Wednesday, September 1, 2010

Widening Gap between Rich and Poor: US cities now compare to African cities (10.23.08)

Another "Banana Republican" sign:  According to a new UN report, as reported in The Guardian, US cities such as New York, Atlanta, New Orleans, Washington, and Miami, now rank among the world's greatest - in terms of disparity of income.  We knew this gap was growing in the US.  But did we know that many of our largest cities now compare to cities in Africa in terms of disparities between rich and poor?  Did we realize that race was a significant factor in these disparities?

As we face the election of our first Black President, in the midst of the greatest financial crisis since the Great Depression, this UN study suggests a potential for civil unrest as well:

"High levels of inequality can lead to negative social, economic and political consequences that have a destabilising effect on societies," said the report. "[They] create social and political fractures that can develop into social unrest and insecurity."

It is a tragedy how far the United States has descended from our proud aspirations of social equality, particularly during the past 8 years of the bush administration.  It is particularly tragic that republicans have worked so hard to foster wealth-shifting, and divisions along racial, ethnic, and religious divides in addition to wasting so much time, energy, and money on bush's vendetta with Iraq.

"It is clear that social tension comes from inequality. The trickle down theory [that wealth starts with the rich] has not delivered. Inequality is not good for anybody," said Anna Tibaijuka, head of UN-Habitat, in London yesterday.

We have traveled so far from our ideals in these 8 years.  We have tortured.  We have spied on ourselves.  We have weakened our Constitutional protections.  We have lived way beyond our means as a nation and created a wealthy class to rival the early years of the 20th century.  But so many people have paid a terrible price in terms of life expectancy and infant mortality, in a nation which imprisons a greater percentage of our population than any other nation and spends half of the entire world's military budget.

We have a lot of work to do.  We have a lot to undo.   So many great tasks lie ahead of us.

We are focused on Nov. 4.

But reducing the disparities in equality, in justice, in health care, and so many other areas lie ahead. 

I'm thinking of Nov 5.  And beyond.



The argument for narrowing the wealth range can be based on biology, or sociology, but they really should be self-evident.
Nutshell version: If members of a society feel they hold a stake in that society they help to ensure the health of the society.
Slightly expanded: Large enough disparities make it obvious that most will never come into the empyrean heights. They know the only route to the highest status is the windfall, either through gambling (stocks, etc.), cheating (insiders, skimping on regulations), or fame (American Idol, football draft).
Large version: Evolution would reward those with status, with more mates, or better selection of mates, meaning more and better offspring. In a normal primate troop there is always hope for a status change. If there is little hope, the ape on the bottom is rewarded by emplying a berserker attack, not at his ranking neighbor, but at the top. This applies to direct sexual access, too, i.e. rape. So too much wealth disparity asks for social unrest.
Narrowing the range through steeply progressive rates, preserves the competition (winners are still winners) while making it more possible for anyone to ascend. Conveniently, it also encourages income over wealth, since steady income stays under the steep rate.
Status, however, need not imply wealth. I could imply service, through one's work or even one's giving away of wealth, as in the Tlinget culture of the Pacific Northwest, where potlatches were held by wealthy tribe members, to give away all their possessions.
If we change what confers status, so that greed is no longer rewarded, and social contributions of whatever type become what we admire about someone, then we could go a long way toward changing the inequalities.
When people rail, for example, about how they might have to wait for health care if everyone gets care, I think to myself... "why should I not have to wait?" I'd far rather wait than know others are lacking.
We could make so many positive changes. Through changing the reward systems that lead to "status."
I think a central point is missing here: it is the middle class that makes the US, the US. The middle class is vast and not just about blue collar workers. It's not about the gap between the rich and the poor, it's about keeping the middle class intact.
We have to embolden the middle class -- it is what really runs our society. (It derives from the mercantile class which is really what pushed the notions of capitalism along.) The Reagan Democrats were drawn from the middle class. Finally, the Dems have put up someone who is also appealing to the middle class in a major way: Obama.
The Dems need to focus on the middle class -- and that includes more than just the people at the lower end of it. They are finally doing that, and you can see the results this year.

