GROWING INEQUALITY OF INCOME – SOME STATISTICS AND COMMENTS
Occupy Wall Street and the Republican presidential primary season finally focus attention on the ever increasing income inequality in the U.S.
Here is some data: In the U.S. from approximately 1968 – 1983, those in the top 1% income bracket received 10% or
a little less of U.S. income. Since 1983, the steady growth of income for the top 1% reached over 23% in 2007. This level was also reached also just before the great depression beginning with the stock market crash of 1929. (Robert Reich, After Shock, p. 20)
“The Community Meal used to serve an average of 325 people per night, and now it is not unusual during the last two weeks of the month for 400-500 men, women and children to come for us for a warm meal.” (Brother Dave Schwab, OFM. Cap. St. Benedict the Moor Community Meal, Milwaukee, WI)
“The ranks of America’s poor are greater than previously known, reaching a new level of 49.1 million - or 16% due to rising medical costs and other expenses.” (U.S. Census Bureau, Milwaukee Journal Sentinel, 11-8-11) “University of Wisconsin-Milwaukee professor Marc Levine’s studies show that in Milwaukee nearly 50% of working age black males are unemployed.” (A devastating blow to blacks, Ralph Hollmon, “Milwaukee Journal Sentinel,” 1-22-12) “There are women who can’t afford $3.00 for medication.” Dorothy Whelan, San Francisco medical data analyst.
“My guess is that not one of the bishops ever changed diapers on a regular basis.” Joan Bliedorn, Milwaukee retired teacher and active grandmother.
“The cost of birth control is one reason poor women are more than three times likely to end up with an unwanted pregnancy.” (Nicholas D. Kristof, “Beyond Pelvic Politics,” New York Times, 2-12-12) “…as of 2010, some 45 million people were without (health) insurance.” (Robert Reich, op. cit. p. 137) A hodge-podge of statistics and comments, but you get the point – something is very wrong.
Some consider it a surprise, but in fact growing income inequality is not new and it’s a global problem. Economist Xabier Gorostiaga, S.J. stated several years ago (National Catholic Reporter, Jan. 27, 1995) that,“The most crucial fact of the 1990s is that our world has become a champagne glass civilization. That is the geometric form the distribution of global wealth resembles. According to the U.N. Human Development Report of 1992, the richest 20% of humanity hoards 83% of the world’s wealth, while the poorest 60% of humanity subsists on 6% of the wealth. This concentration of wealth is greater now than at any moment in the history of the world, even in times of colonial expansion. …the gap between the rich and the poor has more than doubled over the past 30 years.”
Occupy Wall Street protesters, and the Presidential candidates focus on growing income inequality in the U.S. even though we function in, have a determining effect, and are affected by the global economy. Republican presidential candidates alternatively dismiss concern for the gap as envy, class warfare or as necessary to create jobs.
More data: Spain: unemployment 22% (Milwaukee Journal Sentinel, 1-28-12, “Economy” p. 6. “For months Germany has argued that indebted countries must cut budgets and that their people must become poorer, in exchange for help in reducing their debt loads.” (Milwaukee Journal Sentinel, 1-26-12)
Concerning the riots in England last summer, Ruth Lister, Labour, House of Lords wrote: “Addressing the social deficit must involve confronting the rampant inequality and materialism that disfigure our society.” (The Guardian, 13 September 2011)
According to the Red Cross, “there were 1.5 billion dangerously overweight people worldwide last year, while 925 million were underfed.” (Metro, London, 9-23-11) Just mind the gap - no screaming! This is the quiet room.
“The Iron Lady” – It’s ironic that Margaret Thatcher’s attempt at “primitive capitalism” in the United Kingdom was strongly opposed in Scotland, the land of the founders of capitalism – David Hume, Adam Smith and John Knox.
SOME PRINCIPLES TO CONSIDER FROM NATURAL LAW
This blog is about Roman Catholic Social Teaching by sequentially relating it to the current economic situation. Catholic Social Teaching has evolved since the first economic encyclical Rerum Novarum, We are now considering the epoch of Pius XII, but on such an important current topic as growing income inequality, we also need to at least sneak a glimpse back to Rerum Novarum and post Vatican II “teachings,” Economic Justice for All, Mater et Magistra, and Pacem in Terris. The terms “Teachings” and “Doctrine” seem arrogant, but consider them as referring to the philosophically related U.S. Declaration of Independence or the preamble of the U.N Declaration on Human Rights and the immediate corollaries that follow. References in the Encyclicals to cultic beliefs or myths need to be assessed as supportive or destructive by scientific empirical evaluation, experience, discussion and common sense. Current biblical scholarship is an essential.
In the past the Roman Catholic Church has avoided the socially destructive fundamentalist approach to scripture with the notable exception of the Galileo affair. Pius XII’s Encyclical Humani Generis - 1943 avoided a clash with scientists over evolution, and his Divino Aflante Spiritu - 1950 opened the way for biblical scholarship. However, the contraceptive affair points to the fact that the U.S. Roman Catholic Bishops have reverted to a socially dangerous philosophical fundamentalism.
