In his recent book, Pinched, about the Great Recession, author Don Peck points out that the top 1 percent of Americans possess as much wealth as the bottom 90 percent. In terms of income growth, two out of every three dollars in growth goes to the top 1 percent, while the other 99 percent share one lousy buck.
A 2005 report by Citigroup concluded that the future of the American economy did not depend on the much-vaunted American consumer, but rather rested on the spending and investments of the very wealthy. The Citigroup analysts called this a plutonomy, in which economic growth is powered by the wealthy few. The global economy, with its rapid rate of change and complexity, said the analysts, would be exploited primarily by the "rich and educated."
The Republicans in Congress have, in effect, endorsed this view of the future of the American economy by arguing that economic growth rests on tax cuts for the wealthy and large corporations, cutting expenditures on social programs for the poor and middle class, and reducing government regulation of businesses, including environmental and safety rules. All this fits nicely into an economic view of America as two separate groups -- the rich and the rest of us.
Conservatives argue that subsidizing the rich and large multinational corporations, along with cutting government spending, will create jobs. The question, however, is what jobs and for whom? While the high-tech and financial industries clustered in places like Seattle, San Francisco, Boston and New York have quickly rebounded with high-paying jobs for the educated elite, entrepreneurs and Fortune 500 executives, jobs for the middle-class are rapidly disappearing, and there is little prospect that simply improving the lot of the rich and highly educated will help the vast majority of Americans to find a decent job.
Even if one concedes the argument (which I for one do not) that most of the future growth will come from the richest 1 percent of Americans and the handful of multinational corporations, is it really in the interest of America to wander down that primrose path? Throughout recent history, virtually every society that has ignored the fundamental principle of equality has run into serious trouble. A stroll through the leafy streets of an upper-class enclave in South America or the high walls of a Middle Eastern compound for the wealthy -- all equipped with machine-toting guards and high-tech surveillance cameras -- should convince anyone that, despite the economic benefits of a plutonomy, the social price is too great for any nation to endure.
America has always been -- and still remains -- dedicated to the principle of equality, even though (or perhaps because) many of its citizens had to overcome centuries of injustice and oppression. Equality of opportunity and equal treatment under the law are foundations of American society. These principles are not mere abstractions -- they have been critical to the tremendous success of the American economy over the past two hundred and thirty-five years. From small businesses to farmers, from steel workers to janitors, America represents the dream of a better life, based on equality of opportunity. While the odds are often long, and the dream is fading, there remains the hope that, with hard work and passion, success is still possible in America.
However, if we as Americans accept the idea that the only hope for our future rests with the rich and the multinationals, and that we must abandon the fundamental principle of equality of opportunity, then perhaps we need to take another look at the American Dream. Even if it is not strictly in our economic interest, don't we have an obligation to the "bottom 90 percent" of American society who are so easily dismissed as irrelevant to future economic growth? Do we really want to live in a country with a slightly higher GDP, but where 90 percent of the people live in stagnation or worse? And what would be the social consequences of abandoning our commitment to equality and tossing the American Dream overboard?
As President Obama pointed out in his speech to Congress recently, that is not the kind of America any of us want. It is certainly true that the American economy -- along with the global economy -- is in the midst of a deep crisis. There is great suffering as people lose their jobs, their houses and their future. And we must do everything we can to find jobs for the jobless and homes for the homeless. But we cannot forget our deep devotion to the principles that America was founded upon, and must not sacrifice our commitment to equality in the face of this crisis.
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