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5 Ways Most Americans Are Blind to How Their Country Is Stacked for the Wealthy

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- 2039 days ago -
Mitt Romney said he wasn't concerned about the very poor, because they have a safety net. This is typical of the widespread ignorance about inequality in our country.

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Kit B (276)
Wednesday November 21, 2012, 8:59 am
(photo Credit: panachereport)

Mitt Romney said he wasn't concerned about the very poor, because they have a safety net. This is typical of the widespread ignorance about inequality in our country. Struggling Americans want jobs, not handouts, and for the most part they've paid for their "safety net." The real problem is at the other end of the wealth gap.

How many people know that out of 150 countries, we have the fourth-highest wealth disparity? Only Zimbabwe, Namibia and Switzerland are worse.

It's not just economic inequality that's plaguing our country, it's lack of opportunity. It's a dismissal of poor people as lazy, or as threats to society. More than any other issue over the next four years, we need to address the growing divide in our nation, to tone down our winner-take-all philosophy, to provide job opportunities for people who want to contribute to society.

Here are some of the common misconceptions.

1. Americans believe that the poorest 40 percent own about 10% of the wealth.

Most people greatly underestimate the level of inequality in our country, guessing that the poorest 40 percent own about 10% of the wealth, when in reality they own much less than 1% of the wealth. Out of every dollar, they own a third of a penny.

Factor in race and it gets worse. Much of minority wealth exists in home values. But housing crashed, while the financial wealth owned almost entirely (93% of it) by the richest quintile of Americans has rebounded to lofty pre-recession levels.

As a result, for every dollar of non-home wealth owned by white families, people of color have only 1 cent. Median wealth for a single white woman is over $40,000. For black and Hispanic women it is a little over $100.

2. Entitlements are the problem.

No, they're not. The evidence is overwhelming. Social Security is a popular and well-run program. As summarized by Bernie Sanders, "Social Security, which is funded by the payroll tax, has not contributed one nickel to the deficit, and according to its trustees, can pay 100 percent of all benefits owed to every eligible American for the next 21 years." Dean Baker calls it "perhaps the greatest success story of any program in US history."

Medicare, which is largely without the profit motive and the competing sources of billing, is efficiently run, for all eligible Americans. According to the Council for Affordable Health Insurance, medical administrative costs as a percentage of claims are about three times higher for private insurance than for Medicare. And it's just as popular as Social Security.

3. Welfare benefits are a drag on the economy.

Critics bemoan the amounts of aid being lavished on lower-income Americans, making dubious claims about thousands of dollars going to every poor family. But despite an ever-growing need for jobs and basic living necessities, federal spending on poverty programs is a small part of the budget, and it's been that way for almost 50 years, increasing from 0.8 percent of GDP in 1962 to 1.2 percent of GDP in 2007.

Temporary Assistance for Needy Families (TANF) has dropped significantly over the past 15 years, leaving benefit levels far below the poverty line for most families. Ninety percent of the available benefits go to the elderly, the disabled or working households. For each family, current federal budgets pay about $400 per month for food, housing, and traditional "welfare" programs. Food stamp recipients get $4.30 a day.

4. The American Dream is still alive, if you just work hard enough.

The Horatio Alger tale has been a popular one for conservatives, but the OECD, the Economic Policy Institute and the National Journal all came to the same conclusion: the future earnings of a child in the U.S. is closely correlated to the earnings of his or her parents. This lack of mobility is more prevalent in the U.S. than in almost all other OECD countries.

Only 4 percent of those raised in the bottom quintile make it to the top quintile as adults. Only about 20 percent even make it to the top half.

A big part of the problem is the severe degree of poverty for our nation's children. According to UNICEF, among industrialized countries only Romania has a higher child poverty rate than the United States. Just in the last 10 years the number of impoverished American children increased by 30 percent.

And it's much worse for minorities. While 12 percent of white children live in poverty, 35 percent of Hispanic children and 39% of black children start their lives in conditions that make simple survival more important than the American Dream. Eighty percent of black children who started in or near the top half of U.S. income levels experienced downward mobility later in life.

5. Prison puts away the bad guys.

Despite a falling violent crime rate in the U.S., there are now, as noted by Adam Gopnik, "more people under 'correctional supervision' in America -- more than six million -- than were in the Gulag Archipelago under Stalin at its height."

