The Birth of a New American Aristocracy

[NorseThing]

I did some reading. Yes, there is more to this world than TWC. I was interested in an Atlantic article, The Birth of the New American Aristocracy - The Atlantic in the June 2018 issue. The premise of the article is simply that there is the top .1% in wealth, the next 9.9% in wealth, and then the rest of Americans below. Matthew Stewart posits that there is much less mobility between these classes today than even several decades earlier. He believes the 9.9% identify as middle class and that this is self delusion. These people as a group hold more wealth in aggregate than the very richest .1% combined with the remaining 90% s well. Many may also be high income earners, but they are able to retain much of their income as savings and thus the divisions are on wealth and not income. They wish to support the middle class, but they send their children to the best private schools. They believe they made the right choices and should keep their wealth.

They profess to support middle class values of work and merit, but they hire a vast army of people to do their daily chores such as nannies, gardeners, house cleaners, and so on. And all are hired as part time help (perhaps even illegally working in the USA) which makes them too poor to pay for better education, too busy to study, and with no future past the next paycheck. This is the dark side of the 21st century service economy in the USA.

Among these wealthy people are the movers and shakers of the political climate. Both Republicans and Democrats are among these wealthy aristocrats of the 21st century. They say they support middle class values by words but not by deeds. They want to do the natural thing to support and protect their own families and do indeed use public policy to do so. This is of course a contradiction with their supported middle class values in many cases.

My personal take from the article combined with my own biased memories:

I remember years ago about Caesar Chavez and the grape boycott by the United Farm Workers. Many Democrats supported the goal. The union wanted Americans to pick the grapes and the union wanted better wages for those picking the grapes. Well today you can see that the support of that union was in name only and not with concrete action. We still have immigrant labor laws and programs to issue work visas to keep American labor wage demands in check and this is not just for agricultural workers. This is a means as a part of the system that keeps class mobility low. If there is little chance to improve earned income, there is even less chance to create saving. The 90% have less chance today of reaching to the top of wealth than the typical American has a chance to reach the stars.

I think this article is related to our part time nannies as well as the California grape pickers. Technology plays a part as well. Whether it be mechanical devices to pick Roma tomatoes or computer systems to help assist workers in India to program special programs for the international companies owned by the 10%. Yes, today's wealthy benefit by labor around the globe and do not really need to hold wages down in the USA. The wealthy own the international companies and can benefit by lower wages where ever such opportunities occur. These 9.9% wealthy may think they are middle class, but their version of middle class is quite similar to the middle class of late 19th century England where to be middle class, you had the income to hire young people to do the house responsibilities as if they were a part of the noble landed gentry living in a castle of their ancestors. Except those landed gentry had time running out on their ability to maintain their lifestyle as modern war and mechanization were changing the England they knew. So too, I believe time may be running out on the American version today.

I was at one time a part of that 9.9% or at least I thought I was. I also viewed myself as solid middle class. Today is different. I am older. I am poorer. I do own my own home, but there are still many years of payments before I truly own it. Then only if nothing too costly needs repair or replacement and the mortgage cannot be extended to cover the costs. My health is okay, though with failing kidneys and a previous hypertension history, who knows what the future holds. My parents were wise and pretty much spent their wealth with a few exceptions before they both passed on. I do not even have that luxury as a choice. Many of my nieces and nephews may be a part of today's 9.9%. But will they stay there because of the class safety net structure that supports the wealthy or will they fall as I have done? Will they even save up enough of their income to even enter the 9.9% as measured by retained wealth?

This is a part of why Pres. Trump is president. If he ran as a Democrat, he still may have won and the “never Trumpers” would not be changing sides because the “never Trumpers” are a part of the 9.9% and not identified with one particular party or another. They are identified pretty much by wealth though. Ironic that the President is also identified by his family wealth. Are his words as well as his deeds representing the interests of the 90%? Is Pres. Trump self interested to protect the 9.9%? I know his words represent the middle class. I have my doubts about his deeds though time will tell.

So do the top .1% of the population (holding much wealth) have anything in common with the bottom 90% of population? Where do the remaining 9.9% fit into the picture. Are they truly a part ot the middle class as they self identify or are they really a part of the very rich? The Democrats today say they want to tax the very rich. The Republicans say they do not. The politicians are mostly a part of the 9.9%. Who do you think will be helped or hurt by the next tax policies? How could any tax proposal affect wealth if it is a tax with deductions upon current income? Will these expected tax proposals reduce the wealth divisions or are the taxes really meant to assure the divisions remain?

Please read the article. It is a long read (for magazine articles), but worth the time.

