Defining Challenge of Our Time?

Brian Sahd

I do not know anyone who is in favor of poverty – no liberal, no conservative, no tea party member or left wing radical. All of us, I truly believe, agree that poverty is something to be eradicated. The divisive issue surrounding poverty is the how: How do we create an economic environment that supports growth of income so that no one (and not just those of us in the United States, but across the globe) lives in poverty.

Here in the United States the poverty rate remained consistent over the past 50 years, at about 15%

This much is clear, however, today’s poverty is not the poverty of preceding generations.  Current poverty has little resemblance to poverty of the past.  As I mentioned in an earlier blog, various government sources, including census data and surveys by federal agencies, suggest that the typical American family living below the poverty level today are much better off than their counterparts of two or three or four generations ago. Clearly, the United State, with its capitalist system, is doing something right.

Does poverty still exist? Certainly. Can we as a society do a better job at combating poverty? Of course.  But with all this current focus on income inequality and the top 1 percenters robbing the rest of us 99 percenters blind, those with this particular viewpoint seem to be suggesting that we are experiencing the worst poverty in our history.  It begs the question: Are we – those of us that believe in the merits of a capitalist society —  missing something? Is income inequality, as Obama believes, the “defining challenge of our time?”

There are those with this particular point of view that propose two connected arguments to try to convince the rest of us that we are being duped. Income inequality, the type that keeps the vast majority of us in or near poverty, is inherent of capitalism and that we are stuck in our economic position without any hope of climbing out. Taken to the next logical conclusion: our capitalist economic system is so unjust and beyond fixing that we need redistributive economic policies, and quick. Wake up folks!  The US as a capitalist country is fading, we are being told. We are no longer the economic powerhouse we once were. It is high time we face this reality and accept the new economic world order and redistribute our resources now when we have enough to redistribute.

The second but related point of view is that the 99% cannot think or do for ourselves. Instead, those in power, that is our government officials and leaders, know best. We are not intelligent or capable enough.

This argument hinges on the notion that since the 80% (referred to by Harry DeRienzo) or 99% (referred to by Obama) cannot extricate ourselves from the yolk of the 1% — capitalism has run its course.  And now, no one cannot get out of poverty without the assistance of our leaders.  Government has to do it for us.

I cannot help thinking that there is something else behind the income inequality rhetoric. Are the times different now? Yes they are, with all indications pointing to times that are better. All of us are better off today than we were in the 50, 60 or 70s.  Is the current generation precluded from earning more than their parents? That depends, as it always does on an individual belief in self, our capability, ingenuity and resourcefulness.

Although I have not studied this issue so thoroughly, the Gini co-efficient, has been long the standard measurement of income equality/inequality.  What is telling, using the Gini co-efficient, is that the two states with the highest taxes, toughest regulations, the states that purport to be the most progressive in the country, the two states that celebrate their moniker as a nanny state –with laws outlawing Happy Meal toys; prohibiting home bible study without a “conditional use permit”; outlawing sales of large sodas — are the those that have the highest income inequality: New York and California.  More specifically, New York City has the highest rate of income inequality in the United States.  Its income distribution is more unequal than South Africa’s was at the height of Apartheid. “The most profound level of inequality and bifurcated class structure can be found in the densest and most influential urban environment in North America — Manhattan,” writes Joel Kotkin, executive editor of and a Distinguished Presidential Fellow in Urban Futures at Chapman University.

Perhaps, and I am only surmising this, those with the view point that income inequality is the defining challenge of our time, are politicizing poverty so as to expand government’s role at the expense of individual rights and liberties.

The world is vastly different than it was fifty years ago. When I was coming of age in the 70s our family did not have a lot of money, but neither did most families.   It was, as Mr. DeRienzo suggest, a classless society.  My dad worked hard, as most parents did, at various jobs to feed the family.  And my mom worked just as hard to stretch the money that put food on our table and maintain a safe and happy environment for her children. The valuable lesson that our parents taught us and that was reinforced by our circle of friends, television, newspapers and other institutions was that if we worked hard, believed in our individual abilities and were responsible spenders we would improve our economic situation.  Nothing was beyond our reach.  We could be doctors, lawyers, bankers, elected officials, cabinet members, or judges if we worked hard enough.

And you know what? My generation was able to make that leap, no matter that we were born without lots of money or connections.  My friends and family members have become judges, government cabinet members, elected officials, bankers, company CEOs, lawyers and doctors. This despite what politicians and academics are telling us about income inequality and the demise of capitalism and their dual negative effects on our lives.

Is the current generation precluded from benefiting from Capitalism and moving up the economic ladder are we all doomed to remain in or near poverty? Some, who see the glass as half empty, would say yes. Because of income inequality the 99% are incapable of running our own lives, making our own decisions — government needs to run our lives for us. We need to all live in states such as New York or California. What a country that would be!

I believe the opposite is true. We are given constant opportunities, it is up to us as individuals to take control of our own lives and take advantage of even the smallest opportunities. It is not government’s role to run our lives for us. Look at what big government has done to the residents of New York and California.

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