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The Comfort Of Other People: Inequality Then And Now

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Welcome to our new guest blogger Susan of Texas, who writes at The Hunting of the Snark. Follow her on Twitter at SusanofTexas.

John and Fanny Dashwood, 1805

John and Fanny Dashwood, 2011

Mrs. John Dashwood had never been a favourite with any of her husband’s family; but she had had no opportunity, till the present, of shewing them with how little attention to the comfort of other people she could act when occasion required it.

It is a truth universally acknowledged that rising inequality and social unrest go hand in hand. Wealth and therefore power in the US are becoming concentrated in fewer and fewer hands, and the deliberate exercise of this power has created one of the highest levels of inequality in the world.

The Congressional Budget Office breaks down the facts on inequality.

CBO finds that, between 1979 and 2007, income grew by:

275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent.

Two hundred years ago, in 1805, the US had less income inequality.

While the top 1% of American households earn 20% of all the income today, say Lindert and Williamson, in 1774 the top 1% earned less than 4% of total income in New England and under 9% of total income in the 13 colonies as a whole.

[...]

Even by 1805, roughly a dozen years after stocks began trading on Wall Street, the distribution of income was nowhere near as unequal as it is today, report Lindert and Williamson.

So just how do the elite justify out of control inequality to themselves and to the growing ranks of newly poor? Some say that inequality is not that bad, some say it is irrelevant, and some say that it’s no more than the poor deserves.

Times may change, but people do not. In 1805 a middle class Englishwoman with a merciless understanding of humanity and a cutting wit sliced open and laid bare the selfish elite of her time for all to enjoy. In Sense and Sensibility, Jane Austen describes the considerable fortunes of Mr. and Mrs. John Dashwood, both of whom inherited large fortunes, and the more straitened circumstances of Mr. Dashwood’s step-mother and half sisters. Most of the family wealth went to the males in their line and the Dashwood women were utterly dependent on the good will of John Dashwood for the little inheritance they were due. Unfortunately for them, when the 99% depend on the charity of the 1%, the 99% is usually out of luck.

Mr. John Dashwood had not the strong feelings of [his sisters and step-mother ...]. He was not an ill-disposed young man, unless to be rather cold hearted, and rather selfish, is to be ill-disposed: but he was, in general, well respected; for he conducted himself with propriety in the discharge of his ordinary duties.

Mr. Dashwood would have made a fine libertarian. Wealthy through no effort of his own, not intelligent enough to imagine how others might think or feel, and certain that inheriting advantages was the same as earning them, he was considered perfectly acceptable by a society that demanded nothing more than money and a personable demeanor. But he did have glimmers of a conscience.

Had he married a more amiable woman, he might have been made still more respectable than he was:—he might even have been made amiable himself; for he was very young when he married, and very fond of his wife. But Mrs. John Dashwood was a strong caricature of himself;—more narrow-minded and selfish.

Mrs. Dashwood did her very best to convince her husband to ignore his family’s plight. Mr. Dashwood had intended to live up to the promise he had made to the previous generation of Dashwoods to help provide for others in his family. After Mrs. Dashwood went to work on him, his sisters were lucky to escape with their household furnishings intact.

Mrs. John Dashwood did not at all approve of what her husband intended to do for his sisters. To take three thousand pounds from the fortune of their dear little boy, would be impoverishing him to the most dreadful degree. She begged him to think again on the subject. How could he answer it to himself to rob his child, and his only child too, of so large a sum?

 Won’t John think of the children? He shouldn’t deprive the next generation, should he?

Our elite also warn that the children will suffer if the wealthy are forced to help the less fortunate. Our One Percenter President Obama told Americans that cuts in “programs like Medicare” would have to be made for the sake of future generations, as did John McCain, also of the 1%. GOP.gov warned, “According to CBO and Census Bureau long-term estimates, the amount of debt placed on the backs of children born today is about to explode.

The Heritage Institute tried its best to whip up fears of toddlers crushed by a mountain of debt. The Cato Institute said the same thing with numbers. Both Cato and Heritage were founded by the 1%, including the Kochs, and worked valiantly at trying to eliminate regulation and taxation that might bother those who hold their purse strings.

Why ask what you can do for your country when you can refuse to do anything at all? The current generation benefits greatly from sacrifices made by earlier generations but why dwell on old-fashioned notions like “duty” and the Golden Rule. To be sure, the “it’s my money and I want it now” middle classes, upper and lower, would instantly “discover” that Social Security is not insolvent if they were interested in the subject. They might even realize that a European-style national health care program would be possible in the US if they were to agree to lower their standards of living to save enough money for health care in their old age.

Just because one has benefitted from the generosity of others doesn’t mean one should hand over one’s inherited hard-earned money to people who are practically strangers. As John Dashwood said:

“Perhaps, then, it would be better for all parties if the sum were diminished one half. — Five hundred pounds would be a prodigious increase to their fortunes!”

[Fanny] “Oh! beyond any thing great! What brother on earth would do half so much for his sisters, even if really his sisters! And as it is—only half blood!—But you have such a generous spirit!”

“I would not wish to do any thing mean,” he replied. One had rather, on such occasions, do too much than too little. No one, at least, can think I have not done enough for them: even themselves, they can hardly expect more.”

“To be sure […] and, indeed, it strikes me that they can want no addition at all. They will have ten thousand pounds divided amongst them. If they marry, they will be sure of doing well, and if they do not, they may all live very comfortably together on the interest of ten thousand pounds.”

After all, the poor already have so much! As Jonah Goldberg tells us:

To understand how subjective poverty in America is, one need only recognize the fact that most rich people from a century ago would be considered poor by today’s standards and today’s poor would be considered rich by the standards of 1900. In 1900, 2 percent of homes had electricity and 1 out of 10 homes had flush toilets. Today, pretty much all of them do. In other words, the tangible goods that defined wealth have been democratized.

Sen. Rand Paul said:

Robert Rector of the Heritage Foundation has profiled the typical poor household in America. The average poor household has a car, air conditioning, two color televisions, cable or satellite TV, a DVD player, and an Xbox. Its home is in good repair and bigger than the average (non-poor) European home. They report that in the past year they were not hungry, were able to obtain medical care as necessary, and could afford all essential needs….

The Atlantic blogger Megan McArdle also believes that income inequality is no big deal–after all, rich people have televisions and so do poor people.

I broadly agree with Will [Wilkinson] that consumption inequality, not income inequality, is what matters. If the rich have access to broad classes of goods that the poor can’t have, I find this worrying. On the other hand, if the problem is that Bill Gates has a really awesome 80 inch flat panel television, while the poor have to be content with a 32 inch CRT, well, I can’t say my heartstrings are plucked very tight by this injustice. So it’s important to know what the real differences are.

If the poor have bread and circuses, why would they need anything else?

It’s true that many poor people have a television. They can pick out any of dozens of televisions at the local Goodwill. They can buy an X-box for $50 online. They might not be able to buy their children orange juice or a chicken but they can buy them spaghetti or a fast food hamburger. If they have a raging fever, they can take them to the emergency room. What the poor cannot do is protect themselves from corporations that eliminate jobs to increase profits or that pay politicians to write laws that will let them pollute the environment, charge exorbitant fees for credit, and ignore safety and health laws. Our society is very wealthy and the poor can always live on the crumbs of the rich. However, it takes a very selfish, mean sort of person to measure out the crumbs we allot to the poor and deem it abundance.

1805 the selfish were constrained by Christian teachings on duty and charity. Fortunately for their bank accounts, modern economic conservatives like Goldberg and McArdle feel comfortable ignoring religious teachings because they can appeal to the authority of a failed screenwriter. When they are not sure what to say, they can drag out their worn copy of Atlas Shrugged and tell themselves that Ayn Rand was right: the poor are looting and mooching scum.

