Have and Have Not Nation (Guest Voice)
Have and have-not nation
by Eugene Robinson
WASHINGTON — The hard-right conservatives who dominate the Republican Party claim to despise the redistribution of wealth, but secretly they love it — as long as the process involves depriving the poor and middle class to benefit the rich, not the other way around.
That is precisely what has been happening, as a jaw-dropping new report by the nonpartisan Congressional Budget Office demonstrates. Three decades of trickle-down economic theory, see-no-evil deregulation and tax-cutting fervor have led to massive redistribution.
Another word for what’s been happening might be theft.
The gist of the CBO study, titled “Trends in the Distribution of Household Income Between 1979 and 2007,” is that while we’ve become wealthier overall, these new riches have largely bypassed many Americans and instead flowed mostly to the affluent. Perhaps my memory is faulty but I don’t remember voting to turn the United States into a nation starkly divided between haves and have-nots. Yet that’s where we’ve been led.
Overall, in inflation-adjusted dollars, average after-tax household income grew by 62 percent during the period under study, according to the CBO. This sounds great — but only until you look a little closer.
For those at the bottom — the one-fifth of households with the lowest incomes — the increase was just 18 percent. For the middle three-fifths, the average increase was 40 percent. Spread over nearly 30 years, these gains are modest, not meteoric.
By contrast, look at the top 1 percent of earners. Their after-tax household income increased by an astonishing 275 percent. For those keeping track, this means it nearly quadrupled. Nice work, if you can get it.
This is not what Republicans want you to think of when you hear the word redistribution. You’re supposed to imagine the evil masterminds as Bolsheviks, not bankers. You’re supposed to envision the lazy free-riders who benefit from redistribution as the “poor,” and the industrious job-creators who get robbed as the “wealthy” — not the other way around.
If Americans were to realize they’ve been the victims of Republican-style redistribution — stealing from the poor to give to the rich — the whole political atmosphere might change. I believe that’s one reason why the Occupy Wall Street protests have struck such a nerve. The far right and its media mouthpieces have worked themselves into a frenzy trying to disregard, dismiss or discredit the demonstrations. Thus far, fortunately, all this effort has been to no avail.
The right maintains that inequality is the wrong measure. To argue about how the income pie should be sliced is “class warfare,” and what we should do instead is give the private sector the right incentives to make the pie bigger. This way, according to conservative doctrine, everyone’s slice gets bigger — even if some slices grow faster than others.
Indeed, the CBO report says that even the poorest households saw at least a little income growth. Why is it any of their business that the high-earners in the top 1 percent saw astronomical income growth? Isn’t this just sour grapes?
No, for two reasons. First, the system is rigged. Wealthy individuals and corporations have disproportionate influence over public policy because of the often decisive role that money plays in elections. If the rich and powerful act in their self-interest, as conservative ideologues believe we all should do, then the rich and powerful’s share of income will continue to soar.
Second, and more broadly, the real issue is what kind of nation we want to be. Thomas Jefferson’s “All men are created equal” is properly understood as calling for equality of opportunity, not equality of outcomes. But the more we become a nation of rich and poor, the less we can pretend to be offering the same opportunities to every American. As polarization increases, mobility declines. The whole point of the American Dream is that it is available to everyone, not just those who awaken from their slumbers on down-filled pillows and 800-thread-count sheets.
So it does matter that as the pie grows, the various slices do not grow in proportion. We’re not characters in one of those lumbering, interminable, nonsensical Ayn Rand novels. We believe in individual initiative and the free market, but we also believe that nationhood necessarily involves a commitment to our fellow citizens, an acknowledgement that we’re engaged in a common enterprise. We believe that opportunity should be more than just an empty word.
Eugene Robinson’s email address is eugenerobinson(at)washpost.com. (c) 2011, Washington Post Writers Group.This column is licensed to run on TMV in full.
12 Responses to “Have and Have Not Nation (Guest Voice)”
Bill Gates and I are about the same age. He has 20 some billions dollars, I have less than a grand right now in my babnk account. But where is there some kind of “redistribution of wealth” at work here? If he didn’t have 20 billion, would I have more in my pocket right now? Only if the government were to engage in redistribution and take from Gates to give to me. This whole “redistribution of wealth” argument is a shifty, dishonest rhetorical falsehood. And dummies fall for it, because it requires a slight application of common sense to see through it.
Wow, what a great read.
No Mark it really is not. The “redistribution” spoken of is not the govt literally taking money from one person to give to another. Its in the govt’s role of setting tax and financial policy that directs where money goes in the general sense. There are policies you can put in place that accelerate the accretion of wealth at the top, and other policies you can put in place to slow or redirect it towards the middle and lower class. During the last decade the GOP got to put in place just about every policy they ever wanted to that removes obstacles to the cash flowing to the top. The results are EXACTLY what liberals, and no few financially savvy conservatives, have been saying would happen. Economic collapse.
