Is Inequality a Bigger

Threat than the Islamic

State?
In the Age of Fear, the sensational always
overtakes the important.

BY DAVID ROTHKOPF-NOVEMBER 13, 2014

One of the hallmarks of the Age of Fear in which we live is

that everywhere we turn there are not only new threats, but with the arrival
of each one there is also a vast orchestra of technologies available to make
it roar and rumble and make us tremble. The threats are so myriad and the
cacophony of alarms and ominous analyses so loud that it becomes

impossible to discern which threats should really concern us and which are
less important. Minor risks rise up on the waves of our other worries until
they appear just as big as some threats many times their size.
Recently, we watched as Ebola stormed into our consciousness because of
one particularly unfortunate case and fatality in the United States. This is
not to minimize the scale of the threat in the few West African countries in
which the outbreak is primarily contained -- Liberia, Sierra Leone, and
Guinea. But in the United States, the threat was minimal, yet the threat
amplifiers on the sound system of the country's national consciousness
(talk radio, cable news, social media) were all turned up,This Is Spinal Tapstyle, to 11.
The Islamic State (IS) is another recent threat that has rocked our world -- a
threat so great that one acronym hasn't been enough to describe it. A
mobile, well-resourced, social-media-savvy hybrid terrorist group that is
part insurgency and part blitzkrieging desert army, it warrants much of the
unease it has triggered. As a modern terrorist group, however, it has been
adept at using 21st-century media to put fear in the hearts of observers
everywhere, whether by videotaping beheadings, tweeting out victories and
taunts, or conducting a massive recruitment operation complete with slick
digital magazines and online annual reports to make the group appear
dangerous and entrepreneurial at the same time. The Islamic State has
sought to be the Apple computing of global terrorism -- choosing a black
livery instead of a white one -- and to a disturbing extent the group
achieved its goal. Indeed, the degree to which it moved so quickly to
unsettle us and the geopolitics of the region only amplified the edge it held
by making us feel ill-prepared and on the defensive (because we were).
Putting the Islamic State Threat in Perspective

But the Islamic State is also an example of a threat that, if not overstated,
has been largely misconstrued. It is, after all, only an organization of
perhaps 20,000 to 35,000 fighters. It has very limited resources. Its hold on
the cities it has claimed is tenuous and to a large degree desperate,
depending more on threats than on the active support of the majority of
local populations. It is not a major threat to the residents of the United
States and certainly not anything like the existential threats Americans
faced in the last century. We, however, have applied the transitive property
of terrorism to elevate its status: We have come to see the Islamic State as
the new al Qaeda, and al Qaeda, despite being a relatively small
organization with limited capabilities, had previously been elevated to the
role of America's new Enemy No. 1, occupying a position once held by a
real existential threat, the Soviet Union, which had inherited its root-of-allevil mantle from the Nazis. Therefore, the Islamic State came to
prematurely occupy the place of Enemy No. 1, previously held by Osama
bin Laden, the USSR, and the Third Reich, along with many of the rights,
privileges, and scary evening-news music licks and logos thereto
appertaining.
Is the Islamic State a real threat? Yes, of course, a serious one. But it's not
as much of a threat at least for now to Americans and their way of life as it
is to American interests and America's allies in the Middle East and
elsewhere. Were the Islamic State to establish a permanent radical state in
the Middle East, that could be destabilizing for years. Further, such a state
could serve as a petri dish for global mayhem, a place where the other real
risk associated with the group -- that of its growing army of foreign
fighters -- could be cultivated, made more dangerous, and released on
different corners of the region or the world. Also, as happened with al
Qaeda, the Islamic State's success is already breeding the sincerest form of

