A tourist who was interviewed last night from Cairo spoke for millions of his fellow Americans when he said he couldn't imagine living in a country like Egypt. It is hard, isn't it?
Imagine: A government run by and for the rich and powerful. Leaders who lecture others about "sacrifice" and deficits while cutting taxes for corporations and the wealthy. A system so corrupt that rich executives can break the law without fear of being punished. Increasing poverty and hardship even as the stock market rises. And now, a nation caught between a broken political system and a populist movement that could be hijacked by religious extremists at any moment.
No wonder they're upset! Why, we'd be marching in the streets too.
Here's the reality: Income inequality is actually greater in the United States than it is in Egypt. Politicians here have close financial ties to big corporations, both personally and through their campaigns. Corporate lawbreakers often do go unpunished. Poverty and unemployment statistics for US minorities are surprisingly similar to Egypt's.
And remember the ratings agencies that told us everything was fine with our country's banking system, right up to the moment it collapsed? Just two months ago, Moody's reassured investors that the Egyptian government had a "stable outlook" for the foreseeable future. Sure, the analogy only goes so far. But why is it so much easier to see what's wrong on the other side of the world than it is here at home?
How do you say "deficit commission" in Arabic?
Egypt's been plagued by the same contradictory "cut taxes and reduce the deficit" logic we're hearing in the US. And why not? It serves the same web of financial interests.
Spurred on by the IMF and the World Bank, Egypt eased corporate regulations and began privatizing its bank sector. It lowered individual and corporate tax rates, while at the same time setting new deficit targets for slowed-down government spending. that won praise from Middle Eastern news outlets and corporation-friendly multinational institutions. "Egypt - A successful reform story," read a typical headline.
The Heritage Foundation continued to celebrate Egypt's increased investment and trade "freedoms" and its lower tax rates, while chiding it for adopting a modest 1.5% stimulus program after the fiscal crisis. (This information can be found on the Foundation's unironically-named "2011 Index of Economic Freedoms.") As their personal economic picture remained bleak, Egyptians were told that all was well. After all, as one government website explained, the country has been enjoying the benefits of "an open and flourishing stock market."
But profits didn't "trickle down." A UNICEF study showed that those years of stock market growth also saw an increase in the number of Egyptian children living in poverty. "This growth," said the report, "has not led to a proportionate reduction in income poverty or deprivation." And we saw this headline in the United States, just before the financial crisis struck: "U.S. Child Poverty Rates Increase Despite Rising National Incomes."
Egypt's government pressed on with privatization, despite a study which showed that "only 20% of citizens considered privatization to be beneficial to Egypt's economy" (just as in the US, a laundry list of the public's strongly-held opinions continued being ignored in Washington.) And despite soaring food prices, Egypt's government declined to boost food subsidies and promised to impose a "means test" that would restrict access to this form of assistance. (While the government held the line on food assistance, it did increase its subsidies for fuel - a form of assistance which, unlike food aid, benefits domestic and foreign oil interests.)
This next statistic may sound familiar: There haven't been enough new jobs created in Egypt to keep pace with the number of new job seekers. Despite this stagnation,the austerity-minded government hasn't invested additional funds for jobs and economic growth. Apparently Egyptian officials thought that an unemployment rate of 9% could become the "new normal" without serious political repercussions.
Bad call. But, hey, they exceeded their deficit-reducing goals for last year! So why's everybody griping?
Crime Pays
Whenever political leadership is entwined with big-money interests, corruption's likely to follow. Some of that corruption may be legal, and even when it's not enforcement is often lax.
Few "legal" forms of corruption are more immoral than rampant bank speculation to drive up food prices. Yet there are several reports which suggest that US banks have done exactly that. If true, that would make them complicit in Egypt's political turmoil.
Some corporate crime does make it to court in both countries. In Egypt, German auto maker Daimler AG is being investigated on charged that it used bribes to help it win government business. In the US, JPMorgan Chase gave up three-quarters of a billion (yes, that's billion) dollars after officials in Alabama were bribed to help it win government business.
