Death and destruction can make for wonderful profit opportunities. We've seen those opportunities unfold in Iraq. Now history seems poised for a revolting repeat in the wake of Hurricane Katrina. We have more below.

But we're going to start with an amazing new UN report that carries an eye-opening egalitarian message for us all.

UN to World: Inequality Matters

The mainstream political debate over global poverty has, in recent years, revolved almost exclusively around the gap that divides the world's richest nations from the world's poorest. But that may be changing.

Two events this September may well force a reframing of the global poverty debate, from a single-minded focus on the gaps between nations to a perspective that openly acknowledges — and challenges — the deep income and wealth gaps within nations.

September's first blow against the conventional political discourse on poverty came, quite literally, from Hurricane Katrina. That storm's ferocious winds and surges left exposed, for all the world to see, the presence of desperately poor people within the world's richest nation.

The second came this past Wednesday, with the release of an amazing new UN report that essentially predicts a “human development disaster” if the world's nations continue to ignore how they distribute, within their own borders, the wealth their economies create.

This UN Human Development 2005 Report amounts to an update on progress toward the “Millennium Development Goals” the world's nations adopted, with considerable fanfare, five years ago.

Those goals call for a halving of the number of people living on $1 a day by the year 2015. But if current trends continue, says the new UN report, the world will fall 380 million people short of reaching that goal.

What's the problem? Economies are “growing” and “average” incomes are rising, but these averages “obscure” deep inequalities in income distribution.

One example: “Average” incomes in Brazil, a deeply unequal nation with huge concentrations of wealth at the top, are currently running three times higher than “average” incomes in Viet Nam, a nation with a considerably more equal distribution of wealth.

“Yet the incomes of the poorest 10 percent in Brazil,” the new UN report notes, “are lower than those of the poorest 10 percent in Viet Nam.”

Shifting just 5 percent of the income of Brazil's richest 20 percent to Brazilians making less than $2 a day would lift 26 million people out of poverty and chop Brazil's overall poverty rate by two-thirds.

UN to World: Start Redistributing Wealth

Globally, the new UN Human Development 2005 Report points out, the world's 500 richest individuals are currently taking in a combined income that exceeds the total income of the world's 416 million poorest people.

“Redistributing 1.6 percent of the income of the richest 10 percent of the global population,” the report adds, “would provide the $300 billion needed to lift the 1 billion people living on less than a dollar a day out of extreme poverty, at least temporarily.”

And that shift would soon evolve into a permanent state of affairs, the UN report emphasizes, because “improved distributional equity” would both increase “the size of the economic pie” and enable the poor “to capture a bigger slice of that pie.”

What's going to happen to this landmark new UN report? This coming week, in New York, the UN's member states will be meeting to review overall progress toward the Millennium Goals they adopted with such high hopes in the year 2000.

These goals — besides halving extreme poverty by 2015, they also call for dropping childhood deaths by two-thirds and having all young children enrolled in primary school — could be achieved, the new report stresses, if the world community ever became serious about redistribution.

“An extra dollar in the hands of a landless agricultural labourer in South Asia or an urban slum dweller in Latin America,” as the report notes, “generates greater welfare than an equivalent amount in the hands of a millionaire.”

“In our interconnected world,” the UN report concludes, “a future built on the foundations of mass poverty in the midst of plenty is economically inefficient, politically unsustainable and morally indefensible.”

The Katrina Chutzpah of Estate Tax Repealers

Modern societies that so choose, the new UN report emphasizes, can significantly increase income and wealth equality via a wide range of redistributive policy initiatives that include everything from programs that create good jobs to progressive taxation.

But none of these redistributive policies currently enjoy any support whatsoever among America's top political movers and shakers, as developments last week once again reminded us.

Take progressive taxation. President Bush and congressional leaders have been scheming to repeal the estate tax, America's only progressive tax levy on grand concentrations of private wealth, for over four years now.

Last Monday, Senate Majority Leader Bill Frist announced that a long-awaited Senate vote on repeal will be placed on the backburner — but only for the moment. That decision reflected political reality: In Katrina's wake, GOP leaders didn't want to open themselves to still another PR problem.

Helping milionaires pass wealth on to their heirs, as University of Texas political scientist Bruce Buchanan notes, “doesn't play well in the face of black people floating face down dead in the water.”

The repealers are now busy retooling their arguments. They've already begun claiming that Katrina makes repealing the estate tax more necessary than ever.

“Permanently repealing the death tax will unlock billions of dollars in family business capital and create 250,000 new jobs each year — jobs hurricane victims and the nation at large will desperately need,” Dick Patten, the executive director of one of the prime front groups for repeal, the American Family Business Institute, piously intoned last week.

In fact, estate tax repeal will pump in into the pockets of America's very wealthiest $1 trillion over the first repeal decade and speed the eroding of our nation's public service infrastructure, an eroding that Katrina's flood waters left devastatingly plain.

Bringing Home the Davis-Bacon

The White House, of course, isn't necessarily against spending money on post-Katrina infrastructure repairs. The White House is only against diverting any significant share of that money to the people who need it the most.

This past Thursday, as if to prove that point, President Bush announced that he was suspending — on all Gulf Coast recovery projects — the 74-year-old federal legislation that requires contractors to pay the “prevailing” local wage on all federally financed construction projects.

This legislation, the Davis-Bacon Act, prevents low-wage contractors from winning contracts by underbidding contractors who pay decent wages.

Suspending Davis-Bacon, the President said Thursday, “will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals.”

The suspension, critics immediately countered, will turn the over $100 billion in federal Katrina recovery projects into as big a profit opportunity as the war in Iraq.

AFL-CIO President John Sweeney, for one, called the move a green light for employers “all too eager to exploit workers.”

“In New Orleans, where a quarter of the city was poor, the prevailing wage for construction labor is about $9 per hour,” added California Rep. George Miller. “In effect, President Bush is saying that people should be paid less than $9 an hour to rebuild their communities.”

Big deal, answered Congressman Tom Feeney, a Republican from Florida, a cheerleader for the President's Davis-Bacon suspension.

“Lots of people in Louisiana,” said Feeney, “are willing to go to work tomorrow, and the market will set the wage.”

That “market,” in the process, will ensure that Louisiana continues to rank among the developed world's most atrociously unequal places.

Stat of the Week

Over the past two decades, 53 countries — with more than 80 percent of the world’s population — “have seen inequality rise, while only 9 (with 4 percent of the population) have seen it narrow.”
UN Human Development Report 2005, September 7, 2005

Quote of the Week

“I am baffled by the ever-increasing excesses at the top. In a recent illustration, one public company paid an executive $32 million when he left the company after three months on the job. Even more mind-boggling, a minimum-wage earner would have to work 11,000 years to make the $120 million paid to the highest-earning CEO in 2004.”
Congressman Martin Sabo,
St. Paul Pioneer Press, September 6, 2005

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