The richest one-tenth of 1 percent, representing just 13,000 households, took in more than 11 percent of total income in 2007.
Ponder that for a moment.
I encountered that statement while reading Bob Herbert this morning, in a piece titled A Recovery's Long Odds. He tells us not to expect a powerful economic recovery because
Ordinary American families no longer have the purchasing power to build a strong recovery and keep it going.
He quotes Robert Reich, who credits the Obama administration for preventing a depression.
"But," he writes, "we did not learn the larger lesson of the 1930s: that when the distribution of income gets too far out of whack, the economy needs to be reorganized so the broad middle class has enough buying power to rejuvenate the economy over the longer term."
.
This column by Herbert is a must read.
He will remind you that the "movers and shakers" have been
embracing privatization and deregulation with the fervor of fanatics. The safety net was shredded, unions were brutally attacked and demonized, employment training and jobs programs were eliminated, higher education costs skyrocketed, and the nation’s infrastructure, a key to long-term industrial and economic health, deteriorated.
It’s a wonder matters aren’t worse.
Relying on Reich's tracing the work of analysts on the increasing income disparity, we can consider the increasing share of income held by the top 1% -
in the 1970s 8-9%
in the 1980s' 10-14%
in the late 1990s 15-19%
in 2005 >21%
And in the last year for which complete data is available, 2007? More than 23%
Meanwhile the median wage, adjust for inflation, is LESS than it was for a male worker 30 years ago.
There can be no full recovery without an increased demand for goods and services by the ordinary folk. Without money, with so many maxed out (or worse) on their credit cards and lines of credit, there is no money to fund such a demand, even though our consumer product companies are well below their production capacity.
If matters stay the same, with working people perpetually struggling in an environment of ever-increasing economic insecurity and inequality, the very stability of the society will be undermined.
What is the future, I wonder, for those young people who enter my classroom each day? Some are brilliant, and will get scholarships to fund their educations. Some are merely very bright, and will limit their choices because their families will lack the resources for more expensive college options, and/or because they do not want to finish their education with mountains of debt, particularly if they are unsure of the economic value of their educations.
Some are not particularly academically oriented. Yet many of them have the street smarts to see what is happening. Adult relatives and friends are struggling economically. Families around them are losing their homes because they cannot afford the mortgages, or they are too overburdened with debt. What they may not realize is that the changes of the bankruptcy laws in the last administration made it harder to recover, to get out of the hellish hole of debt. Meanwhile many of our tax dollars went to bail out economic actors who (a)helped create the current situation with their reckless and unregulated behavior, and (b) whose top leadership continues to receive obscene bonuses and live at a level that is also obscene - remember that top 1/10 of 1%?
I am a teacher. I see hedge fund managers who have a tax system that is skewed to allow them to continue to make huge profits without supporting the society using that wealth to tilt the political playing fields, to oppose elected officials who block their latest schemes. In education, hedge funds have figured out how to use the tax laws on real estate investment trusts to profit from chartering of schools, and when one state senator in NY lead the effort to block the expansion of charters, have begun pouring huge amounts into funding a primary opponent. We will see this evening whether their money has gotten them the elimination of that opponent.
In education, we also see the outsized influence of the wealthy. It is not just that the foundations of Bill Gates and Eli Broad fund so many of the endeavors designed to perpetuate a particular view of education - think Teach for America and New Leaders for New Schools as exemplars - it is that their wealth gives them, with no particular expertise on education, outsized voices in the making of educational policy.
We are told education must change to provide corporations with the workers they need to be competitive. Really? For jobs that will be paying even less than they do today, with fewer benefits, because the corporate leaders are determined to break the unions that could help protect the workers, because those corporate leaders are perfectly prepared to ship jobs overseas to low wage economies where they don't have to worry as much about worker safety and environmental regulations.
The rich get richer. The powerful get more powerful. Even in desperate times they find ways to continue feeding at a government funded or subsidized trough. Politicians of both parties cater to them because they are the source of campaign funds, and may provide sinecures after one leaves government, even temporarily.
1/10 of 1% has 11% of income - that was the ratio more than 2 years ago. How much would they have today, as the economic in equity in our society deepens?
Herbert ends by telling us that the inequity needs at least to be recognized. He writes
The U.S. economy needs to be rebalanced so that the benefits are shared more widely, more equitably. There are many ways to do this, but what is most important right now is to recognize this central fact, to focus on it and to begin seriously considering the most constructive options.
Yet those voices that have been warning of the trends, that have been pointing out the data, do not get the attention of those that already are wealthy, who will tell us what they want.
We are the world's oldest continuing democracy. I question how much longer we can continue as a democracy if the severe imbalances between those at the very top and the rest of us continue and intensify?
What happens to the idea of the American Dream? What about the nightmare into which so many find themselves thrust?
I was reading a column today. I encountered a sentence that shocked me: The richest one-tenth of 1 percent, representing just 13,000 households, took in more than 11 percent of total income in 2007.
Unless and until our leaders, our government, our media, focus on the imbalance that allows that fact to be true, we will have little hope that future generations will know what real democracy means.
We will become worse than a banana republic.
If we do not act.
Now.
In all the elections before us.
Before it is too late.