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Stimulus for All?

The staggering gulf between the rich in America and everyone else is the root cause of our financial crisis.  We can only stimulate the economy if we solve inequality.

There would have been no sub-prime mortgage crisis had there not been poor families with unstable jobs to trick with bad loans.  There would not be outlandish interest rates and record consumer debt had credit schemes not been invented to sucker those with limited cash.  Healthcare costs would not be bankrupting families if we had established health as public benefit not a private privilege. 

More to the point, these and other structural inequalities were allowed to spiral out of control because our government got out of the financial regulation business at the behest of big corporations and the super-rich who wanted their profit - and thus, inequality - to grow. 

Trying to revive our stalled and stumbling economy without addressing the fundamental problem of inequality that got us here is like trying to fix the flat tire on your car just by adding air.  It's no solution at all: there's still a hole in your tire. 

There is a giant hole at the bottom of the American economy that has been engulfing poor families for decades but which many others are noticing for the first time as they too are falling through it. 

The Congressional Budget Office recently forewarned that, if there is no government action, the nationwide unemployment rate could approach 9% by 2010.  In the Bronx borough of New York, where there has been little government action for years, unemployment is already at 8.3%.  The same in Detroit.  President-Elect Obama recently suggested that in the absence of a stimulus package, unemployment could hit double digits.  But in parts of Appalachia, unemployment has been over 13% for years.  In Youngstown, Ohio, the unemployment rate is over 14%.

Meanwhile, we're finally acknowledging the national crisis that 47 million Americans lack health coverage and 79 million more have significant healthcare debt.  But poor families and low-wage workers have been without adequate health coverage for decades.  Inner-city African Americans and Latino immigrants have long received substandard care through unequal services. 


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In our increasingly interconnected and complex world, it's naïve to think something isn't a problem until it affects us directly.  If compassion for others wasn't a sufficient wake up call, hopefully the low balance in your retirement account now is.  Lani Guinier and Gerald Torres suggest that the canary in the coalmine, whose premature suffering warns the miners of impending danger, is a fitting metaphor for communities of color and poor people whose experience at the margins of our society illuminates crises threatening us all.  We're in this financial crisis now because we failed to heed the signs of danger as noxious inequality rose all around us. 

Few have talked about the financial crisis in terms of rich and poor.  Most of the focus is on the "disappearing middle class."  But where do you think the middle class is disappearing to?  They're not sailing their yachts to Hawai'i.  The middle class is rapidly joining the ranks of the poor, reeling from the inevitable, gravitational, polarizing pull of inequity. 

Barack Obama himself said that, in addition to providing "a jump-start to the economy" we should use the stimulus package to "put a down payment on some of the structural problems that we have in our economy."  What might that look like?

Well, while construction jobs are valuable and important, those jobs don't usually go to those at the bottom of our economy.  And communities like Detroit and Youngstown have infrastructure needs that go far beyond buildings alone.  They need early childhood education programs and health clinics and better schools - which happen to be areas more likely to employ women and people of color and low-income communities.  In addition to physical infrastructure, the stimulus package should invest in community and human infrastructure - and related jobs - as well. 

And similarly, we should not only be helping those who have lost their healthcare recently but make a down payment on affordable, quality healthcare for all.  Many children and families haven't had any health coverage for some time, many others are receiving unequal care due to racial disparities, others are finding the hardships of the financial crisis multiplied by mounting healthcare debt.  Reinvesting in Medicaid and the State Children's Health Insurance Program and removing the barriers to participation in these programs would not only lift the financial burden on families and state governments but be a significant down payment toward ultimately universal care.

The Campaign for Community Values, a national alliance of more than 150 community organizing groups organized by the Center for Community Change, is bringing grassroots leaders to Washington everyday to press this agenda on Capitol Hill.   You can help by visiting and joining our list.

In his inaugural address, President Kennedy said, "If a free society cannot help the many who are poor, it cannot save the few who are rich." For the economic stimulus package to work, it has to get everyone working - and make our economy work for all of us.  And that means finally addressing the inequality that got us into this mess.

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Sally Kohn

Sally Kohn

Sally Kohn is an activist, columnist and television commentator. Follow her on Twitter: @sallykohn.

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