Thursday, April 4, 2013

Time To Dismantle, Not Tinker, With Political And Economic Hierarchies

David H. Ikard and Martell Lee Teasley write in their book, Nation of Cowards, that "structural inequalities are systemic material, social, political, and economic factors that individually or in combination facilitate individual and group disadvantages."

Structural inequalities are firmly entrenched in American society. According to Ikard and Teasley, they "manifest themselves in inferior housing, health services, education, and employment opportunities."

The continuing problem of joblessness is an appropriate place to start in trying to understand how structural inequalities work in America. Nationally, the unemployment rate is 7.7 percent, down from its Great Recession peak of 10 percent in October 2009. This figure only tells part of the story; roughly 20 million Americans are either out of work or underemployed. To make matters worse, the Federal Reserve reported last year that US corporations are sitting on about $1.7 trillion which they keep in treasuries, other bonds, and bank accounts that could be used to hire and train unemployed and underemployed Americans But, that only covers money they are sitting on domestically. If you look at worldwide holdings, a more realistic figure is that they may be hording an unprecedented $5 trillion in cash since the Great Recession.

The tenacity of structural inequalities also manifest themselves in the way wealth and income are disproportionately concentrated in the hands of a small segment of the nation's population.

Last week, The Wall Street Journal published a story about how the S&P 500 – the stock market index of 500 large US companies – rose to a new high of 1,569.19, recouping all of its loses from the global financial crisis which, as we all remember, was sparked largely by the rapacious greed of the folks who run Wall Street and their enablers in Washington.

The other major indicator of economic activity, the Dow Jones Industrial average, had already reach a record high last year, recovering all of its loses from 2007.

Most Americans, however, do not directly benefit from this "buoyant economy." Indeed, according to a recent PEW survey, the stock market rally has had a "limited effect on the public's economic outlook because they are not what affect people's personal financial situation." Of those surveyed, 73 percent said the rising price of stocks had "very little" or "no effect at all."

Instead, 64 percent said their household finances were impacted by gas prices, and 58 percent said they were impacted by the prices of food and other consumer goods.

In the real world, while Wall Street is breaking records, ordinary folks are becoming increasingly dependent on food stamps to feed their families. According to an article published last week in The Wall Street Journal, as of December 2012, a record number of Americans – 47.8 million people – were enrolled in the Supplemental Nutrition Assistance Program (SNAP).

Structural inequalities in the US are about as bad as they have ever been in the history of the nation. Combating inequalities as stark as they have become in the US will require dismantling, not tinkering with, political and economic hierarchies. Unfortunately, many of the well-intentioned solutions being touted today by some on the left – such as, higher taxes on the rich, or a financial transaction tax – may do little more than prop up the status quo.

We need a much more radical solution. The problem is capitalism. It must go.

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