There is a virus in our economic system that — not unlike our current problem with COVID-19 — has largely been ignored or dismissed by far too many in our society, especially those who are in positions of power to make a difference. However, unlike COVID-19, there is no end in sight to this problem and the time has long passed to do something about it. This virus is the ever-widening wealth gap and insidious economic inequality in our society that has direct effects on the other great issues of our day; social (in)justice, access to quality and affordable health care, and lack of social mobility, among others. The time is long overdue for our politicians and business leaders to adopt a new approach to our economic system, a cure which I call Common Sense Capitalism.
To be specific, Common Sense Capitalism is an idea based on fairness and equity (not necessarily equality) for all and giving those who have been left behind for the last 40 years or so the time, attention and resources to get a hand up (not handout) in attaining the American dream. It does not disparage those who are wealthy and well-connected but recognizes that it’s time to give greater focus, attention and resources to building up our country’s middle and working-class again. It rejects trickle down economic theory and the idea that we will all benefit if we just give the wealthy and well-connected an even bigger piece of the pie to buy a 5th vacation home or 6th yacht.
One example of this systematic inequality is the ratio of CEO to worker pay. According to the non-partisan Economic Policy Institute as of 2019, CEO’s now make 320 times more than their average workers make, up from around a 50:1 in the 1970s — and the pandemic has only worsened this inequality. Are CEOs really that much more valuable than those who are putting in the actual blood, sweat, and tears?
Furthermore, according to the Guardian, in 2018 the richest 400 families in the United States paid an average effective tax rate of 23 percent while the bottom half of American households paid a rate of 24.2 percent, further exploding our national debt and deficit. This rate was much higher for the super wealthy throughout most of the twentieth century when this country had a healthy middle class. Should the super wealthy pay a lower tax rate than the middle class and working poor?
Finally, according to the Federal Reserve, as of 2016, the richest 1 percent of Americans own almost twice as much wealth as the bottom 90 percent and that number also has been exacerbated by the pandemic. Is that much wealth at the top really creating greater opportunities for all? Or is it fattening up an already swollen and bloated micro-segment of our society?
There are many more examples but these fundamental inequities in our society are not sustainable and require political and social action. The great thing about Common Sense Capitalism is it is a win-win proposition with greater economic opportunities for all, leading toward a lowering of social ills like crime, poverty, drug addiction and domestic violence, among many others, as well as the advancement of standards of living, productivity, happiness and overall well-being. It does not involve all-out socialism or communism but harnesses the benefits of capitalism with the need for more compassion and empathy for our fellow citizens. It does not disparage the rich but recognizes they’ve had plenty of help in recent history and maybe it’s time we helped out those who need it most again. America did this as a country throughout much of the last century. We can do it again. We need to start a movement to benefit all, not just the already wealthy and privileged among us. The time is now for Common Sense Capitalism.
Michael J. Jacobsen works in higher education, is a parent of three, and formerly taught high school economics, government, geography, psychology, sociology, U.S. history, world history, and world political theory. He is a native of Sac City now resides in Williamsburg. email@example.com