Almost half of the inmates in federal prisons were jailed for drug offenses. Between 1980 and 2003, the number of drug offenders in prison or jail increased by 1100% from 41,100 in 1980 to 493,800 in 2003. African Americans constituted 53.5 percent of all persons who entered prison because of a drug conviction. In the nation's largest cities, drug arrests for African Americans rose at three times the rate for whites from 1980 to 2003.

In Washington, DC, it is estimated that three out of four young black men will serve time in prison. In New York, with 50,000 marijuana arrests per year, 90% are black or Latino. In Seattle, the 8% black population accounts for 60 percent of the arrests. Over the last 10 years Colorado police have arrested Latinos at 1.5 times the rate of whites, and blacks at over three times the rate of whites. Newly passed marijuana laws reflect the beginnings of a backlash.

Perversely, this is all happening as studies by the Substance Abuse and Mental Health Services Administration find that both black and Hispanic adolescents use drugs less than the general population. And a study by the National Institute of Health shows that the prevalence of marijuana use in colleges and universities was highest for white students.

The greatest misconception: The rich are being soaked.

Redistribution has not spread the wealth, it has concentrated the wealth. Conservative estimates say the richest 1% have doubled their share of America's income in 30 years. It's worse. From 1980 to 2006, the richest 1% actually tripled their share of after-tax income.

The real problem is tax avoidance: lost revenue from tax expenditures (deferrals and deductions), corporate tax avoidance, and tax haven losses could pay off the entire deficit. But the very rich refuse to pay. They have their own safety net in the House of Representatives.

By Paul Buchheit | alternet|

pam w (139)
Wednesday November 21, 2012, 1:07 pm
SUCH an eloquent, well-written article! Unfortunately, I'm afraid the people who NEED to read it will not!

I've forwarded it on to some people who need to read it.....will you?

Roger G (154)
Wednesday November 21, 2012, 1:48 pm
noted, thanks !

Kit B (276)
Wednesday November 21, 2012, 2:17 pm

We have been here before and forget that. During World War II there were many strikes and protests, the "war machine" was not owned by the government but by industrialists that a made a fortunate on the war, and didn't want to end the War Economy, nor pay fair wages. In many, too many ways it didn't.

Gloria picchetti (304)
Wednesday November 21, 2012, 3:09 pm
The brainwashing of the masses works because so many poor conservatives think if you vote the way the wealthy cronies vote you will somehow magically get rich.

Phil R (29)
Wednesday November 21, 2012, 4:11 pm
Thanks! Great article....I'm a big fan of Bernie Sanders. I wish we could clone him!

Tamara Hayes (185)
Wednesday November 21, 2012, 6:11 pm
Excellent article Kit! Shared and twittered.

Mitchell D (87)
Wednesday November 21, 2012, 6:20 pm
And it is much worse than that. See "democracy for the Few," by Michael Parenti, for a very thorough discussion of this.
See ALSO, my new petition on, titled "End the 'No Tax Pledge.'" It is about the pledge that Grover Norquist, a lobbyist, not elected to anything, has been pushing for years, according to the NY Times article of 11/20/12. He has pressured congresspeople to pledge to"...never, ever," as the Times puts it vote for a tax hike.
I believe that this is unethical, and that no congressperson, all of whom take an oath of office,, ought to be pressured to take any other sort of pledge/oath, as this can later on compromise their ability to legislate.
This is coming to the fore, now, as congress has to deal with the "Fiscal Cliff."
Newt G., of course, is urging congresspeople to "Toe the line," on their pledges, which is exactly the kind of situation my petition is designed to avoid.

Mitchell D (87)
Wednesday November 21, 2012, 6:22 pm
P.S.: If you are on Facebook , or Twitter, which I am not, I would greatly appreciate your publicizing the petition.

Kit B (276)
Wednesday November 21, 2012, 7:36 pm

I found two petitions about Grover Norquist on Sign-on, but none at Both are now at FB and tweeted.

greenplanet e (155)
Wednesday November 21, 2012, 8:25 pm
Corporate welfare is a drain on the economy!

Joanne Dixon (38)
Thursday November 22, 2012, 2:56 pm
ACLU has a form for anyone who lives in a district represented by a pledger, that can be used to start a lawsuit, if anyone has the huevos - and, alas, the money - to want to do that. Not that it's that easy to find. But it does break down exactly why this pledge is inconsistent with their oath of office.

