Why are conservatives still turning a blind eye to wealth inequality?
From the pages of In Business magazine.
When President Obama gave a speech about the dangers of inequality late last year, conservatives reacted as if he’d built a pyre out of American flags and Duck Dynasty swag on the lap of the Lincoln Memorial statue and used it to roast Nancy Reagan alive.
Such is the derangement in evidence whenever anyone makes the fairly obvious point that it’s a bad idea to nurture an economic system in which a vanishingly small minority continues to rake in an outsized share of national wealth.
Conservatives’ response was as tiresome as it was predictable, and boiled down to this: “Why aren’t we focusing on economic growth instead of harping on who’s rich and who isn’t? Envy is such an unseemly emotion, after all.”
Of course, if you want a real-world comparison of progressive vs. conservative approaches to the economy, you need look no further than Scott Walker’s Wisconsin and our Viking-hailing/lutefisk-scarfing neighbors to the west.
As University of Minnesota political science professor Lawrence Jacobs recently noted in a widely circulated New York Times op-ed, Minnesota is beating our brains out when it comes to job growth, and they’re doing it with an unabashedly progressive governor at the helm.
Now, that’s just one example, and it would be reckless to conclude that it augurs a new age of progressive triumphalism, but it does prove this: The idea that economies always function better under the watchful eye and iron hand of conservatives is demonstrably false.
And here are two other conservative assumptions that are just as false:
1. Inequality and economic growth are completely separate and unrelated phenomena.
2. People who are on the bottom rung of the ladder more or less deserve to be there. If they simply worked harder and smarter, they’d be on the same fast track as the wealthy 1%, the very wealthy .1%, or the gobsmackingly wealthy .001%.
Of course, the first assumption defies both common sense and research.
Consider a September 2011 International Monetary Fund study that found that income inequality was the most important factor affecting the length of a country’s growth periods. As the study’s authors, Andrew Berg and Jonathan Ostry, noted at the time, “a 10 percentile decrease in inequality … increases the expected length of a growth spell by 50%.”
And that only makes sense. If you want as many people as possible to buy goods and services, you want as many people as possible to have significant disposable income. At some point, as more and more cash gets sucked past the event horizon where the ultra-wealthy (think the Koch Brothers and the Walton family) blithely detach from the rest of us, you’re bound to see the system begin to implode on itself.
Take, for instance, these statistics: The wealthiest 1% own approximately 46% of global wealth. According to one estimate, the top 1% in the U.S. own 35.6% of all the nation’s wealth, while the bottom 80% combined own just 12.8%. And those are 2009 numbers. The recent recovery, which has largely been a stock-market recovery, has likely skewed those stats even more. (While space limitations preclude a thorough dissection of this trend, it’s not hard to find more supporting evidence. Simply Google “wealth inequality,” “income inequality,” or “Donald Trump’s tricked-out bidet.”)
As for conservatives’ second assumption — that the degree of inequality we’re now experiencing is the rightful consequence of dissolute living on the part of society’s “takers” (the Waltons’ vast inherited wealth notwithstanding) — that’s largely a myth as well.
Look at any chart tracking the nation’s productivity vs. workers’ wages from the ’70s onward and you’ll see a clear separation. As workers’ wages have flat-lined, productivity has continued to soar. Clearly all that wealth is going somewhere other than poor and middle-class workers’ pockets. And if you can find a chart depicting the income gains of the ultra-wealthy during that same period, you’ll see where.
When conservatives scream “class warfare” in the face of these facts, remember that it’s really just clumsy sleight-of-hand. While there may indeed be a class war raging in this country, there can be no doubt about this conclusion: The rich have already won.
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