idea of government as a needed counterweight to laissez-faire capitalism remains a hard sell.
Maybe it's time to re-focus. We've been so busy fighting it out over the social issues, combating the bigotry that is such an important motivator for the Republican base, that we have allowed wealth and income issues to be put on the back burner. I have a suggestion. Let's keep our eyes on another prize, the Gini index. This index, named for the Italian statistician who proposed it in 1912, is a measure of income inequality. It's a number between 0 and 1 where 0 means perfect equality of incomes in a country and 1 means one person is receiving all of the country's income. This link will take you to the Wikipedia entry on the Gini index. If you go there and scroll down a bit, past the mathematical banjo music, you will see this:
Click here for a bigger image.
It's not a perfect number. For example, I'm very suspicious of the downturn shown for Mexico from the late '90s. Reporting methods are imperfect and governments can fudge numbers. But still, it's a place to start, it's a number. The CIA and the UN both use it. If you look at the chart it confirms a lot of what we know from other sources. Inequality is lower in western Europe, particularly Scandinavia. The Gini for Canada is healthy. The index is higher for Latin America (African nations are off the chart). The chart also makes clear the importance of electoral politics for income inequality.
Note the upturn for the US and the UK beginning in the early '80s. This was the direct result of the election of Ronald "It's Morning in America" Reagan here and Margaret "Tina" Thatcher there. These were the two most prominent exponents of Milton Friedman's free-market supply-side scam. The Gini coefficients for the two countries provide evidence for the effects, if not the intent, of economic policies derived from this ridiculous economic doctrine. Note also, fellow Democrats, that the trend continued through the Clinton years.
This brings us to a little thing called "triangulation". We took our eyes off the prize under Clinton. The Clinton administration liked to point out that both the Right and Left were dissatisfied. So, they reasoned, they must be doing it right; triangulating, charting a middle course. Of course, the two sides were unhappy for different reasons. The Left was PO'd about economic trends while the Right objected to tolerance and inclusion. Clinton decided that the battle was to be over diversity. Economic issues were conceded without a fight. Democrats seemed satisfied with lip-service, and marginal progress, on the social issues while income inequality continued to rise.
Income inequality doesn't "just happen". It is not an Act of Nature. The government sets the rules of the game for business and finance. Income inequality results when interested parties are allowed undue influence in government. Laws get changed or selectively enforced. We must watch our elected officials and insist that they write laws and policies that benefit the majority, and when I say benefit I don't mean some fuzzy, symbolic benefit. I mean concrete, measurable economic progress. It's about the money. The corporate/conservative elite know this, even if the Republican base doesn't. We know that it's possible for GDP, total economic activity, to grow without spreading the wealth. We know that a rising DJIA, the stock market, does not indicate widespread prosperity. These are not adequate scorecards. A falling Gini index, by definition, means decreasing income inequality. This is the number to watch.
Keep your eyes on the prize.