Wealth Inequality Challenges the Health of America
My guess is you are every bit as frustrated, disheartened, and yes, angry as I am with the world situation. I have been alive for over seventy years, and my level of anxiety and dismay regarding the actions of people and nations over my lifetime has fluctuated up and down as would be expected. Yet at this time, my anxiety has risen to the highest level ever. Within our own nation there is chaos everywhere, and though the equal rights issues were settled long ago, far too many refuse to accept it and do everything they can to foster prejudice, hate, and bigotry. And so much of this strife is due largely to the inequality of wealth in America. (The same holds true for all other nations.)
With all the strife and chaos in the world, here’s the United States in the midst of a political reality show dominating the airwaves. The leading news is either war and chaos overseas, or political showmanship in the US. And to my amazement and total dismay, it appears that the more egotistical, demeaning, insulting, self-centered, unapologetic, and arrogant a politician is, the more press they get. What’s with a person who thinks that’s those aspects of character could run any nation? That kind of mentality belongs in the circus, not the White house? I simply do not understand a person’s need to degrade and demean. There is nothing to be gained besides demonstrating one’s own conceit, incompetence, and insecurities (and stupidity). And when someone brags about how rich they are, well, they confirm what this essay is all about.
I’m worried. Our own political system is designed to argue and fight, rather than work together to accomplish and compromise for the benefit of all Americans. Those two words don’t exist in DC. The two words that dominate our capital are “money and power.” If you look back at the previous 20-years it becomes clear that or nation has become focused on the ultra-wealthy and big business at the expense of the middle class. Our nation’s “Happiness and Health” is directly related to wealth inequality, as it is of all nations, rich and poor. But with the wealthy running the nation, what chance do we have?
Widespread ignorance and misconceptions of inequality rage a quiet war on the middle class by the majority of our government leader in the Capitol Building. Yes, there are caring and hardworking politicians not catering to favors or money, trying their best to make things better for us, but sadly they are in the minority. Capitol Hill office holders are not part of the middle class and most have little or no empathy for us. And those few who do are largely ignored and certainly don’t have enough power on their own to pass legislation for change. When you realize that the top 1% in this nation control 43% of the wealth, and the next 4% control an additional 29%, it means that the top 5% have 72% of America’s wealth. More discouraging is that all of us in the lower 80% together have a whopping 7% of this nation’s wealth?
I’m quite certain that EVERY single politician in the capitol building as well as our state capitols are in the upper 5%. Well, just who do you think they are looking out for? Where does their wealth come from? If 80% of the American people have a measly 7% of our nation’s wealth, just how much power do we have? Why look out for you or me in the lowly 7% of the countries wealth when we can’t offer them anything, while big business can increase their wealth? We haven’t seen such a disparity this wide since before the Great Depression — and it keeps growing. We’ve all heard the adage, “The rich get richer and the poor get poorer.” It’s true, but they forgot to add, “At the expense of the middle class.” In his address to the joint session of congress, the pope brought up wealth disparity–yes, even a pope he see’s it. But just what do you think went on in the minds of all the ultra-wealthy folks listening to him? Do you think anything clicked regarding the needs, programs, ambitions, or goals or problems of the middle and lower class Americans (that 80%)? Of course not.
The middle class can’t afford lobbyists, and we can’t write huge checks to have our concerns recognized as legitimate. In 1980 the average CEO made 50 time more than the average worker, while today the average CEO makes 300 time more than the average worker—do they work 300 times harder? Warren Buffett said it well: “There’s class warfare all right, but it’s my class, the rich class that’s making war, and we’re winning.” (Thanks for the honesty Warren, much appreciated.)
From 2009 to 2012, the incomes of the top 1% grew by 31.4%, while the other 99% saw incomes growth by 0.4%. Hence, the top 1% captured 95% of the income gains. Capital gains and dividends have contributed more to the rise of income inequality than everything else put together, but the middle class don’t have enough to invest to get capital gains or dividends—money begets money.
If you list income on a straight line from the poor to the ultra-rich, in 1883 the median (middle point in that line) for 99% of Americans was $73,000, while the top 1% earned over $9½ million. Now, look at 2010—the median for 99% of us dropped to $57,000, while the top 1% soared to $16 ½ million, and it’s far higher today for that 1%. We’re losing ground while the ultra-rich are flying high. The real income for working-age households is the lowest since 1994. We in the middle class are losing ground fast.
