Eric Alterman: We've become more unequal and that matters

[Alterman is a columnist for The Nation and for Media Matters, a journalism professor in NYC, a historian and an author.]

In the decade since the passage of NAFTA, labor productivity in the U.S. manufacturing sector rose between 70 percent and 80 percent, while real wages rose only 6 percent. In Mexico, productivity rose 68 percent, while real wages rose 2 percent. In Canada, the numbers are 34 percent and 3 percent, respectively.[i] The question for any democratic society is how to address this. Alas, we in the United States have done so by conducting what one conservative writer terms"a massive social experiment" in economic inequality. Over the last quarter-century, the portion of the national income accruing to the richest 1 percent of Americans has doubled. The share going to the richest one-tenth of 1 percent has tripled, and the share going to the richest one-hundredth of 1 percent has quadrupled.[ii] For working people, wages and salaries now make up the lowest share of the nation's gross domestic product since the process of collecting this data began more than 60 years ago.[iii] For the poor, just in the years since 2000, the number of Americans living below the poverty line has increased by nearly a third.[iv] Meanwhile, the average CEO of a Standard & Poor's 500 company took home $13.51 million in total compensation in 2005, a year in which the top 1 percent of Americans earned nearly 22 percent of all income.[v] Believe it or not, by 11:02 a.m. of the first workday of work on the first day of 2007, one of these average CEOs"earned" more money than the minimum-wage workers in his company will make for the entire year.[vi] The media tend to treat these trends as merely"the way the world works," but this is actually the essence of conservative ideology. As the political philosopher Michael Walzer pointed out in 1973:

At the very center of conservative thought lies this idea: that the present division of wealth and power corresponds to some deeper reality of human life. Conservatives don't want to say merely that the present division is what it ought to be, for that would invite a search for some distributive principle -- as if it were possible to make a distribution. They want to say that whatever the division of wealth and power is, it naturally is, and that all efforts to change it, temporarily successful in proportion to their bloodiness, must be futile in the end."[vii]

And yet, one cannot help but ask, why is this not the case in Europe or Japan?[viii] In fact, among major world economies, the United States in recent years has had the third-greatest disparity in incomes between the very top and everyone else; only Mexico and Russia are worse.[ix]

Only in the United States are the super-wealthy so powerful and their ideological interests so well tended and defended that their interests have come to stand as"principles" in our political discourse. As the historian Eric Foner notes in his history of"freedom," Franklin Roosevelt explained that"individual freedom" could not be said to"exist without economic security and independence ... for the average man which will give his political freedom reality." And his successor, Harry Truman, would use the phrase"economic freedom" in his 1950 State of the Union address to mean"a fundamental economic freedom for labor." But by the time of Ronald Reagan's second inaugural, the same phrase had come to imply not the right to organize or achieve economic security and independence, but deregulation, tax cuts, and an attack on unions on behalf of powerful corporations and their wealthy owners and investors.[x] By the second Bush presidency, following more than 20 more years of conservative agitation, the ideological demands of the super-rich had grown ever more extreme. For instance, Kenneth C. Griffin, who received more than a billion dollars in 2006 as chairman of a hedge fund, the Citadel Investment Group, could explain to a New York Times reporter in the summer of 2007,"The income distribution has to stand," adding,"I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard."[xi] Just what"principle" Mr. Griffin had in mind, he did not say. Meanwhile, this period in American history witnessed a pitched battle between members of the Democratic Congress and a Republican-supported group of private-equity billionaires fighting to retain their tax privileges. These included, as Warren Buffett explained, the right to"pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter." They insisted on this right, because to force billionaires to pay what bartenders must, would, according to wealthy Bush administration"pioneer" Wayne Berman,"disrupt thousands of partnerships around the country that provide the economic engine," and"punish innovators."[xii] In no other democracy in the world are the wealthiest members of society so generously indulged. This argument, so patently absurd from the standpoint of basic fairness, was nevertheless sufficiently respectable for its adoption by New York Sen. Charles Schumer, the third-ranking Democrat in the Senate leadership, one of the key architects of the 2006 electoral victory, and a self-described"progressive" politician (though not, in his own estimation, a"liberal"). Of course, Schumer had good political reasons to go to bat for one of his most important sources of campaign funds, and one that happens to be located in the state he represents, but the mere spectacle of a prominent center-left politician fighting against a tax increase for plutocrats without shame or apology demonstrates just how influential the power of money has become in 21st century America.

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Vernon Clayson - 8/10/2007

This is a silly commentary, the "rich" pay income taxes, even with the deductions they may claim they still pay in amounts that make them the major source of government income. Just because a bartender pays what to him seems a major hit, it is a piddling amount in the context of the system. A "rich" person contributes dollars to a program, e.g., defense, while the bartender contributes in pennies.
When you tell a cop you pay his salary it can be computed, your share in his salary is less than a penny, if he gave you a penny when you make that comment you would be ahead. Duh!

Steve Veatch - 8/10/2007

"I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard."[xi] Just what "principle" Mr. Griffin had in mind, he did not say. I'm proud Mr. Griffin is an American, too. The principle is that he is a pig. Sorry to use such retrograde rhetoric.

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