Wealth Inequality in the US - Worse than many Amercians think

American Royalty: an insight

Wealth Creates Arrogance

By Fred Mazelis

Directed by Lauren Greenfield

 

The new documentary, The Queen of Versailles, advertised at least in part as a kind of reality show based on the tale of a Florida billionaire and his wife who set out to build a 90,000-square-foot home inspired by Louis XIV’s palace in Versailles, is in fact a good deal more serious than its media coverage might suggest.

Filmmaker Lauren Greenfield, also an artist and documentary photographer, has come up with a movie that to some extent holds up a mirror to twenty-first century America. It would be difficult for any thinking viewer of the film to come away without some serious questions about the state of contemporary society.

David Siegel, 74 years old when the film was begun some four years ago, grew up in Indianapolis. His father was a businessman who apparently gambled away most of his earnings. The younger Siegel was determined to achieve wealth on a grand scale. He got his big chance in 1980, launching what was to become Westgate Resorts, a vast empire based on timeshare vacation homes.

Jackie Siegel, 30 years younger than her husband, comes from a working class background in the upstate New York town of Binghamton. When she met and married Siegel in 1995, it was her second marriage and his third.

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We Eat They Starve

They go without

By Sharon Astyk and Aaron Newton, from the book A Nation of Farmers

 

It's hard to grasp the degree to which the Western lifestyle is implicated. We don’t realize that when we buy imported shrimp or coffee we are often literally taking food from poor people. We don’t realize that our economic system is doing such harm.

What is the most common cause of hunger in the world? Is it drought? Flood? Locusts? Crop diseases? Nope. Most hunger in the world has absolutely nothing to do with food shortages.

Most people who go to bed hungry, both in rich and in poor countries, do so in places where markets are filled with food that they cannot have.

Despite this fact, much of the discourse about reforming our food system has focused on the necessity of raising yields.

Though it is true that we might need more food in coming years, it is also true that the world produces more food calories than are needed to sustain its entire population.

The problem is unequal access to food, land, and wealth, and any discussion must begin not from fantasies of massive yield increases, but from the truth that the hunger of the poor is in part a choice of the rich.

Inequity and politics, not food shortages, were at the root of almost all famines in the 20th century. Brazil, for example, exported $20 billion worth of food in 2002, while millions of its people went hungry.

During Ethiopian famines in the 1980s, the country also exported food. Many of even the poorest nations can feed themselves—or could in a society with fairer allocation of resources.

It can be hard to grasp the degree to which the Western lifestyle is implicated. We don’t realize that when we buy imported shrimp or coffee we are often literally taking food from poor people.

We don’t realize that our economic system is doing such harm. In fact, the system conspires to make it nearly impossible to figure out whether what we’re doing is destructive or regenerative.

We have been assured that “a rising tide lifts all boats,” that it is necessary for us to make rich people richer, because that will, in turn, enrich the poor.

The consequences have been disastrous—for the planet and for the people whose food systems have been disrupted, who never had a chance to be lifted by any tide.

Journalist Jeremy Seabrook, in his book The No-Nonsense Guide to World Poverty, describes First World efforts to eliminate poverty and hunger this way:
It is now taken for granted that relief of poverty is the chief objective of all politicians, international institutions, donors and charities. This dedication is revealed most clearly in a determination to preserve the poor.

Like all great historical monuments, there should be a Society for the Preservation of the Poor.

Only, since it is written into the very structures of the global economy, no special arrangements are required. There is not the remotest chance that poverty will be abolished, but every chance that the poor themselves might perish.It is hard for many of us to recognize that the society we live in helps create poverty and insecurity, but it is true. Our economy is based on endless growth.

We’re told that if the rich get richer, it makes other people less poor. Think about it for a moment—about how crazy that is. Wouldn’t it make much more sense to enrich the poor directly, to help them get land and access to resources?

Historically, rural people have been quite poor, but often, despite their poverty, could grow enough food to feed themselves.

Over recent decades, however, industrial agriculture and widespread industrialization have moved large chunks of the human population into cities, promising more wealth.

But rising food and energy prices (rising because of this move and this urban population’s new demands for energy and meat) have left people unable to feed their families.

Multinational food companies have also worked their way into the food budgets of the poor. Faith D’Aluisio and Peter Menzel are the authors of Hungry Planet.

“Few of the families we met [in the developing world] could afford a week’s worth of a processed food item at one time,” they report in the Washington Post, “so the global food companies make their wares more affordable by offering them in single-serving packets.”

Around the world, industrial agriculture has consolidated land ownership into the hands of smaller and smaller populations.

Rich nations dumped cheap subsidized grain on poor nations. Local self-sufficiency was destroyed. Now, as the price of food has risen dramatically, those created dependencies on cheap grain, which doesn’t exist anymore, mean that millions are in danger of starvation.

