As a new year dawns, life in the land of opportunity isn’t what it used to be for many Americans.
Today, our nation is marred by growing inequality, constricting opportunity, and declining social mobility- it has become a place where record-setting corporate profits do not translate to increased compensation for workers or even enough jobs for our legions of unemployed.
We live in a country where the wealthiest citizens often have lower effective income tax rates than many in the middle class; one where the villains who brought on the financial crash received bloated bonuses and had their firms rescued by government bailouts even as ordinary taxpayers received nothing but foreclosure notices, upside-down mortgages, and pink slips in return.
Our pain, their gain. The rising tide has lifted the private luxury yachts and left the rest of us drowning underwater.
Today, working families in America are receiving a raw deal.
This shouldn’t surprise us. Economic and political inequality are linked. The former inevitably leads to the latter as wealth becomes heavily concentrated and gains influence that it uses to secure additional advantages. Money talks and our politicians listen. Put simply, it is far more lucrative to make the rules of the game (or influence those who do), than it is to break them. Recognizing this, the rich have rigged the economic and political rules in their favor, producing a system that is increasingly unfair from the perspective of most Americans.
The result is systemic capture- a government run primarily by, and for the benefit of, the richest members of our society that prioritizes their interests and concerns.
Here, the hollowing out of the middle class, the financial crash, the recession, and the anemic recovery are all the products of a broken and dysfunctional system. Their lesson is clear: systemic capture is a dangerous and destructive phenomenon. What’s good for Wall Street firms and those that run them isn’t necessarily good for America. Put another way, the interests of the wealthy and those of the rest of the nation are not aligned; indeed, in many cases they are at odds. Moreover, inequality and political exclusion are expensive- they impede economic growth and impose huge costs on society.
Sadly, public policy choices that we have made- particularly the deregulation of the financial sector, the movement towards a less progressive federal income tax system, and the preferential tax treatment given certain types of investment income, such as capital gains and carried interest – helped fuel the rise of the rich and have contributed significantly to growing inequality in our society. However, if public policy has played a role in exacerbating inequality, then it can play a role in stopping or reversing these trends too.
Government has an obligation to intervene in the economy in defense of the common good. When the private interests of particular persons or industries clash with the general welfare of society as a whole, it is private interests that must yield. More broadly, we have a right to demand that the rich pay a fair share in taxes to support the costs of public goods like roads and infrastructure, education, and social protection programs such as food stamps, unemployment insurance, and retirement security. We have a right to demand an economy that generates adequate numbers of jobs that pay living wages. And we have a right to demand policies that produce a broadly-shared prosperity open to us all- to insist that our political and economic systems actually deliver on the promises of the American dream.
There is ample kindling for the fire of reform. America is dry tinder- legitimate grievances exist across a wide spectrum of our society. They are the common ground from which, despite all their differences, both the Tea Party and the Occupy movement emerged. In the end almost all of us, regardless of our race, religion, socioeconomic status, or sexual orientation are steadily losing ground to the wealthy and being victimized by a captured system. We can either passively accept more of the same, and a future of diminished horizons for our children, or we can free ourselves from the tired partisan narratives foisted on us to divide and distract us, and demand fairness- a better deal- with a single voice.
The great task that has been set before us in the coming years is simply this- to break the power of the wealthy and make America’s government one run by and for the people once again.