In a recent opinion piece by Paul Waldman of the Washington Post, he references a hearing in the House of Representatives, in which freshman representative Katie Porter (D.-Calif) questions Jamie Dimon, the CEO of the big banking corporation JP Morgan Chase. Porter carries out a series of calculations at this hearing, and shows how a single mother of one living in California and on the lowest budget possible would be $567 below budget per month, living on the salary of a full time bank teller at a JP Morgan Chase. She then asks Dimon, who made $31 million last year alone, how he would remedy this situation. He responds that he would “have to think about it” or might sit with her and see how he could “be helpful.” Waldman argues that this one conversation is evidence of the larger economic rift in our country, referencing to the elite monetary status of the top one percent and to the economic inequality that our country faces. He also mentions that despite public exposure to this issue, tax cuts that aid the wealthy in the acquisition of even more money are consistently being voted into place by congress.
Expanding on Waldman’s argument, this blog post will include the analysis and synthesis of political data and theory to explain why these kinds of laws are consistently put into place, and further, what this economic disparity means in terms of our country and in the stability of our democracy as a whole. What is causing this discrepancy between what the people actually want and what laws are passed? What does it mean for our country if this economic inequality continues to grow? Is our democracy decaying and in danger of backsliding as a result? It is my perception that the theories and data presented will show that the economic inequality of our country is truly a problem for the resiliency of our democracy.
In Page and Gilens’ book Democracy in America? they have found a pretty clear answer as to why all of these laws are getting voted in despite popular opinion: the rich are paying to get the laws passed. According to their statistical data, a law that is passed is much more likely to follow the opinions of the top one percent than it is the majority of the country. This is because rich CEOs just like Jamie Dimon spend millions of dollars on lobbyists to get a word in on laws that are important to their businesses, like cutting corporate taxes, reducing government regulations on big businesses, etc. An excellent example of this is the Koch Brothers, who are also mentioned in Page and Gilens’ book. The Koch Brothers, owners of a multinational petroleum company, have spent over half a billion dollars on lobbying since the late 90s, and are known for having their fingers in conservative pockets all over the United States government. The general public barely stands a chance against them if they have differing views, for lobbying cost money, and big corporations like the Koch Brothers or even the NRA are responsible for a lot of candidate funding, and if a representative from a state takes the majority of their funding from the NRA, then they are going to vote according to the NRA’s values.
This helps to explain why the gap is so large and why it is not decreasing despite the public’s suffering and exposure on the issue, but what does this economic inequality really mean for the country? According to Lipset, economic inequality is correlated to democratic decline. In the ideal democracy, according to him, the economic distribution would be in a diamond shape rather than the current triangle shape, with the richest at the top, middle class in the middle, and poorest at the bottom. A triangle shape (with a large lower class) makes the democracy very unstable, for the poorer people are going to be the most unhappy. The more unhappy people there are, the more contestation, radical ideas, and potential for radical, riotous actions. If the middle class is fairly large as in the diamond shape, however, the majority of the population would be content. Clearly, the less economic inequality and the more economic prosperity present, the more ideal the situation.
Dahl goes further with this, explaining that although a market economy in which large corporations exist and thrive is necessary for a democracy, leaving them entirely unchecked goes entirely against the whole idea of a democracy. Dahl believes that the two essential tenants of a polyarchal democracy are a continuous responsiveness of the government to its people and for all of the participating citizens in the society to be as equals. A situation in which corporations have too much money and too much power breeds inequalities and limits the democracy’s abilities to fulfill these two essential tenants. For in the example of our democracy, the government is responding to the wants and needs of its corporations rather than to all of its people, and it holding the rich to a higher regard than the general public, limiting equality.
Given all of the information thus far, how bad is the United States really in terms of economic inequality? Are we truly in such a negative state to feel a potential threat to our democracy? According to statistics reported by Richard Reeves as a part of The Brookings Essay, 80% of all Americans make $100,000 a year or less, with the highest earner in America making over $11,000,000. What’s more is that those born in the lower quintiles have a less than 25% chance of ever making it to the top 20% of income earners. This is quite significant, and is a lot further from the diamond model as Lipset would hope. Clearly the market system is currently going with a lot less regulation then Dahl would hope too.
Just as Waldman suggests, there is great economic inequality in our country, and it is causing issues in our democracy. If we do not do something to fix this gap soon, our democracy and very way of life is in danger. As Porter points out, there is a serious issue in our country when a single mother working full time does not have a living wage for herself and her child. We cannot just sit back and watch the rich get richer anymore. We have to do something so that all Americans have an equal chance at economic prosperity and that all Americans have an equal value to their vote.