113. How Americans Think and Feel About Income Inequality

In his November 17 New York Times column, The Hedge Fund Republic, Nicholas Kristof takes on the rising income inequality in the U.S.   He notes that while Latin American countries notorious for their income inequality have improved their income distribution somewhat, the U.S. has increased its gap.  In the 1940s in Argentina the top 1 percent by wealth controlled more than 20 percent of incomes, twice as much as in the United States.  In 2007, the top 1 percent in Argentina controled a bit more than 15 percent while in the United States the top 1 percent controls 24 percent of income in 2007.  In fact, The top 1 percent of Americans owns 34 percent of America’s private net worth, according to figures compiled by the Economic Policy Institute in Washington. The bottom 90 percent owns just 29 percent.

Kristof wonders: "At a time of such stunning inequality, should Congress put priority on spending $700 billion on extending the Bush tax cuts to those with incomes above $250,000 a year? Or should it extend unemployment benefits for Americans who otherwise will lose them beginning next month?"  

How is this possible in a true democracy?  Why would working class Americans vote for candidates put forward by two major capitalist parties supported by corporations and elect a Congress that is more than half composed of multi-millionaires?  What happened to Lincoln's promise of "a government of the people, by the people, and for the people?" 

A democracy is not a formal system of political parties and regular elections (even though these are required).  More importantly, it requires politically educated citizens.  

The American ruling class has managed to engineer the American voter who is neither politically educated nor free of bourgeois prejudices.  

Below please find the Abstract from a recent survey by  about Americans perception of income inequality and their preference.  You can also download the entire report in PDF format.

--KN 

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Building a Better America – One Wealth Quintile at a Time

By Michael I. Norton and Dan Ariely

Abstract

Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of “regular” Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to “build a better America” by constructing distributions with their ideal level of inequality. First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups – even those not usually associated with wealth redistribution such as Republicans and the wealthy – desired a more equal distribution of wealth than the status quo.

For the full report click here.