Productive Inequality

Posted on October 18, 2012 by Professor Taboo

This post is a continuation of the Oversimplification 2012 post-article.

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Is inequality necessary to provide people with incentive? Does the fear of failure, foreclosure, unemployment, bankruptcy, or government welfare and food stamps make people impassioned to succeed? Another way to ask this question is this way: Is the fear of shame, by family, by society, by the status quo a necessary motivator in a free-market society? No. Histories of great civilizations promoting inequality are laden with economic and societal collapses that show otherwise. Advocates of traditional free-enterprise, or capitalism, often argue that if a nation does not have total economic freedom and the correlated supporting government policies (small government), then that is a blatant step toward communism or socialism. These arguments cloud and grossly oversimplify our current crisis and the causes.

The Power of an Illusion

Having much less inequality does not equate to socialism or communism. On the contrary, less inequality (but not full equality) for the mid-term and long-term improves a nation’s gross domestic product (GDP). When citizens have incentives based on real hopes and realized achievements due to accessible social educational tools, workforce opportunities, and economic mobility, a country’s GDP is more stable and more efficient. Honestly, it is a simple sports concept: a well-oiled, concerted team is stronger and more successful than a fragmented, polarized team of hyper-competitive individuals. What makes this simple sports concept embarrassing, perhaps even deplorable, is when a team owner, or team captain claim and receive bonuses above and beyond the actual performance or decline – in some cases disaster – of the organization or team. Yet in the 2008 financial plunge, CEOs and their élite echelon did just that while the expendable lower workers lost their jobs and homes. Do not mistake this philosophy of the nation’s business élite as necessary incentive compensation schemes. It is merely guaranteed high compensation for good performance or bad performance; a handout for the CEO title, not the performance of his firm.

Political economists tend to place the fault of America’s growing inequality on various market or policy-factors not aligned with their own party. However, singling out one or two spokes in a failing wheel does not address the functionality or non-functionality of the remaining spokes, or the wheel as a whole. Yes, changes in computer technology created a change in skill-biased technology. Yes, the weakening of labor unions and less-scrutinized executive pay has contributed. The role of financialization in a global economy has contributed. Joseph Stiglitz, author of The Price of Inequality and Nobel Prize winner in economics feels, however, this tunnel-vision is missing the bigger picture. He states that if any of these factors were central:

“…we don’t have to sit idly by and accept the consequences. Greed may be an inherent part of human nature, but that doesn’t mean there is nothing we can do to temper the consequences of unscrupulous bankers who would exploit the poor [and uneducated] and engage in anti-competitive practices. We can and should regulate banks, forbid predatory lending, make them accountable for their fraudulent practices, and punish them for abuses of monopoly power.”

Stiglitz goes on to elaborate several other contributive forces and how to “temper” or punish abuses, but he later notes that growth in America’s financial sector as a spoke, or portion of the total U.S. income, has clearly added to increased inequality, i.e. “to both the wealth created at the top and the poverty at the bottom.” As I will point out below, the movement and growth of inequality and increased disparity was no accident; financial executives knew beforehand what was likely to occur.

The exceptional 2011 film “Margin Call” which portrays the beginning hours of the 2008 crisis.

Is wealth always the reward of hard work and resilience? Is wealth always determined by an individual’s time-invested: 70-hour, 80-hour work weeks, or 7-days a week, 50 weeks of the year? Of course not! If this were true, then we could conclude that wealthy drug-cartels are wonderful “hard workers”. Yet, this is a logic still promoted and distorted by age-old political campaigns. In the kindergarten and elementary classrooms, these tales of rags-to-riches by hard persistent work ring true, but in the arena of highly intelligent, misguided or non-violent orators of political-business eloquence, it requires an equal amount of sleuth by 70% of a disadvantaged common population.

Less Inequality Equals Less Volatility

No matter what the various causes of our economic crisis, all of them must be addressed. Stiglitz references another accomplished economist, James K. Galbraith, professor from the University of Texas at Austin. Galbraith goes into detail about why instability is directly and closely linked with high inequality, particularly in global financialization. The U.S. economy is naturally a major component in the world market, and it follows then that U.S. economic policy-makers are also major components. After researching and compiling some 50-years of data, both European and U.S. economic data, his striking discovery shows that in economies that are more egalitarian have markedly lower unemployment and hence lower inequality. But I must allow Mr. Galbraith to explain his discovery in his own words. Below is his four-part interview series discussing his book, Inequality and Instability, which precisely explains why the United States must become more egalitarian to avoid future civil collapse and revolt.

Why does any of this matter? Of what importance or impact will this analysis have on my life and my family? That answer is simple: association. You are associated with this life, with this planet, with your countrymen, with your parents and with your offspring. And you have a choice to make that association better than when you found it or became part of it, or you have the choice to ignore it or oppose it. Either way, you are associated. The question then becomes what part, what role are you going to play?

Philosophical questions aside, the more related question here to this 3-part blog/post is Are you interested in perpetual wealth-accumulation for yourself, or are you interested in making this world and those around you a happier place? One outlook is egocentric, the other is altruistic.

The Fallacy of “Productive Inequality”

As I alluded to in my previous two paragraphs, everything is connected or associated. One person’s words and actions will affect or be felt by those around them. The interactions within a family will affect families next door, or coworkers, or fellow schoolmates. Naturally, this explains why the Department of Health & Human Services quarantines major viral infections: to decrease the outbreak. The point being here is that inequality (moral or economic) leads to instability, and instability leads to unemployment, and unemployment leads to weak local and national output, which in turn leads to weak demand or stagnation, which leads to recession…and that ironically, over the long-term increases the risks on the wealth the egocentrics accumulated. However, it is not enough for me to spout-off personal opinions, substantiated or not by history, facts, or reliable sources. I must show that I have done the homework, or at least a large part of the homework. Thus, let me again turn to Nobel Prize winner, Joseph Stiglitz.

“Beyond the costs of the instability to which it gives rise, there are several other reasons why high inequality – the kind that now characterizes the United States – makes for a less efficient and productive economy. We discuss in turn (a) the reduction in broadly beneficial public investment and support for public education, (b) massive distortions in the economy (especially associated with rent seeking), in law, and in regulations, and (c) effects on workers’ morale and on the [problematic myth] of “keeping up with the Joneses” [or a consumer-driven society].

Let’s look more closely at the three reasons Stiglitz puts forth.

Declining Public Investment and Support for Public Education

We all know that an automobile will not run without fuel. We know that without the apple there is no applesauce. Without the photon particle, there are no vibrant visible colors. A basic principle in economics 101 is that the private-sector cannot be successful without an efficient active public-sector, and vice-versa. However, these two sectors cannot fully function by themselves or necessarily in conjunction. There needs to be rules-of-the-game established to keep the markets and sectors playing fairly. This is where government is vital. It makes sure that the infrastructure stays fair and healthy.

