Sunday, March 11, 2012

Income Disparity Is Not The Issue

In last Thursday's issue of The Inlander, our former congressman, George Nethercutt, misdirects and misleads the reader about the Occupy movement and income disparity in America. He leads off with this:

In the debate over the legitimacy of the “Occupy” movement and the frustration some Americans feel over the alleged 99 percent vs. 1 percent (poor vs. rich) ratio in the United States, it’s fair to pose the question: “What is the right ratio of rich to poor in the U.S. today?”

First, he seeds doubt in the reader's mind by saying there's a debate over the legitimacy of the Occupy movement and then uses the 99 and 1 percent numbers as a poor versus rich ratio. Establishing that, he leads the reader further away by asking a question nobody else is asking. And then he's off on a "discussion" about tax fairness and income equality.

Mr Nethercutt gets it wrong from the start and the millions poured into this election season provide an example of why he is wrong. The Occupy movement is not about resenting the wealthy for being wealthy. It's not about establishing a specific ratio of wealthy vs poor. It's about the undue influence of wealth in our democracy that benefits the wealthy to the detriment of everyone else. It's about a system that promotes and protects a concentration of wealth. The expanding gap in income equality is a function of this influence.

The market-oriented society he refers to isn't necessarily the same one envisioned by the 99 percent. In Mr Nethercutt's market-oriented society, corporations and businesses are a privileged class always trying to overcome obstacles placed by a government whose sole existence only serves to interfere. Combined with a theme emphasizing freedom and personal responsibility, individuals are left to their own devices when a weakened government is unable to help after fracking makes their their tap water flammable.

Mr Nethercutt's position is hardly surprising when you consider his actions while representing Washington's 5th District. He voted for the Bush tax cuts, which overwhelming benefited the wealthy and became the single largest contributor towards the deficit. He also voted to make those tax cuts permanent. He sponsored legislation to repeal the estate tax, which affected only 2 percent of Americans. The wealthiest Americans. He voted against campaign finance reform banning soft-money contributions. One fight in the area of campaign finance reform ended up with the Supreme Court's ruling in Citizens vs United allowing unlimited donations via purportedly independent groups. One "benefit" of that is that we're now getting to know the billionaires influencing our election process with their millions.

Mr Nethercutt closes his short discussion on poverty with this:

No matter how hard we try to eradicate poverty, we likely never will. While trying to do so is laudable, we shouldn’t stifle the creativity that is a hallmark of American life. Creativity often leads to great wealth for those with ingenuity, drive, energy and free will. Ambition levels, like talent levels, will always be unequal for individuals in a free society, and those disparities will result in disparate income outcomes.

How trying to eradicate poverty stifles creativity taxes even my imagination. But he is right that creativity, ambition, and talent can result in disparate income outcomes. Again, that is not the problem. The problem is the inordinate amount of influence in our democracy by "the haves and the have mores" and the injustices resulting from it. Just look at the criminal behavior by mortgage lenders and the failures of regulatory agencies resulting in the 2008 crash and the disparity in the number of prosecutions there.

Mr Nethercutt closes with this:

While helping America’s poor is legitimate, worthwhile and an American tradition, an income equality goal doesn’t fit a market-oriented society. Capitalism and free enterprise, having produced the strongest economy and most advanced society in world history, should largely be left to reach natural levels, allowing those who seek, and achieve, financial reward to enjoy their good fortune, distribute it as they wish and pay a reasonable income-tax rate.

He again distracts the reader. Nobody is talking about establishing an income equality goal. As for the U.S. being the strongest economy and most advanced society in world history, world history isn't over yet. It has yet to be seen if this most advanced society will allow itself to be bought out.


Spokane Al said...


In reading this - - it appears to me that virtually all of the Occupy Movement’s goals involve resolving their perspective of economic problems via transferring of wealth from the rich to the less rich via taxes. That said, there was an interesting analysis in yesterday’s Wall Street Journal where it appears that domestic fiscal policy over the past century has had absolutely no impact on the rich vs. poor divide.

And as to your point that the Bush tax cuts being “the single largest contributor towards the deficit” I would answer that spending is the other part of the equation and must be managed as well, which it most definitely wasn’t, and still isn’t.

Take care.

Hank Greer said...

Al, thank you for the site link. I notice the section on goals leads off with this:

The Movement intends to focus on unfair practices and structuring within the world’s economic systems. The presence of such mal intended practices put the overall health of the big system in jeopardy which correspondingly threatens the world’s peoples.

It continues with an emphasis on fairness. There is the statement that says, " just as much taxation to the world’s rich if not more when compared to the rates of the middle classes and poorer citizens." This is appropriate if wealth continues to be more and more concentrated. And that's the problem. The system we have right now protects concentrated wealth which, in turn, influences the system to protect itself even more.

You are correct that spending is another part of the equation. Spending on the wars was the second largest contributor to the deficit. This was the first time in America's history that we didn't raise taxes at some point to pay for war. We shot ourselves in both feet by lowering taxes instead.

I think a key issue here is determining fair taxation. That is certainly beyond me, but one thing is certain. You have to go where the money is whether it's concentrated or not.

It's good to hear from you, Al.

Anonymous said...

At the simplest level, occupy is about civil rights. Corporations like Goldman Sachs are the Ku Klux Klan of our era, though the modern bigots hate all non-wealthy people and seek to disenfranchise us.

They've succeeded-- there is little difference between electing Obama and Romney, or McCain and Obama, or Clinton and Bush Sr. All these candidates are profoundly corrupt and only represent the wealthy. Certainly Clinton and Obama's corrupt trade deals, which unfairly divide and disenfranchise workers, have done more evil than tax policy.

That's why Occupy doesn't endorse, and why attempts to co-opt Occupy into the Democratic party fail--particularly while Democrats are largely responsible for terrorizing the movement with police thuggery.