Have We Completely Lost Our Way?

Posted by Bob Lord

We all know about the huge disparity in wealth and income. Unfortunately, we've actually been underestimating, badly it seems, that disparity. Check out these two pieces:

http://www.huffingtonpost.com/2012/07/22/us-poverty-level-1960s_n_1692744.html?ir=Politics&ref=topbar

http://www.guardian.co.uk/business/2012/jul/21/offshore-wealth-global-economy-tax-havens

The first is a post in today's Huffington Post, which describes how poverty in America is at a level not seen since the 1960's. In other words, we've lost all the gains achieved in Johnson's Great Society program. Undoubtedly, things will get worse for those at the bottom in America before they get better. 

The second piece, from the Guardian, describes how the amount of wealth concentrated at the top has been vastly underestimated, as the wealthy have stashed tens of trillions in tax havens. This exposes the fallacy of the trickle down theory, as compared to the actual result of right wing economic theory, the Guardian piece notes:

"These estimates reveal a staggering failure," says John Christensen of the Tax Justice Network. "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people.

 "This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich."

The Guadian piece notes how the foregone taxes on the trillions in offshore accounts of the ultra rich could make a huge dent in the suffering of the world's poor. 

With that as background, consider the nature of the discourse in American politics. On tax policy, the Republicans, led by a member of the group making use of tax havens to shelter massive amounts of wealth, seek to further benefit the ultra wealthy, while the Democrats, afraid to anger their corporate sponsors, seek ridiculously insufficient moves towards tax equity and fairness. At the same time, the debate regarding the social safety net centers around how far to cut back on benefits, with the difference being that the Republicans seek to slash, while the Democrats would prefer to trim. The obvious need to enhance benefits for the poor is not even on the table. 

You have to question whether a victory for Democrats this cycle would be a good thing. On the one hand, it would at least avoid some of the pain that would be inflicted on the poor and middle class were Romney to win. On the other hand, a Romney victory might accelerate the onset of the uprising we so desparately need. A Hobson's choice if there ever was one.