The Birth of the New American Aristocracy - The Atlantic

[Abdülmecid I]

Well, ideally, the main goal of the fiscal system is to reduce income inequalities through social welfare or evn investment on public infrastructure, which is supposed to improve the quality of life and future prospects of the most disadvantaged segments of the community, who are more dependent on state help than the elite. In reality, of course, the situation is far from flawless, as even the best-meaning and least corrupted governments are unable to completely negate the inevitable trend of growing income inequality. Even in Scandinavia, where the social-democratic governments are praised for establishing a remarkably harmonious and stable system, inequality is long on the rise, which is reflected on the increase of political power for right-wing extremists (e.g. in Sweden).

As Atlantic's graph indicates, things really deteriorate during financial crisis (like those of 1929 and 2008), which are both caused and exacerbate income inequality, because the crème de la crème of the establishment is strengthened not only qualitatively (in terms of wealth), but also quantitatively (by sheer numbers). Unfortunately, as the author pessimistically observes, contrary to the popular myth, interventionist and protective policies (like Roosevelt's New Deal) can limit the gravity of the consequences and slightly improve the living conditions, but they are rarely sufficient. Therefore, the anaemic expansion following the crash of 2008 (actually, for some countries, stagnation is a more accurate description) makes me suspect that we have not yet recovered totally from the disaster. I'm not obviously claiming that a WWII-like humanitarian catastrophe is inevitable, but I wouldn't be surprised if more sacrifices are necessary for the near future. After all, present prosperity originated from the chaos of World War and the subsequent, particularly clever initiatives (even diplomatic ones, like the Marshall Plan) of the United States.

In conclusion, the weakening of the economy also results in the loss of social mobility, which, together with income inequality, is much more responsible for the popularity of political radicalism than absolute poverty or even lack of freedom, despite what many inexperienced journalists may arbitrarily assume. From a conservative perspective, under the current circumstances, I would argue that the Republican Party's manifesto could, in the long term, be more dangerous than House Representative Cortez' most revolutionary visions, because they actually encourage the dissolution of the social fabric, instead of attempting to maintain it. For instance, free and state education plays a crucial role for social mobility, so undermining it will cement the position of the "aristocracy in question" and infuriate the "proletariat", by curtailing its opportunities of escaping from the miserable present. For an interesting historical comparison, you can examine the case of many social-democratic politicians (and later fascist groups) being endorsed by the previously quite reactionary and authoritarian industrial and agrarian nobility, as a much safer alternative option of "bloodthirsty Bolsheviks and Communist Parties".

[Ludicus]

Even in Scandinavia, where the social-democratic governments are praised for establishing a remarkably harmonious and stable system, inequality is long on the rise.

Increasing income inequality in the Nordics - Nordic Council of Ministers

One of the main reasons seems to be that the benefits system has become less redistributive and transfer payments are not adjusted upward at the same rate as wages...
In the United States and other Anglo-Saxon countries, the increase in income inequality has mainly been due to major differences in wage levels and other market incomes associated with new technology, globalisation and weaker trade unions.

The situation is different in the Nordic countries, where a major factor seems to have been that the tax and benefit systems have become less redistributive, mainly because benefits have not risen at the same rate as wages. This gap between increases in wages and benefits seems to be the crucial reason why those on the lowest incomes have seen significantly slower increases in their disposable income than those on higher incomes.


At the same time, the top-income shares, i.e. the share of total national incomes that goes to those with the highest incomes, have also increased in the Nordic countries. This is because capital incomes, which make up an increasing proportion of total incomes, are more unevenly distributed than other types of income due to income from dividends and capital gains, which are very unevenly distributed, increasing in importance in relation to income from interest, which is more evenly distributed.

The report also shows that the welfare state and its services – schools, health and social care – help even out the differences. If the value of these services is included when calculating incomes, it greatly reduces the relative poverty rate (the proportion of the population with income below 60% of the median). This is especially the case for single people and people on pensions.Another conclusion in the report is that women's disposable incomes are more evenly distributed than men's. Narrowing the gender pay gap has stopped overall inequality growing even greater.

Hope this helps, What the world can learn about equality from the Nordic model

Rising inequality is one of the biggest social and economic issues of our time.
It is linked to poorer economic growth and fosters social discontent and unrest.

So, given that the five Nordic countries – Denmark, Finland, Iceland, Norway and Sweden – are some of the world’s most equal on a number of measures, it makes sense to look to them for lessons in how to build a more equal society.
Nordic countries show that major egalitarian reforms and substantial welfare states are possible within prosperous capitalist countries that are highly engaged in global markets.

But their success undermines the view that the most ideal capitalist economy is one where markets are unrestrained.

They also suggest that humane and equal outcomes are possible within capitalism, while full-blooded socialism has always, in practice, led to disaster.

