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Writing in Vanity Fair, economist Joseph Stiglitz reminds us that, as crowds across the Middle East decry kleptocratic elites, a dramatic social transformation has taken place in the United States.
The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran.
To those who argue that this widening discrepancy merely reflects the natural rise to the top of the nation’s most gifted and most entrepreneurial, Stiglitz has some sharp retorts. First, he argues that opportunity for advancement is falling sharply. Second, he says that these income distortions actually make the economy less efficient. Third, he links this wealth concentration to declining social investment in technology, education, and infrastructure, which are key to sustained economic growth. He also sees a process of political lock-in, with the 1 percent elite having come to control the political process, so that even what is lauded as reform rarely turns out to work meaningful change. He argues that this process will ultimately feed a backlash:
The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.
More from Scott Horton:
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How will the Obama Administration handle Edward Snowden’s case in the long term?
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Is it possible to simply disband the partisan FISA court?
Number of free condoms handed out by the Brazilian government in advance of Carnival this year:
The best way to measure happiness is simply to ask people how happy they are.
Following three weeks of clashes between protesters and government forces that killed at least 17 people, Venezuelan president Nicolás Maduro announced a two-day extension of Carnival. “Happiness will conquer the embittered,” he said during an appearance at a recreation center.
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“American politics has often been an arena for angry minds.”