Real Life with Ryuei

The Growing Gap Between Rich and Poor

Though the article bends over backwards to show that conservatives don't see this as a problem at all, and that only crazy left-wing wackos would see this as problematic - the hard core of this article is that Alan Greenspan of all people is saying that the growing gap between rich and poor in this country is becoming a danger to our democracy. I remember when I was in the Navy ROTC in college and upon my commisioning taking a vow to protect this country from all enemies foreign and domestic. Well, the Al-Quaida are on the run or else being lured into Iraq by the lightning rod our our occupation so that we can use our military might against them (the effectiveness and/or morality of this is of course debateable) but I wonder if the domestic dangers of a crumbling infrastructure and the Brazilification of our country will ever get addressed. Having been in LA during the LA riots, I often wonder what will happen if the desperate, disparaged, and discarded will rise up again and when and where, and where will my family and friends be when it happens. I admit, I also wonder where will I be when it happens. Seeing a city in flames and the violent outrage of those forced by cycles of poverty to live in ghetttoes is not just a possibility for me, I have alread seen it. If things keep going as they are, I fully expect to see it again. I also know that right now my entire quality of life is threatened by school closures and the threat that even school bus service will be suspended (which would be an incredible hardship as my wife and I work full time just to afford a two-bedroom apartment that costs twice or three times the monthly mortgage of a sizeable house in other parts of this country). I see the infrascture that makes middle-class life possible crumbling around me. Articles like this supply the context for what I am feeling at the ground level.

I fear that the values of this country are geared towards Mammon and Mammon alone, and God and Jesus are used as a gloss and an excuse. And while children are not sacrificed to Moloch, the public school system that can provide them with a future is being abandoned and thus the future generations are being abandoned to poverty and drugs. I heard just the other day from a public school teacher that African-American and Latino boys entering high school are warned right off the bat that only 1 in 3 of them are expected to graduate. They are effectively told that most of them have already been written off. So it is to the grave or jail that they are written off to as they drop out of school and into the gangs. And of course their violence and desperation will effect, even mortally, those who do not give up on themselves or allow others to give up on them. And so the children are sacrificed after all.

Our culture is no longer, if it ever was, a shining city on the hill. It is Babylon, and if it does not change it will suffer the fate of Babylon.

I use Biblical imagery for two reasons, I happen to be reading through the Bible (again) and I realize that most people in this culture have a gut response to the Bible and even those who deny it find that it has an authoritative hold.

In 13th century Japan, Nichiren used the sutras in the same way to warn his society about its own corruption and degredation and false worship. For the Kamakuran samurai, the sutras had the impact as the Bible does on us. But I believe the message is the same - a society that neglects the value of people and turns to worship money and power instead, will fall from threats within and without.

Here is the article:

Rich-poor gap gaining attention By Peter Grier, Staff writer of The Christian Science Monitor
Tue Jun 14, 4:00 AM ET

WASHINGTON - The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.

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Is that a liberal's talking point? Sure. But it's also a line from the recent public testimony of a champion of the free market: Federal Reserve Chairman Alan Greenspan.

America's powerful central banker hasn't suddenly lurched to the left of Democratic National Committee chief Howard Dean. His solution is better education today to create a flexible workforce for tomorrow - not confiscation of plutocrats' yachts.

But the fact that Mr. Greenspan speaks about this topic at all may show how much the growing concentration of national wealth at the top, combined with the uncertainties of increased globalization, worries economic policymakers as they peer into the future.

"He is the conventional wisdom," says Jared Bernstein, senior economist at the Economic Policy Institute, a liberal think tank. "When I'm arguing with people, I say, 'Even Alan Greenspan....' "

Greenspan's comments at a Joint Economic Committee hearing last week were typical, for him. Asked a leading question by Sen. Jack Reed (news, bio, voting record) (D) of Rhode Island, he agreed that over the past two quarters hourly wages have shown few signs of accelerating. Overall employee compensation has gone up - but mostly due to a surge in bonuses and stock-option exercises.

The Fed chief than added that the 80 percent of the workforce represented by nonsupervisory workers has recently seen little, if any, income growth at all. The top 20 percent of supervisory, salaried, and other workers has.

The result of this, said Greenspan, is that the US now has a significant divergence in the fortunes of different groups in its labor market. "As I've often said, this is not the type of thing which a democratic society - a capitalist democratic society - can really accept without addressing," Greenspan told the congressional hearing.

The cause of this problem? Education, according to Greenspan. Specifically, high school education. US children test above world average levels at the 4th grade level, he noted. By the 12th grade, they do not. "We have to do something to prevent that from happening," said Greenspan.

So are liberals overjoyed by these words from a man who is the high priest of capitalism? Not really, or at least not entirely.

For one thing, some liberal analysts prefer to focus on the very tip of the income scale, not the top 20 percent. Recent Congressional Budget Office data show that the top 1 percent of the population received 11.4 percent of national after-tax income in 2002, points out Isaac Shapiro of the Center on Budget and Policy Priorities in a new study. That's up from a 7.5 percent share in 1979.

By contrast, the middle fifth of the population saw its share of national after-tax income fall over that same period of time, from 16.5 to 15.8. "Income is now more concentrated at the very top of the income spectrum than in all but six years since the mid-1930s," asserts Mr. Shapiro in his report.

For another, some Democratic analysts believe that Greenspan's emphasis on education as a cure ignores other causal factors of inequity. Data show an income gap widening among college graduates, says Mr. Bernstein. The quality of US high schools has nothing to do with that, he says. Instead it's partly a function of overall monetary and fiscal policies. "Greenspan takes a very long term view of the situation," says Bernstein.

On the other hand, some conservatives label the whole inequality debate a myth. The media's recent focus on the subject stems from its liberal bias and clever press management by Democrats, they say.

Inequality studies often ignore the wealth created by rising house prices, for instance - and homes represent the most substantial investment by many, if not most, Americans.

Nor do US workers necessarily perceive themselves on the losing end of a rigged capitalist game. A recent New York Times survey found that while 44 percent of respondents said they had a working-class childhood, only 35 percent said they were working class today, points out Bruce Bartlett, a senior fellow at the National Center for Policy Analysis. Eighteen percent said they grew up lower class, while only 7 percent said they remained in that societal segment.

When Democrats today raise the inequality flag, they are simply trying to attack President Bush's tax cuts, albeit indirectly, says Mr. Bartlett. "A lot of this is driven by the estate-tax debate," he says.

And as Greenspan himself points out, by many measures the economy is doing well. Unemployment is down, GDP is up. Inflation still slumbers. Current standards of living are unmatched.

"So you can look at the system and say it's got a lot of problems to it, and sure it does. It always has," Greenspan told the JEC last week. "But you can't get around the fact that this is the most extraordinarily successful economy in history."

Posted by Ryuei at June 14, 2005 03:48 PM