Sun 10 Jun, 2012 12:11 pm
America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: To what extent do an individual’s life chances depend on the income and education of his or her parents?
Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe—or, indeed, in any advanced industrial country for which there are data.
This is one of the reasons that America has the highest level of inequality of any of the advanced countries—and its gap with the rest has been widening. In the “recovery” of 2009-2010, the top 1 percent of US income earners captured 93 percent of the income growth. Other inequality indicators—like wealth, health, and life expectancy—are as bad or even worse. The clear trend is one of concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom.
A closer look at those at the top reveals a disproportionate role for rent-seeking: Some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence: either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).
Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.
It might not be so bad if there were even a grain of truth to trickle-down economics—the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off – with lower real (inflation-adjusted) incomes—than they were in 1997, a decade and a half ago. All of the benefits of growth have gone to the top.
It is about damn time for we idiot Americans to wake up and smell the coffee.
I am not optimistic that this will happen anytime soon.
I blame the broken education system.
Americans never used to be so dim witted.
What, no comment from a2k'ers???
We used to be better than this, we used to be able to spot the important subjects of the day. But then I did predict the the new programming would kill this place.