The death of the American Dream and the re-emergence of the caste system [View All]

[prolesunited]

While Americans have been sleeping. we have been moving once again to a society in which no amount of work will raise people out of the socioeconomic status into which they were born while the rich continue make to amass even greater wealth.

As evidence of the trend, Congressional budget office figures indicate that between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers FELL by 7 percent. In the same time period, the rich enjoyed huge increases in wealth, with the income of the top 1 percent rising by 148 percent, the income of the top 0.1 percent growing by 343 percent and the income of the top 0.01 enjoying 599 percent windfall.

Perhaps this could be made more palatable if more Americans had entry into the upper echelons through hard work and perseverance, but that is hardly the case. Over the past generation, upward mobility has fallen dramatically, with few from the lower classes even making it into the middle class. Only 10 percent of adult males whose fathers were in the bottom 25 percent of the population as ranked by social and economic status made it into the top 25 percent. A landmark 1978 survey had pegged that figure at 23 percent.

Instead of moving society forward, we are retreating to the gross inequalities of the early 1900s. We are undoing ALL of the gains that have been mad in closing the income gaps following WWII through strong unions; taxes on inherited wealth, corporate profits and high incomes; close public scrutiny of corporate management.

Now, the GOP is using its control to roll back any of the progress that was made as part of the New Deal, codifying the advantages the haves wield against the have-nots.
Some actions they have taken toward this end:
• Get rid of the estate tax, so that large fortunes can be passed on to the next generation.
• Reduce tax rates both on corporate profits and on unearned income such as dividends and capital gains, so that those with large accumulated or inherited wealth could more easily accumulate even more.
• Create tax shelters mainly useful for the rich.
• Reduce tax rates on people with high incomes, shifting the burden to the payroll tax and other revenue sources that bear most heavily on people with lower incomes.
• Cut back on healthcare for the poor, on the quality of public education and on state aid for higher education, making it more difficult for people with low incomes to climb out of their difficulties and acquire the education essential to upward mobility in the modern economy.
• Do everything possible to break the power of unions, and you'd privatize government functions so that well-paid civil servants could be replaced with poorly paid private employees.

* This post is based on The Death of Horatio Alger by Paul Krugman, which appeared in The Nation magazine. Full text available only to subscribers.


Some possible questions for discussion:
• How has the GOP been able to sustain the myth of the American Dream in light of these developments?
• Why has the class warfare argument been so successful?
• How can we best shatter people's illusions with the truth?
• Can true democracy thrive in such an economic climate?
• What steps can Democrats take to reverse these trends?
• Is it really necessary to have a more egalitarian society or is social Darwinism acceptable?

Feel free to add any other comments that you may have.