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Why are Americans so unbothered by their growing economic inequality?

What continues to astonish me most, not only about city life but American life, is our easy tolerance of economic inequality. Three decades have now passed during which the gap has grown steadily wider between the very wealthy and the rest of us, and yet no one seems to mind. If anything, most of us appear to be pleased that the wealthy continue to strengthen their grip and pull away from the pack.

Even in the depths of the worst economic meltdown since the 1930s, there have been no hints of insurrection, no clouds of teargas rolling through the streets, no pitchforks pointed at the Wall Street elite who, along with their lax government regulators, perpetrated the current hardship.

Instead, politicians of both parties lavish extended tax breaks on the already wealthy; our "socialist" president, having failed to stir populist outrage, grovels before business groups, promising to further relieve the regulatory burdens that have held them back for so long; and the TV talkers appear to be genuinely puzzled over how the stock market can regain its bullishness and corporations chalk up record profits while jobs grow hardly at all. "It's a great mystery," one of them proclaimed last week with a straight face.

A lopsided economy
The numbers rarely mentioned are these: Between 1979 and 2006, the average household income rose by nearly 50 percent — a compounded gain of about 1.5 percent per year. An average household went from earning $47,900 in 1979 to $71,900 in 2006. (Those are Congressional Budget Office figures expressed in constant 2006 dollars.) That's the happy part.

But unlike in the 1950s and '60s, the income gains since 1980 have been extraordinarily unbalanced. The incomes of the poorest 20 percent (or quintile) of households rose from $14,900 to $16,500 — a modest 10 percent. Meanwhile, the incomes of the middle quintile rose from $42,900 to $52,100 — about 21 percent. That sounds nice but it works out to a real gain of only 0.7 percent per year, half the overall rate of growth. So who got the rest?

The lion's share was pocketed by the top quintile, and disproportionally by those at the very top. The average after-tax income of the richest 1 percent of households rose from $337,100 in 1979 to more than $1.2 million in 2006, an increase of 260 percent. Looked at another way, between 1979 and the eve of the Great Recession, the richest 1 percent grabbed more than one-third (36 percent) of all new income in the United States. Their share was particularly impressive in the 2001-2006 period when the richest 1 percent pocketed more than half (53 percent) of all new income.

In summary, the story of the last 30 years is that while the poor and middle class muddled through with increasingly acute job insecurity, the wealthiest few, apparently without any extraordinary merit, made out spectacularly — and, if anything, strengthened their grip over the last few difficult years.

And so two questions arise: Why has that occurred? And why is the public not troubled by it?

Winner take all
A relatively new book, "Winner Take All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class" by political scientists Jacob Hacker at Yale and Paul Pierson at the University of California-Berkeley, offers the best answer I've yet heard to the first question.

Winner-Take-All Politics

The authors set up a detective story and begin with a kind of whodunit interrogation of the usual suspects. Why the growing disparity? As it turns out, each suspect is complicit in the crime, but none explains fully how the American corporate elite, almost alone, has achieved such spectacular separation.

Start with globalization. Yes, the worldwide flattening of production and consumption has left the U.S. working class relatively weakened. Yes, advances in technology have eroded the wages of under-trained U.S. workers. Yes, failures in the educational/social system diminish the opportunities for U.S. workers to keep up with machines and foreign competitors. Indeed, those forces help explain how economic life has become riskier and more unreliable for most of us at the middle and lower ends of the income distribution. But they fail to explain the runaway incomes and assets of the richest among us, or how the wealthy have managed to restructure the economy in ways that shift the risks downward, burdening ordinary Americans with greater debt and bigger holes in the social safety net, and imposing broader financial risks (the shaky future of entitlements) on workers, investors and taxpayers.

In other words, technology, globalization and educational deficiency fail to explain how the wealthy were able to reshape the U.S. economy into a winner-take-all system that, in a distributive sense, resembles more closely the oligarchic systems of Mexico, Brazil and Russia than the economies of other Western democracies.

The takeover of politics
The answer is politics. Hacker and Pierson conclude that starting in about 1980 the wealthy and their allies took over the American political system and aren't about to let go.

"This sounds inflammatory," Hacker said one night last week in a small-group discussion at the University of Minnesota, "but we're just trying to lay out our case. Looking back over 30 years it's clear that the organized efforts of big business and its allies to influence public policy have overwhelmed the disorganized middle class."