Conservative belief is that accretion of wealth at the top is best for society, and liberals thing slowing that process and redirecting it to the poor is best for the country. What we have seen is a concrete example that the conservative way is garbage. Once too much money is at the top, the middle class can no longer sustain the economy because they don’t have enough to spend on anything. Without this engine the companies that rely on massive consumer spending to grow sales every quarter stagnate. Their stocks drop. The indexes based on the total sum of these companies drops. The financial vehicles created by Wall St. to make money off of the indexes of these comapnies tank. To make themselves look good many companies will lay people off to cut costs and show a short term profit. This exacerbates the financial woes of the middle class. All the money is at the top but there is no where for them to invest it, because no one is buying anything. Market re-collapses after a short term rebound.
Somewhere after we lose a generation to low income, 15 years from now when college graduation drops off and we lose our competitive edge in the world, the GOP might maybe admit they really screwed things up by backing the rich. How they constantly manage to get poor people to back their agenda remains a mystery to me.
Exactly. How many times have I stressed the same exact point? Republicans can make the country as social Darwinist as they like as long as opportunity is EQUAL.
Republicans are always using the word freedom but never the word equality. I can only assume because they don’t believe in it.
Are there? What policies slow or redirect wealth towards the middle and lower classes?
Dr J-
What? You can’t be serious.
I’m quite serious. It seems to me we’ve achieved our current level of inequality despite decades of progressive taxation, increasing funding for schools, growth of big entitlement programs, and other policies intended to benefit the poor and middle classes. Our gini coefficient has been rising steadily since 1968, and in that time government spending has risen from 30% of GDP to nearly 40%, so it’s hard to make the case that we got here via laissez-faire policies. I suspect lowering income inequality is harder than it sounds.
But please prove me wrong. If there are a set of obvious policies that provably reduce income inequality, tell me what they are.
Tuition free higher education at all State Colleges.
Single payer healthcare that guarantees a minimal healthcare packages to all citizens.
Small business loan guarantees.
Functional Infrastructure.
The breakup of monopolies and enforcement of antitrust laws.
And that’s just of the top of my head…
Mark N. “If he didn’t have 20 billion, would I have more in my pocket right now?”
Hmmmm…. Yes, if you’re talking about management in corporations. The top management in companies set compensation policies approved by boards. Boards reward performance of top management but not so much the people who actually do the work. While I am not against top managers receiving appropriate compensation the redistribution of wealth is done on the backs of the workers. Is it fair for management to ask workers to work many 60 or 70 hours a week, and sometimes these workers work 30 to 35 hours straight on special projects, yet when compensation and recognition comes around these people are given bonuses of a couple hundred dollars while top management receives millions of dollars each?
Sounds great, Q, but do those things actually reduce income inequality?
We have two big single payer systems already, Medicare and Medicaid, which were started in the 60s, about the time our inequality took off.
We started big programs to subsidize higher education in the 60s as well. The Pell grant program started, and California started subsidizing its public universities so they were close to free. Since then, and arguably as a result, college costs have skyrocketed. What’s more, these programs are funded by taxes on (mostly) the middle class, and they subsidize college graduates who will earn more than average after they graduate. In other words, they’re an example of the middle class subsidizing the (relatively) rich–not a clear recipe for more equality.
I’d ask similar questions of your other ideas. They sound like fine ideas (with the possible exception of the Solyndra one), but what’s the relationship between them and income inequality, and what evidence is there that they would move the needle?
[...] Have and Have Not Nation (Guest Voice) (themoderatevoice.com) Share this:FacebookTwitterDiggStumbleUponMoreRedditLike this:LikeBe the first to like this post. [...]
Way to fix the obscene compensation in corporations
First off, we are talking only about corporations that are publicly owned and operate in more than one state (or operate internationally). Such corporations are supposed to be regulated by the federal government due to interstate commerce clause in the constitution. The reason it should only apply to publicly owned corporations is that if someone privately owns a corporation, he is entitled to its profits as a matter of fairness.
1. No one is allowed to have a salary (including bonuses—see exceptions below) more than 10 times (or 20) that of the lowest paid person working for the corporation. This includes those who are ‘contracted’ to do work for the company and spend the majority of their time (or the most time of any place they work in similar contract) for that company (think contracted cleaning crew, etc)
2. Exceptions to the above include those who cause the corporation to immediately realize the fruits of the their labor. Examples would include artists (singers, etc), professional athletes and sales people who sell items that allow the corporation to get the money immediately (not some promise of money in the future). Since these people cause the corporation to get the money immediately, they should be allowed to get their commision (or whatever) immediately.
3. Employees may be given stock options that are set at the price when the options are issued or the price of the stock when the employee got his job—whichever is HIGHER! For those who don’t know how stock options work: you get the right to purchase stock at a guaranteed price, regardless of what the price at the market is. This would allow top management to earn those bloated salaries—but only if they get the corporation’s stock to rise in price!
4. The stock options offered above can not be used until three years after they have been awarded. This will make it that management will not make short-sighted, potentially dangerous or risky decisions since much of their compensation will depend on the long-term viability of the corporation.
Just for starters…