Saturday, May 10, 2014

THE SKY-HIGH COST OF EXCESSIVE INCOME INEQUITY

Much has been written in recent years about how the nation's income inequity has exploded over the last 30 years, weakening the middle class and decimating the hope of realizing the American dream of upward mobility for a majority of our citizens, as they struggle to just maintain their standard of living against increasingly futile odds.  The basic realities are well known, yet virtually nothing has been done to reverse the factors that are continuing to add to the disparity in income and wealth between those in the highest ranges of wealth and the rest of the nation. The figures themselves are obscene--the average CEO's annual income is over 10 million dollars, the average citizen's yearly income is just over $40,000 -- when broken down to working days per year, the CEO is making in just one day what the average salaried employee has to work an entire year to earn.  It is not, of course, just CEO's-- entertainers, athletes, media figures, even heads of public institutions and services can draw multi-million dollar salaries. 

The massive disparity is a fairly recent phenomena, and it is no mystery how it developed. In 1965 the average CEO income was about 25 times more than the average employee, by 1980 it had risen to 35 times more, by 1990 to 70 times more, by 2000 to 300 times more, dropped to150 times more when the economy collapsed in 2008, but had risen again to 350 times more by 2013. The imbalance was not prevalent or dysfunctional during the years up to 1980, that year initiated the changes brought on by Reaganomics, supply-side economics featuring reducing tax rates and shrinking government services.  Corporations and businesses  were given freer rein to make profits, with the "trickle down" belief used to justify the changes to the public.  It obviously hasn't happened, but is still advocated by the special interests which profit from it, and they apparently control enough votes in Congress to ensure that policies favorable to their interests are maintained. Money clearly is needed to win elections. Exorbitant income leads to wealth, wealth leads to power as money is available to flood the election air waves, and factual truth in campaigns is of little relevance, as free speech does not necessitate factuality.

The high cost of income inequity is often under-appreciated.  It isn't just the economic hardship that it imposes on an increasing number of citizens.  Our country is racked with polarization, disunity, separation, an unraveling of the social fabric and sense of community that holds us together. The financial desperation and hopelessness that people can experience can readily lead to escapist behavior, crime, drugs, violent outbursts, a breakdown in emotional and physical health. Our nation, tragically, has been witnessing an increase in all of these behaviors.  The extreme wealth of the few is obvious for all to see, many fall into an epidemic of greed in wanting in on the act, and impatience for results can lead to extreme frustration and dysfunction.  The high cost of the massive income inequity is at risk of creating a dysfunctional society, and with the political gridlock that exists in Washington, our leaders are incapable to doing a thing about it.  The casualties continue to mount, and few are looking upstream to really access why so many casualties are coming downstream.

It is also no mystery what steps a functional government could be taking to reverse the damage and begin to create less imbalance in our nation's wealth.  Robert Reich has just written an article, How to Shrink Inequality, that lays out the necessary steps. It is published in The Nation and also on Reader Supported News.  The question is, will our leaders get the message and begin to act, and will enough citizens care enough to place sufficient pressure on them to ensure that the necessary changes are enacted.  A lonely few are fighting the battle right now, Bernie Sanders and Elizabeth Warren in the Senate, Paul Krugman and Robert Reich publishing commentaries virtually everyday, Bill Moyers and a few others on TV.  Most other public figures are too beholden to special interests to take a clear stand, most citizens are too busy struggling to just keep up financially, or too distracted by the hours of trivia that passes for entertainment on TV, or the breaking news on inconsequential events that flood the airwaves, to get involved. The issue of income inequity is the most important one of our time, it has many ramifications and secondary negative consequences. It deserves our engagement. Our future, and our grandchildren's future, are at stake.