Skip to main content
Part of complete coverage from

Inequality threatens the rich

By Frida Ghitis
December 6, 2013 -- Updated 1856 GMT (0256 HKT)
STORY HIGHLIGHTS
  • Frida Ghitis Don't dismiss Obama's speech on inequality as a ploy; it's serious
  • Ghitis: The richest have the biggest share of national income of any time since 1928
  • Conservatives should make ending inequality their cause, she says
  • Ghitis: An unequal society distorts democracy, causes instability, promotes extremism

Editor's note: Frida Ghitis is a world affairs columnist for The Miami Herald and World Politics Review. A former CNN producer and correspondent, she is the author of "The End of Revolution: A Changing World in the Age of Live Television." Follow her on Twitter @FridaGhitis.

(CNN) -- When President Barack Obama proclaimed the fight against income inequality is "the defining challenge of our time," you might have dismissed his words as the effort of a struggling president to revive his political fortunes. But anyone looking at the relentlessly expanding income gap can see that the problem is real -- and it is serious.

The economy is gradually recovering from the Great Recession, but inequality continues to grow. In the first two years of recovery, the net worth of the bottom 93% continued to shrink, while the top 7% grew wealthier. The richest Americans are taking the biggest share of national income of any time since 1928.

Rather than dismissing Obama's call as a political ploy, Republicans in the United States and other conservatives across the developed world, should take up the cause and make it their own. Rising inequality is the proven enemy of stability. And nobody benefits more from stability than the wealthy.

Frida Ghitis
Frida Ghitis

This is their fight, too.

If trends continue, the well-tended sources of wealth of the rich could get trampled by the march of popular frustration.

The signs are already here, in the United States and Europe. A sense that unfairness permeates the system is what fosters extreme views, erodes the middle ground, and makes it increasingly difficult for government to function.

From Occupy Wall Street to the Tea Party, populist politics is creating gridlock and producing a government that cannot address the country's problems. In Europe, the perception of unfairness has fostered extremist parties, such as the neo-fascist Golden Dawn party in Greece, with alarming echoes of the 1930s.

Traditionally, inequality is the kind of issue that receives attention from leftist politicians and is shoved aside by those on the right, who expect free markets to work their magic, improving the lives of those who work hard and, by the judgment of some moral gauge, deserve to be rewarded.

But it turns out that the invisible hand of the market, as economist Adam Smith famously described it, may have developed arthritis in recent years.

Obama is right when he says this is undermining the very definition of what America means. The U.S. was the land of opportunity; the place where you could succeed regardless of where you were born.

In the old days, America was the place where you could be born poor and rise on your own merits. Today, incredibly, researchers say upward economic mobility is easier in Canada and Europe than in the United States.

Obama calls for a raise in minimum wage

This contract, the "American Dream," has meant that the U.S. was not, and still isn't, a land that is fertile for those seeking to sow class warfare. America was never a place where people hated the rich as much as they wanted -- and often succeeded -- in becoming the rich.

But the stratospheric rise of incomes at the top is not just an American problem. And the search for solutions is a global pursuit.

This is a time to debate and innovate; a time to find the causes of this stagnation of the majority and look for solutions.

Unexpectedly, sedate Switzerland has started experimenting with some startling ideas.

When Swiss voters heard that the Chairman of Novartis, a large pharmaceutical corporation, was going to receive some $78 million in severance, they mounted a campaign to ban "golden handshakes." They resoundingly approved strict limits on compensation in a referendum last March.

It's worth noting that CEOs in Switzerland make an average of 148 times what the average workers make. In the U.S., they make 354 times more, according to the AFL-CIO.

The most intriguing of all the ideas will come to the voters next year.

Under a proposal spelled out in a referendum, every Swiss citizen regardless of income would receive a monthly check of $2,800 from the government.

The notion of a guaranteed income is receiving enormous attention around the world. The idea defies traditional notions of government assistance and means-testing. Instead of a giant bureaucracy and complex programs breaking down assistance for food or housing, the government would make sure nobody lives in poverty, and presumably dismantle a host of welfare structures.

In theory, minimum-income programs would reduce the incentive to work. But when a small town in Canada conducted a four-year experiment in minimum income, researchers say poverty disappeared, graduation rates went up, and hospitalization rates went down.

This is just one proposal, and one that focuses more on poverty alleviation than on inequality.

And inequality itself, not just poverty, is a key issue. An unequal society distorts democratic principles. Financial muscle amounts to political muscle. We have seen it in the United States, where campaign donations are reshaping the political landscape.

You might think this is a great argument for the rich to keep the system exactly the way it is. Ironically, however, wealthy businesses use their money for political power, but populist politicians are able to tap into discontent and gum up the works.

The business community hated the government shutdown, but the angry base, particularly on the Republican side, supported politicians who kept the government closed.

The wealthy are more powerful than ever, but they risk losing control of the system if they allow it to continue along its present path.

