Friday, October 28, 2011

Social and Income Inequality: Does Occupy the Wall Street Group(s) stand a chance?

The rise of the Occupy the Wall Street Group(s) undoubtedly direct attention at one of the greatest irony in modern day America- we live in an era of untold and unimaginable social and income inequality, while at the same time, we have rallied to intervene and help those countries across the globe that we consider less fortunate than us. The greatest economic expansion of the past half a century and the transformation of America that is so admired by millions across the globe, have been at the back of the poor and middle class Americans. But exactly, how did we get to this crux, a junction in our Democracy, where the top 1% in the population has experienced expansion of after tax income and wealth to the tune of two hundred and seventy percent of the bottom 99%? How did we become the greatest super power, while the majority of our population continues to wallow in declining personal income? How did we allow the wealth of the top one percent of Americans to be out of whack with the remaining 99% in our Democracy?

Some observers believe that except for two or three administrations, Johnson, Carter and Clinton, the past Presidential Administrations, have mostly looked out for the wealthy at the expense of the middle and lower classes. The spotted upward mobility touted for the middle-income groups were actually ephemeral. The income and capital creation terrain were mostly skewed towards the affluent and the rich members of American society. A few spotted upward mobility among the middle class were propelled by public policies, without which, many Americans would have remained dirt poor. Some wealth creation and capital accumulation came out of the bulwark of inheritance that a few Americans have been privileged to. As the poor got poorer, the rich got powerful and bought political power through campaign contributions; and, where they remained outside political offices, many of them retained lobby groups that bid their interest in the halls of congress. 

The unfortunate aspect of the American Democracy is that: the rich used their capital to situate politicians into offices to serve their personal interest; and where they are able, actually write parts, if not most of the laws that are passed in congress in their private office, labeled think tanks! The result of this unfortunate arrangement is what has now walked itself into the political lexicon or reality of American life as documented for the last decade by Professor Vernellia R. Randall of University of Dayton Law school: 1) the gap between the rich and poor in the United States grew at the same pace as the economic growth. Statistics show that the richest 1 percent of the US citizens own 40 percent of the total property of the country, while 80 percent of US citizens own just 16 percent; 2) from 1977 to 1999, the after-tax income of the richest 20 percent of American families increased by 43 percent, while that of the poorest 20 percent decreased 9 percent, allowing for inflation. The actual income of those living on the lowest salaries was even less than 30 years ago; 3) a great number of Americans suffer from poverty and hunger. According to the statistics of the US government, over 32 million citizens, or 12.7 percent of the total population of the country, live under the poverty line. The incidence of poverty is higher than in the 1970s, and higher than in most other industrialized countries. U.S. Census.

Current statistical data, released by Census Bureau from its 2010 American Community Survey of 516 metropolitan and micropolitan areas, indicate widest ever income gap between American households since the tracking of data on household income through community surveys. The Rich hold down to wealth about 275 times than the poor. Today, when residents of metropolitan and micropolitan areas are divided into five groups of equal size, known as quintiles, based on their income levels, data shows that the least quintile of about 20% of the population earned least while the uppermost quintile, earned most since the recession. In less technical terms or jargon, according to the Congressional Budget office, a nonpartisan budget and tax analysis arm of the United States Congress: “For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007. Among metropolis with a population of one million, the widest gap between the rich and the poor are found in Los-Angeles, Miami-Fort Lauderdale and New York City, with increments from city to city. At the opposite end of the scale are the major markets with the lowest inequality scores: Virginia Beach, Salt Lake City and Washington.

Here we are in 2011, fighting an economic recession that is about to subsume any progress that the nation has made in half a century, an a few privileged millionaires are asking us to buck up, while more responsive and realistic rich folks like Warren Buffet are asking that the rich be taxed more. With the current ambivalence regarding what the Occupy the Wall Street groups want, will it be safe to say, that that is just belaying the point as the level of poverty among Americans has expanded exponentially. Although not with all certainty, the protected challenge of the current recession will likely expand the number of people that are likely to fall further into poverty. There are massive number of unemployed newly graduated college students and another thirteen to fourteen millions of the outstanding unemployed and underemployed. How unearth can a government continue to look elsewhere without doing something drastic or radical to change the faith of the people?

