Thoughts on “The Birth of the New American Aristocracy”

The Birth of the New American Aristocracy, The Atlantic, June 2018 issue – by Mathew Stewart: “The gilded future of the top 10 percent—and the end of opportunity for everyone else.”

The above seminal article serves two useful worker ownership movement purposes for every non-aristocratic American. First, it shows, not tells (the classic English 101 solution to better writing and communications), why America urgently needs a coast-to-coast, border-to-border solidarity restructuring intervention based on widened and deepened workplace ownership and democratic practices for everyday working poor to rising middle class stakeholders. Second, it shows how leading inequality-generating culprits such as education disparities becoming self-fulfilling prophecies, socio-geographically privileged gated communities, economic class-based inherited merit and nepotism, and cannily manipulated tribal resentment politics can be reverse engineered by a return to fundamental, founding American principles and values (Mathew Stewart refers to “Life, Liberty, and the Pursuit of Happiness” for starters). This process self-incubates through fully equal opportunities featuring land, home and workplace ownership for, of and by all of America’s people who then are equipped to apply their collective assets and talents to local resiliency goals and co-build lasting and empowering individual and community civic equity.

To recap, “The Birth of the New American Aristocracy:”

  • Separates the top 1% into the top 0.1 % and the top 9.9% – they are very different and require different approaches
  • Shows how inherited merit is passed from one generation to another

o  Shows how the accident of birth becomes neo Calvinist predestination within inequality oligarchies

o  “Obesity, diabetes, heart disease, kidney disease, and liver disease are all two to three times more common in individuals who have a family income of less than $35,000 than in those who have a family income greater than $100,000.”  This economic class curse indiscriminately augments the death rates of low-educated, middle-aged white communities and underserved communities of color.

  • Shows how mobility does not compensate for inequality; the former is decreasing while the later increases – in fact, they are inverse functions of each other.
  • Shows how IGE works (intergenerational earnings elasticity)…”In America, the game is half over once you’ve selected your parents. IGE is now higher here than in almost every other developed economy. On this measure of economic mobility, the United States is more like Chile or Argentina than Japan or Germany… The difference is in what happens at the extremes. In the United States, it’s the children of the bottom decile and, above all, the top decile—the 9.9 percent—who settle down nearest to their starting point. Here in the land of opportunity, the taller the tree, the closer the apple falls.”
  • Shows how all of this crystalizes to become self-fulfilling prophecies, setting expectations & stereotypes, justifying racist predilections like “assortative mating.”
  • Shows the evangelical prosperity gospel hypocrisy of interpreting relative poverty as meted out vice, a punishment from God: “parenting is more expensive and motherhood more hazardous in the United States than in any other developed country, that campaigns against family planning and reproductive rights are an assault on the families of the bottom 90 percent, and that law-and-order politics serve to keep even more of them down.”
  • Shows that rising inequality doesn’t arise from the invisible hand of the marketplace or from any other “hidden law of economies” but instead becomes cemented through privilege-reinforcing cycles. “Inequality necessarily entrenches itself through other, nonfinancial, intrinsically invidious forms of wealth and power. We use these other forms of capital to project our advantages into life itself. We look down from our higher virtues in the same way the English upper class looked down from its taller bodies, as if the distinction between superior and inferior were an artifact of nature.” That’s what racists do.
  • Shows how America’s competitive higher education system is an inequality enabler and reinforces generational inequality even with programs meant to offset it – “To keep it simple, let’s just say that there are two types of occupations in the world: those whose members have collective influence in setting their own pay, and those whose members must face the music on their own. It’s better to be a member of the first group.” This is why eclectically adapting principles and practices of the Mondragon worker ownership ecosystem and other comparable worker and local economy empowerment success stories must be viewed as fundamental healing solutions that outweigh and transcend the usual conventional wisdom of policy bandages reinforcing existing patriarchies on the Right and the Left.
  • Calls out social media Silicon Valley culture as “Monopoly money with a smiley emoji. Our society figured out some time ago how to deal with companies that attempt to corner the market on viscous substances like oil” and financial services.
  • Shows who should be organizing as worker owners to grab for a better power paradigm in their life-times, “Who is not in on the game? Auto workers, for example. Caregivers. Retail workers. Furniture makers. Food workers. The wages of American manufacturing and service workers consistently hover in the middle of international rankings. The exceptionalism of American compensation rates comes to an end in the kinds of work that do not require a college degree.”
  • Shows the callow manipulation of the anti-government conservatives as just an excuse for more local power that they get to wield over others without oversight, that the Constitutional choice “between government and freedom…really offers a choice between government you can see and government you can’t. Aristocrats always prefer the invisible kind of government. It leaves them free to exercise their privileges…the 9.9 percent have mastered the art of getting the government to work for us even while complaining loudly that it’s working for those other people.”
  • In “The Gilded Zip Code,” shows how denied access to sustainable and affordable home ownership cut off underserved populations from the single most important wealth aggregation tool in the U.S. microeconomic arsenal, “The returns on (the right kind of) real estate have been so extraordinary that, according to some economists, real estate alone may account for essentially all of the increase in wealth concentration over the past half century.”

