The income inequality gap between rich and poor is expanding in our rebounding economy. In the U.S., it grows at a faster rate than in any other developed country. The top 1 percent has benefited from 95 percent of the post-recession growth since 2009.
Trailing far behind, 90 percent of Americans’ salaries stagnated. Their benefits have been sliced. Job security isn’t secure. Forced to work longer hours, wage-earners adjust to fewer protections caused by shrinking unions and reduced workforces.
Still, some support this leap in wealth for the 1 percent. Advocates dismiss economic critiques offered by religions. For instance, Jesus encountered a rich young ruler. After posing constructive questions, this aristocrat became annoyed with the rabbi’s responses. Discover purpose in life by leveling the economic playing field, advised Jesus. “Sell all that you have and distribute it to the poor” (Luke 18:22).
Finding Jesus’ counsel irritating, the rich young ruler went away sad because he expected kudos for investing wisely.
In the colonial era, Alexander Hamilton established a legacy which insists that income inequality is inevitable. Economic conservatives march in lockstep with this conviction and muzzle those who dissent from their party line.
Serving as secretary of the treasury in George Washington’s administration, Hamilton argued that natural monetary inequalities would increase as time went on. He assumed this natural economic cycle was set. Consequently, Hamilton didn’t expend energy to remedy disparities. The top 1 percent still bow before Hamilton’s fiscal creed.
Is the Wealth Gap Good?
Is the expanding wealth gap good for the economy? Some conservatives are voicing misgivings.
In early January, Representative Paul Ryan spoke at the Brookings Institute and sounded like President Barack Obama about broadening equal opportunity. He stated that economic policy must shape a society in which “the condition of your birth does not determine the outcome of your life.” Representative Ryan echoed Lincoln’s convictions at the Republican Party’s founding in 1861. The Great Emancipator wanted citizens freed from destitution by a government that provided conditions “to afford all an unfettered start and a fair chance in the race of life.”
Other conservative pundits support government for cultivating broad-based opportunity. George W. Bush’s former speech writer Michael Gerson and colleague Peter Wehner, in a recent issue of “National Affairs,” build on Lincoln’s theme of equal opportunity. They believe that “government holds some responsibility for creating the ground for that equality of opportunity which is not a natural condition.”
Early in the 20th century, Republican presidents Theodore Roosevelt Jr. and William Howard Taft battled robber barons holding enormous wealth in railroads, oil and steel. These industrial titans rode on capitalistic rails unobstructed by government regulation.
Allying with investigative journalists, Roosevelt and Taft rallied public sentiment against these financial trusts. Historian Doris Kearns Goodwin in “The Bully Pulpit: Theodore Roosevelt, William Taft and the Golden Age of Journalism” deftly shows these presidents busting economic trusts — the 1 percent.
“Time was when the least government was thought to be the best,” recollected Taft, “and the policy which left all to the individual, unmolested and unaided by the government was deemed the wisest.”
When industries consolidated into financial powerhouses and the wealth gap increased, Taft “clearly recognized” that the government had responsibility “to further equality of opportunity in respect of the weaker classes in their dealings with the stronger and the more powerful.”
Republicans such as former President Taft don’t wage class warfare against the 1 percent. They realize income inequality slows our economy. Rana Foroohar, Time Magazine’s financial commentator, pinpoints how wealth coalescing among the few narrows the American dream for the many. “Inequality matters for lots of reasons: it makes countries less economically and financially stable, it dampens growth by keeping wages and spending low and it reduces social mobility,” reports Foroohar.
Nothing in the Middle
“Yes, we have a recovery,” she concludes, “but it’s a bifurcated one. There are jobs for Ph.D.s and burger flippers but not much in between. The rich are indeed getting richer: the top 1 percent took 95 percent of all new wealth created in the U.S. from 2009 to 2012” (Time magazine, Feb. 10)
Fohoorar suggests financial changes to redistribute wealth without gouging those at the top of the financial pyramid. “ ... We need to have a serious conversation about raising the capital gains tax, ending deductions that favor debt over equity and disproportionately reward the rich, and increasing incentives for firms that put more money into Research and Development and less into buybacks or overseas bank accounts.” Add to this removing the salary cap on social security payments.
Restoring income balance is not a socialist ploy. It’s a sensible way to rev capitalism’s engine and empower equality of opportunity to more deserving citizens.
The Rev. Dr. Jack R. Van Ens is a Presbyterian minister who heads the nonprofit, tax exempt Creative Growth Ministries (www.thelivinghistory.com), which enhances Christian worship through dynamic storytelling and dramatic presentations aimed to make God’s history come alive.