America’s Rampant Inequality Impossible to Deny

Roger Bybee

The CIA ranks the country 64th, behind Ivory Coast and Uganda — but Fox’s banshees still scream class warfare’ when Warren Buffet wants to tax the rich

For years, America’s super-rich and their allies in Congress and the media have tried to deny that a tiny elite was growing astronomically wealthy at the expense of the vast majority of Americans.

But the vast gaping canyon between the richest 1 percent and Corporate America, on the one hand, and the rest of us on the other, has become so large and well-documented that denial no longer works. The ideological combat gets especially intense when it turns to the relatively minimal taxes that corporations and the rich pay.

What defense can be offered when billionaire investor Warren Buffet admits that he pays a 15 percent capital-gains rate on most of his income, while everyone else in his office (including the secretary) pays a considerably higher rate?

What can the pundits of the Right say when a corporation like General Electric makes $14.2 billion in profits in 2010 and not only pays no federal income taxes, but collects $3.2 billion in tax credits to lower future tax bills? Well, on Fox at least, they go on the offensive, accusing critics of the wealthy of cruel demonizing.”

The Right has a lot to justify: The gap between the top 1 percent and the majority is now so vast that three Citibank analysts in 2005 created a new term to describe the situation: plutonomy.” (Which Don Peck insightfully explains in The Atlantic.)

The inequalities in income and wealth have become so stark that America is increasingly no longer recognizable as the middle-class society in which many of us grew up. Where Americans once condescendingly mocked the gross inequalities so evident in the banana republics” of Latin America, the United States is now far more unequal than most Latin nations.

Significantly, the plight of the broad American middle class has been closely linked to the fate of the labor movement as it has come under siege in the last 35 years. While many middle-class people have long resented the gains made by blue-collar workers who often lacked higher education, the fact remains that as labor has lost ground in terms of real wages, so has the middle class.

Prof. Bruce Western of Harvard concluded in a study this month:

From 1973 to 2007, wage inequality in the private sector increased by more than 40 percent among men, and by about 50 percent among women. […] deunionization — the decline in the percentage of the labor force that is unionized — and educational stratification each explain about 33 percent of the rise in within-group wage inequality among men. Among women, deunionization explains about 20 percent…

Having invested in union-busting lawyers, private police, and anti-union politicians, America’s rich benefit immensely from such de-unionization. The most affluent Americans and big corporations have enjoyed a spectacular recovery from the deepest recession in 80 years.

While effects of the recession linger for working-class families in America — joblessness and insecure employment, loss of health coverage, exhausted unemployment benefits, falling home values, the threat of home foreclosure, to name a few — the prosperous and Corporate America have almost entirely avoided this pain. In fact, corporations saw their profits soar 243 percent in 2009 and another 61 percent in 2010. The wealthiest 10 percent now account for 60 percent of all consumer spending.

With most U.S. consumers having little money to spend, American corporations see little reason to crank up production and hire new workers in America. Corporations are sitting on at least $2 trillion in savings (plus another $1 trillion or more stashed outside the country) but have no reason to invest in the U.S. The consumer demand simply doesn’t exist in America, and corporations can sell to the engorged elites of emerging nations like China, India, Brazil, and Mexico.

Perhaps that explains why major corporate leaders seem perfectly complacent with the obstructive hijinks of Congressional Republicans, in whom they invested so heavily with campaign contributions (out-spending labor in 2008 by a ratio of 15-1) and who are committed to crushing any and all programs that might serve as a badly-needed economic stimulus.

When President Obama seeks a modest increase in corporate taxes and the closing of some of the most outrageous tax loopholes, he is cast as a Third World leader” — with all of its racial and authoritarian implications — and demonizing” the rich. 

Normally, these statements go unchallenged by talk-show hosts or most Democratic politicians, who seem to have a strong masochistic streak. But Jon Stewart’s August 18 Daily Show allowed the Right to run thorugh their string of talking points, followed by the kind of hard-hitting (and hilarious) commentary on U.S. inequality that seems utterly forbidden on major networks:

Sen. Marc Rubio (R-Fla.) said in June: It’s disappointing, it’s class warfare, and it’s the kind of language that you would expect from a leader of a third world country, not the President of the United States.”

Rubio’s comment perfectly set up this acid retort from Jon Stewart, who used CIA figures on income inequality to show exactly where America stands:

It’s true, because the United States of America is not a third-world country by any measure, except, perhaps, income inequality… where we rank… (list scrolls down) blabliddyblabliddyblabliddy… worse than the Ivory Coast, worse than Cameroon… 64th! Ahh! In your face, Uruguay, Jamaica, and Uganda! Uganda? Yeah, Uganda. Keep trying, Rwanda. Wow.

Stewart’s skewering of the Right on inequality is a powerful reminder of why labor needs more independent media that are unafraid to slaughter some sacred cows. And it’s also a reminder to do the slaughtering with good humor.

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Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Roger’s work has appeared in numerous national publications, including Z magazine, Dollars & Sense, The Progressive, Progressive Populist, Huffington Post, The American Prospect, Yes! and Foreign Policy in Focus. More of his work can be found at zcom​mu​ni​ca​tions​.org/​z​s​p​a​c​e​/​r​o​g​e​r​d​bybee.
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