Tuesday, July 31, 2012

Joseph Stiglitz: We Won’t Fix America Until We Fix Income Inequality

“We used to think of ourselves as a land of opportunity, but if you look at the numbers, the statistics … the chances of someone from the bottom making it to the top or even the middle are very limited. In fact – mobility, opportunity in the United States today is lower than it is in any of the advanced industrial countries.”
~Joseph Stiglitz

Stiglitz writes in Vanity Fair bout the issue of income inequality

So, no: there’s little debate over the basic fact of widening inequality. The debate is over its meaning. From the right, you sometimes hear the argument made that inequality is basically a good thing: as the rich increasingly benefit, so does everyone else. This argument is false: while the rich have been growing richer, most Americans (and not just those at the bottom) have been unable to maintain their standard of living, let alone to keep pace. A typical full-time male worker receives the same income today he did a third of a century ago.

From the left, meanwhile, the widening inequality often elicits an appeal for simple justice: why should so few have so much when so many have so little? It’s not hard to see why, in a market-driven age where justice itself is a commodity to be bought and sold, some would dismiss that argument as the stuff of pious sentiment.

I have a question for all of the advocates for “trickle down economics” or “Horse and Sparrow” as it was known in the late 1800′s. They espouse this belief that lower tax rates on the wealthiest and cash rich corporations will lead to prosperity for the middle class because the money will just trickle down. The wealthy have not had tax rates this low in 60 years; yes – taxes under Obama are lower for every single income bracket than any other President in modern history (source) . Fact. For large corporations – EFFECTIVE tax rates are at all time lows and profits are at all time highs (source). So – the question that I have and the question that you should ask is this:

If trickle down economics works so well – shouldn’t we be swimming in low unemployment, higher wages and better quality of life?

  • If “trickle down” works- why are we still at 8% unemployment?
  • If it works so well – why was the economy in recession for 13 months before Obama came into office.
  • If it works so well – why did we go from record surpluses and a projection of no federal debt by 2010 to Bush handing off a $1 trillion deficit to Obama?
  • If it works so well – why do we have the highest poverty levels since the 1960′s? (source)
  • If it works so well – how are the 6 heirs to the Sam Walton fortune worth more than the bottom 48 million families combined (source)

The answer is simple – trickle down economics is a farce and anyone who buys into the idea is no different than the proverbial “useful idiot” who are manipulated by some hate or fear of the other or lack of understanding as to why we are where we are.

We now live in a country where who we become is now mostly defined by the parents whom we were born to. If you’re poor – you’re very unlikely to move out of that class. If you’re wealthy – you’re very unlikely to move out of that class.

Pew Research has shown that this trickle down economics that we’ve lived under for the last 30+ years has led to the rich getting richer and the poor getting poorer (source).

We live in a country where the average worker is paying 50% more in taxes than a person making $200 million a year (source).

We live in a country where unintelligent children of privilege are more likely to graduate college than intelligent poor children (source).

We live in a country that is the ONLY advanced industrialized country in the world that doesn’t give mandated sick leave and holidays to its workers (source).

We live in a country where 25% of all private sector jobs pay less than $10 an hour (source).

Finally – social mobility in the U.S. is not what they think it is. If Americans really lived in a country that had the kind of social mobility and equality of opportunity that we seem to think we have … we’d be in Denmark (source).

It’s all messed up – and the solution that the Republican party brings to the table is give MORE tax cuts to the wealthy who already pay lower rates than either you or I. It’s offensive.

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