A friend, who apparently doesn't read this blog, just called me astounded that this week 1.3 million Americans would be losing their unemployment benefis. He had just found out. "What are they going to do," he asked. I mentioned something about turning their anger, in a decidedly non-electoral way towards the individual conservatives in Congress, who have authored their impending misery. He pointed out that if anyone gets shot it'll probably be someone at a WalMart or post office, rather than a Paul Ryan, John Boehner or Ted Cruz, all merciless persecutors of the working poor.
Friday, Obama's Director of the National Economic Council, Gene Sperling, told the press that "While we remain disappointed that Congress did not heed the President's call to extend emergency unemployment benefits for next year before the holidays, the President as well as the Democratic Congressional leadership have made clear the importance of extending the benefits immediately upon Congress's return. Senator Jack Reed and Senator Heller have put forward bipartisan legislation to extend emergency unemployment insurance for three months which would prevent these 1.3 million workers and their families from losing benefits while giving more time for consideration of further extension through 2014, and Leader Reid will bring it to a vote as soon as they return. The President strongly encourages both the Democratic and Republican Congressional leadership and their members to support this bipartisan solution and to pass the Reed-Heller bill."
There were some people who weren't fans of Elizabeth Warren's campaign speech (above) about all of us being in the same boat. Those are conservatives, usually conservative Republicans. Normal people found the speech uplifting and inspiring. A few days ago a Columbia University sociology professor, Shamus Khan, author of Privilege: The Making of an Adolescent Elite at St. Paul’s School,did an Op Ed for the NY Times, We Are Not All In This Together, as part of their "great Divide" series on inequality.
Rising income inequality troubles Americans. Some of us worry that the fate of the many has become divorced from the fortunes of the few. Others are concerned that the government will attack inequality by taking their hard-earned money and giving it to the less virtuous.
What both sides seem to agree on is that from the late 1940s until the early 1970s things were different. Those coming home from the war entered college in record numbers, which fueled a generation of economic growth. As each year passed, a majority of Americans were economically better off. Incipient political movements that confronted racial oppression and gender discrimination flourished.
Today, when we try to imagine our ideal future, we often turn to this unique moment of our past in which the expansion of rights, the advancement of the economy, and the march toward equality appeared to constitute the defining trinity of American life.
The Obama administration has done little to push back directly against the rise of inequality. But earlier this month, in a speech announcing his plans to dedicate the rest of his term to the problem, Mr. Obama joined the chorus in suggesting that we turn to postwar America for answers. Yet perhaps we are yearning for a past that, in terms of its dynamics, is not terribly different from the present.
During our golden age not all Americans experienced the same kind of growth and mobility. The richest among us saw their share of the national income decline. They were also stagnant: in comparison to their counterparts in other periods in the 20th century, a higher proportion of the wealthiest Americans had inherited their money rather than earned it.
Doesn’t the fact that millions of Americans were better off more than counterbalance the fact that a few rich people weren’t rising so quickly? I certainly think so. But America’s golden age of parity and today’s winner-take-all society have something in common. The economic experiences of the many and of the few are the opposite of each other.
We understand this basic insight: In a world of finite resources, if you have more, I have less. But we also believe that the magical quality of markets can counteract these dynamics. The imagery we deploy is revealing. Markets behave like water. Resources can and should flow freely and if they do, we’ll all be better off. President John F. Kennedy famously used an analogy to imprint this elegant view of economic relations upon the American psyche, “A rising tide lifts all the boats.” Yet the evidence of the past 70 years shows that this is a myth.
In the postwar period the rich found themselves in a quandary. Their wages and their membership were static. They needed to resuscitate themselves. This required allies who shared a basic concern. The rich thought, not incorrectly, that high tax rates were handicapping their capacity to advance. And they found common ground with suburbanites who didn’t see social spending as something that enhanced their lives and neighborhoods, but as something that transferred their tax dollars to a different kind of American-- urban, of a notably darker hue-- who had only recently gained political legitimacy. Through a tax revolt these groups went to work dismantling social programs.
They were terribly successful and they helped turn America on its head. Since the late 1970s, it has been average Americans who have experienced comparative wage stagnation and who are more likely than their parents to stay in the same economic position. For the rich, the story is the exact opposite.
Let’s say you’re fortunate enough to be in the top 1 percent of American families; at a minimum you make almost $400,000 a year. Things aren’t just good; they seem to keep getting better. While the median American worker received about a 5 percent wage increase since 1979, your raise was above 150 percent. From your perch, even when you look at people right below you in the top 5 percent, you find that the rate of your wage growth is much greater than theirs
The satisfaction of looking down is met with the anxiety of looking up. That’s because even within the 1 percent, those who make more money than you do are outpacing your wage gains at an even greater rate than you are outpacing those below you. But it’s hard to be jealous. When you look at some of the richest people around you, you notice that they aren’t just the children of other very rich people. Warren E. Buffett, Bill Gates and Michael R. Bloomberg may have had well-off parents, but they weren’t born billionaires.
If you’re an average American, you don’t see this at all. It’s been more than 30 years, and you’ve barely seen a drop trickle down.
This helps us better understand why it is that the rich and the rest see the world differently, and why it’s difficult to develop political movements based on economic solidarity. We can think of elites as selfish, power-hungry monsters, or we can think of them as being like others: products of their particular experience and likely to overgeneralize from it. Elites understand their own world well enough. Yes, they underestimate the advantages that helped them along the way and overestimate their own contributions to their status. But they are not wrong to think that for them there is more mobility and growth today than there was a generation ago. What they do not see (or care to see) is that for others, stagnation is the new normal.
As a worldview, there’s something seductive in imagining that what’s good for me is good for everyone. Realizing my own advantage, then, doesn’t only feel good; it’s the moral thing to do. But sadly there isn’t much evidence that greed is good.
This leaves us with two lessons. The first is that just as political alliances brought us out of our golden age, they can also return us to it. This will not be easy. The nation has often come together in response to shared threats, but a political project like this is tougher. Those who want the lion’s share of the national wealth will threaten to leave our shores. Let them. There are plenty of civic-minded members of the elite who recognize that absent major changes, our future is clear: more and more for the richest and a society where the mass of the citizenry idles. This is democracy in decline.
The second lesson is harder. We are not in this together. We need to get back to what made America great, when the many and not the few were winning. To do so we must stop conflating moral arguments with economic ones. Instead of operating under the fiction that we will all benefit from a proposed change in economic direction, let’s be honest. If a few of us are better off, then many are not. If many are better off, then the few will be constrained. Which world would you rather live in? To me the answer is obvious.
