Obama’s Inequality Problem……..Illusory Wealth

Tomorrow President Obama will deliver the annual State of the Union (SOTU) address to an audience that will include members of the Congress, the Supreme Court, the national media and a large segment of the politically motivated public. It’s been widely reported the central theme of his address will be the growing problem of income inequality and the lack of upward mobility for the majority of Americans, not just the urban poor. I’m sure he’ll cast his proposals as representing an agenda to expand opportunity and ensure all have access to the American dream of intergenerational upward mobility, a dream that died in the U.S. heartland, in the industrial centers of Ohio, Michigan, Illinois and Wisconsin. The people in these areas of the country are looking for someone to resurrect their hope in the American dream, a need the Obama campaign understood and exploited in the 2008 campaign theme: HOPE and CHANGE.

Here we are in January, 2014 and President Obama needs to persuade the country there’s still reason to hope for change they can believe in, when the reality is his greatest accomplishment has been the unquantifiable job of preventing things from being much worse. The economy is growing slowly but steadily and unemployment has declined (though not for the long-term unemployed). Recovery from the Great Recession of 2008 has been robust for the top 1% who’ve captured the lion’s share of increases in wealth, practically nonexistent for the ‘middle class’ whose wages stay stagnant despite increased productivity and for the poor, it’s been Dickensian. After years of attempting to work with Republican leaders in Congress to enact legislation to address pressing national issues such as: job creation, infrastructure repair, immigration reform, climate change, education, housing and civic participation, President Obama is charting a different course – one that relies more on executive action. I say Hooray for that!!

Regardless of the course President Obama lays out in his SOTU speech, he and we face a somewhat intractable problem that it will take more than one President and one presidency to unwind. There’s no debate about the dramatic increase in wealth experienced by the top 1% over the past few decades. According to a recent report, 85 people control more wealth than the bottom half of the global population. The gap in the U.S. has similarly widened – in 2012, the top 1 percent collected 19.3% of all household income and the top 10 percent took home a record 48.2% of total earnings, The media punditry class likes to refer to these numbers when talking about income inequality, what they’re less likely to talk about is the source of the wealth that has fueled income inequality.

Despite elected officials promises to restore the American middle class, we’ve increasing become a country with just two classes economically – the class of people who work for money and the class of people whose money works for them. The financial leaders of Wall Street and the international investment community who’ve seen their wealth grow astronomically have a clearer understanding than most of us about the ephemeral nature of their success. As articulated beautifully by Paul Krugman:

We’re not talking captains of industry here, men who make stuff. We are, instead, talking about wheeler-dealers, men who push money around and get rich by skimming some off the top as it sloshes by. They may boast that they are job creators, the people who make the economy work, but are they really adding value? Many of us doubt it — and so, I suspect, do some of the wealthy themselves, a form of self-doubt that causes them to lash out even more furiously at their critics.

For a more colorful description of this lucrative game, this excerpt from the Wolf of Wall Street is spot on:

The wealthy are not entirely wrong to feel defensive. Increasingly Americans are realizing their interests are completely divergent from the interests of the ruling class. There was a time when corporations strived to be like IBM, a blue chip company with a reputation for having a great work environment and good employee benefits, now the model is Wal-Mart, the country’s largest employer with a reputation for having an oppressive work environment and such meager benefits many full-time employees still have to rely on food stamps to eat. Ever since the Occupy Movement defined the divide between the 99% who produce the wealth and the 1% who get to enjoy it, folks are paying more attention to the wolves of Wall Street.

The super-rich have a number of methods of lashing out. The most obvious is to gin up their attack dogs in the right-wing media to beat the drum of “class warfare” and pen the type of rant published recently in the Wall Street Journal comparing criticism of the 1% to Nazi persecution of the Jews and suggesting the country is on the verge of a “progressive Kristallnacht”. The less obvious but more effective method is the one they’ve employed over the last several election cycles – elect extreme right-wing candidates who have mastered 3D politics: Destruction, Distortion and Deflection – making it a self-fulfilling prophecy that government is unable to respond to the needs of the average person.

Unfortunately for the wealthy, despite their attempts at dumbing down the public, we’re just not there yet and filmmakers are playing their own subversive role in shining light on otherwise dark spaces. Millions of people will enjoy watching Leonardo DiCaprio and Jonah Hill as demoniacal deceptive traders in the Wolf of Wall Street. At some point after they stop laughing, they’ll think about the description of ‘The Market’ as a giant Ponzi scheme and wonder just how much of the wealth of the top 1% is based on creating tangible goods and services and how much of it is ‘wealth on paper’ generated by making successful bets with other people’s money? If they ponder it longer they’ll come to the revelation upon which revolutions are based: the ‘Kristallnacht’ event already happened but it was not perpetrated by progressives – it was the financial ‘Kristallnacht’ of 2008 when the wealth and savings of millions was destroyed by the recklessness of financial wheeler-dealers, who then turned around and blackmailed the government into forcing us to pay to repair the mess. Think about it – if the financial destroyers had been held accountable for their actions, we all would see these emperors have no clothes. Their wealth is not real and they create little of value.

Why are we letting these people ruin our economy, destroy paths to mobility and compromise our democracy? The wealth of a nation is in its people, not in the pockets of greedy and paranoid con artists.

About oshun55

Lawyer and public policy analyst focused on criminal justice, drug policy, racial justice, human rights, public health and gender equality
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