Usually if one person, regardless of their credentials as an expert, makes a statement that informs the problems plaguing a nation’s economic health, it is regarded as “one man’s opinion” even if they cite empirical data proving their contention. When another person, like a Nobel prize-winning economist, makes the same statement and provides further proof their “opinion” is valid, it should arouse attention of the nation’s leaders; unless the nation is America and Republicans hold the reins of power. Over the course of the past year, President Obama, Nobel prize-winning economist Paul Krugman, and every American, whether they are wallowing in poverty and barely hanging on to middle class status, have said America’s income inequality is strangling economic growth. Now, a panel of economists has joined the chorus of noted economists, President Obama, and struggling Americans to assert categorically that not only is income inequality crushing the life out of the population, it is holding back the economy.
Yesterday, a majority of over three dozen economists surveyed by The Associated Press expressed their concerns that as the richest Americans continue to prosper beyond their wildest dreams, middle class pay has stagnated or decreased, tens-of-millions of Americans earn poverty wages, and it is the primary reason the economy is struggling. Indeed, although it has been a trend over the past twenty years, it has gotten much worse after the Great Recession because even though the economy is recovering, all the wealth has went directly to the top two percent as middle class and working-poor Americans watched their incomes decline. The economists’ concerns put them in the middle of a significant political debate over income inequality between Republicans and President Obama who last month gave a speech on the issue he called “the defining challenge of our time.”
The economists’ greatest concern is that “higher pay and outsize stock market gains are flowing to affluent Americans” who spend much less of their substantial income than the working-poor and middle class who make up the greatest percentage of the population and have not seen their incomes rise. In fact, according to mountains of government data and studies by real economists, while the richest 5% of income earners watched their income rise by 17% (adjusted for inflation) over the past 20 years, the average middle class income rose less the 5%. Since the Great Recession, the vanishing middle class certainly saw their fortunes decline while the richest 2% of Americans grabbed 90% of the wealth as the nation’s economy clawed itself back from the abyss.
According to the consensus of the three dozen economic experts, the problem for the economy is that it requires “a broader spending base; you want more people spending money. The broader the improvement, the more likely it will be sustained.” The analysts’ primary concern is the economy, and they concurred that it would be better able to sustain its growth if the riches were more evenly dispersed, but the wide gap in pay limits the ability of poorer and middle-income Americans to improve their living standards. Although their concern for the economy is all well and good, the real issue is what little the poor and middle-income Americans have leaves them in a position to afford little more than food and shelter if they are lucky. That sad fact is the fault of Republicans and their Reagan-era assault on the labor force and gifts to the rich.
According to the Organization for Economic Cooperation and Development, America now hosts the highest proportion of low-wage workers in the developed world, and like the economic experts noted, the prevalence and increase of low-wage work is behind rising income inequality that is hampering economic recovery. President Obama broached the subject of low-wage workers in his recent economic speech where he said, “We know that there are airport workers, and fast-food workers, and nurse assistants, and retail salespeople who work their tails off and are still living at or barely above poverty,” but he failed to say the reason tens-of-millions of working Americans are living in poverty is because their employers depend on the federal government, and American taxpayers, to subsidize their low pay with various forms of public assistance allowing corporations like Walmart, McDonalds, and America’s banks to pay poverty wages and post obscene profits. The profits, by the way, contribute to the income gap that is holding back the economy and crushing the life out of low and middle-class Americans while corporations, CEOs, and shareholders who make up the richest 2% hoard all the wealth.
The President did call for an increase in the minimum wage, but that prospect, like unemployment benefit extensions, food stamps, infrastructure improvements, and job creation measures went out the window when Democrats failed to include them in the bipartisan budget agreement due to be enacted at the first of the year. As one Democratic Senator said, any chance of passing anything to help the economy, or the people, was lost when Republicans promised to “take those issues up after the first of the year.” With Republicans controlling the House, and their counterparts controlling the Senate by way of the filibuster, it is game over for any legislation addressing the plight of struggling Americans or the growing income inequality.
It is still unclear if Democrats considered the budget agreement a victory because they prevented Paul Ryan from ending Medicare as we know it, privatizing Social Security, eviscerating safety nets, or giving tax cuts to the richest Americans, but what is clear is they forgot who won the 2012 Presidential election. Paul Ryan and Willard Romney ran, and lost, on austerity economics benefitting the richest Americans, and he and Republicans will hold the debt ceiling ransom for the remaining parts of their losing economic proposals. However, even if the President holds firm on the debt ceiling, there is no vehicle in either the House or Senate to address “the defining challenge of our time;” income inequality.
Now that President Obama, Senator Bernie Sanders, Paul Krugman, three dozen of America’s leading economic experts, and every American struggling to survive has identified income inequality as the source of economic malaise and a nation wallowing in poverty, it should be apparent to Republicans their “trickle down” economic policy is a failure. But they proceed undeterred waging class war on 98% of the American people as mercenaries for the richest Americans taking all the wealth in America. In fact, even Pope Francis identified income inequality as the source of America’s economic woes and explained why it continues plaguing America. He said, “trickle-down theory’s promise was that when the glass was full, it would overflow, benefitting the poor. Instead, what has happened is that when the glass is full, it magically gets bigger so nothing ever comes out for the poor.” There was no magic glass; only Republicans replacing it with a bucket to enrich the wealthy, widen the income gap, ravage the poor and middle class, and as everyone now knows, the economy.