America's Drastic Wealth Imbalance:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

I will be pulling upon this wonderful article for most of my facts and perhaps some of my analysis. Everyone would do well to simply read the entire link for themselves, then return here for the rest of what I have to say.

First, let's discuss the idea of a meritocracy. I am fundamentally opposed to a meritocracy, I think it is evil and inhuman. Those who appreciate meritocracies, and probably suspect that they'd be near the top of it, may dismiss all these facts as unimportant or even good things. However, I have argued before and I will briefly argue again, why meritocracies are evil.

First, my definition of a meritocracy is where all power, wealth, status, reproductive opportunity, and all other 'currencies' that hold any value, are distributed exactly according to people's ability to somehow acquire them without any adjustment by external forces (IE a distributory agent that does not take merit into account.) A group of smooth talkers who manage to seduce a hundred women, leave each of them pregnant, and then move on to the next one, would in a meritocracy be awarded full honor and credit for their activity, instead of prevented through any sort of government opposition. A group of salesmen, who manage to get millions of people to purchase worthless trinkets or snake oil, would be able to pocket their money with a job well done, since the dupes were stupid enough to buy it. A doctor who manages to extort millions of dollars from a patient who desperately needs immediate care and cannot wait to go bargain or shop around for some other doctor, could pocket the money with an admirable slap on the back. If someone wanted to sell themselves into slavery, or sell their body organs, or become prostitutes, no one would interfere. If people couldn't earn their own way in a remunerative job, they'd be left to starve to death in a ditch by the road. I do not allow a meritocracy to have some sort of church or charity system that doesn't operate by a meritocratic philosophy, because that would in itself admit that a meritocracy is wrong and needs checks and balances. The argument would then shift from 'is a meritocracy good or evil?' to 'is the private sphere or the government better equipped to redress the evils of a meritocracy?' Of course, hands down the government is better equipped, but such a debate doesn't even matter. I am dealing with people who literally believe all resources should be distributed precisely to whoever earns them, however they earn them, whatever they earn.

If some ruggedly handsome wealthy fellow wants to marry every single woman on Earth, and deny ALL OTHER MEN ON EARTH any reproductive opportunities, a meritocrat will say "Hey, if he can afford it, more power to him. After all, the contract is consensual, and he deserves whatever he can achieve." Even though this means the complete annihilation of the human race, a meritocrat will not abide any external forces to enter any of his calculations, and will stick to his guns like the cowboy riding the missile, hooting and cheering, from "Dr. Strangelove and the Doom Device."

Retreating from this extreme scenario, we can still imagine one swell guy 'earning' ten or twenty wives, and 19 men being left out in the cold, never to know the happiness of love or family, their genetic line extinguished forevermore. To a meritocrat, this is no big deal, because no one's happiness or genetic interests matter. The only thing that matters is justice, a justice defined by an anything goes world of ruthless, selfish, individualistic competition.

For the same reason, a meritocrat would be okay with a single person, through various stock purchases and the like, somehow get every single person on Earth indebted to him, and force them to become his personal slaves. Or a meritocrat could somehow corner all the farmland on Earth, spontaneously choose not to plant any crops this year, and starve the world to death -- NO ONE COULD INTERFERE, because he bought the cropland fair and square, and it's his private property, to do with what he pleases. One can imagine all sorts of other natural resource monopolies that would have the same negative results. Or if not monopolies, simply a large enough market distortion to make everyone else's lives hell. The point here isn't the scale of the problem, the point is the principle of a meritocracy is absurd, as shown by what it would endorse at the high ends of these scales.

The meritocracy has no value for human life, or human happiness. This is why the meritocracy commonly conflicts with the interests of human life and human happiness. A proper reflection on the Good, what it consists of, what people truly value in life, would leave a meritocracy in tatters. The moment we start attaching value to a human life, simply because they're alive, and human happiness, simply because people have feelings, the calculus of a meritocracy falls apart. In order to correct a law code to take into account people attaching INNATE value to certain things, unrelated to how well people can acquire/earn it, a meritocracy must be discarded and utilitarianism must be implemented.