Rand believed that the world should be ruled by the elite, a tiny group of genetically superior men and women whose drive for excellence in the business world would inevitably lead to world domination. The only thing that hampered their rise to greatness was the mediocrity and weakness of the rest of the world. The scum, looters and moochers who made up the other 99% of the population obviously wanted to bring down the wealthy because of jealousy and shame.

Understandably, this philosophy became extremely popular in the business world. The elite saw Rand’s fairy tales of inherent superiority and personal glorification as a permission slip to denigrate and dismiss the poor. Rand taught the elite to be proud of being greedy and callous. She dreamed up a million reasons to be cold and selfish, why the emotions that were natural to her should be natural to everyone else.

Even though altruism declares that “it is more blessed to give than to receive,” it does not work that way in practice. The givers are never blessed; the more they give, the more is demanded of them; complaints, reproaches and insults are the only response they get for practicing altruism’s virtues (or for their actual virtues).

In other words, forget the poor–what about ME? Rand ignores reality, in which the rich and successful are fawned over by every segment of society. She prefers to take personal affront at any complaints, reproaches and insults directed towards cold, selfish people.

After reducing the amount he planned to give his step-mother and sister, John Dashwood decided that perhaps it would be a good idea to set up a little annuity for them. He could put money aside now for his poor relations and his step-mother would be through her declining years. Fanny goes to work on John with an enthusiasm and skill that would make a Peterson Foundation propagandist weep with envy.

Do but consider, my dear Mr. Dashwood, how excessively comfortable your mother-inlaw and her daughters may live on the interest of seven thousand pounds…. They will have no carriage, no horses, and hardly any servants; they will keep no company, and can have no expences of any kind! Only conceive how comfortable they will be! Five hundred a year! I am sure I cannot imagine how they will spend half of it; and as to your giving them more,, it is quite absurd to think of it.

Money is wasted on the poor. The undeserving masses do not provide jobs by inheriting factories and farms or stimulate the economy by ordering jewels and carriages. They can’t even sell bad CDOs and bet against them. Where would the 99% be without the 1% to run the world for them? Obviously the elite are rich because they work harder, are smarter, and are more moral.

If suggesting that the middle class doesn’t need anything doesn’t work, the propagandists take a more menacing tone. If the 99% are unhappy with inequality they should remember that what the 1% gives, the 1% can take away.

Some on Wall Street viewed the [Occupy Wall Street] protesters with disdain […]. If anything, they say, people should show some gratitude.

“Who do you think pays the taxes?” said one longtime money manager. “Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services.”

It’s no wonder that this money manager did not give his name; his outburst is threatening but also illogical. The financial service industry has crippled the economy. Productivity has been rising while wages have been falling. Tax rates on the rich are getting lower; when the rich are paying more taxes it is because they are growing richer. Yet the rich say that they are groaning under their burden of taxation and are almost ready to shrug off the unbearable weight.

John Dashwood is eagerly persuaded to ignore the pledge he made to his dying father to care for his sisters.

“It is certainly an unpleasant thing,” replied Mr. Dashwood, “to have those kind of yearly drains on one’s income. One’s fortune, as your mother justly says, is not one’s own. To be tied down to the regular payment of such a sum, on every rent day, is by no means desirable: it takes away one’s” independence.”

Helping others is not just unnecessary; it’s also a loss of freedom, the freedom to refuse to help others in need. Judge Andrew Napolitano, commentator at One Percenter Roger Ailes’ Fox Network, feels just as put upon as John and Fanny Dashwood at the thought of being forced to help their less fortunate relations.

In Ayn Rand’s remarkable and famous novel, “Atlas Shrugged”, the producers of wealth got so sick and tired of the government taking their wealth that they stopped producing. What would the government do then?

[…T]here is no such thing as a free lunch. Everything must be paid for. And I am not just talking about paying in high taxes. I am talking about paying in the loss of freedom.

We know […] that government goodies come with strings attached. At one end of that string is the government, and at the other end is the recipient. In other words, we pay a price for this cradle to grave utopia not only in lost money, but also in lost freedom.

A great many of our leaders and their little helpers are cold and selfish. They are satisfied to say the right thing and hope someone else actually does the right thing. As the middle class grows poorer and the poor grows more desperate, protests against inequality and austerity are growing larger and more numerous. Occupy Wall Street has grown from dozens of protesters in New York to thousands across the country. The very wealthy are attempting to convince the masses that not only are the lower classes not growing poorer, the top 1% aren’t really growing richer, and so all those dirty, noisy protesters should just pack up and go home before something unfortunate happens. Waging a class war is not nearly as much fun when the lower classes stop listening to propaganda and start fighting back.

When the 1% and their minions finally noticed the Occupy Wall Street protesters, they immediately began defending their financial and political interests. Barack Obama, president of the 1%, tried to show just enough enthusiasm to convince the protesters that he stood with them but not enough enthusiasm to send the wrong message to the rest of the 1%.

In a call previewing Obama’s upcoming bus tour through North Carolina and Virginia, […] Obama will make it clear that he is fighting to make certain that the “interests of 99 percent of Americans are well represented,” the first time the White House has used the term to differentiate the vast majority of Americans from the wealthy.

The last time Obama represented the 99% he gave away millions of their tax dollars to the 1%, but a fact can be safely ignored. As the number of liberal hopefully Democratic voters protestors grew, Obama grew more supportive. Both Obama and Joe Biden compared the OWS protesters to Tea Party protesters, saying that both movements feel their government is favoring the banks over them and is “not looking out for them.” Obama and Biden did not assume any responsibility for their own actions, which have included helping to use taxpayer funds to bail out the banks and refusing to prosecute Wall Street criminals.

Obama and his reelection team have decided to use the anger against Wall Street for his reelection campaign, according to the Washington Post. “We intend to make it one of the central elements of the campaign next year,” Obama senior adviser David Plouffe told the paper. “One of the main elements of the contrast will be that the president passed Wall Street reform, and our opponent and the other party want to repeal it.”

House Leader and One Percenter Nancy Pelosi was equally supportive of the idea of speaking out against things that somehow happened when she wasn’t looking, such as high unemployment and bank bailouts.

Naturally Republicans were a little less supportive of Occupy Wall Street and a little more supportive of paranoid invective directed towards it. Mitt Romney, also a member of the 1%, took a dignified position–as dignified as he could manage.

[…] Mitt Romney was asked about the protests, and said that he had spoken to the people involved.

“I think it’s dangerous — this class warfare,” Mr. Romney said.

Mr. Romney, whose professional career consists of eliminating jobs instead of creating them, evidently thinks that increasing economic inequality is not class warfare—real class warfare is protesting against economic inequality. After the protests continued to grow, Romney became more sympathetic to the shrinking middle class and announced that he understood how “those people” feel, declaring “I worry about the 99 percent in America.”

Republicans seemed to think that accusing Democrats of class warfare was a crushing blow and took every opportunity to drill in the words through sheer repetition. Representative and Ayn Rand fan Paul Ryan (R-1%) tells us what class warfare actually is:

Sowing social unrest and class resentment makes America weaker, not stronger. Pitting one group against another only distracts us from the true sources of inequity in this country.

Ironically, equality of outcome is a form of inequality — one that is based on political influence and bureaucratic favoritism.

That’s the real class warfare that threatens us: a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules and preserve their place atop society.

Mr. Ryan seems to think that trying to make the elite act ethically can only be a cover for a more nefarious agenda: helping dishonest, all-powerful civil servants to preserve “their place atop society.” Majority Leader Eric Cantor is increasingly concerned about the growing mobs occupying Wall Street and other cities across our country while “W. W.” at The Economist called the protesters extremists.

