The US Population Is Increasingly Divided By Wealth What Is the Future of the US Economy?, 2013 Listen The US Population Is Increasingly Divided By Wealth Patrick Martin is a writer for the World Socialist Web Site, an online publication that opposes the capitalist market system and seeks to establish socialism throughout the world. As the American economy has deteriorated, the division between the super-rich and the poor has grown dramatically. As the job crisis has grown worse, many American children (one in four) have had to depend on food stamps to get by. Meanwhile, other Americans possess excessive wealth, allowing them to buy influence in Congress. America at Christmas 2011 is a society of mass poverty, on the one hand, and vast wealth accumulation, on the other—tens of millions of people are poor and desperate, while a relative handful enjoy riches undreamt of by the Egyptian pharaohs or the aristocracy of Louis XIV. Government agencies and social service groups document the tidal wave of human need in statistics that are increasingly mind-boggling: 50 million Americans live below the official poverty line, while another 100 million live in near-poverty, struggling to support themselves on incomes so low that they are one misfortune away from destitution. The Job Crisis Some 25 million workers are either unemployed or underemployed, 50 million live without health insurance, one out of every seven Americans receives food stamps. The number of self-employed Americans has fallen by two million over the past five years. Nearly six million of the jobless have been out of work for more than six months. The jobs crisis has steadily worsened, not only year-to-year, but decade after decade. American capitalism continues to generate record corporate profits and wealth for the super-rich, but is less and less able to provide employment for working people. One out of every four American children depends on food stamps. Some 1.6 million children were homeless at some point or other during this year [2011]. According to a study by the McKinsey consulting firm, it took six months for the US economy to return to pre-recession job levels after the 1982 recession. After the 1991 recession, the recovery in jobs required 15 months. After the 2001 recession, it took 39 months. Some 48 months have already passed since the current slump in the labor market began, and there are six million fewer people employed than in December 2007. McKinsey initially forecast that it would take 60 months before jobs regained the level of 2007, but at the current level of job creation, it would take 78 months to reach the level of 146 million workers employed before the onset of the recession—assuming that there is no further deepening of the economic slump. The protracted duration of mass unemployment is the driving force of a social crisis that blights the future of young and old. One out of every four American children depends on food stamps. Some 1.6 million children were homeless at some point or other during this year. For young workers aged 18 to 24, jobless rates exceed the Depression level of 20 percent. Nearly 20 percent of all American men between the ages of 25 and 34 are now living with their parents. The Dwindling American Dream Meanwhile, those nearer the end of their working life have little to look forward to: according to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement. While the vast majority of the American people confront increasing difficulty in meeting their basic social and economic requirements, the financial aristocracy lives in a different universe. Four million American families have seen their homes foreclosed since the subprime mortgage crisis first erupted in 2007. Nearly 12 million families occupy homes that are under water, financially speaking—the mortgage debt is more than the dwellings are worth in the depressed housing market. The entire political establishment, the Obama White House and Congress alike, is callously indifferent to the suffering of the population. The Democrats and Republicans speak for different wings of the same ruling elite. While the vast majority of the American people confront increasing difficulty in meeting their basic social and economic requirements, the financial aristocracy lives in a different universe. One recent example sheds considerable light. The New Aristocracy As the New York Times reported this week, one charter member of this aristocracy, former Citigroup chairman Sandy Weill, has just sold his penthouse apartment in Manhattan for $88 million. The purchaser was 22-year-old Ekaterina Rybolovleva, daughter of Russian oligarch Dmitriy Rybolovlev, the monopoly owner of the former Soviet fertilizer industry. The squandering of such a vast sum to house a single individual naturally provokes outrage and revulsion. The $88 million expended for the penthouse at 15 Central Park West is greater than the entire annual operating deficit of the Metropolitan Transportation Authority ($68 million), or the 2010 annual budget deficit of the city of Detroit ($58 million). It approximates the