Tuesday, November 20, 2012

Money, Power & the American Dream

Park Avenue/Daniel Case Creative Commons
Not only is the American democracy under siege by the forces of money and financial power, in Academy-award winning filmmaker, Alex Gibney's latest documentary, Park Avenue: Money, Power and the American Dream - aired recently on PBS - Gibney makes clear that the American Dream of social & economic mobility is severely threatened as well.  As a symbol of money and power, he discusses a building, 740 Park Avenue in New York where the residents are among the richest in the world:a century ago mostly oil barons, now mostly employed in finance and at hedgefunds. Just to highlight a few fascinating observations from this documentary:

- Social & Economic Mobility in the U.S. is not better, and actually worse than in quite a few other wealthy countries, including Canada, Australia, the Scandinavian countries, the Netherlands, France, Germany, and others

 - Income Inequality in the U.S. has skyrocketed over the last decades. According to the Congressional Report, Trends in the Distribution of Household Income between 1997 and 2007,  "....The share of total income in America going to the top 1% of American households increased from 11.3% in 1979 to 20.9% in 2007...." Also, from 1992 to 2007 the top 400 earners in the U.S. saw their income increase 392%, while income of the rest stagnated.

 - Distribution of Wealth in the U.S. too has reached historic levels. Professor G. William Domhoff, author of  Who Rules America?, states on his website, that" ... As of 2010, the top 1% of households (the upper class) owned 35.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 53.5%, which means that just 20% of the people owned a remarkable 89%, leaving only 11% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.1%." or to use a more colorful statistic: the 400 richest Americans have the same combined wealth as the poorest half of Americans, over 150 million people.

So why is it bad that a society has some very rich people, and many others who are struggling and poor?

As Alex Gibney explains:

".. I am furious at the way that we have allowed money to subvert our democracy. I am appalled at the way that the U.S., a very wealthy nation, permits and even encourages a level of poverty that other wealthy nations would not even consider. Last, I am disturbed at the popular acceptance of theories that argue that we should be as selfish as possible and that altruism itself is evil. That’s a perversion of laissez-faire economic theory going back to Adam Smith and Milton Friedman..."

Many more arguments can be made by economists, philosophers, politicians and activists, but I think this documentary will speak for itself, so why not start watching it now:

For background reading see the following selection (see also my post Who Rules America?):

740 Park: The Story of the World's Richest Apartment Building

The Great Divergence

Winner-Take-All Politics

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