I’m angry about yes, inequality in this nation or any other. I’m angry at: trashing the environment, war which is different from self-defense because we have an empire that takes other peoples’ resources, plain and simple (George Kennan admitted that), toleration of poverty, homelessness, waste, corruption, racism, nepotism, cronyism, cynicism, planned obsolescence, mindless entertainment that dumbs-down healthy minds,…credit default swaps, collateralized debt obligations, tranches, ,robo-signatures, toothless regulatory agencies, bought politicians and bureaucrats and judges and cops…Now, according to the American Enterprise Institute (AEI), I should just take my job and my income and go be happy and forget all of these other things, but here’s the difference, my parents raised me to actually care about other people, not make up some fake excuse about “meritocracy” and ignore this list of grievances that I talked about. For the last twenty-four years I’ve been working to change how things are (against AEI’s wishes) and that’s why I’m an Occupier.
– “Yossarian_22,” commenting on a recent “Public” Broadcasting System “Newshour” report[1]
Imagine that I had the power to offer you individual happiness with a catch. The catch is that you have to believe something that is terribly and viciously false and does an enormous amount of harm to other people, reducing their happiness. Would you accept the bargain? Your answer depends on your moral compass or lack thereof. It depends on your values. If you are a narcissistic bourgeois sociopath (an Ayn Rand fan perhaps) for whom life is all about “I, me, me mine” (to quote George Harrison from the Beatles’ “Let it Be” album) and the Hell with everyone else, then taking the bargain is a no-brainer – it’s a done deal. If you are someone with a genuine sense of responsibility and concern for other people, with a commitment to the common good instead of just yourself, the catch is a deal breaker. You will have no interest in a morally idiotic, purely personal happiness that comes at the expense of other people and the broader public happiness. You might even tell me to get lost or even to go to Hell with my devilish deal and send me off with some version of the old labor slogan: “An injury to one is an injury to all.”
Six Waltons Have as Much Net Worth as the Bottom 30 Percent
Maybe somebody should tell Paul Solman and Jamie Napier to get lost, or worse. According to the “Public” Broadcasting System “Newshour’s” fedora-wearing economics correspondent Solman last Friday, the Yale social psychology professor Napier has determined an interesting relationship between “ideology” and “happiness.” [2] “Conservatives,” Napier claims to have found, are happier than “liberals” (the “left”) because of their different takes on economic inequality in the United States, where – as Solomon reported on the Newshour last August – the top 20 owns 84 percent of the nation’s wealth (leaving 4 out of 5 Americans to fight it out for just more than a sixth of the nation’s net worth). The bottom 40 percent of the U.S. has 0.3 percent of the nation’s wealth, basically nothing, as Solman added one month and a day[3] before the Occupy Wall Street movement established its presence and announced its opposition to the 1 percent that stands atop the steep American socioeconomic period. [4]
Solman could have said more, much more, about the inequality that “conservatives”[5] and “liberals” view in different ways, by the way. As the leading wealth and power analyst G. William Domhoff notes, the top 1 percent – the top one hundredth – own more than a third (34 percent) of the all the nation’s privately held wealth. It gets worse when you focus on financial wealth. The top hundredth owns 43 percent of the nation’s financial net worth, including 38.3 percent of all privately held stock, 60.6 percent of financial securities, and 62 percent of business equity. The top 10 percent have 90 percent of stocks, bonds, trust funds, and business equity, and more than three fourths of non-home real estate. “Since financial wealth is what counts as far as the control of income-producing assets,” Domhoff notes, “we can say that just 10% of the people own the United States of America."[6]
But the really super-rich are found in the top thousandth, not the elite hundredth. In 2007, the top thousandth received 6 percent of all U.S. income. The top five hundredth – the upper 0.2 percent, with incomes of $1 million or more – got 13 percent of all U.S. income. The top 400 income “earners” averaged $344.8 million per person.[7]
