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 shrinking middle class, the weakness of our students’ academic performance, the implications of annual federal deficits and debt, and the aging 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 per student and per classroom than other countries, yet their 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 we will 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. 

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

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

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 have significantly improved women's education and career prospects, but now men have fallen behind.

4. Encourage our most innovative 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 indicate 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 test scores are considerably lower down the list. So the core of the problem is not just money. 

After posting this webpage, 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, households in the top 7% of net wealth gained 28%, while households in the bottom 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."

IMHO, Tim Isbell