CNN’s Erin Burnett, soon to be one of the 1% by marriage, mocked the OWS protesters. At Forbes, FreedomWorks’s Matt Kibbe, another Koch employee, Ayn Rand fan and lackey of the 1%, said the dirty hippies at OWS were hypocrites for supporting Obama’s government bailouts, as opposed to the clean, hard-working Tea Party protesters who had supported Bush’s government bailouts.

If the 1% is not waging class warfare on the 99%, why are the elite spending so much money on propaganda designed to undercut the middle and lower classes, telling them they do not need, want or deserve relief from nearly unprecedented levels of inequality?

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70 comments

  1. worldwidepleb

    If the 99% can’t be arsed waking up to this shit, then they kinda deserve their fate. I feel for them but really, how hard would it be to just stop playing along with the system for a while? Isn’t it all really about consent, we just have to stop giving it. I am probably being naive but then I am one of the 99%.

    1. Travizm

      Thanks pleb….but not all of us can completely isolate ourselves such that we are not taking anything……….or are you suggesting we take but not give?

      ——-

      Hunting of the Snark is a great blog…i found it in a very nerdy way which involves strange words and google…..totally forgotten about it so will have to get back to it.

      Thanks Susan for Posting…..it was a real refreshment to catch your spin….so much class in your canter.

  2. Lafayette

    PENN-SYLVANIA

    L&W: Two hundred years ago, in 1805, the US had less income inequality.

    Umm. Dunno.

    From WikiP, about William Penn:

    In 1682, James, Duke of York, the future James II of England, handed over a large piece of his American holdings to William Penn. This land included present-day Pennsylvania and Delaware. Penn immediately sailed to America and his first step on American soil took place in New Castle in 1682.

    Also from WikiP:

    Whether from personal sympathy or political expediency, to Penn’s surprise, the King granted an extraordinarily generous charter which made Penn the world’s largest private (non-royal) landowner, with over 45,000 square miles (120,000 km2)

    I’m not sure how we would estimate the realty-value of Penn-sylvania and Delaware from land values at that time, but I suspect that it would accord Penn a very sizable amount of wealth.

    Now wealth is income accumulated. And the L&W calculations are based upon income estimates. So, the differences are not comparable considerable. They are nonetheless important, since most land in the colonies was intended to be farmed by colonists from the Old World who would then pay a rent, which was, indeed, income.

    And so, the income from rents of William Penn’s lands from farming should have been very great indeed.

    Still, I am not familiar with the methodology L&W employed, so any further suppositions are useless.

    MY POINT

    The article in WikiP on Penn, here, shows the intellectual breadth and strength of William Penn and his influence on democratic principles that would evolve much later on in the following century at the founding of our nation. (Penn died in 1718.)

    POST SCRIPTUM

    Unfortunately, another lesson to be learned from the history of his time is how much was based upon religious factions. Which is perhaps why our founding fathers were so keen to adhere to the separation of church and state. At the time, the colonies were a mirror image of the religious antagonism that Europe was undergoing.

    It’s a shame that notion did not find its way expressly into the Constitution. It’s a worse shame that some elements in America are still trying to make laws based upon religious principles.

    1. Historicaecon

      Umm. Yes. You Dunno.
      The United States was one of the most equal societies in the world when it was founded, as has been shown repeatedly by historians and economists. The most pointed studies have been done by Sokoloff and Engerman, who found that American equality was extremely important to developing lasting, fair institutions:
      “Specifically, in those societies that began with extreme inequality, elites were better able to establish a legal framework that insured them disproportionate shares of political power, and to use that greater influence to establish rules, laws, and other government policies that advantaged members of the elite relative to non-members… In societies that began with greater inequality or homogeneity among population, however, efforts by elites to institutionalize an unequal distribution of political power were relatively unsuccessful, and the rules, laws and other governmental policies that came to be adopted, therefore, tended to provide more equal treatment and opportunities to members of the population.”

      Not sure it was worth replying, but ignorance should not be allowed to fester.

      Sokoloff, K. L, and S. L Engerman. “History lessons: Institutions, factors endowments, and paths of development in the new world.” The Journal of Economic Perspectives 14, no. 3 (2000): 217–232, p 223-224.

      1. Andrea

        Hmm… what about killing off the Indians and importing African slave labor? Are such inequalities to be forever obscured by what amounts to declarations about ‘equality’ resting on college level literary flim flam?

        J. Austen as a great novelist. I’m a fan, but!

      2. Lafayette

        Hist: The most pointed studies have been done by Sokoloff and Engerman, who found that American equality was extremely important to developing lasting, fair institutions

        The data presented in this thread is about Income Inequality, not inequality before the law or institutions.

        You are nonetheless right about the origins of our egalitarian notions, which, as forthright as they may have been, have become trammeled because of Income Disparity and the use of taxation regimes that have generated a plutocrat class of American.

        That was NEVER envisioned by the founding fathers. In fact, American revolutionaries fought and died to free us from an English monarchy that had been handing out land rights to “its friends”. (As the historical references linked show.)

        And here we are, 235 years later having created (all by ourselves) a moneyed plutocracy that seeks to perpetuate its privileges by manipulating the democratic process.

        As they say in French: La belle avance, ça!

        1. RBHoughton

          Excellent article.

          La Fayette is an onerous pen-name to assume. Trying to preserve a middle course between democracy and monarchy was not appreciated then and certainly not now.

          The important thing to recognise in my view is that equality should be entrenched institutionally. The only inequality that we have to allow is political equality, for someone has to carry out the popular will, but we can control that by enforcing Constitutional principles on elections and time in office.

          1. Lafayette

            EGALITARIAN DEMOCRACY

            Trying to preserve a middle course between democracy and monarchy was not appreciated then and certainly not now.

            Yes, you have understood why I have great respect for a personage who found himself locked between both sides. Had he not been like a son to Washington, he surely would have lost his head on the guillotine after the French revolution.

            It might interest you to know that there are only two places in France where the American flag flies night and day. One is the Embassy in Paris, the other is above Lafayette’s grave.

            The important thing to recognise in my view is that equality should be entrenched institutionally.

            Well put.

            We must be careful in our use of words, particularly that of “equality”. It has multiple usages. Equality in income (equal quantities) means, of course, Communism – which is a bankrupt political philosophy dependent upon the “dictatorship” of the proletariat.

            Income Equality does not mean equal quantities of income. It means Income Fairness.

            Whilst equality before the law and institutions means precisely that; indeed, we are all “equal” in treatment. This egalitarian value has been corrupted by our tax-system that has created extreme disparity between the classes and, by this disparity, has created different levels of treatment by our political institutions – namely political and precisely Congress.

            That inegalitarian situation must be corrected for our nation of “one people” to survive and flourish.

            A PLUTOCRAT CLASS

            There is a role for individual ambition and entrepreneurship, but not the manner in which it has been practiced to create the Plutocrat Class in America. Which, like the dictatorship of the proletariat, is a dictatorship of a plutocracy.

            The only difference is the way in which the dictatorship is practiced. In either case, it is a subversion of egalitarian democracy.

          2. Foppe

            Communism – which is a bankrupt political philosophy dependent upon the “dictatorship” of the proletariat.

            How odd, then, that all historical “communist” regimes were in fact strictly hierarchical, and extremely repressive towards “the proletariat” which you suggest ruled itself, but which never had any influence whatsoever over policy. Or was your point that every type of government installed after a revolution that starts out as a “communist” revolution must be called communist? (Such as, say, the current Iranian regime?)
            Something is bankrupt alright, but I doubt it is the ‘political philosophy which depends on the “dictatorship” of the proletariat.’