Utilitarianism stands in complete contrast to meritocracy. The ideal of a Utilitarian is first to identify what is valuable in life, and then maximize this value. Since the marginal return of adding yet more weath, women, and wine to the same person rapidly drops off, but has a high rate of return when distributed to a larger pool of people, we reach the fundamental mathematical truth:

9 x 1 = 9.
8 x 2 = 16.
7 x 3 = 21.
6 x 4 = 24.
5 x 5 = 25.
4 x 6 = 24.
3 x 7 = 21.
2 x 8 = 16.
1 x 9 = 9.

Marginal utility and simple math teaches us that the greatest amount of good is created when we create a parity between our goods, and our population. 25 is the highest possible amount of good, and it is created solely through the multiplication of 5 and 5, the most equal formula possible.

Utilitarians therefore want the complete opposite of meritocracies, instead of 'to each according to their ability,' we want, 'to each according to their marginal utility.'

There is a slight complicating factor in this calculation, which meritocrats love to harp on. It's been shown that people work harder when they receive greater rewards than just 'average.' It's also true that people of high merit tend to invest and spend their money more wisely than those of low merit. Due to these two considerations, a higher level of meritocracy will produce a greater amount of wealth than a higher level of utility.

Of course, since utilitarians don't care about means, but simply results, we have no problem with accounting for these discrepancies.

Take our initial example, where 5 x 5 = 25 was found to have the highest utilitarian return. Suppose the meritocrats propose instead that by inspiring people to work harder and keeping more money in the hands of wise investors, they could create a situation of 12 x 6 = 72. Since 72 is higher than 25, a utilitarian would gladly switch to this meritocratic imbalance to continue to pursue the highest end result. But they would still object to 17 x 1 = 17, since that would again be lower than the much less efficient, but much more fair 5 x 5 = 25. In this way, a utilitarian discovers, through trial and error, what level of merit-based inequality yields the highest utilitarian results for the greatest number of people. It can't be too low, because that depresses our productive power, and it can't be too high, because that depresses our consumptive power. This is why utilitarians are socialists, not communists. It is also why socialism is the greatest moral system on Earth, and why the vast majority of the Earth has adopted it. America is already a socialist state, it isn't a full-fledged meritocracy of libertarian/objectivist dreams, thank God. I doubt there will ever be such a state, it is so repulsive to such a vast majority of people. However, it is one of the least socialist states on Earth, which has caused a great deal of unneeded suffering.

What this country needs is more socialism -- this socialism will come in the form of the citizen's dividend, and the mandatory marriage law, so that everyone will have a normal family life, and the means to afford it. Monogamy is already a socialist system, which bans polygamy and promiscuity in favor of the most equal distribution of wives possible. It was due to monogamy that Europe became the fine place it was, the only civilization on Earth that restricted its nobility to the same quota of women/fertility as the commoners. The mandatory marriage law is simply an extension of this principle. Modern day promiscuity is just polygamy by a new name, and it is causing the same mayhem polygamy always causes across all the other failed civilizations that practiced it all other places and times on earth. I should not have to argue why polygamy is so harmful. It should be self-evident how painful it is to never love or be loved, to drift through life with no progeny and nothing to leave behind when you die. Without anyone even remembering you existed, except perhaps your grieving parents who get to see their entire ancestral line, dating back 10,000 generations, snuffed out with you. Now imagine this sort of pain visiting 60% of men and 20% of women, and you have today's statistics of childlessness. As time passes and culturally monogamous values continue to fray apart, the statistics only grow worse.

The citizen's dividend exists in order to address the other inequality in grave need of re-balancing. Our wealth has become drastically centralized, and the result is a populace suffering from terrible want in the midst of plenty. "How is it possible," socialists keep asking, "that the richest country on Earth can't even afford -- ?" The answer to that question is in this article.

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2009).

When the pie graph is broken up into an even finer examination, we discover this:

Top 1%: 34% of net worth.
2-5%: 25% of net worth.
6-10%: 12% of net worth.
11-20%: 13% of net worth.
Bottom 80%: 15% of net worth.

