FT: Growing inequality is turning America inward by By Jacques Mistral
Growing inequality is turning America inward
By Jacques Mistral
Published: July 16 2006 18:45 | Last updated: July 16 2006 18:45
The backlash against globalisation is becoming more pronounced every day in the US. We see it in rising nationalism and protectionism, which are feeding anti-immigrant sentiments. It is manifest in the eruptions in Congress against a Chinese company buying American oil assets, or in the virulent response to a proposal for an Arabic group to invest in US harbours. Economic openness – which served America and the free world so well for years – is today too frequently perceived as a threat to national security. But populism’s deeper roots are domestic and its causes should be examined, discussed and defused.
Recent events in the US reflect increasing inequalities that endanger the fundamental aspiration of this country – a land of opportunity for all. The images of poverty in a New Orleans devastated by Hurricane Katrina, or of immigrants demonstrating by their hundreds of thousands all over the country, have made it clear that prosperity does not necessarily go hand in hand with fairness.
Recent research provides mounting evidence that the American dream could, in the early 21st century, remain just a dream. Although Americans have rarely sought full equality, they believe strongly in equality of opportunity. But meticulous studies of inter-generational mobility reveal that the situation of a son is now more than ever likely to be dictated by his father’s social position than by his own merits. According to a recent study by the US Federal Reserve, if your parents are rich, the likelihood of your being rich is as high as the probability of your being tall if your parents are tall. Comparing American and European social policies, it is now recognised that social mobility is not higher in the US than in Canada, Germany or Finland and the American poor are more likely to be trapped into poverty than the European poor.
Education is often said to be the most practicable way to increase social mobility. America gave the world an incomparable example with the GI Bill, signed into law by President Franklin Roosevelt in 1944. The bill opened the door to higher education to 8m veterans who would use it to build assets for themselves and their country.
Today, US universities are increasingly expensive and access to the best of them is difficult even for middle-class students. A primary and secondary educational system based on local taxes tends to reproduce the economic inequalities of surrounding neighbourhoods. In the past two decades, this situation has worsened immeasurably. If recent increases in inequalities of income are solidified, they would be a recipe for the dynastic inequalities that America in its early days was so determined to eliminate.
The accepted view in social science is that inequalities are an inevitable condition of economic success. But that generally goes with a moral argument that inequality is justified only when increasing efficiency and improving the situation of the worst off. Rapid growth in recent decades did not deliver those results; the best-off have done so well in the past decade only because they succeeded in capturing a huge part of the increase in national income. The top one-tenth of 1 per cent of the income distribution earned as much of the real 1997-2001 gain in wage and salary income (excluding non-labour income) as the bottom 50 per cent. It should come as no surprise that the number of those without health insurance is increasing and poverty rates in the US are the highest among all Organisation for Economic Co- operation and Development countries, in particular for children and seniors.
Many present the main threats to the security of Americans as coming from the outside. But more pervasive ones begin at home. Economic insecurity has become a feature of life for many Americans. History reminds us that the “Gilded Age†of the late 19th century gave birth to a strong populist reaction. Similar ones are simmering today.
These are not the reactions one would expect from the world’s dominant economic power, one that bears a special responsibility for promoting the agenda of globalisation. Americans are certainly not protectionist by nature. What they probably want looks like a fair distribution of the burdens of a market economy across the populace. After years of indifference, questions of equality could well be on the table again in the future. That could be good news for the future of globalisation.
The writer is professor of economics, Conseil d’Analyse Economique, Paris, and senior fellow at Harvard’s Kennedy School of Government. He is also author of La préférence américaine pour l’inégalité (Temps reels, Paris, 2006)
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9 Responses to “FT: Growing inequality is turning America inward by By Jacques Mistral”
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Right on, the common man perceives the concept of globalization as international corporations profiteering under the guise of spreading American values all over the earth with no concern for the poor or middle class here at home. They’re starting to get angry, they just don’t know what or where to express it, because after all Congress is suffering from the same
Posted on 21-Jul-06 at 12:43 pm | Permalinkdisease.
How do we get out of this mess?
Posted on 21-Jul-06 at 3:54 pm | PermalinkBESIDES dying.
America is taking too many immigrants from uneducated countries and glogging our schools with students bringing down the native borns. It’s dumbing America with people who work here illegally and send their American earned dollars to bolster the economics of undeveloped nations.
Posted on 21-Jul-06 at 9:12 pm | PermalinkNote: China is behind North Korea. Russia gives weapons to Iran, Syria and even Iraq. Also China is dumping their vast store of American dollars and buying up huge grantites of gold.
