Taking on inequality

Via The Nation, a column by editor Katrina Vanden Heuvel: Taking On Inequality. Excerpt:

The good news is that Democratic presidential nominee, Senator Barack Obama, quickly spoke out against the decision by Democrats not to take on the loophole after more than twenty lobbying firms worked to preserve it.

At the time the campaign issued a statement saying, "If there was ever a doubt that Washington lobbyists don't actually represent real Americans, it's the fact that they stopped leaders of both parties from requiring elite investment firms to pay their fair share of taxes, even as middle-class families struggle to pay theirs. When I'm President, the American people won't have to spend record amounts on lobbying to get their voice heard in Washington. I will close tax loopholes for big corporations...."

But it will take a lot more than closing an obscene tax loophole to reverse thirty years of tax cuts for the rich, union-busting, and deregulation that promoted corporate interests at the expense of consumers--all of this bankrolled by conservatives and corporations to instill blind faith in the market as a magic elixir that can solve any problem.

The result is that we now live in a Second Gilded Age. (And The Nation will hold a name Name Our Epoch! contest starting next week. The winner will be selected by our all-star progressive panel of judges--historian Howard Zinn, journalist Barbara Ehrenreich and novelist Walter Mosley.)

The richest 1 percent of Americans currently hold wealth worth nearly $16.8 trillion, $2 trillion more than the bottom 90 percent. According to the Center for American Progress, since 1979 the average income for the bottom half of American households has grown by 6 percent. In contrast, the top 1 percent of earners have seen their incomes rise by 229 percent during that same period.

With less money available, Americans are forced to make tough choices on how to spend diminishing disposable incomes. The largest increases in consumer spending between 2006 and 2007 was on necessities: fuel, food staples, and medical bills. Medical bills now account for almost one-fifth of average family income. The divide is so huge, the Wall Street Journal now dedicates a full-time reporter to cover what the reporter calls "Richistan."

In January 2007, Congressman Barney Frank said dealing with income inequality was his top priority as chairman of the House Financial Services Committee. He summarized the impact of conservative, free-market ideology run amuck this way:

"The rising tide lifts all boats has always been a problem. If you think about that analogy, the rising tide is a very good idea if you have a boat. But if you are too poor to afford a boat and you are standing tiptoe in the water, the rising tide goes up to your nose."

Next week, The Nation will publish a special issue on income inequality, exploring how rising extreme inequality is undermining our common good. It will include a 12-step blueprint for action for citizens and smart elected officials who care about reducing concentrations of wealth, reducing poverty and rebuilding our infrastructure.

I'll post on this blueprint as soon as it's published.