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Thursday, July 19, 2012

Economic Inequality in the U.S.: A Conflagration of Accumulated Dead Wood


According to the Congressional Research Service, the share of total net worth held by the less affluent half of American households dropped from 3.6% in 1995 to 1.1% in 2010. Meanwhile, the share held by the top 10 percent increased from 67.2% to 74.5 percent. That is to say, ten percent of the American population holds three-quarters of all of the wealth. The top 1 percent went from holding 30.1% to 34.5% of the wealth. According to the report, "Inequality is the term commonly applied to the concentration of total net worth among the relatively few households at the top of the wealth distribution." The study shows that inequality increased in the U.S. during the 1990s and 2000s.

Perhaps of all the statistics listed in the report, the one that leaps off the page as a harbinger of future problems in terms of democracy concerns the fact that half of the American population holds only one percent of the wealth in the United States. This means that half of the population has little at stake and therefore little to lose. It is a feat of the sheer breadth and depth of propaganda from the top one percent via the corporate media companies that the bottom fifty percent continue to buy into the system, figuratively speaking, rather than revolt. At the very least, to have half of a population excluded is dangerous, even if only potentially at the moment. In terms of quality of life, society itself would have a much better feel to it were the wealth not confined to 50 percent of the population (with the top ten percent of the population owning 75% of the wealth).

No one likes to have one’s property taken, even if one would not be inconvenienced by the removal.  Hence the dreaded term of “redistribution” is excoriated. However, trends such as those described above can come from systemic biases rather than by outright taking from the poor; similarly, a design could “lean” in the direction of economic equality without overtly taking from the rich. To be sure, the super-rich, or multi-billionaires, could legitimately be subject to direct redistribution because after a certain point a person’s additional wealth exceeds that which can be spent. To play investment games with wealth while half of a population goes without (including many without healthcare) can be subjected to critique as evincing a rather warped sense of priorities in terms of values.

Therefore, both the design of the American political economy and the assumption that no amount of wealth can ever be too much from the standpoint of societal values could be subjected to critique. Raising such basic questions after the twenty-year trend of increasing inequality could in turn be part of a wider societal awakening in the context of not only a new century underway by a decade, but also a new millennium. Even back in 2000, the recognition could have been that a new status quo should at least be attempted in a “spring cleaning” of sorts during the first decade of the new millennium. It was not already too late even in the second decade for a wholesale re-consideration by society at large of that which had been taken for granted in the status quo.

In addition to subjecting the corporate capitalist system and the related amount of economic inequality to a fundamental debate, a constitutional convention in each of the fifty republics, and one for the U.S. constitution itself could be called on the basis that a new millennium calls for fundamental re-examination of the status quo, which is no longer rightfully the default. For example, the long trend of declining federalism could finally be subject to a decision either to restore that system or make the de facto near-consolidation de jure too, constitutionally.

Admittedly, my suggestion is a pretty tall order, and therefore very unlikely to see the light of day. Instead, the unquestioned hegemony of the antiquated default is likely to go on, unthreatened by any societal awakening, especially from the half of society with a vested interest in upsetting the apple cart. Indeed, human nature itself my strongly favor tomorrow being rather like today, instead of being rid of all the dead wood (which can easily catch fire).

The 1988 fire in Yellowstone spread “like wildfire” in large part because of the years of Interior Department policy against allowing contained fires to incrementally consume the accumulating dead wood. Similarly, the dead wood of economic inequality (and political consolidation) renders the American empire extremely vulnerable. One indication of this sort of unthinking build-up is the $16 trillion imbalance represented by the debt being held by the U.S. Government as of 2012. The less tangible dead wood may be even more dangerous.

Once a fire starts (e.g., higher interest rates or small riots), it could quickly get out of control before anyone has any idea that the ship called America will founder as if by some mathematical certainty. Fifty-one percent on one end of a balancing scale is by definition a majority. To put it another way, what goes around comes around. Lack of concern for the other half is likely to have its own consequences, even if only for one’s posterity.

Source:

Dan Froomkin, “Half of American Households Hold 1 Percent of Wealth,” The Huffington Post, July 19, 2012. http://www.huffingtonpost.com/2012/07/19/households-wealth-american-1-percent_n_1687015.html#slide=more217997