Too Invested to Occupy Wall Street

A couple months back, I was reading Alexis de Tocqueville’s Democracy in America and this chapter’s title caught my eye: Why Great Revolutions Will Become More Rare. I was curious to see if the Frenchman’s observations in early 1830’s America were relevant to analyzing the social conditions that gave rise to the now-defunct Occupy Wall Street movement. And if he had some insight into why most of us in the 99% just kept on dragging ourselves to work instead of taking to the streets.

Writing in the 1830s, Tocqueville was concerned with a categorically different type of revolution (France, 1789) from OWS so it’s not directly comparable. His analysis does focus on inequality as a catalyst of revolution and ownership of property as a strong inhibitor of it.

Almost all the revolutions that have changed the aspect of nations have been made to consolidate or to destroy social inequality. Remove the secondary causes that have produced the great convulsions of the world and you will almost always find the principle of inequality at the bottom.

He then puts his discussion of inequality in the context of American democracy.

Among a great democratic people there will always be some members of the community in great poverty and others in great opulence; but the poor, instead of forming the immense majority of the nation, as is always the case in aristocratic communities, are comparatively few in number, and the laws do not bind them together by the ties of irremediable and hereditary penury. 

Recently we have heard politicians say things like hopefully, there always will be inequality in America (Santorum, thankfully gone) and the galling condescension of Daniels, Rubio, et al. saying there are no haves and have-nots in American, only haves and soon-to-haves. But there is quite a bit of evidence that there is little social mobility in the US, which undercuts their assertion. Despite a common belief in the American Dream, the social class into which one is born is the one in which they will very likely remain. The apparently intractable nature of it and the growing number of those among the poor has increased public frustration with inequality. And 99% is an immense majority.

The wealthy, on their side, are few and powerless; they have no privileges that attract public observation; even their wealth, as it is no longer incorporated and bound up with the soil, is impalpable and, as it were, invisible. Hence they do not form a distinct class which may be easily marked out and plundered; and, moreover, as they are connected with the mass of their fellow citizens by a thousand secret ties, the people cannot assail them without inflicting an injury upon themselves. 

The wealthiest 1% or .01% who control so much of the wealth in the United States have effectively severed the ties between themselves and the mass of citizens not among their ranks. This development is not in their favor. They share few interests in common but they have convinced the public that they are necessary, as they create jobs. Sure.

Tocqueville is right that the wealthy are still relatively few but they have learned to use their wealth to influence the electoral and policy processes, through lobbying, ALEC, and Super PACs. This has raised the prominence of the wealthy who are bankrolling such efforts, which has given the OWS movement a class easily marked out, a proper scapegoat.

Between these two extremes of democratic communities stands an innumerable multitude of men almost alike, who, without being exactly either rich or poor, possess sufficient property to desire the maintenance of order, yet not enough to excite envy. Such men are the natural enemies of violent commotions; their lack of agitation keeps all beneath them and above them still and secures the balance of the fabric of society. 

All revolutions more or less threaten the tenure of property; but most of those who live in democratic countries are possessed of property; not only do they possess property, but they live in the condition where men set the greatest store upon their property. If we attentively consider each of the classes of which society is composed, it is easy to see that the passions created by property are keenest and most tenacious among the middle classes. 

Middle-class property owners have a vested interest in the maintenace of social order but this class has been shrinking in America. And home owership rates have been trending downward since 2004, down to the lowest level since the mid-1990’s. These trends unsettle what de Tocqueville regards as the foundation of social stability in America. But don’t fret. About 2/3 of Americans own their home (some 2 or more) so people are still holding on to their property and the corresponding desire for social order.

Men who have a competency, alike removed from opulence and from penury, attach an enormous value to their possessions. As they are still almost within the reach of poverty, they see its privations near at hand and dread them; between poverty and themselves there is nothing but a scanty fortune, upon which they immediately fix their apprehensions and their hopes.  

The notion of surrendering the smallest part of it is insupportable to them, and they consider its total loss as the worst of misfortunes. Now, these eager and apprehensive men of small property constitute the class that is constantly increased by the equality of conditions. Hence in democratic communities the majority of the people do not clearly see what they have to gain by a revolution, but they continually and in a thousand ways feel that they might lose by one.

Although they have an interest in increasing equality, people in this position are not inclined to agitate for the alleviation on inequality. Instead they are told that we should not raise taxes on the job creators [sic]. The implicit threat is that there will be fewer jobs for you all if the boat is rocked. As Tocqueville notes, it is precisely this class who would benefit from more wage/wealth equality but they don’t want to lose what little they have.

There is increasing awareness that the distribution of wealth is too skewed toward the top and that much of the wealth is being extracted from a bloated financial economy that does little to efficiently allocate capital, which is supposedly how the wealthy benefit the economy and society. The housing bubble was a feeding frenzy for Wall Street but, when the bubble burst, it was the homeowners who bore the brunt. It resulted in millions of foreclosures and a declining home ownership rate. The crash left fewer small property owners whose interests lie in maintaining the current social order.

All of these factors have made the public more aware that inequality is a social problem. Despite its myriad concerns, inequality is the galvanizing issue for the OWS movement and current social conditions in the U.S. are such that its message resonated, motivating hundreds of thousands of people to take to the streets. But most people who would benefit are still too invested in the status quo to join in a movement that is fighting for their interest. Tocqueville makes a great point when he states:

If, then, a state of society can ever be founded in which every man shall have something to keep and little to take from others, much will have been done for the peace of the world. 

