Thursday, January 5, 2012

The Ever-Widening Wealth Gap

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"If the peasants are crying because they haven't any bread, then let them eat cake." This is a loosely translated quotation from some plutocratic, indifferent, callous, out-of-touch-with-the-common-serf, and likely French woman of great stature who should have shut up before she ultimately lost her head. Statements like the previous are almost as offensive as Leona Helmsley's  infamous "Taxes are for the little people."

The perception of the pampered, rich and powerful (can't you feel my envy?), who live in a certain isolation from the trials and tribulations of the wage-earning or unemployed crowd (the masses), is quite different than that of their poorer counterparts and, in the case of politics, constituents. There are very few truly wealthy people in the world, and they are vastly outnumbered by the struggling peasants who aspire to what amounts to at least a reasonable standard of living.

The disparity in wealth and income which separates these two groups is increasing rapidly, and dramatically. The social configuration is inefficient in terms of "government by the consent of the governed," or "government representing the interests of citizenry." This is because those who attain high political office and become part of the ruling class are so much wealthier than those who elect them that they cannot possibly empathize with the issues of the voters...the unrepresented majority.

This is happening all over the world. The United States is only one example.

To bring this difference in perception into clearer focus, when a Fortune 100 Director says he's struggling to get by, he might be saying it in a fine restaurant over cocktails while his chauffeur awaits, patiently parked at the curb. Or he might complain about it at the country club or at an executive retreat. When a commoner (as I am) says I am broke, he literally is on the verge of having his home foreclosed, clunky car repossessed, and has less than $4.75 in his jeans pocket. He is truly immobilized and worried to an extent which those elected officials, sheltered as they are on Mount Olympus, cannot remotely understand or relate to.

This makes for government of the increasingly growing population of poor folks by bodies comprised of wealthy, ideologically removed, wealthy folks. They cannot represent the interests of people to whom they cannot hope to relate!

An interesting article extract follows for your review. After you've taken a good read through it, take a look at my conclusions for THE GLOBAL FUTURIST.
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The Wealth Gap Between Congress and Voters Is Growing



Both The New York Times and The Washington Post have separate reports today about the widening wealth gap between members of Congress and the people they represent. Almost half of all Congresspeople are millionaires and their median net worth has climbed to $913,000, compared to $100,000 for the rest of America households. 

According to the Post, that number drops to $725,000 when excluding home equity (and adjusting for inflation), but the same median figure for American families is just $20,500. And that gap has only grown wider in recent years.
Related: GOP Congressman Scraping By on Only $400,000 After Taxes

The biggest reason for the disparity is the sheer cost of running for office, which is both a full-time job and an expensive undertaking. The average successful House race costs $1.4 million to stage (the average Senate campaign is almost $10 million), and candidates are allowed — and often need — to donate as much as they want to their own effort. 

The costs of advertising and travel make it increasingly difficult for anyone who doesn't already have money to get their name out there. There have also been concerns raised recently about the ability of politicians to profit from their position, both through contacts made and the ability to trade stock based on privileged information.
Related: The Net Worth of Congress Rose 23.6% Since 2008

Even putting aside the questions of influence and corruption, the biggest concern is that those who elected to Congress are more out of touch with the world of their constituents than ever before. How can they be expected to look out for the interest of citizens when the biggest issues facing them — unemployment, health care, wages — are unknown to most of those who are supposed to be looking out for them? Or worse when addressing those issues directly contradicts their own interest, as when millionaires are asked to vote on a "millionaire's tax"? The biggest political movement of the last year, Occupy Wall Street, has been devoted almost exclusively to addressing the gap between rich and poor, but it's hard to see how any change becomes possible when that gap is greatest among those in a position to do something about it.
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I am predicting:

1) An increasing number of one-term politicians, and increasing legislative turnover;

2) Increasing protests and acts of rebellion (i.e., "Occupy Wall Street") on the part of the citizenry against any person or institution which represents wealth and power;

3) Increasing pressure on investigative journalists prosecutors and judges worldwide to bring investigate, isolate and punish (i.e., make examples of) many of the world's rich and powerful, rendering this latter group somewhat paranoic for the first time since the Middle Ages;

4) An exodus of the powerful from public life to private puppeteering and market manipulation;

5) Ordinary envy turning to heightened animosity, acts of rebellion, and citizen activism.

I foresee dramatic upheaval in the composition and privileges of elected officials and government in general during these next five years. In defense, I would also expect to see many politicos finding new nesting places in the military-industrial complex, where they will continue to rule, but with a great deal less transparency, and with increased power.

While the rich will always win, I envision wild, extremist political battles, and the shift into the private sector of those who are old hands at being part of the governmental elite. This could portend a new brand of medieval feudalism surfacing as the new form of government.

"Let them eat cake?" Not one of the answer choices.


Douglas E. Castle


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