Last year, by stark contrast, the U.S. Census Bureau reported that the quantity of Americans living in poverty in the U.S. in 2009 was “the largest number in the 51 years for which poverty estimates have been published.”[8] Forty six million Americans now live below the federal government’s notoriously inadequate poverty level[9] and 1 in 15 Americans live in what researchers now call extreme poverty – at less than half that miserly poverty level (less than $11, 517 for a family of four, by the way).[10] As the Center for Budget and Policy Priorities reported last year, the number and percentage of people mired in deep poverty hit a record high in 2009. Nineteen million Americans were mired in deep poverty in 2009, up 2 million from 2008.[11] The bottom 20 percent of Americans owns one tenth of 1 percent of the nation’s wealth. [12] Furthermore, a recent Census report commissioned by the New York Times shows that 1 in 3 Americans lives either in official poverty or in “near poverty,” either officially poor or at less 150 percent of the poverty level.[13]
Meanwhile the web has recently been abuzz with a remarkable finding from University of California labor economist Sylvia Allegretto. Six members of the Waltons, heirs to the Wal-Mart fortune, have, Allegretto shows, amassed a fortune equal to that of the combined net worth of the bottom U.S. 30 percent. [14]
“Belief of a Meritocracy’
But I digress. What is it exactly about how the different ways they view this remarkable inequality (by far and away the most extreme in the industrialized world, by the way) that makes “conservatives” happier than “liberals”? According to Napier, conservatives are happier than liberals because they think there's equality of opportunity in America. “One of the biggest correlates with happiness in our surveys,” Napier told Solman, “was the belief of a meritocracy, which is the belief that anybody who works hard can make it. That was the biggest predictor of happiness. That was also one of the biggest predictors of political ideology.”
To buttress professor Napier’s point, Solman did something disgusting. He went over to the arch-reactionary, super-plutocratic American Enterprise Institute (AEI) and talked to some of its very conservative, meritocracy-believing, and relatively affluent staff members and asked them how happy thought they were and what they think about economic inequality. The staffers reported high levels of happiness and explained that the United States is a special Horatio Alger-esque land where good, hard, talented, and skilled work bring “just desserts” (high incomes and great wealth) and laziness and bad work produces poverty.[15] But of course, at the arch-plutocratic right wing corporate AEI, it is part of staffers’ job description to subscribe what the British columnist and author George Monbiot calls the super-wealthy Few’s “ myth of election: the belief that they are the chosen ones, possessed of superhuman talents.”[16]
After garnering this easily predictable response from young and rising plutocracy worshippers at AEI, Solman then drove over to the Occupy DC site, identified by Solman as “liberal” (despite the fact that Occupy has included a considerable number of left radicals and other sorts of economic populists who are left of liberal) and found a bitter unemployed man who reported (imagine) being very unhappy. Solman found other and younger Occupiers who told him that the American System is less than fair and that this caused unhappiness for them.
“They Earned It”: The Self-Attribution Fallacy
Just so there’s no confusion here, let’s be clear about the belief that creates happiness according to Napier and perhaps by Solman. It holds that the greater income and wealth of the Few, the modest, stagnant and declining incomes of the middle and working classes, and the often extreme poverty of the lower class all basically boil down to different levels of hard and honest work and skill. The 1 percent that owns a third of the nation’s wealth (and a larger share of its elected officials) has more merit than the rest of us. They earned their remarkable wealth and money and the power that goes with it. The bottom 20 percent that together possess less than a hundredth of the nation’s poor has less merit than the rest. They earned their absent and negative net worth and misery. That’s the belief that supposedly makes “conservatives” “happier” than “liberals.”
