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OP-ED | Income Inequality Is A Bipartisan Issue

by Brian O'Shaughnessy | Feb 13, 2014 10:57pm
(10) Comments | Commenting has expired
Posted to: Economics, Opinion, Transparency

Nationally, the issue of rising poverty and income inequality is gaining focus as a rare bipartisan concern. For both humanitarian and fiscal reasons, this is a good thing. As Connecticut continues to experience a pronounced demographic transition to a state with extreme income disparities, we should pay attention to the national debate.

Both parties in Washington have expressed concern that something needs to be done. As usual, different approaches are tied to the emotion of partisan politics. Rather than design policy based upon emotion and posture, let’s promote what works. Therein, however, lies the challenge.

From 1900 through the beginning of the Great Recession of 2008, local, state, and federal government spending expanded from 7 percent to over 40 percent of our national GDP. At $7 trillion dollars, U.S. government spending is the 3rd largest economy in the world. In Connecticut, our state budget has grown well over 150 percent over the past 20 years as our economy has constricted and we have seen zero job growth.

Now that money is scarce and need is expanding, the blue and red people agree we should act. Progressives are outraged that poverty and need are pervasive. Conservatives are angry that it is so expensive. Fine. At least we agree we need to do something — but what?

The truth is that we don’t know. 

For as long as anyone can remember, government has established its commitment to an issue by directing funds toward broadly defined labels. We invest in sound bites, such as education or fighting crime. Underlying these labels and expenditures are programs rarely evaluated for effectiveness or financial consequence. Efforts to do so challenge historical funding streams upon which entire economies are based. Poking a $7 trillion bear is a dangerous game. 

This is not a partisan issue. Both parties represent constituencies passionately clinging to economic inefficiencies. Democracy is served by funding what works. A non-partisan fiscal analysis tied to any issue funded with public money — especially poverty and income inequality — will benefit society as a whole because effective strategies will reduce need and increase revenues.

The tools to capture data surrounding a wide variety of human behavior are exploding in richness and utility. We have information about why someone buys an iPhone versus a Samsung Galaxy, but we can’t evaluate the effectiveness of $7 trillion dollars? This does not make sense. To begin the process of directing funding toward programs that are successful and have positive economic impact requires a nonpartisan function that measures and evaluates how we spend public dollars. We know we can fund this function — we choose not to. The lack of this function provides an opportunity for financial gain, pure and simple.

Programs that improve economic conditions and decrease social service expenditures should be identified and scaled. Addressing root causes will have the most practical economic impact and, as a result, this should be an approach that can generate significant bipartisan appeal. This is not a quick fix centered on funding one “thing.” Solutions are well beyond our traditional four-year election cycle and require people working together through nasty campaigns and administrative transitions.

For example, transforming people that cost money into folks that generate revenue is an idea with which few could argue. However, implementing programs is a daunting task as a constricting economy and barriers to employment — both manufactured and real — can prove to be overwhelming. A clear and articulate financial argument supporting these investments will go a long way in creating the correct long-term political environment for economic empowerment programs to succeed.

During our nation’s history, financial crisis has followed when we have not closely monitored our financial resources. The failure of our capital markets was remedied by disclosure rules tied to the sale of securities and accounting, specifically the adoption of GAAP. Our public expenditures now need similar reform. Disclosure and analysis of our public investments has the potential to diffuse an increasing cynicism toward government.

There is little that unites us politically these days. In an interesting twist, it appears that improving income inequality and reducing poverty is an issue that both progressives and conservatives can agree upon — if we can just speak the same language.

Brian O’Shaughnessy of New Haven is a principal in the firm Community Impact Strategies Ltd.

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(10) Comments

posted by: edw | February 14, 2014  8:44am

Important issue? “Not income inequality”!

First, we were founded as a “republic”, not a “democracy, and the difference is not moot. You might want to read “Common Sense” (available free on the web) by Thomas Paine.

