Wealth Inequality in America
“The middle class is barely distinguishable from the poor.” This video has been going viral over the last couple of days, but since it’s relevant to our interests, we’ve decided to post it here (thanks Elise, for bugging us about it). And good morning!
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Previously on The Billfold
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Thanks for sharing! I want to send it to all my “pro-America, pro-Freedom” relatives (their words, not mine). Though I doubt they would give it any notice – they’ve gone so far as to deny U.S. Census information as being a valid source when we have political discussions. I think the saddest part of it all is watching them struggle with their relatively low quality of life while still feeling a sense of moral superiority over everyone else who doesn’t agree with their political and social views. They are supporting the system that oppresses them, at the expense of their own well-being. It was pitiful to witness when I was growing up, and eventually one of my main motivations for moving far away, not that I ever told them that.
@Blondsak There’s a book about this exact thing I read recently – “Deer Hunting With Jesus – Dispatches from America’s Class War” by Joe Bageant. It wasn’t without faults (but I haven’t had enough coffee to problematize it right now).
My formerly super-Republican mom (newly transformed into and Elizabeth Warren-esque liberal lady) just emailed this to her whole family a few days ago. I’m proud of her :)
@oiseau Can I ask how your mom changed? Like, what happened in her life/her views that altered her thinking so much? I could use some ideas for my own family!
@oiseau
Ah, so your mom exchanged one set of demagogues for another?
@Blondsak She supported GW Bush and McCain, but when the Tea Party started taking over with more extreme ideas she started to question the Republican position. Things really changed when the economy crashed in ’08 and all the news about corporate/banking corruption came out. Suddenly it didn’t seem fair to her that bankers were rolling in millions of dollars, whereas before she just assumed that the free hand of the market had it all under control or something. The breaking point for her was when she started her Masters of Public Health a few years ago and learned more about the healthcare system. She is a strong advocate of universal healthcare as a basic human right. She voted for Obama in ’12 – first Democrat she ever voted for. She is still conservative in a LOT of ways (pro-life, anti- gay marriage, etc.) but every day she seems to be discovering more things to question about the agenda behind many Republican policy maneuvers. I think the fact that she was raised in Milwaukee, a city that voted in a Socialist mayor, may have affected the way she sees the world (populist-ly).
@oiseau That’s great! Thanks for sharing.
I have seen things like this before, and I understand there is a huge inequality in wealth distribution in the States… but what can be done, really? I’ve never heard any reasonable suggestions about how to improve society as a whole. Increasing taxes doesn’t help, because at some point you tax them so much they pull a Gerard Depardieu and head to Russia.
This probably makes me a departure from the average Billfold reader (who, by the way, is the average Billfold reader?) but when I see something like this all I want is to be a part of the 1%. Or even the 10%. Even though I’m a Canadian, I know I should be outraged by what I see, but what I wonder is where I line up on the list and how I can move myself higher.
@megsy I don’t know what the answer is, either, but I’m not satisfied with throwing my hands up and saying, “Well, can’t fix it, no point in trying.” Maybe it is unfixable, but I still think we should create awareness and think about the possibilities, and also plan for a time when we are going to have even more hungry people on our hands than we have now.
One thing this reminder does for me, though, is it makes me say, “Oh! I have money. Maybe I should give some away.” It makes me remember that the food bank has more people than food, so maybe I should help out.
I’m not trying to be snarky though, because I get your point, it’s a valid point, and it saddens me that maybe there is no answer :( But I still want to try to make some small steps.
@megsy I think there are political solutions we can support, more than individual action. For instance, fighting attempts to finally finish off the unions. We could also start arresting people for all the rampant criminality that seems to go unchecked in the finance world. (I’m not saying that rampant criminality is the reason for income inequality, but letting everyone off scot-free does send a message about what our priorities as a society are.) Fighting for things like universal health care and universal preschool would also make things easier for everyone who isn’t loaded.
@megsy I would say firm bank regulation would be a great first step. The banking system as its stands allows rich people to multiply their wealth with little effort, while it penalizes the poor, making them poorer. I think that a similar reform as healthcare reform needs to happen, which makes sense if you view health insurance as a financial product, which it is. So we ensure that all people have equal access to the financial products and that banks don’t get to charge people extra fees for having less money, and limit the amount of money bankers can make by selling securities based on regular people’s mortgages, for example.
Also, I do think that tax reform would help. I am not saying pure wealth redistribution, but maybe the tax burden distribution should be proportionate to the percentage of wealth that you have, regardless of how you got it (ie, capital gains vs. wages), so that we can keep our government running.
These are great at getting people worked up and angryish, but it would be interesting too see how these distributions ave fluctuated over the past economic cycles.
Either that, or I have outrage fatigue.
@Morbo There is a graph on this webpage from the Council on Foreign Relations (it’s part of a longer report) that tracks the percentage change in income for each quintile since 1979. Not exactly the same, but it gives a similar picture of skyrocketing inequality since the 70s: http://www.cfr.org/united-states/income-inequality-debate/p29052#p2.
Here are tables showing the GINI coefficient (basically a ratio that measures income inequality in different countries) for the US from the early part of the 20th century until today. http://www.huffingtonpost.com/ray-brescia/reducing-income-inequalit_b_764477.html
Unfortunately none of these graphs are as stark or well-made as the video above, which I think is why they have less traction with the public, but if you are interested in whether income and wealth inequality has gotten worse in recent decades the answer is yes – it has.