Robert Reich: Inequality has warped the minds of America’s rich

The former labor secretary on why our country's wealthy won't pay anything close to the tax rate of 40 years ago

Topics: RobertReich.org, 1 percent, Rich, poor, Income inequality, ,

Robert Reich: Inequality has warped the minds of America's richRobert Reich
This originally appeared on Robert Reich's blog.

America has a serious “We” problem — as in “Why should we pay for them?”

The question is popping up all over the place. It underlies the debate over extending unemployment benefits to the long-term unemployed and providing food stamps to the poor.

It’s found in the resistance of some young and healthy people to being required to buy health insurance in order to help pay for people with preexisting health problems.

It can be heard among the residents of upscale neighborhoods who don’t want their tax dollars going to the inhabitants of poorer neighborhoods nearby.

The pronouns “we” and “they” are the most important of all political words. They demarcate who’s within the sphere of mutual responsibility, and who’s not. Someone within that sphere who’s needy is one of “us” — an extension of our family, friends, community, tribe – and deserving of help. But needy people outside that sphere are “them,” presumed undeserving unless proved otherwise.

The central political question faced by any nation or group is where the borders of this sphere of mutual responsibility are drawn.

Why in recent years have so many middle-class and wealthy Americans pulled the borders in closer?

The middle-class and wealthy citizens of East Baton Rouge Parish, Louisiana, for example, are trying to secede from the school district they now share with poorer residents of town, and set up their own district funded by property taxes from their higher-valued homes.

Similar efforts are underway in Memphis, Atlanta, and Dallas. Over the past two years, two wealthy suburbs of Birmingham, Alabama, have left the countywide school system in order to set up their own.

Elsewhere, upscale school districts are voting down state plans to raise their taxes in order to provide more money to poor districts, as they did recently in Colorado.

“Why should we pay for them?” is also reverberating in wealthy places like Oakland County, Michigan, that border devastatingly poor places like Detroit.

“Now, all of a sudden, they’re having problems and they want to give part of the responsibility to the suburbs?” says L. Brooks Paterson, the Oakland County executive. “They’re not gonna talk me into being the good guy. ‘Pick up your share?’ Ha ha.”



But had the official boundary been drawn differently so that it encompassed both Oakland County and Detroit – say, to create a Greater Detroit region – the two places would form a “we” whose problems Oakland’s more affluent citizens would have some responsibility to address.

What’s going on?

One obvious explanation involves race. Detroit is mostly black; Oakland County, mostly white. The secessionist school districts in the South are almost entirely white; the neighborhoods they’re leaving behind, mostly black.

But racisim has been with us from the start. Although some southern school districts are seceding in the wake of the ending of court-ordered desegregation, race alone can’t explain the broader national pattern. According to Census Bureau numbers, two-thirds of Americans below the poverty line at any given point identify themselves as white.

Another culprit is the increasing economic stress felt by most middle-class Americans. Median household incomes are dropping and over three-quarters of Americans report they’re living paycheck to paycheck.

It’s easier to be generous and expansive about the sphere of ”we” when incomes are rising and future prospects seem even better, as during the first three decades after World War II when America declared war on poverty and expanded civil rights. But since the late 1970s, as most paychecks have flattened or declined, adjusted for inflation, many in the stressed middle no longer want to pay for “them.”

Yet this doesn’t explain why so many wealthy America’s are also exiting. They’ve never been richer. Surely they can afford a larger “we.” But most of today’s rich adamantly refuse to pay anything close to the tax rate America’s wealthy accepted forty years ago.

Perhaps it’s because, as inequality has widened and class divisions have hardened, America’s wealthy no longer have any idea how the other half lives.

Being rich in today’s America means not having to come across anyone who isn’t. Exclusive prep schools, elite colleges, private jets, gated communities, tony resorts, symphony halls and opera houses, and vacation homes in the Hamptons and other exclusive vacation sites all insulate them from the rabble.

America’s wealthy increasingly inhabit a different country from the one “they” inhabit, and America’s less fortunate seem as foreign as do the needy inhabitants of another country.

The first step in widening the sphere of “we” is to break down the barriers — not just of race, but also, increasingly, of class, and of geographical segregation by income — that are pushing “we Americans” further and further apart.

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His new movie "Inequality for All" is in Theaters. His widely-read blog can be found at www.robertreich.org.

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