The rich vs ‘the rest’: America’s huge (and growing) income gap
Among the top 20 winners in America's wealth sweepstakes: Charles Koch.
Increasingly in America, there are the rich, the very rich, and everybody else.
One of the stories you might have missed this weekend was a startling report in the Washington Post, that shows the richest Americans — those in the top 0.1 percent — saw their wealth balloon by a startling 385 percent between 1970 and 2008; while the bottom 90 percent of Americans (137.2 million people versus just 152,000 in that elite top tier) saw their incomes shrink by 1 percent over that same time period.
It’s an amazing dichotomy, illustrated in the chart below, which shows, in stark terms, how middle class incomes ballooned during the “great compression” after World War II, when union wages and “full employment” policies flattened the distribution of wealth in this country for the first time in its history, and how all that changed when the new robber baron era began in earnest during the Reagan years.
The actual numbers are no less stark:
Related: the 20 richest Americans
And while there is perhaps some, cold comfort in the fact that the very richest Americans aren’t all hedge fund managers and money manipulators (CEOs in high tech businesses and inheritors of great wealth from media and retail conglomerates do quite well) it’s amazing how the wealth gap is widening, rapidly, over time.
This is not a positive development. America is billed as a country where wealth and social status are fluid, such that you can rise from the bottom to the top — and that’s still true, to an extent. But we’re quickly becoming, in a very real way, a banana republic: with very wealthy titans of industry and an increasingly desperate middle class, constantly asked to work for lower and lower wages, and fewer and fewer benefits. The fact that Republicans tout Rick Perry as a model — his having reduced Texas to an American China in terms of low wage jobs, but without the excellent Chinese schools — should frighten Americans who want to pass a decent, middle class life down to their children. And the U.S. wealth gap is growing faster, and more starkly, than in any other industrialized nation. Again, not a good thing.
And again, while it is true that the average American enjoys a standard of living equivalent to a rich person in, say, the 19th century, much of the improved standard of living and opportunities for wealth enhancement have come as a result of public policy: PELL grants to help lower income kids go to college, programs that give girls improved opportunity for athletic scholarships, workplace rules that keep people from dying on the job before they can reach their full income potential, etc. But those kinds of policies are increasingly in jeopardy, because not only is this nation increasingly dominated by the interests of the very rich through their lobbyists (and thanks to Citizens United, through the direct buying of elections by corporations) the rich now literally write the laws. A report in 2009 found that there were 237 millionaires in Congress. And rich Congresspeople got even richer as the economy tanked, and their constituents suffered. If you look at just the freshmen in the 112th Congress, you’ll find they’re worth half a billion dollars collectively. That’s “billion” with a “b.”
Increasingly, running for office is something only the rich can afford to do. So Congress is increasingly looking out for the interests of its own economic class, with fewer and fewer members who live like the rest of us. The Webster’s Dictionary definition of “plutocracy” is as follows:
Read the Washington Post story here.
And read “The road to plutocracy” from The Economist
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