Banish the Bloated Overclass
by Barbara EhrenreichLink to article
Twenty years ago it was risky to point out the growing inequality in America. I did it in a New York Times essay and was quickly denounced, in the Washington Times, as a “Marxist.” If only. I’ve never been able to get through more than a couple of pages of Das Kapital, even in English, and the Grundrisse functions like Rozerem.
But it no longer takes a Marxist, real or alleged, to see that America is being polarized between the super-rich and the sub-rich everyone else. In Sunday’s New York Times magazine we learn that Larry Summers, the centrist Democratic economist and former Harvard president, is now obsessed with the statistic that, since 1979, the share of pretax income going to the top 1 percent of American households has risen by 7 percentage points, to 16 percent. At the same time, the share of income going to the bottom 80 percent has fallen by 7 percentage points.
As the Times puts it: “It’s as if every household in that bottom 80 percent is writing a check for $7,000 every year and sending it to the top 1 percent.” Summers now admits that his former cheerleading for the corporate-dominated global economy feels like “pretty thin gruel.”
But the moderate-to-conservative economic thinkers who long refused to think about class polarization have a fallback position, sketched out by Roger Lowenstein in an essay in the same issue of the New York Times magazine that features Larry Summers’ sobered mood. Briefly put: As long as the middle class is still trudging along and the poor are not starving flamboyantly in the streets, what does it matter if the super-rich are absorbing an ever larger share of the national income?
In Lowenstein’s view: “…whether Roger Clemens, who will get something like $10,000 for every pitch he throws, earns 100 times or 200 times what I earn is kind of irrelevant. My kids still have health care, and they go to decent schools. It’s not the rich people who are pulling away at the top who are the problem…”
Well, there is a problem with the super-rich, several of them in fact. A bloated overclass can drag down a society as surely as a swelling underclass.
First, the Clemens example distracts from the reality that a great deal of the wealth at the top is built on the low-wage labor of the poor. Take Wal-Mart, our largest private employer and premiere exploiter of the working class: Every year, 4 or 5 of the people on Forbes magazine’s list of the ten richest Americans carry the surname Walton, meaning they are the children, nieces, and nephews of Wal-Mart’s founder. You think it’s a coincidence that this union-busting low-wage retail empire happens to have generated a $200 billion family fortune?
Second, though a lot of today’s wealth is being made in the financial industry, by means that are occult to the average citizen and do not seem to involve much labor of any kind, we all pay a price, somewhere down the line. All those late fees, puffed up interest rates and exorbitant charges for low-balance checking accounts do not, as far as I can determine, go to soup kitchens.
Third, the overclass bids up the price of goods that ordinary people also need – housing, for example. Gentrification is dispersing the urban poor into overcrowded suburban ranch houses, while billionaires’ horse farms displace the rural poor and middle class. Similarly, the rich can swallow tuitions of $40,000 and up, making a college education increasingly a privilege of the upper classes.
Finally, and perhaps most importantly, the huge concentration of wealth at the top is routinely used to tilt the political process in favor of the wealthy. Yes, we should acknowledge the philanthropic efforts of exceptional billionaires like George Soros and Bill Gates. But if we don’t end up with universal health insurance in the next few years, it won’t be because the average American isn’t pining for relief from escalating medical costs. It may well turn out to be because Hillary Clinton is, as The Nation reports, “the number-one Congressional recipient of donations from the healthcare industry.” And who do you think demanded those Bush tax cuts for the wealthy – the AFL-CIO?
Lowenstein notes, that “if the very upper crust were banished to a Caribbean island, the America that remained would be a lot more egalitarian.” Well, duh. The point is that it would also be more prosperous, at the individual level, and democratic. In fact, why give the upper crust an island in the Caribbean? After all they’ve done for us recently, I think the Aleutians should be more than adequate.
Tags: Barbara-Ehrenreich, Bush-tax-cuts, Forbes, low-wage-labor, super-rich, underclass, universal-health-insurance, Wal-Mart
June 20th, 2007 at 4:14 pm
One challenge that I see for UP in pursuing ideas along this line is that many of our potential members are part of the upper-middle class: those who make hundreds of thousands of dollars each year in household income, yet remain vulnerable to the usual problems of downsizing, outsourcing, healthcare, etc.
How do we entice them to join our ranks–and bring with them the significant influence that they have in political circles–when some of the phenomena that we point to as problems (like bidding up the price of housing) are actually the result of credit-fueled, upper-middle class excess and not the machinations of the super-rich?
August 2nd, 2007 at 6:51 pm
You are so right! Recently our property taxes went up astronomically. Yes, I wrote letters and contacted my legislators to no avail. It wasn’t until those $1K earners took to the streets that our local gov’t decided to do something.
I wasn’t sorry that they would have to forego their Tahitian vacations while living in their $2.5K mansions. Or that they couldn’t eat out five nights a week.
But I realized that they are the only ones the local gov’t listens to.
August 13th, 2007 at 1:24 pm
The upper classes feel that they are entitled while they lecture to the rust of us about “entitlements.” They go to particular schools, they manage “charities” and other institutions that control the stock market. Even a “self made” inventor needs large amounts of capital to put his invention into practice Bill gates is now outsourcing right along with the rest of the upper classes.
Entertainers. Inventors, etc. in part are created by the public. But the bloated upper class is very much hereditary.
The bloated upper classes decide which surrogates to promote for the lower classes to promote their interests. McInnley for instance went into personal bankruptcy. He was bailed out by millionaires. Nixon and Reagan came from modest backgrounds. So did Hitler. But it was the born rich Franklin Roosevelt that would work to improve the lot of the working class.
As the banks take over the health care industry They will get more government protection. But hat will not necessarily make them more accessible.
I often wonder if some members of the bloated upper class are mentally ill. How much money can they even use? I think some of it is control for the sake of control. When the price of an item is reduced a lot through more efficient production, that helps the consumer. When a half cent is shaved off it, it helps the company through the volume of sales. Some of these people are working 80 plus hours a week to turn the United States into a third world country.
I think the problem is that many, and possibly many UP members, have been indoctrinated with the text book description of capitalism and think that they are living in it.
One thing I notice that some people on this forum have said that they want to organize. Yet emails are sent with no response. Do you think that the people who created this problem fail to organize to protect their interests? Many people who are upper middle class will not remain so for long as we move to a feudal economy.
I remember my neighbor, the owner of a liquor store when he said,” All the business people here are Republicans, but when everyone has money, I have money, when no one has money, I do not have money.”