Is Income Inequality Really a Problem?

[jp1]

If we truly had an equal playing field I'd be fine with income inequality. But we don't. After all, if everyone was allowed to succeed or fail on their merits all of Wall Street would've been done and buried back in 2008.

Instead, what we have is a whole game seems to be rigged to allow a small subset of the very wealthy to basically defraud people, with no repercussions. For example, when Alan Greenspan went public with the recommendation that fixed rate mortgages were a relic that were costing the average person unnecesary interest costs back in 2004 a few months before he proceeded to raise interest rates 17 times one can have a tough time believing that the average person was on a level playing field with the bankers that ended up reaping so much extra income as interest rates rose over the next couple of years. And then the housing bubble burst but the banks got trillions of dollars in assistance to keep from crashing, yet all the little people were left to go into foreclosure and lose their homes. THat's not equality, that's having the deck strongly stacked against the little guy in favor of the very wealthy/powerful banks.

Or when the banks managed to jam through congress the bankruptcy reform bill that made student debt no longer expendable in bankruptcy at the same time that tuition costs are soaring, the amount of college costs that are borrowed to be paid for and 'for profit' schools that don't adequately prepare students for a career are getting a larger and larger portion of education dollars by helping students get these loans that will haunt them for forever if they can't pay them back. Yes, people can avoid these pitfalls (I saw the housing bubble for what it was well before Greenspan acknowledged it) but when most of society, including all the talking heads on tv, are calling what's going on normal a lot of people are going to get sucked in and defrauded. After all the people on tv are supposedly 'experts'. The ability to figure out that these supposed experts are just hucksters trying to rip one off is not something that is taught in school.

[puglogic]

One disturbing but interesting examination of the problem is Derek Jensen's Endgame 1 & 2. Also Jared Diamond's Collapse.

Agreed, sadly. I loved "Collapse," as deeply as it frightened me. Derek Jensen I can no longer read, very smart man but his vision is too dark for me to accept. Just a smidgen of idealism left in me, and I don't want it snuffed out just yet. I can only read Chris Martenson for about four minutes a week or I get all itchy

Bae, do you disagree that the accelerating consumption of resources by the highest echelons of society -- more land, more structures, more toys, more fossil fuels, more more more -- is a major contributing factor in this dearth of resources remaining for intelligent allocation to future generations? One of Jensen's rallying cries is that these mega-consumers aren't going to stop destroying and consuming "just because we ask nicely" - they will need to be forced to stop, most likely by violent revolution.

[bae]

Bae, do you disagree that the accelerating consumption of resources by the highest echelons of society -- more land, more structures, more toys, more fossil fuels, more more more -- is a major contributing factor in this dearth of resources remaining for intelligent allocation to future generations?

I wouldn't phrase it quite like that, no.

There are a couple of billionaires down the street from me. They have 3-4 cars each, and nice yachts, and a couple of airplanes. Their impact on non-renewable resources and energy use is pretty large. But, I look around at the 4000 non-billionaires around here, and most of them have 1-2 cars made of 4000+ pounds of steel and aluminum, TVs, cell phones, eat fruit shipped thousands of miles, etc. etc.

I'm not going to blame "the highest echelons", but it sure looks to me like the First World is burning through energy and resources at an incredible rate. I suppose if you call "The First World" the mega-consumers or the "highest echelons", I'd go along with you :-) We could take all the billionaires, centi-millionaires, and heck, everyone with a net worth more than $1 million out behind the barn tomorrow, and it wouldn't make much difference in our overall consumption.

And the rest of the planet wants to consume and produce like we do.

With current and predicted population levels, and current and near-term technologies, that's not going to work.

[peggy]

One thing that struck me listening to the interview in the car this morning was how Steve Inskeep seemed to be carefully avoiding sticking "liberal" or "conservative" tags on the questions he was asking. This in no way needs to be a partisan issue. Its wrong to think of Democrats as champions of the poor and downtrodden and Republicans as the shield of the aristocracy. The DNC doesn't seem to have any problem selling out $35,000 per head meet & greets. According to Rasmussen reports 34.3% of Americans consider themselves to be Republicans. Even if I just concede the whole 1% as Republican (they're not) that leaves around 104 million Republicans at some lower economic level. It seems like it would be a lot more productive to shed the labeling and examine the real issues.

