Wednesday, March 26, 2014

Inequality for All Review

Unsurprisingly, income inequality was at its highest in 1928 and 2007, or in other words right before the Great Depression and Great Recession.

If you look at some of the first articles I wrote on this website, you will notice that I used to be a bit (read: a lot) more conservative than I am currently. Back then, I watched a bit too much Glenn Beck, drank above the doctor's recommended amount of O'Reilly cool-aid, and generally saw no issue with many of the things that I do today.

My volte-face in regard to ideology is probably best revealed by my absolute adoration of Robert Reich's documentary, "Inequality for All," a film that tackles one of the most pressing issues in America today -- income inequality.

In many ways, this has been something that annoyed me even when I was a blind follower of Fox News. Even when I took everything Beck said as gospel, I always had a sense that there was something unfair about how the distribution of wealth works in this country.

This is where Reich's documentary comes in. I like it because it does not take an entirely liberal or conservative point of view. It simply argues that the Tea Party and Occupy Movement are trying to grapple with the same issue in different ways, and that that issue is the overly wealthy strangling our economy.

Reich's main evidence is some research that reveals how income inequality has been highest in America right before two major economic disasters: the Great Depression and the Great Recession. Reich argues that America experienced economic growth when there was more of a focus on growing the middle class. This was highlighted by the 90% tax rate on the super rich in the 1950s. (As an aside, I am curious to what research would say about income inequality during the Gilded Age, where America experienced many now forgotten economic disasters.)

Best of all, Reich criticized both Democrats and Republicans. Clinton did not do enough, and Obama has decent rhetoric but never follows through on it, as seen through his inability to raise the income tax on the highest wage earners in America and grow the middle class. Republicans were called out on their faulty logic that cutting taxes creates jobs. I had always been wary about that conclusion whenever I watched Beck and Hannity say it, but never had the evidence to back up my apprehensions.

Now, the truth is clear to me. The rich do not use their money to create jobs. They use it to create more wealth. That was Reich's message, and based on what I see going on today in Washington and on Wall Street, that seems to be what is actually going on.

Do not get me wrong, I have not turned into a socialistic hell-bent on the redistribution of wealth. I just think that the one percent has more wealth than they know how to handle. A 35% tax rate on them is far too low, especially given that many of them find a way to weasel themselves out of that rate (see Mitt Romney and capital gains).

Who really creates jobs if it is not the rich? Us! The middle class! We make up the majority of consumers in the United States. We are the ones who even allow for the creation of a rich class due to our purchases. If we are healthy economically, so is the rest of the country. 

On the flip side, if a rich person invests all of their wealth in some speculative endeavour, that money is essentially useless in terms of building up society. Whereas, if it were taxed, it would go to improving education, healthcare, etc. So it basically comes down to this: is the excess wealth the one percent has better served making them even richer, or in funding an infrastructure that will make the country as a whole stronger?

I think the answer here is clear. You cannot rely on the charity of billionaires, a common conservative argument. There needs to be a centralized orchestrator, like the Federal Government, who can delegate the funds towards things that benefit all of us. That is not to say that the government is faultless, indeed, watching Beck for years has shown me that they are often extremely incompetent.
Corrupt beauracrats are little better than greedy one-percenters. However, at the very least, we can vote out the scumbags in Washington. The same cannot be said of CEOs on Wall Street. 

Politics aside, I think that most of us, whether on the right or the left, can agree with Reich's primary message: that we need to find some way to help the people who used to be the backbone of America. The easiest solution would be to turn to what we know has worked already in the past: asking the super rich to pay just a little bit more. This should not be seen as a punishment. Only a return to the status quo. 

This article should not be seen as a demonization of the wealthy. Many of them are charitable and do a lot to help society. Even so, this would be a way to do even more. If they make their money off of consumers, would it not make sense to ensure that these consumers have more in their pockets? As was stated in the movie, it is time for a shift from trickle down economics to middle out economics. After living in such a terrible economy for several years, it is worth a shot. There will still be rich people in America. Their wallets might, however, be just a few ounces lighter than they were before.

No comments:

Post a Comment