Series Introduction. We're going to try an experiment over the course of the next week.
I haven't been blogging much during the past week or so. It's crunch time around law schools -- for professors as well as students. Seminar papers to be read, edited, and evaluated, followed by one-on-one conferences and subsequent drafts. Regular classes and make-ups. Writing final exams. Plus all the usual semester-end details and the inevitable unforeseen requests and emergencies.
But I have been thinking, collecting ideas and links to stories that, it turns out seem to be interrelated in some way to economics and politics.
In the past, this would have taken the form of a very lengthy blog entry that any follower of this blog would have needed a goodly amount of discretionary time to read.
So, what I've decided to do instead is to take the sections into which it naturally falls and parcel them out over the course of the next seven or eight days -- in a couple instances matching them to events of the day in question.
They will be titled, "Golden Rules & Revolutions: A Series," followed by the Roman numeral of that part. That will both make it possible to read each entry in less time, and to track back (with the left hand column links) to the related, earlier entries.
Anyhow, today we start with . . .
Increasing income disparity, despair. . . I am not a conspiratorial theorist, nor am I charging that anyone truly desires to turn the United States into a third world country, in which the top 1% of super rich rule over a 90% in abject poverty. All I would observe is that what is happening -- as a result of what will be spelled out in this series -- is not that different from what would be happening if that were the goal of government officials and the ruling elite.
[F]rom the late 1980s to the mid-2000s . . . inequality increased across the country. . . . No state has seen a significant decline in inequality during this period. . . .Pulling Apart: A State-by-State Analysis of Income Trends, Center on Budget and Policy Priorities, April 9, 2008.
On average, incomes have declined by 2.5 percent among the bottom fifth of families since the late 1990s, while increasing by 9.1 percent among the top fifth.
And see, for Iowa data, David DeWitte, "Report finds income gap growing in Iowa," GazetteOnline, April 9, 2008, 11:40 a.m. ("The income gap between rich and poor is growing faster in Iowa than in most other states, according to a new report, which found a 49.3 percent average income growth in the wealthiest Iowa households over the past two decades. A study by the Center on Budget and Policy Priorities found the richest 20 percent of Iowa families earn 6.1 times as much as the lowest 20 percent of Iowa families by income. The ratio 20 years earlier was 4.7 times as much income for high-income families. . . . Fast-climbing pay for top corporate executives also has increased the income disparity . . ..")
. . . and Revolution. I recall reading many years ago -- where it was I would have no way of recalling now -- that there is a rough mathematical formula for predicting the point at which a growing income disparity will ultimately produce a revolution.
No, I don't think we're yet there in the United States.
But I am one of those who thinks Senator Obama was right when he said, "Lately, there has been a little, typical sort of political flare-up because I said something that everybody knows is true, which is that there are a whole bunch of folks in small towns in Pennsylvania, in towns right here in Indiana, in my home town in Illinois who are bitter. . . . They are angry. They feel like they have been left behind. They feel like nobody is paying attention to what they're going through." Perry Bacon Jr. and Shailagh Murray,"'Bitter' Is a Hard Pill For Obama to Swallow; He Stands by Sentiment as Clinton Pounces," Washington Post, April 13, 2008, p. A6.
As the story points out, Senators Clinton and McCain are trying to dismiss this truth -- denying that anyone's bitter, and charging that Senator Obama, who was living and working in south Chicago as a community organizer, is an "elitist."
It's reminiscent of Ben Stein's story about his visit with Warren Buffett.
Buffett, one of the nation's -- if not the world's -- wealthiest men, had just completed a study of the relative tax rates paid by his secretaries and clerks compared with his own.
It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. . . . “How can this be fair?” he asked . . ..Ben Stein, "In Class Warfare, Guess Which Class Is Winning," New York Times, November 26, 2006.
Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.
“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
Those who refuse to acknowledge what's happening in America can charge those who do with being "elitist," or fomenting "class warfare." But that does little to assuage the anger of those on the losing side of this warfare.
And when that anger is permitted to seethe long enough the news from elsewhere can serve as a reminder of the limits that ultimately come to constrain the greed of oppressive governments and the super rich elite.
Barbara J. Fraser, "As Economy Grows, Income Disparity in Latin America Widens," Catholic News Service, August 3, 2007 ("a two-day general strike in the region was called to protest government economic policies. . . . The incident was one of many around Peru in mid-July, as teachers, farmers and others took their discontent to the streets . . .. Despite six years of steady economic growth, mainly from the export of minerals such as gold and copper, most Peruvians, especially those in rural areas, say they are not feeling the benefits.")No, I don't think we need fear imminent revolution in America.
Thu-Trang Tran, "A new peasant revolution – is China learning from its past?" Inside Asia, June 1, 2006 ("Although the Chinese government may not wish to confront nor discuss the social unrest and violence of the Cultural Revolution, it seems the government is wary of history repeating itself. The government is concerned about the simmering social tension resulting from the widening wealth gap as the giant economy powers its way to the top spot.")
Associated Press, "Egypt: American freelance photojournalist and translator detained while covering riots," International Herald Tribune, April 10, 2008 ("Thousands of Egyptians angry over high food prices and low wages have been rioting this week in Mahallah, a Nile Delta city that is home to the Middle East's largest textile factory. Rising prices have struck hard in Egypt, a U.S. ally where 40 percent of the people live in or near poverty.")
And no, I don't think the declining dollar, the $40 trillion in unfunded federal debt we're leaving to our great-grandchildren, our multi-billion-dollar negative trade balance, and recession mean we're on the precipice of third-world status.
But I do think we need to take the impact of our economy and governmental policies on ordinary Americans much more seriously than I sense our leaders and media are willing to do. Why? For starters, because I think it is the decent, just and humane thing to do.
But also for all the reasons I have laid out here and will in the rest of the series to come.
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