Corporate Republic ─ Income Inequality

America has become a corporate hedge fund republic where the richest one percent possesses more net worth than the bottom 90 percent. The top one percent of Americans owns 34 percent of America’s private net worth, according to figures compiled by the Economic Policy Institute in Washington. The bottom 90 percent owns just 29 percent. That also means that the top 10 percent controls more than 70 percent of Americans’ total net worth. Huge concentrations of wealth corrode the soul of any nation. All one has to do is look at Africa and Latin America. The same is now happening to America.

Emmanuel Saez, an economist at the University of California at Berkeley, who is one of the world’s leading experts on inequality, notes that for most of American history, income distribution was significantly more equal than today. And other capitalist countries do not suffer disparities as great as ours. “There has been an increase in inequality in most industrialized countries, but not as extreme as in the U.S.” Professor Saez said.

Yet, career politicians insist on granting $370,000 tax breaks to the richest Americans as a way to stimulate the economy during a recession? I don’t get it. How is that going to stimulate the economy? Do politicians really think these rich taxpayers are going to stimulate the economy by buying fancy cars and yachts and hire more groundskeepers and chauffeurs? Of course not. But they are the people who fund the politicians re-election campaigns.

The unemployed poor who can stimulate the economy with unemployment benefits are given no breaks because they don’t have money to spare on career politicians re-election campaigns. A study commissioned by the Labor Department during the George W. Bush administration makes clear the job-creation power of unemployment benefits because that money is spent immediately. It is pumped back into the economy rather than a savings account or politicians re-election coffers.