When President Franklin D. Roosevelt denounced “undeserved poverty” and “self-serving wealth” in his third inaugural address on Jan. 20, 1941, he tried to inspire confidence in American democracy when freedom itself was threatened. Nazi Germany dominated Europe and the Japanese empire poised for further expansion in Asia.
Having seen the nation gripped by the Great Depression, Mr. Roosevelt saw clearly the threats to democracy that lay within and beyond the nation’s borders. He saw what few today — with eyes focused on Syria or other countries blighted by autocratic governments or terrorists — cannot see, although it is in plain view.
He understood that America’s strength as a democracy also depended on reducing economic inequality at home.
More than 70 years later, that simple truth remains, perhaps, the greatest unacknowledged problem of this generation.
A recent report documents its dimensions: The division between the wealthiest 1 percent of Americans and everybody else is the widest it has been since the 1920s.
As The Associated Press reported, economists at the University of California at Berkeley, the Paris School of Economics, and Oxford University — using Internal Revenue Service figures dating from 1913 — showed that U.S. income inequality has been growing for almost three decades.
Last year, the very wealthiest Americans earned more than 19 percent of the nation’s household income. The top 10 percent had a record 48.2 percent of total earnings.
True, the wealthiest Americans lost more than others during the Great Recession of 2007-09, but they have rebounded dramatically. Some 95 percent of the income gains since 2009 have gone to the top 1 percent.
Why does it matter? Because the growing prosperity pie is leaving most Americans behind. Economically, that’s a recipe for disaster. U.S. capitalism needs a broad and healthy middle class to consume products and keep the economic engine roaring.
Socially, extreme inequality subverts the democratic idea of America as a place of equal opportunity, which income inequality sabotages.
The rich have every advantage: business connections, tax breaks, money to invest, affluent addresses with good schools, and politicians serving their every whim.
Self-serving wealth perpetuates itself. Alas, so does poverty.