Facts about inequality: paraphrased from Angus Deaton’s book,” The Great Escape”
The Facts about inequality:
- Poor people do not choose to be poor
- The unemployed are miserable and demoralized without work
- The GDP is a well meaning statistic that doesn’t measure the 99% struggling at the bottom of income distribution
- Labor unions have declined in membership
- Legal immigrants have gone from a well off group to being relatively poor
- The African American male population, may not vote, because of incarceration and remain, disenfranchised
The Consequences of Inequality
- Only the top 20% is left to vote.
- The top 10% , those making $255,000 and up commanded 47% of all income.
- The CEO’s of large firms, Wall Street Bankers and hedge fund managers, the working rich, have acquired more wealth with a reduction of taxes on their incomes. They have prospered much more then the middle class after taxes.
- We no longer have equal opportunity for upward mobility. Mobility is restricted to networking among an elite class. Middle Class kids are priced out of the job market.
- The encouragement of the best minds into financial engineering, “weapons of mass destruction”, is a loss to the rest of the economy reducing growth and innovation elsewhere.
- The people playing with their own money or their clients money should get rich, to use the “people’s” money is inexcusable. If these activities cause widespread social harm, that is intolerable.
- The egregious behavior of a few is compounded by CEO’s sitting on each other’s boards giving giant compensation packages to their friends.
- Government regulation and laws favor the wealthy and have failed the Middle Classes.
- Allowing the overturn of Glass Steagall led to the creation of Mega Bank Cartels, responsible to themselves and their profits. Encouraging risk taking.
- Political lobbying has played a key roll in the increase of incomes at the top.
- The collapse of Fannie and Freddie was caused by well connected political operatives who enriched themselves and their senior executives through catastrophic risk taking, keeping regulators at bay, by means of well funded campaigns of political influence.
Bad consequences of Inequality:
Be forewarned, the income at the top may continue to grow by the continued infusion of money into the political process. Studies of Congressional voting by political scientists have demonstrated that Congressmen on both sides of the aisle are sensitive to the wishes of rich constituents and not at all to the wishes of poorer constituents.
Rules are made in the interests of the rich who become more rich. The largest increases in shares of income come from the largest cuts in taxes on top incomes.
- Justice Brandeis argued, the United States could have either democracy or wealth concentration in the hands of a few, but not both.
The very wealthy have little need of state provided education or health care, they have every reason to support cuts in Medicare and to fight increases in taxes.
Overturning our “State of Inequality” is appropriate to restore the well being of everyone else. If we fail to overturn our “State of Inequality”, Democracy is hijacked and we the people will never move forward or achieve well being, a decent education, health care or a good paying job. There could be no Escape from our state of inequality, if we allow conditions to exist that prevent us from achieving real growth and creativity. The longer we wait, the more people are malnourished in their body and their mind.
“the heart and pulse of the Middle Class”