  3. CLARENCE SWINNEY

    America is tracking the trend line to End Of Empire laid by
    Rome-Spain-Holland-England
    Over extension worldwide on Debt.
    Small group own most of the wealth
     
    10% own 70% net wealth  80% own 15%
    10% own 70% financial wealth  80% own 7%
    10% take 50% individual Income  50% take 13%
     
    70/15  70/7  50/13  = 190/35

    Simplistic– clear picture—can you see it? Congress cannot! White House cannot!

    Each of 10% own $7 of net wealth and each of 80% own $0.18
    Each of 10% own $7 of financial wealth and each of 80% own $0.09
    Each of 10% take $5 of individual income and each of 50% take $0.16
     
    $7  to  18 cents ratio: 700:18
    $7 to 7 cents 700:7
    $5 to 16 cents 500:16

    Is that not a picture of Third World Country?
    Is that not a picture of England in End of Empire?
    Is that not a picture of a Dictatorship
    I cannot paint a clearer picture but sadly our president is too busy preaching to his choirs
    The members of congress are too busy counting $$$$$$$$$$$$$ from Wall Street.
    Ministers of America $$$$$$$$$ Got Your Tongues?
    Where are our leaders? Counting $$$$$$$$$$$$$$$$$$$$$??????
    If my numbers are wrong advise cswinney2@triad.rr.com I correct.

    1. ajax

      I don’t know if you have seen maps of the world where,
      for example, a country’s area is in proportion to its
      GDP, or otherwise its population.

      On the same theme, there could be one hundred square
      boxes labeled 1 to 100, with box #1 referring to
      the top 1% in incomes, and box #100 referring to
      the people/households in the bottom 1% in incomes.

      The twist would be to make the area of each square
      box in proportion to its share of national income.
      So if Box #1 had 23 square units, per the 2006 data,
      the remaining 99 boxes would have a combined area of
      100 – 23 = 77 square units (for 99 boxes …)

  4. Middle Seaman

    As one who finds little humor in the 1% vs 99% situation, this post doesn’t do the trick for me. What bothers me is the fact that the 1% is not an American phenomenon. Many affluent societies suffer from similar divisions. (In Tel Aviv 400,000 people, equivalent to 25 million Americans, came out to demonstrate against by and large the same division.)

    Are we doomed to live with it for long? Could we have prevented it? Even a stronger social network does not change the division. It also does not seem to be the individual fault and any particular group of people. (Obama is not responsible for rich Irish people.)

    More information and better analysis are called for.

    1. patricia

      Middle Seaman, A conservative Christian once sourly said to me, “the poor you always have with you”, as if inequality’s perpetualism proved the ridiculousness of trying to repair it. Yet, he found the necessity for regular bathing, for adequate housing, and for consistent food intake, to be acceptable perpetual pursuits both in his own life, and for all humans throughout history. He just didn’t like to be called to a perpetual moral purpose that reached beyond his own little self.

      There is a constant tendency in humans to not pay attention to trouble until it comes knocking at the door. It would be splendid if we could evolve out of it, but I doubt that it’ll be any time soon, if we do.

      So meanwhile, we keep at it. There’s good analysis and info even on this single site. Read the archives. Join your local Occupy—they are trying to find ways to proceed out of this incarnation of it.

      And a sense of humor along the way makes it all go down better, like that little bit of honey. And it needn’t be artificially applied humor. Sometimes we are simply very funny, like the shopping guy in this youtube, which someone sent me yesterday:

      https://www.youtube.com/watch?v=KqRPOEa3P44&feature=player_embedded

    2. Andrea

      Absolutely. It is not asked where the threshold is, in terms of ‘measures’ (e.g. GINI) not that they are of much use, but not considered at all. Living circumstances – minimal income, health care, etc. – slip away, to just yadda yadda about inequality. Of course, one can’t treat all topics at once, so maybe this person should be given a little leeway. However, leaving aside all the important issues – govmt and politics, finance industry, natural resources – to mention just inequality is more than a little odd, and in my eyes a waste of time.

    3. RBHoughton

      More information and better analysis would make a post endlessly long but I can suggest two objectives to reformers that would achieve all that they want:

      Firstly, end limited liability; secondly, end the concept of a company existing as a person, separately from the directors and shareholders.

      1. Lafayette

        Firstly, end limited liability; secondly, end the concept of a company existing as a person, separately from the directors and shareholders.

        OK. But not good enough.

        Now explain why … what are the consequences/results.

  5. Eleanor

    I love Austen. My mother, who raised me on Austen’s books, said the chapter in which John and Fanny decide not to help his relatives, was the best and funniest portrayal of greed she knew. This is W. H. Auden on Austen, in his Letter to Lord Byron:

    You could not shock her more than she shocks me;
    Besides her Joyce seems innocent as grass.
    It makes me uncomfortable to see
    An English spinster of the middle class
    Describe the amorous effects of `brass’,
    Reveal so frankly and with such sobriety
    The economic basis of society.

  6. LeonovaBalletRusse

    Yves, this is a masterpiece of strategic positioning.

    I have promoted your keen insights and website continually, and appreciate your rise to prominence in quarters that count in real life. You are our Jeanne d’Arc without the Medieval mind-set. Congratulations on your success. You exemplify the *paradigm for performance* as an open society leader in C. 21. If young women today are looking for someone to emulate, far from the *pink collar ghetto*, they can do no better than to follow your example of creative intelligence and daring industry.

    Will you consider the likeness of MF Global practices to those of Olympus? It looks like what we used to call embezzlement, cleverly cloaked by *CrisisChaos*, a “cloak of invisibility” hiding financial sleight of hand for personal gain. How much of this might have been going on in the *CorpoPoliFinanceIndustry* across the board? Was *TARP* [tarp!] the “cloak made visible” for the People’s purchase?

    1. Yves Smith Post author

      Thanks so much for the praise, but this is NOT my post! It’s by SusanofTexas. She’s written some great stuff on her site (see link in post), in particular regularly bashing Megan McArdle (she also has a nice series on Ayn Rand).

  7. Nemo

    There is an appropriate name for people like sometimes:

    “Rich White Trash”

    We get to enjoy the frolics
    of the same who have built a large house next to
    us. Lots of staff, cleaning ladies, pool cleaners, mow and blow gardeners,
    window washers and the new and upcoming career for the arrived too late
    White Anglo Saxon generation Xers -dog walkers to the rich. More on dogs later.

    RWT are mercifully only there about 40% of the time, having at least two other places that they live. Lots of Town Car arrivals and departures taking them to their PJ*, new cars in the garage…it must be a mark of shame and overt poverty when the permanent metal license plates arrive, it’s time to get a newer car, always imported.

    When they are here, we get to listen to the latest popular music that they favor, usually some young thing howling about her emotions backed up by electronic music. Like poor White Trash, there are plenty of cigarettes and he of course smokes cigars. Never once have we heard Jazz or Classical music emanating from their compound.

    Unlike the poor, these folks could easily afford higher education beyond accounting and business courses. Their language, demeanor and loud outdoor poolside conversations do not indicate the presence of liberal arts education in their life. There never seems to be the expression of an original thought of any kind.

    Sometimes we can hear snatches of conversation drifting downhill thanks to the portable phones which carry what should be personal conversations outside…Sentences are almost always preceded by “she said…” or “What did she say?…”It’s as though they must continually test the social wind based on what other females are saying. The gleaming surfaces inside their home are not marred by a single book.

    Dogs seem to be the surrogate for something.

