09.18.12

To fix inequality and bring prosperity it’ll take a movement of the people

Posted in Around The Nation, Employment, Inequality, Take Action, The Economy at 9:56 am by wcnews

“Most Americans don’t realize how unequal our country really is.”

That comes from this PBS News Hour item from 2010 on Americans perception of inequity in the United State, Land of the free, Home of the poor. It’s based on a study which asks Americans to choose between three wealth distribution models and pick which one they prefer.  Here are the pie charts and what the study found.

We had 7,000 people distributed around the U.S., different levels of income, education, wealth, political opinions — 92 percent of the Americans picked Sweden over the U.S. When we broke it by Democrats and Republicans, Democrat, it was 93 percent, Republican, it was 90.5 percent.

So there’s a difference, but the difference is tiny. And one of the possibilities is that, when we dig deep down and we ask people to examine their core beliefs about a just society, Americans are really quite consistent in terms of thinking this is way too much inequality, and we want something that is much more equal to Sweden.


Because most Americans don’t realize how unequal our country has become, is why this problem isn’t getting fixed and can’t be fixed. There is no way to fix a problem, if most aren’t even aware there is a problem. And, of course, those at the top don’t see it as a problem.

The reason to point all of this out is that this and the fact that until we become a more equal society, as we once were, prosperity for all will not return to our country.  And this not even being addressed in our current campaigns for President and Congress. Which is what this article points out, Prosperity economics: Answering America’s top unasked questions.

Economist Dean Baker was one of the pioneers of blogging in the late 1990s, when his “Beat the Press” blog began as a weekly online column consisting of concise critiques of economic stories in the New York Times and Washington Post. He’s still at it, but with more continuous posting and a wider range of targets – up to and including America’s establishment press corps as a whole. Such was the case with a recent post, “‘Are Americans Better Off Today Than They Were Four Years Ago?’ The Question That Exposes Incompetent Reporters”.

Why is this question a sign of incompetent reporting? Baker deftly explains:

“Suppose your house is on fire and the firefighters race to the scene. They set up their hoses and start spraying water on the blaze as quickly as possible. After the fire is put out, the courageous news reporter on the scene asks the chief firefighter, ‘is the house in better shape than when you got here?’

“Yes, that would be a really ridiculous question… A serious reporter asks the fire chief if he had brought a large enough crew, if they had enough hoses, if the water pressure was sufficient. That might require some minimal knowledge of how to put out fires.

“Similarly, serious reporters would ask whether the stimulus was large enough, was it well-designed, and were there other measures that could have been taken like promoting shorter workweeks, as Germany has done.”

There’s one more point Baker could have made: Even if you want to know what shape the house is in and why, you have to ask these other questions in order to make sense of the situation. Even wrong questions make more sense when you start with the right ones.

Unfortunately, what Baker is pointing out is not merely a matter of individual bad reporting. Rather, it reflects on the American media establishment as a whole – and the incompetence affects virtually every issue in the news, not just economics. I could write an entire column on that topic – from the Iraq War to the housing bubble and the Great Recession that followed, America’s media establishment has been either AWOL or wrong about the biggest political stories of the new millenium. It’s not just that they got the wrong answers. As Baker makes clear, they were asking the wrong questions.

But there’s a more immediate reason to take note of Baker’s point: Because it applies equally well to coverage of the economic choices before America today. The questions Baker raised – was the stimulus large enough, was it well-designed, could other measures have been taken – are backward-looking ones, but it’s not that hard to come up with forward-looking ones, too. Here are two obvious important ones, for example: “How do we get tens of millions unemployed, and underemployed back to work?” and “How do we rebuild the sort of sustained, broad-based prosperity that America and Western Europe enjoyed in the post-World War II era?”

That brings us to a study that was released this week which points out what many of us already knew, Tax Cuts For The Rich Do Not Spur Economic Growth: Study.

There is no clear correlation between tax cuts for high earners and economic growth, according to a new study by Congress’ nonpartisan policy analyst.

“There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth,” concluded a report by the Congressional Research Service released Friday. “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.”

So, if tax cuts for the wealthy doesn’t spur economic growth then what does? For the answer to that check out this report, Prosperity Economics. Here’s a synopsis:

  • Dynamic, innovation?led growth, grounded in job creation, public investment and broad opportunity
    We must take immediate action to jumpstart our sagging economy. In the future, we need to invest in people and productivity that will lead to good jobs and rising wages. Growth alone is not sufficient to sustain our nation. We need long?term growth that is broadly enjoyed, sustainable in light of our resource and energy constraints and driven by investments in our workforce and strong collective bargaining rules that raise our standard of living.
  • Security for workers and their families, the environment and government finances
    Markets work better when working families feel a basic security for their futures. A dynamic and competitive market requires a strong foundation that is reinforced by programs like Social Security and Medicare that guarantee a secure retirement and access to health care. Markets also work better when governments have the resources to operate smoothly far into the future. These resources are best raised through a progressive tax structure that supports the middle class; no more tax giveaways for corporations and super rich.
  • Democratic voice, inclusivity and accountability in Washington and the workplace
    Money is increasingly corrupting and corroding democracy. When economic winners are allowed to write the economic rules, the rest of America becomes poorer and our political system weaker. For democracy to thrive, strong Unions, and empowered citizens and community organizations are needed to ensure that workers and the broader public have an organized, effective voice in our politics.

Also check out this infographic, which explains Prosperity Economics very well.  Fixing this problem can’t be done by the current political structure and leaders.  It can only be done by the people.  It has to be done by building and movement like the Progressive and Populist movements of last century.  Reading this memo would be a good place to start.

Progressives and Democrats cannot possibly match the vast financial resources of business and the wealthy and must turn to building powerful, long-term grass-roots organizations. That makes “Working America” the most important political project in America.

Let’s get started now.

1 Comment »

  1. Eye on Williamson » Senate passes new abortion regulations said,

    June 19, 2013 at 5:09 pm

    [...] care, Medicaid–and it’s hasn’t changed how Texans vote. But until there is a movement of the poeple to get rid of the current elected representatives and replace them with some new ones, nothing is [...]

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