Inequality in the US: (1) The Problem

President Obama has called for his administration and the Congress to address inequality as the most pressing domestic problem we currently face. The next six essays are my take on various aspects of the difficult and complex problem of inequality in the US. Readers who want a thorough discourse on the topic should read Thomas Piketty’s outstanding new book, Capital in the Twenty-First Century.

Inequality in the US
is at record levels.

Inequality in the US presently stands at record levels for the nation, and may soon rise above the world record set by France in the early 20th century. Two main groups of people are involved in the discussion of inequality: the poor and the extremely rich. Inequality is created by a kind of stretching of the distance between them. The poor get increasingly poor; the rich increasingly rich. There is a gross imbalance of size between the two groups, as the poor are half of the population, and the extremely rich are some fraction of the richest 1%.

With poverty,
inequality is all political, and simple.

Of the two situations, addressing the challenge of poverty is relatively simple, even though literally half of the population is involved. Almost all of the difficulties are political, and have little to do with the actual economics, fairness, or democracy of the issue. The answer I subscribe to will go a long way, but of course will not by any means end poverty.

Addressing the inequality created by the wealth of the very rich, on the other hand, is fraught with numerous difficulties, and it’s hard to say which of them provide the greatest challenge. 

For great wealth,
solutions are difficult and complex. 

To begin with, wealth in itself is not the problem, and solutions like Cuban communism are not fruitful. The Cuban communist system does provide a high level of equality—but that’s because everyone is poor, hardly a satisfactory solution. Ultimately, the only wealth available to the rich in the short term comes from the poor, in a process called extraction. Greed plays a significant part, but it’s not the most important element. Pure greed of the rich does contribute to inequality for the simple reason that greed is infinite, and there is no point where “enough” is reached. But the biggest problems for equality stem from the inherent nature of wealth itself.

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