Glimpses of the New America being born now

Summary: Here we look at two stories that powerfully illustrate the trends that are creating a New America on the ashes of the old. It’s not too late to stop this process. Doing so becomes more difficult each day. Soon it will be too late to stop, let alone reverse — it will become our legacy to our children.

Fed Survey of Consumer Finance
Fed Survey of Consumer Finance

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Here are two stories showing outlines of the New America now emerging. They’re worth reading in full.

  1. An artistocrat mingles with the proles
  2. Building an unequal America thru poor schools

The many trends concentrating wealth and income are not just happening; these reflect long-standing policies of elements in our ruling elites.

This requires no conspiracy, just like-minded people in an open-source movement. There are nodes, key individuals and institutions (mostly non-profit think-tanks). It is an open-sourced insurgency, as described in John Robb’s great book Brave New War.

(1)  One of our national leaders mingles with the common people

This is a oft-told story in oligarchic societies. An aristocrat wanders among the peasants, learns about their lives, returns home and shares her tale about their colorful but hard lives. It’s just an anecdote because nothing happens as a result of this experience.

‘This was really eye-opening for me’: Fed’s Raskin shocked at low quality of work at local job fair”, Reuters, 17 June 2013 — Excerpt:

I became interested in this question of quality somewhat by accident. I did something atypical one day. I decided on my way into work I would stop at a jobs fair. There was a jobs fair at a local community college close to my home and I thought, instead of pounding through all this heavy data that we typically look at at the board of governors, let me just go into this job fair. It turned out to be a really interesting morning.

… This was really eye-opening for me.

(2) Building an unequal America thru poor schools

The Great Divide: Schooling Ourselves in an Unequal America“, Rebecca Strauss, New York Times, 16 June 2013

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New York Times, 16 June 2013
New York Times, 16 June 2013

Averages can be misleading. The familiar, one-dimensional story told about American education is that it was once the best system in the world but that now it’s headed down the drain, with piles of money thrown down after it.

The truth is that there are two very different education stories in America. The children of the wealthiest 10%  or so do receive some of the best education in the world, and the quality keeps getting better.

For most everyone else, this is not the case. America’s average standing in global education rankings has tumbled not because everyone is falling, but because of the country’s deep, still-widening achievement gap between socioeconomic groups.

And while America does spend plenty on education, it funnels a disproportionate share into educating wealthier students, worsening that gap. The majority of other advanced countries do things differently, at least at the K-12 level, tilting resources in favor of poorer students.

… Historically, broad educational gains have been the biggest driver of American economic success; hence the economist’s rule of thumb that an increase of one year in a country’s average schooling level corresponds to an increase of 3 to 4% in long-term economic growth.

… No matter how much wealthier children keep gaining, there are not enough of them to raise that number. The only way America will again rise to the top in education is by lifting every student up.

US vs Emerging Nations
US vs Emerging Nations. From the New York Times, 16 June 2013

For More Information

To see the big picture: America – how can we stop the quiet coup now in progress.

Posts about inequality:

  1. A sad picture of America, but important for us to understand, 3 November 2008 — Our low social mobility.
  2. The latest figures on income inequality in the USA, 9 October 2009
  3. An opportunity to look in the mirror, to more clearly see America, 10 November 2009
  4. Graph of the decade, a hidden fracture in the American political regime, 7 March 2010
  5. America, the land of limited opportunity. We must open our eyes to the truth., 31 March 2010
  6. Modern America seen in pictures. Graphs, not photos. Facts, not impressions., 13 June 2010
  7. Jared Bernstein examines the economic impact of raising taxes on high-income households, 30 April 2012
  8. How clearly do we see the rising inequality in America? How do we feel about it? Much depends on these answers., 27 September 2012
  9. Ugly truths about income inequality in America, which no politician dares to say, 2 October 2012

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Man who has everything

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21 thoughts on “Glimpses of the New America being born now

  1. It appears that the USA are finally becoming an American country like all others — the trends you are dissecting are patterns established long ago, firmly entrenched, and certainly much more forcefully applied in Latin America. If I had time, I would compare the situation with statistics about Chile.

    Curiously enough, the worm might have been in the fruit since the very beginning, as every independence movement and the resulting constitutional and institutional frameworks in the USA, Spanish- and Portuguese speaking countries were the deeds of fairly wealthy (often slave-holding) colonial landowning elites with a strong distrust for broad based democracy, complete disregard for native populations, and an ambivalent attitude towards lower immigrant classes (simultaneously officially encouraged and publicly praised, as well as utterly despised and ferociously exploited).

