Tuesday, November 06, 2012

Risks of concentrated wealth

It is now common knowledge that the profile of wealth in the United States has changed radically in the last few years.  While most people in the country have gained little ground in the last ten years a small number of individuals have been acquiring huge amounts of wealth at a staggering rate.  Charles M. Blow in the New York Times recently quoted an October report from the Congressional Budget Office that found that, “from 1979 to 2007, the average real after-tax household income for the 1 percent of the population with the highest incomes rose 275 percent.”

Actually, it isn’t really the 1% that has made the most dramatic gains but the upper one-tenth of 1% of the population.  David Cay Johnston reported last year that “The Saez analysis of tax return data shows that through 2008, the top one-in-a-thousand taxpayers had average income in recent years that ranged between $5.2 million and $7.5 million annually. Just investing that much in corporate bonds will produce enough interest income to keep someone in the top 1 percent.”    

What I don’t hear people talking about is the risk for the country, actually for democracy, that such a disparity if wealth creates.  There is the obvious ability to spend profligately in elections, as in the one being held this very day.  There is the ability to control information – both to truncate discussion about some topics and to promote others that are of interest to those who have the most leverage in the society.  And then at some point a country's leaders – congressmen, senators, even presidents – can become so beholden to powerful interests, dominant industries,  wealthy individuals, that the whole apparatus of government administration  becomes merely an instrument of their will.  

If that happens, those of us who are embedded in the system may not notice how much has changed for a good while, for the narratives that dominate much of our public discourse are constructed by wealthy and powerful interests that have the wherewithal to promote their particular views, in their own interests.  

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