It was a great pleasure to discover the response of Rob Olson to my previous opinion, “Now or never,” because it means that at least one person took the time to read what I wrote and cared enough to write an answer. This being said, I completely disagree with Rob’s conclusions. (You can call me Fred. I am not that old).
First, Rob questions the fact that inequalities increased over the last decade, arguing that I quoted an article by Joseph Stiglitz (Nobel Prize in Economics) that does not provide any source. It is very disappointing that Rob did not check the other reference that I had given (website Mother Jones, paper named “It’s the Inequality, Stupid”) or he would have found interesting statistics.
For instance, the average household income of the top 1 percent has been multiplied by four between 1979 and 2007 while the bottom 80 percent did not see any increase. What is the source? The non-partisan Congressional Budget Office that provides inflation-adjusted numbers (2007 dollars). I think that Rob will appreciate this reference. So, the affirmations of Mr. Stiglitz are well founded: the richest are getting richer while the rest are not.
Then Rob quotes a conservative analyst (Brian Riedl) who tried to show that the Bush tax cuts did not benefit the richest. “The share paid by the top quintile of households (by income) increased from 81 percent to 85 percent.” It is really unfortunate that Mr. Riedl used the top 20 percent as an example. It really looks like he tried to hide an inconvenient truth: the tax rate for millionaires went from 36.4 percent down to 32.4 percent after the Bush tax cuts (source: The Tax Foundation). Yes, you read that right. The millionaires pay less taxes but the fiscal burden increases on the top 20 percent, so the top middle class (the top 20 percent without the millionaires) is paying for the millionaires. It is clear that the current system transfers the wealth to the wealthiest and now we also know that Mr. Riedl is intellectually biased by the conservative ideology that makes the promotion of greed and selfishness.
Finally Rob talks about two economists (Arthur Laffer and Stephen Moore) who explained that the tax rate on the top 1 percent went from 70 percent down to 35 percent between 1981 and 2005, while they are paying now 39 percent of the fiscal burden instead of 17 percent. Nothing surprising if you take the time to think about it: the richest became so rich that they are paying a higher fiscal burden even with lower tax rates. This may sound fair but this is not, because as it has been already shown, the richest are the only ones to get richer (within insane proportions), so the current dynamic is completely wrong. One can really question the intellectual honesty of people who keep denying that inequalities have been increasing since the presidency of Ronald Reagan.
It is even more disappointing that Rob did not try to answer the rest of my previous opinion. I explained how the increasing inequalities create instabilities in the economic system and generate an increasing pressure on natural resources. The consequences are really serious because the biosphere cannot provide what we are asking for. Denying these facts would be a proof of either huge ignorance or criminal cynicism.
Two months ago, I talked about these issues with Laura Tyson (professor of economics at Berkeley and adviser at the White House) who was at UC Davis to give a conference. She agreed that Europeans and especially Americans must adapt their lifestyle and show a better example to the rest of the world.
We only have one planet; we have to take care of it. Do we have to go back to the Stone Age in order to avoid an ecological disaster? The answer is no, and I invite you to read my previous opinion titled “Now or never” where I exposed reasonable solutions that can lead us on the path of economic recovery and sustainable development.
One last point to the attention of Rob: please stop calling yourself poor, because you and I belong to the top 20 percent of this planet. If you have ever visited a developing country, you would know what poverty really means and you would feel ashamed to call yourself poor.
Frédéric E. Vincent
Staff Research Associate, Ph.D candidate
