Obama Right about Something Important
My fellow conservatives will probably label me a traitor for what I am going to say in this article. I have tried to analyze the results of the recent election, which, at first, were inexplicable to me. I initially concluded that the reason for Romney’s defeat lay in the corrupt media and the disintegration of America’s society. These reasons were valid but not the main reason for the election result. I also concluded that the onslaught of negative ads against Romney and most Republicans was decisive. Again, this factor was important, but not decisive.
The main reason for the Republican defeat was that Obama was right about one very important aspect of American life: the growing and now vast inequality of incomes and wealth that has developed in America over the last few decades – an inequality that became excruciating for millions of our citizens when housing values, the main repository of wealth for most Americans, collapsed.
This kind of inequality, which I will describe shortly, was a fact of life at the turn of the last century. It led to the trust-busting that made Teddy Roosevelt a hero, and to the breakup of Standard Oil and of the US Steel Company. Inequality peaked in 1928 and then ameliorated greatly up until the late 1970’s, when it began to reverse and take on steam. The wealth inequality ratios that existed in the 1920’s have returned and exist today. One example of this is that average CEO pay was 40 X average factory pay in 1976. In 2008, average CEO pay was 400 X average factory pay. This is immoral and unsustainable.
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In 2007 the richest 1% of the American population owned 34.6% of the country's total wealth, and the next 19% owned 50.5%. Thus, the top 20% of Americans owned 85% of the country's wealth and the bottom 80% of the population owned 15%. Financial inequality was greater than inequality in total wealth, with the top 1% of the population owning 42.7%, the next 19% of Americans owning 50.3%, and the bottom 80% owning 7%. However, after the housing bubble burst, which started to happen in 2007, the share of total wealth owned by the top 1% of the population grew from 34.6% to 37.1%, and that owned by the top 20% of Americans grew from 85% to 87.7%. The Great Recession also caused a drop of 36.1% in median household wealth but a drop of only 11.1% for the top 1%, further widening the gap between the 1% and the 99%.
We Republicans don’t like the idea, but some sort of wealth and income redistribution is absolutely necessary for America to become a more-just society. We are approaching the environment in which Marie Antoinette, when told the poor have no money for bread, supposedly said, “Let them eat cake”. We need much higher income taxes, and we need steep, progressive estate taxes on the 1%. We also need to return to a 20% capital gains tax.
Many millions of Americans are hurting badly; a large number of them actually have a negative net worth. They are hurting, they are resentful, and they are angry. They don’t care about Benghazi, Fast and Furious or Solyndra, and they will NEVER vote Republican again if Republican leaders don’t shut up about never raising taxes on the rich and instead cooperate in a workable approach to lessen the inequality that exists.
I had no idea that American society had reached such a state until my doctor made a comment that caused me to do some research. Most of my data is contained in a report by Professor G. William Domhoff of the University of California at Santa Cruz. Before you call me a communist, read this report. I am carrying no water for President Obama, whom I detest. It is outrageous that, knowing of this situation, he only uses it to score political points and wasted four years while it worsened noticeably.
Labels: Wealth Inequality