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Depression
Mind the Gap!
There are radical differences in our political rhetoric, but only one reality.
Posted November 19, 2011
"Mind the Gap," the famous warning sign in the London Underground (where some station platforms are misaligned with the doorways of the subway trains) provides a metaphor and a battle-cry for our present condition. As the New York Times op-ed columnist Paul Krugman put it, "Republicans and Democrats don't just have different priorities; they live in different intellectual and moral universes." Worse yet, they have radically different views of reality, and about what is needed to re-start our stalled economy.
For Democrats, there is a moral imperative to provide for the basic needs of our fellow citizens at a time when 14 million people are officially unemployed and another 10 million are without work but are uncounted, or else seriously underemployed. To Democrats, this calls for such measures as job-creating initiatives, extending unemployment insurance, expanding the food stamps program, and protecting Social Security, Medicare and Medicaid.
For Republicans, taking House Speaker Boehner at his word, raising taxes on the "job creators" is both unfair and would undercut our economic recovery. The economy is stalled because the business community is "basically on strike" over high taxes, burdensome government regulations, and our ever-increasing Federal budget deficit. The solution is to lower taxes on the wealthy, drastically reduce the oppressive regulatory burden, and slash domestic (not military) spending. Following the conservative activist Grover Norquist, many Republicans view taxes, especially on the wealthy, as a form of "stealing".
As Krugman says, "the facts have a liberal bias." Economists are increasingly persuaded that the root of our current economic malaise is a lack of consumer demand - spending on goods and services. The combination of high unemployment, a depressed housing industry, home values that, for many owners, are "underwater" (worth less than their mortgage), plus heavy consumer indebtedness, tighter credit, and other factors have taken the steam out of our economic engine. Our major corporations are sitting on near-record cash hordes but are not spending it on job-creation because sales remain weak. It's economics 101.
As for those abused and striking business owners, this has been termed "a myth" by a long-time entrepreneur and venture capitalist, Garrett Gruener, who heads a new group called "Patriotic Millionaires for Fiscal Strength." They champion raising taxes on millionaires - yes, raising taxes. In a PBS Newshour interview, Gruener stressed that marginal tax rates (currently 35 percent on incomes over $1 million versus 39.6 percent in the years before the Bush era tax cuts) "literally has had zero impact on the investment decisions I have made." Gruener also calls the argument by Grover Norquist that taxes on the rich amount to theft "pathetic." Granted that taxpayer money is not always spent wisely; there is a lot of room for improvement. But "we make decisions as Americans ...to build another aircraft carrier or to build a freeway, and then we fund it...The decisions we make as a country are decisions we have to pay for...collectively."
Beyond the gap in our political rhetoric, the other gap that we need to be mindful of is a set of deplorable measures of national well being that rank us at the bottom of the list of developed nations. Thanks to the "99 Percent" movement, more of us are now aware that last year the top 1 percent of earners took home 24 percent of our total national income and the top 10 percent took home 49 percent. The other 90 percent of us got the remaining half. As for the distribution of wealth, the top 1 percent own 40 percent of the total and the top 20 percent own 87.3 percent. That leaves 12.7 percent for the other 80 percent of us. All told, some 50 percent of our workers earn less than $25,000 a year - most of them below the new poverty line figure of $24,343 for a family of four. Not only are these numbers shameful but they amount to a political time-bomb.
Among the many consequences of this extreme disparity of income and wealth, some 49 million Americans (one out of six) are now living in poverty, and close to 50 million Americans lack health insurance. An equal number, including 17 million children, were reported to have gone hungry at various times last year. Another 50 million have recently been reclassified as "near poor," meaning that one-third of our population, all told, are struggling economically.
This has affected other measures of our national wellbeing. We rank 45th in the world in infant mortality and 50th in life expectancy, behind every other developed nation. We have by far the highest crime and incarceration rates in the industrialized world. In comparative tests among nations of basic reading and math skills in 2011, our students ranked 17th in reading and 32nd in math proficiency. We even rank well down the list of nations in such measures as government corruption and trust in government.
The litany of depressing statistics could go on and on. The reality is that we are dreaming -- about a past that is long gone, and about some proposed fixes that would make matters much worse. The gap between some of our fantasies and the ugly reality is about as wide as the Grand Canyon. As the train carrying our hopes for the future is getting ready to leave the station for the 2012 election, we need to "Mind the Gap."