A flourishing industrialized nation requires public investment: roads, scientific research, civil services such as ambulances and ER services, police and prisons, firehouses staffed with firemen, seaports, airports, and basic quality education. These are just a few of the investments needed for a modernized society to remain peaceful and progressive. Leaving these public-sectors to the whims of the “free-markets” or a private investor will and has led to declining investment. The consequences of public under-investment are a heightened risk and paranoia on the part of the private-sector, as I alluded to earlier. A neutral entity, the government, must be actively involved to keep the playing-field, the economy fair and efficient. There has to be a healthy stable balance between BOTH sectors. Otherwise, the common workers (the 70% population) have less incentive, perhaps no incentive to patriotically work for the whole, much less the upper percentile.

During the periods of good sufficient public investment, the United States as well as the world reaped the benefits of government-sponsored research, health, and education! Some examples in research during the 20^th century: information technology, internet, and biotechnology. In health: immunizations, declines in heart disease, safer healthier foods, cleaner drinking water, public waste, motor-vehicle safety, family planning, healthier child-bearing and hence lower infant mortality rates, and infectious disease control. In education, these fields mentioned could not have been possible without good-to-great public investment. Yet, at the current rate of public investment these great innovations are becoming fewer and far between. Stiglitz warns:

“Our failure to make these critical public investments should not come as a surprise. It is the end result of a lopsided wealth distribution in society. The more divided a society becomes in terms of wealth, the more reluctant the wealthy are to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security. They can buy all these things for themselves. In the process, they become more distant from ordinary people [ala Syrian President al-Assad or French Queen Marie Antoinette].

The wealthy also worry about a strong government – one that could use its power to adjust the imbalances in our society by taking some of their wealth and devoting it to public investments that would contribute to the common good or that would help those at the bottom [or their perceived competitors/threats?]. While the wealthiest Americans may complain about the kind of government we have in America, in truth many like it just fine: too gridlocked to redistribute, too divided to do anything but lower taxes.”

Public education, it’s funding and performance is one of the hottest most controversial issues in modern America. Although our nation’s educational system has evolved well since 1870, there is no silver-bullet policy or program – nor has there been a policy-program – that can get perfect results. Perfect, or near perfect results happen on an individual and family unit basis. The rhetoric of school reform frequently overlooks the impact of individual, family, business owners, and educators on determining educational results. If an adolescent chooses to play Xbox instead of doing homework or studying, no amount of educational reform or opportunity will meet the desired results – and sadly, parents let their/our future-citizens do this. Quality education requires personal and family initiative, a characteristic that is infamously difficult to create or impose.

Where individual or family initiative is not the problem, however, lays the construction area of public investment. Ignoring this resource has grave mid and long-term social and economic consequences. “When we diminish equality of opportunity,” writes Stiglitz, “we are not using one of our most valuable assets – our people – in the most productive way possible.” In the earlier blog-post, The Land of Opportunity?, I conveyed how bleak higher-education and wage-mobility existed in America for children of impoverished and middle-income parents. The cost of college tuition is rising faster than median incomes. This begs the question, are student loans the golden-brick road to opulence? No. Once again, the financial sector is wrought with oppressive interest rates and perverse incentives. And from this money-trap comes a slew of further unregulated abuses.

In 1976, and again in 1984, lawmakers in Congress made it increasingly harder for college graduates to discharge student loans in bankruptcy. This had the adverse affect of lenders executing no responsibility to decide whether the educational institutions would provide a degree that would truly enhance their future income. Still later in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act, Congress made it near impossible to discharge any student loan – federal or private – unless the borrower was able to prove in court (more money expended) a severe health or work disability. This made student loan discharges the same debt as criminal fines or child support fines. These acts were all lobbied through by the financial sector. During these four decades the for-profit college and universities, with wealthy executives and endowments, blocked all attempts to regulate and hold accountable these same institutions to extensive countermeasures upon exploitative recruiting of students from low-educated poor families, thus making them ineligible for loans.

There is another after-shock of decreasing public education support and declining wage-mobility. Imagine yourself inside one of these low-income, low-educated homes just described. You naturally want your children to attend quality schools in order to have a reasonable chance, or better, to gain admission into a quality university, which in turn increases their chances of becoming a well paid worker or business owner. But to better these chances both parents must work more to make ends meet. As a result, the family spends less time together. Now you are unable to supervise this student or other children in their studies. These families must make difficult compromises, and often those compromises lead to social misconduct or crimes.

Distortions of the Economy

Many of our childhood games teach a basic concept: he who gains the most resources at their disposal has the best chances of winning. As we mature in life we realize that unlike the start of these childhood games, where all players begin on a level-playing field, this concept doesn’t reflect real-life circumstances. This series of blogs expands on this social reality. Our reality is very well documented throughout a plethora of historical civilizations during several centuries. And though our American heritage states “that all men are created equal….” even this famous document was written when slavery and slave-rights in America spoke otherwise. Equality, though the ideal, is most often created. In political marketing – also known as lobbying – it is no different. Gift-wrapped equality does not fall from the sky. It must be created and guarded.

OpenSecrets.org is a Washington D.C. research group which traces funds in federal politics and its correlation and effects on government policies and elections. Corporations, labor unions, and various organizations spend billions to lobby Congress and federal agencies. Since 2008 over $3.3 billion dollars have been spent compared to $1.44 billion in 1998; an average $1.66 million increase every year. And there have been no less than 10,408 lobbyists over this 14-year span; topping out so far at 14,849 in 2007. What industries or sectors are spending the most in lobbying? From first to sixth over the last 14 years, pharmaceuticals/health-products was the biggest spender (13 of the 14 years), followed by insurance, electric utilities, business associations, computers/internet, and oil-gas respectively. Reflecting on these spent resources, Stiglitz writes, “The main distortion to our political system [and consequently our inequality]; the main loser, our democracy.”

What happened to our economy was not unforeseen, uncontrollable market forces. This recession/depression was created. In order to better understand how it was created, an important business-tactic must first be explained: rent-seeking.

Investopedia.com is an internet-based group of writers from various economic and investment fields. Their website defines rent-seeking as such:

“When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation. An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protections. These activities don’t create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group.”

Rent seeking distorts our real economy in several different ways. Executives and corporations who have learned well to rent seek, reap magnificent financial reward. The accolades and bonuses that they receive may be enormous, however this does not necessarily reflect the social contributions from these rewards; they may not even be beneficial. The distortions come in a variety of sectors in our economy: post-undergraduate talent, public services, technology and telecommunications, business finance, and one of the most subtle and maligned of distortions, the environment and its resource depletion to name just six.

