Wake up: the American Dream is over

[Menydh]

Wake up: the American Dream is over

June 8, 2006
The Guardian

Even America's richest think they're getting too many tax breaks from a government determined to keep the poor in their place. As poverty in the US grows, Paul Harris wonders what happened to the Land of Opportunity

There is a common response to America among foreign writers: the USA is a land of extremes where the best of things are just as easily found as the worst.

This is a cliché. But it is often hard to argue with when surveying America's political and cultural landscape. America has some of the worst urban sprawl in the world and also the most beautiful and well-protected wildernesses. Its politics is awash with lobbyist inspired corruption. Yet passionate political engagement among millions of Americans puts many other countries to shame.

Culturally American TV can plunge depths that are hard to imagine. Yet at the same time commercial channels such as HBO produce the best dramas, documentaries and comedies in the world. Its media boasts celebrity tabloids including People and the National Enquirer, yet the New Yorker and Harpers and Atlantic Monthly are examples of its magazines which invest in quality journalism that no publication in Britain can match.

So in this land of black and white, we should not be too surprised to find some of the biggest gaps between rich and poor in the world. Such a yawning chasm is just the American Way, it would seem. Besides, the American Dream offers a way out to everyone. All someone has to do is work hard and climb the ladder towards the top. No class system or government stands in the way.

Sadly, this old argument is no longer true. Over the past few decades there has been a fundamental shift in the structure of the American economy. The gap between rich and poor has widened and widened. As it does so, the ability to cross that gap gets smaller and smaller. This is far from business as usual but there seems little chance of it stopping, not least because it appears to be government policy.

Over the past 25 years the median US family income has gone up 18 percent. For the top one percent, however, it has gone up 200 percent. A quarter of a century ago the top fifth of Americans had an average income 6.7 times that of the bottom fifth. Now it is 9.8 times.

Inequalities have grown worse in different regions. In California, home to both Beverly Hills and the gang-ridden slums of Compton, incomes for lower class families have fallen by four percent since 1969. For upper class families they have risen 41 percent.

This has led to an economy hugely warped in favour of a small slice of very rich Americans. The wealthiest one percent of households now control a third of the national wealth. The wealthiest 10 percent control two-thirds of it. This is a society that is splitting down the middle and it has taken place against a backdrop of economic growth.

Between 1980 and 2004 America's GDP went up by almost two-thirds. But instead of making everyone better off, it has made only a part of the country wealthier, as another part slips ever more into the black hole of the working poor. There are now 37 million Americans living in poverty, and at 12.7 percent of the population, it is the highest percentage in the developed world.

Yet the tax burden on America's rich is falling, not growing. The top 0.01 percent of households has seen their tax bite fall by a full 25 percentage points since 1980. That was when 'trickle down' economics began, arguing that the rich spending more would benefit everyone as a whole. But America's poor have simply been getting poorer: clearly that theory has not worked in reality.

And still the American government is set on tax breaks for the rich. Bush's first-term tax cuts notoriously benefited the upper strata of American taxpayers. So much so that even Warren Buffet, the second richest man in the world who benefited to the tune of hundreds of millions of dollars, has said the tax cuts 'scream of injustice'. As head of a hugely successful investment firm, it is hard to paint Buffet as a lefty liberal who hates Wall Street (though, bizarrely, some conservatives do try).

Still the tax cuts go on. This week one of the main political debates in Washington has been about scrapping the 'estate tax' whereby those who inherit large amounts from their relatives will be taxed on it. This overwhelmingly affects the wealthy. The estate tax is already set so high ($4m) that only one in 200 estates pay any tax at all when they are inherited. Unlike the UK's inheritance tax, which affects more and more Britons as house prices increase, this is not a problem faced by Joe and Jennifer Public.

Yet the White House and many politicians, overwhelmingly Republican, want to get rid of it. The lobbying campaign against it has been financed mostly by 18 business dynasties, including the family that owns WalMart. At the same time the Bush administration has sanctioned millions of dollars of cuts to Medicare, Medicaid and the education budget as part of a measure aimed at reducing the spiraling deficit. This is, frankly, obscene.