    The Golden retriever breed (of dog as well as wife) is the favored breed this decade. Pit bulls are of course for the course and rough of any group and then there are the tiny dogs, Chihuahuas are the favored lap dog while you drive around here. What happens when the air bag goes off? There’ll be a strange fusion of dog and human facial flesh, the ultimate French dog kiss.

    It’s difficult to judge how they deal with the poor because we only see them dealing with their Hispanic staff where there is a language barrier. The dog walkers are a fascinating subset. Based on details gleaned from conversations overheard from the Jacuzzi up against our fence, they are as a group young females who in spite of poverty and no money, manage to fly to Portugal on cheap flights, or meet up with some pilot somewhere whom they met in a bar somewhere else. Most have P.O. boxes to get their mail. There is a sad subset of stated regrets about not going to college and/or being in debt. They usually drive newer American cars and dress well.

    *Private Jet

  8. andrew hartman

    so the 99% are blameless and the 1% are the cause of all evil? is it really that
    simple?

    my father in law was born in modest circumstances and became a
    member of the forbes 400. i cannot recall him supporting any politician with
    campaign contributions. i remember his disdain for mike milken and
    investment bankers. in life and death he gave away most of his fortune to
    charity. he was a proponent of education, technology, and entrepreneurship.

    this 1/99 divide is too easy. it leads at the same time to simplistic condemnation and indulgent self pity.

    that said, certain large banks are predators and should be broken up. the
    only way this will happen is by putting a much pressure as possible on members of congress. OCCUPY WALL STREET is all diversion and hand waving.

    1. Lafayette

      CREDIBLE INCOME ANALYSES SINCE ALMOST A CENTURY

      ah: it leads at the same time to simplistic condemnation and indulgent self pity.

      Unfortunately, it is the result of serious economic studies. The original information is here – a web-site posted in 2005 by a sociology profess of the University of California at Santa Clara. (You are welcome to dispute the findings. But the argument had better by pretty damn good.)

      Refute the data or misinterpret if you like. But it remains factual nonetheless and a sad testimony to the glaring Income Inequality in America.

      How so? Americans have, quite likely, always been a victim of Income Inequality. Studies by Pickety & Saez, both economists, of income declarations that go back to the origins of the national Income Tax at the beginning of the 20th century indicate the same results. (See the Saez data here. It takes a while to generate the info-graphic, so be patient.)

      It is entirely possible that as America expanded in “manifest destiny”, that land was the principle generator of income and therefore wealth (because of agriculture and mineral rights). But with the advent of the Industrial Age, America was a country coast-to-coast and its prime generator of income and therefore wealth was its industrial base.

      MY POINT

      Fast Forward to 2011 – we are still in the same predicament. Except that the imbalance of the haves and have-nots has become more evident with the current recession.
      Will anything change. We must hope so. The poverty in this currently, presently conveniently absent from the media is quite able to generate significant Social Disharmony. Another Watts conflagration is entirely possible.

      But is it probable? Time will tell …

    2. Hugh

      Let’s deconstruct this a bit. In a kleptocracy, all wealth transfers to the rich are portrayed as virtuous. Check.

      What is left out of this is all the laws written by and for the rich which helped your father maintain and expand his wealth. And even if we were to accept the premise, that his wealth was legitimately earned, what do his virtuous actions have to do with those of his rich rentier son? Or is your argument that virtuous acquisition of wealth is something that can be transmitted across generations?

      And is it self-pity or math that the top 10% own 70% of the country, or that the top 1% to which your father belonged own 33.8% of it?

      http://www.businessinsider.com/facts-about-inequality-in-america-2011-11#half-of-america-owns-25-of-countrys-wealth-the-top-1-owns-a-third-of-it-2

      You tell us we should put pressure on members of Congress. Would this be the same Congress whose members of both parties the 1% also own lock, stock, and barrel?

      As I have often written, distraction is the primary of class warfare, that is how the 1% keep their wealth in face of being vastly outnumbered by the 99%. So how exactly am I supposed to take it when a member or heir of the 1% tells me not to pay attention to OWS? It’s a distraction. Much better for the 99% to expend their energies on worthless members of Congress, all of whom work for the 1%.

      1. andrew hartman

        you know nothing about me, but jump to the ad hominem immediately. all i said
        was that generalization can be dangerous, and that a movement based on
        simplistic slogans is problematic in a lot of ways.

        1. Historicaecon

          Andrew, the 99%/1% divide *would* be overly simplistic if were not empirically true. That aside, Occupy Wall Street is not saying the 1% is evil. THAT is a simplistic generalization. They’re saying that government for the last 30 years or so has been bought and paid for by members of the 1% and those members have received what they paid for. Occupy is not insulting your father, they are attempting to pave the way for the people who might, some day, follow in his footsteps.

        2. Hugh

          You can’t have it both ways. You can’t invoke your father to bolster your argument on the one hand and then claim that personal references are out of bounds.

        3. Blunt

          andrew hartman, it seems to me that you miss the one thing that you description of your father-in-law captures: that his concern was larger and broader than the welfare simply of his daughter and her husband and extended, likely, to a sense of at least noblesse oblige for those who didn’t gather quite as much fortune as he had.

          He certainly doesn’t sound as though he was one of the elites who imagined that they’d made themselves without any intervention of any sort. All too many of the 1% appear to congratulate themselves on the very hard work they performed in managing to finagle the best family in which to be born.

          But, as was pointed out I don’t think the ground under your feet is solid when you ascertain a good bit about others without “knowing who they are” while otoh you demure that anyone might glean some information about who you are simply from reading your words and ascertaining the heights of Olympus from which they echo.

          1. Blunt

            O, yes, Yves, forgive me. Your newest guest poster is wonderful. I read some of The Hunting of the Snark prior to reading this post after reading your introduction.

            Susan of Texas, welcome very much to NC and “thank you.” I hope to be a regular visitor to THOTS.

            It would be beyond rude to suggest that you are somehow Molly Ivins recreated. Yet, you make a nice follow-on to that cogent and perceptive woman. There are excellent people who come out of Texas, regardless what Perry, Dubya and a flock of state legislators may have led us to expect.

      2. Lafayette

        PROGRESSIVE VALUES

        You tell us we should put pressure on members of Congress. Would this be the same Congress whose members of both parties the 1% also own lock, stock, and barrel?

        Have you a better alternative? We all march on LaLaLand on the Potomac (DC)?

        No, one revolution is enough; another would be catastrophic.

        What I have suggested is to explain to the grassroots the benefits of progressive values and their ability to improve their lives. I’ve even written a treatise on the subject which is entitled A Progressive Agenda for Political Action.

        It’s purpose is a litmus-test for political candidates to Congress. It will be despised by most of the Senate, who are already issued from the Millionaire Class of America.

        The present outrage and indignation must coalesce around a political movement. The above treatise is intended to commence the debate towards what political platform is necessary to attract the most people to support Progressive Values in Congress – where there are some politicians of that ilk but certainly not enough.

        Change must come from the grassroots, which votes. That challenge is greater than one might think given the present situation of Fat, Dumb and Happy as well as political indifference of Grassroots America.

        POST SCRIPTUM: Incarcerated in poverty

        Those posting on this forum are, by and large, not the grassroots. The posts are too articulate and free of spelling errors …

        At best, these posters are part of the middle Politically Independent Class of swing-voter. They too decide elections.

        But, I will remind you, aside from perhaps some presently higher unemployment, they are not the class that hurts most long term – that is, the truly poor incarcerated in poverty.

        WANT A NUMBER?

        The median household income in America is about $44,000. Fifty percent of American households earn a household income below that level. (See the distribution here).

        Then, I presume, you are a member of the Grassroots Class.

