This post begins with me sitting in a conference room that overlooked the capital city of a developed country. The room was filled with a handful of Ivy League MBAs, a former officer at a major international bank and two high-level government officials. We were tasked with developing a strategy for the nation’s financial service industry. They viewed themselves as the next Dubai or Singapore, but lacked the infrastructure and history of success. Across from us sat an executive at the second largest corporation in the nation. Her job was to direct the company’s overall strategy. That morning we were there to ask ACME Corporation questions around the private sector’s views on the financial system.
In 2012 the top 1 percent of Americans took home over 20 percent of the income generated in the country. According to Annie Lowrey of the New York Times, this level of income equality was one of the highest rates since 1913, when the federal income tax became law. Think about that for a minute. Things are more unequal today than when John D. Rockefeller was alive. “That should offend all of us,” President Obama remarked in a December speech addressing the topic.
In a lot of ways income inequality is like climate change. Both are happening, both are exacerbated by our current system, and both threaten to upend the entire world. Deniers of both situations create an environment where facts become debatable. Despite 97 percent of climate scientists agreeing “that climate-warming trends over the past century are very likely due to human activities,” it is still acceptable for a mainstream American politician to argue if it is even happening. The same holds true for income inequality. “In far too many countries the benefits of growth are being enjoyed by far too few people,” Christine Lagarde a managing director at the IMF told a group at the World Economic Forum. If a leader at an organization whose answer to every economic problem is tax cuts and trade liberalization says income inequality is a problem, it is a problem.