That is as sound an argument for wealth redistribution as you might find but no one wants to give up what they have, despite the fact that most of us would be on the receiving end.

source2012:

Dodd-Frank. “Fat cat” populist rhetoric.  Voters have yet to judge whether these and other actions taken by Barack Obama against Wall Street are enough to sway their decision. But one thing has been clear all along this election cycle: Goldman Sachs, whose employees counted themselves in 2008 as Barack Obama’s top private financial supporter, have abandoned the president in droves for his re-election. 
(Source: Wall Street Journal, data via OpenSecrets.org)

Of course they’d contribute more to the candidate who appreciates the value they add to our economy, raking in huge illusory profits that fuel their conspicuous consumption. Hey, it adds more to GDP than some poor person just buying food.

source2012:

Dodd-Frank. “Fat cat” populist rhetoric.  Voters have yet to judge whether these and other actions taken by Barack Obama against Wall Street are enough to sway their decision. But one thing has been clear all along this election cycle: Goldman Sachs, whose employees counted themselves in 2008 as Barack Obama’s top private financial supporter, have abandoned the president in droves for his re-election. 

(Source: Wall Street Journal, data via OpenSecrets.org)


Of course they’d contribute more to the candidate who appreciates the value they add to our economy, raking in huge illusory profits that fuel their conspicuous consumption. Hey, it adds more to GDP than some poor person just buying food.

(via opensecretsdc)

theatlantic:

Happy Birthday Occupy! Income Inequality Is Still Getting Worse.

Occupy Wall Street may well have been the first global protest movement to rally around a statistic cribbed from an economics paper. So to mark its one year anniversary today, I thought I’d break out some of the latest numbers tracking U.S. inequality, courtesy of this month’s Census Bureau recent report on income, poverty, and health insurance coverage. 
From 2010 to 2011, the top 5 percent of U.S. households upped their share of the country’s income by 5.3 percent. The top 20 percent got a 1.6 percent bump. And while the country’s poorest saw their piece of the pie grow by a smidgen, the middle classes lost ground.

Read more. [Image: Jordan Weissmann]

Decades-long trends don’t change in a year, especially when no substantive policy changes have been made.

theatlantic:

Happy Birthday Occupy! Income Inequality Is Still Getting Worse.

Occupy Wall Street may well have been the first global protest movement to rally around a statistic cribbed from an economics paper. So to mark its one year anniversary today, I thought I’d break out some of the latest numbers tracking U.S. inequality, courtesy of this month’s Census Bureau recent report on income, poverty, and health insurance coverage. 

From 2010 to 2011, the top 5 percent of U.S. households upped their share of the country’s income by 5.3 percent. The top 20 percent got a 1.6 percent bump. And while the country’s poorest saw their piece of the pie grow by a smidgen, the middle classes lost ground.

Read more. [Image: Jordan Weissmann]

Decades-long trends don’t change in a year, especially when no substantive policy changes have been made.

(via kiplinger)

motherjones:

EXCLUSIVE: When he doesn’t know the camera’s rolling, Mitt Romney says what he really thinks about American voters.

Romney went on: “[M]y job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.”

kiplinger:

usnews:

Today’s Chart of the Day comes via the Congressional Budget Office

Queue Occupy chants … 

From the nonpartisan Congressional Budget Office.
The drop from 2008 to the present for the top 1% looks big but don’t feel bad for them. Overall their income has grown more than three times as much as it has for everyone else since 1979.

kiplinger:

usnews:

Today’s Chart of the Day comes via the Congressional Budget Office

Queue Occupy chants … 

From the nonpartisan Congressional Budget Office.

The drop from 2008 to the present for the top 1% looks big but don’t feel bad for them. Overall their income has grown more than three times as much as it has for everyone else since 1979.

To Have or Have Knot by Mr. Fish

To Have or Have Knot by Mr. Fish

Of course.
theatlantic:

The Rich Get Richer: 2010 Was a Very Good Year to Be in the 1%

During the Great Recession, the 1% absorbed half of total income losses between 2007 and 2009. But in the first year of the recovery, the top percentile won 93% of all income gains. For a while, it was fair to say that income inequality was decreasing. No longer.The rich are different from you and me, because they have more money. But they’re also different because their money has a tendency to yo-yo more dramatically between downturns and upswings. The 1% took more than half of all losses in the 2001 recession, and then two-thirds of the income gains in the recovery, according to updated research posted on Emmanuel Saez’s website today. Income volatility is apparently the price you pay for being worth a million dollars. As for this recession, Tim Noah puts it beautifully: This recovery has been a luxury item. For the bottom 99%, real income growth over the first two years of the recovery was one-fifth of one percent. The richest percentile saw its income rebound by 11.6%. It is only slightly sensational to point out that the 1%’s income has outgained the rest of the economy by a factor of 58 in the recovery.
Read more. [Image: Emmanuel Saez, et. al.]

Of course.

theatlantic:

The Rich Get Richer: 2010 Was a Very Good Year to Be in the 1%

During the Great Recession, the 1% absorbed half of total income losses between 2007 and 2009. But in the first year of the recovery, the top percentile won 93% of all income gains. For a while, it was fair to say that income inequality was decreasing. No longer.

The rich are different from you and me, because they have more money. But they’re also different because their money has a tendency to yo-yo more dramatically between downturns and upswings. The 1% took more than half of all losses in the 2001 recession, and then two-thirds of the income gains in the recovery, according to updated research posted on Emmanuel Saez’s website today. Income volatility is apparently the price you pay for being worth a million dollars. 

As for this recession, Tim Noah puts it beautifully: This recovery has been a luxury item. For the bottom 99%, real income growth over the first two years of the recovery was one-fifth of one percent. The richest percentile saw its income rebound by 11.6%. It is only slightly sensational to point out that the 1%’s income has outgained the rest of the economy by a factor of 58 in the recovery.

Read more. [Image: Emmanuel Saez, et. al.]