More than a half-century ago, John F. Kennedy stood before a roaring crowd at the Capitol as he was sworn into office as president of the United States. To some eighty-million people watching across the country, his breath clear in the winter air, he delivered what would become one of the most famous lines of any inaugural address in history: “And so, my fellow Americans: ask not what your country can do for you — ask what you can do for your country.”
Fifty years have come and gone since Kennedy’s call for patriotism and progress, when he solemnly declared that, whether we liked it or not, we had the capability to eradicate both all of poverty and all of human life. It was a call for advancement — the recognition that we had the capacity to choose which to eradicate, and that were we the wiser we could begin the long trek toward making our society a freer, fairer, and more just place for all. Kennedy’s address inspired patriotism across the country, and the energy was electric.
Patriotism and progress became the foundation for the meteoric rise of the greatest middle class the world had ever seen, and beneath it was the profound undercurrent of Kennedy’s ultimate question to the American people — a question that seemed to test the very limits of the meaning of civic duty. The patriotism of the ‘60s was real and lasting, and it was validated by a blossoming post-war economy that fought poverty, reduced extreme wealth and income inequality, and delivered the strongest high-speed growth the country had ever seen.
Despite the idealism that the Kennedy era inspired, the world is different now. Today, the United States has one of the highest rates of wealth and income inequality in the industrialized world, worse now than at any other point in our nation’s history since the Great Depression. Despite the progress of the past, we have, by far, the highest rate of childhood poverty of any industrialized country. And at a time when millions of families can’t afford to send their kids to college or even afford basic healthcare, one family — the Walton family of Wal-Mart — owns more wealth (roughly $90 billion) than the combined bottom 40 percent of the entire American population.
At some point in the last half-century, the fight against poverty faltered. And as it did, an entire generation of Americans was left out to dry in a modern society that idealizes patriotism but lacks the progress to validate it. The devastation of the United States’ wealth and income inequality gap is crippling to both the economic and moral fabric of our nation, and after five decades, it would appear that Kennedy’s call for patriotism and progress has been withered by time.
In a highly capitalistic economy, it is natural for there to be wealth and income inequality. In fact, many argue that some inequality is even good — after all, people need incentives to work hard in order to achieve more. As Bill Clinton’s former Secretary of Labor Robert Reich puts it, “Some inequality of income and wealth is inevitable, if not necessary. If an economy is to function well, people need incentives to work hard and innovate. The pertinent question is not whether income and wealth inequality is good or bad. It is at what point do these inequalities become so great as to pose a serious threat to our economy, our ideal of equal opportunity and our democracy.” In other words, when does the net effect of wealth and income inequality become negative?
The answer, though not as black and white as some people would like to make it, is still relatively clear in the context of modern America’s highly unequal distribution of wealth. At a time when college costs have more than tripled (adjusted for inflation) since 1970 and healthcare costs relative to wages have quadrupled since 1958, the middle and lower classes are being left with even less money to keep themselves afloat. Today, the wealthiest 400 Americans own 62 percent of the nation’s wealth – while, at the same time, the share of wealth attributed to the bottom 47 percent has dropped from 2.5 percent in 1983 to zero percent in 2009, essentially signaling that their debt exceeded their assets. This drastic shift has helped to propel the United States’ Gini Coefficient (a statistical measure of wealth inequality, with 1.00 signifying total inequality) from just above .350 in 1970 to nearly .450 in 2010. So, even as the expenses of essential social utilities for many Americans drastically increase (like education and healthcare), they’re maintaining less wealth to pay for them.
And in a different measure of how inequality is impacting ordinary Americans, a study by the Economic Policy Institute found that “between 2009 and 2012, the top one percent of Americans captured 95 percent of total income growth.” In other words, almost all of the new income generated in America today is snatched up by the wealthiest members of society before the rest of the country even gets a look.
To understand when wealth and income inequality is a problem in a capitalist economy, it is important to understand the context and structure on which that economy is built. In the United States, 70 percent of GDP is driven by consumer spending. When people earn more, they spend more, contributing to our GDP and driving additional sales and income tax revenue for the government, which in turn leads to increased government spending on positive societal assets like teachers, infrastructure, and social programs. When people earn less, as they do now (adjusted for inflation, “median household income was lower in 2013 than in 1989″), they spend less, our GDP remains stagnant, income tax revenue decreases, the government spends less, and unemployment rises as the government cancels contracts and fires police officers, teachers, fire fighters, and public officials through spending cuts. The bottom line is that a strong economy comes from a strong middle class, not a strong wealthy class.
The U.S. economy today, however, would tell you about a different set of priorities, one in which the CEOs of large corporations often pay an effective tax rate lower than that of their secretaries, and where many large, profitable corporations pay little or nothing in federal income taxes as a result of tax loopholes and offshore tax havens.
To better illustrate this point, take a look at the graph above from former Secretary Reich’s documentary Inequality for All that compares wealth and income inequality to the top income tax rates. The graphs are almost perfect inverses, and inequality was lowest in the ‘60s (where the wealthiest Americans had a top income tax rate of 90 percent) but began rising again when the top income tax rate was lowered as a result of the 1980s Reagan tax breaks. As tax breaks for the rich increased, so did the extremities of wealth and income inequality. (See http://inequalityforall.com/resources/#/ for a detailed breakdown and more graphical representations.)
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When Kennedy took to the podium in 1961, the country demanded patriotism and progress. His call for advancement ushered in one of the great eras of American history — a period of high-speed economic growth, of low wealth and income inequality, of increases in the standard of living, and of stunning achievements that eventually climaxed with Armstrong’s boots on the moon at the twilight of the ‘60s. Kennedy’s vision for America was one in which, instead of nuclear arms eclipsing the horizon, Americans would find unity in the very patriotism for which they would become famous. His vision was for the United States to work to ensure that, instead of engaging in the abolishment of life, the country would strive for the vindication that would come from the abolishment of poverty and disease. Perhaps this is all wishful thinking.
Perhaps it is not.
Today, America often appears as patriotic as ever. But, as Kennedy once said, “the world is different now.” The America of today may have patriotism, but it is a patriotism that has been warped and redefined over decades to mean something very different than what it meant in the Kennedy era. It is a patriotism that ignores that we have the highest rate of childhood poverty in the industrialized world. It is a patriotism that ignores that we are experiencing a terrible downturn of the American middle class even as millions in our country already live in poverty, with more likely to join them. It is a patriotism that ignores the obscene level of wealth and income inequality that has arisen since the 1980s.
Today, we have patriotism without progress. We belt out the national anthem and wave flags in July, as we should, but real and defining patriotism comes not from blindly giving praise even in the face of wrongness. It comes from recognizing that perhaps the country that we love, and the people in it, have made mistakes and that we must, if we are true patriots, go about remedying those mistakes so that our fellow man and woman can enjoy the principles of equality and fairness that our country was founded upon. Patriotism demands progress in a much larger and more profound way than resting on the laurels of having the largest economy in the world, or the strongest military, or any other number of large but ultimately meaningless achievements.
Patriotism and progress demand that our citizens are afforded dignity. They demand that we work to eliminate injustice and ensure that every American is given access to the pathways of equal opportunity that so many in our past have enjoyed. They demand that we reject a society in which the wealthiest people in the country receive tax breaks while millions of American children go hungry. That scenario should be fundamentally offensive to every breathing American.
We must make it our imperative to join the ranks of civilized nations in putting people ahead of ideology and mitigating the tragedy of America’s modern wealth disparity.