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(The following is a slightly extended version of my response to an op-ed by Vince Carroll,  Putting Fat Cats In Their Place, in today’s (10/30/11) Denver Post: http://www.denverpost.com/opinion/ci_19211159?source=bb.)

Vince Carroll is absolutely correct that we must consider not only the distribution of wealth, but also the absolute growth of wealth, when discussing issues of our economic well-being as a nation and a people. Certainly, if everyone is getting wealthier, then why should we worry if that is accomplished by means of a system in which the wealthiest get astronomically wealthier while the further down you go along the spectrum of income and wealth, the less robust the growth of wealth becomes (less robust even as a proportion of existing income and wealth, meaning a lower percentage of a lower base number)?

There are several reasons why:

1) The growth in household incomes that Carroll cites is due to an increase in two-worker families, and a decrease in stay-at-home moms. In reality, there has been a decrease in real individual average income in that same time period, an anomaly in the modern era of ever-expanding wealth which corresponds precisely with the rise of income-concentrating deregulation.

2) We have an economic system demonstrably less efficient than some others in existence (e.g., Germany, the Netherlands, etc.) at striking an optimal balance between absolute growth and distribution of the fruits of that growth, resulting in far greater levels of impoverishment, infant mortality, homelessness, violent crime, incarceration, mental health problems, and numerous related problems, than have been achieved by other nations that have struck a more sensible balance.

3) Extreme income inequality reduces economic vitality by constricting the breadth and depth of economic activity. The more concentrated wealth is, the less disposable income, in the hands of fewer people, is available to contribute to the consumer engine of our economic vitality.

4) Carroll disregards the role of deregulation (from the 1980s onward) in generating this economically debilitating concentration of wealth, how that deregulation has been implicated in every major economic crisis since its inception, how it has now undermined the consumer engine of our economy in dramatic and enduring ways, and how, as a result, our economy is in a period of stagnation following contraction, with a no-longer-growing pie still obscenely concentrated in far too few hands.

5) Carroll disregards the various costs not measured by traditional economic indicators, referred to in the economic literature as “externalities” (those costs and benefits of economic transactions that affect those who were not parties to the transaction, in either positive or negative ways), which, while helping to author the huge concentration of wealth in America over the past 30 years, also have helped to do so on the back of the population at large by reducing public health, safety, and welfare, and placing increasing burdens of accumulating and devastating negative externalities on future generations across the globe.

6) Extreme income inequality has many other socially destructive consequences, even aside from the ones listed above. It undermines national solidarity and cultivates inter-class resentments, creates subjective feelings of relative poverty, and undermines democracy by concentrating both the means of affecting public opinion (and thus determining the outcomes of elections) and the power to determine the economic well-being of the vast majority of the people of the nation into the hands of a small, corporation-beholden-and-embedded economic elite.

One must look not only at this “snapshot of reality,” but also at the trends revealed over time, and the consequences of such trends. Even if all of the present reasons for considering how equitably distributed wealth is did not exist, a trajectory of accelerating concentration of wealth is clearly untenable in the long run.

Today, 1% of the nation’s wealthiest command 40% of the nation’s wealth, while the bottom 80% command less than 15% of the nation’s wealth. In 2007 (see http://sociology.ucsc.edu/whorulesamerica/power/wealth.html for an overview of 2007 income distribution figures), the top 1% commanded slightly less than 35% of the nation’s wealth (already considered an indicator of astronomical inequity). The current growth trend in capital concentration has been underway since 1980, coinciding precisely with the Reagan-coined “government is the enemy” paradigm of the right; in 1979, the top 1% commanded just over 20% of the nation’s wealth, having fluctuated since WWII between 20% and, in a rare outlier in 1965, 34%.

The last time the concentration in wealth in the hands of the wealthiest 1% of the population exceeded 40% was in 1929, on the eve of The Great Depression, when policies similar to those advocated by the Libertarian Right today had been successfully championed under the Hoover Administration.

If the challenge is to “get it right,” all things considered, then our grotesque and accelerating concentration of wealth in America, accompanied by the highest-among-developed-nations rates of poverty, hunger, homelessness, violence, incarceration, and other social ills, is indeed an indicator of having failed to do so.