Self-interest may not be the most admirable reason to fight for justice and a better life for all, but it may just prove persuasive, even if it means heading the call of an embattled president.

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Frida Ghitis.

ADVERTISEMENT
Part of complete coverage on
December 20, 2014 -- Updated 0242 GMT (1042 HKT)
Conservatives know easing the trade embargo with Cuba is good for America. They should just admit it, says Fareed Zakaria.
December 20, 2014 -- Updated 0112 GMT (0912 HKT)
We're a world away from Pakistan in geography, but not in sentiment, writes Donna Brazile.
December 19, 2014 -- Updated 1709 GMT (0109 HKT)
How about a world where we have murderers but no murders? The police still chase down criminals who commit murder, we have trials and justice is handed out...but no one dies.
December 18, 2014 -- Updated 2345 GMT (0745 HKT)
The U.S. must respond to North Korea's alleged hacking of Sony, says Christian Whiton. Failing to do so will only embolden it.
December 19, 2014 -- Updated 2134 GMT (0534 HKT)
President Obama has been flexing his executive muscles lately despite Democrat's losses, writes Gloria Borger
December 18, 2014 -- Updated 1951 GMT (0351 HKT)
Jeff Yang says the film industry's surrender will have lasting implications.
December 18, 2014 -- Updated 2113 GMT (0513 HKT)
Newt Gingrich: No one should underestimate the historic importance of the collapse of American defenses in the Sony Pictures attack.
December 10, 2014 -- Updated 1255 GMT (2055 HKT)
Dean Obeidallah asks how the genuine Stephen Colbert will do, compared to "Stephen Colbert"
December 18, 2014 -- Updated 1734 GMT (0134 HKT)
Some GOP politicians want drug tests for welfare recipients; Eric Liu says bailed-out execs should get equal treatment
December 18, 2014 -- Updated 1342 GMT (2142 HKT)
Louis Perez: Obama introduced a long-absent element of lucidity into U.S. policy on Cuba.
December 16, 2014 -- Updated 1740 GMT (0140 HKT)
The slaughter of more than 130 children by the Pakistani Taliban may prove as pivotal to Pakistan's security policy as the 9/11 attacks were for the U.S., says Peter Bergen.
December 17, 2014 -- Updated 1600 GMT (0000 HKT)
The Internet is an online extension of our own neighborhoods. It's time for us to take their protection just as seriously, says Arun Vishwanath.
December 16, 2014 -- Updated 2154 GMT (0554 HKT)
Gayle Lemmon says we must speak out for the right of children to education -- and peace
December 17, 2014 -- Updated 1023 GMT (1823 HKT)
Russia's economic woes just seem to be getting worse. How will President Vladimir Putin respond? Frida Ghitis gives her take.
December 17, 2014 -- Updated 0639 GMT (1439 HKT)
Australia has generally seen itself as detached from the threat of terrorism. The hostage incident this week may change that, writes Max Barry.
December 12, 2014 -- Updated 2020 GMT (0420 HKT)
Thomas Maier says the trove of letters the Kennedy family has tried to guard from public view gives insight into the Kennedy legacy and the history of era.
December 15, 2014 -- Updated 1456 GMT (2256 HKT)
Will Congress reform the CIA? It's probably best not to expect much from Washington. This is not the 1970s, and the chances for substantive reform are not good.
December 15, 2014 -- Updated 2101 GMT (0501 HKT)
From superstorms to droughts, not a week goes by without a major disruption somewhere in the U.S. But with the right planning, natural disasters don't have to be devastating.
December 15, 2014 -- Updated 1453 GMT (2253 HKT)
Would you rather be sexy or smart? Carol Costello says she hates this dumb question.
December 14, 2014 -- Updated 2253 GMT (0653 HKT)
A story about Pope Francis allegedly saying animals can go to heaven went viral late last week. The problem is that it wasn't true. Heidi Schlumpf looks at the discussion.
December 14, 2014 -- Updated 1550 GMT (2350 HKT)
Democratic leaders should wake up to the reality that the party's path to electoral power runs through the streets, where part of the party's base has been marching for months, says Errol Louis
December 13, 2014 -- Updated 2123 GMT (0523 HKT)
David Gergen: John Brennan deserves a national salute for his efforts to put the report about the CIA in perspective
December 12, 2014 -- Updated 1426 GMT (2226 HKT)
Anwar Sanders says that in some ways, cops and protesters are on the same side
December 11, 2014 -- Updated 1439 GMT (2239 HKT)
A view by Samir Naji, a Yemeni who was accused of serving in Osama bin Laden's security detail and imprisoned for nearly 13 years without charge in Guantanamo Bay
December 14, 2014 -- Updated 1738 GMT (0138 HKT)
S.E. Cupp asks: How much reality do you really want in your escapist TV fare?
ADVERTISEMENT