That's right, the top 1% has more than twice the money than the bottom 80% of Americans. Which is the same as saying the top 1% are over 160 times as rich as the bottom 80%. This isn't two, three, or four times as rich. This is over 160 times as rich. And this isn't the top 10% vs. the bottom 10%, it's the top 1% vs. the bottom 80%. As in, practically EVERYONE IN AMERICA is in this bracket. And yet we don't count for SHIT. We are NOTHING. We are an inconsequential part of the economy. We are meaningless. And we are treated as meaningless. And we are paid accordingly -- with a meaninglessly small sum of money.

The classical concept of 'rich people' would really be the 6-10% bracket. People who earn twice as much as their percentage of the population. That sounds rich. Wow! Twice as much as me. That's a lot of extra money. The classical concept of the middle class is reserved for the 11-20% people. These people earn a little larger share of the country's net worth, than their share of the population. They break even, thus, by any sane measure, they are the middle class. The break-even point, wherever it is, is clearly the middle of our class structure. In a classical definition of the 'poor,' we would include the entire bottom 80%. Together, they managed to scrape together 15% of the net wealth of the country, or about 1/5 as rich as the national average. When you have 1/5 as much money as the middle class, the break-even point in your country, you are poor. You are extremely poor.

So let's look at what the top 5% has created for everyone else. 4% of people are 'rich,' they earn twice the national average. 10% are 'middle class,' they earn about the national average. And 80% of people are 'poor,' they earn 1/5 the national average.

In what world is this a success story? In what world is an economy acting properly when it leaves 80% of its people in various ditches and sewers, and only allows 10 measly fucking % to be the entire middle class? How does this wealth distribution make sense from a utilitarian perspective? Why on earth do the top 5% of people in this country hold 60% of our net worth? What do they need that much money for?? Are you telling me people just don't feel like working hard until they start earning 2.4 million dollars a year, and anything short of that is just communism? Seriously?

Mind you, these measures of wealth occur after taxes, after government spending, after everything. They are simply a snapshot of who has how much money in our country as we speak. This means that even with all the socialist methods we currently employ, America ended up with this severe a wealth imbalance. But even this isn't good enough for republicans and libertarians, who insist the problem with America is our wealth distribution isn't imbalanced enough, and merit isn't highly rewarded enough, and deserves a larger slice of the pie. How much does the bottom 80% have left to give up, before they're down to their last shirt and last crust of bread? Half of children in the USA are on food stamps at some point in their lives. Do we need to cut the food stamp program so food can go to only those who deserve it from here on? Maybe rich people should just eat our babies, thus solving two birds with one stone.

Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). Thus, the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P.R. reasons -- would take a huge bite out of government revenues for the benefit of less than 1% of the population.

Leaving no stone unturned, the rich don't just want to protect their own wealth, they want to protect their wealth for ETERNITY. By not having any capital gains tax, or any inheritance tax, it would be possible for these top 5%, who have 60% of all assets in America, to pass their wealth untouched from generation to generation, while those who still have to earn their money would continue to be taxed at 50-60% income tax, payroll tax, state income tax, etc. The rich would enjoy all the benefits of taxation, but they wouldn't actually have to pay for any of it, including the military and police that protect their giant mansions from the bottom 80% they've dispossessed. The republicans refused to cut taxes that might help the poor, like the social security tax. Instead they cut taxes only for the top 1%, by getting rid of the inheritance tax. This is where their hearts are located. They serve the interests of the top 1% and fuck the rest of the country, let them eat cake.

But don't worry, the meritocrats will claim. This is all part of the trickle down theory. The bottom 80%, even with just 15% of the net worth of the country, are better off this way, due to the massive productivity gains of giving the rich all the money in the country. If we diverted more money as a proportion to the poor, they'd actually end up with less money in sum. Ignoring the fact that inequality in and of itself makes people unhappy, this argument is also just plain false:

Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions: Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s (Wolff, 2007).

Income distribution paints an even grimmer picture.

