I was switching channels this morning and happened upon the movie Arthur, staring Dudley Moore as a lovable drunken millionaire who lives in NYC. And the funny thing about the movie was that all of Arthur’s associates and relatives kept referring to themselves and each other as millionaires and I thought to myself, how quaint. They had millionaires back then who thought they were really rich! I mean really! By the end of the movie it was revealed that Arthur would inherit 750 million dollars and he and his fiancée and driver and apparently everyone else thought that was more money than a person could use. Can you imagine that?! Isn’t nostalgia so amusing?
But Back in 1981 when the movie was made there were only 12 billionaires in the USA and some 200,000 millionaires so Arthur really was among the elite persons of means. Today however, a mere 30 years later, we have 70 Billionaires in NY state alone and over 400 in the USA and over 5 million millionaires! I wonder what they do for a living because I know not one of them…do you?
Coincidentally, 1981 was also the year that saw the inauguration of President Ronald Reagan and the advent of “Reaganomics” and it was President Reagan’s new way of looking at the economy and how to grow it and it espoused lower taxes, deregulation, and entrepreneurism. And for the real “Arthur’s” of the United States it was just what the economic doctor ordered, but along with the rise of wealth in America, poverty began to rise steadily again too and today the nation’s poverty rate is 15.1% with close to 50 million citizens living in poverty.
Today A minimum wage job of $7.25 an hour will bring you about $15,000 a year before taxes, placing you right in the middle of America’s poverty line. Imagine getting up every day and going to work, 5 days a week, 52 weeks a year and coming home dirt poor in the year 2013…or perhaps you don’t have to imagine? I know a lot of these people and it just doesn’t seem fare that someone who works hard and who works every day, should still have to be considered poor and in need of financial help just to make the basic ends meet.
In fact since the 1980’s the overwhelming majority of Americans have derived almost no benefit from the boom in stocks and real estate and 30 years of economic growth in the U.S. that Arthur and his ilk have enjoyed. In 1980, the average per capita income for a middle class American was $45,879. Today, adjusted for inflation, that figure is $45,113… But for today’s Arthurs, incomes have almost tripled since the 80s began and right now The 400 richest people in the U.S. have the combined income of the bottom 150 million American citizens!
ipledgeafallegiance 
That final sentence is absolutely staggering.
Almost pointed post. Well done. Remember when they called Reganomics ‘Voodoo Economics’, well the results speak for themselves, as you’ve shown. The USA has inherited economic stagnation and tragic levels of inequality. Indications are that it can only get worse
I meant ‘A most pointed post’ – iPads do this sort if thing. Sorry.
A very good post here. Interesting points and observations of which I’m mostly in agreement with. It’s really just history repeating itself though. I would just like to not that what we have today isnt really capitalism at all. When we had true capitalism there were fewer wealthy and fewer poor. I’m think of the 50’s and 60’s. If you wanted to work you could find work and nobody really concerned themselves with the few that were rich. In fact people were more inclined to celebrate your success when you got ahead than to be envious. That all changed when we moved to crony-capitalism. Our govt and the huge corporations are all but one and the same now. Those few tied to these big corporations are the ones making all the money. The very money the govt taxes the rest of us for. Be it small business or small farms, the little guy has slowly been put out of business by these giant corporations – they can afford the massive layers of regulation. The corporations get the government money (just look at the banks for one example – massive bonuses to top people when the banks were failing) and those people are the ones getting rich, simply through the power of government. Shrinking government and ending the subsidies would be a great place to start. Of course there is that history thing again and our nation has demonstrated an astounding ability to ignore history. I leave you with a quote and apologize in advance for its length. Not hard to see where we are on the path described in teh second paragraph.
“Again and again after freedom has brought opportunity and some degree of plenty, the competent become selfish, luxury-loving and complacent, the incompetent and the unfortunate grow envious and covetous, and all three groups turn aside from the hard road of freedom to worship the Golden Calf of economic security. The historical cycle seems to be:
From bondage to spiritual faith; from spiritual faith to courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to apathy; from apathy to dependency; and from dependency back to bondage once more.
At the stage between apathy and dependency, men always turn in fear to economic and political panaceas. New conditions, it is claimed, require new remedies. Under such circumstances, the competent citizen is certainly not a fool if he insists upon using the compass of history when forced to sail uncharted seas. Usually so-called new remedies are not new at all. Compulsory planned economy, for example, was tried by the Chinese some three millenniums ago, and by the Romans in the early centuries of the Christian era. It was applied in Germany, Italy and Russia long before the present war broke out. Yet it is being seriously advocated today as a solution of our economic problems in the United States. Its proponents confidently assert that government can successfully plan and control all major business activity in the nation, and still not interfere with our political freedom and our hard-won civil and religious liberties. The lessons of history all point in exactly the reverse direction.”
