In a political climate increasingly dictated by the interests of Big Business and the financial sector, it should not be surprising that the vast majority of economic growth over the past several decades has gone straight to the top.
Furthermore, this distribution of wealth (the most unequal of all advanced countries, and far worse than many of us realize) is not an accident; it is a result of deliberate policy decisions, what is called by Josh Bivens of the Economic Policy Institute “Failure by Design.”
But this is not the picture presented in the mainstream.
We are told that mysterious “market forces” and technological advancement, among other factors, are causing income inequality, not policy decisions.
This is an important view to promote for several reasons, two of which are: It tells people that there isn’t anyone actively working to make their situation worse (it is worsening on its own; can’t explain it), and it tells people that they can’t do anything about the system in which they live.
They just have to continue plugging away and perhaps, miraculously, they will make it to the top someday, too.
Of course, this is a fantasy, and it is now being recognized as such.
Social mobility, or what was once referred to as “The American Dream,” is an important metric to consider when determining the fairness of opportunity within society. Well, the United States isn’t doing so well on this front.
IMF chief Christine Lagarde, commenting on JFK’s famous idea that economic growth is comparable to a “rising tide” which raises all boats, remarks:
In too many countries, economic growth has failed to lift these small boats, while the gorgeous yachts have been riding the waves and enjoying the wind in their sails…In too many cases, poor and middle-class households have come to realize that hard work and determination alone may not be enough to keep them afloat.
Some would still have us believe that inequality is simply a result of laziness on behalf of the working class; you know, all those “welfare queens” living off the government, as Ronald Reagan often lamented.
That brings us to another fact about the current economic situation: A significant percentage of the people relying on welfare measures are employed, meaning their wages are not sufficient to sustain their own lives and the lives of their families.
To quote Eric Morath, writing for The Wall Street Journal:
It’s poor-paying jobs, not unemployment, that strains the welfare system.
The stagnation of wages over the past several decades, paired with increased working hours and job insecurity, is a deliberate policy direction which keeps the working class subservient and docile.
Walmart, for example, could choose to pay its workers a living wage, but they must stick to the prevailing motto of today’s capitalist economy: Profit over people.
Pair these factors with vicious and relentless attacks on unions, and the working class is powerless to do anything about their situation.
This hopelessness is helped along by a robust propaganda machine, convincing us to vote against our own interests, telling us that unions are a problem, not a potential solution, and that raising wages leads to a huge loss of jobs, so even though they (our politicians and business elites) really want to help the working class, they just can’t, because it wouldn’t be in the best interests of the economy at large.
Healthcare is yet another issue.
A significant percentage of Americans favor some form of universal healthcare, much like the system adopted by every other advanced country in the world.
But we are reassured by political elites that this system would be disastrous to the economy, even though the current system is rife with problems, one of which is its remarkable inefficiency. And, before Republican pundits blame our poor standing on “Obamacare,” the US healthcare system also ranked last among developed nations before the full implementation of the Affordable Care Act.
Finally, Republicans, along with some Democrats, are doing their best to peel back or privatize what is left of the New Deal (not much), to leave the average American with no safety net, and no opportunity to move upward.
Again, this isn’t the work of mysterious market forces. This is a class-conscious elite wrenching power away from the people, one step at a time.
All the while, massive tax cuts for the extremely wealthy, bailouts for big banks, deregulation and privatization, and “trade deals,” among countless other policies, are working to enhance the ability of the rich to get richer at the expense of the population and the environment.
Where are all of the benefits for the lower and middle classes? Oh, that’s socialism, and we can’t have that.
Essentially, we have a Wall Street government that is almost completely immune from the influence of the people, and above the law, so they are free to trample any calls for accountability.
The only punishments for Wall Street executives who play integral roles in bringing about a global recession are huge bonuses and high-level positions in government; while they prosper, the public pays.
Politics in the United States has become what John Dewey feared: “the shadow cast on society by big business.”
The concentration of wealth leads inevitably to the concentration of political power, which leads inevitably to the complete destruction of democracy, as we have seen.
Not only is this level of income inequality horrible for the masses, it is horrible for the economy in general.
Larry Eliot, writing for The Guardian, comments:
There is a vicious circle at work here. Inequality breeds instability, which leads to recession. Recession damages the public finances, which leads to government belt tightening. Austerity requires spending cuts that widen inequality, which in turn leads to slower growth and a greater reliance on debt.
If not now then at some point, this vicious circle will have to be broken.
On a positive note, these things can be changed. On a negative note, these things can be changed, but the status quo is backed by powerful forces which will not relinquish the advantages they have obtained without a serious fight.
We can’t underestimate the willingness of elite sectors of society to keep things just the way they are, no matter how unequal our society is becoming and no matter how many people are struggling just to get by in one of the richest countries in the world.
Instead of investing in the development of a strong and vibrant working class, official policies are pushing the “average American” further to the margins, confining them to a life of perpetual insecurity, leaving parents wondering how they are going to put food on the table, how they are going to put their children through college, and how they are going to survive after retirement.
The “American Dream” has not collapsed in some inexplicable accident; it has been stolen in a conscious effort by business and political elites, and until we recognize this fact, nothing can be done to restore power to the people.