Yes, we do not want to seek “equality” in a vacuum, engaging in the folly of imposing an equality of impoverishment. But we as a nation are not teetering on the edge of that particular folly; rather, we are over the edge of the opposite folly, which we insanely avoid addressing by pretending that it doesn’t exist.

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(The following is a series of posts I made on a Libertarian’s Facebook page. Ironically, the owner of the page, while lost in the morass of Libertarian nonsense, seems to be a fairly decent fellow, as some are, which only adds to the poignancy of the tragedy, since we are capable of doing great violence to one another without even possessing the emotional disposition to do so. But the fact that we as a country can be in the grips of this self-destructive mania is simply too much to bear. How on Earth do we shake some sense into these blind and destructive fanatics, trying to do their own re-enactment of history’s most tragic chapters?)

I don’t copy and paste anything, Rick. I live, learn, study, contemplate, and comment. There are several values that merit our attention, not just the maximization of aggregate wealth (though that is one as well, since indeed it is important to maintain a political economy that produces wealth robustly). This country has been moving in a highly regressive direction in terms of social mobility and social justice, increasing the extent to which the condition you are born into determines your opportunities in life.

In reality, the number one predictor of future socio-economic status in America is one’s socio-economic status at birth. This is a statistical fact. To argue that it is irrelevant because some minority of people succeed in changing their socio-economic statuses, which to the irrational means that there is no social injustice in America, neglects that the members of that minority benefited from some good fortune or combination of good fortunes that the rest did not: Great parents, a great mentor, exceptional natural endowment, chance circumstances, etc.

A commitment to equality of opportunity (not equality of outcome, as you insist equality of opportunity means) requires not relegating certain classes of people to drastically reduced chances of success in life due to the chances of birth, even if additional chances save some small subset of those disadvantaged classes. In fact, addressing it is not just good for rectifying our endemic and growing social injustice (far greater than that of our fellow highly developed nations), but also improves aggregate productivity itself, mobilizing our human resources more efficiently and effectively.

In 2007, 35% of America’s wealth was concentrated in the hands of 1% of our population. (The bottom 40% of Americans are thrown the crumbs of .2%, one five hundredth, of America’s wealth; the next 40% of Americans share just 15% of America’s wealth. 85% goes to just 20% of Americans.) Our Gini Coefficient (the statistical measure of the inequality of the distribution of wealth) is behind all other developed nations, and is behind even Iran, Russia, and China. This is not, as your convenient mythology maintains, due to a meritocracy, but rather an entrenched and growing classism, with only marginal social mobility laced into it (this is a statistical fact, not a random assertion; America has less, not more, social mobility than all other developed nations).

You imagine yourselves to be the warriors of freedom, and those who oppose you to be “elitists,” but that is precisely backward: You are warriors of elitism, fighting for gross inequality and injustice against those who actually understand economics and history and the fact that by no measure are your assertions accurate or defensible.

Your assertion that this inequality is necessary to the robust production of wealth is, like the rest of your assertions, simply wrong. The United States, despite its off-the-charts inequity in the distribution of wealth, has only a middling per capita GDP in comparison to other developed nations, below many that are far more egalitarian, and not significantly above any (see http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita). A far smaller portion of Americans participate in that wealth, however, than do those of those other countries.

In other words, you are fighting for ignorance in service to human suffering, and calling it a noble ideal. Freedom, prosperity, justice, are far more complex and subtle ideals than you recognize, and, in your shallow world, you therefore sacrifice the realities on the alter of your false idols. There is no real freedom when the circumstances of birth are so highly determinant of one’s future prospects, and when participation in a society’s prosperity is so skewed by the chances of birth. There is no justice when the descendants of those who were conquered or enslaved not so many generations ago are statistically extremely overrepresented among those who do not partake of that prosperity and opportunity today. There is only an implicit racism in insisting that we live in a meritocracy, and that if some races and ethnicities are overrepresented in poverty in our country, it must be that they coincidentally are just lazier and less meritorious than the descendants of the former elites. Yeah.

