Blog 135. American Angst Part 3 of 7: Engineered Inequality

America has greater inequality than any other advanced country.[1]

Among the advanced countries of the world, America has the greatest wealth, but also the greatest inequality in wealth.  The U.S. ranks 27th out of 27 high-income countries in median wealth per adult.  The top 1% took home 22% of all income in 2015.During the 2009-2013 federally-sponsored “recovery” from the 2008 recession, 95% of the income gains went to the top 1% of wealth holders.[1] While our country is wealthy, its wealth is retained by only a few. Studies show that the greater the disparity in income, the more dysfunction a society has as measured by infant mortality, social mobility, literacy, AIDS, homicide rate, degenerative diseases, teenage births, trust, and status of women.

Inequality is not the result of economics.  It results from policy and politics. For example, following the 2008 crash, some 700 billion dollars went to supporting the banking industry which had speculated in subprime mortgages and derivatives, but little went to families losing homes. When the housing market sank, it took the American middle class down with it.[1, 2]

Inequality occurs in taxes, too. The richest 400 pay less than 20% of their income in taxes, and their assets are not taxed when inherited by their children. Politics—and therefore government—increasingly represents the 1%. The result is despair and disillusionment with the so-called democratic process.

Our ideal of social and economic mobility is a myth, a deception. A young person’s prospects are more dependent on the income and education of his parents than on his ability. Deprivations of one generation are visited upon the next.

Opportunity is inherited. Inequality is also inherited.

Of the costs imposed by the top 1 percent, the greatest is the erosion of individual sense of identity, opportunity, fair play, and feeling of community. Justice is bought and sold. The citizens don’t trust the government. It isn’t their government any more. The manipulation of public policy by corporations and by the one percent is destroying democracy.

Positive feedback

In 2010, the Supreme Court’s Citizens United decision ruled that corporations and other organizations could make unlimited expenditures on behalf of political issues. This led to the generation of super PACs, agglomerations of secret money for advertising and other influences on elections and the governmental process. In 2014, the Supreme Court’s McCutcheon decision struck down the limits on campaign finance. Corporations, secretive associations and money are now officially treated as “free speech.” We are in a destructive cycle in which money buys influence, and influence changes the rules so that more money flows to those with influence.

Any system with unlimited positive feedback, whether mechanical, electronic, or social, will self destruct.

That is a simple rule of nature. In other words, nothing can grow forever.

What’s missing?

We’ve lost our sense of value of the commons—those things we share together, those things for which ownership is inappropriate.  Among them might be clean air, water supply, public parks and open spaces, forests, and roads. The Administration is reducing national parks. It is controversial to consider whether public transportation, radio communication, and internet should be common or under private ownership. Most roads are still public, but toll roads favor the rich. Radio licenses are captured with little question, and the internet access is now being parceled by price, not equal access. We expect some federal authority to prevent epidemics, and we say that public health has a common value, but we try to manage it with market mechanisms like subsidized insurance that promotes senseless costs. Politicians dare not talk about the commons.

If you can’t talk about something, you are powerless to change it. Politicians won’t talk about regulation, but society IS regulation, and we must regulate what we value, not subsidize wealth. Integrity is being what you say you are,  and a society without integrity becomes neurotic, just as an individual whose public face must belie his underlying self.

We fail to realize that the economy, opportunity, and minimal living standards are shared commons that, when ignored or reduced, impact everyone—ultimately even the rich. Would you want to be a rich person in a corrupt third-world country?

Contrary to popular belief, the market cannot solve everything. Unregulated, the market acts to funnel wealth upwards toward influence, leading to monopolies and oligarchies. If a corporate CEO does not act to inflate the price of the stock, he/she will be replaced. A corporation has no moral sense other than price. Price is speculation, not inherent value. Speculation leads to financial crashes—such as those of 1927 and 2008.

Communities are self-controlled feedback loops generating accountability that prevent people from feeling isolated or ignored. The bully-leaders foster separation, isolation, and polarization as a means to control a minority, generating resentment, chaos, insecurity, and disillusionment among the majority.

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Next: Part 4 will discuss the slide into fascism.

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[1] Joseph E. Stiglitz, The Great Divide, Norton and Company, 2015.

[2] Elizabeth Warren, A Fighting Chance, Metropolitan Books, 2014.

2 thoughts on “Blog 135. American Angst Part 3 of 7: Engineered Inequality

  1. daniel sass ·

    We choose “Commons” among those who we feel ARE our “commons.” That’s why my family and I left El Paso. Too “common” for what we were experiencing. Not very much better where we live now, The Peninsula (the SW WA Long Beach Peninsula), but Astoria and the Internet “buddies” present some, nay, much DESIRED commonality for Leanne and me. No commonality with ANY of my children, for a great variety of reasons. And I am not bothered by that. What I DO fear is our retreat into the only interest which “interests” us together, my wife and I, are our solitude and total “commerce” ONLY with our solitude and pets!

    • I detect a sense of both humor and anxiety in your review of what the term “common” might mean. You have a strong point. The meaning of “commons” depends on who is using the term. I might want to regard the national parks as “commons,” meaning held for benefit of all the people. The oil or mining industries might have other ideas. A person who finds joy in riding a motorcycle freely across the landscape, unrestricted by the confines of roads, might also have still a different set of ideas. Thanks for contributing. dn

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