o   “Zip code is who we are. It defines our style, announces our values, establishes our status, preserves our wealth, and allows us to pass it along to our children. It’s also slowly strangling our economy and killing our democracy. It is the brick-and-mortar version of the Gatsby Curve. The traditional story of economic growth in America has been one of arriving, building, inviting friends, and building some more. The story we’re writing looks more like one of slamming doors shut behind us and slowly suffocating under a mass of commercial-grade kitchen appliances.”

  • Shows “What is less well understood is how central the process of depopulating the economic core of the nation is to the intertwined stories of rising inequality and falling social mobility. Real-estate inflation has brought with it a commensurate increase in economic segregation.  What is less well understood is how central the process of depopulating the economic core of the nation is to the intertwined stories of rising inequality and falling social mobility. Every hill and dale in the land now has an imaginary gate, and it tells you up front exactly how much money you need to stay there overnight.”
  • Shows how this vicious cycle to the bottom comes back to education as an inequality-enabling tool, “Nowhere are the mechanics of the growing geographic divide more evident than in the system of primary and secondary education.”
  • Shows how redlining repeats endlessly and universally, “With localized wealth comes localized political power, and not just of the kind that shows up in voting booths. Which brings us back to the depopulation paradox. Given the social and cultural capital that flows through wealthy neighborhoods, is it any wonder that we can defend our turf in the zoning wars?”
  • Shows how symbolism nostalgia breeds resentment culture that enables the relatively “better-off” 2016 Trump voter to adopt the luxury of looking down at those stuck on lower economic rungs, the 2004 Thomas Frank question of “What’s the matter with Kansas?” as in why do lower economic class whites consistently vote against their own economic interests:

o   “We feel in our bones that class works only for itself; that every individual is dispensable; that some of us will be discarded and replaced with fresh blood. This insecurity of privilege only grows as the chasm beneath the privileged class expands. It is the restless engine that drives us to invest still more time and energy in the walls that will keep us safe by keeping others out… The source of the trouble, considered more deeply, is that we have traded rights for privileges. We’re willing to strip everyone, including ourselves, of the universal right to a good education, adequate health care, adequate representation in the workplace, genuinely equal opportunities, because we think we can win the game.”

  • Unpacks the 2016 politics of resentment starting with the relatively upper economic classes, “The surest sign of an increase in resentment is a rise in political division and instability… “The 2016 presidential election marked a decisive moment in the history of resentment in the United States. In the person of Donald Trump, resentment entered the White House. It rode in on the back of an alliance between a tiny subset of super-wealthy 0.1 percenters (not all of them necessarily American) and a large number of 90 percenters who stand for pretty much everything the 9.9 percent are not… According to exit polls by CNN and Pew, Trump won white voters by about 20 percent. But these weren’t just any old whites (though they were old, too). The first thing to know about the substantial majority of them is that they weren’t the winners in the new economy. To be sure, for the most part they weren’t poor either. But they did have reason to feel judged by the market—and found wanting… The residents of Trump country were also the losers in the war on human health… Even so, the distinguishing feature of Trump’s (white) voters wasn’t their income but their education, or lack thereof. Pew’s latest analysis indicates that Trump lost college-educated white voters by a humiliating 17 percent margin.”

o   And back we go to education as the primary vicious cycle to the bottom enabler.