The depth of your irrationality in service to your inhumanity is simply mindboggling. Don’t get me wrong: There are no simple answers. The market economy is indeed a robust producer of wealth, and the problems and challenges we face are not easily solved. But we must first, as a nation, as human beings, be honest about what those problems and challenges are, rather than conveniently defining them out of existence and turning a blind eye to the real injustices and inhumanities that we are blithely reproducing and deepening.

The way to approach this ongoing endeavor of ours is to understand economics (the real discipline; not the archaic caricature on which you rely), and history (again, the real discipline, not the information-stripped caricature on which you rely), and all other disciplines relevant to our shared existence, and to treat the challenge of self-governance as non-trivial, not reducible to a few neat, ideological platitudes that adherents claim are ordained by God or by Founding Fathers, or by something other than what works and what’s just and what’s wise.

You rely on caricatures of our wonderful (though human, historical, and imperfect) founding document (the U.S. Constitution, which was drafted to strengthen, not weaken, our federal government, a strengthening eloquently argued for in The Federalist Papers by Madison, Hamilton, and Jay). You ignore those clauses which don’t suit your ideology, and ignore our system for interpreting the Constitution, insisting that your nonsensical interpretation should prevail, thus only destroying the document and nation you claim to serve. It’s a tragic comedy of ignorance and inhumanity, one that loses its comic value when you take measure of the real human suffering it imposes and preserves, and the damage it does to us as a people and to our children’s prospects in the future.

Let’s not forget the real human measures of your regressive ideology: We have, in comparison to other developed nations, the highest infant mortality rates, the highest poverty rates, the highest homelessness rates…, a tribute to a society in the grips of an inhumane mania that has no connection whatsoever to reality, or to justice, or to reason, or to compassion, or to anything to which human beings ought to aspire.

Here’s the story you folks need to live: http://coloradoconfluence.com/?p=1624. And here’s the historical reality you ignore: http://coloradoconfluence.com/?p=1506. Here are the cliches and caricatures on which you rely: http://coloradoconfluence.com/?p=984, http://coloradoconfluence.com/?p=525, http://coloradoconfluence.com/?p=1194, http://coloradoconfluence.com/?p=1205. And here is a guide to the rational, compassionate, historically and economically literate, humane, and truly progressive alternative: http://coloradoconfluence.com/?page_id=1215. Finally, while you are crowing about the brilliance of your shriveled and inhumane little platitude-driven blind ideology, here are some examples of what a real, growing, contemplative, informed understanding of our world looks like: http://coloradoconfluence.com/?p=1676, http://coloradoconfluence.com/?p=1695, http://coloradoconfluence.com/?p=1714, http://coloradoconfluence.com/?p=1660, http://coloradoconfluence.com/?p=1859, http://coloradoconfluence.com/?p=2235, http://coloradoconfluence.com/?p=187, http://coloradoconfluence.com/?p=577, http://coloradoconfluence.com/?p=832.

What we are and what we are capable of, as human beings, is incredible. But it is not served by your flattened and stripped parody of the intellectual product of a historical moment, rather than the living, growing reality that those ideals gave birth to. Our liberty isn’t served by the absurd farce that popular government and strivings for social justice are its enemies, but is rather most pointedly threatened by it. As Sinclair Lewis poignantly observed: When fascism comes to America, it will come carrying the cross and wrapped in a flag. And for all your rhetoric deluding yourselves that you represent its opposite, you are nothing if not the unwitting (though eagerly exploited) agents of fascism, freeing those who wield the political power of concentrated corporate wealth from any restraint of popular regulation and oversight, demolishing problematic but indispensible popular government in preference for the tyranny of unfettered concentration of wealth and the real political power that it wields.

You are clueless, and dangerously so, threatening this nation, and, to some extent, this world, with your belligerent ignorance, trying to obstruct all thought and analysis and compassion and human decency in service to your mania. Good God, it’s just too much to take! Get a frickin’ clue already.

(See The Catastrophic Marriage of Extreme Individualism and Ultra-Nationalism for a continuing discussion of the precise ideological components of the dysfunctional ideology I am confronting in this post, and Dialogue With A Libertarian for a response to a comment that gets to the heart of the logical and empirical fallacies on which libertarians rely).

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