Growing Social Inequality in America

A little survey of man-in-the-street–type individuals by a TV show showed them all saying that what America needs is to raise the taxes on the rich—and maybe also reduce taxes on the poor.

And that is a core message of the "Occupy Wall Street" and other "occupy" demonstrations.

So millions of Americans feel this way. But—you know what? It's not going to happen. At least not as long as some of the fundamental facts of the American political system do not change.

The fact is that wealthy interests control our government. They can effectively buy Congress through lobbying, and through campaign contributions. Wealthy individuals and corporate-organized and -funded lobbying organizations buy Congress. Whereas political contributions from individuals are limited to $2500, the so-called "Super PACs" (political action committees) have little or no limitations on them. This state of affairs was made possible by the disastrous Supreme Court decision known as Citizens United (discussed elsewhere in this blog).

A recent book by Hacker and Pierson, two social scientists, called Winner Take All Politics, shows how the concentration of wealth in America has worsened. That is, the top few as regards wealth have grown wealthier—in fact vastly, astronomically wealthier—in the last 25 or 30 years.

The concentration of wealth in America is worse than in other Western countries: in Europe, in Canada, in Australia. And of course money is power. It can even be concluded that we no longer have a democracy.

The situation is the result of money buying influence; of the tax code; and of lax or even lack of regulation of Wall Street. (The countries named above, for example Canada, did not have as severe an economic crisis as the US four years ago, because they have more effective regulation of their financial systems.)

In 1986 legislation was enacted that closed many of the loopholes in the tax code that enabled the super-rich to escape taxation. But in the years since, those tax reforms have been very largely undone.

It's a sad situation in America. People are speaking out and voicing their dissatisfaction. But have they got power to effect change? Are any of the political candidates even promising to do something about the situation? It does not seem to be one of the issues discussed in candidate debates. The Occupy people are aware of all this but otherwise it all seems to be a big secret.

Copyright © 2012 by Richard Stein