Progressive Era Redux

The signers of the Declaration of Independence affirmed three unalienable rights –life, liberty, and the pursuit of happiness – that were to be secured by the state based on the consent of the governed. Heady words, indeed.
Many question whether their personal ability to purse happiness is being held hostage to the inordinate influences of the top one percent of Americans upon the federal government. Most do not question the right of some Americans to earn and retain substantial wealth. Increasingly, however, they point to the unfair advantages bestowed upon the uber-rich by federal and state governments.
This was not always the case. From the end of the Second World War until the beginning of the Regan administration, a rising economic tide led to substantial increases in the standard of living of all income levels. The growth in family income ranged between 112% - for the lowest 20% of American family income earners – to 99% for the top 20%. The trends diverged beginning with the Reagan tax cuts and continued thereafter. From 1980-2007 the growth in family incomes ranged from 15% to 33% for bottom 80% of population as opposed to 95% for the top 20%. Family income levels for the top 1% of American families rose by a whopping 251%.
This marked shift in income distribution did not raise a hue and cry. Americans do not begrudge the rich, in part because they hope, however unrealistically, one day to be able to similarly enjoy the fruits of their hoped-for success. The banking crisis and subsequent recession has brought these disparities into sharper focus. What has become particularly galling to some, most notably the Occupy Wall Street movement has been the way these gains in wealth have been achieved. Specifically, they look at the influence of the uber-rich on state actions:
• The Bush tax cuts were focused on improving the lot of the wealthiest Americans by virtue of the sharp cuts on taxes for capital gains and taxes;
• Legislation was passed to reorganize the financial services industry and those appointed to oversee financial services were plucked from the very industry they were watching. Not surprisingly, regulators were loath to constrain poor banking practices or otherwise alert the public at large to the potential dangers of excessive bank lending to sub-prime borrowers.
• Legislation was passed that effectively bailed out many banks despite their poor practices: financial community managers were soon once-again collecting substantial financial bonuses.
• Legislation to improve oversight was slow in coming and has yet to be fully implemented because of Republican-led filibusters against Presidential nominees to head the new Agency.
Home ownership is the major form of wealth creation for many middle class families and, in marked contrast to their treatment of the financial sector the government has done little to help those whose property values plunged through no fault of their own. Those whose houses were under water, moreover, found it impossible to take advantage of the fall in interest rates to refinance. Moreover, economic revival is being constrained by the government’s newfound zeal in reigning in deficit financing. While hundreds of billions of dollars were authorized to rebuild Iraq, they find the government reluctant to extend unemployment benefits or lower income tax breaks.
In the late 19th century American citizens rallied behind the progressive movement. Upset over the greed of the Robber Barons and government sanctioned restraint of trade and union movements, they empowered their elected representatives to make fundamental changes to include anti-trust legislation, a highly progressive income tax, and the direct election of Senators (to remove the power of the upper class in the selection of Senators by state legislatures.) Currently President Obama is stirring the pot with progressive-sounding language. Whether he has the mettle or inclination to go forward with this platform is problematical. I would venture that a properly articulated progressive platform would find a willing audience.