I have talked with my family over the past several years about my fear of major social unrest resulting from great economic disparities. Often times, I have referenced such disparities between the developed and undeveloped nations. More recently, I have been concerned about the economic disparities within our nation. As Kevin Phillips discussed in his books, nations that lose their middle classes tend to eventually lose their power.
Bruce Judson, a Yale Professor, brings data and imagination to address the great economic disparity within our nation. We are becoming, if not already present, a nation between the top and the rest! “It Could Happen Here” details the implications of a nation without a strong middle class. It is not simply a matter of social justice. As he says, “In fact, economic inequality if not solely a matter of fairness. It is a transcendent danger that threatens our national security and the survival of our form of government”.
It is clear that history indicates that nations with wealth allocated disproportionately to the few end up in some sort of major change. This situation is more problematic when a nation’s economy is in crisis. Can one imagine what would happen if nations investing in our relatively worthless bonds decided that they could do better elsewhere? Granted, it is hard to believe that they would do such because the consequences would be catastrophic for so many! However, should such occur, it surely would overwhelm our nation! Even as I write, I find out that our dollar’s value continues to decline! This may contribute to some “growth” because our exports will be cheaper, but surely it cannot be a great way to grow our economy.
Economic inequality is not just an absolute difference between groups of people. There is a relative aspect to what people perceive to be fair. People have expectations and, if there is no way to satisfy them, they become angry. Government can address problems associated with this disparity, but government’s failure to successfully remedy problems may inflame those who appear to be short-changed. And government may be overwhelmed to the point of being inherently ineffective.
The causes of a collapse of a society are unpredictable when focusing on specifics However, even from the time of Aristotle, economic inequities generally associated with major events, e.g., fiscal meltdown, result in some sort of revolution. But, the actual trigger could be less momentous. In short, when enough people feel like there is no hope in satisfying their aspirations and government is ineffective in addressing the issues, a society becomes quite vulnerable.
It would be hard to find anyone who would dispute the statistics indicating that the top 10% and above have more income and wealth than the remainder of our nation. In addition, high income is not no longer associated with an increase in social value. Making money with high leverage does not make a nation more productive. It mostly serves to increase the wealth of the few.
Technology and the global market were major factors in how economy has changed since the 70’s. So many people lost jobs due to technology, especially computers. Middle management tasks were outsourced as well as tasks generally done by unskilled labor. The end result is that corporations made increased profits with less employees. Moreover, regulations ceased to limit the markets, resulting in high leverage, increased debt, and less security for the ordinary middle class citizen. There was a time when adding women to the workforce contributed to maintaining the standard of living. Now, two earners in a household became insufficient, contributing to the need to add revenue by assuming debt in the form of credit and equity. We had produced a non-sustaining economy.
Obama’s administration recognizes the seriousness of the problems affecting our nation. At the same time, it is unclear whether they (and members of Congress) can adequately address the inherent problem of economic inequality. Those with wealth fight to maintain their gains. Redistribution of wealth is not achieved easily!
To rectify the situation, our nation has to focus on the common good. We are interdependent. Rather than an issue of just social justice, it is in our self-interest that our wealth is distributed more equitably.
We need to introduce policies that will tend to make society more fair. Health care, education, and retirement are issues that everyone wants. We have the means to have health care that is affordable to all that delivers high quality medicine. We need to address the problems associated with our school system that squanders so many youths with effects that last for life. We have to promote higher education, knowing that it is important that such education will promote opportunities for a full life. We need fiscal regulations to ensure that our markets can be trusted to serve the common good.
No comments:
Post a Comment