Hacker made it clear that he's talking less about electoral politics than about the accumulation of policy shifts within government that, taken together, have greatly benefited the wealthy few at the expense of everyone else. Money talks. And forces aligned with business now hold great sway not only over Republicans but large portions of the Democratic Party that realized, beginning in the 1980s, that to get elected they had no choice but to solicit money from business interests (That's where the money was) and, in many cases, to vote the way business wanted. Hacker's book recalls the infamous quote from former Democratic Senator John Breaux of Louisiana, who quipped that his vote wasn't really for sale; it was just for rent to the highest bidder.

Hacker and Pierson analyze in detail a "30-year war" in Congress over tax benefits, deregulation (especially of the financial industry), campaign finance reform, health insurance and other issues that ended in lopsided victories for conservatives. The rapid decline of labor unions coupled with the rising tide of business lobbyists, radio talk, Fox News, think tanks, campaign money, misuse of the filibuster and the breathtaking skill of conservatives to frame the debate have all come into play. As it turns out, millions of Americans will sacrifice their own economic interests for the sake of social concerns (abortion, gun control, immigration, gay marriage, fear of terrorists, etc.). Then there's the problem of plain ignorance on the part of many voters and the demoralization of others. The fragmenting of the media compounds the problem; in the age of the Internet everyone gets to have his own facts.

Does mobility justify inequality?
As for inequality, I discovered years ago that Americans aren't much bothered by it. A piece I wrote in Washington in the '80s about the "new" growth in income disparity was greeted with shrugs and the general belief that people achieve the economic success they deserve. It's part of the American Dream mythology that people easily and often migrate upward to a higher income status. Inequality, it's believed, is a necessary motivator. Or, as it's often put, Americans believe in equality of opportunity, not equality of outcome.

It sounds nice, but Hacker and Pierson found that opportunity is shutting down, that mobility has come nowhere close to matching the rise of inequality over the last 30 years. Over a decade's time four in five Americans tend to stay in their same quintile, or nearly so. As for generational mobility, people in Australia, Sweden, Norway, Finland, Germany, Spain, France and Canada have a better chance of moving up.

Another popular argument is that inequality is the price Americans pay for a growing economy. But Hacker and Pierson have their doubts. During the 1979-2006 period, if all new income had been shared as broadly as it was in the 1950s and '60s, the average household in the poorest quintile would have earned $6,000 a year more every year; the average household in the middle quintile would have earned more than $12,000 more every year; and the average household in the top 1 percent would have earned $700,000 less every year — about $500,000 per year in 2006 dollars rather than $1.2 million. While it's true that the U.S. experienced phenomenal growth during the last three decades, other Western nations matched our growth and in some cases exceeded it without hyperconcentrations of wealth at the top.

Despite the Hacker-Pierson discussion, I'm still perplexed about why we Americans are so unbothered by our growing inequality. I know that it's unseemly to resent the rich. No one wants to play class warfare, even if it has been played in reverse for 30 years.

Three reviews of "Winner Take All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class":
American Prospect
Crooked Timber
Salon

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Comments (32)

Readings in 'cultural hegemony', sometimes defined as participating in your own oppression, provide one set of insights.

Just about anything James Gee writes can be helpful, for example:
http://www.jamespaulgee.com/node/46

My friend told me that capitalism keeps most people just happy enough to not do anything about the problems. He may be right.

Thank you for giving attention to this subject and an excellent book. An area that merits more discussion and research is the role of religion in promoting acceptance of inequality. Among many people there seems to be a conscious or unconscious belief that the poor are somehow less moral than the wealthy, that they make bad decisions which keep them poor. What a change from previous (especially Biblical) times!

I think a good start would be to look at what passes for "social studies" curriculum in k-12 education (both private and public). In particular, economics curriculum over the past 30 years has been nothing short of dismal. Students "learn" economics as a quasi-mathematical science that has something to do with supply and demand and not much else. What is utterly lacking from much curriculum is any conception of the political sides of economics...in particular the debates and struggles over the purpose of an economic system within human activity. Lacking any such background or knowledge in any of that, it is not so surprising that most people lack any sort of coherent social theory when it comes to things like this that would enable them to 1) recognize the problems and 2) have a sense of what to do about it.