According to the natural law, nature acts – moves - to achieve its purpose. People act to achieve happiness, the human purpose, naturally through reasonable choices and therefore moral activity. Action that is destructive in the quest for happiness socially or individually is immoral.
Natural law, for the bishops, dictates that sexuality is reserved for reproduction. In the 21st century, scientific research shows other equally or more important purposes of sexuality. In the light of the purpose of the economy, the common good with a preferential option for the poor, the bishop’s position on contraception can no longer be considered reasonable and therefore is contrary to the natural law.
If the bishops feel trapped in an untenable political position by Paul VI’s Encyclical Humanae Vitae, 1968, which condemned contraception (Infallible?), and common sense, Pius XII offers an out.
“The duty of repressing religious and moral error cannot be an ultimate norm of action. It must be subordinated to higher and more general norms which in some circumstances permit, and even perhaps make it appear the better course of action, that error should not be impeded in order to promote the common good.” (Murray, John Courtney, S.J. We Hold These Truths, Sheed and Ward, 1960 p, 61 -62, Pius XII, Discourse to Italian Journalists, December 6, 1963.
U.S. DECLARATION OF IN DEPENDENCE
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. “We hold these truths that all men are created equal.” (Declaration of Independence) Does this mean that Natural Law mandates income equality? – For the next blog posting.
U.N. DECLARATION ON HUMAN RIGHTS
Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,
Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people,
Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law,
Whereas it is essential to promote the development of friendly relations between nations,
Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom,
Whereas Member States have pledged themselves to achieve, in co-operation with the United Nations, the promotion of universal respect for and observance of human rights and fundamental freedoms,
Whereas a common understanding of these rights and freedoms is of the greatest importance for the full realization of this pledge,
Now, Therefore THE GENERAL ASSEMBLY proclaims THIS UNIVERSAL DECLARATION OF HUMAN RIGHTS as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction.
•(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
•(2) Everyone, without any discrimination, has the right to equal pay for equal work.
•(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
•(4) Everyone has the right to form and to join trade unions for the protection of his interests.
ROMAN CATHOLIC SOCIAL TEACHING BASED ON THE NATURAL LAW
Help from Leo XIII, 1891: The first encyclicals were written when it was obvious that many people lived in devastating poverty. No survey with statistics was necessary. So in one sense it does matter; morality is the issue when some are very rich and others are trapped in poverty as a consequence of the rich getting rich and richer.
Opening statement of Rerum Novarum, 1891: “It is not surprising that the spirit of revolutionary change, which has long been prominent in the nations of the world, should have passed beyond politics and made its influence felt in the cognate field of practical economy. The elements of conflict are unmistakable: the growth of industry, and the surprising discoveries of science; the changed relation of masters and workman; the enormous fortunes of individuals and the poverty of the masses.” Sound familiar?
Pius XII, 1947: “The goal toward which you can and must aim is a more equitable distribution of wealth. This is and remains the basic point of the program of Catholic social doctrine.” (Discourse of September 7, 1947 to the men of Italian Catholic Action)
Pius XII, 1941: “National wealth in as much as it is produced by the common efforts of the citizenry, has no other purpose than to secure without interruption those material conditions in which individuals are enabled to lead a full and perfect life. Where this is consistently the case, then such a people is to be judged truly rich. For the system whereby both the common prosperity is achieved and individuals exercise their right to use material goods, conforms fully to norms laid down by God the Creator.” (Acta Apostolicae Sedis, XXIII (1941), p. 200) (But what about the unemployed and others who don’t participate in production?)
Help from John XXIII: “From this it follows that the economic prosperity of any people is to be assessed not so much by the sum total of goods and wealth possessed as from the DISTRIBUTION OF GOODS according to the norms of justice, so that everyone in the community can develop and perfect himself. For this, after all, is the end toward which all economic activity is by nature ordered.” (Mater et Magistra, Part II, para. 74. 1961)
More help from John XXIII: “Beginning our discussion of the rights of man, we see that every man has the right to life, bodily integrity, and to the means which are necessary and suitable for the proper development of life. These means are primary, food, clothing, shelter, rest, MEDICAL CARE, and finally the necessary social services.” (Pacem in Terris, 11. 1963)
Help from the U.S. Bishops, 1986: “Distributive justice requires that the allocation of income, wealth and power in society be evaluated in the light of its effects on persons whose basic material needs are unmet.” (Economic Justice for All, U.S. Catholic Bishops, Chapter 2 – para. 70, Nov. 1986) Wow – the twenty-fifth anniversary; were the Roman Catholic Bishops too busy organizing their attack on women’s health care to notice? “Berkeley physician Claire Broome said she wished the bishops would take an equally strong stand on other issues of social justice. ‘I wish they would speak out as forcefully on poverty or homelessness or general access to health care.’” (Carla Marinucci and Joe Garofoli, “Obama’s switch has wide support,” San Francisco Chronicle, 2-11-12)
A QUESTION: What has changed in the economy to produce this phenomenon? Statistically growing income inequality can be traced to the 1980’s.
