I usually don't talk about the books I read, mostly because they're not worth talking about -- mysteries and thrillers by Michael Connelly, Robert Crais, Tana French, Louise Penny. I just started Y Is for Yesterday, the last book by Sue Grafton.
But I recently read two interesting nonfiction books mentioned in the NY Times book review. They both basically blame all the economic ills of our country not on the super-rich, but on the upper middle class. Not the top 1%, but the other top 9% -- the doctors, lawyers, professors, accountants and faceless administrators and bureaucrats who run our government-regulated capitalistic society.
These are the people who believe in our merit-based economic system. They credit their success to talent, education and hard work. But according to these authors, this professional class consists for the most part of people (as was said of George Bush) who were born on third base and think they hit a triple.
There's just enough truth to their view that it makes sense . . . to them. It does take a good education and marketable skills to get ahead in our world. But much of their success has less to do with hard work, and more to do with winning the lottery of birth. Most are born to rich, educated parents. They benefit from an enriched childhood, good suburban public schools (or private schools), a ticket to a good college, and maybe even a leg up to find that cushy well-paying job.
Just so you know, the median individual income in the U. S. today is about $44,000 per year. (It depends where you live. The average is about $35,000 in Mississippi or New Mexico, but $55,000 in Maryland or Massachusetts.) To be in the top 10% of earners, you need to make about $110,000 a year as an individual, or over $200,000 in household income. (If you live in Maryland or Massachusetts you need more than $280,000 to reach the top 10%!)
Why so much more as a household? Blame it on what the authors call "assortive mating." College graduates tend to marry other college graduates, and since college graduates make more money than those who don't go to college, these households have comparatively more income. When lawyers marry other lawyers, or financial analysts marry other financial analysts, the cycle of inequality just gets worse.
The authors are careful not to blame people who want to succeed, or parents who want their kids to get ahead. It's only natural. But as a class, that top 9% -- the upper middle class -- gets the lion's share of economic benefits, and thus perpetuates inequality. They're the ones who can afford to reap the tax benefits of IRAs and 401Ks, for example, while people on the bottom rungs of the economic ladder can't afford to take advantage of these retirement vehicles.
It's the upper middle class that rushes to open tax-advantaged 529 plans to fund their offsprings' college education -- making sure their children and grandchildren go to college and perhaps graduate school, to perpetuate their prized economic status into the next generation and beyond.
It's also the upper middle class that reaps the most rewards of home ownership. They get a tax deduction for mortgage and real-estate tax -- the more expensive the house, the more rewards they reap. And the expensive house gains them entry into a good local school system, easing the way for the kids to attend a private college or top state university.
The second one is: The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality by Matthew Stewart.
I like the Reeves book better. It's shorter, more to the point, and seems more factual. I recommend it to anyone who's a member of the 9.9%, who resents the 9.9%, or who cares about how our economic society really works. To me, the Stewart book seems like more of a political rant. Besides, you can access his 2018 article in The Atlantic which will give you the bones of the book in a tenth of the time.
What . . . you thought when 2022 arrived there'd be no more homework?!?
20 comments:
The more I read on inequality, the more I see the distinct pattern of the old master and peasant, royalty and serfs. We just call it by other names. The "rulers" do the bidding of the real masters. I remember reading Taylor Caldwell oh about 40 years ago. She laid it all out. Never more exemplified than by their privileged almost tax free status.
I see the poverty from a lifetime of hard labour (stay at home mothers, menial poor paying heavy lifting jobs) and realize how duped most of us are.
Great post Tom.
I must write an analysis of my own tiny province and floodlight the inequality and outright financial and economic abuse.
Happy New Year 2922!!
XO
WWW
That first book does sound like a good read Tom, but I'm not sure that's a wrong thing, being born to successful parents? Being born into big wealth is one thing, but upper middle class (to me) still takes lots of hard work. Okay, maybe some get a few lucky breaks, but it's not like the poor are prohibited from getting ahead. My own parents were uneducated, I grew up lower middle class, but no one stopped me from working my butt off to get thru college. When I graduated, it was one of my professors who helped me score an unpaid internship, but I also worked nights at a supermarket & weekends in a restaurant washing dishes until that first IT position was offered.
