Standing Up to American Inequality

Economic inequality is the most serious threat facing the America people. It divides our country into antagonistic haves and have-nots. It serves up a surfeit of wealth and power to some and grinding poverty and neglect to others. It flattens the middle class. It is, in fact, the source of our gridlock politics.

Yet, in the face of our immense wealth, inequality can only exist if we allow it to. So why do we put up with debilitating inequality, demeaning poverty and the insecurity of unemployment? Why do we deny a living wage to the working families of America?

The pervasive suffering and insecurity in our society are muted by a political system that refuses to recognize the needy. Do we think people like to dumpster dive, sleep on cardboard under bridges or choose between retirement and their daughter's education? We pretend like we do.

The only immediate, widely- held concern that is getting a hearing is that the American Dream will not be available for future generations. The fear is that Baby-Boomers will not be able to afford their old age and Generation X (born early 60s to early 80s ) will lack all security and opportunity.

At least, that makes an opening in what is otherwise a solid wall of denial.

The American Dream, reduced to its most essential feature, is homeownership, but it is homeownership backed up by a secure job that pays enough to provide reasonable retirement and the opportunity for generation to improve its lot. Strangely, it looks like we are quite affluent despite the inequality.

The overall prospects for the American economy look very good. The economy has been growing pretty steadily over the past 40 years, even despite that nasty little depression. Real GDP grew from $5.8 trillion in 1982 to $11.2 trillion in 2000 and $13.3 trillion in 2011. Productivity or output per person has increased. Output more than doubled over just the last 30 years. We have twice as much output per capita in 2013 as we had in 1980. With such increases in wealth, why would the Baby Boomers and Generation X be concerned about their retirement or opportunity?

Because, on the way to the pay window, all the money disappeared. Something happened beginning in the 1970s. Wages stopped growing despite a growing economy. In the postwar years, 1948-73, American business productivity grew by 96 percent and wages went along, increasing by 94 percent. Then things changed.

From 1973 to 2001, worker productivity rose 80 percent but wages on average rose only 4 percent. Worse, wages are no longer just stagnant; they are now falling at near record pace. Real wages were lower by 6 percent in April 2013 from what they were in April 2008. That was the biggest drop since 1921-26.

Real wages have been stagnant since the 1970s and for good reason. Over that period the top 5 percent took 80 percent of the average income growth. There was nothing left for wages.

How could the rich take so much?Why didn't, and why aren't, wages rising? Because there has been a power shift in the American economy since the 1970s. A contrived pro-business and anti-worker attitude now pervades our political and social structure. That is best seen in candidate Romney's remark about 47 percent of the population being moochers. That attitude is acceptable to the 47 percent of the people who voted for him in the last election.

The poor have become unworthy, an attitude that was deliberately instilled. If the poor and working-class people are lazy losers, setting a minimum wage just encourages them to malinger. The minimum wage shouldn't be raised, it shouldn't exist! If workers are in temp or part-time jobs, that's all they really want. Employers are quite justified in importing workers who will accept lower wages or outsourcing to India with its low wages.

Lower-class people are obviously not really contributing with their low-wage work. They should be taxed more to get them to work more. The wealthy, who are the job creators and contributing to our society, should not be penalized with higher taxes!

After all, the business of America is, as Coolidge said, business. Inequality should be accepted, the more the merrier, since it spurs the work ethic and reflects the success that is the reward for hard work. Inequality is just the market at work.

In reality, the 1 percent did indeed get all the money. They used it to buy a state of mind to buy a compliant Congress that subsidized them, deregulated them and cut their taxes.

In truth, America has come to worship money more than anything else. The poor, because they are poor, are not considered deserving of the American Dream. And that's why they're not going to get it. They don't deserve it.

But remember, inequality can only exist if we allow it to. Money doesn't have to be above the law.