By Joseph Sweet,
Democratic Executive Committee of Collier County
Some Republican pundits have accused the Obama administration of attempting to redistribute wealth in America. The truth is that redistribution has already occurred; American wealth is now concentrated in the portfolios of the very rich in a proportion last seen just prior to the Great Depression. The real income of middle class Americans has actually declined over the last few decades and their pensions, health care and social security are under attack. Home values of middle class Americans have shrunk significantly while multi-million dollar homes spawn bidding wars. The security of a middle class American is being shaken at a time when the wealthy in America have been shielded from the precariousness of the economy. The United States now ranks 95th among 134 nations studied for equality of wealth distribution, according to the Gini coefficient, a measure used by economists.
What happened? Economist Robert Reich wrote, "In the late 1970s, the richest 1 percent of the country took in less than 9 percent of the nation’s total income.... By 2007, the richest 1 percent took in 23.5 percent of total national income. It is no mere coincidence that the last time income was this concentrated was in 1928." The American middle class has comparatively less income to buy goods and services. Well paying jobs are harder to find. Corporations and the very wealthy have trillions of dollars of disposable income, but they are not investing this money back into America because of the decreased demand for goods and services. Republicans suggest that we need to increase the amount of money in the hands of corporations to restart the economy, but this begs the question on why they are not using their current stockpile to invest in America. Increasing that stockpiled money will not increase production; it siphons money out of the middle class to lie idle in the bank accounts of the wealthy and corporations. With less disposable income the American middle class no longer has the resources to maintain their lifestyle of the previous generation.
How did it occur? Our country has seen a slow erosion of the power of unions who fought for higher wages, better working conditions and benefits that also helped raise the standard of living of non-union members. The banking industry has been deregulated and those remaining regulations were inadequately enforced. The lack of oversight allowed shaky investments to suck money out of the economy as opposed to the old banking industry that would use money to lend to companies and individuals to invest in America. As income moved to the top, so did political power in the form of lobbyists and political donations. Those well-funded lobbyists protect their clients by ensuring tax breaks, subsidies and favorable regulations for their clients. A recent Supreme Court decision allows unlimited corporate funding of political advertisements. These trends will promote even more income inequality of left unchecked.
Why does it matter? The erosion of a vibrant middle class means an erosion of the wealth, power and security of America. Our standard of living as a whole is declining. Infant mortality rates are rising, poverty and its associated social problems are increasing. Reliance on safety net programs of welfare, food stamps, mental health agencies and Medicaid have spiked. Young people entering the work force find it more difficult to secure jobs that pay a living wage.
What can we do?
America was made great by a strong private/public partnership. We need to reinvest in America. Government is not our enemy; it is our essential partner for a healthy America. Our United States government won World War II, built the Eisenhower Interstate Highway system that generated thousands of businesses and allowed the development of suburbs. Our government’s investment in the space program created technological developments that created many more businesses. The Department of Defense research and development efforts developed the Internet. The American government has been a trusted and valued partner in making our country great; current attempts to make it our enemy are misguided and harmful.
More specifically, we need to make higher education accessible and affordable again. Pell Grants have been continually cut to the point that college loan debt has recently outpaced credit card debt. We need to invest in our infrastructure to put people to work and ensure that businesses have access to modern means of conveyances for their goods. We need to invest in research and development by government agencies to lessen our dependence on fossil fuels; businesses will be able to use that knowledge to be profitable. We need to restore the bargaining power of American workers and make livable wages easily attainable so middle class Americans can again participate in the American Dream. We must remember our history; Henry Ford recognized that by paying better wages, people could afford to buy his automobiles. The increased public spending and expanded job opportunities will put more people back to work, increase our tax base and help restore middle class wealth.