flattery among the world's really bad guys -- other terrorist cells are
rebranding themselves as Islamic State chapters or followers. Just this
week, one such group in Egypt proclaimed its ties to Abu Bakr al-Baghdadi's
men and goals, and this too could prove to be deeply destabilizing if it goes
unchecked. That's why the efforts of the United States and its coalition
partners are warranted and why it is so important that they are successful.
But there are other threats beyond those that dominate the nightly news or
are seemingly permanently plastered on your Facebook wall.The threat of
the Islamic State is only a subset of the growing, globally spreading threat
of militant extremism. Indeed, that threat is made more complicated for
many of America's allies because today it takes multiple forms -- that of the
Shiite extremism of the Iranian revolutionary regime and that of the Sunni
extremists such as the Islamic State, Hamas, Ansar al-Sharia, al Qaeda in its
multiple regional incarnations, al-Nusra Front, the Muslim Brotherhood, Boko
Haram, etc. Indeed, a greater danger lies with thinking we "solve" our
problems by turning back the Islamic State when doing so may actually
empower some of these other groups and won't deal with the massive,
long-term problem that the spread of such extremism represents.
The Geopolitical Risks on the Horizon
Other threats that are real and easy to underestimate given the challenges
to our bandwidth range from the deterioration within Pakistani politics that
has made that nuclear power more susceptible to extremist takeover than
ever before (it's not imminent, just closer than it has been), to the potential
risks associated with how falling oil prices might squeeze a Russian
economy that is already in bad shape, thus potentially provoking
threatening behavior from that country's already aggressive regime. On top
of which there's also the upheaval that might be associated with regime

change that could go awry in Saudi Arabia as well as the potential for
military conflict were Iran to prove yet again to be unreliable with regard to
its promises to stop its nuclear weapons program.

But unsettling as these risks are, there is another tier of threats that are
even more pernicious because they come with few headlines, approaching
gradually, silently, without benefit of television logos, Internet memes, or
shouting matches among worried TV pundits. These include those
associated with gradually rising powers such as China that gain influence
and then exert influence subtly. Or those associated with climate change
and the potentially huge upheavals that shifting weather patterns may
cause in coastal societies and to global food supplies, water resources, and
other vital underpinnings of life on the planet. Or those associated with
another global economic crunch or the growing risk of cyberconflicts, the
consequences of which we barely understand and are ill-prepared to
grapple with. In each case, these threats are simmeringlike that proverbial
frog sitting in a pot of increasingly hot water. They may reach a boiling
point before we know it and can jump out to save ourselves.
But Closer to Home, the Trends Are Even More Unsettling
But beyond these international risks, there are risks closer to home for
Americans, profound threats that are plain to see and, to my mind, are
ignored to a remarkable, almost unfathomable degree. These are problems
that already impact the lives of hundreds of millions in a deeply negative
and life-changing way. Yet few herald them, and those who do essentially do
little more than wave their hands about them. They write op-eds. They
lament. And their words fall on deaf ears because it is so clearly not in the
interest of any of those in power to hear them.

These are urgent challenges that do not involve armies or terrorists but
touch every one on either side of Main Street. Indeed, whatever we may
say right now based on today's headlines, it is these issues that will be
absolutely central to the 2016 U.S. presidential race. They are the sticking
points of the new American economy, the disturbing realities that have
made the recent economic recovery unlike any other. Indeed, they are the
reasons that a U.S. president who has an immense amount to be proud
about in his domestic and international economic agenda -- from
engineering an overall recovery to health-care reform, from financialservices reform to tapping into an energy revolution, from driving export
growth to overseeing a recovery in the housing market -- has not been able
or willing to tout those very real gains.
They have to do with the fact that despite steady job growth rivaling the
gains of the Clinton years, and despite a booming stock market and a rising
GDP outstripping those of the world's other major developed economies,
wages are not rising and the quality of the jobs being created is disturbingly
low. We are, in fact, seeing America's first major post-recession recovery
that has bypassed its middle class.Ninety percent of the gains have gone to
the top 10 percent of the population. Something is broken.Something is
badly wrong.
The most grotesque element of this existential threat to the American
dream, to America's sense of itself and to its fundamental social cohesion,
is growing inequality. In fact, it is inequality at historic levels. As reported in
the most recent issue of the Economist, the top one-tenth of 1 percent of
America's population is about to achieve a level of wealth equivalent to that
of the bottom 90 percent. That's just over 300,000 people with holdings
equal to that of some 280 million. Those wealthy few will control 22 percent
of the wealth. The bottom 90 percent, everybody essentially, will also have

