Thursday, September 23, 2010

Economic Apartheid Runs Rife in America

Last week's release of the US Census Bureau's report: Income, Poverty, and Health Insurance Coverage in the United States: 2009 caused quite a stir. The emerging image is quite bleak.

In summary, nearly 44 million people were living in poverty last year, which is 14% of the population, one in seven adults, one in five children. That is in an increase of 4 million people over the previous year, the highest percentage in 15 years, and the highest number in more than a half-century of record keeping.

Median Incomes were 5 percent lower in 2009 than they were a decade earlier, and as Harvard University economist, Lawrence Katz points out, "this is the first time in memory that an entire decade has produced essentially no economic growth for the typical American household."

Race continues to play a huge factor in poverty and income inequality. Median per capita income for non-Hispanic whites was $30,941, down 0.8 percent from a year earlier. Among blacks, median per capita income was not quite two-thirds that, at $18,135.

When looking at household income, the widest racial gap is between black and Asian households. Black-led households make less than half the median income that Asian households do.

In some ways, these figures are not all that surprising given that the United States is a nation founded on the genocide of its indigenous peoples, who by the way aren't considered important enough to make it into the official statistical portrait, and the enslavement of African Americans. It is doubtful that these types of historic income disparities can ever be erased.

Yet, the greatest income disparities exist within the white population where we find an almost complete decoupling of economic trajectories between the superrich and the rest of white America.

Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression, according to a recently updated paper by University of California, Berkeley Professor Emmanuel Saez. The paper, which covers data through 2007, points to a staggering, unprecedented disparity in American incomes.

Though income inequality has been growing for some time, the paper paints a stark, disturbing portrait of wealth distribution in America. Saez calculates that in 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000.

As of 2007, the top decile of American earners, Saez writes, pulled in 49.7 percent of total wages, a level that's "higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the 'roaring' 1920s."

Beginning in the economic expansion of the early 1990s, Saez argues, the economy began to favor the top tiers American earners, but much of the country missed was left behind. "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007," Saez writes.

So how does less than one percent of the population maintain its privileged status in a nation that prides itself on having free and fair democratic elections? The answer: it engages in populist politics and plays the race card.

First, it should be remembered that the superrich don't give a shit about the well being of the average American regardless of the color of his or her skin. Therefore, the trick to be turned is to tie together a political package that includes preferential policies that benefit the rich with emotionally laden social issues that appeal to an the increasingly disenfranchised white population.

It's as if as long as the political agenda contains the familiar political rhetoric: anti-abortion, anti-gay, anti-gun control, lower taxes, smaller government, and increased military spending, it doesn't matter that economic policies are tilted to favor the rich at the expense of the average American.

Moreover, the presence of colored people allows the rich to use them as scapegoats in order to fend off any claims that might be made against them. For example, if unemployment is a problem it isn't because the middle class jobs have been transferred off shore, it's because those damn immigrants are taking your jobs.

Playing to xenophobic fears is at the foundation of a divide-and-rule strategy. It is very effective and it is at the heart of the Republican strategy of regaining control of the US congress in 2010.

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