New Agenda for America: Income Inequality Threatens America’s Basic Economic and Political Systems
Thursday, 10/29/2009 - 3:44 pm by Bruce Judson | 2 Comments
To mark the 80th Anniversary of the Great Crash of ‘29, we asked 15 progressive thinkers to write about lessons learned and what lies ahead. Together, their reflections constitute a New Agenda for America — a message of how the ideals of a fair society should apply to the economic and social policies of our time.
Today, we have the highest level of income inequality in our nation’s recorded history. We must address the structural flaws in our economy that created, and continue to widen, this divide. History teaches that extreme inequality leads to political instability. We cannot assume that we are immune.
In President Obama’s words, the middle class is experiencing “the American Dream in reverse.” Rising long-term joblessness and the possibility of 13 million foreclosures (more than one in every four American mortgages) create the potential for the former middle class to move from frustration to anger — an anger sparked by reduced circumstances and the belief that they have been treated unfairly.
With each job loss or foreclosure, another family — now on a down-ward spiral — potentially loses its faith in our basic economic system and our basic system of governance. America’s ongoing vitality requires that people trust that these systems work, and that our democracy is self-correcting. With rising income inequality, this trust is now at risk.
America has never been a nation of haves and have nots. If the gulf widens, it’s hard to imagine that our future will be marked either by a healthy economy or a healthy democracy.
The only other time in our nation’s recorded history that income inequality approached current levels was 1928, just before the Great Crash. The New Deal eliminated the excesses of an unsustainable system. It was not easy then, and it will not be easy now. But, it is essential.
Roosevelt Institute Braintruster Bruce Judson is a Senior Faculty Fellow at the Yale School of Management and the author of the new book on economic inequality, It Could Happen Here: America on the Brink.
Watch out for the Palin’s and Ron Pauls. If the inequality trend continues and the Democrats are perceived as favoring Wall Street, things could get ugly. The Austrian/goldbug fringe is realllllly gaining some steam.
Posted by nope | October 29th, 2009 at 7:52 pm
Professor Emmanuel Saez at U.C. Berkeley in his essay “Striking It Richer” updated August, 2009, claims that the top one percent of incomes received 23.5% of the national pre-tax income, and from 2000-2007 they received 65% of the economic gains of the slowly growing economy. Also, from 1929 the top one percent still hold the world record of 23.9% of national income in one year. Professor Edward Wolff claims that the median household wealth dropped to about 1992 level of $65,400, about a third below of their 2007 level. The bottom half of households own 2.5% of net worth. Inequality! (Survey of Consumer Finances, 2004, Federal Reserve)
Posted by Ben Leet | December 11th, 2009 at 11:11 pm