What the last recession should have done was provide a wake up call for Americans about the amount of control we have over our economic, political, and social environment. This shrinking amount of control is not due to income inequality, as President Obama and members of the left and even the right have been arguing for the past week. Trying to equate incomes of the wealthy or well-to-do with the incomes of the poor is not feasible. Even if that were the goal, policy recommendations by the likes of Robert Reich and his fellow liberals seem to take a sharp left turn away from that idea as soon as they are asked about their policy prescriptions for addressing the problem.
Remember, this discussion started as a discussion on poverty. Webster’s New World Dictionary defines poverty is the condition or quality of being poor. Poor is defined as having little or no means to support ones self. While availability of sufficient income goes to lifting an individual out of the state of poverty, and public aid like food stamps, housing vouchers, and free access to health care goes a way towards temporarily alleviating the pains of hunger, lack of shelter, and illness and injury, in the long run it’s a lack of ownership of sustainable capital that threatens our ability to stay out of poverty.
In addition, even if we are employed, it is our lack of investment in the systems that distribute capital and create output that leaves us open to the ravages of recession. Remember that it was those who held diversified portfolios of corporate stocks and bonds that were able to weather the storm, while those of us who put most of our investments into the American dream of owning a house got the dark side of the American nightmare when we saw our home values plummet and our ability to access the credit markets evaporate.
The rate of poverty, in my opinion, is greater than the 15% rate determined by the U.S. Census Bureau, especially if we consider the ability for people to stay out of poverty over long periods of time. Most of us live paycheck to paycheck, settling for the undervaluation of our skills our employers base their payments to us on. The fear of the wealthy is that we figure out that we should acquire a larger role in the distribution of capital and take ownership of a larger amount of residuals flowing to the iconic one percent.
Rather than incorporate more ownership in the distribution systems and the residuals, the wealthy via the guise of the state’s machinery, government, prefer throw temporary bandages such as minimum wage increases, food stamps, housing vouchers, and the false hope that a college degree will somehow wipe away a lot of the “income inequality” troubles.
It’s part of the reason why I found President and First Lady Obama’s recent speeches on college opportunities heartening yet disconcerting. A college degree certifies that you successfully completed a program that exposed you to certain pieces of information and knowledge and that you can access and process data via limited methodologies. Today’s college education, however, comes no where near educating you on how best to leverage that ability to process data and it is definitely not the only way to obtain information and knowledge. Colleges are not vocational education centers.
If policy makers are serious about closing the so called income inequality gap, they should dispense with the class warfare rhetoric for starters. Valuable information on income making opportunities are held by the very class that the President and liberals enjoy criticizing and if the poor are to access these pieces of information, a truce in this class war will have to be called.
Second, once the negative messaging has ceased, the poor will have to start sharing the risks involved in closing the income inequality gap by investing. What? Risks? Yes, because the gap is created by the diversity of investing the wealthy make. The residuals they earn are based on risks, not guaranteed paychecks or public aid.
The barbarians need not be appeased by trinkets but have to be introduced to the real methods for obtaining sustainable capital, owning the systems of production, eventually leading to avoiding real poverty.