A New Gilded Age Threatens The State Of Our Union

A New Gilded Age Threatens The State Of Our Union

WASHINGTON -- The numbers are shocking -- assuming that we still have the capacity for shock -- and they will form the backdrop for President Barack Obama’s State of the Union speech on Tuesday.

The president will declare himself a foe of “income inequality,” with good reason: As a nation, we have climbed out of the deep hole of the Great Recession, but we have not done so as a whole people.

For the first time since precise recordkeeping began a century ago, 10 percent of Americans take in more than half the country’s income.

In the last 40 years, the income of the top 1 percent of Americans has quadrupled, while incomes for everyone else have stagnated.

Billionaires such as the Koch brothers and Michael Bloomberg, empowered by the Supreme Court, spend fortunes to influence politics, just as J.P. Morgan and California railroad magnates once did.

The biggest of the Big Banks are bigger than they were when we bailed them out over the financial crisis.

Study after study shows that we are in the midst of a new Gilded Age, in which a yawning, gold-plated gap between the richest and the rest of us risks collapsing the American ideal of fair play and democracy itself.

The same is true in the world at large. According to an Oxfam study, 1 percent of the planet’s population now controls half the planet’s wealth.

At this week's World Economic Conference in Davos, Switzerland, where disparate incomes will be a topic of earnest discussion, the attendees include at least 80 billionaires, according to Bloomberg News.

At the movies, “The Wolf of Wall Street” has attracted crowds and good critical notices for its dark, yet in some ways agnostic, ode to greed.

But whatever we think of the virtues of capitalism or the acquisitive instincts of man, we can’t afford for the United States to deteriorate into the top-heavy profile of a developing nation. The Founding Fathers would be dismayed at the current concentration of clout. So, too, should serious minds on all sides: liberals who fear rampant private privilege, conservatives who fear centralized power.

The questions the president will ask, implicitly or explicitly, are these: Why have we come to this? What can we do about it as a nation?

For if this is a new Gilded Age, where are the signs of a new Progressive Era -- a wide-ranging reform movement, like the one long ago?

In a series of pieces from Jan. 23 to Jan. 28, when the president delivers his State of the Union, The Huffington Post will look at the problem from several angles and for signs of new solutions. Topics include:

  • How fast-food workers came to symbolize the plight of all low-wage workers, and new demands (which the president will amplify) for a long-overdue increase in the federal minimum wage.

  • The growing influence of billionaires in the political trenches, and new efforts to control their reach.
  • The search for a new generation of muckrakers, like the investigative journalists a century ago, who set the agenda of Progressive Era reform.
  • The federal and state courts and judges who are challenging the pro-corporate jurisprudence of the Roberts Supreme Court.
  • How banks, bigger and bolder than ever, are blowing past weak regulation to load college students with crushing debt.
  • The search, just beginning, for organizations and voices to carry a new progressive message, the way reformers and a fiercely ambitious leader named Theodore Roosevelt once did.
  • President Obama has cited several political role models, including Ronald Reagan. He might now want to look at TR, a Republican.

    “He invented in some ways the modern presidency,” historian Doris Kearns Goodwin told one interviewer recently. Her latest bestseller, The Bully Pulpit, describes TR’s career as a reformer. “He said he was a steward of the people with a responsibility to use government to ameliorate social conditions,” she said.

    It is easier to describe the Second Gilded Age than to explain how it arose.

    Economist and former Obama administration official Jared Bernstein notes several factors -- from globalization, which puts downward pressure on wages by shipping jobs overseas or importing cheap labor here; to technology’s demand for “skill-based” workers, which is eliminating formerly well-paying manufacturing jobs; the “financialization” of the economy, which gives ever-increasing advantage to those who control and manage money, credit, insurance and real estate; continued levels of high unemployment and underemployment, which create a “slack” labor market; and the decline of institutional protections such as labor unions and government wage guarantees.

    “The last big factor is what I call ‘political economy,’” Bernstein said. “That means what the political system does or doesn’t do: court rulings, gridlock in Washington, what we do on stimulative spending.

    “None of that is helping right now.”

    Next Tuesday, the president will unveil his latest ideas on how “political economy” can bridge the income gap that has only widened on his watch.

    It’s not clear which Americans will be listening, but the topic is an urgent one for us all -- all 100 percent.

    This article is part of a weeklong series examining income inequality in America in advance of President Obama's State of the Union address. Read more here.

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