        If your household income is ten times that amount, you are likely part of the Plutocrat Class – whether you like it or not. It is above $550K per annum that taxation becomes inherently unfair and caps at about (effectively, after deductions) 20/25% of total income.

        These classification are arbitrary and entirely mine. You may wish to dispute them and I invite you to do so. Which is the purpose of debates …

        1. Foppe

          How quaint; I don’t make spelling errors (mostly grammatical ones, due to English not being my native language), but I don’t make $44k either.
          So am I to understand the above as an attempt to delegitimize the grievances of those who make more than the median income (or those who have “enjoyed” too much education), as being insufficiently “grassrootsy”? What happened to the whole working together thing, where people contribute according to ability?

          1. Lafayette

            So am I to understand the above as an attempt to delegitimize the grievances of those who make more than the median income (or those who have “enjoyed” too much education), as being insufficiently “grassrootsy”? What happened to the whole working together thing, where people contribute according to ability?

            What nonsense. None of the above was intended and if you understood it that way, then you wanted to do so.

            Either you are incapable of understanding or simply do not want to understand. I suspect it is the latter.

            Nonetheless, the grassroots of a country is that class of people who obtain so little income that the discretionary part of it is near zero. Net income has two parts, one discretionary and the other non-discretionary. The latter is that part of net income that is employed upon the basics to sustain life. (To understand, have a look at Maslow’s Hierarchy of Needs.)

            Discretionary income is that part necessary to climb the ladder to a higher level of self-actualization, because one need not worry about how they are going to pay the rent/mortgage or the groceries. Or when their UI is going to run out.

            There is a point on that triangle where, if achieved, one is no longer in the grassroots and they benefit from the skills and education that allow one a higher level of income. There are levels of the hierarchy that are not related to any income whatsoever. But the bottom levels very definitely are related.

        2. JTFaraday

          I can’t take seriously as a grassroots advocate anyone who *can’t even open their mouth* without referring to the public as fat, dumb, happy sheeple debtor troglodytes who can’t spell.

          Then again, that is the Capital F D-Party in a nutshell. Shouldn’t you be trolling over at the American Prospect?

          (What’s the matter, no readers?)

        3. Foppe

          What nonsense. None of the above was intended and if you understood it that way, then you wanted to do so.
          Either you are incapable of understanding or simply do not want to understand. I suspect it is the latter.

          Such pushback, and such doubt of my mental faculties!
          OK, now let’s see if it holds water.
          To start: you define the “grassroots class” (lovely conflation of political activism and economic success) this way:

          Change must come from the grassroots, which votes. That challenge is greater than one might think given the present situation of Fat, Dumb and Happy as well as political indifference of Grassroots America.

          Leaving aside the fact of your constant slurring of the “grassroots class” — who, or so it seems to the untrained eye, you seem to blame for allowing the system to break down — you then — rather strangely — stipulate that change must come from them, but not from a broader movement that also includes “non-grassroots” Americans.
          Now let’s have a look at the other side of your argument. On the one hand you fairly obviously imply, though you do not write this down explicitly, (after your “Post scriptum” subhead) that anyone who makes more than median cannot understand, nor (legitimately) represent that class. On the other hand, and in quite a bit of tension with that, you think that “responsible politicianscan do so, and are in fact the only actors who may do so, as everything must proceed via the present institutions, minimally decorrupted. Do you see the double standard yet, or should I go on?
          It seems to me that you’ve read a bit too much Julius Caesar, and are trying as best you can to divide and conquer.

          1. JTFaraday

            I think L thinks that the grassroots class is him(?), and the sheeple are what he herds to polls with the sharp end of his baïonnette.

            Upthread I was going to ask if he was Ezra Klein, but even EK spells better than that.

          2. Foppe

            (Let me clarify: I am under no illusion that my, or ‘the middle class’s’ preferences match those of the bottom quintile or decile, and I am very much aware of the fact that the French revolution was a bourgeois revolt, which did the ‘masses’ little good in the short run. Having said that, from this it in no way follows that cooperation is impossible, nor that the bottom will necessarily be exploited or betrayed.)

    3. liberal

      The real issue isn’t so much the 1% versus the 99%, although it’s highly correlated with that.

      The real issue is that a huge amount of economic “activity” is economic rent collection, aka legalized theft.

      It’s correlated with the 1/99 issue, since most people who get extremely wealthy get that way by collecting economic rents.

  9. Clonal Antibody

    Yves,

    I posted the following on the nycga site yesterday http://www.nycga.net/groups/alternative-banking/forum/topic/discussion-immediate-and-long-term-financial-relief-including-minutes-from-alt-banking-meeting-on-11052011/?topic_page=2&num=15#post-6057

    If you look at my gini coefficients of the US, http://upload.wikimedia.org/wikipedia/commons/d/d4/Gini_since_WWII.gif the gini coefficient went from 35 in 1968 to 45 in 2008. This may not seem like much, but let me put a perspective on this, and show what this difference implies.

    Today

    Minimum Wage $7.25
    Median family income $ 50,000
    Median Hourly wage $16.25
    Hours worked per median family per year 3077
    per capita GDP $47,200
    CPI 650

    1968
    Minimum wage $1.60
    Median wage $2.60
    per capita GDP 4,491
    CPI 100

    So, from 1968, if the minimum wage had kept up with CPI, which went from 100 to 650 the minimum wage today should be $10.40

    If the income inequality had stayed the same, since per capita GDP went from 100 to 1050, the minimum wage would have been $16.80 and the median wage would have been $26.70

    The median family income would have been $26.65 x 3077 = $82,000

    This clearly shows the difference between a gini coeff of 0.35 and 0.45

    Another useful site http://remappingdebate.org/map-data-tool/data-w-2s-allow-closer-look-income-higher-wage-scale“>Data from W-2′s allow closer look at income

    If you look at the W-2 earnings from 2009, 55.14% of wage earners earned less than $30,000 per year

  10. don

    Very well done. Hard hitting. A breath of fresh air.

    At some point stating all this becomes increasingly obvious to all who have eyes and ears — unless it is against one’s class and personal self-interest to see it otherwise. Still, in a world where the rich are spun as job creators, we’ve got a long ways to go before turning this around. In fact, the tide against us has been strong for decades.

    At some point, though, we are going to need to get beyond the critical and eventually get to advocacy. And what might this advocacy look like? Well, we’ll need to get to the point where we limit ourselves to a critique of individuals who represent and who, in their slimy apologetics, defend the status quo, and find something that we can put up as an alternative.

    So that will be the primary task before us in coming years, difficult as it may seem when the thought of societal collapse seems readily more imaginable than any radical and far reaching alternative to the status quo.

    Perhaps NC can begin to move in this direction, outlining what that alternative would look like. From where I stand, it must be based on a rejection of the colonization of the public sphere by on market dictatorship, and a renewal of social solidarity and economic principles based on social justice. Call it what you what, but I for one am in line with Sen. B. Sanders on this point: its democratic socialism.

    1. Patrice

      I agree that this post was well done and a breath of fresh air. The problem lies with what Chomsky and Herman referred to as the the “guided free market” model of the US mass media, in which thought is controlled by market forces and Media institutions are profit-seeking corporations whose interests are closely aligned with the same large banks and defence corporations that they supposedly report on.

      “It is the societal purpose served by state education as conceived by James Mill in the early days of the establishment of this system: to “train the minds of the people to a virtuous attachment to their government”, and to the arrangements of the social, economic, and political order more generally’. It is the societal purpose of ‘protecting privilege from the threat of public understanding and participation”. – Chomsky “Necessary Illusions: Thought Control in Democratic Societies” (1989)

      1. Lafayette

        SINCE ROMAN TIMES

        Pat: The problem lies with what Chomsky and Herman referred to as the the “guided free market” model of the US mass media, in which thought is controlled by market forces and Media institutions are profit-seeking corporations

        Seems right, but that is NOT all the equation in play.

