Hundreds of police officers, many wearing riot helmets, marched into lower Manhattan’s Zuccotti Park early Tuesday morning to clear out the Occupy Wall Street protesters. The operation required boroughwide task forces and “scores of mobile officers who are usually used to flood high-crime neighborhoods.” According to the police, 142 people were arrested, largely for “disorderly conduct and resisting arrest,” though it turned out that according to a judge’s ruling, the police did not have the right to clear the park at all, but merely to dispose of its tents and sleeping bags.
The first thing the police did was clear out the journalists so that they could not see what was going on—just as they routinely do in totalitarian nations. At least 10 reporters were arrested. Ironically, the owners of at least three New York newspapers could not have been happier. Of course, all three are not merely members of “the one percent” but the 1 percent of the 1 percent.
The Daily News, owned by billionaire real estate mogul Mort Zuckerman, cheered “Bravo to Bloomberg’s Occupy Wall Street eviction from Zuccotti Park, [for] finally reclaiming public space from unsanitary shantytown.” He added: “What they [the protesters] need to overcome is a sense that they occupy a higher moral ground than everyone else and are entitled to the privilege of behaving obnoxiously.”
Rupert Murdoch’s New York Post claimed: “Lunatics had taken over the asylum, as if the right to use a park as a public outhouse was in the Constitution,” and called the Occupiers “silver-spoon sickos.” The editorial page credited the crowd at Zucotti Park with being made up of “criminals, vagrants and other loons.”
Another New York newspaper, this one owned by Jared Kushner, the socialite son of another real estate scion (who is currently in prison), also embraced the “law and order” arguments of the mayor. His New York Observer worried, without evidence of problems, that the protests could hypothetically “lead to public health issues, especially with winter approaching.”
Lost among this tone of self-congratulation by the millionaires and billionaires who are lucky enough to buy their ink by the barrel are not only their alleged commitment to the protection of the first amendment but the facts themselves that inspired the protests.
So let’s recall just a few of them. For instance
- In 1974 the top 0.1 percent of American families earned 2.7 percent of all income in the country. By 2007 this same tiny slice of the population had increased its holdings to fully 12.3 percent, roughly five times as great a piece of the pie as it had enjoyed just three decades earlier. (see here and here)
- Half the U.S. population now owns barely 2 percent of the country’s wealth, putting the United States near Rwanda and Uganda and below such nations as pre-Arab spring Tunisia and Egypt when measured by degrees of income inequality.
- By the end of 2010, as corporate profits rose to 15 percent of national income—their biggest share of the economy since such statistics became available nearly 70 years earlier—the share going to workers’ wages fell to its lowest level in the same period.
These numbers have consequences. Wednesday morning’s New York Times publicized the release of a new report documenting the slow-motion destruction of the American middle class “as rising income inequality left a growing share of families in neighborhoods that are mostly low-income or mostly affluent.”
The study, conducted by Stanford University and released Wednesday morning by the Russell Sage Foundation and Brown University, employs census data to illuminate what has happened to family income in the country’s 117 most populous metropolitan areas.
According to the data, “In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970.”
The report also demonstrates a pattern of escape, or at least attempted escape, by the well-to-do of the neighborhood, a consequences of this epidemic of increased inequality with “the rich flocking together in new exurbs and gentrifying pockets where lower- and middle-income families cannot afford to live.”
As a result, according to the study’s authors, “Children in mostly poor neighborhoods tend to have less access to high-quality schools, child care and preschool, as well as to support networks or educated and economically stable neighbors who might serve as role models.”
The results may be evident in any number of outcomes, such as “the growing gap in standardized test scores between rich and poor children, now 40 percent bigger than it was in 1970. That is double the testing gap between black and white children.”
What’s more, the gap between the rich and poor in college completion—one of the single most important predictors of economic success—has grown by more than 50 percent since the 1990s. Today, over half of children from high-income families finish college while less than 10 percent of low-income children do.
As the noted sociologist William Julius Wilson told The Times, the study offers further evidence that “rising inequality is beginning to produce a two-tiered society in America in which the more affluent citizens live fundamentally different from the middle- and lower-income groups. This divide decreases a sense of community.”
This study confirms much of the data discussed in a recent Time magazine cover story, described in this post, entitled “Why the U.S. is No Longer the Land of Opportunity.”
The Time story discussed a recent study from the Pew Charitable Trust finding that “Americans born in a family that was one of the bottom fifth in terms of wealth, only had a 17% chance of making into the top two-fifths as an adult.” It turns out that for all of Europe’s problems, “it is now easier to move up the income ladder in Europe than it is in America.”
Time attributes the causes of inequality to “two mega trends that have been reshaping the global economy since the 1970s: the effects of technology and the rise of the emerging markets.”
And these are indeed important. But during one week in the autumn of 2010, the U.S. Census Bureau reported that the number of Americans living in poverty had reached its highest level in 15 years. (For a single adult in 2009, the poverty line was $10,830 in pretax cash income. For a family of four, it was $22,050.)
Economic inequality was also soaring. A few days after the census report, Forbes magazine released its annual list of the 400 richest Americans and their combined net worth, which had climbed 8 percent to $1.37 trillion.
That’s not the whole story, however. Another report, this one from the Corporation for Enterprise Development and the Annie E. Casey Foundation, found that the U.S. government had spent nearly $400 billion during fiscal year 2009 to fund tax breaks and programs aimed at helping Americans build wealth. More than half the benefits in question went to the wealthiest 5 percent of taxpayers, individuals, and households making more than $167,000. The top 1 percent of taxpayers—those making more than $1 million—received an average of $95,000 in assistance. Meanwhile, families making $50,000 received less than $500 in benefits.
Time’s cover story also notes that European nations with higher levels of mobility also provide much stronger safety nets for the lower classes “such as universal healthcare.” They also “have fewer corporate loopholes, longer tax codes and generally higher rates, and at least on an equality and mobility standpoint their nations’ economies seem to be performing better.” Moreover, in these countries, “Unions get seats on corporate boards in order to help balance out worker pay and CEO pay.”
Some conservatives simply reject the idea that the government should do anything about inequality. Matthew Continetti, writing in the November 14 Weekly Standard, advises his fellow right-wingers, "The way out is to reject the assumption that government’s purpose is to redress inequalities of income. Inequalities of condition are a fact of life.”
This of course ignores the fact that, unlike pretty much every other liberal democracy in the world, government policy in the United States has been designed by conservatives to promote inequality and ensure that billionaire hedge fund managers are taxed at a far less confiscatory rate than their secretaries or even their janitors.
It also ignores the deleterious effects that inequality has on democracy—the Koch brothers can buy a great deal more from Congress and state legislators than the rest of us—and America’s historic formula for economic success.
As former Secretary of Labor Robert Reich puts it, “Pump-priming works only when a well contains enough water.”
During periods when the very rich took home a much smaller proportion of total income—as in the Great Prosperity between 1947 and 1977—the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats.
During periods when the very rich took home a larger proportion—as between 1918 and 1933, and in the Great Regression from 1981 to the present day—growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007—the two years just preceding the biggest downturns.
In that respect, as well as many others, the Occupy Wall Street folks are demonstrating not only for democracy but for the very economy they are accused by the local billionaire newspaper owners of undermining.
Eric Alterman is a Senior Fellow at the Center for American Progress and a Distinguished Professor of English at Brooklyn College and the CUNY Graduate School of Journalism. He is also a columnist for The Nation, The Forward, and The Daily Beast. His newest book is Kabuki Democracy: The System vs. Barack Obama. This column won the 2011 Mirror Award for Best Digital Commentary.