I still feel like I won the birth lottery though, for being born white, male and in the US, versus someplace like Ethiopia or Communist China.
I agree with ApacheDug. A culture that rewards people for smarts and hard work is a good thing. You don't want to stifle people's incentive/ability to improve their own lives or prevent parents from advocating for their own children. US is still a country that offers more people the opportunity to move up, and so many people from other countries (rich and poor) want to move here because of that. We should provide a floor of financial support for people who can't compete and more role modeling for children who are not so lucky with wise parents, but lets not move our society from "no one left behind" to "no one gets ahead".
These books feed directly into what Husby and I have been discussing ad infinitum for the past few weeks.
We have definitely re-entered the feudal system here in Canada. Only the rich can afford housing. They buy it up at astronomical prices, then rent out to the poor who work themselves to death to have a roof over their heads.
What can be done?!
Thanks for the book reviews Tom. I plan to check out the "Dream Hoarders" book from the library.
Loved the saying "born on third base and think they hit a triple."
I can only say I was born at home plate, bat in hand, to parents with a good work ethic. I was personally blessed with having a supple mind and decent hand, eye coordination. I worked for what little I have and don't resent those who had it easier. Of course, my not having children might be the reason I'm probably not angry as I should be.
The Atlantic article was very interesting Tom. I have long understood that a good portion of my economic success was due to inherited genetic characteristics. Without winning that lottery all the bootstrap pulling in the world would have been of limited good. Building multigenerational family dynasties is a problem. Being able to pass on $22 million tax free is a very bad joke, and that is just the tip of the iceberg. Each generation needs to prove itself on an even playing field. The first step is fixing our broken education system. Busting up the profession cartels, in the Atlantic article, would also help in numerous ways.
I have taken all of the above into account in my estate planning. My heirs will receive a chance at a leg up but not a guarantee. Giving some less fortunate folks a chance factors into my planning. I hope future generations will realize how lucky they are and share that chance for success.
Doug and Cathy -- I sure don't disagree with you. Neither do the authors, really. As I mentioned, they don't blame people who work to succeed. Kudos to those who do, esp. those from poor or modest backgrounds. But the deck is certainly stacked in favor of those who already have money and who get the lion's share of economic benefits, from 401Ks to 529 plans, itemized deductions, local school funding, assortive mating, inheritance laws, etc. And so the system perpetuates inequality. Of course, it's easier to diagnose the problem than to come up with fair and practical solutions. And unfortunately, the person who does will probably never get elected.
Nicely said Tom, you'll get no argument from me--in fact, I am positively basking in the glow of your very Democratic-minded response! Btw, I also liked what Cathy had to say, Arkansas Patti too--sure are some good comments here.
I love all the sue grafton books. I actually re read them multiple times. I still wonder if maybe she had a manuscript for Z. Anyway, did I ever mention on my blog, the first time I went to Santa Barbara with my husband and he was working with the co ops( Isla Vista) near UCSB, we were walking the beach trail in SB and near the marina was a baby blue 1972 VW with the license plate Kinsey on it. Who else could that have been except Sue Grafton.
Great post, Tom. I have an interesting perspective due to being the child of a welder and a housewife, but I spent 25 years in a small privately owned investment banking firm. The partners were a mix of generational wealth and (literally) a coal miners' kid from a family of 13 children. It was more of an education than I could have gotten at Oxford. One cannot generalize from such a small sample, but I will say that the coal miners' kid, although a kind man, was stingier than most. As a man who received $1 million per year for seven years for ONE project, he charged his siblings when he acted as his father's executor. I mean, I never earned even six figures per year and I performed that service for my siblings for free. Imagine how generous he was to his employees.