        The American people, via the Boob-Tube, are getting what they want. Jack ‘n Jill Sixpack want action movies, mindless sitcoms and just a wee bit of political dialog – but not too much because it is otherwise boring. Gotta keep the masses laughing.

        Nothing has changed since Roman emperors built the coliseums in all the major towns they inhabited. The rule was: “Give them games and porridge – they will keep happy”.

        Porridge – or polentum, or puls – was a sort of meal made of wheat and water/milk. It was the staple diet of the Roman masses. The vomitoriums were for the elite.

        We’ve come a long way since then – beer and pizza (whilst watching the Boob-Tube) is the new pap for the masses. So, what has changed fundamentally?

        Nothing.

        1. Foppe

          The American people, via the Boob-Tube, are getting what they want. Jack ‘n Jill Sixpack want action movies, mindless sitcoms and just a wee bit of political dialog

          And you know this for a certainty because you know that the corporate media really cares about serving the American people with precisely what it desires, and that it in no way desires to shape their desires to fit with whatever it is that they can deliver most readily?
          I ask because I have frequently found the content on offer frustratingly dull (to say the least), and because I have the distinct impression that they don’t really care about my opinion, and that, in fact, they haven’t even taken notice of it yet. I mean, I know the Market teaches that of course they care, why else would they be economically successful, but I would point out here that TV production is a pretty oligopolistic market with high entry costs, and that it is quite possible that TV would be much more diverse if it wasn’t.

  11. Schofield

    Of course the great hole lying at the heart of the American Constitution is actually found in the phrase Thomas Jefferson inserted in the Declaration of Independence, “the pursuit of happiness.” This phrase obscures a key task of the Constitution which was how to secure the well-being of all. Anybody who has visted Monticello, Jefferson’s home, will see clearly why Jefferson chose such a vague phrase his well-being depended upon the lack of freedom and well-being of his slaves.

    1. Septeus7

      Quote: “Of course the great hole lying at the heart of the American Constitution is actually found in the phrase Thomas Jefferson inserted in the Declaration of Independence, “the pursuit of happiness.” This phrase obscures a key task of the Constitution which was how to secure the well-being of all.”

      I’m sorry but you don’t know what you are talking about. The phase Jefferson used was “pursuit of property” and it was changed to “pursuit of happiness” on the urging of Ben Franklin. The phase wasn’t to obscures but rather to attack the Lockean notion that the purpose of government was to secure property which Locke has defended in his Treatise on Government and Locke’ connection to the slave trade was known.

      Ben Franklin’s insistence that the phase be change to “pursuit of happiness” is a phase that Leibniz’s essay against Locke where Leibniz defend the notion of human creature defined by creative action rather than primitive accumulation. The declaration is inherently antislavery as is the Constitution contrary to historically illiterate quackdemics like William Hogeland who simple spew Aaron Burr’s old lies against this Republic.

      1. JTFaraday

        Don’t you think, though, that Madison’s reference to natural faculties (and their outcome) in Federalist 10 somewhat supports Hogeland?

        Here, the “first object of government” is not to secure property directly, but the natural faculties. Nevertheless, the object of the exercise of those faculties is property, with the understanding that the outcome can and will be material inequality–which is also therefore a “natural inequality.” This will then result in further political factionalism:

        “The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of Government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.”

        Perhaps James, architect of the main compromise between northern bankers and southern slavers, alongside many others, didn’t get the “happiness” memo.

        We also can’t pull the liberal’s favorite slaver, Thomas Jefferson, as he spoke glowingly of the new nation’s “natural aristocracy.”

        In any case, I think Hogeland’s overarching point which I would tend to share, is that there was a diversity of opinion in the founding era, not the single fairy story we’re given as kids in public schools.

        Granted, he does have a tendency to posit elitist and democratic political blocks, divided by class, and to minimize any democratic leanings you might find in the elite(-ist) block, rather than seeing them as people who are themselves internally divided. (John Adams, who he thinks is evil, is a good example of this).

        No doubt he, or some others of his general persuasion, would say this is corrective effort.

        (But no, Lloyd Blankfein is not internally divided because he knows he should be up for criminal investigation and charges and that personal doubt in his own genius and righteousness in the performance of “God’s work” is a luxury he can’t afford).

    2. Lafayette

      THE NOTION OF EGALITARIANISM

      Anybody who has visted Monticello, Jefferson’s home, will see clearly why Jefferson chose such a vague phrase his well-being depended upon the lack of freedom and well-being of his slaves.

      Point well taken.

      The slaves were freed in Europe long before the US. (See the abolition time-line here.)

      Any notion of egalitarianism, nonetheless, was not common until the 20th century. Egalitarianism being the principle that all people are equal and deserve equal rights and opportunities before the law and a country’s institutions.

      From there to Income Inequality is just a hop, skip and jump. The notion that because we all participate in the generation of economic wealth that we therefore should share equitably (but not equally) in its distribution is not yet a common notion – except in some social democratic countries of Europe.

      It is certainly not the present situation in the US.

  12. 2laneIA

    Such a great post, combining great analysis with Jane Austen. It doesn’t get better than that, and probably takes a blogger who is also a woman to think of doing it. I just bookmarked your blog.

    I read what Yves puts up here, every day. She is working on my financial education, where there is considerable room for improvement, and her commenters are stellar.

  13. Schofield

    Well sorry you haven’t noticed Andrew Hartman but the Occupy movement is promoting a key message to fill the hole at the heart of the American Constitution. That message is – if you want to avoid sociopathic tendencies and being labeled as a hypocrite you acknowledge that your claim to freedom and well-being should apply to others as well as yourself. The vehicle for translating this into practice is democracy at all levels and institutions of society. Further understanding of the message to be found in “Reason and Morality” by Alan Gewirth.

  14. ginnie nyc

    First, welcome Susan of Texas!

    Second, I found the Heritage Foundation’s list of ‘proofs’ (consumer goods) that the American poor are not really poor very interesting. As an officially semi-poor person (income just above FPL), I only have one-and-a-half of the items on that list. Hmmm, methinks they exaggerate the distribution of these goods, and also completely ignore important issues such as condition and obsolesence.

    Also, machines for domestic use essentially did not exist a hundred years ago; the fact they do now is not a sign of wealth. They (partly) substitute for the formerly widespread use of slavery and/or servitude. And the idea that the emergency room is somehow a sign of health or a symbol of medical care – so the poor must be grateful to live in a state of constant health crisis?

    Third, anyone who can demonstrate that Austen beats Rand – and in economics – is my kind of gal. It’s a new paradigm!

  15. b.

    I have no respect or … empathy! … for inbred wealth and sociopathic power. However, it simply does not matter whether those that engineer and benefit inequality of wealth are loathsome scum – though it is hard to imagine Jesus, Buddha, Gandhi and MLK building towards their own personal Gates Foundations, as tolerating and accepting such staggering inequality is testament to certain personality flaws all by and in itself.

    Inequality is incompatible with democracy on first principles. The most important resource of any particpatory democracy is the citizen. For democracy and open society to sustain, the citizens have to be educated, economically secure, and retaining enough disposable time and income to be able to take part in the discourse, inform themselves with respect to policy and candidates, and ultimately to be able to support, or run as, candidates. The democratism we live is defined by a chokehold on candidacy, ensuring that those who aspire are the last who should be elected.

