As President Obama begins his second term, he's not lacking
for challenges, such as jobs, immigration and gun control, not to mention Afghanistan
and Iran. Meanwhile, recalcitrant
Republicans contest very move the President makes. But Obama's biggest challenge, economic
inequality, gets little attention from many politicians.
To his credit, the President continues to decry
inequality. In his second inaugural address, Obama said,
"[Americans]
understand that our country cannot succeed when a shrinking few do very well
and a growing many barely make it. We believe that America's prosperity must
rest upon the broad shoulders of a rising middle class."
The President and most
Democrats recognize the gap between the rich and poor is now as large as at any
time in the last one hundred years. In 2011, the Congressional Budget Office found that between 1979 and 2007, " After-tax income for the highest-income households grew more than
it did for any other group" 275 percent for the top 1 percent of households, 65 percent for
the next 19 percent, just under 40 percent for the next 60 percent, and 18
percent for the bottom 20 percent."
Remarkably, Republicans don't seem concerned about the growing
economic divide. Many conservatives,
such as Arthur
Okun, believe inequality is the price America pays for an efficient
economy. They argue we shouldn't worry
about inequality so long as there continues to be social mobility and the
economy performs well. But the last
twenty years has seen a dramatic decrease in mobility and a marked increase in
economic instability.
In October, Berkeley sociologist Jerome
Karabel published a paper detailing the decline in US social
mobility: " Family origins matter
more in the United States in determining where one ends up in life compared to
other wealthy democratic countries. This
is a recent development. Studies of social mobility as far back as the 1950s
and 1960s showed that rates of movement in the United States were generally
comparable to other developed countries."
An August 16th, 2011, section of the PBS News Hour focused on the lack of public awareness of the growing economic divide. Many Americans cling to the notion that
wealth is relatively equally distributed.
The reality is that the top 20 percent of Americans have 84 percent of
the wealth, the second quintile has eleven percent, the middle quintile has
four percent, and the bottom forty percent has but .3 percent.
Despite these disquieting facts, Americans might tolerate record
inequality if it was the price the US paid for a dynamic economy. But Nobel Laureate Joseph Stiglitz argues the
reverse is true: inequality is bad for the economy. Writing in The New York Times Stiglitz observed,
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