Real alleviation of poverty and hunger means reallocating the resources of our world into the hands of people who need them most. This is not only ethically the right thing to do, it is necessary.

There is no hope that newly industrializing nations will help us fight climate change if it means a great inequity between their people and those of the United States.

Russia, India, and China have all said so explicitly. The only alternative to the death of millions in a game of global chicken is for everyone to accept that the world cannot afford rich people—in any nation. 

Unequal Distribution of Wealth

Captialist Nature

By David Barber

David Barber is an assistant professor of American history at the University of Tennessee at Martin. He is the author of A Hard Rain Fell: SDS and Why it Failed (University Press of Mississippi, 2008).

American society’s fantastically skewed distribution of wealth stands as one of the main structural fault lines underpinning the Crash of 2008.

America’s richest one percent of the population own over forty percent of America’s wealth – exclusive of home ownership – in this, the most opulent society history has ever known. On the other hand, the bottom sixty percent of Americans own approximately one percent of all of America’s wealth.

If we picture an auditorium with one hundred people and one hundred seats, the single richest person would be able to spread out smartly over nearly forty-three seats. The poorest sixty people in the auditorium would have to make due squeezing into a single seat.

This mal-distribution of wealth does not bode well for a society based on the buying and selling of goods. Our super-rich plutocrats, after all, do not need more than five or ten automobiles or five or ten homes each.

This top one percent – 3 million people – certainly cannot purchase all the goods that the poorest 180 million Americans would be capable of purchasing had our society a more equal distribution of wealth.

And so debt has had to sustain our market economy: the more skewed the distribution of wealth has grown over time, the more frantically has the economy been forced to create a growing array of consumer debt mechanisms – subprime mortgages, payday loans, more and more intricately structured credit card debt – in order simply to maintain its functioning.

When a critical mass of poor and working-class Americans could no longer pay their fabulously expensive subprime mortgages and usurious credit card bills, this house of cards collapsed.

A number of the financial institutions built on this consumer debt foundered and the remainder required unprecedented injections of federal funds to remain afloat.

The housing market and new residential construction, the market for consumer goods – automobiles, appliances, electronics – all crumbled, taking down with them the jobs and retirement savings of millions of Americans.

The Crash, in short, was not an episode of mass hysteria or panic; it represented a structural crisis in part rooted in the grossly unequal distribution of wealth in this society. When millions of Americans could no longer buy goods, industry had to stomp on the brakes.

And what is true in the United States of the unequal distribution of wealth, and of the consequences of that unequal distribution, is true again on a world scale. Nearly half the world’s population lives on $2 per day or less.

This super-poor mass of humanity, from whose soil is ripped vast amounts of mineral and agricultural wealth, and out of whose labor the world’s manufactured goods increasingly come, are almost wholly excluded from participating in the world’s market economy.

These people, too, must depend upon debt, public debt in this case. More importantly, the survival of our world’s economic system, as it is currently configured, depends upon these people being both poor and indebted. But it is both the poverty and the debt which lead inexorably to the Crash.

Soft Left Sides With Wallstreet Rich

During a recession, soft left sides with big money

By blackandred

Liberals support fiscal austerity during the recession because they no longer care about economic performance, much less the interests of workers and the poor, but instead identify their interests with those of Wall Street and the upper middle class.

At the recently concluded G-20 meetings in Toronto, Canada the leaders of the major economies issued a communiqué pledging to cut their budget deficits in half over the next three years.

Instead of draconian fiscal austerity, what is needed is a massive, globally coordinated, fiscal stimulus to pull the economy out of the worst global recession in over eighty years.

In Greece, when PASOK was in opposition it called for pro-growth policies favoring middle income sectors. Now, as Prime Minister, Papandreou is presiding over policies even more draconian than those of the previous right wing government he and PASOK criticized. How does one explain this madness?

One possibility is that many in the economics profession have contracted amnesia and forgotten the most important economics lesson learned during the twentieth century.

Governments must spend more when the economy is depressed and save only after the economy has recovered -- and that center left, along with right wing politicians, have now made the mistake of embracing the advice from misguided establishment economists to do just the opposite.

Two Nobel Prize winning economists, Joseph Stiglitz and Paul Krugman, who have not forgotten Keynes’ lesson believe this is exactly what has happened, and there is evidence to support their hypothesis.

Keynes was only able to successfully challenge the wisdom of traditional, balanced budget orthodoxy which requires governments to cut spending when recessions reduce their tax revenues with a powerful assist from practical experience during the Great Depression.

Even when conservative economists like Milton Friedman and right wing politicians like Richard Nixon were quoted saying “We are all Keynesians now” during the late 1960s and early 1970s, many economists and politicians remained uncomfortable with Keynesianism and were already hard at work organizing an economics counter revolution.

Over the ensuing decades establishment economists labored mightily to write Keynes out of their macroeconomic theories, models, and text books, and conservative politicians happily reverted to their pre-Keynesian, balanced budget orthodoxy.