Prior to the 2008 crisis the nation’s college graduates sought employment in many professions; such as, research and development, medicine, public services such as government, firemen or law enforcement, or teaching future generations in schools and universities. However, at the same time an increasing amount of bright graduates were recruited into business finance and investments. Released in February 2000, during the peak of the tech-boom, the U.S. Bureau of Labor & Statistics’ Occupational Outlook Handbook and Career Guide to Industries (USBLS) showed the five fastest growing occupations being projected from 1998 through 2008 were computer engineers (the most), then computer support specialists, systems analysts, database administrators, and desktop publishing specialists respectively. Financing and investments were ranked 20^th. Business executives did not make the projection-list. The same report released in February 2004 showed the 21 of the 30 fastest growing occupations to be again in the computer-related fields but also in health-related fields. Yet, about this time the USBLS began reporting employment change by salary, i.e. movement in labor by salaries. In that 2004 report the professional management, business and financial services (including banking) projections were among the best and rising. The same reports released in December 2007 showed significant increases and rises in employment change by salaries projected in the business-financial services with the most in management at almost a 78% change, the highest of all.

Rent seeking is also prevalent in both the health care sector and the telecommunications sector. There is a pill for every imaginable ailment in existence. Pharmaceutical companies now spend enormous amounts of money on marketing to doctors to prescribe their pills and patients to consume them that research, by comparison, has become one of their smallest business expenses. The majorities of their “research” are spent in generic forms of their brand drugs with minor differences, but nonetheless divide the profits of their rival labs of the same successful drug. This rent seeking takes away huge amounts of salaries for real research, real investments, and real productivity and places it in the pockets of executives and shareholders. One quick example of rent seeking in telecommunications would be how “quickly” 10-month old, 1-year or 2-year old cell phones are simply outdated and can no longer function properly with “changing technology or services”. Therefore, the provider can “only offer a new and improved” phone or package, generally more per month with a new complex contract. The micro-processing company Intel has done this since at least Windows 3.1 was popular; a once industry-leading Microsoft product.

As mentioned before, rent seeking practices come in more subtle forms such as in environmental deterioration and depletion. Using the economic successes and profits of our nation’s environmental resources to pad the GDP (Gross Domestic Product) numbers does not reflect the costs to the environment over the long-term. Oil, water, natural gas, coal, and so on is not sustainable growth. There is most certainly a diminished wealth of the nation’s resources. Yet, as of today there is no metric indicator of this cost. Why? The oil, coal, or energy firms lobby and fight hard to block government reports, indicators, indices and green accounts because they would be invoiced for extracting a non-renewable resource from our country’s resources; a cost that would cut their excessive profits. But by not charging the oil, coal, and gas companies a non-sustainability charge, the American government (and average citizen) are giving the corporations an indirect subsidy, favorable tax treatment, and a valuable product well below fair-market prices! Therefore, one primary aim of rent seeking people and companies are to shape laws and government regulations to their own bottom-line. Once again, this distorts the true health of the economy.

Worker-morale and the Ever-Elusive Joneses

In order for a worker to labor most efficiently and most loyally, they must believe they are achieving a comfortable future. This means they must feel they are being treated fairly by their employer. Certainly one would agree that an unmotivated, under-nourished worker is less productive. Education experts and scientists have long known that hunger and inadequate nutrition hinder learning. These were the clear theories of the late 19^th and early 20^th centuries. But today, the efficiency of worker morale is more complex.

When the general population experiences anxiety over such worries as losing their home, or “Can I provide my children with a quality education to enable them a prosperous life?”, or “Can I survive beyond retirement age?” these questions reduce workplace efficiency. But not only does the psychology reduce workplace efficiency, it also impairs the impoverished to analyze properly the choices that might improve their situation. As the cliché goes, they are living from hand-to-mouth, firmly in the here-and-now. When one lives in this type of daily stress, it can and often does lead to desperate and irrational decisions. Harvard economist Sendhil Mullainathan and psychologist Eldar Shafir thoroughly explain this behavioral thinking:

Naturally, this expenditure of physical and cognitive energy by poor or middle-class workers will also hinder the achievement of new improved skills and knowledge. If this condition persists throughout a nation, productivity will grow slower, and hence the long-term growth of the economy is unstable as well as unsustainable. And too often over the last decade or so, if a corporation was performing unsatisfactorily, even near bankruptcy, the common worker, not the high-level executives/owners, bore the punishment of lay-off, pay-cuts, or termination.

Joseph E. Stiglitz describes more poignantly the importance of labor fairness in recent economic experiments:

“Or take another [experiment], involving a group of workers performing a similar job. One might have expected that increasing the wages of some and lowering that of others would increase productivity of the higher-wage worker, and lower that of the lower-wage workers in offsetting ways. But economic theory – confirmed by the experiments – holds that the decrease in productivity of the low-wage worker is greater than the increase in productivity of the high-wage worker, so total productivity diminishes.”

Yet is this experimental result all that surprising? When the greater good for the greatest number is continuously ignored or discriminated against in unfair free-market practices and deregulation, the final result is economic recession or collapse.

There is also deeper psychology involved with rent seeking practices within societal inequality that may not be clearly understood. When we were all young children, there was always some hero or heroes we aspired to be. When I was a youth and on into my teenage years, I was utterly fascinated and enthralled by the fighter pilots of World War II and their magnificent planes. To this day, I still have a very high regard for those daring men constantly putting their lives in harm’s way to preserve basic human rights around the globe, often for less fortunate people they had never met, nor would they meet.

In today’s American economic policy and politics, many tax-paying citizens aspire to the upper middle-class, or even the top 10% or 20% financially and their standard of living. We have seen so far in this article and my previous articles (Oversimplification 2012 and The Land of Opportunity?) how much inequality affects a nation’s economy and efficiency. Though the popular Trickle-down economic philosophy of many conservative élite is a fanciful fabrication and illusion, trickle-down psychology is tremendously real. The bottom percentile in our society know and accept that dreams of opulence in the top percentile are fantasies. However, those in the lower middle, center, and upper middle have serious hopes of attaining the American Success Dream; into the top 20%, 10%, or 1%. These dreams are sometimes referred to as keeping up with the Joneses.

There is a perfectly good explanation as to why on a scale of global comparison, the United States is one of the busiest and hardest working societies on the planet: consumerism. And to keep up appearances with those around us in our communities, many Americans must live beyond their means.

The April 2012 edition of the World Economic Outlook Database published by the International Monetary Fund (IMF) reported the Top 10 industrialized, or advanced economies of the world. Of course, the U.S. was a member. However, this listing does not show all industrialized-advance economies in the world which provides a more balanced point-of-view. There are 35 nations classified as advanced economies. The United States ranks in the top four in most databases. According to the Business Insider, April 13, 2011 and the OECD (the Organization for Economic Cooperation & Development), the U.S. ranks 9^th out of 35 nations as the hardest working nation in the world. With that said, Stiglitz offers refinements as to the differences between America’s work rate and the rest of the world:

“Many years ago Keynes [i.e. John Maynard Keynes] posed a question. For thousands of years, most people had to spend most of their time working just to survive – for food, clothing, and shelter. Then, beginning with the Industrial Revolution, unprecedented increases in productivity meant that more and more individuals could be freed from the chains of subsistence living. For increasingly large portions of the population, only a small fraction of their time was required to provide for the necessities of life. The question was, How would people spend the productivity divided?

