The American dream is becoming an American nightmare


I’m very proud of this blog title. Until now, surely no one has used such a way to describe the fabled American Dream. There’s really no need to confirm this via Google.

Stunning new research by very smart people finds that income inequality in America is not only bad, but getting much much worse. From The Atlantic (“Severe Inequality Is Incompatible With the American Dream“):

The idea that an unequal society allows the wealthy to dictate policies that help themselves has very troubling implications in a country that just elected a president who seems focused on putting the wealthy in charge. The wealthy have benefited from the system that has helped create their wealth: the private schools, the elite colleges, and the growing salaries for those at the top. And they have little incentive to change it.

I chuckled reading the phrase “putting the wealthy in charge” as if this is something new. But I admit the incoming presidential administration will, in addition to countless other vile aspects, likely have the look of a kleptocracy, the likes of which haven’t been seen in recent memory. I’m only referring to America, of course. Silvio Berlusconi in Italy and Petro “The Chocolate King” Poroshenko in Ukraine are only two of many contemporary examples. At any rate, the notion that Trump will do anything substantive for the poor white dipshits who worship him is and always has been laughable.

And here’s FiveThirtyEight (“Inequality Is Killing The American Dream“):

‘There really is a dramatic change in what’s going on in the income distribution in the U.S.,’ said Nathaniel Hendren, an economist at Harvard and another of the latest paper’s authors. ‘The rungs of the ladder are growing further apart, so the difference in outcomes in being born to a rich family versus being born to a poor family is getting greater.’

Both articles discuss new research by, among others, Thomas Piketty, Emmanuel Saez and Gabriel Zucman. Their forthcoming paper can be found here. It’s nice that there is such robust analysis being performed, but it should be intuitive that governments of capitalist societies need to control for systemic inequalities. That is, if one idealizes egalitarianism rather than a cut-throat society based primarily on competition. For proponents of the latter, the Horatio Algers myth continues to reign supreme as the primary means of moving up the economic ladder. It’s basically a lottery the poor are forced to play, but with horrible consequences for the many who don’t win.

On a personal note, I am at best semi-literate economically. I’ve read Piketty’s The Economics of Inequality and while I understood the general message, there were large parts I could only barely comprehend (one day i hope to read his allegedly magisterial Capital). So, hat in hand, I’m asking for suggestions on fundamental books on economics for dummies like me. Thanks in advance!

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