Second, while economic issues top the list of what Americans feel is important,  historically, and today, jealousy of those making more than them (income inequality) does not seem to be on it.
Oddly, global warming, gun laws, immigration, and same sex marriage are insignificantly represented, although that seems to be the only issues Congress and the president want to address.
Is it any wonder that “dissatisfaction with government” tops the non economic list?

Will someone tell Congress and the president:
“It’s the economy, stupid!”

What are important issues?
http://www.gallup.com/poll/1675/most-important-problem.aspx

posted by: gutbomb86 | February 14, 2014  12:33pm

gutbomb86

Regardless of what our pal thomas paine said or wrote, the USA operates as a representative democracy. That is the structure of our government as it is conducted today. Period. Live within the moment, not within a history lesson.

And it’s also funny how you simply ignore economic inequality despite economic issues topping the gallup poll you cited yourself. You make this enormous assumptive leap that people are simply putting the economy at the top for no other reason.

Why is the economy a chief concern? Because they’re not satisfied with how the government is handling it? No… people must be placing the economy at the top of the list because all of us millionaires don’t have enough tax shelters or ways to invest our personal fortunes to grow our wealth at an even higher exponential rate. I mean why would anyone who answers polling questions be unhappy about the economy? How could income inequality possibility as a motivator within that data? Silly me.

posted by: SocialButterfly | February 14, 2014  3:30pm

The biggest reason that we have income inequality today is because Pres. Obama and our elected officials continue to fail to provide jobs for our people—and find it easier to put them on welfare or disability pensions to attain their captive votes by realistically making these unfortunate people “parasites of society.” What a way to turn our country around from Democracy to Socialism. Shame on our careless voters for electing
politicians with no life-time record of job creative performance.
They have left us with a negative predominant society of non-performance. Working people are now the minority voters—which leaves our social benefit voters deciding our elections.

posted by: ASTANVET | February 15, 2014  7:30am

GUT - so what is the answer - you’re all about picking other’s opinions apart… You’re always portraying yourself as the smartest guy - so please…enlighten us.  I will say that INDIVIDUALS will never have EQUAL OUTCOMES.  Free will, and free choice.  Do you want to know where we don’t have free will?  under the force of government!

posted by: art vandelay | February 16, 2014  11:34am

art vandelay

@Gutbomb86,
Great! Let’s live for the moment and forget history. You’re definition of a utopian society is where everyone and everything is equal.  Let’s just forget the fact that this was tried once in Russia after the 1917 Revolution.  Let’s forget that Lenin virtually starved the populous due to his concept of equality & centralization.  Let’s ignore the fact that Herbert Hoover as Secretary of Commerce saved Russia from complete starvation.  Let’s just plow ahead with the ideas of Obama & the “NEW PROGRESSIVES” (disguised as neo-Communists) and make the same mistake again.  This is exactly what you wish along with your Marxist comrades.

posted by: Drew76 | February 19, 2014  9:16am

Wow! I thought the recommendation here was to encourage “A clear and articulate financial argument supporting these investments” that have occurred and will continue to occur even without one. That recommendation does not, on its face, seem so controversial as to warrant the vitriol in the comments, but we seem to talk “at” one other more often than “to” one another, no matter which side we’re on.

posted by: edw | February 19, 2014  11:53am

Few people care about “income inequality”. We call that “jealousy”.
What people want is enough money to live on, and they can’t get that from government.
“Government cannot give anything to anybody that it doesn’t first take from somebody else.”—Adrian Rogers

posted by: SocialButterfly | February 19, 2014  12:05pm

@Drew76:  It’s all part of the act.

posted by: BrianO | February 19, 2014  2:00pm

Thanks for reading the article Drew.

posted by: SocialButterfly | February 19, 2014  2:32pm

@edw:  You quoted Adrian Rogers “Government cannot give anything to anybody if it doesn’t first take t from someone else.” Ironically, U. S. voters elected Pres. Barack Obama twice by proclaiming and practicing the same premise.