The Wreckage in Sight We Fail To See

Wealth Gap

Published on http://www.counterpunch.org/

“We fail to see that some are mired in desperate and degrading poverty, with no way out, while others have not the faintest idea of what to do with their possessions, vainly showing off their supposed superiority and leaving behind them so much waste which, if it were the case everywhere, would destroy the planet. In practice, we continue to tolerate that some consider themselves more human than others, as if they had been born with greater rights.”

Pope Francis, “Laudato Si (“Praise Be To You”)

“Compared with American slums, the banlieues have relatively decent standards of housing and safety…”

George Packer, “The Other France,” The New Yorker, August 31, 2015

“Neighborhoods that were once considered hubs of relatively inexpensive motels and single-room apartments . . . have been transformed into well-to-do enclaves filled with cupcake emporiums and doggy day care centers.”

Jennifer Medina, “Los Angeles Declares a Homeless Emergency,” The New York Times, September 23, 2015

“The Dolce & Gabbana store in Athens had been closed. ‘To give respect,’ Dolce said. ‘We don’t pretend the people there can buy a pair of shoes,’ Gabbana said. He added that Alta Moda clients were unlikely to be harmed much by the economic tumult dominating the news. ‘These people live in another world.’”

Rebecca Mead, “The Couture Club,” The New Yorker, September 21, 2015

The wreckage is visible in the plight of the poor and the homeless, though this is not interpreted as wreckage by some nor is this wreckage part of the world that wealth enables others to design for themselves.

While I think it’s transparent that wealth has moved to a few spots on our economic Monopoly chessboard and that such economic inequality has already undermined political equality, I receive responses reminding me that people prefer to collect welfare checks than work, that unions are crippling the country, that a minimum wage costs jobs, and that Obamacare gives tax payer provided health care to undeserving folks. Facts show that wages have not increased in the U.S. for decades, that labor has been brought to its knees by capital, and that the Work Not Welfare “reform” effected by Bill Clinton in 1996 has further dissolved a government’s capacity to keep a wealth divide in check.

Tony Judt assessed welfare in the U.S. and in Europe thusly:

[T]he welfare state is not just a value in itself. In the words of the London School of Economics economist Nicholas Barr, it “is an efficiency device against market failure”⁶ : a prudential impediment to the social and political risks of excessive inequality. . .In the US today the richest 1 percent holds 38 percent of the wealth and they are redistributing it ever more to their advantage. Meanwhile one American adult in five is in poverty—compared with one in fifteen in Italy.⁷ The benefits don’t even trickle down anymore.

(“Europe vs. America,” The New York Review of Books, Feb. 10, 2005)

In the ten years since Judt wrote this, income at the top has increased 70% while it has remained the same for those at the bottom. In his article “If you thought income inequality was bad, get a load of wealth inequality,” Christopher Ingraham writes that 10% of Americans own 76% of all wealth in the U.S. and that the bottom 40% has negative wealth (debt). (The Washington Post, May 21, 2015). In his op-ed article, “The Invisible Rich” Paul Krugman writes: “In fact, most Americans have no idea just how unequal our society has become.” (The New York Times, Sept. 28, 2014). The Occupy Wall Street protest as well as the presidential campaign of Bernie Sanders has perhaps now given Americans some idea of this inequality. What they do with that knowledge, however, is the crucial point.

Take the segment I mention above. I call them “The Staten Islanders” because every Islander seems to hold these views, though these views extend to about half of a U.S. wage/wealth demographic we call “middle class.” Here, welfare, unions, taxes, liberal giveaway presidents and lazy moochers are the problem. The homeless they see on their streets or on TV or in the movies and the statistics they read regarding the poverty rate mean only that there’s too much welfare paid for by the taxes of those who work, too many powerful unions preventing companies from growing and hiring, and “Obama.” President Barack Obama here becomes a satanic symbol –“Obama” — of a never ending assault on working, righteous Americans.

Bernie Sanders will have as much luck reaching this demographic as DeBlasio had in getting their votes as mayor of New York City. Even though these people fall mostly within the bottom 80% of the population owning only 12% of the nation’s wealth, they stand immoveable in directing their attention to the bottom 40%, the Federal government and President Obama as the villains in their lives. The wealthy and the “Wild West” economic system that brought them to where they are, remains a mystery to them, one they are detoured and distracted from pursuing.

The 20% of the population who own 88% of the nation’s wealth are not as solidified a group as “The Staten Islanders” in regard to what they may say but are just as solidified in their upholding of an economic system that treats them well. Here 19% own 54% of the wealth but 4% of those own 28% while 10% only own 12%. This 10% group breaks down into a professional class, wealthier than a previous professional class because now, via what Christopher Lasch called “assortative mating,” doctors marry lawyers, engineers marry bankers and so on. You can assume that the professional classes with their professional surgical, lawyering, engineering, computing skills are in a kind of angry relationship with the 4% owning 28% of the wealth by virtue of their financial skills, arcane and questionable from any outsider’s perspective. Both of these contingents are in an angry relationship with the top 1% who own 35% of U.S. net worth due mostly to inheritance of assets. And this top 1% cast an angry eye at the top .01%, which has as much wealth as the bottom 90%.

