The Great Economic Divide

The Increasing Gap Between the “Haves” and the “Have-Nots."  Surveys taken over time show that the gap between the “haves” and the “have-nots” is very wide and continues to get wider with each passing year. Most people know that a gap exists, but few truly comprehend just how wide that gap has become, that it is actually increasing, and that the impact that this gap has on our government and our economy. Here are a few examples of the disparity:

Wealth Disparity. A 2001 survey reported that the top 1 percent owned 39.7% of the non-home wealth, while the bottom 95 percent owned 32.5%

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By 2004, the gap grew, and the survey reported that the top 1 percent owned 42.2% of the non-home wealth, while the bottom 95 percent owned 31%.

By 2007, the gap widened more, as the survey reported that the top 1 percent owned 48.4% of the non-home wealth, while the bottom 95 percent owned 20%

In only six years, the non-home wealth of the top 1% went from 39.7% to 48.4%, up by 8.7%.  Meanwhile, the non-home wealth of the bottom 95% went from 32.5% to 20%, down 12.5%.

The gap between these two groups widened from 7.2% to 28.4% – almost a fourfold increase in a six-year period. Yes, the rich got richer and the poor got poorer. And, if something isn't done about it, that gap will just continue to widen, along with all the political clout and influence that wealth brings to what is, in sheer numbers, an infinitesimal minority called the super rich.

Nota Bene. Keep in mind that these figures are comparing a very small 1%of the population against a huge 95%, which makes the results far more dramatic. They also do not include homes, which are generally going to cost significantly more for the exceedingly wealthy, and are likely to include second and third homes, and more. costing millions of dollars. The inclusion of these would make the disparity even wider.

Privately-Held Wealth Disparity. In 2007, the top 1% (the uppermost class) owned 34.6% of all privately-held wealth in this country. The next 19% (mostly managers, professionals, and small business owners) held 50.5%, As a result, this 20% minority owned a huge 85% of all privately-held wealth, while the bottom 80% (primarily wage and salary workers) were left with only15% of all privately-held wealth – a tremendous disparity.

Stock Ownership Disparity. When it comes to stock ownership, we see similar disparities:  The top US 20% owned 89.1% of the stock in 2001, 90.6% in 2004 and 91.1% in 2007.  The bottom 80% owned 10.7% of the stock in 2001, 9.4% in 2004, and 8.9% in 2007.  The top 20% (in actual numbers, only one-fourth the size of the bottom 80%) owns ten times more stock.

Income and Capital Gains Tax Rate Disparity.  To add insult to injury, Forbes Magazine recently reported that the The 400 Richest Americans pay their federal income tax at an effective rate of on;y 18% That's right – only 18%. Even Warren Buffett, one of America's riches, reports that his effective tax rate is only 17.4%, while the 20 people who work for him in his office pay at rates ranging from 33% to 41%.  The wealthy elite once paid an average 30% of their total income in taxes, but now they pay 40% less, thanks to the Bush era's income tax cuts and a cut in the capital gains rate -- both of which favor the wealthy..

Sharing the Pain?  Forbes also noted that “Shockingly, the plan to raise the debt ceiling collects nothing from the wealthiest Americans to reduce our budget deficit.” Nor does it address our national debt, the burden on the average citizen, or the huge and growing disparity between the super-rich and the rest of the population. Forbes states further, “It’s a sad day for the principle of sharing the pain equitably.”


Coming Up. 

	How the Pursuit of Profits Kills Innovation and the Economy
	An Open Letter to the One Percenters
	Duopoly and Wealth: The Ties that Bind
	Political Duopoly: Working Partner of the Plutocracy

Democracy: From Definition to the Constitution

First let's examine two types of democracy and see how the founding father chose the type they did..

Pure Democracy

A pure democracy is one in which the power to govern lies directly in the hands of the people. Hence, it is sometimes also referred to direct democracy. All citizens are allowed to participate on an equal basis with fellow citizens in establishing policies, regulations and laws, and their enforcement. This form of democracy can work well for organizations or small towns, but it becomes unwieldy and virtually impossible at a national level. Attempts at pure democracy in a few colonies failed, which helped lead our country toward a different form of government.

Democratic Republic

To overcome the unwieldiness of a pure democracy, the drafters of our Constitution turned to a representative form of government. Instead of direct participation of the people in day-to-day governance, they set up a system that provided for elected representatives to enact executive and legislative policies and laws on behalf of its citizens in accordance with the common good and the welfare of our country. Therefore, our country was founded not as a pure democracy but as a democratic republic.

