Friday, December 27, 2013


Recently, President Obama raised the ‘Income Inequality’ issue—without advancing fresh policies to deal with a situation that has been distorting the U.S. economy for decades. Quite why it took him so long to focus on such an obvious matter of concern is a good question. He has been in office five years, and he has had his pick of professional advisers on the economy—and, indeed, on any other matter of social concern. How come this impressive array of talent didn’t raise the alarm years ago?

Could it be because many of his policies—particularly in relation to the financial sector--have, in fact, exacerbated the problem? In short—he is not a concerned onlooker. He is a player, and an exacerbater of the many factors which have led to the current situation. He is complicit.

That said, his speech is excellent—as far as it goes—but it doesn’t get to the heart of the matter. As is so often the case with Obama, he pulls his punches at a time when he needs to lead. He needs to learn to define the debate with brutal precision—for, if he doesn’t, his opponents will.

The phrase ‘Income Inequality’ represents a wrong choice of words—and is likely to cause the debate to be lost virtually before it is begun. Few Americans are in favor of income inequality and don’t regard it as either necessary or desirable. In fact, most of us believe in an incentive based economy where effort and talent are rewarded—and we are remarkably un-grudging of the rich. Yes, income inequality does exist, and some of it is outrageous, but it is a symptom of the problem—not the problem in itself.

So if ‘Income Inequality’ does not define the problem, what does? In fact, just so we don’t put the cart before the horse, what is the problem? Does one exist at all?

Yes, it does—and the following are just some of the symptoms. 

  • The slowest recovery from the Great Recession since the Great Depression.
  • The decline of the Middle Class.
  • The earnings decline of most Americans.
  • The persistence of long-term unemployment.
  • The increasing prevalence of low pay jobs.

So what is the root cause of all this—or are there many causes like globalization which, supposedly, nobody can really be blamed for?

In fact there is a readily detectable root cause which boils down to a systematic distortion of the ground rules that govern the U.S. economy to benefit the ultra-rich, the corporations they largely own  and control, and the many who serve them—primarily politicians, senior corporate executives, senior academics, and judges.

In effect, the U.S. economy has been hijacked to favor the few at the expense of the many. The main technique has been to pay off legislators to tilt the legal system in favor of the hijackers. In effect, control of the economy has been bought (and fairly cheaply at that). The correct word for that is ‘corruption’ but the scale of such economic violence is so extensive, I would argue that stronger language is required, and the bottom line is that our economic system has been hijacked.

Can I produce evidence to support that statement? Yes, in profusion—but the point of this piece is not to prove the case, but to consider what choice of words might best define the problem—and lead to a successful resolution.

The track record demonstrates that the Right Wing is vastly better at framing the debate than the Democrats. Well, it’s about time the Democrats learned about the critical importance of words, because this is too important a debate to lose. A situation where a small minority is getting ever richer, while the majority is seeing its earnings steadily decline, is unsustainable. A situation where low paid workers are so badly paid that they need government support is equally untenable.

I have thought about all sorts of phrases which summarize what is widely known as ‘Income Inequality.’ However, the distortions which have been deliberately inserted the economy are so widespread and so severe that using language like “The economy has been tilted to favor the rich,”—which certainly is the case—just doesn’t have the necessary punch.

Imagine the effect of Obama starting a speech with: “The U.S. economy has been legally hijacked…” followed by giving just a few clear examples.

Strong leadership accompanied by strong language is what the situation calls for. Unfortunately, Obama seems to be two-thirds politician and only one third leader—and we need the reverse.

We can but hope he will rise to the occasion.

Not all economies have been hijacked. In fact, most developed economies have handled their economies with much greater economic fairness (and effectiveness) than the U.S. has. The results—as far as the average citizen concerned—have been spectacular, and demonstrate how badly the U.S. has done—and continues to do. High growth is of scant use if virtually all the increase goes only to a few.


  • AUSTRALIA   +64%
  • DENMARK + 220%
  • FRANCE + 154%
  • GERMANY +194%
  • U.S. +0.47%

Source: What Went Wrong by George R. Tyler—a fact-filled book that is well worth reading. In it, Tyler compares the U.S. system and track record with that of others. The results speak for themselves.




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