You're absolutely right. I hate this bickering and divisiveness that has creeped into our political discourse. if I seem on the defensive it's because of Fox, Limbaugh, Beck and the other hate mongers who have taken over and shouted every one else down. I include Olbermann and others on the left who, in response to Fox and co., simply shout as well. It sickens me to think how many Americans believe the spin that other Americans are their mortal enemies, hate their country and want nothing more than for it to fail. How many people believe this of their own President? Even moderate republicans are being tossed out of office because they aren't fringe enough.

Maybe the real problem lies with us, the voters. We aren't getting out in large enough numbers to demand a stop to this craziness. On both side of the aisle, we need to demand accountability, and more transparency. But to be honest, when a politician is shown to be dishonest, ignorant, or a one trick pony, then we are only to blame for voting for/supporting them anyway. You can't fix stupid, unfortunately. But I digress...

There will always be poor among us and there will always be rich. The problem is the buffer, the middle class, is disappearing. And the middle class is the cushion that softens the way from either direction. I think the problem lies in the unashamed pandering to only the wealthy by our government. They have been bought, and they make no pretense about it. I think term limits is the answer. I think term limits is as important for congress as it is for President. Even more so, really. Congress has more power than the president.

You're right Gregg, the 99% includes plenty of republicans. So why do we let the loud mouth extremist control the conversation?

[jp1]

Maybe the real problem lies with us, the voters. We aren't getting out in large enough numbers to demand a stop to this craziness.

Personally I don't think the problem is with us the voters. I think the problem is with them, the politicians and their handlers who benefit from remaining in charge regardless of whether democrats or republicans run things. After all, has anyhting much really changed since Obama took office? no. not really. Yes, we've gotten a small win on ending don't ask don't tell. But really??? has anything changed? Not at all. The banks still got their bailouts. THe military is still doing thier thing in the middle east. The military contractors are still racking in multiple billions. And on and on and on.

And this is exactly where the real people in charge want us. They want average republicans and democrats dickering about minor details like gay marriage and don't ask don't tell and the legality of abortion, etc etc etc. Meanwhile the people who actually run things are raking in the money from the military industrial complex and from the bailouts of the financial meltdown, etc. But most people aren't paying attention to all that because they're too busy worrying about gay marriage, abortion and every other 'social' issue.

[ApatheticNoMore]

One of Jensen's rallying cries is that these mega-consumers aren't going to stop destroying and consuming "just because we ask nicely" - they will need to be forced to stop, most likely by violent revolution.

Ok haven't read Jensen but I doubt the argument is that the rich just *consume* so much ... I rather doubt they do. I think it is less about consumption and more about *power*. I think a better argument goes like this: the main beneficiaries of the economic system are the super rich and the whole economic system *doesn't seem to work* in terms of long term environmental survival. Clarification on main beneficiaries: the super rich hold VASTLY disproportionate wealth compared to everyone else. This includes ownership of stocks, including huge corporations, which are the very economic entities that make up our economic system and of course some of which are involved in destroying the planet. But this does not mean the rich are the only beneficiaries of the status quo. Anyway, we seem to be on a runaway train of environmental problems at the very least (this is inarguable), and if you take the extreme position environmental catatrophe, with no way to slow down. What blocks slowing down? Well the difficult nature of some of the problems doesn't help (some may have no solution) but .... we're at the point where we want to transport crude in pipelines over major aquifiers. This is just brain dead. And why, why must we do that? Because it is the cheapest path and well the major corporations sure like cheap? (and hey they own the politicians don't they?) Because people need jobs no matter how destructive those jobs are (it is not a job I would blame someone for taking, but risking the destruction of a major aquifier on which much FOOD depends for temporary jobs in your state - is just very destructive public policy!). Is there something wrong with an economic system that drives people to desperately take a job, any job, just to survive, no matter the long term consequences on their world?

How would more equal income distribution help? Well I think those who think it can are working off some kind of ideal vision (but in the real world I do think more equal socities actually do consume less), where people who otherwise have enough money to retire don't keep working just because they need the healthcare, where the average person is not a debt slave to some bank for pretty much his whole life (what with mortgages and tuitions and healthcare bills - anyone who runs up massive debt on clothes or something is just plain stupid) anyway a world in which houses are more reasonably priced. A world in which the average person is just under a lot less of the pressure that DRIVES so much of his consumption (commuting long distances burning gas in desperate need of a job, any job, consuming convenience food in plastic because of lack of time, heck even not recycling because of lack of time, consuming to make himself feel better, never mind not being politically informed due to lack of time - see the book Take Back Your Time on how this happens).

