Economic Inequality is Real (Bad)

By Joel S. Hirschhorn

Rising economic inequality has received attention by Senator Jim Webb, presidential candidate John Edwards, CNN's maverick Lou Dobbs, and others. The middle class has not shared in rising national prosperity, because the nation's wealth has been siphoned off to the richest Americans. Some elites are nervous. They have attacked what are pejoratively called "neopopulists" – people who say the middle class is under siege.

Surprisingly, the attack has come from the relatively unknown Third Way group that is associated with the Democratic Leadership Council. Why would self-proclaimed progressives and centrists put out a report that says the whole economic inequality story is bogus?

They favor continuation of the free trade globalization policies of recent Democratic and Republican administrations. They want no restraints on international trade, despite mounting U.S. trade deficits and loss of manufacturing and many professional jobs to low wage nations. Of Third Way's 18 board members, 14 are current or former CEOs or investors, including several hedge fund managers and the co-head of global equity trading at Goldman Sachs.

Third Way's report "The New Rules Economy" uses sleazy statistical tricks to create a false image of rising economic prosperity for middle class Americans. You know the group is full of crap when the intellectually bankrupt New York Times columnist David Brooks praises its findings. Anyone who believes this report's data and conclusions is either in the Upper Class or is just plain gullible. The report argues that the middle class is not stagnating, not drowning in debt, not being victimized by free trade. Is this your reality?

Federal Reserve chairman Ben Bernanke said recently that incomes at all levels are rising; it's just that incomes at the upper end are rising much faster. Minor increases for the many are not the same as staggering increases for the few. And that's what economic inequality and injustice are all about.

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