We can thank our old buddies, the Puritans, with their notions of predestination and their belief that economic prosperity is a sign that you just might be one of God's elect. Equating the possession of wealth with moral virtue is a long-standing theme in America and one the current right wing is exploiting. If you have it, you deserve it; if you don't, you don't. Never mind that the current income inequality is the deliberate result of specific public policies.

And it's self-perpetuating. As the author notes, wealth provides those who have benefited from those policies with the means to influence future policies and keep things that way.

I believe this is dead-on. The Republicans, beginning with Reagan, did a killer job of framing all politics on "Family Values" and the like and convinced swaths of Americans to vote for them despite it not being in their best financial interests - and despite the string of prominent Republicans who've fallen in spectacular manner on the wrong side of those values over the years.

They vote instead on abortion and religion and immigration and evil big government and so many other smokescreen issues. They define government as bad and the rich as entirely deserving and extra hard working. "Elites" are no longer the rich but the educated, and somehow hatred for the educated works just fine by many Americans. Couple all this with the fact - and i cannot remember the exact percentages - that a surprisingly large number of Americans are relatively certain they will be very wealthy and/or famous in their lifetime.

So why not let the ultra-rich eat my lunch when so very soon I will be lunching beside them?

People don't understand the inequality. One of the things Ronald Reagan did is make the middle class feel they were one bathroom, one car and one vacation short of the Rockefellers, when in fact the divide is so huge they can't comprehend it.

In reflective moments, I think back on all the things I've liked on planet Earth, having been alive. I also think of the things I didn't like here-the inequality and unfairness that exists among God's children, all of whom deserve what I wanted for my children: a comfortable home, nutritious food, a good education and opportunities to work in a career and support themselves someday. The inequalities seem to widen between the "haves" and "have-nots". Yet what have I personally done about it? Not much. And I am ashamed.

I think as individuals many Americans are upset by the income inequality and the lack of opportunity for upward mobility. I know I certainly am, not only for myself, but also for others who have less in the way of political skills than I do.

But what is there for me, as an individual, to do? I could join a group that is addressing this issue and work with others to try to change it. But after getting up at 5:00 am so I can leave by 6:15 am, working for 8 hours, commuting home for another hour-and-a half, I'm pooped! Particularly in winter when I'm fighting snow and ice and traffic backed up to who-knows-where, I don't want to go anywhere at night and, sometimes, not even on the weekends.

Also, I have become extremely discouraged (and cynical). I used to believe that a group of people could get together and change things. But unless you have money these days, it seems you can't change anything.

As a child of the 60's I'm all for marching in the streets as they did in Egypt, even at my age. But would it do any good? What would change? Would we be told to go home and quit whinning? "At least you HAVE a job with benefits. Think about those who don't even have that."

I truly believe that this is where a lot of Americans are at. We work hard, we help with our extended family, we help out however we can by contributing to our local foodshelf and volunteering to help at other social services for others not so fortunate as we, but we are exhausted! We either went backwards economically over the last two years, or, at best, stood still. And now this year we're paying even more out of our salaries for our health insurance, (NOT the fault of Obama Care!!) and we're looking at property taxes probably going up if the Republicans in the Legislature have their way.

It's hard to even think about organizing when the possibility of even making a dent in income disparity seems so overwhelmingly impossible.

Thanks for a place to vent.

Contra Erick, dispite he's scare quotes around "Socialist", and all his Rwallsians: Justice ain't "Fairness" no mater how you slice it. And btw there isn't anything "...Wrong With KS."

There's also the huge propaganda factory funded by groups like the national Chamber of Commerce and billionaires like the Koch brothers. (Google "anti-union movement.")

It has for decades helped companies avoid worker organization or kill the unions they have (Northwest Airlines, for example). These attacks continue, but at the moment teachers and public employees seem to be the biggest targets of this propaganda, 'cause, y'know, if it weren't for their greed and excessive benefits, these money shortages we have just wouldn't exist.

And, of course, those politicians who support the idea of a living wage and a decent retirement are just "socialists" who want to "take my hard earned money and give it away to someone who didn't work for it."

While not the only cause, the visible result of this and other right-wing efforts have all contributed to the terrible inequity we see today.

