Of the 1%, by the 1%, for the 1%.

Recent statistics of Wealth Distribution in The United States

The recent essay by Nobel Prize winning economist Joseph E. Stiglitz’s that appeared in the April/MayVanity Fair, the acidly titled “Of the 1%, By the 1%, for the 1%”,  encapsulates the most grim reality facing the United States.  It is the exact same reality that my parents took me aside to explain  one night so long ago: that the rich get richer and the poor get poorer every year in America.  This social ill has simply gone on for too long and has now reached a crisis point for which there must be a reckoning, and this reckoning must come and come soon in America.  I am gratified to know that no less a figure than Stiglitz shares my view. In his essay he quickly unfolds the case that the relentless co-opting of the U.S. government by the wealthiest 1%, who have vacuumed up 40 % of the nation’s wealth at the expense of the vast majority, will lead to a day that “even the wealthy will come to regret”.  Mark those words.  If Stiglitz is bold enough to say them from his outlook, I feel safer than ever saying them from mine.

It strikes me as extremely poignant that a man of Stiglitz’s position would valiantly trumpet this opinion. Stiglitz, as recipient of the 2001 Nobel Prize for Economics, resides at a high altitude within his priestly field and is no stranger to the recondite workings of the financial top 1%.  He received his first major government position in ’93 during the Clinton Administration, where he eventually rose to be the chair of the President's Council of Economic Advisors (1995 – 1997). His next position at the World Bank saw him serve as Senior Vice President and Chief Economist (1997 – 2000). These positions, plus his Nobel, endow him with no small amount of prestige and credibility on the subject of economic management and forecasting.

His stay at the World Bank was, however, short circuited. He was fired in 2000 for expressing dissent with its policies. He is a strong opponent of free-market philosophy, much preferring a system where government intervention is a system norm. Thus, he holds some views that might, dare I say it, be called "socialistic". Since then he has come to be regarded as the “rebel within”, a reputation that the title of his most recent book, Freefall: America, Free Markets, and the Sinking of the World Economy(2010),  would seem to justify.  In scanning a few of his most recent essays it strikes me that Stiglitz has grown increasingly rebellious and dissatisfied with things since the time of his firing.  Now he seems to actually have a foreboding of revolution.  

It’s more than a little telling that the opening sentence to his latest essay is, “Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few”.  That he chose this as his embarcation point strikes me as a dire alert to those  “1 percent of the people (who) take nearly a quarter of the nation’s income”.  Cassandra warned of the Trojan Horse.  Stiglitz warns of the enemy within the gates too.  Will they wake up in time to recognize their mistake and make restitution for it?  It's still not too late for the elite to respect their duty to the rest of us.  However, I doubt they will and I sense Stiglitz doubts it too.  That's why he speaks of actual revolution. This would be the death of Agamemnon, indeed.

We well know now that those first protests evolved into actual revolutions and to date have successfully brought down two Middle Eastern dictatorships and are working on at least three others as I write, amidst great bloodshed.  With this as his chosen backdrop, Stiglitz, though he doesn’t come out and directly say it, the echo inside the seashell of this essay is this: the wealth concentrated in the hands of the top 1% needs to be redistributed and revolution is always the ultimate recourse for an angry populace to do so.  Revolution is always an option.  Revolution is always a possibility. Revolution is always, always a high risk matter, one that common folk would much prefer to avoid, but if their hands are forced to the extent that they have been in the Middle East and to the extent that are being forced in America, then its probability greatly rises. And if full-blown armed revolution in the streets can occur in a place as highly repressive as the Middle East, where much of the policing had been culturally internalized, it can occur elsewhere, even America.

The gross economic inequality that led to the Tunisian and Egyptian revolutions exists at or is rapidly approaching the same level in America, and it is no stretch to imagine tens of thousands and then hundreds of thousands of protesters out in the streets of America if the working class continues to be pummeled by the upper stratum of society.  America got its first eyeful of this last March in Madison.  Granted that Americans aren’t living in the same magnitude of poverty as the Egyptians, who were estimated recently to have more than 50% of their population living on two dollars a day or less, but at the same time you have a situation in America where most Americans (58.5%) will spend at least one year below the poverty line at some point between ages 25 and 75.  Currently, 1 out of every 7 Americans is living in poverty with another one very close by and a couple more just a paycheck or so away from that abyss. In short, at least 4 out of every 7 Americans are getting squeezed and squeezed hard. That constitutes a tipping point, I would say.  Add to this the current attacks on labor and entitlements and you have the ingredients for foment.  If you add working class blood to it you get more marching, chanting bodies in the street and more blood.  This is the curdle of revolution.  Blood reifies it.

Since the night that my parents first informed me as a little boy of this spreading gap between rich and poor, economic inequality has risen by no less than 8%, wherein now1% of the population owns as much as 45% of the nation’s wealth. When I asked at the age of 8, “but why?”, my parents just shook their heads and said they didn’t know why. However, Stiglitz has an answer: “one big part of the reason we have so much inequality is that the top 1 percent want it that way”.

But that’s not the way you and I want it. During the last 30 years I have seen all of the ills that Stiglitz recites: decreased opportunities and a decline in income for the majority of the population with a concomitant increase in monopolization of wealth and power in the hands of the few, which has generated the innumerable waves of social distortion that Stiglitz variously mentions. The only things that have kept that social distortion even remotely in check are the government social programs that have assisted the middle and lower classes. But now these programs are in a fight for their lives and the shills for the top 1%, the Republican Party, most of whom are members of that top 1%, or close, are more and more aggressively coming out and saying what they’ve wanted to do all along—rollback these New Deal social programs. Paul Ryan’s budget was the first shot

House Majority Leader Eric Cantor said, very bluntly, on Fox two Sundays ago "We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be.” Destitute? The thing is, America isn't really broke as the Repugnicants and too many of their Demeanocrat fellows would lead us to believe with all the false choices that they present us that all lead to austerity.  What the current Republican leadership really wants America to be is one not only where the rich dominate. They also want an America where there is no support or protection for the rest of us. They don’t believe government ought to “promote the general welfare” -- only the specific welfare of the top 1 percent. No one else matters. However, it is greatly in their self-interest, that vaunted principle of Capitalism, for them to care otherwise. As Stiglitz concludes:

In recent weeks we have watched people taking to the streets by the millions to protest political, economic, and social conditions in the oppressive societies they inhabit. Governments have been toppled in Egypt and Tunisia. Protests have erupted in Libya, Yemen, and Bahrain. The ruling families elsewhere in the region look on nervously from their air-conditioned penthouses—will they be next? They are right to worry. These are societies where a minuscule fraction of the population—less than 1 percent—controls the lion’s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general.

As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.

Indeed, it has and I tremble.   

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