Contrary Argument to Robert Samuelson’s "Government is not Beholden to the Rich"

In a Washington Post article of November 19 (http://www.washingtonpost.com/opinions/robert-samuelson-lobbyists-for-the-rich-do-not-own-government/2013/11/19/8e47d8f0-513e-11e3-a7f0-b790929232e1_story.html), Robert Samuelson makes this argument.

To try to prove his point, he simply explains how the federal budget is spent, showing that a majority of our social support spending (a huge part of our budget) goes (one way or another) to provide for the elderly in our nation–individual benefits, health care, veterans benefits, etc.

The information Samuelson uses come from the Congressional Budget Office, and we trust it is accurate.

Nevertheless, this does not prove Samuelson’s point: “Democracy’s problem is not the influence of money. It’s the influence of people. As the CBO report shows, so many Americans have become dependent on government that consensual change is difficult and, perhaps, impossible.”

It is certainly true that Americans resist giving up Medicare and Social Security entitlements, and it is also true that we have to make some adjustments in these to preserve the financial integrity of our federal finances.  It is also true that consensual change is difficult in this country–we are legislatively gridlocked.

However, if the rest of Samuelson’s argument were true–essentially that the people (we assume he is referring to the “99%”)–control what happens in our federal budget, then how could he explain these developments:

Have a look at the Piketty and Saez 2004 study “Income Inequality in the US 1913-2002” (http://elsa.berkeley.edu/~saez/piketty-saezOUP04US.pdf) or look at Real World Economics Review Blog’s (http://rwer.wordpress.com/2011/02/25/25-graphics-showing-upward-redistribution-of-income-and-wealth-in-usa-since-1979/) showing the dramatic increase in the degree of US inequality across the last 3-4 decades.

Piketty and Saez found that the top decile’s share of wage income in the US rose from about 25% in 1957 to about 34% in 2002. Real income of the 99% was about the same in 2002 as it was in 1972, inflation adjusted–i.e., about the same buying power–no improvement. However, the top 1% saw real income double across that period.  If all types of transfers are included, real income of the 99% has grown by 40%, but real income of the 1% has grown by 3.3X.

WordPress reports that the top tax rate for millionaires in 1945 was 66%, and in 2010, that rate was 32%. In 2007, the bottom 50% of the US owns 2.5% of total US wealth. The top 50% owns the remainder, with the top 10% owning 71%, and the top 1% owning 35%.

No matter how the government’s social welfare system is configured (Samuelson’s focus), it is irrefutably true that in almost any social breakdown (by income, by skin color, by educational achievement, etc.), the US has markedly worsened in terms of increased inequality since the 1970s.

So, how can one fail to recognize that the income and wealth and power of the country is increasingly with the wealthy and connected?

If we don’t concern ourselves with ways in which to remedy this trend, we are likely to experience great instability in our country in the future. There are practical answers we should galvanize around.

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