A new report is alarming and helps explain the meteoric rise of political outsiders Donald Trump and Bernie Sanders. The charity Oxfam said in Davos (which is like delivering a report on world hunger at a Las Vegas buffet) that 62 people own as much wealth as the 3.5 billion people in the bottom half of the world’s income scale. As recently as five years ago, the fortunes of 388 billionaires were needed to reach the halfway mark.
Jeffrey Winters, a political scientist at Northwestern University described it this way to the New York Times: “These are unprecedented levels of stratification in all of human history. Whether compared to ancient Rome or authoritarian dictatorships that exert near-total control of a country’s resources, no other system has concentrated wealth as much as this system has.”
Oxfam’s alarming study is in line with other disturbing economic trends – which are caused or exacerbated by reckless consolidation, monopolization, and deregulation. Here are a few examples:
• A child born in the bottom quintile of incomes in the United States has only a 4-percent chance of rising to the top quintile, according to a Pew study. This is compared to a boy in Britain having a 12-percent chance. Sadly, we have less mobility than traditionally stratified Europe, and there is less American and more “dream” in the American Dream. In the same way we dream of winning the Powerball, but it’s hardly a financial plan for our future.
• While we bicker about food stamp recipients, there are $12 billion in annual subsidies for corporate meals and entertainment.
• Stanford researcher Sean Reardon of Stanford University reports that 77-percent of adults in the top 25 percent of incomes earn a B.A. by age 24. Only 9-percent of those in the bottom 25-percent do so.
• In our post-Citizens United environment, 158 families have given more than half of the cash for 2016 races. The Washington Post reports that top-tier Republican donors this year will pay $1.34 million per couple for political insider access. The Democratic Party will charge roughly $1.6 million. In such a money maelstrom, how can the voices of average citizens be heard?
• The New York Times reports that median CEO compensation in 2013 was $13.9 million, a 9-percent increase from 2012
• The average CEO of a Standard & Poor’s 500 company was paid 216 times more than the median employees at their companies, according to a USA Today analysis. They were paid just 20 times more on average in the 1950’s, according to Bloomberg Business Week.
• USA Today reports: The 100 largest U.S. CEO retirement packages are worth a combined $4.9 billion, equal to the entire retirement account savings of 41% of American families, according to the report by the Center for Effective Government and the Institute for Policy Studies.
• Census Data reveals that 16-percent of young people in their mid-20s to mid-30’s were in poverty in 2012, compared with just above 10-percent of Generation Xers in 2000, and baby boomers in 1980. Nearly 14-percent of that age group were living with their parents in 2013, much higher than in previous generations.
• A shocking 95-percent of income growth since the recovery started has gone to the super-wealthy. According to Mother Jones, if an average household currently making $71,000 had enjoyed the same gains as the 1% since 2000, it would now make more than $83,000
This inexcusable wealth gap was not necessary for the growth of the economy or the creation of jobs, as Republicans like to say. Hedrick Smith, author of “Who Stole the American Dream” vividly explains how this happened.
The number of corporate lobbying offices leapfrogged from 171 in 1971 to 2,445 a decade later. By 1978, these 2,000-plus corporate interests in Washington had a total staff of 50,000 employees, 9,000 lobbyists, and 8,000 public relations executives. In fact, these business interests outnumbered Congress 130 to 1. They had 130 lobbyists for each of the 535 members of Congress.
The results? Today’s New York Times article on the Oxfam report states: A global network of tax havens contributed to the wealth divide by allowing the rich to hide trillions of dollars in assets from their countries and governments.
So, when powerful and wealthy conservative interests say we can’t afford to make America better, the data says we can. The public is against this unfair system and wants action. According to a New York Times/CBS News Poll, two-thirds of Americans support higher taxes on those earning $1 million or more a year.
This glaring worldwide economic imbalance is unsustainable. The people are catching on and this wild election cycle is an example of its volatile and destabilizing effects. Those perpetuating this system should take Donald Trump and Bernie Sanders as a warning. If their candidacies don’t lead to fundamental change, the powers that be should be truly concerned about Donald and Bernie 2.0.Read More »