Can America recover from the poison that the ascension of corporatism has brought it? I don't know.

Excellent question. In pages 151-60, the authors explain: Americans are "conservative egalitarians." They are skeptical of government but are concerned about inequality of income, wealth and opportunity, and are supportive of programs to address them.

Americans know inequality is there and that its been growing. But they seriously underestimate its magnitude, the earnings of people at the top - more than citizens of other countries.

Americans are uninformedabout politics They find it hard to link their broad economic concerns to specific policies, primarily because they have no organizations to follow the tortuous trail of policy development and interpret it to them so they can vote accordingly.

Unions used to fill this function before their decline in the 80's; now the news services have to carry the full load, but the quality of news is declining.

Unions and other organizations used to pull middle class voters into politics. With their decline politicians are less and less responsive to middle class voters.

Just came across this reference for Nine Pictures Of The Extreme Income/Wealth Gap http://bit.ly/h7EP8g

It does seem an immense undertaking, to try to sway the voters with facts and logic and change this economic system. I think a big step is to educate our selves and our families and friends to the reality of what is taking place and vote. And get others to vote. And vote for people who would change to public financing of elections. (That does seem to me to be an enormous task, given the amount of money the corporations hold and use.)
If each of us would hook up with one organization--maybe the DFL--and do even a little toward changing the culture, maybe, maybe we could change things.
It seems overwhelming, doesn't it? But in that well-used quote of Margaret Mead:
"A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has."

Happy to see that Mr. Vee paid close attention in English class…

There’s PLENTY “…the Matter [“Wrong”] with Kansas, and due to well-funded and masterfully-produced propaganda from the right wing extreme – this is, after all, the country of Madison Avenue, where we can sell just about anything – the maladies of the Sunflower State have been spread to every corner of the land.

The chasm between the “haves” and the rest of us has grown, as Steve’s piece shows, to proportions that most of us (me, included) can’t really grasp. I’ve never managed to reach median income in any metro area where I’ve lived, yet people like me, public employees, are the current (well, teachers have been thus for many years) whipping boys for any and all ills, social and economic. It’s all part of the classic “bait and switch” program of the right wing, and it has worked very well in recent years, especially to distract the general public from the trend(s) illustrated in Steve’s piece.

I think Steve’s article, by the way, is incorrectly titled. It’s not a matter of being “unbothered” by the appearance of, and fawning over, a new oligarchy. Plenty of comments above this one show that others are similarly concerned. I don’t work Sheila’s hours – or, thank goodness, have her commute (hint: move closer to work, Sheila!!) – but I share that same sense of “What can I do?” When people who live nearby actually vote FOR Michele Bachmann, and endorse further efforts to undermine their own (and mine) economic well-being by someone who rails against the evils of “socialism” while living comfortably on the taxpayer’s dime, including taxpayer-paid healthcare, I admit to some discouragement.

I believe I’ll survive the near future economically – I live modestly, and have learned from experience to buy less than I can afford – but I worry for the welfare of my son and his family, especially my gorgeous granddaughter, who deserves every good thing that comes her way, as does every toddler. Thirty years down the road, I’ll have returned my atoms to the cosmos, but she’s likely to be a young mother, with elderly parents and limited prospects.

Recent studies have shown that there’s less social and economic mobility in the U.S. than in many other industrialized countries, so the whole American cultural fairy tale of being able to “move up” in society – one fondly repeated by the oligarchs at every opportunity – is simply not supported by facts. Because one multiracial kid named Obama manages to get to the Oval Office does NOT mean there's some sort of social or cultural avenue available to a broad spectrum of people.

Sadly, by cutting social services and other budget items that benefit the lower half of the economy, while maintaining the tax breaks pushed through Congress by the wealthy and the right wing (almost, but not quite, synonymous), Mr. Obama has revealed himself to have sided with the “people of money” rather than the welfare of the society as a whole. Since it’s increasingly obvious that the wealthy control the national government and its political machinery, Obama’s choice is understandable, but – to put it as mildly as I can – it’s also profoundly disappointing.

The first economics course I ever took (and the only one I enjoyed) was one that used a small text called either "A History of Economic Thought" or "An Introduction to Economic Thought."
It traced the development of ways of thinking about the economy over centuries during which economics was considered a branch of philosophy and then into the modern world.