The Nordic countries are among the most equal in terms of distribution of income. Using the Gini coefficient measure of income inequality (where 1 represents complete inequality and 0 represents complete equality) OECD data gives the US a score of 0.39 and the UK a slightly more equal score of 0.35 – both above the OECD average of 0.31. The five Nordic countries, meanwhile, ranged from 0.25 (Iceland – the most equal) to 0.28 (Sweden).

The relative standing of the Nordic countries in terms of their distributions of wealth is not so egalitarian, however. Data show that Sweden has higher wealth inequality than France, Germany, Japan and the UK, but lower wealth inequality than the US. Norway is more equal, with wealth inequality exceeding Japan but lower than France, Germany, UK and US.

Nonetheless, the Nordic countries score very highly in terms of major welfare and development indicators.

Norway and Denmark rank first and fifth in the United Nations Human Development Index. Denmark, Finland, Norway and Sweden have been among the six least corrupt countries in the world, according to the corruption perceptions index produced by Transparency International. By the same measure, the UK ranks tenth, Iceland 14th and the US 18th.

The four largest Nordic countries have taken up the top four positions in global indices of press freedom. Iceland, Norway and Finland took the top three positions in a global index of gender equality, with Sweden in fifth place, Denmark in 14th place and the US in 49th.


Suicide rates in Denmark and Norway are lower than the world average. In Denmark, Iceland and Norway the suicide rates are lower than in the US, France and Japan. The suicide rate in Sweden is about the same as in the US, but in Finland it is higher. Norway was ranked as the happiest country in the world in 2017, followed immediately by Denmark and Iceland. By the same happiness index, Finland ranks sixth, Sweden tenth and the US 15th.

In terms of economic output (GDP) per capita, Norway is 3% above the US, while Iceland, Denmark, Sweden and Finland are respectively 11%, 14%, 14% and 25% below the US. This is a mixed, but still impressive, performance. Every Nordic country’s per capita GDP is higher than the UK, France and Japan.

Even more importantly, Finland is top of the world for happiness, according to the World Happiness Report 2018, closely followed by Norway, Denmark, Iceland, Switzerland and the Netherlands.
Nordic countries take four out of the five top spots, and are well known to be stable, safe and socially progressive. There is very little corruption, and the police and politicians are trusted.
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In fact, happiness is vitally important, Why Happiness Is Important - State of the Planet - Columbia University

When a country’s social fabric is strong, feelings of well-being can grow because people work together to solve problems and appreciate the social support they have

[fkizz]

Well, ideally, the main goal of the fiscal system is to reduce income inequalities through social welfare or evn investment on public infrastructure

The word in bold shows that you start to understand. Realism and Idealism often dislike each other.

[Cyclops]

A very disturbing trend for any society, for one small section to grasp all the wealth. Typically such societies spend a lot of time fighting themselves for resources, rather than facing external enemies.

[Ludicus]

you start to understand.

Oh dear, Abdulmecid is "starting to understand".
----
Here I fully agree with him: "Republican Party's manifesto...actually encourage the dissolution of the social fabric, instead of attempting to maintain it. For instance, free and state education plays a crucial role for social mobility"

On a side note, Trump's budget cuts $1.5 trillion from Medicaid, $845 billion from Medicare and $25 billion from Social Security, and gives more money for the military and for the Great Southern Wall.

[fkizz]

On a side note, Trump's budget cuts $1.5 trillion from Medicaid, $845 billion from Medicare and $25 billion from Social Security, and gives more money for the military and for the Great Southern Wall.

Let's not play pretend, USA never liked the idea of a Welfare State seeing it as a trap for Socialism, and this goes back to Nixon or even before. US politicians cutting or avoiding Welfare due to fears of Socialism and other derivatives is a recurrent theme in many Presidencies, modus operandi kept for many decades, and nothing exclusive to Trump's presidency.

[Ludicus]

USA never liked the idea of a Welfare State seeing it as a trap for Socialism, and this goes back to Nixon .

Certainly.Yet, before the rise of neoliberalism,Eleanor Roosevelt played a key role in the development of the Universal Declaration of Human Rights, Americans benefited from the Second New Deal, the Social security Act and the Works Progress Administration. According to the right, Roosevelt was close socialism, and the left felt he had not done enough.Upton Sinclair's End Poverty in California Campaign. Today what you see is the inhuman face of neoliberalism.

[conon394]

On a side note, Trump's budget cuts $1.5 trillion from Medicaid, $845 billion from Medicare and $25 billion from Social Security, and gives more money for the military and for the Great Southern Wall.

Good thing its a dead letter.

