The United States Of Inequality

I was taken aback to read a post called In the US everyone’s talking about income inequality, but nobody’s really doing anything about it (Quartz, April 18, 2013). Since the death of the Occupy movement, only infrequently will someone mention astonishing inequality in the United States. It is rarer still for somebody to notice that nobody's doing anything about it.

On the face of it, income inequality is high on America’s agenda. President Barack Obama has made it a signature issue of his second term, bluntly stating that the US won’t succeed “when a shrinking few do very well and a growing many barely make it.” Federal Reserve Chairman Ben Bernanke decried inequality for “creating two societies.” Nobel laureate Joseph Stiglitz blamed the “concentration of income and wealth at the top, the hollowing out of the middle and increasing poverty at the bottom” for disrupting the American dream.

Even Goldman Sachs CEO Lloyd Blankfein called for “some redistribution” to create a stable and just society. But despite the growing consensus in Washington, Wall Street and academia, there hasn’t yet been concrete action and the situation is only taking a turn for the worse.

The US has the highest level of income gap of any of the advanced countries, with the top 1% capturing over 90% of the income growth.

A Gini coefficient (the most commonly used measure of inequality) of zero represents perfect equality, while 1.0 indicates maximum inequality where one person takes all the income.

A reading above 0.4 is widely seen as an indicator of potentially destabilizing inequality. In 2011, the Gini coefficient for the US rose sharply to 0.475 from the 0.469 recorded in 2010 (pdf, p.2), and not a single state managed to reduce inequality.

When Lloyd Blankfein calls for "some redistribution" of the wealth and income, you know we are in some deep, deep shit. That is lip service of course.

The author of the Quartz article, Nandagopal Jayakumar Nair, goes on to say that even Brazil and China are making efforts to reduce poverty and thus inequality, as measured by their Gini coefficients. (See my 2011 post Income Inequality — America Is Like Mexico And The Philippines.) Brazil's inequality is still worse than America's, but China's is better.

Here in the Greatest Country on Earth, inequality just gets worse and worse. The last time I talked about Bill Moyers, I gave him a hard time. He deserved it, but I feel a little guilty about it because Bill's heart is in the right place.

The Moyers video below, called The United States of Inequality, describes general inequality in America and also contains a heartbreaking segment describing grotesque inequality in Silicon Valley. It is no surprise that among such great wealth there is also grinding poverty.

In the past I have tried to take an objective, hard-hearted attitude toward inequality in America, often saying that such unfairness is simply part & parcel of all complex human societies. That's true, but putting it that way doesn't capture the way I feel about our stunning inequality.

Frankly, it makes me sick at heart. If it didn't, I wouldn't have written about it as much as I have over the last three years. Among Homo sapien's defective traits, and there are lots of them, the irrepressible tendency of humans to treat other humans like shit is a constant source of sadness for me.

 

Comments

[Julian Bond]

I have trouble expressing this in a way that people understand. It puzzles me that the usual response to this once people recognise the problem is to bash the rich. That I think opens up an argument that the view is driven by envy and the unfairness of it all. Perhaps that is justified since it's fairly clear that the rich and successful skew the rules of the game to keep themselves rich and successful.

But I can't help thinking though that the problem is at the opposite end. It's the poor with the real problem and it's them we should be trying to help. This is apparently awkward in the USA because most practical ways of helping the poor look like socialism and that's a dirty word. There's a whole set of language and thinking wrapped up in that. Along with a frankly religious belief that the free market will raise all boats and some how solve the problems of the poor by some mystical process called "trickle down" or "economic growth".