The Janus Forum at UVM recently held a debate featuring senior fellow at the Center for American Progress, David Madland and Michael Tanner, senior fellow at the Cato Institute on the question: “Is Growing Income Inequality a Threat to our Democracy?”
Did you miss the event? Watch here
David Madland is the author of the book Hollowed Out: Why the Economy Doesn’t Work without a Strong Middle Class. He has also been featured on television shows such as “PBS NewsHour” and CNN’s “Crossfire” and has been cited in The New York Times, Wall Street Journal, The Washington Post, and The New Yorker. Madland’s resarch and work is focused on economic policy, retirement, labor unions, employment, public opinion, economic inequality and the middle class
Read Madland’s full bio here
Read more about his views here
Madland argued that growing income inequality in the U.S is a threat to our democracy. His main points were that,
1. The levels of inequality have dramatically increased: In 1970, CEO’s made 22 times more money than the average worker, now they make 300 times more.
2. There is evidence of special interest tax breaks that disproportionately benefit the very wealthy, hedge fund managers pay less in taxes than secretaries. This has only gotten worse, by a lot, in recent years despite there being consensus and push for tax reform.
3. Wall Street bailout had no strings attached, corruption convictions have quadrupled while at the same time, things the public wants haven’t received funding- investment in infrastructure, higher education, increase in minimum wage,
4. Polls of what the public says compared to what politicians actually do show that they lean towards what higher income people want, not everyone else, especially when it’s in direct conflict with the interests of the wealthy.
5. Public perception of corruption in Government has increased drastically.
6. The direct ways income inequality infiltrate the political system is through campaign contributions, lobbying, and what politicians do on a daily basis, try to raise money and talk to wealthy people rather than talk to their constituents.
7. Income inequality makes us less civic in the way it pulls us apart and makes us feel different, live different lives, interact less, think they are different and become less trusting. This increases polarization, the rise in income inequality correlates to the rise in polarization.
8. When we are less participatory, we are less likely to join together in organizations. We then vote less and feel less connected and powerless, less engaged.
Michael Tanner is an author of many books and has been featured in almost every major American newspaper and is frequently featured on network and cable news programs.His research and work is focused on poverty and social welfare policy, health care reform, and Social Security.
Read Tanner’s full bio here
Read more about his views here
Tanner argued that income inequality is not a threat to our democracy, His main points were that,
1. We are overstating the problem of income inequality, pretax and pretransfer income, doesn’t reflect government redistribution to low income people. This consideration closes the gap significantly, then when considering how much income they actually have to spend that shrinks it even more.
2. Inheritance is not a big part of wealth, top wealthy, large majority are “self made”,3% have from inheritance. Money is not passing through generations, the top 400 richest people are not from the dynasty families, family fortunes are often gone by the third generation.
3. The top wealthiest are not all on Wall St, a third are in business and 10-12% are medical professionals and in finance. The top wealthiest got wealthy from giving us things we want.
4. Inequality doesn’t matter, poverty is much more important, more inequality does not equal more poverty. If we were to double everyone’s income, so many people would be raised out of poverty. The recession made the rich lose millions, but it wasn’t good for the poor. It is better to be unequally rich than equally poor.
5. We have experienced upward mobility and that is what matters. There is huge income inequality in China but many have been lifted out of poverty. Poverty has declined even though inequality has increased.
6. The rich don’t all share the same political ideas, there are ones who give a lot of money to politics but they balance each other out.
7. Labor unions and organizations like the NRA also give a lot, it’s not rich businesses protecting themselves, money in politics is based on interests and beliefs.
8. The rich are just part of process and the process should be open to everybody without knocking them down, the goal is more participation
9. Why should we give more power to government if government is a tool for rich to have power over the poor?