Never mind (neither Napier nor Solman seemed to) that the conviction is flatly false, on par with believing in the tooth fairy or thinking that 2+2=5. The upper class is loaded with people who are rich independent of any special effort or skill on their part due to the simple fact of inheritance. The passing on of net worth and connections (prep school backgrounds and legacy admissions of the sort that got the legendarily mediocre messianic militarist George W. Bush into Yale and Harvard) and other benefits across generations covers up the stupidity, decrepitude, and/or laziness of many rich people and offer stupendous advantages to more able and/or energetic elites who profit from the fact that success in the “free market” of the present and future depends significantly on how much accumulated capital you bring to that market from the past. Bad behavior and poor skills have little negative economic impact on those born into wealth; the dissolute children of the rich generally stay rich regardless, just as most born into the lower and working classes remain there regardless of how hard, honestly, and skillfully they toil. A vast quantity of reports by the Economic Policy Institute and, more recently the Economic Mobility Project, which examines the highly differentiated accessibility to the American dream, shows that the U.S. is actually one of the least Horatio Alger-like rich societies in the world. Despite the relative weakness of welfare policy and unions and other social and institutional forces that “conservatives” like to blame for sapping the work ethic in the U.S., America actually provides considerably less intergenerational upward economic mobility than most other industrialized nations do. At the same time, polling data has long shown that poor Americans are no less dedicated to hard work than other Americans; they just happen to possess fewer inherited and present day advantages and opportunities than more affluent citizens do.
Black Americans are no less committed to hard work and savings than white Americans. But as a group they enjoy far less wealth than whites – and I mean far less: the average black U.S. household currently possesses 7 cents of net worth for every dollar of wealth owned by the average white U.S. household – and suffer unemployment and poverty rates double those experienced by whites. The differences reflect a vast and overlapping, interrelated panoply of barriers to equality imposed by past and present cultural and institutional racism.[17]
Of course, as Monbiot recently noted, “If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of what Monbiot calls “the self-attribution fallacy….crediting yourself with outcomes for which you weren’t responsible.” Monbiot cites the findings of the psychologist Daniel Kahneman, who won a Nobel Prize in economics. When he examined the comparative “earnings” of 25 wealth advisers across eight years, Kahneman found that the results “resembled what you would expect from a dice-rolling contest, not a game of skill.” Those who received the biggest bonuses had simply gotten lucky. “Such results have been widely replicated,” showing, Monbiot notes, that “traders and fund managers across Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin.”[18]
Exploitation
Even in relatively rare cases of remarkable first-generation ascendancy into the wealthy U.S. elite (without the benefit of inheritance), the notion that the rich “earn” their fortunes on their own is completely bogus. As the ultra-billionaire U.S. investor Warren Buffett has acknowledged more than once, people can “earn” large amounts of money only when they live under social circumstances that are suitable for private accumulation. They hardly create those circumstances themselves. Society, Buffett admits, is responsible for his wealth. “If you stick me down in the middle of Bangladesh or Peru,” he once said, “you’ll find out how much my [special talent for smelling market opportunities] is going to produce in the wrong kind of soil.” The Nobel Prize-winning economist and social scientist Herbert Simon has estimated that “social capital” is responsible for at least 90 percent of the income that people receive in rich nations. By social capital, Simon means not only natural resources but also technology, organizational skills, and “good [wealth-friendly] government.” “On moral grounds,” Simon concluded, “we could argue for a flat income tax of 90 percent.”[19]
But this actually understates the case for eating the rich. The wealthy do not simply benefit from society; they accumulate fortunes at the expense of it. They profit from: mass unemployment’s depressive impact on wages, which cuts their labor costs; regressive tax cuts and loopholes, which increase with wealth while shutting down social services for the poor; the evasion and undermining of environment regulations, which reduces their business costs while spoiling livable ecology; wars and giant military budgets that feed the bottom lines of the giant high-tech “defense” corporations they own while stealing money from potential investment in social uplift; a hyper-commercialized mass consumer culture that despoils the environment and assaults peoples’ capacity for critical thought; deals with corrupt dictators who provide natural resources at cheap prices while depressing wages and crushing democracy in “developing countries;” the closing down of livable wage job in the U.S. and the export of employment to super-exploited low-wage peripheries; a health care system that privileges the profits of giant insurance and drug companies over the well being of ordinary people; exorbitant credit card interests rates that lead to millions of bankruptcies each year; predatory lending practices that spread and perpetuate poverty and foreclosure; agricultural and trade practices that destroy sustainable local and regional food cultivation and distribution practices at home and abroad; the imposition of overly long working hours that keep employee compensation levels down while helping business maintain a large “reserve army” of unemployed workers; exorbitant public business subsidies and taxpayer incentives and bailouts paid to the rich at the expense of the rest; and from&he
