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America Richer, Americans Poorer

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This piece appeared in October in newspapers in my very red congressional district (VA-06).

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I’m writing this while sitting at the main train station in Vienna, Austria. When I visited Austria more than 50 years ago with my parents, nothing I saw fueled concerns in me about whether my own country was on the right path. But that happened on this visit.

As my wife and I have explored this city, and various towns and villages and agricultural areas in the countryside – on foot and on bicycle — I’ve been impressed with how comfortable and secure the lives of average Austrians seem to be. The houses are not huge, but they are spacious and well-maintained. I never saw mansions, but almost all the dwellings and lives I witnessed fell well within what I grew up, in America, thinking of as “middle class.”

It seemed to me that most Americans, if they were living like most Austrians today, would feel that their lives had improved.

And that is striking, if true, because the per capita GDP of Austria is only 2/3 of that of the United States. Which raises the question, How can the lives of the average citizens of one country be more comfortable than those in another country which has 50% more wealth per person?

The answer, I suspect, is that GDP per capita does not tell you anything about the lives of the average people – not if there is a huge gap of income and wealth inequality.  If Bill Gates walked into a room of 100 poor Americans, the per capita wealth of the whole group would average more than half a billion dollars.

The average annual GDP in America may be over $60,000 per capita, but the median GDP – meaning the level at which there are as many above as below the line – is only about $17,000.

When I was growing up, at a time when the dynamism of American business was the envy of the world, the average CEO was paid about 20 times what the average worker on the shop floor received. At most, 40 times as much. Now the ratio is between 300 and 400 to 1.

There’s no reason to believe that today’s “captains of industry” are so much more valuable than their predecessors.

What I’ve seen in Austria has made quite palpable to me how the widening division between the richest few and the struggling many has real effects on the quality of people’s lives.

The growing gulf in America between the richest and the rest is not a new issue in these times.  But much of my own attention to this issue – prior to this trip – has been directed at the political effects of that gulf: i.e. how such vast inequalities are destructive of democracy, how big money inequality can rob the people of a voice in their government.

Back in the 1950s and 60s, that long-known truth was used to explain why it was so difficult to establish democratic government in Latin America. But now that we have Latin-American-sized inequalities in the United States, we can see that inequality corroding our democratic system.

Judges have been put onto the Supreme Court by the Money Power to hand down decisions – like the ironically named Citizens United decision – that take power from average citizens and give it to those who can bankroll the politicians.

 

Of course, we still have elections, so the American people nominally still get to choose who will wield power in their name. But it has become clear in recent years that something strange has happened among a segment of the American public – a segment large enough to hand considerable power to the very people who are working to enrich and empower themselves at the people’s expense.

Consider the current 115th Congress.

This Republican-controlled Congress had two main legislative goals, one of which it succeeded in achieving. The one at which it did not succeed was getting rid of the Affordable Care Act. It has been pointed out that a disproportionate number of the people who would have been hurt by the elimination of that program – the 23 million who would have lost their affordable health care coverage – were the very people whose votes had put those Republicans into office.

But there is no sign that those Republican voters will withdraw their support of those GOP politicians in the upcoming midterm elections.

The one important legislative success of the Republicans in Congress was the passage of a tax cut bill whose overwhelmingly predominant effect will be to increase still further the gap between the richest and the rest. It gives more than a trillion dollars to the rich and to giant corporations, while giving temporary and token amounts to average working families, and while piling another $1.5 trillion onto the national debt.

Polls seem to indicate that this tax giveaway to the rich is not popular with most Americans. But again, there is no sign that the Republican voters whose interests this tax bill has betrayed will withdraw their support. No sign, even though there can scarcely be imagined any clearer evidence that the real constituency that today’s Republicans serve is not their voters, but the donors and the corporate system for whom no amount of wealth or power seems to be enough.

Barring some medical breakthroughs, it seems highly improbable that I will be returning to Austria in another half century. But if somehow I could make that return trip, I would hope that I would find then that the lives of average Americans will have been enriched in a way commensurate with the growth of the American economy. But for that to happen, there will have to be a major change in the dynamics of American politics.