Debate is intensifying over the implications of the apparent emergence of a two-class economy (the uber-rich and the other 99%). The rich say it’s good; more and more of the rest disagree. Whatever the truth of that debate, two things are undeniable: 1) the shift in U.S. society toward inequality and 2) the failure of the uber-rich to manage professionally the economy from which they have derived such exorbitant personal rewards.
The data on rising inequality are stark:
Since 1980, about 5 percent of annual national income has shifted from the middle class to the nation’s richest households. That means the wealthiest 5,934 households last year enjoyed an additional $650 billion -- about $109 million apiece -- beyond what they would have had if the economic pie had been divided as it was in 1980, according to Census Bureau data. [Bloomberg Businessweek 10/13/11.]
When inequality is rising because some are rising faster than others, that’s one thing. When inequality is rising, but the winners take care of the losers (providing honest jobs for all willing to work, taking care of all children, making good education available for all who are willing to study, and ensuring that the population is given a health care safety net, and using the police to provide security for all), that too may be defensible. But when inequality occurs because the rich are impoverishing the rest through brazen, illegal, and unproductive financial trickery and a corrupt political system designed of the elite, by the elite, and for the elite, then it is time to change the system.
At that point, the debate should perhaps start centering on the question, “When should ‘all options’—a phrase the political elite now likes to toss around in the foreign policy context--be put on the table?” Personally, I still do not believe the U.S. has yet reached quite that point, but it is moving in that direction frighteningly fast.
How the elite reacts to the incoherent but heartfelt popular protests on Wall St. will say much about whether or not we will be able peacefully to reform the economic system in the U.S. that the elite has so disgracefully mismanaged over the past generation. So far, Washington and New York Mayor Bloomberg have essentially given the finger to the protestors; no wonder their protest is spreading. Expect violence as the elite temporizes.
A bit more government effort to identify, arrest, and try those who brought us the recession would send a welcome message to the protestors. Treasury Secretary Geithner’s promise this week of such action is somewhat encouraging, though he is one of the foxes guarding the henhouse, so we need to reserve judgment until we see action. Elimination of the Senate 60% majority rule and a serious demonstration of Democratic backbone in support of financial reform would also send a message. So far, it is a dangerous standoff between greedy politicians and weak-kneed politicians, with the people confused and increasingly angry.
The official news agency of that great American creditor, the People’s Republic of China, which did so much to finance the U.S. invasion of Iraq with loans that our children will have to pay back, put it neatly:
Unbiased eyes can see through these anti-Wall Street protests a clear need for Washington, which habitually rushes to demand other governments to change when there are popular protests in their countries, to put its own house in order. [Xinhua, 10/10/11.]
Indeed: domestic and foreign policy are related. Might that have anything to do with the wild claims about Iranian plots coming out of Washington even as Americans are demonstrating on Wall Street for economic justice? Might some imagine that another nice little war in the Mideast would distract short-sighted Americans from the real source of their discontent?
As for specific solutions to U.S. financial problems, the protestors are now calling for the highly practical and eminently moderate solution of individuals transferring their bank accounts to banks that represent depositors’ interests…in other words, to banks that are banks, not brokerages or gambling firms, a sort of Glass-Steagal (the New Deal reform that put a legal wall between brokerages and banks) by democratic action rather than law.
Hmmm…can we the people really change things without going through our legally elected but highly distracted (by temptation) representatives? Can we figure out ways to change our behavior directly, as individuals in order to counteract the elitist distortions in the economic system and put working Americans back on their feet? Bank at a local bank that is not part of a huge chain. Buy high quality made-in-America products even if you have to pay a bit more. Support environmental groups fighting against corporate pollution of your air and drinking water. Grow vegetables and share with your neighbors. Persuade those neighbors to change how they live. Don't sit around waiting for the politicians to save you: that is exactly what they are counting on.