Wed Jun 19 2013

Numbing numbers explain US frog revolution
by Joel S. Hirschhorn
April 8, 2012

Believing in the classic American Dream that hard work will deliver prosperity is like believing that buying super lottery tickets is a smart way to become wealthy. Both are delusional beliefs because both are bets on incredible long shots that will disappoint nearly everyone who believes this garbage. The American Dream has been destroyed by a revolution from the top.

Americans have been watching authentic bottom-up revolutions in other countries but remain oblivious to a very different kind of revolution by elites that has been in progress for over three decades in the US. It has not destroyed the government or Constitution, merely bought control of both. Our government was not overthrown in a bloody revolution. It was purchased to win the class war against the 99 percent.

Call it the frog revolution. It is best understood by the parable of the frog in water that stays in it as the temperature is raised, ultimately to the boiling point, killing the frog. The key indicator of the US frog revolution is a mountain of data showing the rise in economic inequality, the loss of upward economic mobility, and the killing of the middle class. The vast majority of Americans, the 99 percent of frogs, remain ignorant of how they are being destroyed by that infamous rich and powerful one percent.

Note that in a poll released by Pew, 19 percent of Americans agreed with the statement that “success in life is pretty much determined by forces outside of our control,” the highest number since 1994. It would be much higher if there was not an epidemic of delusional thinking. But more on target, 40 percent of Americans — also the highest number since 1994 — agreed with the statement that “hard work and determination are no guarantee of success for most people.” For the counter-revolution we need that number must get much higher.

Consider new data about American reality from a study by University of California economist Emmanuel Saez. In 2010, despite non healed wounds from the great recession, an amazing 93 percent of the additional income created in the country that year, compared to 2009 — $288 billion — went to the top 1 percent of taxpayers, those with at least $352,000 in income. That delivered an average single-year pay increase of 11.6 percent to each of these households. Yes, the rich are getting richer.

But there is more to this depressing story. All the talk about the top 1 percent misses the truth about the super rich. In 2010, 37 percent of these additional earnings went to just the top 0.01 percent, a miniscule collection of about 15,000 households with average incomes of $23.8 million. They saw their incomes rise by 21.5 percent. The richer you are the richer you get.

What about ordinary Americans? The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation. The top 1 percent, whose average income was $1,019,089, saw an 11.6 percent increase in income. Most Americans are no longer sharing in economic recovery or growth.

Consider this finding: David Madland and Nick Bunker of the Center for American Progress recently found that in pre-frog revolution 1968, when 28 percent of the workforce was unionized, 53 percent of the nation’s income went to the middle class. In 2010, when only 11.9 percent of the nation’s workers were unionized, the fraction earned by the middle class had fallen to 46.5 percent. And if current efforts to destroy unions are successful the vast majority of non-unionized workers will suffer more.

Still more numbing numbers: Over time the top 1 percent has done better in successive economic recoveries of the past two decades. In the Clinton era expansion, 45 percent of the total income gains went to the top 1 percent; in the Bush recovery, it was 65 percent; now it is 93 percent. How much more negative impacts of the frog revolution will it take for a counter-revolution to take back our country?

Add to all this: Research by Julia Isaacs of the Brookings Institution, as part of the Economic Mobility Project, has shown that intergenerational mobility in the United States has fallen far below the levels in Germany, Finland, Denmark and other more social democratic nations of Northern Europe. In other words, the American Dream really is nothing more than a big, delusional lie that far too many Americans still cling to and that mainstream politicians still boast about. Those politicians enable the elites to sustain the top-down frog revolution.

Listen, all around the 99 percent the socioeconomic waters are still being heated up more by the rich and powerful 1 percent that runs the two-party plutocracy. Delusional frog-citizens are mostly blind to the hot water they are in. Far too many are still clinging to the myth that voting for one party or the other will somehow make things better. Wrong. Both major parties have allowed and sustained the top-down frog revolution. What we need for the counter-revolution is finding a way to overturn the status quo political system.

A major opportunity is using what the Founders gave us in the Constitution: an Article V convention of state delegates with the power to propose reform constitutional amendments. This should be a priority for both the Tea Party and Occupy movements and any candidate coming through the Americans Elect nomination process on the Internet should also support using the convention option.

What is at risk without effective rebellion is much more than dollars. Harold Meyerson got it right: “If belief and participation in democracy are sustained by people’s conviction that democracy produces good economic outcomes, then the growing concentration of wealth and income in the United States is a long-term threat to everything we profess to stand for.”

Contact Joel S. Hirschhorn through Delusional Democracy