Tuesday, February 25, 2014

Inequality for All

This is an excellent documentary. It admits it has a viewpoint and does not hide it: That there is economic inequality and that this inequality can be harmful to our economy and our democracy. Yet it is neither preachy nor boring academic although it does fall more on the academic side. What is good about this documentary is it backs its arguments with facts and statistics. People may still wish to argue interpretations of the numbers, but this film makes solid arguments without being preachy nor melodramatic, as some failed documentaries do.

Viewers learn that household wages rose from the 1940s to the late 1970s and then began dropping after that. The wage increases were helped by an increased graduations from higher education that made the U.S. the most educated country which in turn led the U.S. to be the most economically productive nation. There was a similar growth in unions which protected wage growth.

In the late 1970s, the I.R.S. allowed companies to deduct executive pay based on performance. This resulted in an increase in greater compensation to executive with stagnant pay to other employees. In the 1980s, taxes on the wealthiest Americans were reduced to levels seen before the depression. Unions faltered and many wage protections were removed. The financial industry experienced increased growth as law changes permitted increased speculation that brought them wealth yet did little to create new product snd more jobs. By 2008 the disparity in economic wealth was similar to that which existed before the depression of 1929.

Household spending had kept pace even as housing, education, and health care costs continually grew faster than the inflation rates. Households achieved this by the historic entrance of women into the labor force, by people on average working longer hours, and by households taking on increased debt. Consumer debt reached $500 billion by 1929.

As in the depression, there was another economic crash in 2008. The country has seen a revival in stock market prices. Yet nearly all of the increased wealth has gone to the wealthiest people.

Economic growth occurs when the middle class and poor spend money which increases demand for more products which produces more jobs. This creates an upward cycle of growth. Concentrating wealth in a few people who do not spend as much money creates a downwards cycle of economic downfalls.

This creates a threat to our economy, this film argues. The wealthiest Americans are investing more in lobbyists and in campaign contributions to politicians who are keeping tax rates on the wealthy are kept low. A 2010 Supreme Court ruling now allows unlimited amounts of funds to flow to candidates. The lower taxes paid by the wealthy reduces public sector revenues which in turn leads to cuts in spending on public education and higher education. The education levels overall decline which diminishes the productivity of our labor force. This results in lower wages and further lowers public sector revenues and the downward cycle continues.

I found this movie informative. I suspect many will bring their prior biases and political beliefs to when they view this film and their reactions may be in accordance to their prior conceptions. I would urge people to have an open mind when viewing this movie and to think of more questions on these economic issues to which we should seek further answers.

No comments:

Post a Comment