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Wednesday, 6 November, 2002, 10:10 GMT
Few votes in fighting poverty

The gap between rich and poor has grown enormously in the United States in the last 30 years - but it is unlikely to figure as a key electoral issue between Democrats and Republicans.

This is because the Democrats are unsure whether to play this electoral card, often labelled "populism," for fear that it will backfire.

Al Gore tried it in the 2000 election, and the leader of the Democrats in the House of Representatives, Dick Gephardt, has toyed with the issue in the early stages of the mid-term campaign.

But like the issue of corporate wrong-doing, inequality could prove a double-edged sword for the Democrats.

It was President Bill Clinton who recognised when he took office that his first priority would have to be pleasing the government bond-holders on Wall Street, rather than tackle poverty through increased government spending.

That led him to advocate balanced budgets and welfare reform, ultimately discomforting the Republicans under Mr Gingrich and securing his re-election.

And the Clinton economic boom of the l990s did eventually spread to the poor, with more jobs easing the pain of welfare reform and raising the household income of blacks and Hispanics, despite a growing number of single parent families.

Gains reversed

Now the Bush recession is reversing those gains, especially among minority households, and the overall poverty rate is rising again.

Poor people, when they vote, tend to vote Democratic - but they are far less likely to vote than the better-off.

And the Democrats, like the Republicans, depend on the rich to fund their election campaigns, limiting the scope for radical redistributive appeals.

The Democrats have strongly objected to the $1 trillion Republican tax cuts for the rich.

And their own plans to spend more on health and education, and give a modest tax cut to the middle class and poor, have been stalled in Congress - and could be deemed just as irresponsible in budgetary terms.

American ideology

One reason that US political parties do not make more of the issue of inequality is that the belief that anyone can rise to the top is deeply rooted in American society.

Americans tend to see the gap between rich and poor - which is much greater than in most other developed countries - as arising from a lack of effort by the poor, compared to an exceptional effort by the rich.

And even if they are concerned by the growing inequality, they generally have less faith in government to solve the problem of poverty than in other countries, preferring instead to rely on charity and voluntary work.

The decline of organisations like trade unions, which fought for collective action to raise living standards but now represent less than one in 20 Americans in the private sector, has also weakened any belief in collective action to solve poverty.

Corporate rip-offs

Some Democrats and most trade unionists have been outraged by the huge increases in corporate salaries.

The introduction of stock options boosted the pay of chief executives of big companies to salary levels in the hundreds of millions of dollars.

As a result, the gap between the wages of the average worker - whose real wages have not changed since l973 - and those at the top has shot up to unprecedented levels.

But Democrats are powerless to change much while the machinery of government is controlled by President Bush, who is committed to further deregulation, and heavily influenced by the powerful company lobbyists who dominate many Congressional committees.

With the Republicans taking control of both Houses of Congress, it is likely that any further efforts to reform the corporate sector to avoid future Enrons will be severely toned down.


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