The political policy to establish economic structures is not determined in a vacuum. Granted unacceptable inflation under President Johnson (The Viet-Nam War, the Cold War and Great Society spending) and stagflation under President Carter (The Oil Crisis), President Reagan dusted off the economic policies of President Herbert Hoover as supply side economics or Reaganomics. This policy includes aggressive anti labor tactics, e.g. strikes now became impossible because replacement workers were supported by police enforced law, monetary and fiscal policy favoring the wealthy. Economic stimulus was directed from the top down; the 1981 tax cuts favored the rich. It was called the “Trickle Down Theory,” but workers called it the “Tinkled On Program.” Milton Friedman replaced J.M. Keynes as the theorist to support the wealthy.
Economist Bob Kuttner wrote in 1983:
“Since the New Deal, most Americans have agreed that equity is good economics…The Reagan Administration took office in1980 insisting that economic recovery requires a return to the primitive discipline of market economics-survival of the fittest-with all the human costs that implies.” (Bob Kuttner, A Working Economy, p. 6, 1983)
The massive 1981 supply side tax cuts for the wealthy stimulated growth of wealth for the rich but not the poor. If you remember, just suffer in silence; this is the quiet room and there is more to come.
THE BUSH (1988-1992), CLINTON (1992-2000), BUSH (2000-2008) EPOCH
Reagan liberalism morphs into neo-liberalism.
Some help from Pope John Paul II; In January 1998, the Pope addressed a packed crowd during his homily at a Mass celebrated in the Plaza of the Revolution in Havana, Cuba:
“Various places are witnessing the resurgence of a certain capitalist neo-liberalism, which subordinates the person to blind market forces and conditions the development of people on those forces.” (New York Times, January 26, 1998)
Kuttner describes Reaganomics as primitive “laissez fair” capitalism. The Encyclicals call “laissez fair capitalism”- liberalism. (Liberalism meaning free – free from government regulation – no government intervention in the economy) Reagan liberalism downsized government in so far as government limited the power of corporations to control the economy, but aided corporations with tax cuts and protection of replacement workers at striking plants. A program of privatization was begun as an attack on public service workers unions. George Bush I called Reagan’s economic policy “voodoo economics” and promised “compassionate conservatism.” (Read compassionate liberalism in the context of the Encyclicals) The reign of George Bush I and the reign of George Bush II were interrupted by neo-liberal President Bill Clinton. Income inequality continued to grow.
The Bushes continued the Reagan program and added a few wars that caused the national debt to sky rocket. Under Clinton neo-liberalism (It’s necessary for government to enter the economy to help big business) banks were bailed out in 1994 to save the banks and the Mexican peso. Why? Speculative investment in oil bonds went bad and sent the Mexican economy in a crisis, and it has never recovered. The banks were too big to fail. Clinton’s free trade program, the idea was inherited from George I, sent manufacturing jobs overseas devastating cities like Milwaukee. With Clinton’s NAFTA (1994 North American Free Trade Agreement) the Mexican economy went into a deeper crisis. Robert Reich was Secretary of Labor. Mexican workers and families crossed the border in droves looking for work. Wouldn’t a prosperous Mexico move us towards a solution to the immigration problem?
Aid to dependent children was “reformed” by the Clinton Administration. The new program eliminated the possibility of education for welfare moms and provided a source of cheap labor for industry. New technology made it possible to move massive amounts of money quickly all over the world. Privatization went to the extreme with the school voucher program as an attack on the public schools and teachers who were members of unions. Wisconsin led the way with the blessing of Archbishop Rembert Weakland. Reagan’s program of deregulation, remember “laissez fair,” continued under the Bushes with Clinton and culminated with the financial crash of 2008 which was worldwide. George II and President Obama again bailed out the banks. Financial managers made millions and millions.
“Mr. Kaplan (University of Chicago) and Joshua Rauh of Northwestern University note that investment bankers, corporate lawyers, hedge fund and private equity managers have displaced corporate executives at the top of the income ladder. In 2009 the richest 25 hedge-fund investors earned more than $25 billion, roughly six times as much as all the chief executives of companies in the S&P 500 stock index combined.” (The Economist, “Who exactly are the 1%? The very rich in America increasingly work in finance, marry each other and feel passionately about politics.” January 29, 2012)
OK, do we have some brandy in the quiet room? The 1955 novel – 1960 movie Cash McCall needs to be revisited – only possible with some brandy - OK already, maybe some Chicha or Mescal.
Is income inequality against the natural law? Let’s look to a solution. Refer to the next blog posting. OK – OK I know you’re in a hurry, but this is tough stuff.
CREDIT: Image by Patrick Marrin, National Catholic Reporter, 1-27-95