Does Discussing Inequality Promote Envy?

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        The Economic Policy Institute, in an analysis of Federal Reserve data by Sylvia Allegretto, issued a study in 2011 which noted that the wealthiest 1 percent of Americans controlled 35.6 percent of the total wealth of the country and that the top 10 percent controlled 75 percent of the wealth of the United States. In September of 2013, Forbes magazine reported that the 400 wealthiest Americans were worth slightly more than $2 trillion, which was roughly equivalent to the GDP of Russia.

          Those two reports underscore an increasing disconnect between the wealthy elite and ordinary Americans. The vaunted private sector, in our economy's collective race-to-the-bottom, has failed to create well-paying jobs, has not rewarded workers' productivity with salary increases, and continues to out-source jobs to the third world while it disproportionately enriches corporate CEOs and those employed by brokerage firms and hedge funds.   


             Despite all of the evidence that shows an increasingly dysfunctional market economy, with its mal-distribution of the benefits and burdens, the wealthy remain largely unpersuaded. Through their armies of well-paid lobbyists, propagandists, and political sycophants, they peddle a barely disguised version of Social Darwinism that blames the poor and the increasingly struggling middle class - the 47% moochers that Mitt Romney decried - for their own travail and offers the myth of Horatio Alger as a balm. Through their surrogates, the 1% repeatedly propagate their recipe for economic bliss - that minimal regulation and less government, low taxes, union-free workplaces, and free trade will, in the long run, uplift everyone.


             As a growing chorus of critics, including Pope Francis, have condemned "the idolatry of money" and "trickle-down" economic theory and urged policies to remedy economic inequality,  some members of the elite have begun to complain that they feel besieged. A prominent recent example is Tom Perkins, a founder of the Silicon Valley venture capital firm, Kleiner Perkins Caufield & Byers. In a letter to the Wall Street Journal this past January, Perkins compared criticism of the wealthy to the Nazis persecution of the Jews. His indignation about the slights to which he and his peers believe they have been subjected are as grounded in reality as is Bill O'Reilly's annual lament about some imaginary war being waged against Christmas.


             In last Sunday's New York Times, another courageous voice was raised in defense of the wealthy. Arthur Brooks, president of the American Enterprise Institute and a life-long shill for the monied interests, cautioned against the dangers of class-warfare. In an op ed column entitled, "The Downside of Inciting Envy," Brooks invoked the names of U-2s Irish Singer Bono and Alexis deTocqueville to support his argument that Americans have thrived economically because they have embraced the wealthy as role-models and sought to emulate their success.


             By contrast, Brooks observed, "Unsurprisingly, psychologists have found that envy pushes down life satisfaction and depresses well-being. Envy is positively correlated with depression and neuroticism, and the hostility it breeds may actually make us sick."


             Brooks insisted in his opinion piece that his own rigorous, impartial and scholarly analysis "confirms a strong link between economic envy and unhappiness" and he ominously warned that "a national shift toward envy would be toxic for American culture."  Next, Brooks identified that the root cause of what he has diagnosed as the reason for increasing envy of the wealthy by the rest of the U.S. population: It stems from an apparently mistaken "belief that opportunity is in decline." 


             Brooks then suggested a smörgåsbord of prescriptions that he claimed would "break the back of envy and rebuild the optimism that made America the marvel of the world." Not surprisingly, his proposed solutions included the usual right-wing drivel and talking points that, one hundred and thirty years ago, would have elicited enthusiastic endorsements from Herbert Spencer and William Graham Sumner: "education reform that empowers parents through choice, and rewards teachers for innovation"; "regulatory and tax reform tailored to spark hiring and entrepreneurship at all levels, especially the bottom of the income scale"; "recalibrating the safety net to ensure that work always pays -- such as an expansion of the earned-income tax credit -- while never disdaining the so-called dead-end jobs that represent a crucial first step for many marginalized people."


               Brooks concluded his homily with a burst of pious platitudes: "... we must recognize that fomenting bitterness over income differences may be powerful politics, but it injures our nation. We need aspirational leaders willing to do the hard work of uniting Americans around an optimistic vision in which anyone can earn his or her success. This will never happen when we vilify the rich or give up on the poor. Only a shared, joyful mission of freedom, opportunity and enterprise for all will cure us of envy and remind us who we truly are."


             In his analysis, Brooks refuses to acknowledge that the U.S. economy has become dysfunctional, nor will he admit that inequality and wage stagnation pose a threat to this nation's well-being. In his worldview, any discussion of these issues should be dismissed as a smokescreen for envy of the 1%. Instead he recommends "happy talk" as a panacea.


             In the fantasy-land that Brooks and his fellow deniers inhabit, the answer to the present inequitable, ill-performing economy - in which the wealthy amass an ever greater-share of the wealth - is to return to the 19th century model of laissez-faire capitalism with one important exception: His proposed expansion of the earned income tax credit. That credit, first introduced during the Reagan administration, represents a form of socialism for the wealthy since U.S. taxpayers, rather than business owners and shareholders, subsidize the incomes of hundreds of thousands of poorly paid employees who work for corporations such as Wall-Mart and McDonalds.


             Brooks' idyllic vision would return us to a time when there was, in fact, no public safety net. Further, there were no income taxes and there was no regulatory oversight. Teachers were poorly paid, few had even attended college, and public education beyond grammar school was the domain of the few who did not need to depend upon the labor of their children to help support their household.


             In that era, because there were no corporate or income taxes and no antitrust laws, a mere handful of "robber barons"  - Cornelius Vanderbilt, Andrew Carnegie, John D. Rockefeller,  J.P. Morgan, et al - were able to amass extraordinary, unchecked wealth that enabled them to effectively control much of the political and economic machinery of the United States.


             Although Arthur Brooks may view that era with nostalgia, those who have learned the lessons of history and remember the struggles of their forebears should be forgiven for their lack of enthusiasm.


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