How can America hold its head up? That 46-pound toupee inelegantly perched on its crown must make it hard.
What the hell am I talking about? This past Sunday, Frank Rich tossed out a line in his New York Times column that gave me pause. He noted that “the top 1 percent of American earners now take home nearly a quarter of Americans’ total income — perhaps the single most revealing indicator of how three decades of greed and free-market absolutism have eviscerated America’s fundamental ideals of fairness.” The sentence was linked to the first part of a series by Timothy Noah in Slate on the Great Divergence, a term coined to describe the post-1979 period of broadening income inequality in America. Noah cites research from 2007 indicating that “the richest 1 percent account for 24 percent of the nation’s income.” Over the last century, income inequality has ebbed and flowed:
It dropped a bit in the late teens, then started climbing again in the 1920s, reaching its peak just before the 1929 crash. The trend then reversed itself. Incomes started to become more equal in the 1930s and then became dramatically more equal in the 1940s. Income distribution remained roughly stable through the postwar economic boom of the 1950s and 1960s. Economic historians Claudia Goldin and Robert Margo have termed this midcentury era the “Great Compression.” The deep nostalgia for that period felt by the World War II generation—the era of Life magazine and the bowling league—reflects something more than mere sentimentality. Assuming you were white, not of draft age, and Christian, there probably was no better time to belong to America’s middle class. The Great Compression ended in the 1970s. Wages stagnated, inflation raged, and by the decade’s end, income inequality had started to rise. Income inequality grew through the 1980s, slackened briefly at the end of the 1990s, and then resumed with a vengeance in the aughts.
Vengeance, indeed. During the Great Divergence, specifically “from 1980 to 2005, more than 80 percent of total increase in Americans’ income went to the top 1 percent.” Now, according to statistics compiled by the Central Intelligence Agency, “income distribution in the United States is more unequal than in Guyana, Nicaragua, and Venezuela, and roughly on par with Uruguay, Argentina, and Ecuador. Income inequality is actually declining in Latin America even as it continues to increase in the United States. Economically speaking, the richest nation on earth is starting to resemble a banana republic.” Despite this trend, the issue of income inequality has “barely entered the national political debate.” Yet it is “a topic of huge importance to American society” and has become a cause for worry among many economists and political scientists. “Even Alan Greenspan, the former Federal Reserve Board chairman and onetime Ayn Rand acolyte, has registered concern. ‘This is not the type of thing which a democratic society—a capitalist democratic society—can really accept without addressing,’ Greenspan said in 2005.”
So how can America permit such gross inequality and hold its head up? How can a democratic nation stand tall with the equivalent of a 46-pound toupee upon its pate? (If an average adult male in the US weighs 191 pounds and 24 percent of that weight is concentrated at the very top, that would make for a 45.84 pound hairpiece.) We are dangerously top heavy. If the country were an SUV (and our fondness for the gas-guzzling behemoths makes that an apt analogy), we would be at risk for a rollover. How long before we topple? How long before the chasm between the top one percent and everyone else in America swallows us whole? What are we doing?