Updated: October 4, 2013 at 7:51 am
There's been a lot of hand-wringing over our lethargic economic recovery these days. Too much of the growth has been going to the top 1 percent of our citizenry it's charged, not enough to the rest of us. This disparity is characterized as income inequality - the implication, unfair. And what drives this concern? The highly reported increasing gap between income growth of the mega wealthy at the very top and everyone else. "There's only so much treasure to go around", the argument goes, "and the super-rich are siphoning off way more than their 'fair share'." Hold on here. Since when have we compared ourselves to extraordinarily successful and talented people, you know, those rare individuals who are at the pinnacle of their profession, the 1 percent at the top such as artists, entertainers, athletes, business men and women, and yes, politicians? It's true that at one time or another most of us have fantasized about being rich and famous, but we knew that such aspirations were well beyond our grasp, highly unlikely to be realized. So we've gone on with our lives, leaving those super high performers to their coterie. They are way out of our league and we know it.
A capitalist market-driven system in which everyone is free to pursue their own best interest highly rewards those who are exceptional, a consequence we accept as long as we all have the opportunity to achieve the same lofty status through hard work, intelligence, special skill or talent, and yes, luck. It's the American Dream, which still exists, and which is why people from all over the world want to come here.
Well, why in the world then are we so exercised about what's happening with those people economically, and why should we compare our economic well-being with them? We shouldn't. It's an absurd comparison.
Take a look at history. Since our nation's founding income distribution has remained pretty much the same, with occasional minor shifts. In 1774 the top 20 percent of the population earned roughly 58 percent of the income, in 1860 it was 54 percent, and in 2011 it stood at 50 percent.
The bottom 20 percent of workers represented 12 percent, 10 percent, and 11 percent of earnings in those years. For the 60 percent majority in the middle it was 40 percent, 35 percent, and 37 percent respectively. Is 250 years of economic history now going to be obliterated? In the short view have conditions changed so radically that "social (in)justice" is running riot, and will become the new norm? Is the sky falling? Heavens no.
Well why then, is the tiny slice of the super wealthy way at the top benefiting in a way that seems to be unjustified? Are they ripping off the rest of us, grabbing what isn't rightfully theirs, making them winners and the rest of us losers? Not at all.
Economists have long proffered that in times of economic growth the wealth 'pie' actually grows, it gets bigger because of increasing productivity. It's not a case of who gets what size of a slice of a static pie where those who get the biggest piece do so at the expense of everyone else. In such times everyone benefits but at differing rates.
And no, the overwhelming majority of Americans aren't losers, we're users. We actually give the top winners their lucre, either directly or indirectly.
We buy stuff, like iPads, iPhones, cell phone service, HD TVs, cars and trucks, certificates of deposit, stocks bonds, vacations, dining out, show tickets, furniture, homes, and the list goes on. Recently we've become more like lemmings where disproportionate millions of us flock to the latest gadgets which highly benefit people like the Steve Jobs, Bill Gates, and Warren Buffett families, and many, many others less well known to us.
Accordingly their stock spikes up uncharacteristically. So we're the ones that do it. And over time, this too shall pass. As the Bard said: ""The fault, dear Brutus, is not in our stars, but in ourselves, that we are underlings."
Tuck Aikin's is a professional in the consumer credit reporting industry and counseled approximately 400 business owner aspirants for the Chamber of Commerce in behalf of the Service Corps of Executives (SCORE).