In another job, the president of the small university where I worked counted on the organizational skills of his assistant to apply for the employee benefit of free tuition at reciprocal colleges. His application would go in on Day One to this very limited program, which meant that overworked employees in busy departments who didn't get their application in first were out of luck (no assistant to help them!). How twisted is that?!? The benefit was intended to counter the low wages paid to employees. Nobody mentioned to them that it was a race to cash in on that benefit.
I guess my question is, why does it have to be anyone's fault? Why do we always have to point a finger outside ourselves? I find that so offensive, especially when I recall that Hitler took power by taking economic downturn and blaming the Jews...and because people need to point a finger, it worked in Germany. For me, it's as simple as looking at oneself. There is plenty of opportunity out there for most people. Not all, but most. If they choose to access it and work for it.
I agree with the book on the view of those born to upper middle class get a head start on others. Certainly the access that they have to better education and life experiences would make a difference in their success. Hard work and a strong desire to be better also play into a large portion of the upper middle class for those who bettered themselves on their own. Some in the lower income classes often perpetuate their situation on their children by not encouraging them and giving their children the sense of hopelessness. I know of parents who never encourage their children to even look at college and want to get the children out of the house and "off the payroll" as soon as they graduate high school. I think parenting or lack of parenting plays as much of a role as what income class you are born into.
It's certainly a different way of looking at things. I don't blame people for being successful who can employ others and contribute to the economy. However, I do think they need to pay their fair share in taxes. I have been recently watching the series Versailles about King Louie XIV and how he taxed the poor so he and the nobility could afford all their opulence. Things haven't changed much.
I have seen in many of these children of privileged parents an attitude of entitlement that is annoying and sometimes harmful to the kid. Part of the American dream used to be that each generation does better economically than their parents. I think it is not so true anymore on both ends - the privileged kids can't maintain the lifestyle, and the lower classes can't break out and move up.
In the Tucson retirement community where we spend the winter, some people live here year round and rely upon Social Security checks. Others are there only for several months and have a second home elsewhere. In our Facebook groups there are some whiners who feel insulted when the restaurant's servers quit because "we pay enough to live here that we should have a decent restaurant." And there are the rest of us, who enjoy the sunshine and make do with inconvenience. I wonder if there's any correlation between the wealthy and the whiners.
I think many in the 9.9% and 90% have similar genetic, financial and societal background. The reasons why they ended in different groups, I think other than luck, should be the hard work, sacrifice and picking the priorities. For example, if one started in poverty but worked hard, save hard and get educated for many many years and ended up in the 9.9%, he or she may not be living luxuriously right now but at least secure, they should not be blamed. This seemed to be possible for the baby boomers. It it still possible for the current generation of young people? Will social welfare and very generous social benefits solve this problem? I think the right approach is to correct the environment of social and economic bias, but the out-right handing out the benefits. Person responsibilities are still important.
Dear Tom, it was ever thus. The cards are stacked against the poor, that's for sure. Sometimes the poor get a leg-up but it's only by great good fortune and very hard work. And communism didn't work either.
It's the same the whole world over, It's the poor what gets the blame, It's the rich what gets the pleasure, Isn't it a blooming shame?
I'm from the Working Class background, where Dad worked long hours each day and mum stayed home taking in ironing and sewing school uniforms to make a bit extra. I would argue that is IS hard to get ahead, the cards are definitely stacked against the poor. I left school at 15 to get a job and after applying for quite a few, I realised I wasn't getting work because of my non-english sounding name. I went to work in a factory instead, quitting several years later to raise children, and going back to work in factories again once the youngest was in school. My husband was an alcoholic gambler who smoked so there was never any money except what I brought home. I'm happy to say my children all do much better than I did, have decent jobs with good wages and my grandchildren have also done well, two of them in well-paying jobs, one with a career and one still in school. They managed this because I paid the school fees, I paid the bills, I put the food on the table and they learned from me.
Thanks for sharing this. I have ordered it from library. This reminds me of the book The Millionaire Next Door. I had been working for in estate planning attorney for a long time and after reading it, I saw that the mom & pops that were coming in really were the people described in the books and lived as it suggested.
Post a Comment