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SPOTLIGHT
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Have you been duped?

Published on -11/4/2012, 2:36 PM

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For many of us in the United States today, it's impossible to ignore that these are troubling times with no clear resolutions in sight. While concerns about our deeply divided political society seem ever-present, we continue to struggle with inequality and the possible consequences and dangers of that -- dangers which, I believe, are more serious and daunting than our own partisan political divide, per se. Where will we find answers? Sometimes it seems we are torn in so many different directions that such a simple question seems altogether unanswerable. But, perhaps there is a way.

I'm writing this to express my own ideas about inequality in this country. I will note to your readers that I find they are consistent with, and supported by, a recent book titled "The Price of Inequality" (published in 2012, a recent New York Times best-seller). This book was written by the 2001 Nobel prize winner in economic sciences, Joseph F. Stiglitz, an imminent scholar and global thinker in his field who is recognized for his expertise worldwide. I find it worthwhile to quote this author to illustrate some ideas I would hope the public could take to heart as they cast their ballots in this upcoming election.

The idea society is divided needs no further examination but to look at the almost 50/50 split between the endorsements of the Democratic and Republican candidates for president in 2012. It's well-documented that inequalities exist in power and resources between what might be called the top 1 percent of our country and the bottom 99 percent. But before you flinch at what I've just said here, know this: the numbers 1 and 99 are arbitrary. The same could be said of 0.8 percent and 99.2 percent or 1.2 percent and 89.8 percent, but the point is the same. Inequalities between the top citizens of the United States and the rest of us are very large. These inequalities are not only in income, but also assets and, very significantly, influence.

Many, but not all, of those at the top did not earn their positions, nor do they contribute to our society in any productive sense. That is, they do not provide goods and services themselves, but merely collect "rents" from the rest of us. "Rent seeking" is discussed in Stiglitz's book. He describes "rent seeking" as "many of the ways by which our political process helps the rich at the expense of the rest of us."

According to Stiglitz: "The term rent was originally used to describe returns to land, since the owner of land receives these payments by virtue of his ownership and not because of anything he does. This stands in contrast to the situation of workers, for example, whose wages are compensation for the efforts they provide."

I can see that inequality is leading the United States in a wrong and dangerous direction. Our country is at serious risk of continuing to erode its reputation as a land of opportunity. And, for too many of us, the American Dream is tattered and fading.

Consider (I'm quoting from the book): "... the plight of today's 20-year-olds. Instead of starting a new life, fresh with enthusiasm and hope, many of them confront a world of anxiety and fear. Burdened with student loans that they know they will struggle to repay and that would not be reduced even if they were bankrupt, they search for good jobs in a dismal market."

Consider their 50-something parents: "Will they lose their home? Will they be forced to retire early? Will their savings, diminished by the (recent) great recession carry them through? ... From Washington comes even worse news: cutbacks to Medicare that will make access by some groups to health care unaffordable are widely discussed. Social Security too seems to be on the cutting table. As older Americans face their sunset years, the dreams of a comfortable retirement seem a mirage. Their dreams of a prosperous, better life for their children may be as antiquated as something out of a 1950s movie."

Is there a way out of this? Stiglitz goes on to propose: "A real economic reform agenda would simultaneously increase economic efficiency, fairness, and opportunity. Most Americans would gain; the only losers might be some of the 1 percent -- those whose income, for instance, depends on rent seeking and those who are excessively linked to them." Measures include curbing excesses and bailouts in the financial sector; strong, strictly enforced laws of competition; limiting the power of CEOs to enrich themselves at the expense of stockholders and tax payers; tax reform, etc.

I believe that to move forward, political reform must precede economic reform. Those at the top have fashioned a myth that they continue to perpetuate, as Stiglitz notes: "The 1 percent has worked hard to convince the rest ... that doing anything that the 1 percent doesn't want will harm the rest of us. Instead, those in the 99 percent could come to realize that they have been duped by the 1 percent: that what is in the interest of the 1 percent is not in their interests."

Dr. Robert Blanks

Bogue

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