In the week that we celebrate Labor Day, it is disheartening to read about the economic status of Americans in the middle class and below. They represent 80 percent of the population, but their combined wealth constitutes only 15 percent of the country’s total wealth.
The gap between the very rich and their countrymen has widened. One recent report found that the gap between rich and the rest of us in 2005 was as high as it was in 1928 — the year before Black Friday on Wall Street and the start of the Great Depression.
And the gap has only widened in the past five years. Many Americans are not only out of work, they have seen their own wealth diminished by the housing bust that began in 2008. For most families, their homes are their biggest, single investment, and millions now owe more on their homes than they’re worth. Foreclosures number in the millions.
This trend really began during the 1970s. As more women entered the workplace, family incomes rose and people could afford more. But their individual incomes didn’t improve nearly as much as those at the top.
No figure illustrates this better than the difference in pay between company executives and their average worker. In 1965, CEOs in the United States earned 24 times more than their average worker. In 2005, CEOs earned 262 times more than their typical worker. That means the boss made more in one workday than an average worker earned in 52 weeks.
This is not good for any country, especially a democratic nation like the United States whose political stability depends on a large, financially healthy middle class.
Almost every political survey at the start of this fall’s election says that the top concern for voters is the economy, mainly how to get it started to create jobs. The current Great Recession began after the mismanagement of Wall Street and the big banks by the George Bush Administration. They and their champions such as the Wall Street Journal believed the “market” would be the watchdog on flim-flam financial dealings.
Congressional Republicans are calling for the same cure. They voted against the stimulus. They voted against financial reform. They voted against extra unemployment benefits.
Now, they want to give tax breaks to the richest Americans who will invest in the market, which will make more jobs. This is proven nonsense.
President Obama used last year’s stimulus of about $800 billion to get the economy moving again. It worked.
But it wasn’t enough. What we do next with the economy is the debate we should be having in this election, not whether Mr. Obama was born in America or the new color scheme in the Oval Office.
If Republicans win either house in Congress and apply their “do nothing” ideology to the economy, the country will get what it got in 2008. Another panic and more misery.