Why the United States’ Inequality Problem Is About a Lot More Than Money

NEW YORK, NY - SEPTEMBER 10: A homeless man sleeps under an American Flag blanket on a park bench on September 10, 2013 in the Brooklyn borough of New York City. As of June 2013, there were an all-time record of 50,900 homeless people, including 12,100 homeless families with 21,300 homeless children homeless in New York City. (Photo by Spencer Platt/Getty Images) *** BESTPIX ***
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 By David Cay Johnston, AlterNet | Op-Ed

Inequality is about much more than the growing chasm of income and wealth between those at the very top and everyone else in America. It’s also about education, environmental hazards, health and health care, incarceration, law enforcement, wage theft and policies that interfere with family life over multiple generations.

In its full dimensions, inequality shapes, distorts and destroys lives in ways that get little attention from politicians and major news organizations. How many of us know that every day 47 American babies die, who would live if only our nation had the much better infant mortality rates of Sweden?

“Poverty is not natural,” Nelson Mandela once said. “It is man-made and it can be overcome and eradicated by the actions of human beings.”

The man-made disparities between the rich and the poor are a threat to the liberties of the people. Plutarch, the Greco-Roman historian, observed more than 2000 years ago that, “an imbalance between rich and poor is the oldest and most fatal ailment of all republics.”

For more than two decades I have been documenting the widening gaps in income and wealth in the US in articles, books and essays. My first few years of reports in theNew York Times drew complaints from some readers who asserted I had no idea what I was doing and skepticism from more than a few editors. But I felt confident because the trends I distilled from the official data were clear and because the fine print in government rules — which few journalists ever read — revealed that Congress was creating a system that takes from the many to give to the already rich few.

While the passage of time has shown that I was right, I must confess I paid scant attention to something else very important: disparities in wealth and income are primarily symptoms of an insidious social disease. This is a national ailment we can cure, but only if we first understand the broad dimensions of the problem. With knowledge comes insight, focus and the power to effect change.

To make up for my own shortcoming I spent a very useful, if unprofitable year putting together a collection of essays on the broad dimensions of inequality and the terrible toll it takes on human lives. From stacks of books, academic papers and blogs I created an anthology for a little nonprofit publisher called The New Press, founded by the late André Schiffrin, one of the most important book publishers ever.

DIVIDED: The Perils of Our Growing Inequality comes out in paperback this week. My hope is that college professors and even high school teachers will use it to introduce young people to the full nature of inequality and what we can do to reduce it.

“American inequality didn’t just happen – it was created,” wrote Joseph Stiglitz, the Nobel Prize-winning economist who is among the 44 contributors. Their brief essays are intended to reduce a complex problem to easily digested pieces, all written in plain English.

Elizabeth Warren, Barack Obama, Barbara Ehrenreich, Paul Krugman, Steelworkers leader Leo Gerard, journalists Gary Rivlin and Neil deMause and scholars who are highly regarded in their fields like epidemiologist Ernest Drucker, education theorists Linda Darling-Hammond of Stanford and Mike Rose of UCLA, as well as physicians Olveen Carrasquillo, Mary E. O’Brien and Stephen Bezruchka are among the deeply informed who contributed chapters. Insights also come from the past: Plato, Adam Smith, Studs Terkel, the 19th-century reformer Henry George and the American president who called out “malefactors of great wealth,” Teddy Roosevelt.

Part of the problem with inequality is that our culture and our intellectual constructs obscure simple, verifiable facts. And those who benefit from inequality pay others to confuse us.

Biased to the Rich

Moshe Adler, who teaches economics at Columbia University, provided a chapter called “How Economics Is Biased Toward the Rich.”

Even people who have never taken an economics course can learn from Adler how neo-classical economics favors the haves over the have-not-enoughs.

What Adler shows certainly is not what I was taught between 1967 and 1975 when I studied economics and public policy at seven colleges including our most influential center for manufacturing economic policy, the University of Chicago. At best, suggestions of bias in economic theory got lip service.

The ways in which race impedes access to health care in America and the price of our “medical apartheid” are explained by Dr. Carrasquillo and by Jaime Torres, who founded Latinos for National Health Insurance, which advocates for a single-payer health care system.

Education is equally infected with discrimination, as Stanford University professor sean f. reardon (who does not use capital letters in his name) explains in a chapter called “No Rich Child Left Behind.”

In the last few decades, reardon shows, “differences in educational success between high-and lower-income students have grown substantially,” a disparity that those who are willfully blind to inequality try to explain away with clever arguments and by abusing the data.

Unable to find what I wanted about two issues, I wrote the chapters.

One asks why married men are not in the forefront of demanding equal pay for women, since most of them have working wives. Nonprofit tax filings show that gender discrimination in pay in the same position is not only verifiable, but gets progressively worse as organizations grow in size.

The other chapter puts in simple language the painful cost of our inefficient non-system of sick care versus a modern health care system.

America could have eliminated the federal income tax in 2010 if we had spent the same and much smaller share of our economy on health care as France and Germany. Those countries provide very different systems, but both provide universal care and are among the best in the world.

The next time you look at your paycheck, think about what could be if we had a universal, single-payer health care system providing top-quality care with little or no out-of-pocket expense. You could have kept all the income taxes you paid in 2012. Today we could end the income tax for all except the top 2 percent just from reducing health care costs.

Let’s Face the Music

The awful truth is this: Americans have chosen our extreme inequality and all of its awful consequences in the politicians we elected in the last 35 years. We can make better choices, not that it will be easy, but then nothing that really matters ever is.

Presidents John Adams and James Madison (the primary author of our Constitution) warned us that what would doom our experiment in democracy was not a foreign invader, but economic inequality and its consequences.

Adams, living in an agrarian age, feared that “monopolies of land” would destroy the nation. He foresaw a business aristocracy born of inequality and legions of workers with no assets who just lived on their wages. The business aristocrats, he predicted, would manipulate voters, creating “a system of subordination to all… [by] the capricious will of one or a very few.”

Adams also warned that “the rich and the proud” would wield such economic and political power that it “will destroy all the equality and liberty, with the consent and acclamations of the people themselves.”

Madison thought extreme inequality evil, saying government should prevent “an immoderate, and especially unmerited, accumulation of riches.” He favored “the silent operation of laws which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigents towards a state of comfort.”

Even Alexander Hamilton, who championed business while serving as the first Treasury secretary, said in 1782 that widespread ownership of assets was crucial because “whenever a discretionary power is lodged in any set of men over the property of their neighbors, they will abuse it.”

We live in the second American Republic under a Constitution adopted to ensure the power to tax and regulate commerce. It is based on six noble principles listed in the preamble including the duty of government to “promote the general Welfare.” (That capital W is in the original.)

We can choose better. Indeed, we can solve any problem we have if we choose to and do the work. We got rid of slavery (at a cost of at least 638,000 lives). Women got the right to vote after eight decades of struggle. More than a century ago we got child labor laws despite the clergymen who fought against them. We won, but are now losing, worker protection laws, a woman’s right to control her body and reliable pensions.

Understanding is the first step toward change, toward moving closer to our ideals of liberty, equality and happiness. I created Divided so we could understand where we are and how we got here. That knowledge can then empower us to make a better America.

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