Economic inequality in the U.S. is reaching Third World levels. Where’s the press?
COMMENTARY | June 24, 2005
Things that happen in small increments go almost wholly unnoticed, to the country’s peril, writes Henry M. Banta. Thus, one of the largest redistributions of wealth in history – right here in the U.S. – has gone basically unreported, or, at the very least, underreported.
By Henry M. Banta
Economic news, unless it involves the loss of several thousand jobs or sends the stock market crashing down a few hundred points, rarely gets much attention. Things that happen in small increments go almost wholly unnoticed. It is a commonplace among those who read the back pages of the Wall Street Journal, flip through Commerce Department statistics, or even just hang out at the nonfiction tables of larger book stores, that the American middle class has faced virtual stagnation for over two decades, and that most of the economic gain of the last couple of decades has gone to less than the top one percent of the economic ladder.
In fact the nation has seen one of the largest redistributions of wealth and income in the history of any major industrialized nation. Economic inequality is reaching Third World levels. David Cay Johnston (Perfectly Legal) reports that the top 28,000 people (who would fill less than a third of Yankee Stadium) have an income greater than the bottom third of all Americans. Yet this massive shift has gone, if not unnoticed, certainly without comment by the general media.
Perhaps, if this were merely an issue of "fairness," "social justice" or some other left-wing nonsense, maybe we could forgive it being given less attention than Terri Schiavo or Michael Jackson. But unfortunately more is at stake. Underneath this growing class disparity are issues that threaten the basic stability of our economy.
Since World War II, middle class spending has been the force driving the American economy. But as middle class income growth has stalled over the last two decades, this spending has continued, outpacing income. It has been sustained by working more, running up debt and consuming savings. These are things that cannot go on forever. At some point they must come to an end. When they do, we have no cushion.
Conservative government's hostility to public goods has made us even more vulnerable to any downturn in private spending. We have a government totally focused on promoting private spending. Should that spending falter, our tax and budget policies have left us with no ability to respond.
The flip response from the conventionally wise is to blame the problems of the middle class on "globalization." But the problem here is not the transfer of jobs and income between nations, but the transfer of wealth and income between economic classes within this country. Whatever can be attributed to globalization, it cannot explain the relative decline of the entire middle class, much less the enormous gains of the super-rich.
This is not to say that our domestic economic problems do not have a world market dimension. We, all of us – government and private citizens together – are borrowing more than one and a half billion dollars a day from the rest of the world to purchase what we can't pay for. The economic policies of the Administration have created a cocktail of unprecedented economic problems any one of which, given the precarious condition of the middle class, could produce a genuine catastrophe.
In short, the transfer of enormous wealth from the middle class to the absurdly wealthy is not just a matter for government statisticians, graduate student, and liberal crybabies. It has serious implications for all of us.
Henry M. Banta is a partner in the Washington, DC, law firm of Lobel, Novins & Lamont.
08/05/2008, 12:40 PM
Yes. Thank you Reagan, Bush I&II, and Clinton...