And then you get into the distribution not of abstract wealth but of concrete things like land and whether it is better to have this widely distributed to small farms or concentrated in agribusiness (although I can't say forced redistribution generally works, it definitely doesn't, but look the desk is rigged currently and could be changed to encourage small farmers instead)

So I think an environmental argument for more equality is all this:
1) the rich, especially in the form of corporations buy out our politicians and cause them to act in ways that are destructive to the environment because it benefits those corporations. More wealth inequality concentrates this power.
2) The rich are the major beneficiaries and thus (assumed) defenders of the status quo and that status quo means certain continued environmental destruction. An economic system based on neverending growth is unsustainable.
3) Desperate economic conditions in the middle class and poor DRIVE some of their high consumption. Not all of it because iPads are shiny regardless, but some of it ....
4) Other problems with the economic system such as few ways for society as a whole to take productivity gains in terms of leisure rather than more and more stuff. Not strictly an issue of income equality of course.

[flowerseverywhere]

Some people just plain don't want to work or feel entitled to handouts. Even if this is a small number, I bet everyone here has worked in an organization with someone who is habitually late, always has excuses, never gets their work done then claims they are being discriminated against or picked on. Once I worked with some welfare to work people, it was a nightmare. There are also some people who have low intelligence and cannot reach a high level of work.

In times of low unemployment and low underemployment these people are not much of a problem. A certain percentage of the population in every society since the beginning of time is going to be poor and not want to better themselves or be unable to better themselves. No matter what you do there are people who just don't want to take responsibility for themselves. Early education has the potential to break the chain, and some kids make it out, but the odds are against them.

I see the problem now is we have many people who want to work, but are making way less than historically they have made according to their education and work ethic and cannot contribute as much in taxes and sometimes need to tap into government services. And we have several posters here who just cannot even find a job, despite wanting to work. At the same time the people at the top are making huge bonuses and many organizations are top heavy with vice presidents, managers etc. who make a good buck while the worker bees get behind.

The government can only do so much. Unless people will change their habits from buying cheap junk made overseas with cheap labor, eating at huge chain restaurants where most of the food is prepared offsite, and eating chemical laden genetically modified food produced on giant farms and shipped long distances we don't have a chance. These habits benefit the owners and managers of large corporations instead of people who produce quality things for a price.

[ctg492]

Peggy,
I watched my 80 year old parents change attutudes and for not the best on topics, that kinda surprised me . Then I found out they were taking the only word of truth to be that of Beck.

[Gregg]

I'm not going to blame "the highest echelons", but it sure looks to me like the First World is burning through energy and resources at an incredible rate. I suppose if you call "The First World" the mega-consumers or the "highest echelons", I'd go along with you...

And the rest of the planet wants to consume and produce like we do.

With current and predicted population levels, and current and near-term technologies, that's not going to work.

It does seem like expanding our scope makes sense when talking about resource allocation. In my experience the "super rich" do tend to consume, per person, a disproportionate share of just about everything, but viewed individually how much does that really matter? The first world, and obviously the United Stated to an even larger degree, consumes planetary resources at a disproportionate rate and that not only jeopardizes everyone living today, but future generations in every part of the world. Even the lower economic classes in the US live at "the highest echelons" of wealth on a global scale. I'm not saying that's all bad and I don't at all mind benefiting from living here. What I do think is valuable is to gain a little perspective on how the other six billion live. That might lead those of us lucky enough to live in the first world to realize we have responsibilities at several different levels. Maybe, in the bigger picture, its less about income inequality than it is about what is done with that income.

[peggy]

Peggy,
I watched my 80 year old parents change attutudes and for not the best on topics, that kinda surprised me . Then I found out they were taking the only word of truth to be that of Beck.

I know. Unfortunately these are the ones who watch, vote, and send them money (or 'invest' in whatever they hawk) I see it in my own elderly parents. Educated, very aware people, still politically savvy, but suffering from diminished thinking powers. In little things they say or do that I know wouldn't have happened even 10 years ago. These media types are very aware of sales tactics, and the right key words, or dog whistles, to say to get us to 'buy' whatever it is they are selling, whether it is gold or a political point of view. My dad, for instance, is at the point that he believes almost anything he is told (fortunately my mom controls the check book) but he has other issues and has started that long, sad spiral down into himself.