The 1%, Inequality and You

book cover 197x300 The 1%, Inequality and YouIf you’re anything like me you might not have thought much about inequality over the last week/month/year.  If you are white, upper middle class, have no debt, a good family income and are healthy—it doesn’t cross our mind much. Unfortunately, if you don’t fit in any of those categories, there is a good chance that you experience inequality in dozens of ways on a regular basis.  Even worse, you might not even be aware of how your opportunities for a better future for yourself and your family are slowly being eroded.   But because SMART Living 365 is about waking up and living consciously, responsibly and sustainably in everything we do—and then making choices and decisions that lead to greater happiness and wellbeing—learning about the growing inequality in our country is essential.

The issue of inequality captured my attention because I started reading a book entitled, “The Price of Inequality—How Today’s Divided Society Endangers our Future.”  Written by Joseph Stiglitz, winner of the Nobel Prize in Economics, author of numerous books and a professor at Columbia University, this book highlights how inequality is growing in the U.S. and around the world.   The book is slammed full of facts and studies showing that those in the middle class and below in the U.S. (basically 90% of us) are increasingly disadvantaged.

Some of the more disturbing statistics reported is that ¼ of all the children in our country live in poverty.  In fact, 15.1 percent of Americans live below the official “poverty line”, while 1.5 million American’s actually live on $2 per day.  That’s right-$2 a day! If you, like me, thought that only happened in third-world countries, we are mistaken.  Of course the trickle down effect of such poverty is that hungry people are less productive, not to mention less motivated.  Plus, education scholars show that hungry children face impaired learning.  And what about if you have no health care and no money?  Surely we can all recognize that if you or a family member is in pain and needs medical care you’d do just about anything to help?  Plus, there is evidence that most children only rise to the level of education and success of that of their parents—if the parents are poor and uneducated—then the children will stay there as well.   Finally, those living on the lowest rung of income, end up living where the rest of us don’t want to—meaning areas that are highly polluted, crime-ridden, and otherwise unsafe.   And lest any of us think I’m only talking about those at the bottom economic rung of our society, compared to the 1%, everyone in the 90% is poor.

But again, why should you or I care if we don’t fall in that category?  First and foremost should be to show compassion for fellow human beings.  Beyond that, regardless of whether you consider yourself part of the upper 10% of our society or not—Stiglitz argues that inequality is extremely bad for the long-term economic growth and stability of our country.   Should our country continue to dissolve into a society where our democracy is owned by the 1% of the wealthy, then everything that has led to our greatness will be eroded.  In fact, according to Stiglitz, if the trust, social capital, and reciprocal good of America continues to fall, our country, our financial markets and our economy will further splinter and eventually fall.  In other words, if we don’t do it as compassionate people, we should still do it because it is actually good for business!

Another fascinating part of the book is how easily so many of us who fall somewhere in the middle, are being manipulated by those who are in the top 1%.  A list of the more obvious propaganda (falsehoods) that I have absorbed and passed on myself is:

#1 Many of us believe that poverty in America is not real poverty.  After all, everyone has a television right?  Wrong.  The statistics in this book prove how deep inequality is in our country.  Don’t believe me?  Then, reread the second paragraph above.

#2 If we try to slow down business and make things more equal it will hinder the economy.  Wrong.  The 1% and most big business wants us to believe that the economy is dependent upon them—but this is merely propaganda in order to allow them to write the rules benefiting them in most ways.

#3 Believing that polititians, economists and business people know more than us about how to create a healthy economy—and that they will also do the right thing for our country and its people.   This book offers too many examples to list but there is an enormous amount of evidence proving this to be false.

#4 Those in the top 1% are creating and sustaining jobs and business in our country.  The fact is that most of the uber-wealthy in our country inherited it—they did nothing to earn it themselves.  Most of their efforts are hanging on to it and avoiding having to share any with the rest of us.

#5 We had to bail out the banks because they were too big to fail.   Stiglitz makes it clear that we didn’t need to bail them out the way we did (without regulation).  But because they were behind the scenes writing the terms if the deal—they not only got tax payers to bail them out—they turned around and made billions under the new terms.

#6 It is unfair to bail out underwater homeowners—they should have known better than sign on to loans they couldn’t repay.  According to Stiglitz, the push by our government and the banking industry to promote homeownership and easy lending during the early 2000’s led to the banks profiting billions of dollars.  Comparing individual homeowners to big banks and their bailout is like comparing a child stealing a piece of candy, to the War in Iraq.

#7 The government is inefficient—privatization is so much more capable of running a business.  I was pleasantly surprised to see how wrong I was on this.  Actually, in most cases the government is much more efficient, but big business would have us believe otherwise.  The best example given is Medicare.  Medicare, a social program run by the government is much more efficient than current insurance programs.

#8 The current deficit problem resulted from overspending and too much government interference.   Stiglitz explains clearly that the deficit has nothing to do with entitlements.  He clarifies that it resulted from a) the wars in Iraq and Afghanistan; b) increased military spending; c) Medicare drug benefit in 2005.  Yes, in case you’re wondering these all occurred when George Bush was president.

#9 Europe’s debt crisis is a result of overspending and deficit  (just like in the US) –and austerity programs will solve the problem.  Stiglitz offers details showing that the crisis happening in Greece, Spain and Portugal is different than ours.  No other country controls U.S. dollars and we control our printing press.  The similarities are being made to promote the idea of cutbacks and control in our country by the 1%.

#10 America is the land of equal opportunity for all.  It’s not.  Read the book.

In case you’re wondering, the book is not about doom and gloom.  Stiglitz offers numerous suggestions about how this trend can be stopped and turned around.  A few of the more obvious suggestions are:

1)    Regulate and curb the financial sector.

2)    Make stronger and more effective competition laws.

3)    Improve corporate governance  (don’t let them give themselves pay raises!)

4)    Reform bankruptcy laws that are more equitable for student loans and homeowners.

5)    End government giveaways.

6)    End corporate welfare.

7)    Create a more progressive income and corporate tax system with fewer loopholes for the wealthy.

8)    Balance globalization.

9)    Maintain monetary and fiscal policies to promote full employment—with equality for all.

10) Correct trade imbalances.

 

Stiglitz also suggests several social programs:

1)    Improve education for all Americans.

2)    Help ordinary Americans save.

3)    Healthcare for everyone.

4)    Strengthening social protection programs.

 

Obviously I can only touch on some of the important facts and ideas suggested in this book during this short article.  But for any of us concerned about creating a world of peace and harmony, a world that works for everyone (not just those who have money and influence) then this book is worth a read.  Information like this is valuable for us all because in some cases if we aren’t part of the solution, we are contributing to the problem.   It is clearly more sustainable and responsible  (both qualities of a SMART life) to be conscious and aware of inequality—and then take action when possible to do whatever we can to serve the greater good.

 

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” Franklin D. Roosevelt

“There can be no peace as long as there is grinding poverty, social injustice, inequality, oppression, environmental degradation, and as long as the weak and small continue to be trodden by the mighty and powerful.” ~The Dalai Lama

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