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Class Warfare: Rich versus Hyper-Rich

Guess who’s upset about the widening income gap…

The New York Times had a good analysis yesterday of the incomes of Americans and their relationship to Bush administration tax cuts. The piece includes a nice set of graphics showing the growing category of “hyper-rich” (the top 0.1 percent of taxpayers by income) that are leaving even the “merely rich” (top 10 percent) behind in terms of their share of the national income and the lower fraction of the tax burden they pay, both of which are at levels not seen since the 1920s.

The Times revised a Treasury Department computer model that did not “look in detail fine enough to differentiate among those within the top 1 percent,” something considered important to the Times’ editors. You see, the top 10 percent who receive 44 percent of the national income were getting a bad name. The real problem-people, it appears, are the 145,000 millionaires in the top 0.1 percent (the top 1000th). According to the article,

The share of the nation’s income earned by those in this uppermost category [0.1 percent] has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell.

This is very important information, and the fact that the Times finds it important suggests a growing resentment on the part of the “merely rich,” (which I would guess would be the primary readership of the newspaper) to the growing wealth and power of the “hyper-rich” that benefit the most from the Bush administration’s policies. The Times sounds downright bitter:

The Bush administration tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden. [Emphasis added]

Though it’s right to see the hyper-rich as despicable cutthroats catered to by Bush, the author David Cay Johnston appears to forget that the merely rich also benefit from the current system that allows concentrated ownership and rewards privilege and wealth. The only argument he gives for the possible problems with having a hyper-rich upper class is that of “some of the wealthiest Americans,” who

have warned that such a concentration of wealth can turn a meritocracy into an aristocracy and ultimately stifle economic growth by putting too much of the nation’s capital in the hands of inheritors rather than strivers and innovators.

The piece is part of a 9-day series of articles in the New York Times on class, but only a few of the articles (those on education and immigration, in particular) really say anything about the pain and suffering felt by the poorest Americans, caused by the obscene concentration of wealth. For example, the 2004 Hunger and Homelessness survey of the US Conference of Mayors, which found that in the 27 cities surveyed, (1) requests for emergency food assistance increased 14 percent from 2003; and (2) requests for housing assistance went up by about 7 percent.

The article, and most of the series, treats mainly the top 50 percent of income holders. The bottom half is ignored, unless lumped together with the rest of “the bottom 90 percent.” For example,

From 1950 to 1970, …for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162…From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.

I applaud the newspaper for doing the series. This much of the truth is rarely seen in the mainstream media. And it exposes the elitism behind Bush tax policy. The problem is, it feels like the authors want us to identify with the so-called “strivers and innovators” in the second 9.9 percent, the owners, who ultimately came about their wealth by investments, i.e., much the same means as the hyper-rich. None of these people have any problem with the current system per-se, they just don’t want to be shouldering more of the tax burden than the hyper-rich.

If the merely rich engage in a class struggle with the hyper-rich, can we hope to see the passage of New Deal type social programs, reversing the losses of the 80’s, 90’s and 00’s? Will this extremely constrained class struggle open the door to a more egalitarian politics, and ultimately lead to a more equitable distribution of wealth and ownership? The answers to those questions will probably depend on whether or not there is an organized popular movement supporting these, and more radical goals.