Wall Street banks have a record of chronic criminality in the United States, yet continue to maintain a level of political power and influence that would look familiar to any Egyptian.
Cairo On the Potomac
Poor voter turnout, slanted media coverage, intimidation, corruption ... and Egypt's elections aren't very good, either. If you want to win elected office in the US, it helps to be from a politically powerful family like Hosni Mubarak's son. Then you'll need to raise enough corporate money to earn a nomination from one of the two major parties.
Mubarak's wealth is estimated to be in the $30 to $40 billion range. US leaders are pretty wealthy, too: The average net worth of a U.S. Senator is $1.7 million, and that of a member of Congress is just under $1 million. Their most popular investments include Bank of America (the worst foreclosure lawbreaker in the country), Exxon Mobil, Citigroup (which deceived its investors), Wells Fargo (which has repeatedly laundered drug money), the fraudsters at Goldman Sachs, and bribery-haunted JPMorgan Chase. (More information on the crimes of each here.)
Wall Street bankers showered Democrats with campaign contributions in 2008 and were rewarded with bailouts and reform that stopped short of systemic change. They showered Republicans with money in 2010 and are being rewarded with efforts to undo the reforms that Democrats were able to pass last year. And after a year of record corporate profits, the media are insisting that the government isn't "friendly" enough to big business.
Poverty and Inequality
How uneven is the distribution of wealth in our two countries? Studies from several organizations, including the United Nations and the CIA, applied the widely-accepted "GINI Coefficient" to both countries and found that the US has greater inequality of income than Egypt.
19.6% of Egyptians and 14.5% of Americans live below the poverty line. 21% of Egyptians are considered "near poor," and 40% of Americans will fall below the poverty line at some point in their lives. One in six American children lives in poverty. So do one in four African Americans, which means the poverty rate for African Americans is greater than it is for Egyptians.
Life for the Egyptian poor can be much harsher than we're used to seeing here. Roughly 3.8% of Egyptians live in "extreme poverty," which means they don't have enough to eat on a daily basis. While that level of poverty's much rarer here, 14.7% of US households experienced "food insecurity" in 2009, according to the USDA, a measure which includes uncertainty about the ability to buy enough food and the inability to purchase it. In 2008, 17.3 million Americans lived in a household where one or more people went hungry during the year because there wasn't enough money for food.
Egyptian health statistics aren't all that different from those of African Americans. An African American male born in this country has a shorter life expectancy than an Egyptian (70 years, versus 72.4 years). Infant mortality (the death of a child before his or her first birthday) is much worse in Egypt (25 per 1,000 birth) than it is in the United States (6.9 per 1,000), but African American infant mortality is 14.1 - nearly 2.5 times that of Caucuasians. And the gap between white infant mortality and that of African Americans and Native Americans increased during the last decade, while Egypt's rate continued to improve.
Poverty damages the body - and a damaged body perpetuates poverty. The Center for Economics and Policy Research found, disabled persons in the US were two to three times as likely to be impoverished. CEPR found that "almost half of working-age adults who experience income poverty for at least a 12-month period have one or more disabilities," and "nearly two-thirds of working-age adults who experience consistent income poverty ... have one or more disabilities." As the authors observed, "Disability is both a fundamental cause and consequence of income poverty."
American values
Societies have historically rebelled against extremes of inequality, and recent studies have even suggested that the human brain is "hardwired" to dislike inequity. For our part, Americans have always prided themselves on valuing "fair play," a "level playing field," and "opportunity for all."
Yet income inequality in the US is rising sharply. It's true that Egyptians face greater extremes of poverty but the poor in this country suffer more disease, greater disability, and an earlier death than other Americans.
Egyptians face much greater hardships and dangers than Americans do, and it would be wrong to minimize either their difficulties or their bravery. But while we shouldn't trivialize our differences, it's also wrong to ignore our similarities. If we do, it lets our nation's leaders do far less than they should be doing to create real economic and political change. It allows us to praise the Egyptian people without challenging our own consciences. It lets us admire their activism without seeing the need for action here at home.
Sometimes it's easier to admire courage in others than it is to seek it in ourselves.
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