The rising concentration of income can be seen in a special New York Times analysis of an Internal Revenue Service report on income in 2004. Although overall income had grown by 27% since 1979, 33% of the gains went to the top 1%. Meanwhile, the bottom 60% were making less: about 95 cents for each dollar they made in 1979. The next 20% - those between the 60th and 80th rungs of the income ladder -- made $1.02 for each dollar they earned in 1979. Furthermore, the Times author concludes that only the top 5% made significant gains ($1.53 for each 1979 dollar). Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).

But the increase in what is going to the few at the top did not level off, even with all that. As of 2007, income inequality in the United States was at an all-time high for the past 95 years, with the top 0.01% -- that's one-hundredth of one percent -- receiving 6% of all U.S. wages, which is double what it was for that tiny slice in 2000; the top 10% received 49.7%, the highest since 1917 (Saez, 2009).

Another way that income can be used as a power indicator is by comparing average CEO annual pay to average factory worker pay, something that Business Week has been doing for many years now. The ratio of CEO pay to factory worker pay rose from 42:1 in 1960 to as high as 531:1 in 2000, at the height of the stock market bubble, when CEOs were cashing in big stock options;. It was at 411:1 in 2005. By way of comparison, the same ratio is about 25:1 in Europe.

It's even more revealing to compare the actual rates of increase of the salaries of CEOs and ordinary workers; from 1990 to 2005, CEOs' pay increased almost 300% (adjusted for inflation), while production workers gained a scant 4.3%. The purchasing power of the federal minimum wage actually declined by 9.3%, when inflation is taken into account.

I don't see much money trickling down here. When does the trickling begin? And by the trickle down theory, did we only mean money trickles down from the top 1% all the way down to the top 20% or so? Is that supposed to make the rest of us happy? "Look, some of the money did manage to trickle ALL THE WAY DOWN to the 20th percentile, we aren't greedy." Whee. I'm happy for the top 20%, which gets to live a decent, middle class existence. But the trickle down theory hasn't helped the rest of us. In fact, we're worse off by almost all measures. So much for capital gain's tax cuts, inheritance tax cuts, and all other policies designed to help the rich, with promises that it would all somehow 'trickle down' to the poor.

As the recession continues and 20% of the country remains unemployed, the discrepancies will only grow. While the rich receive billion dollar bonuses, the poor are living in tent cities. And the poor = 80% of the country. Something has to snap. This is an unbearable, and completely unnecessary, imbalance of funds. As the study above pointed out, the European gap between CEO's and workers, was a mere 25-1, while we were 411-1. A modern economy, with plenty of incentive to work, and a high standard of living, is possible right across the ocean, with 16 times as much parity between the rich and the poor. That doesn't mean we should adopt the same socialism as Europe, which is largely bureacratic and wasteful. It just shows that socialism has succeeded in promoting equality, at a low price to per capita income. Therefore a similar redistribution of money via a Citizen's Dividend in America would also come at a low price to our per capita income, while delivering a life-saving influx of money to the vast majority of the populace, at the price of only the top 10% (who, I assure you, can afford it.) Look at it this way. We can a) leave the bottom 20% unemployed and on food stamps in foreclosed homes and the other 60% one misfortune away from joining said bottom 20%. B) tax the top 10% more and get rid of unnecessary spending on our military and other government boondoggles, creating vast savings, and ensure a high quality of life for 100% of our country.

Anyone who talks about how pitiful and painful it would be for the top 10% to be taxed more than they receive in government benefits, how evil and unfair it is that people without merit are receiving 'hard-earned money.' ((And how hard is it to earn money, really, when you receive 100 dollars a second? Hard earned money is when you spend an entire hour and earn seven dollars. Don't come complaining to the poor how hard it is to earn money, you filthy rich inheritance tax dodgers.)) Just confront them with these facts. These facts need to be known. Somehow, America needs to realize just how bamboozled we've been.

