In these days of budget buzz and deficit dallying, it is useful to consider just where things are in terms of wealth in the U.S. Nobel prize-winning economist and Columbia University professor Joseph Stiglitz presents some unsettling realities.
While the Baconauts and Boomergeddons bemoan their idea that profligate spending and “Mass Overconsumption” (an EMR buzzword) will bring an end to the American dream, Stiglitz says it’s already gone.
He notes some familiar but still vital information that the top 1 percent in terms of personal wealth are taking in 40 percent of income. Twenty-five years ago, it was the top 12 percent taking in 33 percent of income, Stiglitz wrote in a recent Vanity Fair piece.
The usual conservative dogma has it that if you have an extraordinary income, somehow you deserve it. Stiglitz exposes this horrendous myth, nothing that the current income inequality in the U.S. makes old Europe seem far more egalitarian. With wealth distribution numbers like these, the U.S. has more in common with the rulers of Iran or the oligarchs of Russia, which is cold comfort indeed. The American big wigs have been helped along by tax cuts and easy regulation, especially regarding trusts, during Republican administrations.
How this new American elite got there is a curious story, basically a tale of tax cuts, overweening self-interest and lobbying and a general change in attitudes. Rather than science or manufacturing, finance is the most popular field for the most talented youth go so they can divvy up and massage the wealth of the tiny rich rather than create new wealth.
The new ultra-rich are inclined to cut public spending for such things as government research that brought us such advantageous innovation as the Internet and breakthoughs in public health. The One Percenters, you see, don’t need public research or public health since they have their ownlabs and their own private doctors. Here in Virginia, there’s even talk about “privatizing” the University of Virginia, a top-rated public university. To get an idea where this comes from, take a peek at the school’s alumni magazine, which I get because I am a U.Va. parent. The back pages are stacked with four-color ads for multi-million-dollar Albemarle County estates. One wonders where their values have gone.
Speaking of health, the Baconauts among us cling to the tired idea that private corporations are the only salvation to our health issues. Funny, but Stiglitz points out that with the top 1 percent game plan, the health care market is rigged from the start, meaning there isn’t any market economy that the Baconauts claim is the salvation of all things. Pharmaceutical companies, for instance, are getting a $1 trillion gift from the federal government, which has agreed to not negotiate the prices for drugs of which it is the single largest buyer. Odd, but I thought that negotiating prices was a key part of a market economy.
As the tiny slice of rich even richer, the American middle class is slipping. The number of men with only high school degrees has actually dropped 12 percent in the past 25 years. And if they get their degrees, or even a college sheepskin, their jobs will be easily thrown away by an elite that is more than willing to bargain U.S. employment for cheaper foreign labor since the price is right. I guess that kind of market economics is OK. Congress? They are part of the 1 percent themselves and are funded by it.
The problem with the Boomergeddons is that they tend to be upper middle class types or aspire to that group distinction and see a lot of the problems with the greed and irresponsibility of lower income people. This classist, if not racist, view is out of whack since these less wealthy people have responded positively during the Great Recession by cutting back on purchases and paying off credit cards that the 1 percenters and their companies have thrust upon them.
I know Stiglitz isn’t exactly popular reading for the Baconauts. When I wrote a piece a couple of years ago about Stiglitz’s observation that Iraq-Afghanistan will cost is $3 trillion that we haven’t even begun to pay for, I might as well have been put in stocks and pummeled with rotten tomatos. I am sure to be accused of harboring “socialist” views and perhaps I am.
But the elite had better pay attention. Watch what is happening in the Middle East against ruling oligarchs. And the rebels won’t exactly be Jefferson-spouting Tea Baggers lecturing about individual freedom.
Peter Galuszka
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In these days of budget buzz and deficit dallying, it is useful to consider just where things are in terms of wealth in the U.S. Nobel prize-winning economist and Columbia University professor Joseph Stiglitz presents some unsettling realities.