I'll bet we don't hear from Diane on this one, unless she just drops by to say it's all lies.

DORIS L (61)
Thursday November 22, 2012, 6:55 pm
I shared this on facebook.

. (0)
Thursday November 22, 2012, 7:24 pm
I definitely have to Tweet this one.

Louise D (44)
Friday November 23, 2012, 1:00 am
Only the other day a Republican troll posted an article claiming the rich were being soaked on this site, anyone who contradicted the article was abused by the member as they still believe St Ronnie's articles of faith of the piss down economy. They may claim it is for balance but also there people posting on this site with dangerous racist material which is coming from the sources that influenced Anders Breivig. The article here is a good one and giving a balanced insight into the way the rich are no longer in touch with anyone, Mittens proved virtually every day when he managed to gaffe enough for people to wonder if he was for real.

David C (129)
Friday November 23, 2012, 8:46 am
"take off the blinders, fellow citizens!"

Arielle S (313)
Friday November 23, 2012, 9:08 am
Fabulous article - full of those odd things the GOP hate (that would be FACTS). I'm saving this one - thanks, Kit!

Mary Donnelly (47)
Friday November 23, 2012, 1:28 pm
Great post--thanks Kit.

In 1974 G.Myrdal (along with Hyack) won a Nobel Prize for Economics.

One of his quotes is:-

The big majority of Americans, who are comparatively well off, have developed an ability to have enclaves of people living in the greatest misery without almost noticing them".

This post seems to indicate that not much has changed.

Lois Jordan (63)
Friday November 23, 2012, 2:27 pm
Very well stated article...thanks, Kit. I think I got the MoveOn petition a few days ago and signed it. I also understand that many of the new GOP congress critters are not signing Norquist's pledge, while some are asking to have their names removed. A few steps in the right direction could hopefully lead to a domino effect of Norquist going the way of the dinosaurs. If only!

Kathleen B (37)
Friday November 23, 2012, 5:37 pm
It distresses me to hear the oft repeated cliche, "if your work hard, pray and live a 'clean decent' life you can make it in America. Besides blaming the victim of poverty for his/her condition, this cliche also implies if you're not making it, it is because you're not right with God.

However, God in my experience, doesn't dabble in making sure you're able to keep up with the Jones'.
I also get riled when I read social security, that I paid into my entire working life is somehow an unearned entitlement.
One way to save money is to end the Israeli gravy train. That $8.2 million dollars a day that we gift Israel with, would go a long way towards housing for homeless vets.
Charity begins at home -- as long as one child in America is homeless, foreign aid to a country running a malignant occupation on our tax dollar is intolerable.

Gina Narvaez (16)
Friday November 23, 2012, 6:31 pm

Gina Narvaez (16)
Friday November 23, 2012, 6:33 pm

Mitchell D (87)
Friday November 23, 2012, 7:17 pm
My apologies to anyone who might have searched for my petition about "The Pledge"in MoveOn. In my haste to get the message out,I mis-spoke: it is on
That is the petition to get rid of the Grover Norquist pledge that he's had numerous congresspeople sign, saying they will "...never, ever" vote for a tax hike, and that, of course, protects the particularly wealthy very well.
the petition is called "Stop the Grover Norquist "No tax increase p;edge.'"

Craig Pittman (52)
Saturday November 24, 2012, 9:07 am
So true and very well put. What an excellent article. Thanks Kit. The current misconceptions have the middle class turning on the working class and the working class turning on those in poverty. (alas the last two brackets are beginning to merge). The criticisms need to be directed where they properly belong - the wealthy elite.

Nancy M (169)
Saturday November 24, 2012, 11:11 am
Great article Kit. And don't forget Social Security. After a certain level of income, you aren't paying in.

g d c (0)
Sunday November 25, 2012, 1:33 pm

Stella Gamboni (17)
Sunday November 25, 2012, 11:13 pm
Someone once compared an individual's chance of "making it" in our economy to the offspring of an octopus. An octopus can have 100,000 to a half-million babies and each one has a chance to "make it" to adulthood. The fact is, however, that the vast majority will be swallowed up in the food chain and the odds of a particular one surviving are minuscule.
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