The Inequality Dodge
Ferguson, Niall, Newsweek
Byline: Niall Ferguson
The world's bottom billion is booming. But growth abroad may increase the income gap at home?
Everyone's talking about inequality these days. President Obama made it a central theme of his State of the Union address: "We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, everyone does their fair share."
The Republicans have yet to come up with a credible answer to this. Mitt Romney complains that it's "class warfare" to complain about his 15 percent tax rate. If so, Newt Gingrich is joining in the war. "We aren't going to beat Barack Obama with someone who owns Swiss bank accounts, Cayman Island accounts," he declared in Florida last Thursday. "I'm running for president to represent you ... not to represent Goldman Sachs. People matter more than Wall Street."
Yes, in this debate everyone gets a fair shot ... at Romney.
Inequality was also a surprisingly hot topic at last week's World Economic Forum in Davos. You wouldn't expect a gathering of plutocrats, oligarchs, and C-suite supremos to shed much light on the subject, least of all between tastings of vintage Bordeaux and excursions to the finest pistes in Switzerland. And yet one night in Davos taught me more about the true meaning of inequality than anything I've read or heard in the United States since the launch of Occupy Wall Street. It was the night I met Leymah Gbowee.
Forty years young this week, Gbowee won last year's Nobel Peace Prize for her extraordinary efforts to bring peace to Liberia. Despite all the misery she suffered during her country's hellish civil war--which raged for 14 long years--she radiates warmth and humor. The story of her showdown with the Liberian tyrant Charles Taylor is an astounding one (check out the documentary film about her, Pray the Devil Back to Hell).
Yet it was what Gbowee had to say about Liberia today that left me thunderstruck. Despite the coming of peace and her efforts to promote reconciliation, the Liberian economy is a mess. Youth unemployment is off the charts. Practically the only jobs for young men are in mining. For women? Prostitution. According to Gbowee, a girl needs to have sex with seven men to earn a single U.S. dollar.
To hear a story like that while nibbling veal cutlets in a high-end Swiss ski resort is to know the meaning of inequality. …