Henning W. Prentis, “Industrial Management in a Republic”, 1943
I loved this post because it highlights the strengths of capitalism vs. the class warfare that is now happening. First of all, we’ve redefined “poor” in the US, so we could expand our “poor class” which is still richer than any other country’s poor. We have more wealthy people now because in the capitalist economy, wealth is more easily created. That is how the US brought up the wealth of the entire world, and it is only senseless bureaucrats who keep that wealth from spreading even further. This post seems to posit that all wealth is stolen – that poor people are only poor because someone took their wealth. But in a free society, everyone is afforded opportunity to achieve, whereas in a socialist society, (incompetent) bureaucrats determine who gets to advance and who gets left to be poor. For instance, Obama funded the well-known Solyndra, promised lots of jobs, which never materialized, and money that the government had taken by force from its (wealthy) citizens was squandered, given to cronies – i.e. other wealthy people. Some people got wealthier – but it certainly wasn’t any poor people!
The poor in the US might be better off than many other countries but they are still rather poor. 2012 Federal Poverty Guidelines consider an individual making $11,170 or less as living in poverty. Now think about that. An individual making that amount is earning less than $1,000/mo. Rent on a cheap place will easily eat up 40-60% of that money. Then they need health insurance which is unlikely to be provided to workers earning that little. They also need food as well as transportation. When all is said and done they are living on a shoe string trying to make it week to week. Something as simple as being sick for a few days can drive somebody in poverty into the red. So yes they are better than the poor in some countries but that doesn’t mean they are doing well.
Though I agree that not all wealth is stolen. Rather much of it is created. But at the same time a lot of it is created by those at the bottom and kept by those at the top. Just look at how incomes of the top earners have increased along with the economy and corporate profits over that last 20 or 30 years while those at the bottom have not increased to the same degree. A higher percent of profits is going to the wealthy and less is going to the workers that keep everything going.
Also I agree that in a free society everyone is afforded opportunity to achieve but that is highly influenced by your parent’s socioeconomic status. Those on the bottom can’t afford good schools or early education like pre-k. They can’t offer their kids the enrichment opportunities that help develop children cognitively and emotionally. The wealthy can offer their children much more which improves their opportunities and probably of being well off. Those with money can afford better schools and they can support their children through college. They can help them start businesses or just plain give them a few bucks when they are broke. All of this influences each person’s chances at success.
I was watching that movie too!
The rest of your post depressed me though. I often look at homes/neighborhoods, see the hoards of folks with their iPhones, or walk through stores where the clothes are half my mortgage payment and wonder…where do folks get all this money?
I know I don’t have it.
i do. i know a lot of millionaires.they are drs, lawyers, store owners,retired people….. i used to be one,until 2007.
I agree with someone else here who posted that the last sentence says it all.
The current system is not sustainable and whether intended by some sneaky power hungry elite group or not, our entire economic structure is comprised of parths that systematically transfer wealth from the poor to the the wealthy.
If anyone is interested in further reading, there is:
– Thomas H. Grecco Jr.’s online book, “New Money for Healthy Communities (http://www.ratical.org/many_worlds/cc/NMfHC/toc.html)
– PBS documentary series, “The Ascent of Money”
– Jack Weatherford’s, “The History of Money” – available through Amazon
I’m certainly in no position to judge or solve our economic problems in the United States, but I can tell you this, a good CPA, tax attorney and a corporate lawyer can make a middle-class person, a company with marginal profits, look mighty good on a balance sheet. I assure you, smoke and mirrors still fill our business world accounting systems today. Books are still being cooked today. Remember Enron? Do you really believe Enron was the last to use smoke and mirrors and cooked books. The wealthy may be getting wealthier, but I wonder how much of their wealth is really real, how much is smoke and mirrors and how much is from cooked books? Remember all the home loan disasters and foreclosures and back bailouts over the last several years? I hope for everyone’s sake, the “wealthy folks” have not built their houses of “wealth” with smoke and mirrors and cooked books.
I loved your essay/articled. It obviously made me think… I enjoy your perspectives.
Oh boy. Don’t get me started.
If I could think in terms of numbers I would probably understand how revealing the stats quoted in this essay are. As it happens, my brain can just about manage to process 6 zeroes after a number – that’s a million? Crony-capitalism has replaced capitalism, like someone has pointed out – and I don’t think anyone has figured out a way to deal with the resulting conundrum of the widening divide between the ‘rich’ and ‘poor’. I don’t understand finance, banks, economics and lots of other related issues. Sometimes I wonder whether Bhutan has got it right, measuring their nation’s progress by ‘Gross National Happiness’.There is a nice perspective on this in the book ‘The Geography of Bliss’ by Eric Weiner. I quote from the same chapter on Bhutan:
When the last tree is cut,
When the last river is emptied
When the last fish is caught,
Only then will Man realize that he cannot eat money.
Or maybe I’m just an ostrich, refusing to face reality . . . I don’t know.
good read..insightful. It is too bad the truth behind it. We are a sad country for how our poor just keep getting poorer…..