A community ed. or community college non-credit course using this book, or something like it, might be an eye-opener for Americans who have never been exposed to a range of ideas they now don't know exist.

Maybe there are some economics or business grads or teachers out there who would like to give it a try.

Totally my supposition here, so take it for what it is worth: the piece of the puzzle not mentioned in this article is the role that cheap credit has played in the situation. Middle class Americans might not be distressed by rising disparities in income because, to outward appearances at least, affluence is still commonplace. People around them are living in big new houses, with new cars, regular vacations, and fancy electronics.

Of course, as we've seen in the last two years, much of this affluence is illusory, highly leveraged and inherently unstable. But as a result, the gap between rich and middle-class seems not nearly as unbridgeable as it actually is. Just a supposition.

Remember we must pay our "creditors" (large banks) and we cannot raise taxes on them to pay those debts, we must slash jobs and benefits. This is the dilemma we find ourselves in. It is rarely mentioned. It seems you have to read The Guardian to see that mentioned.

This is what American should be talking about as a matter of on-going public discourse, and in the spirit of education. Obviously, we need to the media to assist in this effort, so your story is much appreciated, Mr. Berg!

Also in the spirit of education, this is where Facebook and Twitter could be so useful (as our friends in the middle east are figuring out). I'm not suggesting massive protests, but share this article, like I just did on Facebook. Yes, my FB network might be a bit of a bubble, but it's a bubble that intersects with about 190 other bubbles. Eventually the word gets out.

In my mind a much better question would be:

Why is Steve Berg (and so many commentors) so concerned about the private financial situation of his wealthier neighbors?

The Bible states "Thou shalt not covet your neighbors' goods (and wife)." There seems to be a lot of coveting going on here.

So why are so many people concerned about how much others earn? If it is such a concern, why are you not focused on what you can do to earn more and to give it away to close the "gap". Is it greed? Is it jealousy? Why are you doing to personally help the less wealthy earn more? Are you tutoring them in financial matters? Teaching them a trade? Paying for a technical degree?

"Fairness" has been used a lot in these comments. Is it "fair" to try to keep me from earning more by risking more or working more? Is it fair to take away what I earn in order to reduce a "gap"?

@Sheila

I'll address this first, because it's important to acknowledge given what I'll write later:

> But after getting up at 5:00 am so I can leave
> by 6:15 am, working for 8 hours, commuting home
> for another hour-and-a half, I'm pooped!

This is a real issue. For lots of people, including me. Getting the balance right is very tricky.

This is part of the way the rich maintain control. Things are made so difficult for the middle class and anyone below just to scrape by a living that there's no time to even contemplate the larger picture, much less do something about it. This is part of the machinery of oppression.

I need to acknowledge that because its there and its something we all have to struggle against.

> Also, I have become extremely discouraged (and
> cynical). I used to believe that a group of
> people could get together and change things. But
> unless you have money these days, it seems you
> can't change anything.

I understand the sentiment and it's easy to believe, but it's wrong. The problem is believing what Margaret Mead said. She was wrong. You need a really HUGE group of people to make change. A few ain't gonna cut it.

I know this from experience. It took a large number of people to pass a new transportation bill over Pawlenty's veto, but we did it. It took years, but we did it. Persistence matters.

It took a large number of people to get three LRT stations in the lowest-income, most diverse, most transit-dependent neighborhoods along Univerity Avenue, but we did it. It took years, but we did it. We had to to right to the top, to the president, but we did it.

These are two campaigns I was personally involved in and I believe their contributions to the community will continue for decades. I am personally proud to have worked with those people to get it done. But I know I am not done. It's off to the next campaign!

There are groups out there doing this kind of organizing work. I work with ISAIAH. We partnered with groups like Transit for Livable Communities, Fresh Energy, Community Stabilization Project and many others. There is oh, so much out there if people will care to look and get involved.

One of the reasons people don't seem to care is that they've simply been lied to. This takes all sorts of forms from, "immigrants are stealing our jobs," to, "the wealthy create jobs." There is so much BS coming out of the Republicans and many Democrats that the lies are now truths. George Orwell was right, just a decade too early.

