Monday, January 03, 2005

Horatio Alger Not Welcome Among Today's Republicans

Many middle class people voted for George Bush (and opposed John Kerry's proposal to roll back the tax cuts on those making over $200,000 per year) in the hopes that Republican economic policies would allow them to also become rich.

Think again. As discussed in the current issue of The Economist, the rich are getting richer, but it's becoming harder and harder for others to join the club:
A growing body of evidence suggests that the meritocratic ideal is in trouble in America. Income inequality is growing to levels not seen since the Gilded Age, around the 1880s. But social mobility is not increasing at anything like the same pace: would-be Horatio Algers are finding it no easier to climb from rags to riches, while the children of the privileged have a greater chance of staying at the top of the social heap. The United States risks calcifying into a European-style class-based society.

The past couple of decades have seen a huge increase in inequality in America. The Economic Policy Institute, a Washington think-tank, argues that between 1979 and 2000 the real income of households in the lowest fifth (the bottom 20% of earners) grew by 6.4%, while that of households in the top fifth grew by 70%. The family income of the top 1% grew by 184%—and that of the top 0.1% or 0.01% grew even faster. Back in 1979 the average income of the top 1% was 133 times that of the bottom 20%; by 2000 the income of the top 1% had risen to 189 times that of the bottom fifth.

The article discusses these issues in great detail, concluding with:

The Republicans, by getting rid of inheritance tax, seem hell-bent on ignoring Teddy Roosevelt's warnings about the dangers of a hereditary aristocracy. The Democrats are more interested in preferment for minorities than building ladders of opportunity for all.

In his classic “The Promise of American Life”, Herbert Croly noted that “a democracy, not less than a monarchy or an aristocracy, must recognise political, economic, and social distinctions, but it must also withdraw its consent whenever these discriminations show any tendency to excessive endurance.” So far Americans have been fairly tolerant of economic distinctions. But that tolerance may not last for ever, if the current trend towards “excessive endurance” is not reversed.

I would add that there is some truth to the sterotype of Democrats presented by this conservative publication, but all Democrats are not the same. One reason I supported John Kerry was his willingness to cross party lines on issues, and his strong support for the middle class and small business.


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