Popular Economics Weekly

 Answering Kennedy’s Call

Vice Presidential candidate Kamala Harris made a promise at this year’s Democratic Convention. She would create programs that give every American the opportunity to better themselves.

“I see an America where we hold fast to the fearless belief that built our nation and inspired the world. That here, in this country, anything is possible. That nothing is out of reach. An America where we care for one another, look out for one another and recognize that we have so much more in common than what separates us. That none of us — none of us has to fail for all of us to succeed.”

Equal opportunity hasn’t been available to many Americans, even though it is part of the American Dream—America is the land of opportunity that is taught in schools and heard by immigrants.

Why? Because it is also part of a larger truism that not all Americans have accepted: Equality Is Good for Everyone. It should be self-evident, a statement of common sense. The more equality of opportunity among us, the more we can better ourselves, become more productive citizens, which in turn increases our national wealth (and lowers budget deficits).

It was certainly the dream of immigrants, such as my mother, a British citizen born in Jamaica.

But there are times, such as today, when many Americans don’t believe it is possible, which is why we are living in another Gilded Age with the worst income inequality of the developed world. It is on a par with developing countries in Africa and has been the major cause of recessions, including the Great Recession.

Many have bought the counter narrative by those that don’t like equality, the privileged few at the top of the income ladder who want us to believe they are the most qualified to create greater wealth for the rest of us.

This Gilded Age was formed from supply-side, trickle-down economic policies, because enough Americans believed it, believed government was the problem and cutting taxes the solution, believed that equality is not good for everyone because we live in a zero-sum world with limited resources. What is given to one must be taken from another.

The conservative position espoused by 1970s Economist Arthur Okun, for instance, was that greater equality meant less market efficiencies to produce and so fewer incentives for greater wealth, since leveling the playing field meant leveling out the opportunity for large profits.

But that has never been the case. There has always been copious evidence that the opposite is true; that overly large profits have led to diminished household wealth.

One can measure inequality with such as the CIA’s World Factbook that ranks inequality among nations. Those with the greatest equality also have less violence, greater freedoms, greater health, and guaranteed vacations!

Richard Wilkinson’s TEDx lecture and book with Kate Pickett, “The Spirit Level” is one of the best studies of the dire effects of income inequality on the quality of life. The most important factor, and a sign of dire consequences when inequality has approached the level of the Great Depression, are the US violent crime and incarceration rates, which Wilkinson discusses at length. The U.S. is by far the most violent country in the world—worse than any other developed country with the highest incarceration rates.

Efforts to reverse such inequality have begun on the local levels, even if congressional conservatives have blocked raising the miniscule minimum wage of $7.25 per hour.

I wrote in 2011 that the state of Massachusetts was the first to raise their minimum wage to $10 per hour, California is raising it to $8.25 over 2 years, with New Jersey and other states to follow. It was the beginning of a return to greater equality that has continued.

And there is an increasing awareness of the income disparities, such as the fact that corporate CEOs now earn more than 300 times the income of their employees, and certain hedge fund managers have reported an annual income of $1 billion.

The Center for American Progress launched the Washington Center For Equitable Growth, which aims to deepen the economic critique of inequality. It was set up by Berkeley economist Emmanuel Saez, among others, who is known with his partner Thomas Piketty as the first economists to historically research the history of income distribution over the past 100 years.

As the mission statement of the Center says:
"New research suggests that growing inequality in the United States may have broad social and economic effects -- by reducing stable demand for goods and services, dampening entrepreneurialism, undermining the inclusiveness and responsiveness of political and economic institutions, limiting access to education, and stunting individual development. Yet our understanding of how these mechanisms interact with the broader economy is limited."

Kamala Harris said as much in her acceptance speech: “opportunity is not available to everyone. That’s why we will create what I call an opportunity economy, an opportunity economy where everyone has the chance to compete and a chance to succeed.”

A majority of Americans and a majority of Electoral College votes must agree with her for this to happen in November.

Harlan Green © 2024

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