Warren Buffett explained that the rich are always going to tell us, “Just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you—but it hasn’t worked.” He’s telling us trickle-down economics is a farce—a feeble means of deceit. And, while American workers’ productivity has soared over the last 30 years, that extra output hasn’t translated into higher earnings. Middle class earnings were actually much less—for doing more. How great is that?
How does this all translate to quality of life, happiness, and health of this nation? Well, the answer is equally depressing. As you see, the USA, with the highest of all income inequality, tops all the nations listed by having the most health and social problems, with Portugal and the UK, second and third, while Japan, Sweden, Norway, and the Netherlands have the “Happiest” people and the lowest wealth inequality. Is that not telling us something important?
And paralleling that line, the US leads in incarceration rate, with 707 out of 100,000 people in prison (1 out of 141): Russia 470, Iran 284, New Zealand 183, France 103, Switzerland 87, Netherlands 82, Germany 78, Sweden 60, and Japan 51 (1 out of 1960 people). Now really folks, what does this tell us about the health of our nation/society?
Just a few words on taxes. Yes, it’s true that most of the ultra-rich have a far lower tax burden than in the middle class–and as time moves on, they pay even less. Look at this chart of the change in rate over a dozen years for the top 400 ultra-rich. While they paid 30% in 1995, the changing legislation and loopholes lowered their tax rate to 16%. Now how do you supposed that happened? Hint: How many middle class individuals hold office on Capitol Hill?
In 2011, Warren Buffett told us that he paid only 17.4% in taxes and that was lower than any of his employees. He went on to say that the federal tax rate should be raised for those making more than $1 million. The president took note of this in his 2012 State of the Union speech and then later Baldwin and Whitehouse introduced legislation that included what was call “The Buffett Rule” which said that people making more than $2 million/year would pay a minimum tax rate of 30% with a sliding scale between $1 million and $2 million. Well, guess what? It didn’t become law—Capitol Hill squashed it like a cockroach–do you wonder why? Same hint—how many middle class Americans hold office on Capitol Hill? (I do appreciate the try).
My guess is that we all believe that if you’re good enough to make the millions, you deserve it, but when your high wealth biases you toward the ultra-rich and against the middle class, that’s the time you need to leave Capitol Hill. Politicians represent all Americans, including the 90% who struggle. So what are they telling us by defeating legislation that increases their tax burden, a burden they wouldn’t even notice? When they look out for the rich at the expense of the middle class, it’s clear they are self-serving, selfish, and need to look up the definition of empathy and obligation, and just maybe the words selfish and unscrupulous. If they don’t take heed, they should resign their office.
Remember some of this as you evaluate the slate of individuals running for the presidency (and every upcoming political election). Think about wealth inequality and try to determine how each candidate feels about this critical issue. Try to assess where they want to take this country regarding this excessive and divisive problem and try as well to feel them out regarding their wealth, attitude, and status, and how they feel about the 90% who don’t hold a candle to their financial worth. The key attribute to consider when listening to them is “Empathy”. That characteristic is easy to assess—just listen to the words they use and watch their body language–eyes are quite revealing. They can pretend to be empathetic, but their sham sticks out like a gorged tick on a bald dog.
Yes, national security, the military, immigration, environmental concerns, terrorism, and all the other issues are important, but revisit that graph of health and social problems in America relative to other nations to remind yourself what truly impacts this nation’s “Health and Happiness”.
As the rich get richer, guess what, they only want more? And when the rich get a tiny bit less rich, they merely shrug their shoulders. When someone makes $15 million one year, and $14 million the following year, do you think they start selling their belongings on EBay or even blink? Nope, they merely think, “Well dang it all anyway.” What’s the real impact? NONE! Now try and understand why a higher tax rate could possibly impact that person financially—it can’t, it simply can’t–except for the “Oh, shucks” effect. However, the only ultra-rich person I know of who agrees with me is Warren Buffett. Maybe Warren Buffett should run for the presidency—he certainly understands this demon of inequality and knows what to do about it, and too, he knows how to choose a barber.
For a quick and simple presentation on the facts of wealth inequality, please look at the site listed below. The middle graph tells the tale—and you will understand clearly what I’m trying to get across. It is worth your time. Just prepare to be disheartened. And if you agree with what you hear and see, feel free to forward this essay to anyone in the 80%. Who knows, maybe there’s an outside chance that if 95% of the 80% get as upset as I am, we might shout loud enough to be heard–I know, I’m whistling Dixie—dang; but do it anyway. I wish you wealth, but more importantly, I wish you happiness. TJ