You can have wealth concentrated in the hands of a few, or
democracy, but you cannot have both." - Louis
Brandeis
"The richest 1 percent of Americans now take home almost 24
percent of income, up from almost 9 percent in 1976. As Timothy
Noah of slate noted in an excellent series on inequality, the United
States now arguably has a more unequal distribution of wealth than
traditional banana republics like Nicaragua, Venezuela, and Guyana. " Nicholas
D. Kristof, New York Times 11/7/2010
Economists who say we should relegate questions about
inequality to philosophers often advocate
policies, like tax cuts for the wealthy, that increase inequality
substantially. That greater
inequality causes real harm is beyond doubt. Robert H. Frank, New York
Times, 10/17/2010
"... high levels of inequality strain the bonds that hold us
together as a society. There has been a long-term downward trend in the
extent to which Americans trust either the government or one another.
In the sixties, most Americans agreed with the proposition that “most
people can be trusted”; today most disagree.’ In the sixties, most
Americans believed that the government is run “for the benefit of all”;
today, most believe that it’s run for “a few big interests.” And
there’s convincing evidence that growing inequality is behind our
growing cynicism, which is making the United States seem increasingly
like a Latin American country. As the political scientists Eric Uslaner
and Mitchell Brown point out (and support with extensive data), “In a
world of haves and have-nots, those at either end of the economic
spectrum have little reason to believe that ‘most people can be
trusted’ . ..social trust rests on a foundation of economic equality.”
Paul Krugman, The Conscience of a Liberal pg 251
Concentration of wealth is a major cause of our difficulties
and as it
increased, which it undoubtedly has, we become less able to deal with
our problems: Demand weakens, volatility increases,
large amounts of money game the system, government becomes
dysfunctional because it is hooked on campaign money. Democracy withers away. Plutocracy rules.
Large disparities in income are bad for democracy, bad for the
general welfare, bad for the economy. They lead to social pathologies,
inequity in the
Courts, destroy domestic tranquility, suppress economic activity, and
because we have ignored it, we are experiencing yet another economic
collapse.
The US is now run by oligarchs. Media
moguls control pretty much everything
broadcast. Bankers get unlimited amounts of taxpayer money without
strings. The Congress often gets it wrong
because it is money driven. Democracy
withers when income disparities are extreme. We have a strong-man Presidency, but, thanks to the Supreme Court, Corporations
rule, not the people.
Republicans ignore this problem
because they are on the wealthy side of the class struggle. The
result of all this inequality is financial collapse, in which everyone
is a loser.
There is
evidence that high levels of income inequality, as in the US, are
highly correlated with corruption. (1, 2)
Republicans brought on the financial crisis with deregulation
that allowed markets to go out of control, privatization that removed
the public from the process, tax cuts that in
effect directed massive
public debt into deep private pockets (banana republic), civil service
destruction and cronyism placed incompetents in public office;
regressive, anti-labor policies led to a
general decline in consumption; a determination to build an empire for world domination requires unlimited
budget for the military; a contempt for international
law covered up illegal activities including torture, renditions,
secret prisons; Congress did no oversight during the Bush years; regulatory agencies were captives of
the industries they were supposed to regulate; industry migrated to low
wage countries and not much was done to mitigate the damage; but there
was war enough for everyone. War is profitable, and in its chaos pallet
loads of shrink wrapped money just disappeared. Civil liberties here in the good old US
of A were cut down to size by chicken hawks who built the profitable
national security state. PayGo left.
There is a relatively simple way damp down obscene
compensation, to pay our bills (which we are not), to reduce inequality
and to keep up our infrastructure, and that is to re-implement a stiff
graduated income tax. Continue the estate tax to be sure that we do
not create an aristocracy, and to break
up extreme concentrations of wealth with a renewal of anti-trust
oversight. Anti-trust should preserve competition.
The Constitution has an
inherent warning about concentrated
power, but
it has little to say about private power. Anti-trust efforts faded
away. We are seeing media that is too
concentrated, banks that should be broken up, insurance companies that
can kill health care reforms, oil
companies that successfully deny climate
change. We have allowed the military to become too large and it now
threatens our civil liberties. You no
longer have
fourth or sixth amendment rights.
When corporations run government, that is the very definition of fascism. Do we not have
that ?
In 1929 inequality reached new heights, the market crashed,
and there
was widespread misery. It has happened again and we have not yet
recovered. Worse, those banks that were too big to
fail got bailed out by taxpayers. As Larry Lessig
pointed out, this is the stupidest form
of socialism ever invented.
Wide income inequality leads to market volatility, lack of
demand,
little competition among big corporations, widespread misery,
anti-social behavior, environment devastating, corporate behavior.
Concentrated wealth becomes aristocracy
when there is low social
mobility. Wages go down, necessities become
more expensive, education out of reach for most, and Republican policy is
hastening the process.
Through history, economic cycles are strongly correlated with levels of
concentrated wealth. Economic turmoil can easily
produce a fascist state as the Germans
learned. The Bush family helped
finance the Nazis.
At the extreme, like Rome, we become an empire.
We then need a standing
military that is the direct cause of the loss of civil liberties, and
ultimately results in a dictatorship...because
representative government cannot
deal with an empire.
Since empire is ruinously expensive, people's
standard of living must necessarily fall. Official activity must be
carried out in secret. Media cannot reveal
the truth.
“The American oligarchy spares no pains in promoting
the belief that it does not exist, but the success of its disappearing
act depends on equally strenuous efforts on the part of an American
public anxious to believe in egalitarian fictions and unwilling to see
what is hidden in plain sight.” — Michael Lind, To Have and to
Have Not
A United Nations report has revealed major US cities,
including New
York, Washington, Atlanta and New Orleans, have levels of economic
inequality that rival cities in Africa. The report found that the
United States had the highest inequality and poverty after Mexico and
Turkey, and the gap has increased rapidly since 2000. The life
expectancy of African Americans in the United States is about the same
as that of people living in China and some states of India. http://www.democracynow.org/2008/10/27/headlines#16