The Great Redistribution of Wealth

There once existed a time in American history where consumer debt was very high, there was little to no regulation of the markets and the inequality of the nation's wealth increased. What's kind of odd is that the time which I'm referring to isn't exactly the time we are currently living in. It is actually the Roaring 20's (1920-1929). The 1920's were a decade of American prosperity. The Great Depression of the 1930's punctuated the end of this era of growth. What is interesting is one direct parallel that exist between the current economic climate and the time of prosperity during the 1920's. Last year it was reported that, "Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928"¹. Our economic policies have allowed the income gap to widen considerably. I have always believed that the more the scale tips in favor of one group, the more problems are created within a society. When 20% of the American population controls 80% of the wealth but only pays 67.1% of the taxes, is that a problem? The chart below gives a snapshot of an economic trend of the last 20 years:



_{Source: Executive Excess 2006, the 13th Annual CEO Compensation Survey from the Institute for Policy Studies and United for a Fair Economy.²}

As the economy has thrived so has the stock markets and the CEOs of America. This unfortunately has not translated over to the salaries of production workers, federal income tax or federal minimum wage. This is a problem. I'm no economist but I do believe this has more than helped to put us in a hole. If anything this does nothing but enhance my view on the flaws of trickle-down economics.

Personally I do not believe in the redistribution of wealth. I believe in the redistribution of opportunity. I do not believe that paying more taxes as a result of amassing more wealth is a punishment. If anything, it's a privilege; a blessing for being financially able. The more those who are able contribute, the more they are likely to gain. We often hear that without those with the resources having opportunity there won't be any jobs. I think the more those with resources invest in those without resources, the better it is for everyone. After all there is a direct correlation. The more wealth generated within a society, the more consumers you will have within that society. There is a reason that this current economy could never work in a place such as Haiti. In general, the citizens of Haiti can't afford to live our lifestyle. If things don't change, Americans won't be able to afford the "American" lifestyle either. In closing I'll leave you with this quote from Marriner S. Eccles, the Chairman of the Federal Reserve under Franklin D. Roosevelt. In his biography Beckoning Frontiers, Eccles describes the American economy that led to the Great Depression. Eccles states, "The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop." How long can we play this game?