  • Shows how and why America’s Original Slavery & Genocide Sins Past are more and more harbingers for America’s Massive Inequality Present & Prologue, “No one is born resentful. As mass phenomena, racism, xenophobia, anti-intellectualism, narcissism, irrationalism, and all other variants of resentment are as expensive to produce as they are deadly to democratic politics. Only long hours of television programming, intelligently manipulated social-media feeds, and expensively sustained information bubbles can actualize the unhappy dispositions of humanity to the point where they may be fruitfully manipulated for political gain. Racism in particular is not just a legacy of the past, as many Americans would like to believe; it also must be constantly reinvented for the present. Mass incarceration, fearmongering, and segregation are not just the results of prejudice, but also the means of reproducing it.”
  • Shows how “the raging polarization of American political life is not the consequence of bad manners or a lack of mutual understanding. It is just the loud aftermath of escalating inequality.”
  • Shows how when the politics and culture of resentment are unleashed, nobody is safe.  Like outsourcing and offshoring, the precariat circles become larger and larger, moving inexorably up the human value chain.  “Resentment is a solution to nothing. It isn’t a program of reform. It isn’t “populism.” It is an affliction of democracy, not an instance of it. The politics of resentment is a means of increasing inequality, not reducing it. Every policy change that has waded out of the Trump administration’s baffling morass of incompetence makes this clear. The new tax law; the executive actions on the environment and telecommunications, and on financial-services regulation; the judicial appointments of conservative ideologues—all will have the effect of keeping the 90 percent toiling in the foothills of merit for many years to come.”

o   “As the population of the resentful expands, the circle of joy near the top gets smaller.”

  • Shows what will happen if we don’t start to deeply, dramatically and deliberately turn this around, “The toxic wave of wealth concentration that arose in the Gilded Age and crested in the 1920s finally crashed on the shoals of depression and war. Today we like to think that the social-welfare programs that were planted by the New Deal and that blossomed in the postwar era were the principal drivers of a new equality. But the truth is that those efforts belong more to the category of effects than causes. Death and destruction were the real agents of change. The financial collapse knocked the wealthy back several steps, and war empowered labor—above all working women.”

o   My favorite singer/poet, Jacques Brel, wrote that “we believe we’re the candle’s wick but we’re only the dripping wax that burns”.

  • Announces the mandate, “The defining challenge of our time is to renew the promise of American democracy by reversing the calcifying effects of accelerating inequality. As long as inequality rules, reason will be absent from our politics; without reason, none of our other issues can be solved. It’s a world-historical problem. But the solutions that have been put forward so far are, for the most part, shoebox in size.”

o   Out from under under-imagined, coffin-like shoeboxes, and onto the living, aspirational and fulfilling, local stakeholder ownership streets.

  • “The American idea has always been a guide star, not a policy program, much less a reality. The rights of human beings never have been and never could be permanently established in a handful of phrases or old declarations. They are always rushing to catch up to the world that we inhabit. In our world, now, we need to understand that access to the means of sustaining good health, the opportunity to learn from the wisdom accumulated in our culture, and the expectation that one may do so in a decent home and neighborhood are not privileges to be reserved for the few who have learned to game the system. They are rights that follow from the same source as those that an earlier generation called life, liberty, and the pursuit of happiness.”

o   But now,  in our generations and our times, “Life, Liberty and the Pursuit of Happiness” must double-down and recommit their promise through organically cultivated and home-grown, Mondragon-inspired, “one worker, one vote” profit-making and values-fulfilling ecosystems benefitting local living economies.  #Ownership4All.