  2. Income equality is a chimera that can never be realized in a free society. Why? Because in a free society, the income one can achieve is based on one’s own ambition, drive, and work ethic, more than on outside factors. Some people will naturally work harder than others, take more risks than others, and achieve more than others. There’s nothing wrong with that. In a free society, everyone is free to do as much or as little as they want, and to reap the rewards accordingly.

    Too many nowadays feel as though they are not to blame for their situation and circumstances, they blame “the Man”, or “corporate greed”, or “the Banking establishment” for their lack of money, their living conditions, and their feeling of being trapped in their circumstances. As long as it’s someone else’s fault, they will never take responsibility for themselves, and try to find a way to break free and rise, through taking risks, finding and using opportunities, and doing what it takes to better themselves and their circumstances. All change happens within first. Everyone is exactly where their best thinking has gotten them. If you want things in your life to change, you have to change things in your life. You become what you think about the most. Scripture put it this way: “as a man thinketh in his heart, so is he”. Life and death are in the power of the tongue. These aren’t just nice little platitudes, they are proven wisdom. When you change the way you think about your life, you change your life. These principles are not taught to our children in the schools, and are not being taught at home. And our country is suffering because of it. The key to changing our country is in the individual, not the government.

    1. “[…] in a free society, the income one can achieve is based on one’s own ambition, drive, and work ethic, more than on outside factors.”

      Right. There is absolutely no link to such outside factors as, say, inheriting from wealthy parents, or getting preferred treatment from networks of relations.

    2. “Income equality is a chimera that can never be realized in a free society”

      Of all the many defenses conservatives give for the various aspects of their program to reduce America to a Third-world type of society, this is among the most daft. Many aspects of life are omnipresent, but the variations of their magnitude are the difference between heaven and hell.

      Let’s apply Schwan’s insight to other problems of life, and see if there they justify inaction.

      “Cleanliness is a chimera that can never be realized in a free society” because dirt is everywhere.

      “Health is a chimera that can never be realized in a free society because disease can never be completely eliminated.

      “Freedom is a chimera that can never be realized in a free society” because there must always be limits on people’s behaviors.

      Magnitudes matter. Perfection cannot be achieved, but that does not justify inaction.

      The public policies instituted in America between 1932 and 1980 reversed the rising inequality of the Gilded Age, creating the large middle class that today distinguishes America. Public policies since 1980 — largely bipartisan — have reversed that trend and are destroying the middle class.

      It’s not necessary. Other nations, such as Germany, have maintained their competitiveness and middle class. We lack only the will.

    3. The other reply to Schwan is that he cites not a shred of evidence for his little morality tale.

      Whereas there is a mountain of evidence showing the role of public policy in fostering inequality. Some of it cited in the posts listed about inequality; others on our Twitter Feed (@fabiusmaximus01).

      Also see the hashtag #NewAmerica.

    4. Income Equality is not a Chimera – it can be achieved in a communal society where everyone has damn near no income at all. Equality of outcomes is anathema to a Free Society, where a vital economy thrives on the reciprocal scarcities and disequilibrium of market distribution of resources.

      The present Inequalities are not products of our societies Freedom, they more often emerge from the legal coercions that governments engage in when they seek to “fix” the economy by pretending to find “market failures” and then legislating remedies that distort the free market.

      Income inequality is much more likely when not all persons are equal under the Law. If officialdom plays by special rules, the income distribution will come to express the official biases.

    5. Income tends to concentrate when one group gets sufficient power to use the government to further benefit it — most easily by giving it lower tax rates. As in the US where we went from a progressive system ( including all taxes, all levels) to one where many of the very rich pay at lower rates than the middle class — largely due to taxing capital at lower rates than wages.

      This is an old story. Yesterday was the anniversary of the Tennis Court Oath on 20 June 1789, start of the French Revolution. One of the major complaints was that the church and aristocracy were taxed at lower rates than the commons.

      There are other factors at work, such unequal schools; it is a complex subject. See these posts for details and numbers:
      http://fabiusmaximus.com/tag/income-inequality/

  3. @guest: Those are the exceptions, not the rule. And is is also true that inherited wealth tends to disappear in a generation or two, with very few exceptions. I suggest that you deal with the rest of my comments, rather than trying to shoot a hole into one part of it, and act as though you’ve refuted the entire argument.

    1. You should consult some of the links that FM has collated in this site. Income and wealth have been concentrating in upper strata of the society in a massive way since about the late 1970s – early 1980s, as a result of a series of fiscal, economic and social changes favoring top earners. Income and wealth inequality have reached levels equivalent to those during the 1920s. Such accelerated concentration would not be possible if “inherited wealth disappeared in a generation or two, with very few exceptions”.