    It is not by accident that both the first democratic polity – Athens – and the most ambitious – the USA of 1776 – were slaveholder societies, and that many of the minds that shaped and sustained these polities were slavers themselves. Science and technology have enabled us to create enormous wealth without turning manpower into property outright. The inequality that the oligarchs have engineered, however, has steadily pushed us closer and closer to indebted indenture – slavery in all but name.

    Whether ad hominem or anthroplogically correct, it is simply irrelevant whether the 1% are good people or not. They are incompatible with democracy – they are Too Big Too Afford. We cannot have such inequality and uphold and protect the constitution at the same time. That is all that matters, and the simple question of (in the sense of John Maynard Smith’s concept as applied to evolution) democratically stable policies by definition will tolerate neither outsized corporations nor outsized individuals and families.

    Too Big For Liberty.

    1. Hugh

      Extremely well stated. The rich have stolen too much. It has changed things. They have broken the compact, and the toleration, that allowed their existence. Their power must be broken, their wealth returned to the 99%, and their crimes punished.

      1. Lafayette

        A PROGRESSIVE PERSUASION

        Their power must be broken, their wealth returned to the 99%, and their crimes punished.

        That’s just the problem, it wasn’t a crime.

        The Trickle-Up of wealth to an elite-class was quite legal, inscribed within our tax legislation and passed by Congress. And no Dem PotUS/Congress ever reversed the tendency to produce Income Disparity.

        Let’s all wake up, shall we? We’ve been hoodwinked.

        Want to change the law? Change our Congressional make-up and install those of a more Progressive Persuasion – with the specific covenant of introducing Income Fairness.

        Militate to do so politically, rather than bitching-in-a-blog, and it just might happen.

  16. Schofield

    I’m well aware that Jefferson wanted to use the “pursuit of property” since he’d swallowed the Lockean propaganda fairly wholesale but to argue that the phrase “pursuit of happiness” comes over as inherently anti-slavery would be a stretch for most people. That hole still remains.

  17. rps

    The 1% are dependent upon the mass-induced psychology of the 99% to remain submissive, patient,and orderly as they enter the unemployment cattle chute to be churned into soylent green. Louis XVI and Marie Antoinette also made a similar assumption of the 99%.

    The 1% are damn stupid. The flim-flam men and snake-oil salesmen of earlier years knew when the gig was up and it was time to leave town.

  18. LeonovaBalletRusse

    Yves, thanks for reminding me that the blog was by Susan of Texas. It just goes to prove how coherent your site is. She certainly is worthy of her place in your community. She is a keen strategic thinker and blogger, no *blague*.

    Still, the praise is meant for you, *a light unto the nations*. You give us hope and courage, and the means to persevere. Thank you.

  19. casino implosion

    Why am I not surprised that my favorite McMegan basher is a Yves crony?

    Susan and NC go together like peanut butter and jelly!

  20. Susan of Texas

    Thank you very much for the responses, everyone, and especially the compliments. I had a great time writing the article and trying to see the present through the eyes of one of my favorite writers.

  21. Eleanor (not the same one)

    There’s also this gem later in the book, when Fanny’s brother Edward, who has been disowned and disinherited by his family for persevering in his engagement to a fortuneless girl, is given a curacy with its accompanying meagre income. Fanny is, of course, furious.

    “Elinor had some difficulty here to refrain from observing, that she thought Fanny might have borne with composure an acquisition of wealth to her brother, by which neither she nor her child could be possibly impoverished.”

  22. Schofield

    Alan Gewirth in his seminal book “Reason and Morality” suggests on page 77 that Jefferson meant “well-being” instead of “happiness” in the famous phrase “the pursuit of happiness.” I’m not convinced, as a slave-owner, he understand the meaning of “happiness” to be this. If Gewirth is right then why not “and the essentials for well-being?” My preference is to see the 18th century as being more sociopathic even than our own although an improvement on the 14th century when the English priest John Ball was hung, drawn and quarted by King Richard II for the temerity of posing the Gewirthian style essentially philosophic but moral question:-

    “When Adam dwelved (dug) and Eve span (spun) who was then the Gentleman (rich landowner and serf owner).

    1. Lafayette

      “When Adam dwelved (dug) and Eve span (spun) who was then the Gentleman (rich landowner and serf owner)”.

      Presumably, the Lord … if one cares to believe in a Judeo-Christian biblic version of mankind’s history.

      But, I ask, if there is no such bible and therefore no such stricture to “Love thy neighbor”, then how do other societies arrive at such a social agreement amongst their populations? And yet, such does exist -in whole or in part. (The Ottomans allowed Jews, Orthodox and Roman Catholic Christians to follow their faith.)

      Our Judeo-Christian society (with its myriad religious factions) is not the only such one on earth, which is why freedom of religion is (or should be) a sacrosanct notion. And therefore so should be the separation of Church (any particular religion) and the State.

      The State is temporal, the Church is not or should not.

  23. Lafayette

    MASLOW’S HIERARCHY OF NEEDS

    SoT: So it’s important to know what the real differences are.

    In economic terms, the relative material well-being of an individual (or group of individuals) is only one objective. Maslow’s Hierarchy of Needs gives a far larger view of the array of socioeconomic needs of the individual towards obtaining “well-being”.

    One can place a piece of material like an X-box on that hierarchy, but I doubt the level should all that high.

    So, in terms of self-fulfillmentone may attain higher fulfillment without a large income (except to assure basic needs)- in terms very different from materialism. (Which is where America is at presently.)

    And economics has developed another interesting explanation of the value of money. It is this: Each and every marginal (read extra) dollar we earn brings us to a higher level of material comfort. It can also bring us to a higher level of fulfillment (in the arts, in commerce, in sports even).

    But with each extra dollar also the ability to bring additional material comfort or fulfillment decreases and does not necessarily enhance our well-being. How many Rolls-Royces can you drive? How many yachts do you need to visit St. Tropez in August? How many private jets?

    In terms of fulfillment, the trek up the hierarchy is even more difficult, because it no longer becomes a question of extra income – but more so one of ambition and intellect.

    From the point-of-view of economic utility, however, the upper levels of Maslow’s triangle are not considered. Only the material benefit that money allows is important.

    Meaning that beyond a certain point, one’s material well-being is very largely assured. It is therefore beyond this point that taxation levels can be applied more progressively. (As once was the case in the US – from the mid-1930s to the early 1960s when they were well above 70%).

    WHY SHOULD A NATION TAX ITS RICH?

    Because the money taken from them, having achieved material well-being, no longer affects their material wealth but only their financial wealth. (Which we have assumed wrongly, in America, is equally as important.)

    And those funds obtained by taxation can be spent providing both universal health care, for instance, as well as a least-cost education – the former to assure throughout one’s life adequate health and the latter the skills with which one earns a decent living. (Education also helps for us to understand that materialism is not the sole raison d’être of our existence.)

    These attributes really and truly enhance the well-being of those that find themselves on the first two-levels of Maslow’s Hierarchy*. (And despite the LED-TVs, they are legion.) In fact, both attributes permit the individual the means by which they climb to higher and higher levels in the hierarchy. (Tantamount to taking the economic escalator to a higher level of middle-class lifestyle.)

    Is this not the benefit to the nation as a whole for which we should strive?

    Methinks yes …

    FOOTNOTE
    * And of course they mean nothing whatsoever to those who enter the triangle by birth at the upper-levels.

  24. Lafayette

    The share of income info-graphic above is historically interesting.

    Look at the trend of the 1-percenters. See how the war and the early fifties leveled out their share of national income (salaries, capital gains, rents) at around 10%.

    Note however, that in 1980, the inflexion upwards of their share? See how it has long since returned to the stratospheric levels of the inter-World War period.

    Who became PotUS in 1980? You betcha! Reckless Ronnie.

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