The answer was not obvious. They could decide to enjoy more and more leisure, or they could decide to enjoy more and more goods. Economic theory provides no clear prediction, though one might have assumed that reasonable people would have decided to enjoy both more goods and more leisure. That is what happened in Europe. But America took a different turn – less leisure (per household, as women joined the labor force) and more and more goods.

America’s high inequality – and individuals’ sensitivity to others’ consumption – may provide an explanation. It may be that we are working more to maintain our consumption relative to others, and that this is a rat race, which is individually rational but futile in terms of the goal that it sets for itself. Adam Smith pointed out that possibility 250 years ago: “this general scramble for preeminence, when some get up, others must necessarily fall undermost.” [A mentality abundantly demonstrated in our American professional sports: victory at all costs, while heads roll soon after failure; screams of “clean house!” prevail] While there is no “right” answer to Keynes’s question according to standard economic theory, there is something disturbing about America’s answer. Individuals say they are working so hard for the family, but as they work so hard there is less and less time for the family, and family life deteriorates. Somehow, the means prove inconsistent with the stated end.”

Joseph Stiglitz, John M. Keynes, Adam Smith, and other economists point out an implicit warning. The U.S. population makes up between 3.8% and 4.5% of the world’s total population. Yet, as such a small percentage of the world, Americans consume the most electricity, the most corn, much of the coal (2^nd to China), the most natural gas, fourth in wheat consumption, an inordinate amount of oil by comparison – leading in the depletion of energy resources. Not only is there no denying that the U.S. is an economy firmly driven in consumerism, we take the cake and the party too, yet make up a mere 4% of the world population. This is an ASTONISHING fact! That Americans are an Earth-devouring people might be an understatement.

We have touched on various causes of our country’s growing inequality and how distortions of our economic health has made it worse, and how declining public investment will further the problem, and how our illustrious free-market economy was supposed to be envied by the world…has become an illusion that is rearing its ugly head. In my next post/article on this subject: Unveiling Incentive-Opportunity Fallacies, it needs to be shown that the direction our social and economic state is headed, is eerily reminiscent of the decline and fall of Rome. As the gap between socio-economic classes widen, and proclaimed “opportunities” and “incentives” of the Right turn into a thin smoke, just like the upper Roman classes and the bottom Roman percentile polarized (e.g. the Occupy Wall Street movement) America will see its democracy crumble unless some well-proven social, political, economic regulations, and more progressive-taxation packages are implemented or revamped.

I hope that the 2012 November elections – and later elections – are seen this way by the 70% – 90% of Americans. Otherwise, there could very well be another second falling of “Rome” in North America.

For an excellent overview of America’s inequality and severe polarization, watch the documentary Patriocracy by Brian Malone. It is an accurate portrayal of how today’s American generation is no longer the greatest generation who adapted, compromised, and labored generally as United, but instead has become the greediest, egocentric generation rendering our government dysfunctional and society hyper-polarized.

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Oversimplification 2012

Posted on September 14, 2012 by Professor Taboo

Are you an informed voter?

Over half of America’s population does not sufficiently or safely understand their own government, their own laws, and most likely the campaign premises and rhetoric of political candidates running for offices that they will uphold, abide by, and then enact their civilian government and laws! Why not? Simple: growing inequality over four decades.

The average years of education in the United States is 12 years; a high school diploma. This average is barring various levels of sub-par or quality education. In 2011 only 30.44% of the U.S. adult population received a Bachelor’s Degree. Less than 8% of the American population attained a Master’s Degree or higher. These bleak figures are a result of one primary cause: the almost exorbitant cost of post-secondary education, again barring various levels of education quality. As we Americans approach another presidential and congressional election year, all the candidates, their campaign managers, and campaign-workers, all have Bachelor Degrees or higher. In other words, they make up a mere 8% or 30% of the American public, and speak to and campaign for votes to the other 92% or 70% of the population respectively.

This stark contrast of social imbalance is the quintessential definition of disparity; disparity of a subtle and complex kind.

On at least one occasion [Abraham] Lincoln gave some good advice to a young lawyer. “Billy,” he said, “don’t shoot too high – aim lower, and the common people will understand you. They are the ones you want to reach – at least, they are the ones you ought to reach. The educated and refined people will understand you anyway. If you aim too high, your idea will go over the heads of the masses and hit only those who need no hitting.”

Clearly Mr. Lincoln understood ordinary people. But more so, he not only understood, he related; he identified with ordinary ‘high school educated’ people, if you will.

Let’s Shoot Between the Eyes

There is one life-lesson that always holds true: actions speak louder (and truer) than eloquent words. What does that mean to you? What have you lived? What have you not only lived, but what have you lost, or almost lost? How miserably have you failed, and therefore learned a life-long lesson from? In other words, how well can you REALLY identify with the 92% of America? Did your expensive undergraduate and/or graduate education teach you how to live, even survive in poverty? Does your expensive degree indicate how perfectly you can relate to and lead 92% of the U.S. population? How and where have you spent the majority of your life, your job or career, and with your family both immediate and extended family? Does it represent anything close to the 70% — 92% of Americans?

Perhaps more importantly a question we should be asking our political candidates and leaders is this: “How well do you precisely understand the needs of some 50-100 various diverse ethnic, economic, social, educational, historical, and religious classes in America?” The purpose of this post/article is to show the dangerous trap of oversimplification to a high-school-educated population by the highly educated 8% of the population.

By the way, for the sake of disclosure I am from a lower-middle class family, raised in a lower-middle class neighborhood in south Dallas, Texas. I have a bachelor’s degree (Humanities) from a tiny private liberal arts college, and four semesters of graduate studies toward an incomplete master’s degree. I had a successful collegiate and semi-pro soccer career with a short stint in pro-soccer, all of which took me to five different continents around the world. I am what you might say in the middle of the road within this article; mixing with several different American and foreign socio-economic classes.

Reject the Politics of Polarization

Oversimplification is often radical extremism. Most intelligent people would agree that knee-jerk reactions are rarely productive, even destructive. The same applies in complex issues in a diverse complex nation such as the United States. This applies more so to increasingly globalized economies between nation-states.

The adage Knowledge is Power applies here. I would personally add to the adage, Knowledge = Power = More Wealth/More Resources/More Opportunities. Anyone who disagrees with my modified adage, kindly tell me. I would enjoy discussing it, or more accurately point out your folly (wink). For others, I am stating the obvious.

