September 8, 2010 11:18 AM
In the 1970s, the wealthiest 1% of Americans accounted for about 9% of the nation's income. Today that number stands at 23%, the greatest concentration of wealth since the eve of the Great Depression. This is an unhealthy situation on a number of fronts, but it directly contributes to our continuing national recession.
Simply put, Americans are producing more in their role as workers than they can buy in their role as consumers. The problem is that all of the productivity gains of the last few decades and then some have gone into the pockets of the wealthiest Americans while the wages of workers have remained stagnant. We've topped out in terms of two earner households, borrowing against our homes and credit card debt. There's no place left to go in order for us to consume our way out of this recession.
So, part of the answer to the recession needs to be a more equitable distribution of the prosperity that has become so concentrated. For that reason, Congress should not extend the Bush tax cuts, at least for the wealthiest Americans, when they expire later on this year. Instead, those resources should be used to reinvest in our infrastructure, getting work done that needs doing, improving our transportation network which will make our economy even more efficient and putting people to work in family-supporting jobs just when they need them the most.
You can read more about it in Robert Reich's excellent column here: http://www.nytimes.com/2010/09/03/opinion/03reich.html?_r=1&ref=opinion.
So, what we've got right now is a misplaced populism - an anger directed not at the root of the problem, but instead at the very institutions that can correct it.