This could destroy our economy.
If gasoline goes much higher, many truckers and small business will fail.
What do you mean if???? Gas is high and truckers have lost their incomes (trucks) already. These are considered small business’.
I won’t get into the education part of this but it’s clear you don’t have a clue about our educational system and as far as the ‘dumbing down’ of America; I’m sorry but America is and has already been dumbed down by its own complacency of education; engineers, scientists and the like.
China and India graduate more ‘A’ student than we do. But I guess, calling them names makes them more palatable and ignorant.
Your comment about immigrants sounds like, “If you don’t understand the language, then they must be dumb”. Irish? Italians? Vietnamese? Cambodians?
Not knowing their plight in the world and what they had to go through to earn money to survive is beyond your comprehension also. Right?
I live with these ‘immigrants’ in my community, most are from Thailand, Phillipines, Mexico (many states in Mexico), Russia, etc. These people for the most part are not only hard worker’s but very intelligent as well. It’s not them stupid - it’s just a point to throw around because of the upcoming fall elections. I have no problem with these workers. The ‘wall’ is another a big f__king mistake. WhY is it good? What did it accomplish in East Germany? Nothing?
You for the most part are also way behind the curve as you project your ignorance about weaponry global sales. The U.S. (Cheney, Regan [remember Iran-Contra]) sold arms to Iraq (Hussien) and to Iran. So, what are you doing to right the world? Better yet, what are you doing in your community? You can join groups to help get the ‘word’ out. LEARN!!!!!!!!!!!!!!!!!!!!!!!!!!!!GET OUT! and TALK TO PEOPLE ABOUT OUR STATE OF THE GOVERNMENT. get off the small stuff-you’ll suffocate there. Go for the larger piece and have some fun doing it! OK?!
Posted on 21-Jul-06 at 9:54 pm | PermalinkLyle,
I didn’t mean to offend you.
It was my mistake to let my new room mate to write this down her prejudice views.
In my heart, I have nothing against immigrants from all over the world. In the past, I had been working with kids/parents from Lebanon, Syria, Israel, Philipines, Taiwain and Mexico. I worked with the Russians. With my compassion feelings, I helped these immigrants how to write in English for jobs and other applications.
Of course, I do remember of the Iran-Contra issues. You are right what you had expressed your opinion.
I thank you for your criticism.
Posted on 22-Jul-06 at 1:03 am | PermalinkPeace and Light
I respect your views and all other views but it is in my power not to respect those that fail to educate themselves from the periphery to the core and outward on particular subject areas.
Posted on 22-Jul-06 at 1:11 pm | PermalinkIf there is a response, (from your roommate) then we would assume it is knowledgeable and open for others to intervine with their views, equally knowledgable.
However, Roxanne - anybodies remarks whether as a joke or without the basic knowledge of the subject is just asking for criticism.
What is worse, are the ‘buzz words’, ‘talking points’ used.
Thanks for your clarification and indept analysis. Peace…In the Middle East!
Lyle,
Good morning!
Thank you for your reply
May I ask you where you hail from because of your last name? It is so unusual name, smile. Hawaiian? South Pacific? Or Buddhism?
I’m from So Cal in the Santa Monica mountains where the wild animals roaming around. Deers usually visit us for apples and sleep on our property. Raccons stealing my cats’ food at nights, watch them eat and wash their hands from the pool.
Nice to be with the nature
Have a pleasant day!
Posted on 23-Jul-06 at 11:33 am | PermalinkPeace to the Earth!
Hi Roxanne;
I envy your situation to be with nature. Peaceful, contemplative - focused. Animals are the best.
Born in Hawai’i studied Buddhism, I lean more today towards a Taoist belief. Right now, its really survival - survival for the right to be ‘underground’ and its ‘visible’ and not so visible communications.
Good to hear from you again,
Posted on 24-Jul-06 at 11:34 am | PermalinkLyle
Hi Lyle,
Yay! I guessed right…
Posted on 24-Jul-06 at 10:07 pm | PermalinkI read your profile and I will have my domian in coming few months. Am working on this with a website designer. This will fill you in about me, smile.
I was in Washington last May for a week to visit my aunt. Bought a classic car (one of my collections) in Oregon and drove up on the coastline from ORE to WA. Whoo, what a fun drive!
I enjoyed the scenic drive by the ocean. I love the sea.
Back to the valley of SFV, in the heat like we are in the desert!
Stay cool!
Peace,
Roxanne