September 21, 2015

Panel Addresses Impacts of U.S. Inequality

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President Elizabeth Garrett and a panel of five professors discuss U.S. political and economic inequality in Bailey Hall. (Brittany Chew / Sun News Photography Editor)

President Elizabeth Garrett and a panel of five Cornell faculty discussed the effects of different types of inequality and how they could trigger a chain reaction in the American political economy as the concluding event to her inauguration festivities in Bailey Hall Friday afternoon.

The panel, titled “Democracy and Inequality,” began with an introductory overview by Gretchen Ritter ’83, the host of the discussion and the Harold Tanner Dean of Arts and Sciences, followed by Garrett’s own opening remarks.

“While we celebrate a historic event in the light of our university, with ceremonies, picnics and fireworks, we much also affirm that the primary goal of a university like Cornell is to work to more deeply understand issues facing society and to help shape responses that would improve the quality of life for people in our state, country and the world,” Garrett said.

Garrett focused on the impact of income inequality and how the wealth gap in the United States today is at an all-time high — the country has not seen income inequality of this magnitude since the 1920s. She then invited her panelists to discuss this problem in the light of their various specialized disciplines.

Prof. Eswar Prasad, trade policy, began with the statistic that on average, inequality is actually decreasing on an international scale. However, he said this decrease is uneven across individual countries and income inequality reflects the unbalanced influence the wealthy have in governance.

“The fundamental issue we need to think about is, ‘at what point does inequality stop being a sign of a functioning, democratic market economy and becomes a pathology [to the democracy]?’” Prasad said. “Once the democratic process becomes frayed, then it becomes difficult to put in place the policies that are necessary to generate good growth … and reduce inequality.”

Agreeing with Prasad, Prof. Suzanne Mettler, government, added that political gridlock in Washington has only harmed the working classes while benefiting those already privileged as it maintains the status quo. She also cited money in politics as a major cause of inequality, which allows people to essentially “buy out” candidates with campaign money.

“The question is, ‘why hasn’t the United States responded more effectively [to inequality]?’ because Americans truly do feel that there should be equality of opportunity,” Mettler said. “What’s happened over the past few decades is that political parties have become much more polarized and … [are] not to giv[ing] an inch for public policy. That polarization creates great stalemates and gridlock, and that’s one of the biggest reasons why we’re not creating policies to better mitigate inequality.”

Prof. Nick Salvatore, industrial and labor relations, spoke of Eugene V. Debs and the Socialist Party in America. He said he believes that if inequality is to be changed in the United States, it must be through an organized movement similar to Debs’ campaign.

“The issue becomes one of ‘where is the organized force?’ Where’s the organized approach to dealing with these questions?” Salvatore asked. “At one point, people thought Occupy Wall Street was going to be a major event, but Occupy Wall Street … never really lasted much beyond Zuccotti Park and it never really invented a kind of program that … [could] speak in the language of a democratic polity and a set of values that needed to be applied to the economic arena.”

According to Prof. Gerald Torres, law, Americans have already been trying to organize themselves in small grassroots campaigns. Changing the bigger picture, Torres said, is only a matter of uniting these individual movements under the same overarching goal.

“When people say that there are not a lot of Americans trying to take control of things they feel up in arms about, I think that’s not true,” he said. “The question is, how do you take these local movements and pull them together to make a social movement? We have to join these smaller public movements together [in order to influence the whole system].”

In addition to the problem of income inequality, Prof. Robert Frank, management and economics, also brought up the issue of consumption inequality. He argued that Americans in general have been pushed to spend beyond their means as they watch the rich get richer and set new consumption norms.

“We’ve seen a cascade of spending induced by the higher income spending at the top. So now the size of a median house in the U.S. in 2007 was 2,300 square feet. In 1980, it was 1,700 square feet,” Frank said. “The median family isn’t earning significantly more in the later years compared to the earlier ones — why are they spending so much more? Because people like them are spending more.”

Alice Rayner ’19, a student who attended the panel, said that while she believes the panel covered the issue of income and political inequality very well, she wished the panelists would have spoken more in-depth about the issue of racial inequality.

“I think the fact that they even acknowledged the lack of access of opportunity that exists in America — where everyone’s supposedly equal, and if you fail, it’s your own fault … they did a pretty good job with that,” Rayner said. “But the fact that they had an entire panel and only hinted at racial divisions is surprising to me, considering that’s … so much of what makes inequality in America unique.”