But let me not equate Republicans and Democrats here. One side clearly does a huge amount more of this than the other. I won't name names, but the offending group's name starts with "R" and ends with "cans." And no, I won't direct it only toward "conversatives" or "right-wingers" either because the R-cans ARE conservatives and right-wingers. There is no R-can that is not one. Mr. Sutton made sure of that.

That the lies get soaked up can be easily observed by asking someone what "rich" is. No one believes they are rich (least of all the rich) but everyone wants to become rich. Tell someone who has a household income of $150k or more that he or she is rich and watch the reaction. That's the lie in action right there. Even the good-hearted rich who want things to change can't understand the kind of change that's needed because they don't even understand the basic fact that they are part of the rich.

I believe this is true because the gulf between rich and non-rich is SO huge that people simply cannot comprehend it. A family with income of $150k makes more than 92% of households in Minnesota but they still struggle with mortgages, car costs, etc. Some of that is overspending but some of it is also the fact that those above them in the income scale are again SO far above them that prices, wealth and perceptions get skewed.

If a family making $150k can't make it (and there is some evidence that this is true) we are in real trouble.

There has been a concerted and successful effort over the last 40 years to obliterate the American ability to act or even recognize one's own best interests. In addition to the reasons cited by Mr. Berg here I have some other thoughts that I've shared on my blog:
http://pudstrand.fatcow.com/blog/?p=57

The spooky thing is the historical fact that economies like this always crash, and crash big, way bigger than the recession we just saw. This level if inequality is actually unsustainable.

@Paul

Great blog post! I will definitely check out those recommended books. The "me generation/consumerism" effect is real. We are a hyper-individualistic society amped up on speed.

What I earn is my business. And If I work and invest my life's savings and create a product or service that people are willing to pay money for, well than good for me! In no way can that be bad for the masses. By creating something of value that allows people to be more productive or more comfortable or safer or more secure we all win. Why do so many people want to take what they did not earn? Why do you believe that you have any right to it?

Can we have a simple, non partisan discussion on this...

NEWSFLASH - THERE ARE NOT TWO MAJOR POLITICAL PARTIES, THERE IS ONE RULING CLASS WITH TWO HEADS. THE HEADS ARE CHANGED FROM TIME TO TIME TO GIVE THE ILLUSIONS OF POLITICAL REVOLUTION. MEANWHILE THE SAME CASH AND POWER BEHIND THE SCENES CONTINUE TO CALL THE SHOTS.

As long as all of us allow ourselves into Republican and Democrat labels, the Ruling Class will continue to control us by dividing and conquering us.

Author Editor Mohammed Ali Bin Shah says:
In my mind a much better question would be:

Why is Steve Berg (and so many commentors) so concerned about the private financial situation of his wealthier neighbors?

The Bible states "Thou shalt not covet your neighbors' goods (and wife)." There seems to be a lot of coveting going on here.
******
Mr. Mohammed,
We are not opposed (may I speak for others?) to anyone getting rich or making a lot of money. What is at issue here is tax policy and other policy that favor those who are already rich and disproportionately burden those in the middle and lower classes.

Do you think it is desirable to maintain policies that create a good quality of life (infrastructure, public safety, government) primarily at the expense of the middle class, giving the upper classes a free ride???

In our society, we've come to revere the wealthy as almost saint like fashion. The reality is they need the working class more than we need them, but our culture, and even our prosperity doctrine religion teaches us that the wealthy are somehow better than us. We are taught that we just didn't work hard enough or weren't smart enough.

That's why you see in debates like Social Security that taking the benefits from those who need it most, Seniors on the border of poverty, is much more acceptable than raising the cap on those who have benefited the most from society.

In Wisconsin, shutting down the earning power of middle class state workers seems okay, but a modest raise in income taxes is off the table.

In Minnesota, it's the waiters and waitresses who are holding our economy back by taking so much.

The conservatives cry about declaring a class warfare. That is because they don't want anyone standing in the way of their one sided class genocide.

Paul Your are correct the crash is coming.

I think the real reason that the disparity has grown so bad is that after a certain point income merely becomes a way of keeping score. We see it played out in sports all the time. If the 10th best pitcher in baseball signs for $20 million a year then all the pitchers around that level think they need a new contract. It really isn't the money it is the recognition. CEO's and other top executives react the same way. And on Wall Street that plays out way down the organizational ladder. That all to human reaction was kept in productive check in the 60' and 70's with the high top marginal rates. It was transformed into what you owned and/or who you donated to. The money was put into productive use. You had to spend it or give it away to prove you were rich and so gain that status. It is now just as acceptable to tell someone how much you make, and put that money towards making more money to increase the score.