The Articles of Confederation

The Articles of Confederation were this country's first attempt to draft a constitution, uniting thirteen states under a weak federal government whose primary responsibilities were overseeing the revolution against England, conducting diplomatic discussions and negotiations with Europe, and dealing with territorial matters. There was no president, no cabinet, and no federal departments of any significance. It had no power to levy taxes (which was understandable considering the issues at that time), and was totally at the mercy of the states to make voluntary contributions for its support. This confederation did not establish a new country. Rather, it established only a loosely knit association of thirteen separate, diverse, and independent states. While this confederation was relatively successful in the three areas outlined above, it was totally ineffective in dealing with other urgent matters that required a stronger central government to be effective in other critical areas.

The U.S. Constitution

The United States Constitution was written in 1787 and took effect upon ratification of nine states in 1789. In framing a new constitution, its drafters had to walk a very tight line between national rights and states' rights. Many concessions had to be made on both sides to develop a document that would be acceptable to states with widely varying principles and practices. As a result our Constitution as drafted was considered by many to have been imperfect, even for the times, and had many defects which needed to be corrected after ratification. 

Where Do We Go From Here? 


Our Constitution has served us fairly well for more than 200 years.  It has endured thousands of challenges to our democratic republic.  However, it was not written to address every possible event or development that could arise in the indefinite future.  There is no way our founding fathers could ever, in their wildest dreams, have conceived that one day corporations would be recognized as persons, entitled to the same rights of free speech as private citizens, and that money would be considered free speech.  They could never have perceived of our government and our political system essentially being bought by big money interests. Most of all, they could never have envisioned that this country would one day (today) have established an aristocracy that rivals the very one they sought and fought with their life's blood to escape.  It is small wonder that Supreme Court Justice Ruth Bader Ginsburg recently made the comment,  "I would not look to the U.S. Constitution, if I were drafting a constitution in the year 2012.,".

Our Constitution could not anticipate the challenges of the distant future, and our government has failed to guard our country from adapting it to changing times..  The bottom line is that our beloved Constitution  is in critical condition and needs to be revised.  The only real question that remains now is whether or not we are up to that challenge.


Next Topics:

	Are We a Democratic Republic or a Plutocracy? Major Threats to Our Democratic System
	The Great Economic Divide

Democracy, and What It Means to Us

Before starting our discussion, it might be good to define a few terms so we are all coming from a common understanding.  Let's start with "democracy."

What is Democracy?
While there may not be any universally held definition of democracy, there are some commonly-held definitions that can be found in many authoritative sources. Here are five representative examples:

1. Government by the people, a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.
   (source: http://dictionary.reference.com/browse/democracy)
   
   
2. Government by the people; especially: rule of the majority
   (source: http://www.merriam-webster.com/dictionary/democracy
   
   
3. A system of government by the whole population or all the eligible members of a state, typically through elected representatives .
   (source: http://oxforddictionaries.com/definition/democracy
   
   
4. Government by the people, exercised either directly or through elected representatives.
   (source: http://www.thefreedictionary.com/democracy)
   
   
5. U.S. president Abraham Lincoln (1809-1865) defined democracy as: “Government of the people, by the people, for the people.”
   (source: http://www.democracy-building.info/definition-democracy.html)

I have boldfaced the text that I perceive as being the most important portion of the various definitions, that is to say – democracy is government by the people. It is not government by monarchy, dictatorship, aristocracy, theocracy, oligarchy, or plutocracy, but by the people.

People Power.  The word democracy itself comes from the Greek: δῆμος (dêmos) "people" and κράτος (Kratos) "power," and thus its true meaning: “people power,” or, as emphasized above, “government by the people.” Ultimate power originates from and resides in the people. Whenever this power is usurped, democracy fails to exist.

A New Nation, Conceived in Liberty.  Our founding fathers and their fathers before them were subjects who bowed before monarchies, aristocracies, and theocracies.  Their new nation was based upon the power of the people, which required the transformation of subjects into citizens.

Are We Citizens?  A citizen within a democracy is endowed with certain inalienable rights, including the right to self-governance. A citizen is allowed to participate freely and fully in the process of governance. This, however, can be a two-edged sword, inasmuch as it is both a right and a responsibility.

Or Are We Subjects?  Subjects have little or no power or control over their government and sometimes even over their personal lives. They are subject to a higher power, be it a monarchy, an aristocracy, a theocracy, a dictatorship, or any other form of government that subjugates its people to their authority and treats them more as property than as people. Subjects have few rights and virtually no voice in their government.