Anatole Kaletsky is an economic journalist and Chairman of the Institute for New Economic Thinking founded after the 2008 economic crisis. He is a graduate of King’s College at the University of Cambridge, U.K. in mathematics, and master’s degree graduate in economics from Harvard University. Kaletsky has much to say about inequality, polarization, and the upcoming fall elections in Europe and the United States:

…do these [political-economic] decisions really need to be so radical? Is it fashionable to proclaim that the future is a matter of black and white: bigger government or freer markets, national independence or a European super-state. But these extreme dichotomies do not make sense.
…New mechanisms of checks and balances between politics and economics are required. Economic problems ignore national borders; therefore, more complex mechanisms for international cooperation are needed in a globalized economy.

Kaletsky’s words ring true. The role of government in economic stability and social opportunity is paramount. Exactly HOW its role is defined cannot be oversimplified nor polarized. “The fashion for oversimplified radicalism” he states “has taken hold in both economic and political thinking – a tragic irony when global [and domestic] problems are clearly more complex than ever before.” It is simply unfair to America’s three-quarters majority to understand fully what the one-quarter minority is oversimplifying. The fact remains: for the last five decades America’s economic, social, and educational inequalities have widened and reached critical stages.

Another translation for polarization is discrimination. In other words, polarization divides as much as discrimination divides; the motive and end-result determines whether the discrimination is beneficial or harmful for the whole. Once again, whether the polarization is beneficial or detrimental to the whole cannot be determined by oversimplified descriptions or solutions. Therefore, let’s do our homework! Let’s study and analyze political philosophies beginning with the roots of our American political parties, and then conclude which philosophies and their corresponding political party’s best serve the greater good for the greatest number of Americans, or whether any of the parties serve it best.

America’s Political Parties

Since the late 1790’s the United States has had primarily a two-party political system: summarized (but not comprehensive), either liberal or conservative economic-social platforms. Throughout the past 5-political eras, these two parties formed innovative campaign techniques based on what was expressed by the current public opinion. As a result, there were often some blurring or crossover campaign techniques in between the liberal-left and conservative-right. These positions became various forms of “moderate” politics and have formed various third-party groups throughout the five political eras.

Briefly, our two-party then multi-party systems began with two members of George Washington’s cabinet: Alexander Hamilton and James Madison. This period is often called the First Party System. Washington was never in favor of a dividing party-system. He was of the opinion that as the cliché goes, “a house divided against itself, will not stand.” Perhaps Washington was not spot-on, but a divided house certainly does not function as efficiently. Over two centuries later, we still have a dominate two-party system with at least 3-4 minor parties. For a more in-depth review, click Political Parties in the United States.

The Second Party System (1829-1854) saw a redefining of the two previous parties: the Democratic-Republicans (Andrew Jackson supporters) and National-Republicans (John Quincy Adams supporters). Their primary issue was over centralized governing, a strong national bank and single currency, as opposed to state independence and local governing, and hence less federal involvement.

During the Third Party System (1855 – c.1897) the issue of slavery, or the spread of slavery could no longer take backstage. From this political era came our two modern major parties. The Republicans (descendants of Adams supporters) still promoting policies of a strong central government, one army and navy, and unified foreign trade-tariff policies, versus Democrats (descendants of Jackson-Van Buren supporters); promoting antebellum, agricultural, state freedoms and allowing continued slave-trade. This is in name only, however, because obviously the policy platforms have morphed in every presidential and congressional campaign since 1897.

Our Fourth Party System (1896-1932) saw the most critical times of our nation’s history since the Civil War and Reconstruction. This era began in an economic depression, then World War I and followed by the stock-market crash and Great Depression. Within one generation of America, there were no less than 15 major issues vehemently debated! It is here that at least one trend emerges inside party policies: business interests for Republicans; domestic-social interests for Democrats. For a more in-depth analysis, click Fourth Party System.

The Fifth Party System(1933 – c.1964) emerged from the Great Depression – caused by unregulated business-trade practices – and into World War II. From 1933 to 1945 Democrat Franklin D. Roosevelt united labor unions, immigrants, minority and low-income voters, Southerners, Catholics, Jews, urbanites, and intellectuals; unprecedented in U.S. political history. From Roosevelt’s New Deal Coalition the Democrats dominated U.S. government policies and public support until Richard Nixon in 1969.

From America’s five political eras, and perhaps more precisely since the 1970’s, at least one theme can be gleaned from our five transitions: Because the presidential office and the two branches of Congress have swapped back-and-forth over 40 years now, 70% – 92% of Americans want their politicians to stay toward the middle of the political spectrum, not to the radical extremes. According to Stanford, Harvard, and Berkley PhD and Masters students of political sciences, “American political life continues to be dominated by a broad ideological consensus; the electorate continues to hover near the center of the political spectrum, and the parties, in order to remain competitive, generally move toward the center in order to attract voters.”

2012 Party Platforms

Before listing the five major party’s political platforms taken up by their respective candidates, I want to first summarize their party’s basic tenets. These tenets can be viewed on Political Parties in the United States: Party Comparisons, but I will give a quick rundown here starting with the oldest party (Democrat) to the newest (Constitution):

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Current 2012 Presidential Candidate Platforms

There is a wonderful organization in Santa Monica, CA that lists a side-by-side comparison of the five major political party’s candidates on all the nation’s major issues called ProCon.org. Please click on their link for a more extensive list. They also have a convenient Find Your Match quiz-questionnaire of the presidential candidates that best match-up to your personal views of the major issues. Below-right is my summary of the historically controversial issues over the last three decades:

2012 Presidential Candidate Policy Positions provided by ProCon.org

The policy issues presented in the table are not all the hot topics the candidates and their parties have debated. I strongly urge that you go to ProCon.org’s website and take a long look over all the issues and become familiar with each candidate’s perspective. Remember too, this table represents the federal issues; as an American citizen you also have similar policy-issues on your state and local levels too. Find them, thoroughly review them, and vote! If you are not yet registered to vote in your county, you have until Oct. 9^th to get registered. Make your voice count!

Given the growing disparity in American education and economic opportunity for the impoverished and middle-class, the highly educated, the resourceful orators have learned the gift of eloquent rhetoric – who can sell a luxurious palace in the Arctic Circle – and so have oversimplified or distorted the comprehensive solutions to America’s crisis. How can the lower-class and middle-class (the 70% – 92%) lift themselves and their families out of inequality if they do not have access to quality educational opportunities that will not push them further into debt or to the end of their parent’s income? How can the lower and middle-classes afford the “Get out of Poverty” ticket if states continue to cut back support for good high schools, grade schools, and kindergartens, and the critically important teachers and staff required to uphold quality standards on campuses? In other words, 70% or more of Americans cannot pay for private primary or secondary schools that usually send their graduates to good colleges. And guess where most of these primary and secondary schools are located? They are in the wealthy suburbs that the 70+% cannot afford to live. Hence, a gradual disparity follows.

