The great irony of America's recent economic stagnation is its juxtaposition with growing prosperity among the nation's privileged classes. By all accounts -- the raging stock market, growing luxury consumption and the underlying messaging of commercial advertisers -- America's wealthy are faring better than ever. Indeed the top 1 percent of income earners now control more assets than 90 percent of the country.
For most Americans times remain hard with little evidence that any improvement is around the corner. A large part of this equation is persistent poverty. For the past six years running the United States has maintained a 15 percent poverty level. That means nearly one in six Americans is now living below the official poverty line -- more than 45 million people. While most of America's poor are unemployed, a growing number are actually under-employed, confined to working multiple low wage jobs.
Increasing poverty and inequality should concern all Americans, not just the poor and their advocates. The costs of poverty impacts our entire economy and civil society. These include both the direct costs of publicly subsidizing increasing numbers of poor people, as well as the indirect costs of community violence, substance and interpersonal abuse and early pregnancy that impoverished circumstances tend to foster.
But perhaps the most important persistent poverty cost incurred by our nation's businesses, public institutions and the larger society, is America's inability to maximize the totality of its available talent, the same talent that preserves our national economic vitality and competitiveness.
A central cause of persistent poverty is the change in mindset over the recent decades concerning the government's appropriate role in society. For much of the 20th century, American policy sought to mitigate the inevitable imperfections of the market by advancing public investment and protections on behalf of society's disadvantaged. But since the 1980's our public policy has principally focused on strategies to facilitate increased capital accumulation among the already well off through a combination of deregulation, cuts in personal tax rates, and increased subsidies to large corporations.
The argument has been that increasing the wealthy classes' success has an inherent down line -- or "trickle-down" -- benefit for the rest of society. However, after more than 30 years of policy actively favoring the rich, there has yet to be evidence that trickle-down economics works. In fact, evidence to the contrary is overwhelming.
Our over three-decade experiment with supply side economics has undeniably generated more poverty rather than less. In effect, it has produced a level of wealth disparity in America that is untenable both on a financial and moral level.
The only way for our nation to regain its economic and democratic vitality in the years to come is to acknowledge the inherent poverty of America's new prosperity -- a prosperity for only the very few that is inherently anti-democratic and insidious. We can do much better.
After the stock market crash of 1929 and the deep recessions that followed WWII and the Korean Conflict, America supported massive public investments in employment, infrastructure development, and R&D that helped to fuel lengthy recoveries and the formation of a strong middle class. This is how and why we produced the epic monuments of the Works Progress Administration in the 1930's, the Interstate Highway System in the 1950's and the Internet and GPS technology, beginning with basic military research in these areas in the early 1960's.
In the years ahead, America must reinvest in itself as we did in the past, to spur the next generation of national economic progress and benefit sharing. Absent such an essential shift in approach, the America that democratized economic mobility and benefits over the past two centuries will no longer exist.