Addenda

"If you look at most human societies over the last several hundred thousand years, the point of economic systems has been quite simple and unsurprising—to provide for the needs of the people who participate in them. The tribe needs a way to come up with food and shelter because the people of the tribe have to eat and get out of the rain. Cooperation and sharing have been important values because they make for efficient production and it’s how you make sure everyone gets what they need. Which has been the point in most places for most of history."⁵

For the purposes of this discussion, let’s step back to consider what we want a human economy to achieve. It seems evident that a human economy must produce the elements necessary to sustain our species and ensure its continuation. These include food, clothing, housing, healthcare, education, and, since we seek more than mere subsistence, resources that allow humans to develop both as individuals and as a group – such as sports, music, books, and theater. Some may object to including education and our development as individuals and as a society as functions that an economy should support. However, it is precisely our social capacity to share and expand knowledge that has shaped our species. Our social capacities have given us our unique character and position on the planet. Finally, the economy must respect and support our place on a definitively finite earth. In summary, the economy needs to be equitable and sustainable.

Although not included in the insecurities faced by the bottom 90%, the context of our lives encompasses classic American values and aspirations. How have these fared over the past 50 years?

My children will be better off than me

A prized part of our national culture has long been the belief that parents can leave their children better off through improved education and hard work. Effort and persistence would ensure that the next generation is better off.

Children born in the 1940s were likely to earn more than their parents at a rate of 90% rate.⁶  In contrast, only 50% of children born in the 1980s earn more than their parents. The evidence clearly shows that this aspect of the American dream is dead. For those born poor, Black, or Brown, the results are even worse.

Pulling oneself up by one's bootstraps is a central notion of our culture. Hard work and skills gained through education are all that one needs to climb up the social ladder. If you look at the data presented above concerning children earning more than their parents, it is no surprise that upward social mobility is quite low in the US.

Several factors influence social mobility. What is your parents' social standing: poor or rich? Do you have access to quality education? Do your parents and social networks encourage upward social mobility? Typically, social status is assessed by your position in the income and wealth hierarchy. The wage stagnation lasting over 40 years is undoubtedly the most significant factor driving the decline in social mobility.

Everyone is equal

The Preamble to the American Declaration of Independence states: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.” It does not take much analysis to understand how hollow these words are.

The role of the rich and corporations in our politics has already been mentioned. They spend billions of dollars on lobbying and deploy even more billions in dark money to shape the boundaries of policy discussions. When they act with such blatant disregard for the consequences of their greedy behaviors, resulting in an economic meltdown like the one in 2008-9, they run to socialize the risk and receive multi-billion dollar bailouts. Despite their success in this endeavor, the rich and corporations exerted influence over Congressional efforts to reform regulations in the finance sector. Rana Foroohar⁷  told an intriguing anecdote about the discussions surrounding the Dodd-Frank Bill during a panel discussion in 2019, illustrating the grip of the rich and corporations on our government. In an off-the-record meeting with a senior Treasury official from the Obama administration in 2010, the unnamed official provided a positive, optimistic view of the new regulations. Foroohar was aware that over 96% of the consultations regarding the new regulations had occurred with the CEOs of the top three banks in the country. She confronted the official's assertion that they had done a fair job in crafting the new regulations, considering that only the major banks- those subject to the regulations- were involved in the discussions. "He looked at me with a look of befuddlement and confusion. He asked, ‘ Who else should we have been talking to?"⁸  All of the key officials and advisors involved in the economy during the Obama administration had strong personal connections to the financial world. Foxes guarding the henhouse.

The rich and corporations' control of our political system has been mentioned earlier. Nevertheless, it is worthwhile to revisit how little impact the general population has on the laws and regulations of our society.We all experience the quadrennial charade of presidential elections, which gives the appearance of mass participation without any substance. As Lawrence Lessig describes in his talk “We the People, and the Republic We Must Reclaim” , there are really two elections. In the first, the "$$$$ election, " the rich and corporations select who will run in the general election. Then, in the second, the "General election, " the people get to choose between the two candidates selected by the rich and corporations.

Then, turning to legislation in Congress and the Senate, we must face the consequences of this electoral system. The vast bulk of the population has no impact on what goes on. As mentioned earlier during the discussion of neoliberalism, Gilens and Page found  in their empirical study that “....economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”⁹¹⁰

Your life is in your own hands – the land of opportunity

With the surging concentration of monopoly power in the US economy, the dream of starting your own business and “making it” is becoming increasingly unlikely. One might argue that the notion of America as the land of opportunity is increasingly just a dream. Forget about pulling yourself up by your bootstraps. As a result of the significant concentration of ownership in most US markets (discussed in detail in the next chapter), startups are finding it increasingly difficult to survive.

As the chart above demonstrates, despite all the hype of high-tech entrepreneurialism, the number of startups has declined significantly over the last 40 years.

Justice and the Rule of Law

Even the slightest encounter with the criminal or civil justice system clearly shows that access to adequate legal representation is merely a fantasy for most Americans. Who can afford the $350 (or more) per hour legal fees with the expectation of paying several thousand dollars upfront as a retainer? This is in a country where thirty-nine percent of adults cannot cover an unexpected $400 expense at all or without borrowing.¹¹ This situation explains why over 95% of all criminal prosecutions in the US, at both state and federal levels, culminate in a plea deal. Due to insufficient financial resources, individuals are compelled to rely on court-appointed attorneys, who are underpaid and overwhelmed.¹²

Evictions from rental housing are a widespread problem for Americans. The Eviction Lab, which tracks only ten states and 32 cities, reported 1,115,000 eviction cases in 2023. Only a handful of cities, such as New York City, Philadelphia, and San Francisco, have provided a guarantee of legal representation during eviction proceedings. This means that in the vast majority of cases, tenants, who are already struggling to pay rent, are expected to cover their own representation costs. The average hourly rate for lawyers was $327 in 2023.¹³

On the other hand, the rich and corporations exploit the justice system to bully opponents or outlast them in legal contests. They maintain fleets of lawyers on standby. Donald Trump serves as the most prominent and enduring example of this phenomenon.

Hard work pays off

If you work hard, you can get ahead. Hard work pays off. These are commonly American notions. One only needs to consider the unfortunate 50-year history of income and wealth inequality for the bottom 90% of the population to see the fruitless nature of these sayings. From the Introduction, we can revisit this chart:

And then there is the staggering re-distribution to the very top of the pile. $79 trillion re-distributed to the top 10% of the population.