Economic Inequality In The United States

Economic Inequality

There can be different views on what people think about the subject of economic inequality. Some people think it definitely exists in this country and it is unfair. There are also people who think that there are inequalities and that is not something to be alarmed about. They think that it’s an exaggerated notion. What is economic inequality? It is when different people have different levels of income or wealth in a society. Now you may not think there is a problem with this by definition because that is technically saying that if I make a dollar more that you do in a year then there is inequality. The problem that some people argue with economic inequality is when the differences between the wealthy and the working class are so large that economic and political power becomes somewhat concentrated in the hands of a minority who then extend the unequal income distribution by
controlling the rules that govern the system. In particular there are two different points of views I would like to compare on the issue of economic inequality. W.
Michael Cox (former chief economist at the Federal Reserve Bank of Dallas) and Richard Alm (business reporter with the Dallas Morning News) agree that there is economic inequality but they feel like it is being blown out of proportion. They argue that these inequalities are not threatening. They think we should focus on whether the bottom is better or worst off in terms of consumption, instead of focusing on the gap of wealth between the top and bottom. They feel that the wealth from the top is the reason that the bottom benefit from breakthroughs in technology such as color TV’s, VCRs, computers and answering machines that is perceived to make like better for all (pg. 337). Cox and Alm reject the saying “The rich are getting richer and the poor are getting poorer”. They do agree the rich are getting richer but they also believe the poor are getting richer or doing better also. They give examples of people such as Bill Gates, Oprah Winfrey, Bill Cosby, Michael Jordan, as well as others, who have risen from the middle to lower class to top or
elite. They argue that studies of income inequality does not say whether people are doing better or worst because the results never stay the same from one year to another. Because of this you can’t tell if an individual has ascended to a higher bracket. Cox and Alm believe people in America make it upward in the distribution through hard work, education and experience, not luck. They don’t think we live in a society where people only a few people can do really well and the majority get the leftovers. Getting ahead in the US is not a mystery and there isn’t any trick to doing so. The way to get ahead or climb the economic later is through hard word and dedication. They argue that the economy provides opportunity but it is up the individuals to seize it as it is presented to them. Success doesn’t happen randomly to random people. It happens to the people who want it the most and that make the decisions necessary to reach that level of success. Paul Krugman (economics columnist for The New York Times) had a different view about economic inequality. He talks about a time called the Gilded Age where there was vast wealth and income inequalities. This was a time when rich could afford to have houses the size of a palaces and servants for them to command. He felt that the middle class economy he experiences when he was young was better for the country. During this time there were some people with large fortunes as well as people who were living in poverty. However, it wasn’t disproportionate the way that it is now and back in the Gilded Age. Krugman thinks we are not living in a new Gilded Age that mirrors the original. He thinks the cause of this is due to the concentration of income at the top. This is the reason why the United States, despite all the economic achievements, has more poverty and lower life expectancy than any other major advanced nation (pg. 345). He states that corporate leaders in some ways expect to be treated like royalty. Over the past few years, the top 100 CEO’s of big corporations went from making 39 times more to 1,000 times more what pay of an average worker would make (pg. 346). That is a big difference. There is too much of a gab in income between the top and the bottom. Krugman is fearful that when the rich get richer they will use their money to sway the policies in this country to increase the economical inequality. He basic view is a economy is more successful when the middle class is thriving, not when the rich are getting richer. He doesn’t think trickle down economics is the right way to go. I do believe that people can come from the bottom and excel to success, as Cox and Alm point out, but I agree more with Krugans theory. I do think the “rich are getting richer and the poor are getting poorer”. Heads of corporations are getting bigger salary increases and outsource more and more jobs each year. How can the trickle down economy work when the middle class suffer? The wealthiest of American are getting tax breaks when the unemployment rate is over seven percent. I think the problem in this country is politics is too driven by money. The more money and power you have the further you go in politics. The wealthy should not be the guiding force in politics because they will only want bias policies that will only help generate more wealth for them. The wealthy do not care about the middle class and the poor so they have no issues with economic inequality. Even in the current election, the republican party wants to go back to the same policies during the Bush era that put this economy in the state it is in now. I don’t see the logic of going back to those policies knowing what they did to this country.