The American dream is becoming difficult to achieve, if you are not born rich. A country, where anyone can be anything, looks like a dying dream.
The income and wealth inequality is so stacked against the average person, the talented kids are not coming from the average background anymore. We always thought talents and excellence are evenly distributed – diversified by nature in a manner that talent will pop out anywhere – rich or poor. However, studies are showing that talent and excellence are mostly coming from rich and wealthy — whom we call elite.
The Economist magazine (Jan. 24-30, 2015) confirmed the trend – the rich are not only richer but also brainier. The children of the rich and powerful are well suited to earn wealth and power themselves.
The main argument is that the rich are buying the education for their children from the private schools and other unorthodox means. They choose their life partners accordingly. They are super-careful for their children’s education. As a result, their children tend to be smart enough to build additional wealth and power over what they have.
Conventional thinking was that rich kids are getting wealth only – not the brains. Now looks like wealth and brains are going together. That’s the challenge of our generation. No one can be against a brilliant person just because he comes from a rich family. The million dollar question is how to change this trend and make opportunities for average children to be smart and well educated as well.
First, in the early part of the 20th century and after the Second World War, public policies were reasonably supportive to the interests of middle class and low income individuals. However, since the emergence of deregulated politics in 1980s, the public policies of trickle-down economics helped emergence of an America where rich became richer, and average Americans became poorer and less powerful.
To understand these issues, we need to grasp the analysis provided by Joseph Stigliz in his book The Great Divide, where he made a theme of sound arguments about how public policies created an America of 1 percent by 1 percent for 1 percent.
Second, we need to have a historic understanding of why and how the wealth and income inequality happened in the context of Western societies in the past. Thomas Piketty’s book Capital in the 21st Century provides factual arguments by analyzing historical data, and explaining why too much accumulation of capital by the rich and wealthy is harmful for any society. His analysis also helps us to understand the justification for higher income and Asset Tax.
Finally, all the relevant stakeholders should attempt a fair and ethical redistribution of wealth by increasing income and capital gains taxes on top earners, so that all Americans and their kids can have access to good education, good health, good jobs and good life.
Economic trends can be changed. Public policies helped to diffuse income/wealth inequality in the past after the Great Depression and World War II. We can do it again after the Great Recession.
Our politics for future public policies should be based on facts and data – not ideological narratives.
Nasir Ahmed is a professor of public administration in the GSU Political Science Department.