Saturday, Oct 25, 2014

America's intolerable income gap


As unemployed and low-income Americans awaken each day, they face a volcanic economic landscape. To paraphrase Don Mclean, "their financial hopes have become a shadowy ghost, and all their dreams caught the last train to the coast. So bye-by, Miss American Pie." Conversely, America's wealthiest tycoons awaken each day to brilliant new horizons - horizons which illuminate a world of unbelievable riches. Yes, Mr. Mclean, they are becoming more and more bloated from gorging themselves on the "American Pie" - a pie that far-too-many other Americans may never even see.

Thinking people are learning to look past those boringly repetitive charges of "class warfare" when discussing income inequality. Recently, Pope Francis cautioned the world about the hazards of the extreme gap between the rich and poor. More and more critical concern is being expressed through a host of highly credible studies.

The huge worldwide charity organization Oxfam recently released figures that show, "85 of the world's richest people make as much as 3.5 billion of the poorest people on the planet." (3.5 billion is half of entire world's population.)

Billionaires Bill Gates and Warren Buffett have both cautioned about the dangers of extreme income inequality on the economic and social fabric of the nation, "How can anyone justify huge U.S. corporations paying their top officials 347 times more than their average hourly workers?

The Gini coefficient is the primary measure of income inequality. A Gini value of 0 expresses total equality while a value of 1 (or 100) expresses maximal inequality. According to the U.S. Census Bureau, the official Gini coefficient in 2010 was 46.9, the most recent year for which data is available. That coefficient rises to 57.4, if capital gains are included. That places the United States among the most financially unequal countries of the developed world. (Source: Economist G. William Domhoff.)

According to a recent Pew research poll, "the dominant asset on the balance of top 1 percent income households is typically equity in an operating business while - for middle class income families, the typical equity is usually a home, followed by a retirement account.

The unemployed and low-income Americans do not need any more esoteric high-finance reasoning. They know (in their collective gut) that they are hungry and their economic outlook is growing increasingly hopeless. They also know that they are on the receiving end of a gigantic economic injustice.

It should come as no surprise that those who live in the glimmering world of the top 1 percent to 5 percent (or those who regularly kiss-up to those who do) would want to downplay or deny the injustice of income inequality. To this point, the recent headline of the op-ed in Forbes Magazine reads, "White House Income Equality Makes War On Progress." In the words of House Speaker John Boehnor, "Are you kidding me?" Has Forbes totally forgotten American history?

Historical research by economists Peter Lindert and Jeffrey Williams shows that, "at the time of the American Revolution, the United States was the world's most egalitarian society - and proud to be so."

Alexis de Tocqueville, noted Frenchman who wrote extensively about America during the mid-19th century, stated, "Among the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of condition among the people."

I find it nauseating to listen to the fear-mongers who whine that we are heading toward socialism, when the reality is that we are moving more rapidly toward the opposite national conditional - a plutocracy, where rule is by the very rich.

I applaud the rich for their success. I do not nor do I personally know of others who advocate total income equality. Furthermore, I am opposed to those laws which allow far too many people to unscrupulously milk the social welfare system - depriving those who are truly in need of assistance. We certainly need reform at both ends of the economical spectrum, but this obscene level of income inequality brings shame upon our nation. We must pass that "American Pie" to everyone at the table.

Bud Morgan lives outside of Avon Park.


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