The rich are getting richer, the poor are getting poorer, and the middle class …is getting poorer too. Long-time trends since the early 1980s show that middle class income has been steadily declining while the top 10% has seen a steady rise in their share of annual income and overall wealth. Today the top one percent has annual income of over $400,000, while the top 5 percent comes in at just under 200,000. It’s really not that much-especially if you live in a high-priced metropolitan area. But the overall wealth of families in the top 5% averages out at about $16 million, which is not too shabby. While families in the bottom 25% often barely make it from paycheck to paycheck, even with some government assistance.

On the other side of the ledger, the average family income in this country is now about $50,500, declining by over 5% over the last half-dozen years. Now $50,000 a year may afford you a half-way decent, no-frills, middle class life-style in places like Ames, Iowa, or Athens Georgia, but it doesn’t go very far if one lives in cities like San Francisco, Chicago, Houston or New York. As far as the poverty rate in the U.S. these days, it stands at around 15%, with those families earnings being in the neighborhood of $20,000 per year. So we have the top one percent earning over $400,000 a year, while the bottom 15% earn about $20,000 or less. Does that sound like income inequality to you? A subject that President Obama will likely dwell upon at some length in his state of the union address tonight. Or more precisely, how to remedy the continual growing economic inequality that is oozing over this country like a giant blob.

Of course, economic conditions in this country used to be worse. This prompted President Lyndon Johnson, exactly 50 years ago, to declare his famous “War on Poverty.” In 1964, the official poverty rate in this country was over 20%, and Johnson, after taking over the presidency from an assassinated John Kennedy, declared that this was unacceptable. There was, in effect 2 Americas. While some of the citizenry lived in opulent luxury, a vast number endured hardscrabble lives in the most deplorable squalor. So Johnson, with the help of Democratic majorities in both houses of Congress began his war on poverty which resulted in the enactment of major pieces of legislation such as Medicare, Medicaid, food stamps, college loan programs and housing assistance. As a result, poverty rates, especially for seniors dropped significantly to about the 15% level. Under LBJ, the civil rights voting law, which enabled black minorities to freely vote in the South for the first time, also became a reality. Indeed, with such huge accomplishments under his belt, Lyndon Johnson could have been recognized as one of our greatest presidents, except for one thing. The war in Viet-Nam. While the rest of the country finally began to recognize this war as the hopeless fiasco it turned out to be, LBJ continued to pour more  and more troops and money into a lost cause. The country turned on him, as a result, and his presidency was destroyed. Richard Nixon, who followed Johnson, and who extracted us from Viet-Nam, also achieved major accomplishments, only to see his presidency destroyed by his paranoia over the Watergate scandal. I guess the seeds of one’s personal destruction lie buried within everyone’s soul, only to sprout forth under the most opportune and fertile circumstances.

In any event, government intervention to provide assistance to the most unfortunate members of our society, the poor, the sick and the elderly, became the accepted norm, at least until 1980 when Ronald Reagan was elected president. Reagan ran under the mantra of the government, instead of being the solution, was actually the problem. It was government interference in the free-market system that was causing all the economic hardships we were experiencing. Upon taking office, Reagan, therefore, set out to significantly slash social welfare and assistance programs, while also substantially cutting income tax rates, especially for the rich. So, instead of a war on poverty that Lyndon Johnson had undertaken, Reagan and the Republicans set out to make it a war on the poor. It was the 1980s, when “welfare queens” were blamed for draining the public coffers. Of course, everyone knew who the welfare queens were, since it was used as a racist subterfuge for black unwed mothers. One would think, however, that by slashing welfare programs, government spending would substantially decrease. Instead, Reagan increased government debt by over 300% during his 8 years in office, primarily through huge increases in Defense spending. You know, to defend against that Russian “evil empire” thingy. It turned out that Reagan and the Republicans weren’t against government spending per se. They were just against spending it on the most vulnerable of our people. When it came to spending on military hardware and troops, the sky was the limit. This combination of huge Defense spending coupled with sharp tax reductions for the wealthiest among us has mushroomed our public debt now to about $17 trillion. Republican policies regarding these spending and tax priorities have also pretty much stayed the same to this day, as when Reagan first enumerated them in the 1980s.

To be fair, the very nature of our capitalistic economic system will mandate a society where some individuals will possess the necessary talents and abilities to take full advantage and become very wealthy and powerful. Others will have extreme difficulty coping with competitive nature and meritocracy that capitalism demands, and they will usually wind up at the bottom of the totem pole. Most will fall somewhere in the middle. To paraphrase what Winston Churchill said about democracy-Capitalism is the worst form of economics, except for any other system that’s ever been tried.

In any event, no matter what President Obama proposes tonight regarding income inequality, don’t look for our piece of crap Congress to take any meaningful action on any proposal. Politicians these days are bought and paid for by billionaires who have their own agendas, and they hardly include helping to raise the lower classes out of poverty. Once elected, a politician’s primary objective is to get re-elected; and to do that, he or she has to make  the billionaires who put him or her in office happy so these billionaires will keep pouring money into their campaigns. That’s what our so-called democratic system has devolved to, why no meaningful legislation is ever enacted, and why the entire system has pretty much become a farce.


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