In the U.S., we have chosen democracy and free market capitalism as our political and economic systems, a conjunction we call democratic capitalism. In this union, government is the dominant partner, using, orchestrating and regulating the economic sector to achieve the public good.
Democratic capitalism has propelled our nation to a pre-eminent world role and to unparalleled levels of national prosperity. The success of democratic capitalism is based on a balance of entrepreneurial drive and its rewards with a democratic sharing of the fruits of our collective efforts; that is, a sharing of the immense wealth created by our economic system. The public's perception of the fairness of the distribution acts upon the social cohesion vital to the workings of democratic capitalism.
I fear that this social contract is broken. Consider the following:
• Income of the top 1 percent of Americans is twice that of the bottom 50 percent.
• The wealth of the top 160,000 families is greater than that of the poorest 145 million families.
• The average income of the top 1 percent in 2012 was $717,000.
• The income in 2014 of the average American was $51,939.
• The average wealth in 2012 of the top 1 percent was $8.4 million.
• The wealth of the median American family in 2012 was $121,000.
• The wealth of one family, the Waltons of Wal-Mart fame, is equal to that of the bottom 40 percent of Americans.
• Between 1979 and 2007, the income of the top 1 percent has grown five times that of the average American.
• The average income in 2012 of the Fortune 500 Companies' CEOs was $10.5 million.
It is futile, in my opinion, to expect that Wall Street, the hedge fund managers, the top paid professionals in medicine and law and the nation's CEOs will restrict their excessive compensation. As the private sector cannot redress the inequities in income and wealth, the government must act to redistribute the nation's bounty through the tax code; that is, through taxes on income and on the transfer of wealth from one generation to another.
Tax reform proposals are now being brought forth by candidates of both parties that are worthy of consideration. The attraction of radical figures on both the left and the right reflect, in my opinion, a rising discontent, even anger, that our vaunted system isn't working for all.
According to a survey by the Economist of the livability of nations, the U.S. ranks 16th. As the most powerful and wealthy of all nations, we should aim to do better. We need fewer gated communities and more public housing. No American should be without access to first-rate health care. All Americans should have access to the highest level of education of which they are capable. And no American child should ever go hungry.
We have the collective wealth to do all the above, but only if we more fairly distribute our nation's income and its assets.
There is enough for all.