[fkizz]

Roosevelt was advised by John Maynard Keynes himself, the founder of Keynesianism and Macroeconomics, and the alternative/arch-rival to Neoliberalism is Keynesianism, there is the old Keynesianism vs Neoliberalism debate, showing a Communist style poster as the exclusive alternative to Neo-liberalism is rather disonest, albeit nothing new in such atitude, looking at history, Anarcho-Syndicalism back in Spanish Civil War was also violently supressed so that Communism would have no rival "alternative ideology".

Roosevelt was a timid Keynesian, the US Presidents who were more openly Keynesian were from Truman to Lyndon Johnson. (including both Republicans and Democrats)

For the curious, the letter Keynes sent to Roosevelt:

http://www.la.utexas.edu/users/hclea...etFDRtable.pdf

[conon394]

Roosevelt was a timid Keynesian, the US Presidents who were more openly Keynesian were from Truman to Lyndon Johnson. (including both Republicans and Democrats)

That is a bit unfair. Until the war even in the worst bits of depression he faced consistent opposition. And the US system is more or less designed to allow a minority if not fantastically small to prevent sweeping change. Do you really think LBJ could have pushed the Great society agenda without being strong on communism (Vietnam war which was fairly popular for a long time). No communist hawk and likely no social or civil rights agenda and spending policies. Although it does not quite fit your point it was sort of Keynesian - LBJ was the last president to raise a tax for his war in a growing economy. Although Clinton did do a fine Keynesian with fiscal policy producing a surplus while allowing the fed to be easy on money in a boom time. I Gbjr had had the moral credibility to impose a surtax for war and only minimally damaging the country by refunding the surplus as a one time deal we would be better off.

[Gaidin]

That is a bit unfair. Until the war even in the worst bits of depression he faced consistent opposition. And the US system is more or less designed to allow a minority if not fantastically small to prevent sweeping change.

It's not even that so much as there's a lot of lost history you have to do a lot of digging for. Back in Rossevelt's days there was a sort of unspoken, yet observed SCOTUS tradition that the presidents get their appointments and the justices will retire in their turn. But in the Depression Congress had cut their retirement plans by half. What half of nine retirement plans could do for the entire budge, we'll never know. But once the Justices were losing that they started holding out. And in order to keep the country above water everybody knows the major history of the relatively liberal history of the New Deal, and how the relatively conservative Justices at that time by comparison were knocking policies down as they came at them. Roosevelt basically told them, not in words so much as a bill in Congress that would add Justices that he would've traditionally gotten to appoint by then, support me, or I appoint justices anyway. Justice Roberts started guiding SCOTUS to support the New Deal policies and the court packing bill died a quiet death and the Justices never lost half their pension.

[Whitey McKnightey]

Good article.

What especially resonated with me was:

We prefer to signal our status by talking about our organically nourished bodies, the awe-inspiring feats of our offspring, and the ecological correctness of our neighborhoods. We have figured out how to launder our money through higher virtues.

This has a lot to do with the endless threads we see here on the hypocrisy of the movement that goes around calling itself "the Left". The Left as it stands is largely a movement led by 9,9%, and lower tier urban elites who share their worldview and lingo. The reason you see this fixation on idpol and other feel good fluff is that it's the last ditch effort of a ruling class to legitimize its privilege. In America, what constitutes "the Left" is not a workers movement but a radical chic circle-jerk for upper class and what's worse, we feel the influence of this movement increasingly in Europe.

I have a difficult time seeing how the modern petty-bourgeoisie is gonna "turn its back on the man on the top". The instances he cites are not comparable to the modern situation in the West, and when even milquetoast SocDems are labeled as "radical Leftists" I have a hard time seeing a way out for the 9,9%.

I remember years ago about Caesar Chavez and the grape boycott by the United Farm Workers. Many Democrats supported the goal. The union wanted Americans to pick the grapes and the union wanted better wages for those picking the grapes. Well today you can see that the support of that union was in name only and not with concrete action. We still have immigrant labor laws and programs to issue work visas to keep American labor wage demands in check and this is not just for agricultural workers. This is a means as a part of the system that keeps class mobility low. If there is little chance to improve earned income, there is even less chance to create saving. The 90% have less chance today of reaching to the top of wealth than the typical American has a chance to reach the stars.

Not only was it Democrats, but specifically the equivilant to 9,9% of the day that were most loud in their support, as Tom Wolfe recounted in Radical Chic. Angela Nagle wrote about this in The Left Case against Open Borders: www.americanaffairsjournal.org/2018/11/the-left-case-against-open-borders/

[z3n]

Ah yes, that article was very interesting I read it last year. It actually makes some good points, however, the issue is the media. The media constantly beats the climate change, diversity and PC drum.

Unfortunately ignoring issues *everyone* can unite behind like economic inequality, still I do applaud the atlantic for talking about that.