Democracy and the Constitution.  Our founding fathers decided that their new country would be a democracy, or more specifically a democratic republic,  in which ultimate power for governance rested in its people.  Do you feel that is how things are today?  If you do, you need to read on.

Related Topics:   
       Democracy: From Definition to the Constitution

Are We a Democratic Republic or a Plutocracy? Major Threats to Our Democratic System

        

We Must Drive Big Money Out of Politics!

Fundamental Reasons Why We Must Do This To Save Our Democracy.

Words of Wisdom From Two Great Republican Presidents

Introduction. The thoughts expressed herein are a reflection of my personal interests and beliefs. They are the reason for this blog. We have a great country, but it is not as great a country as our forefathers envisioned. The problems that beset us today are not new. We have faced them and conquered them before. We must once again regain our democracy or forfeit it forever.

Popular Government Must Triumph. "Our country -- this great Republic – means nothing unless it means the triumph of a real democracy, the triumph of popular government, and, in the long run, of an economic system under which each man shall be guaranteed the opportunity to show the best that there is in him."

Promises Without Action Are Empty.  “… words count for nothing except in so far as they represent acts. This is true everywhere; but, it should be truest of all in political life. A broken promise is bad enough in private life. It is worse in the field of politics. No man is worth his salt in public life who makes on the stump a pledge which he does not keep after election; and, if he makes such a pledge and does not keep it, hunt him out of public life."

“In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will."

Duty of Humankind.  Theodore Roosevelt referred to Abraham Lincoln as “the man to whom we owe (the) most,” and cited a couple passages from The Great Emancipator:

"I hold that while man exists it is his duty to improve not only his own condition, but to assist in ameliorating mankind."

Labor Is Superior To Capital.  And again:

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

Special Interests Are Entitled To Justice ...”Now, this means that our government, National and State, must be freed from the sinister influence or control of special interests. Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics. That is one of our tasks today."

… But Not To Political Power.  “... every special interest is entitled to justice, but not … to a vote in Congress, to a voice on the bench, or to representation in any public office. The Constitution guarantees protection to property, and we must make that promise good. But it does not give the right of suffrage to any corporation.”

The citizens of the United States must effectively control the mighty commercial forces which they have called into being.”

Control of Corporate Political Activity. “There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done”.

“It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes; it is still more necessary that such laws should be thoroughly enforced. Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs.”

Corporate Accountability. “I believe that the officers, and, especially, the directors, of corporations should be held personally responsible when any corporation breaks the law.”

Duty of Congress. “The duty of Congress is to provide a method by which the interest of the whole people shall be all that receives consideration."

Change Is Needed. “The prime need to is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise.”

“We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows. We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community.”

Government Intervention Required. “This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.

The Path To Ruin. “Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism.”

Government Responsiveness To The People. “If our political institutions were perfect, they would absolutely prevent the political domination of money in any part of our affairs. We need to make our political representatives more quickly and sensitively responsive to the people whose servants they are. More direct action by the people in their own affairs under proper safeguards is vitally necessary.”

Removal of Non-Responsive Representatives. “I believe that the prompt removal of unfaithful or incompetent public servants should be made easy and sure in whatever way experience shall show to be most expedient in any given class of cases.”

Government Should Serve People, Not Special Interests.  “One of the fundamental necessities in a representative government such as ours is to make certain that the men to whom the people delegate their power shall serve the people by whom they are elected, and not the special interests.”

The Bottom Line.  “The object of government is the welfare of the people. The material progress and prosperity of a nation are desirable chiefly so long as they lead to the moral and material welfare of all good citizens.”

The Moment Of Truth.  Although I agree with and embrace all the statements made above, I cannot claim authorship of any one of them, Although we are at a time in history when these statements and observations are extremely appropriate, they weren't made in recent times, but they were made to address the same type of situation such as we now have. The people who made them were both Republicans who saw the same kinds of problems for our country that beset us again today. The bulk of the comments were made by Theodore Roosevelt, with a couple of additional comments from Abraham Lincoln. These are all extracted from a speech that Roosevelt delivered approximately 100 years ago. His message is just as pertinent today as it was back then. The full text of his speech can be found at http://teachingamericanhistory.org/library/index.asp?document=501.

It Is Time To Reclaim Our Democracy.  The past has repeated itself inasmuch as big financial interests (private, corporate, and political) have once again wrested our democracy away from the people and usurped it for their own gains. Can we also repeat the past and rid ourselves of their stranglehold, thereby restoring democracy to its rightful place with the people of America? Our country's fate is in our hands.

Coming Next:  First, Let's Define Democracy.