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%.


The Neighborhood Gap: Racial and Income Segregation

indexLittle Rock    Three Stanford researchers are claiming to have discovered something new in the acknowledged huge divide between white and black families in addition to making less money and “blatant discrimination,” and that’s a so-called “neighborhood gap.” Meaning that through data crunching they found what the Times called “a striking pattern: White (and Asian-American) middle-income families tend to live in middle-income neighborhoods. Black middle-income families tend to live in distinctly lower-income ones.” Going further they argue that “A typical black child living in a household with $100,000 annual income lives in a neighborhood with a median income of $54,000. And a black child in a household making $50,000 typically lives in a neighborhood with a median income of $42,000.” The neighborhood gap means the obvious, that black families, even with higher incomes, have less access to the better schools, day care, transportation, parks, and needless to say jobs, access to healthcare, and other amenities that higher income neighborhoods attract.

I would love to really sit down and look eye-to-eye with any of these folks and ask, What’s the surprise? What’s new here? Are we trying to simply define the line more tightly between what constitutes “blatant discrimination” compared to run of the mill, everyday discrimination?

The Times concedes that discrimination plays a role, but pushes it off on historic legacies of public policies from the 20th century that included “essentially whites-only wealth creation” through federal housing policies, even while acknowledging that “subtle discrimination” continues citing a 21st century HUD study in 2013 that found that “black home shoppers were often shown fewer options than similar white shoppers.” This racial steering has been a persistent and unconquered problem for over fifty years for cry-eye! Remember block-busting! Remember whites-only advertising. Where’s the change?

Let’s also recall persistent efforts and continuing battles to economically integrate higher income housing enclaves. The Wall Street Journal recently featured a column written by someone from the Manhattan Institute with the provocative headline that President Obama was trying to integrate the Clinton’s 95% white neighborhood in Westchester County, New York, saluting the efforts of a newer Republican mayor trying to resist a court approved settlement with HUD to add 750 units of publicly subsidized housing in the county. Similar efforts in another 1200 plus communities were derided. Let’s be clear we are talking about a HUD federal policy to in fact place lower income families in communities with higher incomes and stop income and racial discrimination. This is not a new policy, but it certainly is an ongoing battle to maintain whatever you want to call it, a “neighborhood gap,” segregated communities, or what have you.

The increasing number of rental units and the percentage of families renting, partially trapped by the impact of the Great Recession, means that greater numbers of families, especially non-white families, are stuck in their neighborhoods, and these are going to be neighborhoods that technically have lower incomes, but given new and more conservative lending standards are going to wall in more moderate income families wherever they are.

The difference between so-called “choice” and “blatant” versus systemic discrimination is impossible to parse, but the clear fact that federal policy to create change is still being resisted tooth-and-nail doesn’t escape peoples’ information when they look for a home. Neither does the fact that federal policy, along with state and local policies, to make a difference here are tragically wanting, is going to continue to make such gaps enduring unless there are many more fundamental and sweeping changes.

Brother Ali – Work Everyday