Obama should follow in FDR's footsteps and do something
about the "overprivileged" as well as improving conditions for the
poorest among us.
There’s no doubt that
President Barack Obama will make inequality a major theme of his State of the
Union address, just as Franklin Delano Roosevelt did in 1935.
“We have not weeded
out the overprivileged and we have not effectively lifted up the underprivileged,”
FDR lamented. “Both of these manifestations of injustice have retarded
happiness.”
Like Roosevelt, Obama
gets that the inequality problem has a top and a bottom. In a speech last
December, he railed against the exploding gap between CEO and worker pay and
the concentration of our nation’s wealth in the hands of a few.
When it comes to
proposed actions, though, Obama is expected to focus exclusively on lifting up
the bottom.
Don’t get me wrong. I’ll be cheering if Obama uses the State of the Union address to make a big pitch for raising the minimum wage. It’s shameful that in the richest country in the world there are so many people who work hard every day and still live in poverty.
But unless Obama also
tackles the top end of the problem, he won’t do much to turn around the trend
toward extreme inequality.
In his 1935 speech,
FDR was careful to explain what he meant by “overprivileged.” He had no problem
with some people earning more than others.
What he did have a
problem with was “the acquisition of wealth which, through excessive profits,
creates undue private power over private affairs and, to our misfortune, over
public affairs as well.”
In other words, it
ticked him off when those at the top rigged the rules in their favor.
It’s not hard to find
examples of such “overprivilege” today. Most glaring, perhaps, are the Wall
Street titans who made excessive profits from reckless financial activities
that crashed the economy.
While millions lost their jobs and homes, the titans
used their undue power to walk away largely unscathed.
The 2010 Dodd-Frank
financial reform legislation was supposed to prevent Wall Street pay packages
that reward excessive risk-taking. More than three years since the law was
enacted, however, these modest reforms have not been implemented.
Then there are the
overprivileged who hire hotshot lawyers to help them avoid their fair share of
taxes. Mitt Romney’s Cayman Islands
accounts were a prime example of the kind of tax dodging that
costs the rest of us an estimated $100 billion per
year. Unfortunately, the Obama administration has backed off tough
tax haven proposals.
These are just two
areas where the president could be doing a lot more to weed out the
overprivileged. Of course when he faces the current Congress, he’ll see fewer
friendly faces than FDR did in 1935, when Democrats had strong majorities in
both houses.
And yet Obama
shouldn’t give up trying to build support across party lines on these
issues. A new Gallup poll shows
that 54 percent of Republicans are dissatisfied with current levels of U.S.
income and wealth distribution. Small business owners, who are more likely
to be Republicans than Democrats, overwhelmingly
oppose loopholes that allow big businesses to use offshore
accounts to avoid paying their taxes.
Even most tea partiers
aren’t big fans of the Wall Street gamblers who expect to be bailed out when
their bets go bad.
At the same time,
Obama should use the bully pulpit to plug state and local initiatives that
could build momentum for national action. Like the minimum wage fights rippling
across the country, local and regional drives for fair tax reform make
tremendous sense at a time of Washington gridlock.
When I sit down to
watch the State of the Union, I’ll be looking forward to strong words about
lifting up the poor. Let’s hope Obama doesn’t overlook the equally serious
injustice of the overprivileged.
Sarah Anderson directs the Global Economy Project at the
Institute for Policy Studies and is the author of the new report Fast Food CEOs
Rake in Taxpayer-Funded Pay. IPS-dc.org
Distributed via OtherWords (OtherWords.org)
Distributed via OtherWords (OtherWords.org)