Unbalanced Wealth

Tim Isbell, 2013

A friend of mine posted a 6-minute video clip on his FaceBook page. Homeless in High Tech’s Shadow (by Moyers & Company) analyzes the chasm between the rich and the poor living in Silicon Valley, which has been our home since 1971. When my friend posted the clip, he added an annotation asking for my response. As it turns out, I’ve been thinking about unbalanced wealth for quite a while. I’m disturbed by the diminishing size of the middle-class, the weakness of our students’ academic performance, the implications of the annual federal deficits and debt, and the aging demographic of our workforce. So, here are some resources I've found informative, followed by a few lines of what I think:

Some thought-provoking resources

Wealth Distribution in America is a 6.5 minute YouTube video by Infographics that does a remarkable job of illustrating this problem.

U.S. Education Spending and Performance vs. the World explains that we spend more money per student per classroom than other countries whose students perform much better than ours. Almost everyone who is reading this post can do something about this problem.

A Smaller Slice of the Pie: Why Technology Is No Longer Creating Jobs is a Wharton School article. It points out that the spectacularly successful technology companies of the last ten years do not by their nature create as many jobs as the highly successful companies in the past. And this trend is likely to continue.

The Ugly Truth about the Federal Deficit: It’s Not Just Entitlement Spending is an Adam-Levine Weinberg (Motley Fool) article that puts defense and security spending in perspective alongside entitlement spending.

To Rebuild the Middle Class, Restore Marriage is a David Frum article (CNN) that shifts the conversation from same-sex marriage to what will we do to fix all marriages. It makes the point that reinvigorating the middle class depends on refocusing our thinking about 2-parent families.

Some actions that seem sensible to me

Washington must

... collaboratively attack the deficit and debt problems, as well as work to repair the currently unhealthy wealth imbalance. To do this, Washington needs to "stop fighting and start fixing" (No Labels) and find ways to do things like these (in order of priority):

1. Reduce the size of our Defense spending to no more than 2-3 times that of the second-largest defense spender (China).

2. Raise tax revenue, primarily from corporations and the very wealthy. While doing this, make the tax code fairer (close lots of loopholes).

3. Restructure Medicare.

4. Restructure Social Security.

5. Continue to invest strategically in future technologies.

So, what action can you and I take about a list like this? We can urge our Congress to take action along these lines. Here's a link where you can find out how to contact your elected officials: Common Cause. We can also support No Labels, which presses Washington to "stop fighting, start fixing." It's also where "no budget, no pay" originated. And there are several other good ideas in their Washington pipeline.

The states, Washington, and the rest of us need to:

1. Actively encourage teachers and students to higher levels of achievement, especially in STEM curriculum (Science, Technology, Engineering, Mathematics).

2. Support healthy 2-parent families. Healthy families are crucial to rebuilding the middle class and to improving our students’ academic performance.

3. Work to increase the education of males in comparison to females. The politics of the past few decades has successfully developed the education and career status of women, but now the men have fallen behind.

4. Encourage our smartest entrepreneurs to develop ways to rebuild middle-class jobs. Several are currently working on this problem, but more is needed until we see a healthy middle-class revival.

So, what action can we average citizens take? We can urge these priorities on our state and local leaders. And we can get personally involved through our churches, schools, community groups, and employers to encourage these priorities.

Data indicates that our educational system is not failing because of a lack of money. In America, we spend more money per student than in other countries, but our performance scores test scores are considerably way down the list. So the core of the problem is not just money. 

After posting this article, I ran across another interesting one by Pew Research: A Rise in Wealth for the Wealthy; Declines for the Lower 93%. An Uneven Recovery, 2009-2011, by Richard Fry and Paul Taylor. Here's an excerpt.

"2009-2011 the U.S. economy "recovered." During this time the households in the upper 7% of net wealth gained 28%, the lower 93% lost 4%. Their assessment of the reason: Affluent households typically have their assets concentrated in stocks and other financial holdings while less affluent households typically have their wealth more heavily concentrated in the value of their home."

Still later, a friend sent me this article from Christianity Today: Stewards of Wealth Streams (Four Silicon Valley residents who are wielding their region's capital for good) by Roxanne Wieman. (5/1/2013). This one looks at some of the entrepreneurial concepts that are finding their way to addressing the issue of Unbalanced Wealth. One interesting element that Wieman unpacks has to do with venture capitalists beginning to encourage companies and products that feed a "triple bottom line: economic, social, and environmental factors.

IMHO, Tim Isbell