During the early times in this recession, December 2007, the outgoing Republican Administration attempted to rally around and developed bill(s) designed to save the banks and insurance companies from going under; because according to the Bush Administration, these financial institutions are too big to fail. The lesson from that experience is that the rich and their corporations are sacred cows; and, if nothing is done on time their situation may turn for the worse, a situation that the Republican Party finds unacceptable. In like manner, if public policies are not quickly fashioned and implemented, many more Americans will fall into poverty and some may actually commit suicide. Now, to say financial institutions are too big to fail, could very much be likened to, the nation cannot afford to have more Americans to fall through the cracks; failure to do anything  positive to alleviate the suffering of the underclass would be tantamount to negligence. Unfortunately, just as President Obama has striven to ensure that bills are passed to address the welfare of the poor and middle classes, Republicans continue to be the stumbling block. Sadly, the most recent bill on jobs creation has now turned to become several piece mill proposals barely walking its way through congress. To compound the problem, Republican leaders in congress are boasting that they will continue to stand up to President Obama's choice to help alleviate the suffering of millions of Americans. To Republicans, the issue of class war cannot be entertained; however, it was okay to bailout the banks, insurance and financial sectors, but not the working class.

Except there is responsive tax policies similar to those advanced by President Obama to help fill the gap in zillions of budget line items cut from the Federal and State budgets, the underclass in the nation is probably toast; the Occupy the Wall Street Group(s) may find themselves sleeping in the cold until kingdom come, as Republicans characterize their concerns as being anti-capitalism, a far cry from the truth; and, the cold play of the current recessional problems can only but escalate. There is an urgent need for a roll back on the privileges and tax cuts given to the wealthy in America, to deny this reality is to begin to play with the devil; hoping that all denunciation by the impacted groups will just go away. There is the need for the extension of the expanded child tax credit and home ownership tax credit to help many in the middle and poor classes remain in their homes. There is need for a new paradigm as to how to deal with the increasing disparity in income between the haves and have-nots. To deny these assertions is to be cruel to essence of a fair and judicious equity in our Democracy.
  Without these brakes and other public policies to fight the mysterious recession that began in 207, there is hardly anything that many people can expect from this dire economic time.
One challenge for the Obama’s administration is: how to defend its current executive power in helping bring some succor to American lives without congress. The home-owner’s mortgage refinance and student loans refinance and relief could help but some aspects of these initiatives may actually need congressional approval to actually float. It is okay for the President to do all that is in his executive power to change the tide of times on the mortgage and foreclosure issues; however with the student loans refinance and relief, there may actually be the need for congressional support.
President Obama has attempted to use executive power to accomplish some changes and address issues of immediate suffering among disadvantaged Americans. The President’s executive power may have been exhausted regarding the mortgage refinance, student loans' combinations/ refinance and possible reliefs in both areas; however, no one can tell if the wave of congressional attacks will not undo some of the reliefs the President has attempted to accomplishing through executive powers. At the same time, congress may find itself at the receiving end during the coming election, as many pressure groups are realizing they could actually exert their voting rights and priority in choosing new candidates into congress that will address their concerns. The current advertisements from the AARP indicate that exercising political power through block votes are alive and could really take a life of its own come next year's election. The same can be true of the poor and middle classes, as long as they all are in agreement to bring an end to the tyranny of the few, who are basically fighting in the interest of the rich and wealthy.

The elderly have indicated they will fight for the Social Security Payments preservation as well as their Medicare; if any politician doubts their fifteen million strong memberships as advertised by the AARP, let him or her do so at their peril. The same can be said of the teaming group(s) of Occupy the Wall Street, found across the nation: if these groups find themselves caged in, with the policing inadequacies that are recently reported, this somewhat lukewarm stand against the oppression of the privileged few and the wanton disregard of their plight in congress and mainstream media, may end up becoming the hugest fire that guts the political prairie in America. To paraphrase Robert Lucas, the potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparent disaster and damage to the psyche of Americans as many of them fall through the cracks due to the unyielding unemployment problems and the rising foreclosure crisis. The wind of change is out there, but no one can tell yet, where it is going to blow and whom may be swept away from political offices come November 2012!
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