The Nation: The Death of Horatio Alger - By Paul Krugman

[La_Serpiente]

The Death of Horatio Alger - By Paul Krugman

The other day I found myself reading a leftist rag that made outrageous claims about America. It said that we are becoming a society in which the poor tend to stay poor, no matter how hard they work; in which sons are much more likely to inherit the socioeconomic status of their father than they were a generation ago.

The name of the leftist rag? Business Week, which published an article titled "Waking Up From the American Dream." The article summarizes recent research showing that social mobility in the United States (which was never as high as legend had it) has declined considerably over the past few decades. If you put that research together with other research that shows a drastic increase in income and wealth inequality, you reach an uncomfortable conclusion: America looks more and more like a class-ridden society.

And guess what? Our political leaders are doing everything they can to fortify class inequality, while denouncing anyone who complains--or even points out what is happening--as a practitioner of "class warfare."

more...

The Death of Horatio Alger

[Wolfman 11]

1. Horatio Alger = Science Fiction

[Warpy]

6. Actually, before Reagan screwed the New Deal

...studies found a great deal of class mobility, both upward and downward. The scions of the rich did have a better chance of becoming rich themselves, thanks to a wealth of family and family friends who could be tapped for entrepreneurial seed money, but it found that some people who started from near the bottom who were blessed with the health and stamina it took plus a generous portion of luck in picking the right risks to take did achieve the status of wealth.

What Reagan did was shift the burden of government away from these fortunate people who had amassed vast quantity of capital and onto the poorest of the working public through the mechanism of income tax cuts at the top, written in stone high rates at the bottom, and a huge hike in FICA taxes, 40% of which went into the same pot as income taxes. The result has been the stratification of wealth. Ending the inheritance tax (which only the top 1% had to worry about, anyway) will make sure the wealth stays exactly where it is, in perpetuity if Bush has his way.

I don't know about you, but I had ancestors who fled a rigid class system in hopes of getting a better deal in difficult country that the comfort-seeking aristocrats avoided, except when tapped to be governors. Reagan/Bush/Bush seeks to recreate this system, divine right kingship and all.

I intend to fight it every way I can.

[Wells]

7. Horatio Alger stories for boys...

Boys at the time these stories were written entered the workforce and soon learned that advancing their social status via higher income was next to impossible. The stories were only meant to encourage youth, while little or no real promise existed.

When the Great Depression hit, industrial expansion, (power and roadway projects), created real opportunity for advancement. Now that the era of motorization/mechanization has peaked and is in decline, opportunity to advance also declines because the prime means of maintaining the era, (petroleum), cannot be replaced by alternative fuel and energy sources. The Hydrogen Economy is a hoax. Nor will Biodiesel suffice. All that's left for the elite is set up their golden parachutes.

The elite do not care for the masses. They expect rough times ahead and a miserable subsistence and short lives for the rest of us. They will not give up their luxuries, nor their slaves. The most vulnerable candidate for blame: YOUR CAR, believe it or not.

[jmaier]

2. I couldn't be more depressed

though it might all lead eventually to an actual revolution.

[Dudley_DUright]

3. Krugman is right on the money again (pun intended)

Here is the part I liked the most because it really puts Bushco's priorities in the proper context:

Put it this way: Suppose that you actually liked a caste society, and you were seeking ways to use your control of the government to further entrench the advantages of the haves against the have-nots. What would you do?

One thing you would definitely do is get rid of the estate tax, so that large fortunes can be passed on to the next generation. More broadly, you would seek to reduce tax rates both on corporate profits and on unearned income such as dividends and capital gains, so that those with large accumulated or inherited wealth could more easily accumulate even more. You'd also try to create tax shelters mainly useful for the rich. And more broadly still, you'd try to reduce tax rates on people with high incomes, shifting the burden to the payroll tax and other revenue sources that bear most heavily on people with lower incomes.

Meanwhile, on the spending side, you'd cut back on healthcare for the poor, on the quality of public education and on state aid for higher education. This would make it more difficult for people with low incomes to climb out of their difficulties and acquire the education essential to upward mobility in the modern economy.

And just to close off as many routes to upward mobility as possible, you'd do everything possible to break the power of unions, and you'd privatize government functions so that well-paid civil servants could be replaced with poorly paid private employees.

It all sounds sort of familiar, doesn't it?

[Myra]

4. Wow, both Krugman and Michael Moore have it out for Horatio

That poor guy can't catch a break.

"Horatio Alger Must Die

Perhaps the biggest success in the War on Terror has been its ability to distract the nation from the Corporate War on Us. In the two years since the attacks of 9/11, American businesses have been on a punch-drunk rampage that has left millions of average Americans with their savings gone, their pensions looted, their hopes for a comfortable future for their families diminished or extinguished. The business bandits (and their government accomplices) who have wrecked our economy have tried to blame it on the terrorists, they have tried to blame it on Clinton, and they have tried to blame it on us.

But, in fact, the wholesale destruction of our economic future is based solely on the greed of the corporate mujahedeen. There is a master plan, my friends, each company has one, and the sooner you can get over not wanting to believe it, or worrying that to believe it puts you in the ranks of the nutters who thrive on conspiracy theories, then the sooner we have a chance of stopping them. Their singular goal is to take enough control over our lives so that, in the end, we'll be pledging allegiance, not to a flag or some airy notions of freedom and democracy, but to the dictates of Citigroup, Exxon, Nike, GE, GM, P&G, and Philip Morris. It is their executives who now call the shots, and you can go vote and protest and cheat the IRS all you want to get back at them, but face it: You are no longer in charge. You know it and they know it, and all that remains is the day when it will be codified onto a piece of paper, the Declaration of the Corporate States of America."

http://www.thirdworldtraveler.com/Michael_Moore/Jesus_W_Christ_DWMC.html

From:
Dude, where's my country?
by Michael Moore
Warner Books, 2003, hardcover

[david_vincent]

5. Thanks, LS

excellent post. What I find interesting is right at the end of the article, when he's talking about the eventual result of all this: a class of wealthy, untalented children who control vast reserves of wealth, and another class of talented, penniless children who will be unable to climb out of their situations. I infer from this that the "talent" that will be going to waste includes a great deal of brainpower necessary to keep America competitive in many fields. The drive toward a caste society, therefore, is treasonous because it actively undermines the nation's intellectual capital and helps to render America uncompetitive, even as emerging powers such as India become significantly more competitive.

[area51]

8. Doug Henwood

If I remember correctly, Doug Henwood of the Left Business Observer said on a past episode of the PBS show Now that the Horatio Alger stuff was a myth.