cost of all free school lunches in the New York City schools for an entire school year. By a straightforward calculation, $88 million would provide 2,000 jobs for unemployed workers at the average US wage of $44,000 a year. While Mr. Weill and Ms. Rybolovleva are among the job creators celebrated by American politicians, Democrats and Republicans, who oppose raising taxes on the super-rich, neither of them provided employment on that scale. And if anything, the demeaning employment of chauffeurs, doormen, maids and security men who serve the whims of such billionaires constitutes a drain on society, not a benefit. Buying Politicians There is another yardstick for measuring this waste of social resources. Sandy Weill is best known as the wheeler-dealer who combined his Travelers insurance empire with Citibank, creating Citigroup as the first and largest of the financial supermarkets, companies able to throw their weight around in every area of financial services. In 1998-99, Weill launched an all-out lobbying campaign to sway the Republican-controlled Congress and the Democratic White House to support repeal of the Glass-Steagall Act, the Depression-era law, passed in the wake of the 1929 Wall Street crash, that made illegal the type of financial octopus created by Weill. Weill bought Congress and the [Bill] Clinton administration for $100 million, not much more than the price at which he sold his Manhattan penthouse last month. Further Readings Books Daron Acemoglu and James Robinson Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Business, 2012. Richard Duncan The New Depression: The Breakdown of the Paper Money Economy. Hoboken, NJ: Wiley, 2012. Simon Johnson and James Kwak 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. New York: Vintage, 2011. Simon Johnson and James Kwak White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You. New York: Pantheon, 2012. Paul Krugman End This Depression Now! New York: W.W. Norton, 2012. Chris Martenson The Crash Course: The Unsustainable Future of Our Economy, Energy, and Environment. Hoboken, NJ: Wiley, 2011. Bethany McLean and Joe Nocera All the Devils Are Here: The Hidden History of the Financial Crisis. New York: Portfolio Trade, 2011. Carmen M. Reinhart and Kenneth Rogoff This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University, 2009. James Rickards Currency Wars: The Making of the Next Global Crisis. New York: Portfolio, 2011. Nouriel Roubini Crisis Economics. New York: Allen Lane, 2010. Nouriel Roubini and Stephen Mihm Crisis Economics: A Crash Course in the Future of Finance. New York: Penguin, 2011. Peter D. Schiff How the Economy Grows and Why It Crashes. Hoboken, NJ: Wiley, 2010. Peter D. Schiff The Real Crash: Americas Coming Bankruptcy—How to Save Yourself and Your Country. New York: St. Martins, 2012. Robert J. Shiller Finance and the Good Society. Princeton, NJ: Princeton University, 2012. Peter J. Tanous and Jeff Cox Debt, Deficits, and the Demise of the American Economy. Hoboken, NJ: Wiley, 2011. Periodicals and Internet Sources Zaheer Abbasi Economy Facing Serious Challenges, US Told, Business Recorder, April 5, 2012. Leonie Barrie US Retail Sales Warmed by Spring Sunshine in March, Just-Style, April 10, 2012. just-style. Grant Bowers Sustainable Expansion in the US Economy, Investment Advisor, March 26, 2012. Business Daily Update How Will Two Sessions Set Tune for Chinas Economy? March 5, 2012. Philip Coggan The Patient Is Still in Recovery, Investment Adviser, April 9, 2012. Julie Crawshaw Gary Shilling: 2012 Recession Still Coming, Newsmax, April 4, 2012. Credit Union Journal CUs, Banks Stand to Lose if USPS Suffers Big Cuts, Hikes Postage Rates, April 16, 2012. Financial Express Column: The American Recovery, March 26, 2012. Bradley Gerrard Morning Papers: US Economy Contrasts with Eurozone, Investment Adviser, April 9, 2012. Jill Goldsmith Rosy Forecast for TVs Selling Season, Daily Variety, March 14, 2012. Forrest Jones Expert: Consumer Confidence to Fall This Summer, Newsmax, March 6, 2012. Forrest Jones Gallup: Half See Country Stuck in Recession or Depression, Newsmax, March 7, 2012. Aaron G. Lehmer and Kristen Schwind The Resilient Future for the 99%, Earth Island Journal, Winter 2012. Elaine Misonzhnik Restaurant Chains Poised for Growth in 2012, Retail Traffic, March 22, 2012. Russell Parera Provide Stimulus in Key Sectors, Financial Express, March 8, 2012. James Surowiecki Great Expectations? New Yorker, March 19, 2012. Kevin Wack Banks Have Big Stake in Battle Over Postal Reform, American Banker, April 10, 2012. Full Text: COPYRIGHT 2013 Greenhaven Press, a part of Gale, Cengage Learning. Source Citation Martin, Patrick. The US Population Is Increasingly Divided By Wealth. What Is the Future of the US Economy? Ed. Ronald D. Lankford, Jr. Detroit: Greenhaven Press, 2013. At Issue. Rpt. from Christmas of Crisis in America. wsws.org. 2011. Opposing Viewpoints in Context. Web. 27 Jan. 2014. 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Posted on: Tue, 28 Jan 2014 00:19:55 +0000
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