These conservative politicians and their advisers focused on balanced-budgets and zero inflation in order to accomplish their real agenda -- decreasing the bargaining power of working people.

There was never any great mystery about why right wing political parties pushed an agenda designed to increase unemployment rates, weaken unions, and raise the cost to workers of being unemployed by cutting the social wage.

But now center left political parties are embracing the same economic policies and consorting with anti-Keynesian macro-economists, leaving the likes of Krugman and Stiglitz to wring their hands on the sidelines.

Is this simply an intellectual mistake on their part? What if we drop the assumption that the purpose of today’s economic policies is to rescue us from the Great Recession

We should put in its place the hypothesis that center left political parties are now aimed at benefiting higher income groups rather than promoting the interests of their former political constituencies.

After all, for decades prior to the financial crisis of 2008 and the onset of the Great Recession neo-liberal economic policies were championed by center left as well as right wing governments.

Not only Margaret Thatcher and Ronald Reagan, but Tony Blair and Bill Clinton also claimed that neo-liberal policies would improve economic performance by removing unnecessary and counterproductive shackles on corporate creativity.

Privatization, deregulation, tax cuts for corporations and the wealthy, capital liberalization, and trade liberalization did not increase global growth rates or reduce poverty as advertised.

But these policies did greatly enhance corporate power, disempower workers, consumers, and citizens, and produce the greatest redistribution of income and wealth from poor to rich the world has ever seen.

It is now apparent that these neo-liberal policies which laid the groundwork for the present crisis were never about improving economic performance, but merely about redistributing power, income, and wealth.

So why should we now believe that the same center left political parties, following the advice of the same economic advisors, actually believe, or care if lavishing generous bailouts on banks without conditions while imposing fiscal austerity on workers and ordinary citizens will pull the global economy out of recession?

There is a more simple explanation for the behavior of today’s center left politicians, which is becoming more credible by the day.

Fiscal austerity and stalling financial reform in response to the worst financial crisis and deepest recession in eighty years is not about improving economic performance as its proponents claim.

These policies are simply about continuing to shift income and wealth from the poor to the rich, and from the manufacturing sector to finance, insurance, and real estate (known as FIRE) which have become increasingly ascendant in the US and Europe -- despite the fact that these policies will worsen the economic slump and make another financial crisis likely.

The claim that fiscal austerity during recession is “good economics” when it is actually “bad economics” is merely a “cover story” for public consumption.

As for why center left political parties and politicians now support this disastrous policy, the simple answer is these parties no longer care about economic performance.

They care much less about the interests of workers and the poor, but instead identify their interests with those of Wall Street and the upper middle class who appear to be the focus group for the Obama Administration and Nancy Pelosi.

Democratic Party politicians used to promise to press for policies to help workers, minorities, and the poor. They usually failed to do so, but that was their campaign rhetoric nonetheless.

But for many election cycles in the United States Democratic Party candidates have been promising instead to champion the interests of what they call middle-class Americans.

If center left politicians no longer make a secret of pretending they are concerned about unemployed workers and the poor, why should we be surprised when they adopt policies detrimental to their interests?

Voters in the UK already sent Gordon Brown and the Labor Party packing. Will other center left politicians and their parties -- Zapatero and the Socialist Party in Spain, Papandreou and PASOK in Greece, and Obama and the Democrats in the US -- who agree to impose fiscal austerity also be punished at the polls by voters who know we did not create the crisis and are furious at governments who subject us to counterproductive austerity?

When center left politicians echo false hopes that the economy is recovering promoted by right wing think tanks and the corporate owned media who shout “green shoots” whenever the prices of bank stocks or an index of consumer confidence stabilize momentarily.

They do this while unemployment and home foreclosure rates hold steady or worsen. One can only hope they badly miscalculate their own political self-interest.

But it is apparent that more and more center left politicians are quite willing to gamble that they can bamboozle a guileless public into thinking that fiscal austerity is necessary and wise and avoid voters’ wrath.

It is also increasingly apparent that center left political parties are more afraid of angering Wall Street and upper middle class funders by opposing policies that continue to redistribute income and wealth their way than they are of angering ordinary people who have traditionally voted center left because the right wing alternative is even worse.

However, people know when either they or some relative or friend has lost their job or home. And they will eventually turn on those who persist in telling them that the economy is recovering when they know it is not.

The question is where voters will turn when they abandon traditional center left parties who have abandoned them.

What is needed are social movements and new political parties who answer to and are led by those whose interests are being trampled on, who fight for policies which actually do generate high employment and greater economic equality, and who say no to counterproductive fiscal austerity, trickle down economic nonsense, and corporate sponsored globalization.

We need to build movements and parties which will take power back from multinational corporations and Wall Street, and launch the kind of Green New Deal needed to address the economic and ecological crises which otherwise will continue to worsen by the day.