The Rich Get Richer

Alan Greenspan has a new memoir out, The Age of Turbulence, and it has ruffled some feathers because he is a life-long Republican but has fairly positive things to say about working as Fed Chief during Bill Clinton's term and not-so-kind things to say about his time with President Bush. It seems everyone associated with the Bush fiasco feels the need to separate themselves.

Yesterday I listened to an NPR interview with Greenspan and I was struck by his comments about the rising income inequality in America. He said he it is a "major concern" of his because we "cannot have a capitalist market economy without support of vast majority of people." The rising inequality of income creates, he thinks, the potential for a "backlash" against the market economy. For this reason, he said, he does not support attempts to repeal the estate tax.

Greenspan is apparently not worried about issues of economic justice but is afraid the peasants might revolt and bring harm to the rich folks. Better to be a little less rich and keep the peasants happy.

Greenspan's interview reminds me, though, of a recent post by Paul Krugman on his blog. Someone responded to Krugman's column challenging his contention that there is a vast and growing disparity in income inequality that is actually worse than what is known as The Gilded Age, because even then the incomes of average Americans were rising - just not as fast as that of the Robber Barons. In our modern version of The Gilded Age, the rich are getting richer and the middle class is losing ground. In response to the post Krugman said:

I think you’re suffering from a common failure — you don’t understand how rich the people we’re talking about are. We’re not talking about people with good jobs who’ve paid off their home mortgage; we’re talking about the $1 million a year plus crowd, people who live in a completely different material universe from most Americans.

The rise of their incomes during the Bush years has been so strong that it has made it appear that the entire economy is growing. Their economy is growing; ours is not. And it is unraveling the social compact that somehow we are all in this together. They, the super rich, are not in it with us. And it is their economic interests that are being supported by today's Republican Party.

Bill Gates knows how dangerous this is. Warren Buffett and even Alan Greenspan, too. In many ways the war fiasco has masked this problem. But if there is a silver lining in the very dark cloud of all the problems created by Bush it is that the undoing of the Bush Administration and the Republican Party on the war may also trickle down to a long-overdue leveling of the playing field in the economic life of America.