This 20% is not very likely to run into the homeless or on their trip to Paris, visit the banlieues, or support a return to the 94% tax levels FDR instituted and that subsequently created a middle class democracy. But the closer you get to that .01% the more likely you are to find private donations and philanthropy, none of which threatens the roots of plutocratic divide. Bernie Sanders is not apt to find a vote among this 20%, who unlike the bottom 40% who do not show up to vote, do vote and lobby strenuously to get the middle 40% to vote their way. In this, they have had much success judging by tight presidential races. The distribution of wealth and the distribution of misery in no way support the neck in neck political contests in the U.S. One can only conclude that the 20% benefiting from the status quo are able to persuade those who are not benefiting to vote with them.

I would guesstimate that the top 5% are too hidden away in private compounds and too globe hopping mobile to witness face to face locally the human wreckage that the next 15% of the population faces. I call these “The Gentrifiers,” who are using their wealth to get the real estate and the artisanal ambiance that they want. The feckless souls on the bottom 40% may inhabit what The Gentrifiers want. The goal is not to remedy poverty but just to get these people to move on. The homeless may not own property that The Gentrifiers want but they are an eyesore within the neighborhood The Gentrifiers are designing. The middle 40% join with The Gentrifiers in condemning not poverty but the poor themselves. What “The Staten Islanders” see is progress through property improvements and new businesses, though this group might not be clients of Cup Cake and Mayonnaise Emporiums or Doggy Day Care Centers. They just do not have the money to spend on a ten dollar bar of artisanal soap or on an “Heirloom” tomato.

Bernie Sanders may win some of this group if he switches from ready to wear to bespoke habillements, or proposes some neighborhood renewal projects that convert living quarters for the bottom 40% into shopping, leisure and wealthy condo developments. This is not something Sanders is liable to do.

Our economic ideology, emerging from academic economists and therefore not seen as ideology but “objective analysis” is indeed what Althusser affirmed as a “School Ideological State Apparatus.” It works within a capitalist agenda enabling a silent dismissal of inequality and what price our society pays for it. Neither inequality nor poverty nor homelessness were issues to be focused upon in the dominating neoclassical school of economic thought. Compared to increasing production, pondering how to equitably distribute current production was a waste of time. Robert Lucas, Nobel Prize economist, affirmed that sound economics was harmed by the seductive and poisonous “focus on questions of distribution.” (“The Industrial Revolution: Past and Future,” 2003) In his review essay “Why the Rich Are So Much Richer,” James Surowiecki writes that we are now focused on inequality and points to Thomas Piketty’s Capital.(The New York Review of Books, Sept. 24, 2015). There are signs of this changed focus in Elizabeth Warren’s energetic efforts to bring the Wall Street perpetrators of the 2007 economic collapse to justice as well as investigate their enabling economics. Her success as well as that of Bernie Sanders has blindsided a cultural apparatus intertwined on all levels, high to low, in the view Lucas expresses.

Both Liberals and Neoliberals often speak of “growing the economy” which essentially means making the pie bigger, which in the Neoliberal view will ultimately resolve all questions of income and wealth inequities. Liberals, on the other hand, should be loudly voicing the mantra “Growth– Without Inequities and Harm to the Planet” which they do not and will not because neither Liberals nor Neoliberals represent a populace that places equitable growth and environmental concerns before both consumption and technological expansion. Sharing is an afterthought; consuming is the primary drive. “Sharing” has now been brought into a private world of self-interest, as has the word “social.” We now have as much a “sharing” economy as we have a “social” media. In practice, we consume on the highest level we can. Right now cybertech and cell phone technology fill the needs of our consuming ways. The idea that we will restrict and curtail that relationship is not an idea anyone running for political office in the U.S. can openly express as a winning politics. And yet in order to rebalance the inequities that create the poverty and the homelessness that are expanding at the same time the rich become so much richer, we need to put redistribution of what has already been produced as a priority before we go on “growing” the economy within an inequitable status quo.

Joseph Stiglitz has been arguing for a “structural transformation” of the economy, one that places equitable redistribution before growth. “[T]he political challenge in doing any of this,” Surowiecki writes,” is immense, in part because inequality makes it harder to fix inequality.” The top 20% join in not supporting any taxation for the public good, such as schools, roads, health care, legal aid, day care, housing for the homeless, guaranteed Federally provided minimum incomes because they have no need for such assistance. Personal wealth gives to a small segment of the population means to buy whatever services and products the remaining 80% of the population must rely on taxation to provide.

Unfortunately, a self-sufficient top 20% are niched in powerful positions in all determining areas of society: discourse, institutions and practices. The Many not only parrot the discourse of the top 20% and put into practice those beliefs but they must comply with their institutions. Here then homelessness is an eyesore that needs to be put out of sight and poverty is a misery we lay at the feet of the impoverished themselves.