What? You missed this, on February 20, 2011? Well, here it is again. Please pay attention this time.
The U.S. economy appears to be coming apart at the seams. Unemployment remains at nearly ten percent, the highest level in almost 30 years; foreclosures have forced millions of Americans out of their homes; and real incomes have fallen faster and further than at any time since the Great Depression. Many of those laid off fear that the jobs they have lost — the secure, often unionized, industrial jobs that provided wealth, security and opportunity — will never return. They are probably right.
And yet a curious thing has happened in the midst of all this misery. The wealthiest Americans, among them presumably the very titans of global finance whose misadventures brought about the financial meltdown, got richer. And not just a little bit richer; a lot richer. In 2009, the average income of the top five percent of earners went up, while on average everyone else’s income went down. This was not an anomaly but rather a continuation of a 40-year trend of ballooning incomes at the very top and stagnant incomes in the middle and at the bottom. The share of total income going to the top one percent has increased from roughly eight percent in the 1960s to more than 20 percent today.
This what the political scientists Jacob Hacker and Paul Pierson call the “winner-take-all economy.” It is not a picture of a healthy society. Such a level of economic inequality, not seen in the United States since the eve of the Great Depression, bespeaks a political economy in which the financial rewards are increasingly concentrated among a tiny elite and whose risks are borne by an increasingly exposed and unprotected middle class. Income inequality in the United States is higher than in any other advanced democracy and by conventional measures comparable to that in countries such as Ghana, Nicaragua, and Turkmenistan.
Robert C. Lieberman, reviewing the book Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class, by Jacob S. Hacker and Paul Pierson, Simon and Schuster, 2010, 368 pages. $27.00.; review appears in Foreign Affairs, January/February 2011, pp. 154-158.
- Democracy in America column in The Economist, September 21, 2010, comments by M.S. on the arguments in the book; in the same journal, earlier, harsh commentary against the book’s thesis, by WW.
- Review by David Holahan in The Christian Science Monitor
- Comments at Boing-Boing
- Yglesias at Think-Progress
- Have the rich hijacked American democracy? Rant at the Economist
Two years later, even more:
- The Top 1% (cafehayek.com)
- Britain’s Super-Rich Just Keep Getting Richer (dprogram.net)
- Yes, Virginia, the Rich Continue to Get Richer: the Top 1% Got 121% of Income Gains Since 2009 (nakedcapitalism.com)
- Why Next to No Political Reaction to the Second Gilded Age? (economistsview.typepad.com)
- Brad DeLong: Why Next to No Political Reaction to the Second Gilded Age? (delong.typepad.com)
- How the ultra-rich are pulling away from the ‘merely’ rich (washingtonpost.com)
- inequality: Living in the Second Gilded Age (delong.typepad.com)
- View from the Right, Fey: Healthy economy is built on inequalities (norwichbulletin.com)
- Lifting the Curtain…on Myanmar…on Burma (skydancingblog.com)