U.S. is no longer the land of equal opportunity
The United States has long been seen as the “land of opportunity for all”, but that is no longer the case — for many it has become the land of lost opportunity. What has happened to the “American Dream”? Very simply, it has been stolen by the enormous upward redistribution of wealth. All you have to do is look at the numbers.
The Dow Jones stock market index has recovered all of the decline from its high of 14,164 in October, 2007 to its 6,547 low in March, 2009 — a 17-month drop of 53.8 percent. Has this rising tide raised all ships? Hardly. The rich have waxed incredibly richer. The income of the top 2 percent has increased 250 percent. The wealth of the top one percent has doubled, and the wealth of just 400 families is now equal to that of the entire bottom half, the highest disproportion in our history.
And how are the rest of the people doing compared to the wealthy? Unemployment doubled as a result of the Great Recession but has declined only slightly from its peak. Those in the Middle Class, the backbone of the American economy, have seen their incomes decline by 10 percent, and the value of their assets (primarily their homes) fall much more, in many cases becoming negative. Many are no longer a part of the Middle Class, but have sunk to the ranks of the poor. The wealthy are pocketing the profits from low wages that trigger the earned income tax credit and create the need for food stamps, and the Middle Class ends up paying a large share of those costs.
In a time when increasing productivity is boosting corporate profits, why aren’t the Middle Class and the poor sharing in some of that wealth? The obvious answer is that the wealthy have decided not to share any of it. They are cutting the cost of employee benefits by working their present employees longer hours at lower wages, and replacing full-time employees with part-time or contract workers (who are not eligible for benefits), also at lower wages, and keeping the resulting profits for themselves. Employers complain they can not find people to fill high-tech jobs. That’s because they want to pay only assembly-line wages. They are also not reluctant to expand their businesses (which would create more jobs) because there is no significant growth in people’s purchasing power.
The mystery here is that the corporate powers seem to be ignoring the fact that the reason demand is sluggish is because they have taken much of people’s purchasing power away from them. Our country’s prosperity in the decades following World War II was driven by people’s purchasing power, which came from sharing the wealth created by increased productivity with the people who helped create it. Income and corporate tax rates were higher than they are today, but that didn’t hurt a thriving economy.
The growing spread between the income of the top dogs is not only causing a drag on our economy, but constitutes a real threat to our democracy. Those who are not in the top percentages on the income ladder see their government being stolen from them by the power of money, and with it, their opportunity for advancement, and access to equal justice as well.
Wealth is used to buy legislation that benefits the wealthy by creating low tax rates and tax breaks that cut their true tax rate to 10 percent and shift the financial burden onto the Middle Class, and also cuts those government programs that benefit the people who need them most. Shrinking family incomes and skyrocketing college costs are putting the cost of educating their children — the key to successful careers — beyond the means of millions of families. Public funding, that used to pay two thirds of college costs, now pays less than one third. And in our courts, those that have the money get far better treatment than those that do not.
In the 1830s, Alexis de Tocqueville observed in his treatise “Democracy in America”, “Equality of opportunity is the most fundamental element of democracy”, and “Equality leads to the poor longing to acquire property and the rich fearing to lose it”. If we wish to preserve democracy in America, Congress must take the necessary measures to reverse the government-aided redistribution of wealth (and its power), that has taken over this country since 1980, and restore equality of opportunity to the people.
“As I See It” appears on the first and third Thursdays of the month. Hal Sundin lives in Glenwood Springs and is a retired environmental and structural engineer. Contact him at email@example.com.
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