The effect of all this has been to scotch that long-cherished notion of the American Dream: that honest toil is enough to reap the rewards and let even the poorest join the middle class, or maybe even strike it rich. A survey last year showed that such economic mobility (a measure of those people trying to make the Dream come true) was lower in America than Canada, Germany, Norway, Denmark, Sweden and Finland. In fact, the only country doing as bad as America was Britain (food for thought, there).

Now this is not some argument against capitalism. Inequality is inevitable. It is a good thing. People need incentives. People need competition. People need markets. Some people will always be poor. Others deserve to be rich. But at the moment it looks like the rules of the game are being fixed in America in favour of the wealthy. The gap between rich and poor will only get wider. That is very dangerous.

Don't just take my word for it. Take Buffet's. After all he doesn't have anything to gain from criticising current policy. In fact he has hundreds of millions of dollars to lose. 'If class warfare is being waged in America,' he has written 'My class is clearly winning.' When even the rich are starting to think they are getting too many tax cuts, then you know something has gone very wrong.


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[Galaico]

Excellent article. Those are the consequences of ultra-liberalism and radical capitalism. In order to maintain the existance of extremely rich people, extremely poor people must exist.

Economic intervention (not at a high level IMO) is absolutely necessary in order to build a fairer and more balanced society.

[Milesian]

Originally Posted by Mynydd

Now this is not some argument against capitalism. Inequality is inevitable. It is a good thing.

Interesting that when it comes to "Human Rights", immigration, race, etc they are keen to tell us that we are all equal and that equality is a good thing.
Yet when it comes to economic class then inequality the natural way of things, and further it is actually a good thing.

An inconsistency resulting from an inconsistent worldview.

[Menydh]

It is my belief that Social Justice is a concept alien to America, and consequently alien to the American people.

That makes it all more weird observing the Americans taking pride both on their americanness and at the same time in their europeanness (what they call their European heritage).

Both concepts (americanness and europeanness) are diametrically opposed, just as well as both peoples are as alien to each other as one can be.

The funniest part of it (should be the saddest.. if I cared about them) is that they are actually the first victims.. of themselves, of the beast that they and their ancestors have helped spawn.

Now, my question would be if after reading this piece of text, would your analysis of the [ongoing] present situation as depicted in it will be --in terms of future-- of the racial war so trumpeted by the yankee white nutionalists, or will it rather be a class conflict where many.. or most of the present day white nutionalist adepts will side with blacks and other disenfranchised.. Americans?

I bet that the latter. Let's have a poll on it.

[Menydh]

I thought of another scenario, and I voted for it.

[Errigal]

The third option is the most likely. I could easily see the type of constitutional crisis which brought de Gaulle to power in France happen in the United States. It could even happen within the next two years, but it would not bring a radical social transformation. Unlike any European nation, Americans have very little vertical bonds (between rich and poor) or horizontal bonds (rich with rich, poor with poor). So instead of a clash of group against group, America will continue to be like the room of multi-coloured balls in which children play at Ikea. No pattern will form and so no great change will happen.

[Savage]

Originally Posted by Mynydd

That makes it all more weird observing the Americans taking pride both on their americanness and at the same time in their europeanness (what they call their European heritage).

When serving two masters at least one of them are cheated...

And USAmericans cant generally be said to be very european. Even wasp are faaar from europeans in values, morals and attitudes.

In 995 the Norwegian ruler Håkon Sigurdson was killed by his threll, Kark. The story tells of Kark betraying his master, for then delivering the head to the enemy king, with the hope of beeing saved himself. (Snorri )

He got the clear message from his new master, " If you betray the king, the king betrays you. The threll got beheaded immediate.

The first USAmerican type in Norwegian history?

