Billionaires R Us

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http://www.alternet.org/walmart/27168/

 

Billionaires R Us

 

By Chuck Collins and Felice Yeskel, AlterNet. Posted October 24, 2005.

 

 

Wal-Mart's Walton family now has 771,287 times more money than the

median U.S. household. What gives?

 

Fall is inequality season. Every autumn, as the leaves change color,

we get a vivid new picture of the trends that pull us apart as a country.

 

This year is no different. But after almost three decades of

incrementally widening disparities of wealth and income, it's worth

noting that we've entered a new version of economic apartheid,

American-style. Let's call it Inequality 2.0.

 

The United States is now the third most unequal industrialized society

after Russia and Mexico. This is not a club we want to be part of.

Russia is a recovering kleptocracy, with a post-Soviet oligarchy

enriched by looting. And Mexico, despite joining the rich-nations club

of the Organization for Economic and Community Development, has some

of the most glaring poverty in the hemisphere.

 

In 2004, after three years of economic recovery, the U.S. Census

reports that poverty continues to grow, while the real median income

for full-time workers has declined. Since 2001, when the economy hit

bottom, the ranks of our nation's poor have grown by 4 million, and

the number of people without health insurance has swelled by 4.6

million to over 45 million.

 

Income inequality is now near all-time highs, with over 50 percent of

2004 income going to the top fifth of households, and the biggest

gains going to the top 5 percent and 1 percent of households. The

average CEO now takes home a paycheck 431 times that of their average

worker.

 

At the pinnacle of U.S. wealth, 2004 saw a dramatic increase in the

number of billionaires. According to Forbes Magazine, there are now

374 U.S. billionaires. The growth in billionaires took a dramatic leap

since the early 1980s, when the average net worth of the individuals

on the Forbes 400 list was $400 million. Today, the average net worth

is $2.8 billion. Wal-Mart's Walton family now has 771,287 times more

than the median U.S. household.

 

Does inequality matter? One problem is that concentrations of wealth

and power pose a danger to our democratic system. The corruption of

politics by big money might explain why for the last five years the

President and Congress have been more interested in repealing the

federal estate tax, paid only by multi-millionaires, than on

reinforcing levees along the Gulf Coast.

 

Now, to pay for hurricane reconstruction and the war in Iraq, Congress

is considering cuts in programs that help poor people, such as

Medicaid and Food Stamps. They have not yet considered fairer ways of

reducing the deficit by reversing special tax breaks for the rich,

such as the recent cuts in capital gains and dividend taxes.

 

Inequality is non-partisan. The pace of inequality has grown steadily

over three decades, under both Republican and Democratic

administrations and Congresses. The Gini index, the global measure of

inequality, grew as quickly under President Clinton as it has under

President George W. Bush. Widening disparities in the U.S. are the

result of three decades of bi-partisan public policies that have

tilted the rules of the economy to the benefit of major corporations

and large asset owners at the expense of people whose security comes

from a paycheck.

 

Public policies in trade, taxes, wages and social spending can make a

difference in mitigating national and global trends toward prolonged

inequality. But our priorities are moving in the wrong direction.

 

For example, the failure to raise the minimum wage from its 1997 level

of $5.15 an hour guarantees continued income stagnation for the

working poor for years to come. The President and Congress's focus on

tax cuts for the wealthy and their disinterest in government spending

to expand equal opportunity sets the stage for Inequality Version 3.0.

 

We shouldn't tolerate this drift toward an economic apartheid society.

 

Chuck Collins and Felice Yeskel are co-authors of the new book,

" Economic Apartheid in America: A Primer on Economic Inequality and

Insecurity " (The New Press).