Last week I posted on my blog questioning McCain's "redistribution of wealth" rethoric, but only received one reply, questioning, oddly enough, the notion that we have, for years, transfered our wealth from mid-and-lower class citizens into the hands of the wealthy. I didn't bother to reply to "MiddleClassBill" at that time, mostly because I lack an in-home internet connection to do the necessary research to back up my statement, but I know it is out there in abundance. Since the 1980's we have been suffering under the counter-intuitive "trickle-down" theory of income redistribution economics, a minimum wage that has not kept pace with inflation, billions a year in corporate welfare (not to mention the current "bailout"), a fortunately failed attempt to privatize Social Security, etc, etc.
My dad works in a steel mill, has been there since before he went to Vietnam. About seven years ago the company declared bankruptcy, eventually eliminated retirement benefits for every employee, past and present, just before selling the company to a foreign firm. Those benefits were taken on by the federal government for half their value, meaning you and I are now paying for thousands of people to retire from a company they dedicated thirty years of their life too. The former plant owners and managers? Golden Parachutes all around.
Yes, income redistribution exists in America, it is just in the opposite direction from what McCain asserts, and it is truly ironic that so many mid-and-lower class Republicans can support a man who has so obviously benefited from that redistribution (and immorally used a shitty system to his advantage back in the 80's). I wonder how many of McCain's supporters have been directly or indirectly harmed by conservative economic policies, and been subsequently rescued by "socialist" programs on the left?
This is important and earns the AG seal of approval. One qualification, though, while income inequality in cities like my own (New York) is apparently at levels seen in African nations, the relative levels of poverty are not comparable. Rather than representing a huge increase in poverty and blight, the comparison it would seem represents the rise of a class of mega-rich. Yes, the problems of our inner cities are huge and seemingly intractable (as a public defender I see it firsthand), but the disparity comes from the super rich - the same ones who have seen their taxes go down over the past eight years. Unfortunately, I haven't heard anything from either candidate addressing the problems of the inner city.
Obama's statement about "spreading the wealth around" - apart from providing a perfect talking point for Republicans - misstates the issue. The point is not to redistribute wealth. It's about requiring those who benefit the most from the system to pay their fair share. It's about providing good government services to the middle class - social security, decent medical care, the infrastructure that makes accumulating wealth possible, etc. Republicans have succeeded in the past decades by associating taxing and government spending with giveaways to the poor (an implicitly racist call) when in fact those programs make up a small portion of the federal budget. As the UN report makes clear, we neglect those problems at our peril. But don't expect either candidate to even mention them any time soon.
Lastly (if you've read this far) could someone please explain why, with the McCain camp jumping all over Obama's statements, no one has pointed out that the tax increase on those earning over $250,000 merely restores the rate that was in effect under Clinton - and equally important, that McCain originally opposed the Bush tax cuts by arguing that they were too heavily weighted for the wealthy.
"Lastly (if you've read this far) could someone please explain why, with the McCain camp jumping all over Obama's statements, no one has pointed out that the tax increase on those earning over $250,000 merely restores the rate that was in effect under Clinton?"
Good question AG. I had not made that connection. Thank you for pointing it out.
I grew up in Oklahoma during the S&L scandals and the crash of the oil markets. I saw first hand longtime wealthy families lose their status. But having lived in two of the four aforementioned cities, I can say those experiences were nothing compared to what I have witnessed in Miami or New York. I still remember driving home from work into Miami from the Keys, the first week after having moved. I saw Little Havana truly for the first time. Shanties literally constructed out of corrugated steel lined the roads, yet only a mile away were mansions with Rolls Royces and Ferraris parked upon their gated driveways. The poverty was reminiscent of that which I had witnessed living in Mexico, but to see it juxtaposed with such an appalling display of wealth was unlike anything I had seen.
I think it was then I there I realized something was wrong with the American Dream. I'd been feeling it for quite sometime, but I had been unable to give vision to what was rolling through my head and churning in my heart. I don't pretend to know the answers, perhaps that's why I've returned to school, but I know this: "If peaceful revolution is made impossible, then violent revolution becomes inevitable." What I pray is that we are witnessing is a peaceful revolution in America, so that we may avoid a violent manifestation of the unrest and discontent stirring within us.
While "middle class" is the term of choice for most in the US, it really is imperative that the bottom 20-40% are re-engaged within the economy.
1st, The OECD report confirms what others have shown, that the Top 30% (and particularly the Top 10%) have seen their income & wealth rise... the middle 30-40% have stayed roughly flat... while the bottom 20%-40% have fallen.
2nd, While the Middle Class is central to the American economy, one of the problems is that significant %'s of people have actually fallen OUT of it. Many find they have to work 2-3 relatively dead-end jobs, can't own or hang onto a home or educate their kids. In short, it's not only important to appeal to those still IN the middle class, but to those no longer THERE.
3rd, Economically, it's critical to get higher incomes & employment into their hands, as they spend the highest % of their income. The transfer of income/wealth to the richest - who don't spend all of their income - means an average $ in the hands of the poorer 30% provides more bang for the buck.
In short, as the income pyramid has become more and more to-heavy, the economy became more unstable. The extreme heights of wealth and consumption have attracted all our attention, but the solution must involve not only changing the top end, but wiring funds, and education/training, and hope into those who have lost it.
Many thanks for the link & your discussion Thera.
Wow, an AG seal of approval! Thank you, AG.
And thanks to others for lengthy, thoughtful comments.
Well, TheraP, what can one say,,,,, your insightful essay melds nicely with the Zimbabwe dark night The Republic has endured these last eight years.
So sad and so true.
Nice comment CogIn.
The quote is "Those who make evolution impossible make revolution inevitable". It is from Pope John XXIII (the "Good Pope") in the "Pacem in Terris" encyclical. It goes without saying that the current Pope has stopped his sainthood proceeding while promoting that of nazi enabler Pius XII...
Merci beaucoup!
Do we need a Referendum For A New Democracy?
Are you concerned about the future of democracy? Do you feel democracy is under attack by extreme greed in countries around the world? Are you sick and tired of: living in fear, corporate greed, growing police state, government for the rich, working more but having less?
Can we use both elections and random selection (in the way we select government officials) to rid democracy of undue influence by extreme wealth and wealth-dominated mass media campaigns?
The world's first democracy (Athenian democracy, 600 B.C.) used both elections and random selection. Even Aristotle (the cofounder of Western thought) promoted the use random selection as the best way to protect democracy. The idea of randomly selecting (after screening) juries remains from Athenian democracy, but not randomly selecting (after screening) government officials. Why is it used only for individual justice and not also for social justice? Who wins from that? ...the extremely wealthy?
What is the best way to combine elections and random selection to protect democracy in today's world? Can we use elections as the way to screen candidates, and random selection as the way to do the final selection? Who wins from that? ...the people?

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