Friday, November 04, 2011

Oligrachy, American Style

The caption for this post is the title of a new column in the New York Times by Nobel Prize winner Paul Krugman. As he has been doing for quite some time, Krugman focuses on the sad fact that the so-called American dream is becoming increasingly out of reach of most Americans as the nation quickly heads towards wealth disparities once found in banana republics and autocratic monarchies. The good news is that some folks seem to be finally waking up to this reality. Meanwhile, the oligarchy of the 1% of the population ranking in most of the advantages offered by the country tries to distort to distort the real picture. Heaven forbid that average people figure out that the 1% is living like Marie Antoinette (at left) and Louis XVI while the rest of us increasingly struggle to make ends meet. Here are some column highlights:

Inequality is back in the news, largely thanks to Occupy Wall Street, but with an assist from the Congressional Budget Office. And you know what that means: It’s time to roll out the obfuscators!

Pundits try to put a more benign face on the phenomenon, claiming that it’s not really the wealthy few versus the rest, it’s the educated versus the less educated.

So what you need to know is that all of these claims are basically attempts to obscure the stark reality: We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only.

The budget office laid out some of that stark reality in a recent report, which documented a sharp decline in the share of total income going to lower- and middle-income Americans. We still like to think of ourselves as a middle-class country. But with the bottom 80 percent of households now receiving less than half of total income, that’s a vision increasingly at odds with reality.

In response, the usual suspects have rolled out some familiar arguments: the data are flawed (they aren’t); the rich are an ever-changing group (not so); and so on. . . . . It’s a nice story, and a lot less disturbing than the picture of a nation in which a much smaller group of rich people is becoming increasingly dominant. But it’s not true.

[T]hese days workers with a college degree but no further degrees are less likely to get workplace health coverage than workers with only a high school degree were in 1979.

So who is getting the big gains? A very small, wealthy minority. The budget office report tells us that essentially all of the upward redistribution of income away from the bottom 80 percent has gone to the highest-income 1 percent of Americans.

[W]hy does this growing concentration of income and wealth in a few hands matter? Part of the answer is that rising inequality has meant a nation in which most families don’t share fully in economic growth. Another part of the answer is that once you realize just how much richer the rich have become, the argument that higher taxes on high incomes should be part of any long-run budget deal becomes a lot more compelling.

The larger answer, however, is that extreme concentration of income is incompatible with real democracy. Can anyone seriously deny that our political system is being warped by the influence of big money, and that the warping is getting worse as the wealth of a few grows ever larger?

As I noted yesterday, the America of my childhood and youth is gone and now much of "Old Europe" offers more social mobility than America.

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