Cynthia: Why isn’t America celebrating Boxing Day today, Mike? In other countries where the gap between the rich and everyone else is huge, they at least give stuff away the day after Christmas in boxes.
Pew Research Center reports the largest wealth gap between upper-income and middle-income families in the U.S.on record. And it’s no wonder: household income of middle-class families rose a mere $2,200 over the past decade, while the income of the wealthiest increased by $321,300.
Instead of just getting depressed about income inequality, shouldn’t we be getting a box full of coins, used trinkets and leftover mutton chop?
Mike: Mutton? British cuisine is about as depressing as income inequality, and trinkets aren’t going to fix either of them.
But that Pew study shows the economic policies put into action by President Obama and the Democrats in 2008 to respond to the recession have created significant gains in stocks and other financial assets, while housing — where most people build value and equity — and wages continue to limp along. To add insult to injury, we still have a tax code that treats hedge fund managers better than small businesses.
So, yet again, we have lunacy in Washington helping those “in-the-know” get presents under the tree, while those of us in the hinterlands get leftover trinkets. Happy Not-so-new Year.
Cynthia: The “in-the-know” caste is a small incestuous one made up of CEOs and board members, and wow, they are certainly ringing in the new year! Between 2009 and 2012 the top one percent of Americans enjoyed 95 percent of all income gains. It was so easy, too! All they needed to do was vote to give each other enormous raises over martinis at lunch.
And don’t lay blame for the vanishing middle class at the feet of Democrats. Maine’s two Republican senators voted for the American Recovery and Reinvestment Act, President Obama’s immediate response to the great recession, and economists say that but for the president’s actions the income gap between the wealthy and the rest of us would be even wider.
The challenge for politicians is to parlay solutions to the American public in a meaningful way — like presidential hopeful Rick Perry. Jesus loves inequality, this Perry knows. For the Bible tells him so.
It’s tough to argue with God, isn’t it, Mike?
Mike: I’m not getting into biblical exegesis in the Bangor Daily News. Not gonna do it. Wouldn’t be prudent. But I do like economic exegesis, and that is no less prudent than anything else we write about.
The challenge — and solutions — are multifaceted, and the discussion is often clouded by perspective. First, income inequality is not static. A 22-year-old may be in the bottom quintile of income with their first real job. As they progress, so does their income, moving up the ladder. And that economic mobility hasn’t decreased.
Second, the poverty trap is aggravated by the welfare system. Why are men being pushed out of the workforce? Partly because the system penalizes you if you try to stand on your own feet. God may help those who help themselves, but Washington certainly doesn’t.
Cynthia: Many of the guys exploiting the disability system and abandoning fatherhood lost good jobs in the recession and believe they’re too good to make minimum wage at McDonald’s. Instead of gutting a social safety net in place to help those raising their kids, maybe we should increase wages to get these bad boys off the couch.
In fact, now that so many white guys are stuck choosing between bad minimum wage jobs, supporting a family, and leaching off others, maybe it’s time they ditch the “working people vote Republican” bumper stickers, and listen to what fiscally conservative Democrats say about broadening the social safety net to improve the economy.
Policies that make it easier to work — quality subsidized child care, family-friendly leave, and efficient public transportation — will expand the economy, get more people working and reduce the income gap between rich and poor.
As for that 22-year-old, his chances of upward social mobility are greater in places where income disparity is less. So we’re back to square one. Boxing Day.
Mike: It feels like Boxing Day, since you keep working over Republicans with body blows. But I can’t make the logical leap that fiscal conservatism means spending more money. Let’s spend the money we’re already spending smarter, along with reforms that end things like “carried interest” to provide equality before the (tax) law.
All the things you’ve listed Republicans generally agree with. The question is how to do it. I know lawyers and legislators don’t like to hear this, but simply passing a law does not magically make everything happen.
And, while Scandinavian countries do succeed with high taxes and generous welfare programs, those countries are also culturally and ethnically homogenous. Norway and Sweden don’t have minimum wages. And, in Denmark for example, they have been — gasp! — reforming welfare out of concern that it has grown too generous and cannot be sustained. Sound familiar?
Yet, in the end, should we really be worried about the income gap? If we can create an environment where folks at the bottom can provide themselves a roof over their head, clothes on their back, dinner on the table, and a fair chance to improve their lot, does it really matter how much Clint Eastwood, Donald Sussman or Marissa Mayer make? After all, someone needs to buy Hinckley Yachts.
Cynthia: We should worry about the income gap. America isn’t meant to be a plutocracy.
But I wonder — can a pre-owned Hinckley fit in a box?