FEBRUARY 27, 2006
When The Bounty Isn't Shared
Of course globalization is a tough sell if it only benefits the top 2% of Americans
By Representative Barney Frank
Adlai Stevenson, the story goes, was once congratulated after a speech by a woman who told him it would get him the votes of all "thinking people." "That's wonderful," he is said to have replied, "but unfortunately I need to get a majority." It may have been Stevenson's propensity for making such amusingly deprecatory comments about voters that kept him from winning that majority in his two 1950s Presidential bids. But Stevenson's observation is relevant today to those of us in the minority who believe the most serious problem America faces is excessive economic inequality...
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Alan Greenspan told Congress' Joint Economic Committee in 2004 that nearly all the benefits of recent productivity growth were going to corporate profits, resulting in "a marked fall" in employees' share of the gains. Nothing in the past two years has alleviated that problem. Real wages for the average worker have eroded, and health and pension benefits have faded. Meanwhile, corporate profits and pay for the top 2% of the population have soared... In testimony last summer, Greenspan lamented the "growing evidence of antiglobalization sentiment and protectionist initiatives," which threatened economic flexibility. And he agreed when I suggested that this is not simply a case of crankiness but a broad public reaction to the perception of inequality he cited in 2004. Indeed, when people see their real wages stagnating or falling, health benefits threatened, and pensions insecure, they're unlikely to support policies that help the economy at their own expense.
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At a dinner I attended last month at the World Economic Forum in Davos, a leader of a large financial institution voiced frustration with the average American's lack of support for globalization. "After all," he said, "a recent study by the Institute for International Economics showed that globalization adds a trillion dollars a year in value to the American economy," which, he noted, was worth $9,000 a year to the average American family. The problem, of course, is that the average American hasn't seen that $9,000. Instead, many of them believe -- resentfully -- that corporate executives have been keeping it all for themselves.
Therefore, it's time to make a deal. I am prepared to help persuade my fellow liberals that many of the public policies they have been resistant to, or skeptical of, are in the national interest, if those in the business community work with us to ensure that the bulk of Americans get a larger share of our increased wealth. Our nation has both the resources and the intellect to implement public policies that diminish inequality so that it does not become socially corrosive, without reaching the point where that diminution threatens the needs of the capitalist system. Is Big Business ready to come to the table?
http://www.businessweek.com/premium/content/06_09/b3973124.htm
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