      “rather than trying to shoot a hole into one part of it”

      Shooting a hole through the premises is actually fatal to an entire argument.

    2. I forgot:

      Such accelerated concentration would not be possible if “inherited wealth disappeared in a generation or two, with very few exceptions”, and if getting preferred treatment from networks of relations were the “exceptions not the rule”.

  4. The problem with such inequalities is that – because of the 2nd Law of Thermodynamics- they demand greater and greater energy inputs to be sustained.

    Which, in turn, begs the question of where these inputs would come from.

    The mad scramble for fossil fuels evidences the dire need for such inputs.

    Ultimately, however, the problem described here is a stack of cards that will collapse once this mad scramble ends.

    Our task should be to figure out howto deal with the wreckage and to construct something more durable as an alternative.

    Tricky. But necessary.

    1. Duncan,

      I don’t understand. Most large societies, larger than tribes, have high degrees of inequality. And do quite well in the longevity and duration categories.

      I’ve seen research attempting to say otherwise, but not convincingly IMO.

      As for the 2nd law of term, I don’t get that at all.

      Nor do I understand the reference to scramble for energy. I don’t see anything unusual. Plus stable prices for most forms of energy — far below peaks in 2008 — confirm that view.

      Also new sources are coming online: tight-rock oil & nat gas, solar, etc. These might be so large that concerns are growing that some projects — such as the deepwater pre-salt fields off Brazil — might prove disastrously uneconomic.

      Peak oil is coming, but some of the experts’ forecasted dates, laughed at my amateur peak oil enthusiasts, might prove accurate.

      It’s a different picture than that 5 years ago. I had written that many writers in the peak oil field were producing (to be nice about it) non-quantitative fiction. That they’re still playing the same tune seems to confirm that.

      That’s quite impressive, given the instability in so many oil producing nations that has slowed or even stopped development of their fields: Nigeria, Iraq, and Iran. The last two among those with the largest reserves in the world.

    2. I’m not a geologist, so I won’t discuss Peak Oil.

      Rather, I simply note that in response to my statement that inequalities require high energy inputs is to assert that sufficient energy inputs exist to sustain those inequalities.

      That frames the issue,

      In the long run, these boys are dead ( and didn’t Mao write something about a protracted war. )

    3. “inequalities require high energy inputs is to assert that sufficient energy inputs exist to sustain those inequalities.

      Can you explain that? It makes no sense to me. Divide a pie into 3 or 8 pieces — it takes no more energy either way to maintain.

      “In the long run, these boys are dead ( and didn’t Mao write something about a protracted war. )”

      What “protracted war”? We are as docile as sheep. This is the usual condition of societies. History classes focus on successful revolutions because they are *rare* – and hence mark significant inflection points.

    4. This is not a matter of my dividing up a pie but rather of my keeping it secure from my pet beagles. And believe me – that takes energy.

      As for whether “we” are docile, by “we” I – for one – mean all of humanity. Which has not been very docile lately.

    5. All of humanity is too large a group,too diverse, to easily describe.

      The subject here are the American people. They show no more interest in rebelling than most dogs. Fantasizing our our boldness has become a national pastime, from gun nuts fondling their guns to leftist s dreaming of the rainbow revolution. It’s the 21st century opiate of the masses.

      In any case, even political suppression, if it became necessary, is unlikely to substantially increase oil consumption — which was your original point.

    6. If we assume that the current role of the US military is to enforce the unequal distribution of resources in favor of an elite, then Duncan Kinder has a point. I have read a couple of times (among others at tomdispatch) that the US military is the largest single consumer of refined petroleum products (gasoline, diesel, motor lubricants, etc) worldwide.

    7. “we assume that the current role of the US military is to enforce the unequal distribution of resources in favor of an elite”

      I believe that this is not so now. I hope this will not be so in the future.

  5. FM,

    I read a report several weeks ago that is germane to this discussion. I have been wanting to do a summary post on it for ages, but have not found the time and doubt that I will in the future.

    David Ausor and Melanie Wesselman. “Wayward Sons – Gender Gap in Labor Markets and Education “ (Washington: Third Way). April 2013.

    A clearer portrait of America’s new – and permanent – under class is hard to find. Part 3, “Changing Family Structure and the Gender Gap”, is especially worth your while.

    1. Thanks, will read with interest. It’s an important subject.

      One of the great stories of the age is how behaviors have migrated from the ghetto to the suburbs (not so much to the elites, which of course widens their gap over the rest). This is — in hindsight — what we should expect in a society in which wealth and income concentrate, and the middle class destroyed. One need not be an economic determinist to see that the destruction of the middle class would rip the social fabric of America.

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