22 percent. This in turn means that the top 10 percent of the U.S.
population will control 78 percent of America's wealth. Almost eight out of
every 10 dollars of net worth.
This is not a uniquely American problem. The World Economic Forum,
having conducted a survey of almost 2,000 global leaders, reports that they
view rising inequality as the most threatening trend facing the globe in
2015. In all 44 countries polled by the Pew Research Center, majorities
believe that inequality is a major problem in their countries, and in most of
those countries (28 of them), they consider it a very big concern. The global
numbers are pretty gut-wrenching too: Just 0.7 percent of the population
controls 41 percent of the wealth. Roughly 70 percent have just 3 percent of
the wealth.
But the American case is special no matter how you slice it. It is because,
for example, wage disparities between average workers and CEOs are
greater in the United States than in any other place in the world -- by a lot,
more than five times than in the next-worse nation (Venezuela). While U.S.
workers, according to a recent article in the Harvard Business Review that
analyzes a new study appearing in Perspectives on Psychological Science,
think the difference between average wages and those of the boss should
be about seven times, in fact it is 354 times. An analysis by the White
House's Council of Economic Advisers puts the situation in further relief. The
top 1 percent earn almost 20 percent of the income (as distinguished from
the wealth figures noted above, which refer to assets held), which is much
more than in any other developed country and, as the Washington
Post reports, "it isn't even close."
Why Inequality Will Trump the Islamic State in 2016
Worse, the trends are not encouraging. The deeper we get into the
recovery, the worse many of these metrics are becoming. Wages are stuck.

Inequality is creeping steadily upward. In fact, the situation has become so

bad that the American political party that has in recent years been seen as
the champion of Wall Street and fat cats, the Republican Party, scored many
of its 2014 election victories by emphasizing the gaps in the flawed
economic recovery (which the Republicans, of course, blamed on President
Barack Obama.) According to a Slate article by William Saletan,
"Republicans won big in the 2014 elections.... But they didn't do it by
running to the right. They did it, to a surprising extent, by embracing ideas
and standards that came from the left.... I'm talking about the core of the
liberal agenda: economic equality."
This is a harbinger of things to come. Given this greatest of threats to
average Americans -- the threat that there is no better future out there for
them and their children and that they will toil away producing profits to be
enjoyed only by a privileged handful of Americans -- we can count on the
political debate in the United States for the next two years to turn less and
less on the Islamic State or Ebola and more and more on the time bomb
placed at the foundations of the U.S. economy -- an economic engine of
division and destruction that is gradually pulling the country apart and
instilling anger and frustration in many of its citizens (especially those in
the bottom fifth, those who are not only out of the money but consigned to
inescapable lifetimes of struggle and subsistence).

For candidate Hillary Clinton (who will certainly be the most well-versed and
competent of any in the field in terms of national security and foreign-policy
issues by virtue of her tenure as secretary of state), there will be a special
challenge. She will have to offer an economic approach that is seen as
something new, focused more on these issues of inclusion, opportunity- and

quality job creation, rather than the message of growth and placating Wall
Street that marked her husband's tenure as president. (Note: I served as a
senior economic official in Bill Clinton's administration.) She will need a new
team because those associated with her husband and Obama are too
closely associated with Wall Street and bailouts and policies favoring the
few, even if that is, to a large degree, an unfair oversimplification. Indeed,
her biggest challenge over the next year will be convening a group of new
faces with new ideas to tackle this greatest of all threats to the United
States.

Her competition will likely focus on the same issues -- whether that
competition consists of centrists like Jeb Bush or relative renegades like
Rand Paul. Because at the end of the day, despite the din of media alerts
and the flashing lights of government terrorism warnings, the real insecurity
that haunts Americans late at night as they contemplate their futures
involves not terrorists or rogue nations, but political and financial
institutions at home that have been captured by the self-interested few and
that are seeking to squeeze the hope out of Americans as no terrorist could
do.
Posted by Thavam