So we know a little of thrells serving two masters, and the USAmerican "europids" in these European forums, consists of at least 50% "Karks", hypocrats imaging themselves they can serve two masters, " since they are Americans.."

For the decent USAmericans I am sorry for the "vikingcowboys" discrediting your nation.

Let it roll....

[Errigal]

So that I’m not just pessimistic about the United States I should say that there is a model from European history that we in the New World could use: Roman citizenship. Men and women who were not racially Roman or even Italian were able to become citizens when it was judged by the Romans they were “one of us”. In this way the culture and beliefs of Rome was spread much farther by cultural converts than the Latin people could by themselves.

Of course, the Western Empire was eventually brought down by its entanglement with German tribes, but no plan is perfect!



This model could be applied to the United States if it could be decided what are the core beliefs required of a citizen and how are they to be enforced.

[Siegmund]

Some good points here, but the article is also full of clichés and unexamined assumptions. A few examples:

Yet passionate political engagement among millions of Americans puts many other countries to shame.

Sheer nonsense. Mob actions, typical of democracies everywhere - and much of it financed by wealthy opportunists - should not be confused for political engagement. There are no genuine ideas in American politics, just appetites to be manipulated.

Yet at the same time commercial channels such as HBO produce the best dramas, documentaries and comedies in the world.

His world must be very small. The depravity of of such popular programs as Six Feet Under and (yes, it's heresy to say this) The Sopranos is frequently taken as a sort of gold standard - showing only how gross and pandering a medium television really is. I'm not saying there's no entertainment value. But the best in the world? Not even close, in my view.

Its media boasts celebrity tabloids including People and the National Enquirer, yet the New Yorker and Harpers and Atlantic Monthly are examples of its magazines which invest in quality journalism that no publication in Britain can match.

Low level liberal dreck, all of it. The average news analysis in Le Monde or even Der Spiegel is far superior, even if it too reflects the prevailing politically correct mentality.

Incidentally, to say that no publication in Britain (England, I presume he means) can match these American publications shows only the low level of English journalism, whence American journalism was born, after all.

Most of the economic analysis is correct, but not this part:

Still the tax cuts go on. This week one of the main political debates in Washington has been about scrapping the 'estate tax' whereby those who inherit large amounts from their relatives will be taxed on it. This overwhelmingly affects the wealthy. The estate tax is already set so high ($4m) that only one in 200 estates pay any tax at all when they are inherited. Unlike the UK's inheritance tax, which affects more and more Britons as house prices increase, this is not a problem faced by Joe and Jennifer Public.

Yet the White House and many politicians, overwhelmingly Republican, want to get rid of it.

Think about it for a moment. The author assumes it's appropriate to tax money that has been saved by people upon their death. But that can't be right: it's not as though the money is being distributed to the poor, and even if it were, in such an atomistic society as the American one, the notion that such monies are not immediately squandered and that they benefit people in the long range is absurd. But the money is in fact going to pay the politicians, most of it through indirect channels; and what doesn't go there goes to support such adventures as the Iraqi debacle.

Giving money to the US government is worse than throwing it away. So at least let private citizens hang on to it.

Personally, I favor a corporativist or (national) socialist economic model as much more equitable and as a duty of government to provide for its people. But this old fashioned standard never took root in the US; as a result, the US is doomed to become a simalcrum of late Roman antiquity's infinitely rich and infinitely poor.

Originally Posted by Milesian

Interesting that when it comes to "Human Rights", immigration, race, etc they are keen to tell us that we are all equal and that equality is a good thing.

Yet when it comes to economic class then inequality the natural way of things, and further it is actually a good thing.

Brilliant.

I voted option #3. Nothing will change without massive external pressure, which is unlikely to arrive in our generation; or without massive and intelligent internal revolt, which is likely never to happen given the drugged condition of all but a handful of Americans. Even the spectre of 15 million illegal aliens rewarded with citizenship, or another devastating military gaffe, have done virtually nothing to arouse ordinary people to effective action.