Too many excluded from the nation’s prosperity
America is becoming a predatory society. That should come as no surprise. Prior to the Civil War the nation tolerated slavery, the cruelest of all human predations. Back then slavery was permitted as long as only Africans and their descendants were victimized. Now a pattern of income inequality is destroying the middle class and the American way of life, and it is afflicting whites as well as blacks.
Contrary to public opinion, slavery did not end with ratification of the 13th Amendment in 1865. It does not require a Ph.D. in economics to understand that the abrupt end of slavery in the South had severe financial consequences for plantation owners. In a book entitled “Slavery by Another Name: The Re-Enslavement of Black Americans from the Civil War to World War II,” Douglas A. Blackmon reports on strategies employed to deprive blacks of their economic freedom.
With the industrial expansion in America there were few opportunities for blacks to flourish economically. Some whites were able to join the middle class or even become wealthy. Intergenerational upward mobility for white men was expected and became the American Dream. The magic of private enterprise motivated by free and open markets enabled the American economy to become the greatest in the world. With the destruction of the European industrial capacity in World War II, American business stood alone at the top.
In 1944 the nation enjoyed one of the most favorable distributions of wealth in its history. The top 1 percent had only 11.3 percent of the reported income, less than half the proportion in 1928; and the bottom 90 percent of the population had 67.5 percent of the income. Now the disparity in income has reverted once again to what it was in the Roaring Twenties, and in 2012 the income distribution for the bottom 90 percent was less than 50 percent (49.6 percent) for the first time.
One of the problems seems to be that the professional managers who succeeded the titans of industry who founded the great companies find it in their best interests to raise executive salaries. They do not own large blocks of dividend-earning stock in the companies like their predecessors. Therefore, substantial salaries are necessary for them to enjoy a life of lavish luxury. CEOs now earn from 357 to 495 times the salary of average employees of a company, depending upon how the estimate is calculated.
While executive salaries have climbed, workers’ pay has remained fairly constant since 1979. With such income disparities it is becoming more difficult for sensible whites to believe that they are specially privileged. Indeed, most of those in the top 1 percent are white, but so is the majority of the country’s population (62.6 percent is non-Hispanic white). It is mathematically clear that most have not made it to the top.
Americans are now advised that a college education is necessary to get ahead. For profit schools are being organized to fill the need, and some like Corinthian College have had to declare bankruptcy and leave students saddled with substantial debt while the organizers share the revenue. Conservatives insist on assessing student debt with substantial rates of interest to benefit the banks.
Even though an estimated 26,223,200 whites live in poverty, 24 states still refuse to accept federal funds to provide expanded Medicaid for those who cannot afford health insurance. According to a report there has been an increase in the number of whites moving into poverty areas. One must wonder how long whites will be willing to accept a pattern of abuse similar to that which has been imposed on blacks for generations.
Much of the wealth created these days involves wily entrepreneurs taking financial advantage of the less sophisticated. For their victims, the American Dream has dimmed.