The New American Aristocracy

Vancouver    “The Birth of a New American Aristocracy” is not exactly a catchy title for a piece in the current issue of The Atlantic, although it won’t surprise anyone when I say that it certainly caught my eye.  It’s one of those long-winded, multi-page things that about twenty of us around the country might read the whole way through.  Its author, Matthew Stewart, tries to hold peoples’ attention with the story of his great grandfather’s sketchy dealings in the Standard Oil combine and the Teapot Dome scandal in Wyoming, but that probably isn’t enough for many.  Nonetheless, Stewart makes the case that the 9.9%, essentially the upper-class with net worth between $1.2 and $10 million, controlling 60% of American wealth between the top 0.1% and the bottom 30%, despite all that might say to the contrary have effectively reinforced the ceiling on the wealth game to their own benefit, exacerbating inequality perhaps for generations to come, is so compelling that I tore the article out of the magazine as required reading for my next family vacation.

I won’t gild the lily, so here are some factoids from the article that make his points so powerfully.

  • Intergenerational earnings (IGE) which means the likelihood that children will have about the same wealth as their parents’ tracks increases in inequality. The American IGE is higher now than in almost every other developed country.  In terms of economic immobility, the US is closer to Chile and Argentina than to Japan or Germany.  Essentially, this means the upper middle class has consolidated wealth and is passing privilege along to the next generation at the expense of other people’s children.
  • Among college-educated households, the single-parent rate remains less than 10%.
  • Obesity, diabetes, heart disease, kidney and liver diseases are all two to three times more common in individuals who have a family income of less than $35,000 than in those with a family income of over $100,000.
  • In 1985, 54% of students at the 250 most selective colleges came from families in the bottom three quartiles of the income distribution.In the class of 201, that figure is just 33%.  According to a 2017 study, 38 elite colleges – among them five of the Ivy League schools – had more students from the top 1% than from the bottom 60%.
  • Only 2.2% of the nation’s students graduate from nonsectarian private high schools, and yet these graduates account for 26% of the students at Harvard and 28% of the students at Princeton.
  • The poorest 20% of Americans pays more than twice the rate of state taxes as the top 1% does, and about half again what the top 10% pays.
  • According to some economists, real estate alone my account for essentially all of the increase in wealth concentration over the past half century.

Stewart offers no solutions, just an indictment, and not one that he is all that interested in pursuing for himself or his family, but still he has assembled the pieces into a devastating critique, and sometimes he blurts out something that sounds like a call for change and having the 10%, or 9.9% as he calls it, take some responsibility.  For example, he says,

“We tend to overlook the fact that parenting is more expensive and motherhood more hazardous in the United States than in any other developed country, that campaigns against family planning and reproductive rights are an assault on the families of the bottom 90 percent, and that law-and-order politics serves to keep even more of them down.  We prefer to interpret their relative poverty as vice:  Why can’t they get their act together?”

It’s called blaming the victim, and Stewart is warning us that the 9.9% know what they are doing, but they can’t stop themselves, which leaves that task to the rest of us in the 90%.

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The Racism and Rural-Urban Divide Behind Work Requirement Exemptions

New Orleans   Imposing work requirements to punish the poor seems to be spreading like a virus around the country.  It’s an ugly, mean spirited kind of thing, but a closer look at the way state politicians are trying to carve out exemptions to these requirements reveals even more about the self-serving blindness behind the exemptions and the direct racism and parochial bias at work.  Michigan, Kentucky, Ohio, and Virginia are among the states trying to both impose work and carve out exceptions.

Michigan seems among the most blatant.  There white legislators are trying to punish the poor in the cities where minority populations dominate while protecting their own constituents in rural, white areas by exempting anyone living in counties that are suffering from 8.5% statistically recorded unemployment.  I say “statistical” because virtually no expert in labor economics believes that we accurately capture real levels of unemployment.  I don’t want to get on a tangent though, because in Michigan there are no legislators who do not know the dire poverty experienced in many cities like Detroit and Flint, and the extreme level of unemployment in these cities or the fact that the populations are majority minority, yet by making counties the trigger area for the exemption, the work requirements will block access to benefits there.

The Department of Agriculture in dealing with work requirements for food stamps for example classifies smaller geographical areas as “labor surplus” areas in order to provide exemptions.  This is certainly better if policy makers were trying to be fair rather than punitive, but it’s still not good enough.

Why aren’t other factors relevant as qualifications for exemption like access to affordable transportation.  Once again Michigan’s majority Republican legislators are revealing their true selves on this count.  Auto insurance is ridiculously high for residents of the city of Detroit.  On the doors with ACORN’s Home Savers Campaign there we were finding rates that ran $4 to $6000 per year.  When families owned cars, they were often registering them with friends or family who lived outside of the city or riding naked, both of which have risks.

Lawyers and others rightly point out that these kinds of exemptions in Michigan and around the country are inviting civil rights lawsuits by the score.  We better hope they are filed quickly, because people could starve without access to food stamps, die homeless because they are blocked from housing by new requirements proposed by HUD, or fall at the doorways of hospital because work requirements in many states block them from Medicaid.

The America of forced work and denied benefits is a brutish and nasty place.

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