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“What will happen if the next decade is not one of world growth but of world recession? If a rising tide didn’t lift all boats, how will they be affected by an ebbing tide?” –  Oxford University economist Anthony Atkinson

A new study shows the gap between the rich and poor worldwide is growing — not a surprising revelation to sociologists.  On the other hand, many sociologists have stubbornly clung to the dependency theory of globalization, which suggests that powerful countries extract wealth from poor countries (or in the language of World Systems, core and periphery countries), despite several books (including Milanovic’s Worlds Apart and Firebaugh’s The New Geography of Global Income Inequality) that have shown the action is not between countries, but within countries.  Yes, neo-liberals (see: Tony Blair) are correct when they point out that U.S. economic interventions and the influx of western multi-nationals corporations into developing nations creates wealth in those countries.  And, yes, the Naomi Kleins among us are also correct in noting how it creates new forms of poverty via sweatshops and by placing poor people on the consumer consumption treadmill.

But the trends described in Atkinson’s report are not only present in developing nations.  As we know the distribution of wealth in the U.S. is incredible … and, let’s say it, immoral.  Given the vast wealth in the U.S., solving many of America’s problems with inequality is as simple as forming the political will.  But I guess that’s hard when the poor don’t believe the progressive Senator who wants to help them.  Consider Barbie Snodgrass (“She was forty-two, single, overweight, and suffering from stomach pains”), a member of the working poor in Ohio.  She spoke to George Packer of The New Yorker about Barack Obama’s proposal to implement a more progressive tax policy.

His promise to rescind the Bush tax cuts for wealthier Americans struck her as incredible: “How many people do you know who make two hundred and fifty thousand dollars? What is that, five per cent of the United States? That’s a joke! If he starts at a hundred thousand, I might listen. Two hundred fifty—that’s to me like people who hit the lottery.” In fact, only two per cent of Americans make more than a quarter of a million dollars a year, but that group earns twelve per cent of the national income. Nonetheless, the circumstances of Snodgrass’s life made it impossible for her to imagine that there could possibly be enough taxable money in Obama’s upper-income category—which meant that he was being dishonest, and that she would eventually be the one to pay. “He’ll keep going down, and when it’s to people who make forty-five or fifty thousand it’s going to hit me,” she said. “I’d have to sell my home and live in a five-hundred-dollar-a-month apartment with gang bangers out in my yard, and I’d be scared to death to leave my house.”

Sometimes, I think solving “$1 a day poverty” globally would be considerably easier than garnering the political coalition to solve American inequality.

On a wholly unrelated note, this bit from the Onion, sent to me by a Hall-of-Fame doorframe tapper, speaks to me.

slow news – May Day 2008

Taxes, Warren Buffett, and Paying My Fair Share

By Justin Wolfers (Freakonomics Blog)

I don’t care how much I have to harp on this shit.  Our economy is scary bad right now.  We need to be talking about this every day.  And forget traditional measures like the value of the dollar, the Dow Jones, or GNP growth.  How are real wages doing?  How much revolving credit is the average American carrying?  Who is our tax structure favoring?

Well, crazy rich, high character guy Warren Buffett (Omaha in the house?) is thinking about the last question. He discovered that he pays a lower tax rate than his secretary.  Freakonomics explores the issue.  NBA blogger and ca personal hero, Henry Abbott, makes a connection, noting, “I’d be fascinated to see someone in the NBA pick up this theme: who pays a higher percentage of income in Federal Tax? LeBron James, or a Cavaliers’ receptionist?”

In the movie and book, Fight Club, the main objective of the anti-hero, Tyler Durden, is to bomb the biggest finance buildings in an apparent bid to destroy the debt record – putting an end to a crucial aspect of the divide between the rich and, well, everybody else. Naturally, this is absurd notion because such records are backed up on computer systems globally. While I will not link to it, several people have proposed actions of collective computer hacking that could potentially wipe the debt record.

Given all the news in recent weeks about the looming recession and the millions of Americans struggling with debt and foreclosures (are we all aware of how bad things are right now?), I got to thinking about wiping out the debt records. If a national referendum were held on legislation to relieve all Americans of their debts, an incredible majority of people (mortgage-holders, credit card holders) would likely favor it, while a very powerful minority of business leaders and stockholders would oppose the idea with the vehemence of French Revolutionaries*. Of course, most banks would fail as would many businesses depending on those banks (apparently, many retailers are surviving only by taking on debt). In fact, the whole idea has economic disaster written all over it. Things might get much, much worse before they got better. But in the economy that resulted, banks would offer far less credit and people might be more reluctant to take on debt. Who knows? It’s too radical to reasonably picture.

On the other hand, as a democracy, we should ideally be responding to wishes of the majority and acting in the interests of the people, rather than the business community (I know I’m rehashing Domhoff, Mills, Chomsky, and others here). It’s undeniable at this point that our society needs a substantial financial re-organization to survive. What’s it going to be? Short of radically increasing wages, forgiving debts might be the only way to create a sustainable financial future for the majority of Americans. While I’m in no way advocating Tyler Durden scenarios, we really need a Manhattan Project for our collective financial future.

*According to Bill Domhoff, “In terms of types of financial wealth, the top one percent of households have 44.1% of all privately held stock, 58.0% of financial securities, and 57.3% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds, and business equity, and over 75% of non-home real estate.”