We also need to realize that all the trends are towards MORE inequality, not less. That the poor are doing WORSE than in the 1970's, not better. That nothing is trickling down, so even if we wanted to let the rich enjoy all their wealth, we can't, because they literally have ALL the wealth and we have zero, nothing, zilch. We're out. We have no home, no health insurance, no education, no job, and food stamps to feed the kids. That's it. That's where we stand -- and the trends are all negative and have been for decades. As all the newspapers have told us, "The jobs aren't coming back." Our future isn't coming back, or trickling down, unless we take it for ourselves. In a democracy, what are the bottom 80% waiting for? Why are we still waiting for all that vaunted wealth to trickle down to us? That promise was made to us almost 30 years ago. How long are we supposed to wait? From birth to death? Is this some sort of Hindu trickle-down economics where we get our rewards after we've reincarnated in our next life, by being good dalits in the meantime? Really, I'd like to know what the statute of limitations is on Reagan's promise, and the republican malarkey, that the poor are best served by tax CUTS and government spending should be for Iraq, Afghanistan, and South Korea instead of native born Americans. How long are we going to take this? How long until we deserve to take it, for simply being the most miserable, craven underclass to ever live? You don't see Europe taking this shit. You don't see Japan taking this shit. Why us? Why must we?

There's an answer to that question too. You see, our country is the worst democracy ever made. The constitution was made some 220 years ago, and as a result, we lag behind all other democracies when it comes to truly representing the will of the people. Whereas the rest of the world has a parliamentary system which gives third parties representatives equal to their share of the vote, the American election system is 'winner-take-all,' which means no third party can ever come into existence, as it only ensures the people who vote for it that the opposite side to the party that best reflects them will be even more likely to win. If socialists vote for the green party, the Republicans win. If nationalists vote for the American Third Position, the Democrats win. The American people, therefore, never win.

But why can't one of the two major parties adopt the citizen's dividend platform? Well, why would they? Both parties are funded by the rich and represent only the interests of the rich. No one gets elected who doesn't have rich campaign chests to get their faces on TV and signs in the yards. What kind of upper class is going to support your election if you want a citizen's dividend? It's not just the campaign finance system (which by the way has just been relaxed so that rich people can spend EVEN MORE to adjust elected officials to their special interests). It's the system of 'discourse control' that rich people have via their funding of various think tanks and lobbyists. Every time you hear some speaker on tv who is from 'The Cato Institute,' or 'Moveon.org,' or 'AIPAC,' what you're looking at is MONEY. There are people so rich in America that they can create giant groups of people who do nothing but appear on TV and tell Americans how to think, how to vote, and what government should and shouldn't do. Unless some rich person decides to fund an equivalent think tank that can also somehow buy its way onto mainstream media news channels which themselves belong to the super-rich and only reflect what the super-rich want to hear from their newscasters, where are the American people even going to hear about the Citizen's Dividend? Where will they hear about its virtues? Where will they hear about the need to pass it?

America is still waiting for their idealistic billionaires who will come down from on high and use all their money to fund socialist campaigns and socialist think tanks and socialist lobbyists and a socialist Fox News Channel, etc. I suspect we will wait forever, like jews for their messiah. Billionaires are so insulated from the people, from their fortified suburbs to their private schools to their harvard educations to their chairmanship of some board of directors or other, that they will never once even meet a poor person, much less care about them. Sure, they'll mouth the same platitudes rich people are expected to mouth, "we need to help the poor, the poor are our spiritual brethren," blah blah blah. But when it comes to real policies that might help the poor, their mouths slap shut. And when it comes to a tax that might hurt the rich, they start howling like they're suffering a thousand times worse than any poor person. It's all just talk. They aren't interested in helping us -- which is why they haven't. The elites have never willingly given power, or wealth, to anyone else in history. We cannot wait for the elites to take pity on us, or suddenly become our champions. We'd do better waiting for Godot.

The people have the power of the vote, at least theoretically. They have the internet, where information can be transmitted horizontally, free, without any rich censorship or promotion. They could have a citizen's dividend tomorrow. And when enough children are hungry and asking their mothers why they can't eat tonight -- maybe, just maybe, the bottom 80% will get off their asses, get online, learn what's happening to them, learn why, and vote. Just vote. Walk somewhere and slip a ballot into a box. The snapping point has to be somewhere.