Are American Attitudes on Wealth Distribution About to Change?
Campaign Barack Obama: “My attitude is that if the economy’s good from the bottom up, it’s good for everybody. [snip] …and when you spread the wealth around, it’s good for everybody.”
That conversation proceeded to go viral, and the ‘Eeek! Socialist Obama” reaction was swift and sure; Obama never made the same mistake again, but the issue came up over and over again during the campaign, in interviews, debates, and the MSM. It might be moderately interesting to know how Joe’s life is going now in the midst of this depression.
No, it’s not a depression, we’re told; and even the recession is formally over (GDP falling for two consecutive quarters), and so many signs are pointing to a recovery. I know we all feel better that we shopped so heartily for Christmas, and Wall Street has recovered, and productivity is up, even though fewer workers are contributing to it.
But massive numbers of Americans are now experiencing lengthy unemployment, home foreclosures, and are in dire straits. One in seven of us is now receiving food stamps; underwater mortgages are rampant, credit is frozen, wages are, and have been, criminally flat since the 1970’s, and poverty is growing. At the same time, corporate profits are up, bank bonuses are higher than ever, and more and more people are talking about wealth distribution in this country and around the world. And income disparity is as high as it was in the the 1920s.
George Washington has a geat post up comparing this point in history to the Great Depression, although he admits comparisons are tough for a number of reasons, one of which being that economic records from the time are sketchy. Another is the reasons the banks failed, and the government and the Fed’s response, but that is better left for another discussion. His piece has great charts, as always, and many comparisons that can be measured and compared. In many ways, the extrapolations he makes from the demographics then and now indicate this is worse for most of us, for instance the fact that so many more of us own our own houses, which have devalued by 25%, as during the 1930s. . . .
He then highlights emerging theories of links between economic crashes (bubble bursts) and severe income disparity. He refers to Robert Reich and Emily Kaiser (writing for Reuters) who dig into the link if not as causes, at least as contributing factors, and what it means for our futures.
Kaiser reminds us that Americans have clung to the mythology that in our country, by hard work we can amass fortunes: Horatio Alger, Bill Gates, Sam Walton, Mark Zuckerburg, et.al., and how the recent economic landscape has changed, and is eroding those dreams for many Americans. She quotes others on the subject who explores why the Plutocrats might want to pay attention to the increasing inequality for economic reasons, though most analysts still claim redistribution will cause losses to businesses.
There seems to be evidence that Americans are less likely now to believe that their hard work will translate into wealth, and it’s of course especially true about the long-term unemployed and the many who’ve lost their houses; also among the millions of American who are working part-time or in temporary positions, with no chance for advancement. Unemployment and underemployment rates are much higher for those with only high school educations, and as fewer of us will be able to afford ever-increasing college tuitions, that will take another huge toll on the American Dream, as will spiking unemployment among people of color. George Washington quotes several top economists who are convinced that we’ll be hit with a double dip in housing prices, and Richard Smith offers his ‘Wall of Worry’, or things to watch that could add more fuel to the downturn.
So what might this mean in terms of what Americans ask of government? Will more demand more financial equality and a smidgeon of parity with the wealthy? Will class war talking points become more central to both the Left and the Right as the truth dawns that the game is rigged against us, and more and more of us fall into poverty? I think so. A majority of Americans were against Obama’s extension of tax cuts for the wealthy, a case in point. Will we put up with cuts to Social Security or other unnecessary austerity programs? I hope not.
More economic writers and social scientists are starting to worry about social unrest, comparing our present Banana Republic status both to the 1930s and the other nations around the globe, where housing bubbles burst, the banks were saved (or not), and severe austerity measures were put in place. Shorter: this cannot hold, especially if it worsens, which seems likely.
(Cross-posted at Dagblog.com)