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Economic inequality: Is the American dream dying?

President Obama identified the widening wealth gap between rich and poor as the true “defining challenge of our time.”

“Finally!” said Paul Krugman in The New York Times. For years conservative deficit scolds have been proclaiming that the gravest threat to our republic comes from our supposedly “unaffordable” entitlement programs and “crippling” national debt. But President Obama last week identified the widening wealth gap between rich and poor as the true “defining challenge of our time,” and pledged to devote the rest of his second term to addressing it. The top 1 percent of families in the U.S. now have a net worth 288 times that of the average family, Obama reminded us, and the gap keeps growing: In the three years after the 2008 financial crisis, 95 percent of the economic gains went to the top 1 percent. The top 5 percent now control 72 percent of the nation’s wealth. Even worse, an inequality of opportunity now makes it harder than ever for the poor to escape their circumstances. No one’s calling for a Marxist revolution, said David Simon in Guardian.com. “That argument’s over.” But the American dream is dying. “Are we all in this together or are we all not?”

The first step in addressing this crisis is obvious, said Eugene Robinson in The Washington Post. The working poor need to earn more money. That’s why Obama has proposed a sizable hike in the U.S.’s minimum wage of $7.25 an hour. At that “shamefully low” wage, people have to take second jobs just to afford the basic necessities, and still need food stamps and other government aid to get by. “Conservatives howl” every time a minimum-wage hike is discussed, insisting that higher labor costs would result in layoffs and higher unemployment. But the minimum wage is $10 in Britain and Canada, nearly $13 in France, and $14.88 in Australia. The Australian unemployment rate is only 5.7 percent, compared with our 7 percent.

What Americans need are the jobs created by a healthy economy, not more handouts or government intervention, said Glenn Reynolds in USA Today. The ultimate effect of Democratic policies is to trap people in poverty by creating a permanent “dependent class” who have little incentive to try to escape. Class warfare isn’t the answer, either, said Rich Lowry in the New York Post.Yes, America has a serious problem with poverty and economic mobility, but “it has nothing to do with a small fraction of people being spectacularly rich.” If you’re an unemployed single mother trying to raise a family on welfare and food stamps, it makes no difference what CEOs earn. Facebook’s “Mark Zuckerberg could be stripped of all his wealth tomorrow, and it wouldn’t help anyone further down the income ladder.”

Class warfare already exists, said Dan Balz in WashingtonPost.com, and it’s the wealthy who are waging and winning it. Americans know it, too. “Sentiment is widespread that something is fundamentally wrong with the way the benefits of the economic system are distributed.” By a 64 to 33 percent margin, Americans say in a new Bloomberg poll that the U.S. no longer offers everyone an equal chance to get ahead. The growing perception that the game is rigged should worry the wealthy, said Frida Ghitis in CNN.com. A nation dogged by “a sense that unfairness permeates the system” is an unstable nation, “and nobody benefits more from stability than the wealthy.” Out of pure self-interest, the rich had better realize that growing inequality “is their fight, too.”

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