Editor's note: This is an opinion column written by George Salamon.
During the past three weeks, the New York Times published five remarkable articles about America’s economic divide. Together they paint a devastating picture of a country moving inexorably toward a two-tier society in which the rich will continue to get richer while middle-class and-blue-collar workers cling to a life of stagnant wages and high unemployment. Reader response was heavy, on the whole indicting the government in Washington from the 1990s until now as “profit before people administrations.” But no response seems to be coming from the corridors of power in politics, finance and business.
The first piece appeared Feb. 16 (dates refer to publication in the NYT print edition), “Incomes Flat In Recovery, But Not For the 1%,” by Annie Lowrey. Lowrey’s opening shot is aimed at the recent and so-called “recovery,” in which “incomes rose more than 11 percent for the top 1 percent earners during the economic recovery, but not at all for everybody else.” While her article acknowledges that President Obama has been “animated by the country’s yawning levels of inequality,” she quotes an economist who deflates his administration’s efforts because “they have been aimed at blunting the effects of income inequality, rather than tackling income inequality itself.”
The next article reveals just how big business cashes in while the little guy (and gal) struggle, “A Digital Shift On Health Data Swells Profits,” by Julie Creswell Feb. 20. As doctors and hospitals struggle to make the new digital records system work, she wrote, “the clear winners are big companies … that lobbied for the legislation and pushed aside smaller companies.” The legislation to encourage digital systems turned into a “$19 billion giveaway,” and so what was meant as a federal incentive in the 2009 stimulus bill “has been swept (away) by a gold-rush mentality, too.”
The bigger picture of what this apparently unstoppable mentality wreaks on America is revealed in the third article, “Recovery in U.S. Is Lifting Profits, but Not Adding Jobs,” by Nelson D. Schwartz March 3. In today’s “golden age for corporate profits,” he quotes an economist, “corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, but disposable income inched ahead by 1.4 percent annually over the same period.” And what are we to make of that? “There hasn’t been a period in the last 50 years where these trends have been so pronounced,” the economist concluded.
And when “these trends” are so pronounced, whom do they hit the hardest? If you guessed the poor, you would have anticipated the Times’ next piece, “As Automatic Budget Cuts Go Into Effect, Poor May Be Hit Particularly Hard,” by Annie Lowrey March 4. Discussing the automatic cuts under the current sequestration, she points out the reductions in programs that help low-income Americans (the poor, if you like plain English) such as one granting “vouchers for housing to the poor and disabled” and another that provides “fortified baby formula to the children of poor women.”
While those babies will learn to do without, big businesses are receiving “a stealthy subsidy” to get bigger as the last of the articles describes: “A Stealthy Subsidy Aiding Big Business Is Growing,” by Mary Williams Walsh and Louise Story on March 5. These businesses, we are told, receive tax-exempt bonds for private projects such as stadiums, hotels and golf courses. Billions in revenues are lost at the taxpayers’ expense, and yet a report by the Government Accountability Office sighs and can only wonder “whether facilities like these provide public benefits to federal taxpayers.”
Some readers of these articles were more clear-eyed and blunt. “If this imbalance continues,” one wrote, “it won’t be long before my share of the national debt will exceed my net worth, while Romney, Apple and GE flourish.” Indeed. And another asked, rather plaintively, “Who are you going to hold accountable?”
The Times has done its job. Let’s see if America’s citizens are up to doing theirs.
George Salamon taught German literature and culture at several East Coast colleges, served as staff reporter for the St. Louis Business Journal and as senior editor for Defense Systems Review. He has published three academic books and contributed articles to the Washington Post and the American Conservative.