The Tale of the Shrinking Pie

The U.S. dispute between Democrats and Republicans over the new budget appears to have been resolved to a point where there will be no government shutdown.

At the beginning of December, Barack Obama was quoting a pope highly skeptical of capitalism and denouncing the glaring social divide in his country. He said that the American dream was being jeopardized and the American image tarnished. However, these concerns were nowhere to be seen in Washington policy by mid-month, when a new budget was proposed that apparently was following the concept of “austerity-light.”

Democrats and Republicans patted themselves on the back. They had made a breakthrough on the budget fight, or so they claimed: Now, there was no longer a threat of a government shutdown, which had loomed for 16 days in October — no more stumbling from crisis to crisis. Obama praised the compromise as a step forward because Social Security had not been touched. This is astounding. A few weeks earlier, one might have gotten the impression that Obama was himself open to the idea of cutting retirement monies — for the sake of the “grand bargain.”

In spite of that, if the budget deal was not a catastrophe for retirees, it certainly will be for 1 million long-term unemployed workers, who will lose their support shortly after Christmas. This gives the impression that the debate called off over raising taxes on the rich to stimulate the economy. The outcome means capping spending in an already bloated military budget until 2016.

Obama’s speech writers took a page out of the “Occupy” movement handbook. In 1980, the richest 10 percent of the population received one-third of all earnings; the president says that has since increased to one-half. The typical CEO now earns 273 times more than an employee. In 1980, the CEO earned only 30 times more. Children born into the upper 20th percentile will likely remain there during their entire lifetimes, while those in the bottom 20 percent will probably remain there as well. Bridging that chasm, Obama said, was today’s decisive challenge. Obama’s concept of how that would come about involved all Americans profiting from a growing economy — but then came the crippling new budget compromise.

How it came about and how it got the blessing of the White House, has a great deal to do with how unbalanced political power is in the United States. The man on the street cannot afford to hire a lobbyist, as Barack Obama often reminds us. So, the man on the street gets more cynical, and society becomes increasingly polarized.

Obama has now been in office for five years — a span during which social inequalities have continued to grow. More than 20 percent of children now live below the poverty line. One can no longer hold Republicans or the tea party faction entirely responsible for this. However, those suffering have been incapable of uniting into a progressive alliance. Still, all hope has not yet been given up for Obama, even though more and more victims of social inequality have begun drifting to the right. Who can blame them when Obama himself criticizes economic inequality yet pushes an agenda that actually reinforces it? A society is not likely to become more generous when the pie to be shared keeps getting smaller and smaller.