A micro and macro-analysis sheds light on this phenomenon: In the past, in order for the lower and middle-class to have hope of progression, the poor lived near the job opportunities, near the wealthy in the wealthy suburbs that provide quality education. Consequently, public schools possessed a student body with several various social and economic families. That was the microcosm. Because the United States has been the beacon of liberty (as shown by Lady Liberty in New York City) and opportunity to the world, what do you think our levels of foreign immigration have reached the last three decades? Since 1965 the influx of foreign immigrants has risen every year by about 1 million according to the U.S. Bureau of Citizenship and Immigration Services. It should be noted that these were the legally allowed immigrants. Many of these immigrants are entering the U.S. from under the same circumstances that I am describing domestically: inequality. This is the macrocosm. But inside America this has changed. Nobel Prize winner in economics, Joseph Stiglitz:

“As a recent study by Kendra Bischoff and Sean Reardon of Stanford University shows, [the socio-economic neighborhood] is changing: fewer poor are living in proximity to the rich, and fewer rich are living in proximity to the poor.”

What Stiglitz is pointing out is that what has happened past and present throughout the world’s unstable socio-economic regions is now happening inside America. This should come as no surprise when human nature is closely examined and placed in historical perspective. The wealthier get wealthier because they have more opportunities through more resources at their disposal. As their wealth increases, their perception of risk grows so they increase their “safety-nets” to protect against their perceived risk. What the 1% – 10% of America fails to recognize or accept (or in some cases deny and distort in related public policies) is that their phobia only becomes reality if socio-economic inequality rises and approach critical stages. As a result, their risk-prevention-phobia – or ignorance, or distortion – has the reverse affect. Stiglitz summarizes this vicious “phobic” cycle in a more realistic historical light:

“It’s certainly what one sees around the world: the more egalitarian societies work harder to preserve their social cohesion; in the more unequal societies, government policies and other institutions tend to foster the persistence of inequality. This pattern has been well documented.”

Throughout world history unequal societies, such as Rome, Victorian England, and Manifest Destiny America to name just three, record how inequality was justified. Today it is the same only with different titles, rhetoric, and derivatives. Today it is the explanation of, or in certain cases the distortion of, abstract market forces domestically and abroad. These modern explanations and distortions challenge even the most intelligent college graduate! Yet, gratefully Mr. Stiglitz rips away these fancy justifications and lays bare their true creations despite the concerted efforts of America’s 1 – 10%:

“The view I take is somewhat different. I begin with the observation made in chapters 1 and 2: other advanced industrial countries with similar technology and per capita income differ greatly from the United States in inequality of pretax income (before transfers), in inequality of after tax and transfer income, in inequality of wealth, and in economic mobility [rags-to-riches movement]. These countries also differ greatly from the United States in the trends in these four variables over time. If markets were the principal driving force, why do seemingly similar advanced industrial countries differ so much? [See my article:The Land of Opportunity?]
Our hypothesis is that market forces are real, but that they are shaped by political processes. Markets are shaped by laws, regulations, and institutions. Every law, every regulation, every institutional arrangement has distributive consequences – and the way we have been shaping America’s market economy works to the advantage of those at the top and to the disadvantage of the rest.
[But] there is another factor determining societal inequality… Government, as we have seen, shapes market forces. But so do societal norms and social institutions. Indeed, politics, to a large extent, reflects and amplifies societal norms. In many societies, those at the bottom consist disproportionately of groups that suffer, in one way or another, from discrimination. The extent of such discrimination [or polarization] is a matter of societal norms… These social norms and institutions, like markets, don’t exist in a vacuum: they too are shaped, in part, by the [resourceful] 1 percent.”

Despite that I have so far shown that growing inequality leads to growing volatility and social instability, which in severe cases leads eventually to civil revolt by the masses as seen in recent Middle-eastern countries, American government policies – influenced by America’s 1 – 10% individuals and their corporate institutional networks – still in 2012 continue to justify socio-economic inequality as a necessary ingredient to “free markets” and sound foundations of successful capitalism. On the contrary, I would like to show otherwise. For the sake of clarity, let’s follow this ideology through to its now 8-10 year result since 2008.

What Motivates Productive Citizenship?

Is inequality necessary to provide people with incentive?

I will continue this examination in the next article/blog: Productive Inequality. Check back often for its completion. The importance of truly understanding America’s political party’s (and their candidates) continued oversimplification to the 70-92% of Americans, that lead to social and economic ruin, cannot be overstated.

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The Land of Opportunity?

Posted on July 22, 2012 by Professor Taboo

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As some of you are aware, I teach 4^th through 12^th grade Special-Ed science, social studies, and secondary career development at a charter school. Close to two-thirds of our students are either wards-of-the-state and/or special-needs. Due in part to the nation-wide recession and severe federal-state education cuts and the increasing gap of social-economic inequality in America (families in poverty vs. families with great wealth), my workload and hours are increasing between 25-30% for the 2012-2013 school year. However, my meek salary and annual increase has been frozen – while our cost-of-living continues to run free like a gorilla in a banana farm. Even more astonishing, the social expenditures to address and manage our nation’s growing impoverished families – the exact families my students come from – are dropping through the basement in alarming amounts.

I am not blowing a horn that many haven’t already heard: America is in a very serious economic and social crisis! But what I would like to convey is a re-evaluation of a socio-economic system that like the Roman Empire, is heading toward collapse.

Here is a crash-course in basic social sciences.

From Tribe to Modern Civilization…and Back?

All people on this planet have the same basic needs for food, water, clothing, and shelter. People everywhere live in families, or primary groups, and they get these needs in one of two ways: in a way that is individually and socially beneficial, or in a way that is damaging socially and eventually to themselves, i.e. illegally according to the group’s/society’s laws-of-behavior. The methods of obtaining these basic life-needs are directly proportional to a society’s advancement or decline in relation to available resources; or in an advanced civilization, the opportunities available. I would like to elaborate on this basic social equation.

Advancement in a civilization can be categorized in six stages essentially developing for the greater good. Decline in a civilization is the reverse of these stages coupled with and caused by increased crime, civil revolt, and/or war(s), and deteriorate the greater good. In my diagram Development of Civilization right, the United States is by global comparisons clearly in the last blue stage. However, most indicators show that we are digressing, not only by global rankings but by our own domestic indicators as well.

