The stories are heartbreaking, infuriating, inspiring, and they are ours. These people are workers, business owners, teachers, parents. They are not millionaires, bankers, CEOs, or celebrities. They don’t want bailouts or tax cuts, they want the inequity that has concentrated most of the wealth of the nation into the hands of one percent of the population to end. They are…WE are the 99 percent.
This NYT article, “The Dollar Store Economy”, starts out running perilously close to one of those oft-parodied NYT Style articles about the latest fad among obscenely-rich Upper East Siders, but it’s actually a pretty good look into the business of selling to the largest growing sector of the American economy – the impoverished. Slumming rich people might get a kick out of playing poor for 10 minutes, but the reality is that retail is bottoming out and the only way left to sell all the crap that we can’t seem to get enough of is by dropping the price point a lot closer to what it’s really worth.
Not too long ago, my friend Shelley shared a link on Google + to this blog post about a surprisingly large number of items that you can buy at a dollar store for significantly less than at a standard department store or supermarket. It really emphasizes just how completely suckered most of us are by brand marketing and how little most commodity items can retail for. That blog also has a bunch of resources about building communities around the need to share resources in what is likely to be a very long-term down economy.
So, the other day my friend Shelley posted a question to her Facebook wall:
Do you think a family earning $200,000 per year is “rich”? Surely you can’t tell me they are “poor.” So what would YOU call them?
I was appalled at how many people responded back that $200,000/year means you’re “middle class”. If your household income is $200K/year, it puts you in the richest 1% of wage earners in this country! Have a look at this graph:
Indeed, even if your household income is over $100K/year, you are in the richest 5% of people in the United States. By comparison, the government estimates that anywhere from 14-17% of the population lives in poverty — approximately 45 million people compared to the paltry 3 million who make upwards of $200K. And for a little more perspective, if you make $200K/year or more, you are among the richest 0.04% of all of humanity. Almost half the population of the entire planet lives on $2.50 a day or less. In other words, by any objective measure, an income of $200K/yr makes you inarguably one of the richest people who has ever lived in the history of all mankind.
The thing is that most Americans are totally clueless about class issues because our society downplays class and the fundamental iniquities of wealth. This has two roots, I think: the political ideology that everyone in America is born equal, and the economic ideology that anyone in America can be a millionaire. It also explains why the poor choose over and over again to vote against their own self-interest by electing politicians whose every single action is done to rob from the poor to give to the rich. 66% of the American public support the tax cut extension deal, even though it has been shown over and over and over again to overwhelmingly favor that 3%, because nobody in America wants to be honest about the thin sliver of wealth and the increasingly-larger swath of people who find themselves in poverty. A third factor to consider is that most Americans, especially those in that bracket of people who make lower six-figure incomes, are so far in debt that they see the vast wasteland of their overall net worth: Prose Before Hos today cites the simply astronomical figure of $50.2 TRILLION in combined public and private debt, which is 3.5 times the GDP of the country.
Not sure where you rate? This calculator will tell you which percentile you fall into based on whatever income you put into it. Because people work so very hard to blot out the realities of class and wealth, I suspect that people like the clueless people who responded to Shelley’s question really and truly believe that they aren’t rich, but DAMN if people like that don’t need to have their heads forcibly removed from their rectum. Like I said when I responded to her question, if you are “struggling to get by” on a quarter of a million dollars a year, the problem ISN’T that you don’t have enough money.
In honor of Bastille Day, it’s worth taking a moment to consider the situation in which we find ourselves in this country today.
Speaking at the protests of the G20 summit in Toronto, Canadian activist Maude Barlow reminded the gathered crowd that the three richest men in the world have more money than the 48 poorest COUNTRIES in the world. Just let that sink into your brain for a second. Overall, the richest 2% of the world’s population controls over half of the wealth, and the bottom 50% control less than 1% of the wealth.
