Thanks largely to the Occupy movement, the disparity between the incomes of the wealthiest Americans and everybody else – now a chasm of historic proportions – has exploded onto the national consciousness. Even the Republican presidential candidates have stumbled into the fray; motivated by the fact that the current frontrunner is a financier, they are arguing over what they insist are the differences between “venture” capitalism (good) and “vulture” capitalism (bad).
Debating the role of finance and speculation in our economy in this election year is a bit of good news for beleaguered Americans who have been steadily losing their economic standing for decades and encouraged to offset that long decline through borrowing on credit cards and homes – until this house of cards collapsed in 2008.
This is a discussion that President Obama should embrace for reasons that transcend the usual relentless drive to get re-elected. Obama has frequently recalled Martin Luther King’s dictum that “the arc of the moral universe is long but it bends toward justice.” Economic inequality became as much a priority for King as racial inequality towards the end of his life. As Ron Suskind points out in his masterly assessment of President Obama’s first years in office, Confidence Men, King wrote that, “‘the contemporary tendency in our society is to base our distribution on scarcity, which has vanished, and to compress our abundance into the overfed mouths of the middle and upper classes until they gag with superfluity. If democracy is to have breadth of meaning, it is necessary to adjust this inequity.”
That adjustment is now a matter of great urgency, because the arc of the moral universe has been twisted away from justice.
The middle class is no longer riding the coattails of the rich. To the contrary, the American dream – that through hard work one can hoist oneself up from modest beginnings or even poverty to a better life – has vanished. The Wall Street Journal reports that the economic recovery may take generations. LINK. Saturday’s New York Times contains an interactive feature that illustrates the deepening divide between the wealthy and everyone else. It lets you check out which professions are more likely to usher you into the 1% club, and how much you need to make to qualify as a member of the 1% in various cities throughout the country. ’
Readers' comments to the article are poignant in their reflection of the profound economic struggle so many Americans are facing. Not all those among the 1% are defensive; indeed, many who might be in the 1% themselves point out that when it comes to the distribution of wealth, and the opportunity that wealth provides, it’s really the .01% at the topmost pinnacle vs. the 99.99% – a distinction the data confirms.
Whatever the numerical pivot point, the destruction of the middle class in this country is a stunning transformation that King would have seized upon. As a community organizer, he understood the importance of calling out inequality wherever it is found in order to engage the powerful force that is the American people. Demanding the attention of the affluent, and their intervention, King said, “Injustice anywhere is a threat to justice everywhere.”
Contrary to some pundits and outspoken advocates of the .01%, challenging the increasing distance between the “haves” and the “have nots” – now that the category of “I have because I borrowed to get it” has been foreclosed – isn’t class “warfare.” As the New York Times pointed out: “Class reality has nothing to do with class warfare.”
The super-elites do not want the presidential candidates even to broach the subject of income inequality because they understand, as King knew, that the discussion inevitably will lead to a national demand for action by the 99.99%, which, to this point, is disorganized, fractured and only dimly aware of the strength they might wield if they were united.
Consider this historical example. Back in the mid-1980s, auto insurance rates in California were skyrocketing. Auto insurance companies weren’t just jacking up everyone’s premiums; they were basing rates on where a person lived, rather than their driving safety record. So people who lived in low-income neighborhoods often paid more for the insurance they were required by law to buy – if they could afford it at all. People who couldn’t afford it – lower middle class and the poor – were surcharged with a penalty for not having had prior insurance when they later scraped the money together to buy it. Not surprisingly, there were lots of uninsured motorists on the road, which forced up the price of insurance for those who did buy it. It all came down to one problem: insurance companies were unregulated and free to impose arbitrary prices. But the insurance lobby was able to block any reforms in the state legislature by pitting urban vs. rural drivers, and the middle class against the poor.
California voters, presented with the opportunity, were not so easily manipulated. By directly attacking and then addressing the inequities in the insurance marketplace, Proposition 103 educated and united the constituencies: the 1988 measure mandated an across the board, twenty percent rollback of auto, home and small business insurance premiums. It also ended zip-code based premiums for auto insurance. Everyone saved money; the only losers were the insurance companies. The industry spent an unprecedented $63 million on advertisements scapegoating the urban and, with a thinly veiled racial tinge, the poor. But the strategy didn't work. The voters saw through the industry’s cunning and passed the initiative, with conservative Republicans in Orange County joining Democrats in Los Angeles to provide the margin of victory.
As a candidate in 2008, Obama promised that the presidential election would be meaningful to the vast majority of Americans who had been disenfranchised by the corrupt political system that precipitated the financial collapse. But he failed to wield his victory as a sword on behalf of those Americans. Now he has a chance to win a second chance to do so. He faces a much tougher battle this time around, among other reasons because corporations are far more deeply entrenched in the guts of the democracy, thanks to the U.S. Supreme Court’s decision in Citizens United, which has unleashed the furious, dominating power of corporate money in electoral campaigns.
The nation’s future cannot be dictated by the 1% and their money – not if the country is to retain the democracy that was bequeathed to us by the Founders. If Obama or some other candidate engages the citizenry in a debate over the foundational issue of economic inequality, and offers a vision of democracy in which regular people are back in charge – starting with a constitutional amendment restoring the primacy of humans over money in the electoral process – he will be able to lay claim to having re-bent the moral arc of the universe traced by King.