The Human Development Index (HDI) is an index created by the United Nations Development Program to measure development of all member nations according to a composite indicator of life-expectancy (healthcare), educational attainment for youth and adults (primary, secondary, and tertiary programs & literacy rates), and finally individual income-wealth (Per capita gross domestic product). According to the index covering 1975 to 2005, a thirty-year period, you might be surprised that the United States does not rank in the top 10. Over the scope of annual indices the U.S. ranks higher. However, a 30-year scope shows a trend. Here are the rankings:

Iceland
Norway
Australia
Canada
Ireland
Sweden
Switzerland
Japan
Netherlands
France
Finland
United States

Life-expectancy is directly related to a society’s or nation’s healthcare system. In the 1975 Human Development Index the United States ranked sixth barely above Norway; a real fall in less than one family generation for one of the most advanced civilizations. However, this 30-year index doesn’t paint the whole picture. The World Health Organization (WHO) published a ranking in 2000 of the world’s health systems. Out of 190 nations the U.S. ranked 37^th. The 2000 report was WHO’s last publishing due to vast complexities in compilation. The Common Wealth Fund did a study of 19 industrialized nations on deaths considered amenable to healthcare before the age of 75. In their 2002-2003 study the U.S. ranked 14^th. Yet, the U.S. ranks 1^st or 2^nd worldwide in total expenditures toward healthcare as a percentage of its GDP according to WHO. To put it another way, in Italy, Hong Kong, France, or Japan, citizens pay much less for noticeably better overall healthcare.

The attainment of education is also directly related to a nation’s social and economic development or decline. Education and literacy directly affect a civilization’s progress. If literacy and education are stable and improving, so goes the civilization. If education and literacy are unstable and declining, so goes the de-civilization of its people. According to the Organization for Economic Cooperation and Development (OECD) the U.S. ranked 16^th worldwide for literacy (reading, math, & science above 15 yrs old) in 2000, ranked 27^th in 2006, and 23^rd by 2011 according to UNESCO. A muddling in the mid to low 20’s will not improve over future generations unless attainment of quality education by our general population improves. This in turn requires tax revenues as well as a proportionate per capita GDP. But this is not happening. Though America is one of the wealthiest nations in the world, the overall American standard of living has been in serious decline since at least 1981.

A dysfunctional healthcare system and underfunded public education system will have tragic implications for American society. Joseph E. Stiglitz is the 2001 Nobel Prize winner in economics. He writes in The Price of Inequality: How Today’s Divided Society Endangers Our Future:

The consequences of pervasive and persistent poverty and long-term underinvestment in public education and other social expenditure [healthcare] are also manifest in other indicators that our society is not functioning as it should: a high level of crime, and a large fraction of the population in prison. While violent-crime statistics are better than they were at their nadir (in 1991), they remain high, far worse than in other advanced industrial countries, and they impose large economic and social costs on our society. Residents of many poor (and not so poor) neighborhoods still feel the risk of physical assault. It’s expensive to keep 2.3 million people [illiterate or semi-illiterate] in prison. The U.S. incarceration rate of 730 per 100,000 people (or almost 1 in 100 adults), is the world’s highest and some nine to ten times that of many European countries. Some U.S. states spend as much on their prisons as they do on their universities.

As I mentioned earlier, a civilization on the decline has increased crime intertwined with widening social and economic wealth-to-poverty levels. When the opportunities for socio-economic advancement are hard, few and far between for a country’s impoverished, or semi-bankrupt per capita GDP families making only $41,890 per year in 2005, obtaining basic or moderate life-needs turns immoral or criminal. At least two sets of statistics indicate this trend.

Generation Extreme – Death Rates of Young People

This bleak outlook doesn’t improve. In 2011 the Murdoch Children’s Research Institute and University of Melbourne published a table ranking 28 industrialized – or modernized – civilizations according to their mortality rate of 10 to 24 year olds per 100,000 population by traffic accidents, violence, suicide, and “other” causes. Sadly, it ranks the United States first in all four categories, with the most glaring difference being deaths by violence, out doing the other 27 countries substantially.

One way or another these numbers can be attributed to any combination of three variables: lack of happiness, lack of education, and lack of social-balance. And these three factors are derived from available or unavailable resources and opportunities.

A Growing Popularity toward Immorality and Crime

Get a stout cocktail, this statistic doesn’t paint a pretty picture either. In 2007 the United Nations Development Program (UNDP) released statistical data regarding nation’s prison populations and incarceration rates. Once again the U.S. ranks first, or highest in number of prisoners per 100,000 population. Our total prison population is nearly three times higher as the second highest nation Russia.

One indicator of the immorality rate is hate crime statistics. In 1990 Congress enacted the FBI Hate Crimes Statistics Act but not all states reported during the following five years. In 1996 all fifty states reported their data. Here are those results for the following 14-year period shown in the table.

As the data indicates, religious, ethnic/national origin, and sexual orientation are and have been on a steady climb. A statistic I do not need to illustrate is America’s appalling divorce rate (over 50% in 2010). For the sake of time, I will also not include incidents of domestic-family violence not related to racial, religious, ethnic/national origin, sexual orientation, or physical-mental disability. These cases are typically attributed in various combinations to psychological, psychiatric, and drug-abuse or addiction. Naturally the treatment and management of these problems goes back to available healthcare, and on a broader scale education, employment/unemployment, and overall happiness.

I stated earlier that the United States is on a path to socio-economic collapse, remarkably like the great Roman Empire. The familiar cliché history repeats itself, could not be truer here. Yet, many Americans believe we are the strongest wealthiest nation on earth of which all nations should model themselves. True, but only on the surface and ONLY in the top 1 percent of the population or the top 10% at best. The lower 90-99% has seen their standard of living erode frankly. Nobel Prize winner Joseph Stiglitz describes our historic predicament strikingly Romanesque:

If struggling poor families get our sympathy today, those at the top increasingly draw our ire. At one time, when there was a broad social consensus that those at the top earned what they got, they received our admiration. In the recent crisis, however, bank executives received outsize bonuses for outsize losses, and firms fired workers, claiming they couldn’t afford them, only to use the savings to increase executive bonuses still more. The result was that admiration at their cleverness turned to anger at their insensitivities…

…We described earlier the huge gap between CEO pay and that of the typical worker – more than 200 times greater – a number markedly higher than in other countries (in Japan, for instance, the corresponding ratio is 16 to 1) and even markedly higher than it was in the United States a quarter century ago. The old U.S. ratio of 30 to 1 now seems quaint by comparison…

…What’s worse, we have provided a bad [model], as executives in other countries around the world emulate their American counterparts. The UK’s High Pay Commission reported that the executive pay at its large companies is heading toward Victorian levels of inequality, vis-à-vis the rest of society (though currently the disparity is only as egregious as it was in the 1920’s). As the report puts it, “…publicly listed companies sets a precedent, and when it is patently not linked to [overall] performance, or rewards [overall] failure, it sends out the wrong message and is a clear symptom of market failure.”

If you are familiar with ancient Roman civilization, or even Victorian civilization in Europe, then you are also familiar with the stark inequality of their respective populations. Both Rome and the great British Empire of the 18^th century CE crumbled under this bloated weight of inequality. Rome vanished and Britain to a mere semblance of its former glory. Obviously at the risk of oversimplification, this socio-economic inequality is the consequence of the denial of the altruistic and philanthropic system of the Greatest Good for the Greatest Number lifestyle. I will return to this concept later, but first I want to explain another accurate form of socio-economic performance.

