More people, as a percentage, are being born poor in this country than has been the case in over a hundred years. More people are descending into poverty for the first time in their lives than has ever happened in the history of this country. Also, for the first time ever, this generation of Americans will do considerably worse than the previous one and not because they don’t work. Americans now work 20% more hours per person than just 30 years ago. On top of that, 80% of two adult households have both adults working. We’re working harder than ever before, making less, saving nearly nothing and rolling up the largest personal dept of any country, anywhere on the planet at any time in history.
On the up side, our rich people are doing really well. In fact, better than they’ve ever done before. This is what they call the wealth divide. The money gap. The yawning chasm between rich and poor.
As the vast majority of Americans get poorer, the ultra rich just keep getting ultra richy-er. They’ve got their hands firmly on the controls of this money train and they like the way it’s going. Why wouldn’t they. 98% of the privately held wealth of the wealthiest nation on the planet is concentrated in the accounts of about 6,000 people; 6,000 people out of a population of 380 million. That’s a percentage that approaches zero. Forget the one percenters; those guys are pikers. The 6,000 richest people in this country could own other countries and some of them actually do. One of them has his own space program. A couple of billionaire brothers just bought a presidential candidate for $40 million after spending $20 million a few months before in order to destroy that same candidates candidacy…. that’s just showing off.
And while those shiny happy people with private islands, private banks and private armies buy up and privatize what’s left of our government, the rest of us just circle the drain… one flush away from oblivion.
I wondered recently if this was what the founders had in mind. Then it hit me. Within the framework of their experience, this is exactly what they were thinking. They were rich, fat, white guys. One of the reasons they told England to suck it was to find a way of legally keeping more of the profits, paying less in taxes and owning people without feeling bad about it. So really, as noble as we like to believe them to be, they’d probably be okie dokie with a guy who used his trust fund to buy and break up companies, putting tens of thousands of workers out of work, pillaging their retirement funds and leveraging the whole mess to do it again and again, bigger and bigger, flush after stinking flush. I’m pretty sure that at least half of the founding fathers would high-five a guy like that.
David J Lynch, a financial reporter with Bloomberg and a guy who knows a lot about this kind of thing, wrote last October, “A widening gap between rich and poor is reshaping the U.S. economy, leaving it more vulnerable to recurring financial crises and less likely to generate enduring expansions.” Lynch suggested that, left unchecked, the ten-year trend toward increasing inequality may disrupt social stability with increasing severity and would steadily become more difficult from which to recover.
Since 1980, a little over 5% of annual national income has shifted from the middle class to the nation’s richest households. Roll that little factoid around in your head for a second. That’s 5% per year since 1980. Which means that last year the wealthiest 5,934 households (according to 2010 Census Data) enjoyed an additional $650 billion (about $109 million apiece) above and beyond what they would have had if the economic pie had been divided as it was in 1980.
Between 1993 and 2008, the top 1 percent of families captured 52 percent of total income gains, according to a 2010 analysis of IRS tax data by economist Emmanuel Saez of the University of California, Berkeley. That means 1 percent of our population took more than half of the income gains in a 15 year period leaving the remainder to be shared by 380 million people.
Pacific Investment Management Co’s (PIMCO) CEO, Mohamed El Erian said in a Forbes interview last September that, “The large and growing gap between the haves and have-nots will tend to undermine growth, both directly and indirectly by reducing the marginal propensity to consume and by amplifying the political polarization that has already contributed to poor economic policymaking.”
According to the standard statistical measure of inequality known as the Gini coefficient, the U.S. Gini score rose from .39 in 1968 to .47 in 2010, meaning that incomes were becoming increasingly unequal. In the 30-nation Organization for Economic Cooperation and Development, only Turkey and Mexico have more unequal societies than the United States. In the U.S., the rich-poor gap widened by 20 percent since the mid-1980s, more than double the increase in any other developed country.
Ultimately, unbridled inequality threatens social stability as rich and poor stew in their resentment of each other. Ben Bernanke last year told CBS’s 60 Minutes that rising inequality was leading to “a society which doesn’t have the cohesion that we’d like to see.” That’s Bernanke speak for “the economic division is becoming a social division and people are getting pretty mad.” Again, the implication being that this is how revolutions get started. When enough people get pissed off about having nothing or enough fathers are unable to provide for their families or enough unemployed people decide that they have less to lose by breaking the rules of society than they have to gain by following the rules, disrule will begin to break out like popcorn in a microwave; a few pops here and there and then suddenly the whole bag is popping and filled with steam.
What makes this country a special thing in the history of countries, is, more than anything else, an idea. The idea that everybody has a chance to go from the bottom to the top. With ingenuity and hard work anybody, and I mean anybody, can strike it rich. And the reason we have that possibility is that this whole place is supposed to be a level playing field. It’s as hard for me as it is for you. It all depends upon how much we put into it in terms of effort and smarts. It’s what makes us the good guys and allows us to scoff at how screwed up everybody else’s system is.
At least that’s the idea we used to have. That’s the idea we sold to the rest of the world to make them all wish they could come here. But under the current system, that idea is farther and farther away from the truth. The distance between the idea of fairness and the reality of an obviously rigged game is growing at the exact same rate as the distance between the haves and the have-nots in this country and that is absolutely not a coincidence.
I need to make this really clear. I’m not opposed to being rich. I would happily accept a truckload of money every day of the week and spend it on big houses and jet skis and fancy ass cars. Being rich is a universal dream. Most of us want life to be easier and more comfortable. We want our children to have advantages. We want to be healthy, safe and happy and even if money doesn’t guarantee that, at the very least money makes the effects of not having money go away. Being rich may not be easy but it sure as fuck is easier than being poor.
It isn’t my contention that rich people shouldn’t be allowed to be rich or that they shouldn’t be able to take advantage of the money that they’ve acquired. What I am saying is that they shouldn’t use that money to make sure other people can’t have money. They shouldn’t use that money to subvert the political process or rig the financial industry so that only people with vast sums can participate. The farther away the rich get from the poor, the more that the poor feel left behind and the more angry they become. There is a point where that becomes dangerous. It probably isn’t tomorrow or next week or even next year, but if it continues in this direction with this persistent incipient draining of economic hope from one side to the other, the lack of hope will turn to hopelessness and then rage and finally, what was once the semblance of a level playing field will become the cratered battlefield in the aftermath of revolution. If history teaches us anything it’s that people always do what’s easiest. And when hope is utterly removed it is simply easiest to take the money back from the guys who have been piling it up and keeping it from everybody else.
That really is how revolutions get started. Just ask Czar Nikolas.