It is critically important that there be some counterweight, some countervailing power in Washington on all these public-policy issues that can push back on the growing tendency in Washington to focus on the growing concerns at the top.
The challenge is to construct a compelling political narrative and organizational coalition around the broad concerns of the middle class, and so far that has proved to be a really difficult challenge for Democrats to realize.
To get organized go to: http://www.truth-out.org/introducing-progressive-strategy-handbook67700
or http://www.cognitivepolicyworks.com/
or find your local Progressive Party chapter.

David - Thank you for your comments.

Ray - I would dearly love to move closer to work (or be able to use public transportation(now there's an IDEA), but, unfortunately, the value of my home has dropped like a rock over the last several years just like those of millions of others. Also, I would have to be looking for a home in a community where the housing values are way above mine.

Not sure where this fits in, but wasn't there someone a few years ago who wrote a book? article? about one of the reasons the declining middle class was upset about the talk of tax increases was because they thought that meant THEM?

There were some very astonishing statistics that I think will apply to the discussion going on after today about the tax increases that Dayton wants.

I don't remember what income level it is that Dayton is talking about, but it's something like the top 2-5% of earners. This was similar to what was discussed in the past and something like 60% of Americans thought that kind of increase would affect their income. One explanation seemed to be that Americans aspire to that top 2-5% income level, so they don't want it to affect them when they get there.

One would think that by now they would have realized that unless things change, none of us even has a shot at the top 10-15% income level, let alone the top 2-5% level.

Just keep pullin' on those bootstraps folks!

Actually Mohammed's comments illustrate one of the fundamental problems, widespread ignorance regarding who the wealthy are, and what they do for a living.

Mohammed says: "Why do so many people want to take what they did not earn? Why do you believe that you have any right to it?"

Many Americans subscribe a series of myths about the wealthy that have no substance in reality. The primary myth is that most of the wealthy attained wealth via hard work. This myth conjures images of executives putting long hours at the office and making big decisions that a bus driver couldn't even imagine. Of course the reality is that the highest paid executives put in long hours on the golf course during the week and are insulated from any decisions they make by elaborate management structures, and committee driven decisions. How does a health care executive "earn" $101 million dollars? What exactly does he or she do? What kind of "work" does a shareholder do?

Are these people building anything? No. While one can point to some entrepreneur's the vast majority of the wealthy step into executive positions at already established corporations and industries. These people didn't create anything. As for executive talent, we've recently witnessed the considerable talent it takes to run the worlds largest banks and insurance companies into bankruptcy despite billions of dollars of revenue.

The hard working people Mohammed refers to certainly exist, but they're not wealthy. I can't find it now but for years someone used to do a survey every year, they'd ask Americans what economic decile they belonged to. Typically about 20% said they were in the top 10%. Americans don't know what wealthy really is. You saw this during the campaign when people making $125,000 a year thought Dayton was going to raise their taxes because they're "wealthy". Dude, the "wealthy" don't make $125,000 a year, that make $125,000 an hour. And there's no possible justification for that level of income.

They other persistent myth of the wealthy is they are self made, as if they just find money laying around somewhere and collect it. The economic reality is that capital is accumulated via extraction. In other words, wealthy is transferred, not created. All that money that disappeared from your 401K didn't just evaporate, it went into someone elses bank account. Remember, a bubble is when a lot of people put their money into a area of investment. A bubble burst is when a small number of people take all that money you put in... someone is always the first to sell, and for some reason the early sellers are almost always the wealthy. Martha Stewert gets a call while she's on vacation to sell stock, you get told not sell. When you take a pay cut, a benefit cut, a tax hike, or pay more for services, that's you wealthy going to someone else. In other words, that's our money the wealthy are accumulating, and they have some much because we have so much less.

I'm not saying we shouldn't have wealthy people, but you reach a point in an economy where disparity is too large and unsustainable. We've reached that point.

I know it's shameless but I've yet another blog entry about wealth disparity and tax fairness on my blog: http://pudstrand.fatcow.com/blog/?p=8