The Gini Coefficient (illustrated left) measures the degree of inequality of the distribution of family income within a nation. Basically, a gini coefficient of zero indicates perfect equality, and a gini coefficient of one represents a maximum inequality of incomes. Nations with coefficients of 0.3 or below are considered mostly equal. Nations with coefficients of 0.5 or above are considered mostly unequal. If you have finished your stout cocktail, pour another because this U.S. comparison to the rest of the world is going to break your heart.

According to the 2011 CIA World Factbook – Gini Index, the United States ranks practically the same as Cameroon (Africa) and Uruguay (South America). Stiglitz puts it in these terms: “According to UN data, we are slightly more unequal than Iran and Turkey, and much less equal than any country in the European Union.” Our actual CIA World Factbook ranking has us at 95^th, behind the likes of not only Cameroon but Uganda, Nicaragua, Vietnam, Mongolia, and Pakistan to name a few.

The Indicators Re-examined

Performances of family income inequality don’t tell the entire story. The Land of Opportunity’s real story may in fact be much worse than these numbers are indicating. For example, in other modern European civilizations their people do not worry about how to pay medical expenses, or how to afford taking care of their elderly parents, or how their children will receive a well-funded education. Attaining all these social benefits are viewed as a basic human right! In other advanced nations, the citizens put a heavy emphasis on hard work at a job, but they do not worry so much if they lose their job because their unemployment programs are good. In these advanced countries, homeowners do not concern themselves with foreclosure anywhere near as much as Americans. Social and economic insecurity for lower-class and middle-class Americans has become the rule-of-thumb. And if these international comparisons bear some level of truth, the United States is worse off than it prefers to portray itself.

If the picture is not quite in focus, then Stiglitz concludes these performance indicators this way:

Recent U.S. income growth primarily occurs at the top 1 percent of the income distribution.
As a result there is growing inequality.
And those at the bottom and in the middle are actually worse-off today than they were at the beginning of the century.
Inequalities in wealth are even greater than inequalities in income.
Inequalities are apparent not just in income but in a variety of other variables that reflect standards of living, such as insecurity [fear and sadness] and health.
Life is particularly harsh at the bottom – and the recession made it much worse.
There has been a hollowing out of the middle class.
There is little income mobility – the notion of America as a land of opportunity is a myth.
And America has more inequality than any other advanced industrialized country, it does less to correct these inequalities, and inequality is growing more than in many other countries.

As the American Conservative Right describes this socio-economic outlook, even Mitt Romney, these facts are inconvenient to them and should be whispered in private. There is no need to point out what sectors of the American population the phrase “American Conservative Right” refers. However, the philosophy they cherish, project, and protect is essentially no different from Ancient Rome’s and Victorian Britain’s elite. The proverbial phrases “You need money to make money” and “the rich are getting richer and the poor poorer” are simply true today.

Greatest Good for the Greatest Number

One could argue that the concept of the greatest good for the greatest number is socialism and its initiative found in communism. This type of argument is frequently revealed in American Conservative Right rhetoric. Not surprisingly, you also discover that the Conservative Right has a majority of religious-political advocates, many from various forms of Christianity (and a growing population of Islam). I find this social-political position utterly fascinating and in alarming conflict with the founding principles of the very same theology (and scriptural basis) they proclaim membership. For a more in depth look at this background, read my April 2011 article Constantine: Christianity’s True Catalyst/Christ. It and its references bring to light the utter success that the Judeo-Jesus movement of the 1^st century CE was in reality a welfare-system phenomena for Rome’s grossly outsized and mistreated poor; ironically, not unlike the heading of America’s social-economic system.

Simply and factually put, the philosophy-turning-lifestyle of the Greatest Good for the Greatest Number has been preached, taught, prophesied, born-out, died-for, whatever the case, in just about all of history’s great reformers. From Gautama Buddha in c. 563 BCE to Martin Luther King, Jr. in 1968, one theme stands out from all their wisdom: there is something more and larger than yourself. What can you imagine as this theme’s reciprocal, or antithesis? Think of as many possible oppositions as you can.

The fall of Rome c. 455 CE

Now synthesize your list of oppositions into a summation. It should reflect an inflated ego, whether it is one, many, or a system, it carries with it an awareness and action for self and for few – as well as those who benefit our self. It also carries with it a reduced lack of awareness and action for the whole system – as well as those who we tolerate and/or are intolerant. When viewed in this light, the inequality that is today’s America is absolutely no different from ancient Rome or Victorian Britain. You have the superior and the inferior, and the two should remain mostly separate. The inferior are such because they are illiterate. They lack a good education because it is next to impossible to attain. The inferior are diseased because of their illiteracy and lack of medical treatment because it is next to impossible to attain. The inferior are unskilled workers because of their illiteracy to understand the complex nuances of business and ingenuity, and to gain this understanding is next to impossible without heavy coin.

Is my America-Rome analogy that far-fetched? Your response should turn to civil action; we do live in a country that OFFERS a model of social-political freedom. I come from a family and middle-class background that worked and works its ass off to gain a little more of the American dream. During my generation, and perhaps during my children’s generation, we have seen those opportunities all but vanish. My children and I face almost exactly what my grandparents faced during the Great Depression and World War II. As a boy then, my father faced strict food and material rations for over fourteen years! Our current Great Recession, economists state, began in 2007. Here we are in mid-2012, five years later.

Whatever your situation, I will repeat what I said at the start.

Due in part to the nation-wide recession and severe federal-state education cuts and the increasing gap of social-economic inequality in America (families in poverty vs. families with great wealth), my workload and hours are increasing between 25-30% for the 2012-2013 school year. However, my meek salary and annual increase has been frozen – while our cost-of-living continues to run free like a gorilla in a banana farm. Even more astonishing, the social expenditures to address and manage our nation’s growing impoverished families – the exact families my students come from – are dropping through the basement in alarming amounts. Let me reiterate:

The social expenditures to address and manage our nation’s growing impoverished families – the exact families my students come from – are dropping through the basement in alarming amounts, even disappearing!

And by the way, our enrollment/placement of special-needs students are increasing (and therefore class sizes with fewer teachers) because several identical charter schools in the region had to close their doors due to funding cuts.

In the boom years before the 2007-08 crisis, the top 1 percent seized more than 65% of the gain in total national income. And while the GDP grew, most American citizens saw their standard of living fall into the basement. In 2010, as the nation floundered to stay afloat, the 1 percent (even the top 10%) gained 93% of the additional income created in the so-called recovery. As those at the top continue to enjoy the best healthcare, education, and benefits of wealth in a Reagan-freed-market system, they often fail to realize that, as Rome’s elite fatally ignored, “their fate is bound up” Stiglitz highlights, “with how the other 99 percent live.”

No matter the social, economic, or intellectual differences, we ALL need each other and MUST find and implement civilized efficient, evolving, fair systems toward the Greatest Good for the Greatest Number, or we will go down in history as the 2nd Rise and Fall of the 2nd Roman Empire.