Obama Pledges to Reduce Economic Inequality

Obama's budget represents "a historic shift in the ideological direction of U.S. economic policy", ending our three decades+ agenda of cutting taxes for the rich and shifting the economic burden onto the middle-class and poor.  Before you dismiss me as a misguided liberal, consider these realities:

...out of the world's 120 major cities New York [is] the ninth most unequal in the world and Atlanta, New Orleans, Washington, and Miami had similar inequality levels to those of Nairobi, Kenya and Abidjan, Côte d'Ivoire.

The life expectancy of African-Americans in the US is about the same as that of people living in China and some states of India, despite the fact that the US is far richer than the other two countries.

Beginning in the 1970s and accelerating after 1980, the US began undoing a series of policies that dated to FDR [that] led to what historians call the "Great Compression" - a flattening of income so that by 1964 the ratio of CEO pay to average worker pay was 24:1, the narrowest in the nation's history. Before the financial meltdown the ratio was around 400:1, or back to levels last seen in the late 1920s. And this is actually down from a high of 525:1 in 2000 (the reason is that executive compensation is largely paid in stock). In 1970, the top 1% of Americans controlled 8% of the nation's wealth, by 2000 they controlled 15%. In 1973, the income of the top 20 percent of American families was 7.5 times that of the bottom 20 percent. By 1996, it was 13 times. By 2006, it was 18 times.

The inequality gap in the United States is associated with higher levels of overall and child poverty relative to a majority of OECD countries and even some developing countries...The increase in inequality, Mr. Summers would say, meant that each family in the bottom 80 percent of the income distribution was effectively sending a $10,000 check, every year, to the top 1 percent of earners.

And that income "transfer" came as our real wages stagnated, so that we were earning less than we were in the 1970s, including seeing our median incomes shrink most recently under Bush.  So many men have been laid off in 2008 that more women may be in the workforce for the first time ever, a dubious achievement considering we are more likely to work part-time or in jobs that pay less and lack benefits.

Now, I honestly have to ask: do you think the disparity between executive and worker prosperity is fair?  Really?

Do you think we should maintain these trends?  Because we can ask our government to stop fiddling with our paychecks, and let this recent tradition continue.  We are citizens and voters.  We can say we'd like it if CEOs and their ilk at hedge funds and oil companies and drug companies and auto companies and financial firms continued to earn these much deserved profits.  We can ask to keep anemic pay increases, higher healthcare payments for less access to physicians, more punitive bankruptcy laws, and more and more jobs lost to higher productivity for less money in our pockets.  That's our perogative.

But I'll ask another question to some of you: do you honestly think you're better off now than you were 10, 20, 30 and 40 years ago?  Why or why not?  What would you change if you could?  Whose or what fault is it that you are better or worse off?

The irony here is that under Reagan and both Bushes our national debt soared, mostly due to massive military spending (and not on soldiers, vets and their families).  Yet Reagan's mantra that government is the problem and should shrink persists, even as a majority of Americans voice support for Obama's economic initiatives.  That, my friends, is revealing of the dominance of a conservative ideology despite the fact that it hasn't worked for the vast majority of us.

The Washington Post has some helpful graphs of Obama's proposed spending priorities, and NycWeboy, as expected, :), has the cold shower details on why his budget promises will fail.  I don't have a position on its potential just yet. But I do know that if there's one thing a government can do, it is declare our economic priorities, where, if we're able, we will invest and spend and tax and save.  I like what Obama's budget has to say, and for me, that's an important start.

(Photo by Afroswede)