Tuesday, October 28, 2008

"I think when you spread the wealth around, it's good for everybody."

Those of you who know me well may have been puzzled from time to time by my lack of comment about our issues-of-the-day. This blog has been mainly personal, almost entirely apolitical. Almost.

I have had my reasons, not the least of which has been a desire not to needlessly offend my main readers, friends and family. I remember vividly the negativity of the 60's and 70's. It was almost impossible not to be trapped on one side or the other. Middle of the road meant incoming from all directions. It is not much better today. I generally would rather focus my attention on things we might have in common, those that might bring us together. Any fool can dwell on differences, stir up a fuss. Our public political discourse is divisive and crude enough; I did not want to descend into that maelstrom. I can be as nasty and vicious as the next guy; but why bother? Life is short, let's make it as pleasant as we can for everyone.

However, this does not mean I do not have values and standards. This does not mean I am not paying attention. This does not mean I have not been saddened, disappointed and angered - often beyond words - that my country, this land of my ancestors for over 300 years, has been so poorly served during most of my lifetime by its political and business leaders. This does not mean that I am not pissed off.

Despite historic changes I have witnessed that have improved the lives of minorities and women, and secured some measure of acceptance for those in our society who choose to be different, we have failed time and time again to act in accordance with our professed values, to act in our own best interest. This failure is so widespread I could begin anywhere, but it is so deep I do so reluctantly.

I will not outlive the damage to my country, and by extension to me and my family, done during the last eight years by this current administration. That many in this country are finally beginning to wake up to this reality is heartening, but just a bit late. One does seem to be able to fool a large number of people much of the time. But maybe not forever.

What set off this mini diatribe was a seemingly innocuous article on page two in yesterday's Wall Street Journal. (Yes, I subscribe to the WSJ.) The headline that caught my eye proclaimed, "Wealth Gap Is Focus Even As It Shrinks." The lead refers to the Joe-the-Plumber inspired focus on "spreading the wealth in America."

The author, Robert Frank, summed it up nicely,
Over the past week, the McCain campaign attacked Sen. Obama as "the wealth spreader" for his now-famous remark to "Joe the Plumber" that, "I think when you spread the wealth around, it's good for everybody." Sen. McCain also likened his Democratic rival's tax plan to socialism, because it would raise taxes on those making more than $250,000 and lower taxes, or keep them level, for the middle class.
The purpose of his article was to note that recessions and stock market declines, like the one we are in now, generally reduce the gap between the rich and poor. The evidence presented was "Share of total income, including capital gains, that accrues to the top 1%", over almost the last 100 years. The graph they used is below.

Income inequality

Ignoring for the time being the complexity of this issue - try this Wikipedia entry for a starter if you like - I was struck by the author's emphasis on the true-enough small declines during the recession years and the overall movement of the line itself. The graph clearly indicates that, reversing the general pattern over the first half of the last century where the percentage of income for the top 1% dropped and then held for about 30 years at about 10%, since about 1980 the percentage has more than doubled, now approaching 25%.

The author concluded with,
The fall in inequality is unlikely to last. Immediately after the 1990 and 2000 recessions, wealth and income shares of the top 1% resumed their upward march. The share of income held by the top 1% rebounded after the 2001 downturn to 22.8% in 2006 -- the highest level since 1928.

When the stock markets return, so will inequality.

If one needs an example of not seeing the forest for the trees...

Clearly someone or something has been for the last quarter century "spreading" our nation's wealth into fewer and fewer pockets. If one believes that this is natural and good, a normal result of capitalism, then let them cheer and drink a toast to Karl Marx who at least agreed that this is a norm of capitalism.

But if one suspects a governmental role in the movement of this graph, as I do, one must be struck by the relationship between the headline, "Wealth Gap....Shrinks," the long-standing and deep support for small laissez-faire government, and low-tax political candidates by the WSJ, and the reality of the graph itself. Maybe this is how to sell papers to the well-to-do.

Let me spell it out. Growing income inequality is a bad thing. A strong middle class is a good thing, as is the opportunity to move upward. Government policy that redistributes wealth into fewer and fewer pockets is a bad thing, a policy developed during the Reagan years and polished by the current administration.

For a political candidate to liken his opponent's tax plan to "socialism" - a stretch at best - and accuse him of being a "wealth spreader" and ignore the reality that his political party has presided over a massive redistribution of wealth into the pockets of the rich is simply too much to ignore. Does he not know? Does he not care? Is there anything he will not say if he thinks it might make him president?

I stand by my previous post.


daughter Malindi said...

thanks for breaking it down for me in that next to the last paragraph.

and personally, i think he knows, i think it doesn't matter whether he cares & that he will say anything to become our next president because he is shamelessly self-promoting. and alot of Americans will bite, vote for him, and continue to have something to bitch about. [did you read the feature for the Week (for this week). INNNNNteresting.]

Bibb said...

I have an abiding loathing for the "if you can't vote for me vote against my opponent" mentality, followed closely by the "lesser of two evils" argument. Both piss in the well we all drink from. We have a wonderful country and system of government that, if not perfect, has become pretty damn good. People who criticize should look in a mirror.

However, if more folks would take the time to look past the political spin and smoke and mirrors and simply vote their own self-interest our government will not become permanently hijacked by corporate America and their spawn. If that additional 15% of our nation's wealth had not flowed into the accounts of the top 1%ers it would have be distributed among the other 99% of us. Given the size of the American economy, that is not small change, nor a small issue.

John McCain has served a useful gadfly role as a US Senator, as best I can tell, the only job he has ever done reasonably well unless you separate out being a POW. But presidential candidate McCain has been an embarrassment.

Barack Obama has excelled at everything he has done, overcoming some serious obstacles along the way. He was not born with a silver spoon in his mouth nor two Admirals to further his career. We need a calm leader with a vision, not a hot-headed maverick.

I vote for the guy with one house.