“Imagine if we did something different.”
Those were just seven words out of close to 7,000 that President Barack Obama spoke during his State of the Union address. He was addressing both houses of Congress, which are controlled by his bitter foes. Most importantly, though, he was addressing the country. Obama employed characteristically soaring rhetoric to deliver his message of bipartisanship. “The shadow of crisis has passed, and the State of the Union is strong,” he assured us.
From whose lives has the shadow of crisis passed? And for whom is this Union strong?
“Will we accept an economy where only a few of us do spectacularly well?” Obama asked. “Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”
Oxfam, the international anti-poverty organization, weighed in on the question, releasing a report the day before the speech called “Wealth: Having It All and Wanting More.” Oxfam analyzed data from the Credit Suisse Global Wealth Databook 2014 and the Forbes list of the world’s billionaires to determine some shocking facts about global inequality.
First, it found that, as of 2014, the 80 richest individuals in the world are wealthier than the bottom 50 percent of the world’s population. This bears repeating: The 80 wealthiest people, a group that could fit on a bus, control more wealth than 3.5 billion people. The wealthy are not only accumulating more wealth, but they are getting it faster. Between 2009 and 2014, Oxfam reports, the wealth of those 80 richest people in the world doubled. This, while the rest of the world was mired in the Great Recession, with rampant unemployment and people’s life savings wiped out. If current trends continue, Oxfam notes, by 2016 the richest 1 percent of the world’s population will control more wealth than the bottom 99 percent.
One way the wealthy manage to increase their wealth, Oxfam reports, is through lobbying. The report identifies two industries, finance/insurance and pharmaceutical/health care, as major sources of wealth for the richest, and as principal founts of political contributions. Hundreds of millions of dollars are spent by these industries annually to shape public policy and safeguard profits.
“For far too long, lobbyists have rigged the tax code with loopholes that let some corporations pay nothing while others pay full freight,” President Obama said in his State of the Union. “They’ve riddled it with giveaways the super-rich don’t need, denying a break to middle-class families who do.”
Obama has proposed increasing taxes on the very rich: “Let’s close the loopholes that lead to inequality by allowing the top 1 percent to avoid paying taxes on their accumulated wealth.”
Pulitzer Prize-winning journalist David Cay Johnston is an expert on taxes. We spoke to him on the “Democracy Now!” news hour soon after the State of the Union. “The idea that we shouldn’t adjust the tax rates for people at the top and doing so is somehow class warfare is absurd,” he said. “The president is proposing that for those people in the top one-half of 1 percent—and almost all the money would be paid by the top tenth of 1 percent, people who make over $2 million—that their capital-gains tax rate be at the Ronald Reagan rate of 28 percent,” Johnston summarized. “And Republicans are saying that that’s outrageous. Well, I’m sorry, they’re always telling us Ronald Reagan is a saint.”
What would these taxes pay for? Among other things, Obama pledged to make child care more affordable. He promised free community-college education. These are genuine, good ideas. After his address, Republicans repeatedly said he was for the “redistribution of wealth,” code for socialism. But wealth IS being redistributed by the government—upward, from the poor to the rich—through policies promoted by both major parties, from tax loopholes to “free trade” deals that protect corporate profits over workers’ rights.
And who is promulgating these laws? The Center for Responsive Politics, a political contribution watchdog group, reports that, for the first time ever, more than half of the members of Congress are millionaires. The group states that this “represents a watershed moment at a time when lawmakers are debating issues like unemployment benefits, food stamps and the minimum wage, which affect people with far fewer resources, as well as considering an overhaul of the tax code.”
As President Obama said in his State of the Union, “To everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full time and support a family on less than $15,000 a year, try it.”
Growing economic inequality not only hurts the poor, and the working and middle class, but destabilizes society overall. Yes, we must “imagine if we did something different.” Everyone must have a stake in the state of the union.
Denis Moynihan contributed research to this column.