Sucks to be them, right? Well, you’re most likely one of them, too. If you’ve got some time, this rant by Hofstra University political science professor David Michael Green brings home the reality of how the redistribution of wealth away from the middle class is on the brink of turning this country into another Argentina or Brazil, where a tiny percentage of elites control the wealth and the vast majority of people live in the worst slums imaginable. If you can’t be bothered to read the whole thing (and it is quite a stemwinder), at least read this paragraph:
The product of these efforts has been precisely what one would expect. Corporations and economic elites have grown fantastically more wealthy than they already were thirty years ago. Their tax liabilities are now negligible and sometimes less than zero. Massive national debt, the product in part of those tax gifts to the rich, plus huge bills for interest on that debt (this alone is one of the largest items in the federal budget each year), is now owned by the mass public, who got nickels and dimes worth of tax cuts, in exchange for which they will now have to literally work years of their lives to pay down the taxes the rich escaped. Working people across the country get less and pay more for everything today. College is becoming increasingly out of the financial reach of average Americans. The minimum wage, which actually often isn’t the minimum, is far from a sustainable salary for one person, let alone a family. As of 2004, the richest one percent of Americans possessed sixty percent of all wealth in the country, while the bottom forty percent accounted for a whopping two-tenths of a percent. Between 1979 and 2004, after-tax income for the top one percent of Americans rose by 176 percent, while for those in the bottom 20 percent that figure rose only six percent. And those figures are for six years ago, during what by current standards was flush times for working people. Now jobs are disappearing, with the inevitable effect of driving wages down further, not to mention all the obvious effects on prosperity, security, health, mental health and sheer longevity.
Here’s a graph to help you visualize that:
Writing in The Nation, Harvard economist and former Labor Secretary Robert Reich says that this widening gap is at the very heart of the Great Recession, just as it was in 1929. In 1928, the richest 1% of Americans received 23.8% of income earned in the U.S., and in 2007 that figure was 23.5%, aided by tax cuts and shifting tax burdens that consistently favored the rich while gutting the middle-class. Again, Reich’s article isn’t a quick read, so here’s a good pullquote:
If nothing more is done, America’s three-decade-long lurch toward widening inequality is an open invitation to a future demagogue who misconnects the dots, blaming immigrants, the poor, government, foreign nations, “socialists” or “intellectual elites” for the growing frustrations of the middle class. The major fault line in American politics will no longer be between Democrats and Republicans, liberals and conservatives. It will be between the “establishment” and an increasingly mad-as-hell populace determined to “take back America” from them. When they understand where this is heading, powerful interests that have so far resisted reform may come to see that the alternative is far worse.
Need some quant porn to flesh it out? Look at this post at Calculated Risk that compares the current unemployment situation to previous economic downturns. The graph below is too small to read here, so be sure to look at the original, but I think even at the reduced size you get the point:
Boston College law professor Ray D. Madoff (apparently no relation) calls the end of the estate tax and the continuation of other elite-friendly tax laws nothing less than the enabling conditions to create an American aristocracy, even as some super-rich individuals like Warren Buffet and Bill Gates themselves have called for their class to give away their fortunes to the betterment of society.
While Reich is quick (and correct) to point out that the Democrats are just as equally to blame for the situation as the Republicans, it never ceases to amaze me that the current crop of Republicans has stopped even pretending that they have any other agenda, and that President Obama and the Democratic leadership in Congress will compliantly go right along with it, without so much as a peep from anyone other than “Give ‘Em Hell” Bernie Sanders (the only ACTUAL socialist in Washington, I hasten to add).
It is more than painfully clear that there is little that can be done within the existing political structure to reverse the situation, and that the only agent of change will be class warfare on the size and scope of the three major proletarian revolutions. The real remaining question is how much worse will things have to get for the middle-class populations of the U.S. and Europe — will nothing happen until every major city resembles Mumbai or Rio de Janeiro? I think the answer lies in how quickly things transpire; if things level off for a decade or two, the complacent population of America and Europe are not likely to rise up, even as our way of life is inexorably assaulted. A few sharper shocks, and maybe we’ll get some sense kicked into us.
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