“It’s Now The Canadian Dream”: It’s Time To Bring The American Dream Home From Exile
It was in 1931 that the historian James Truslow Adams coined the phrase “the American dream.”
The American dream is not just a yearning for affluence, Adams said, but also for the chance to overcome barriers and social class, to become the best that we can be. Adams acknowledged that the United States didn’t fully live up to that ideal, but he argued that America came closer than anywhere else.
Adams was right at the time, and for decades. When my father, an eastern European refugee, reached France after World War II, he was determined to continue to the United States because it was less class bound, more meritocratic and offered more opportunity.
Yet today the American dream has derailed, partly because of growing inequality. Or maybe the American dream has just swapped citizenship, for now it is more likely to be found in Canada or Europe — and a central issue in this year’s political campaigns should be how to repatriate it.
A report last month in The Times by David Leonhardt and Kevin Quealy noted that the American middle class is no longer the richest in the world, with Canada apparently pulling ahead in median after-tax income. Other countries in Europe are poised to overtake us as well.
In fact, the discrepancy is arguably even greater. Canadians receive essentially free health care, while Americans pay for part of their health care costs with after-tax dollars. Meanwhile, the American worker toils, on average, 4.6 percent more hours than a Canadian worker, 21 percent more hours than a French worker and an astonishing 28 percent more hours than a German worker, according to data from the Organization for Economic Cooperation and Development.
Canadians and Europeans also live longer, on average, than Americans do. Their children are less likely to die than ours. American women are twice as likely to die as a result of pregnancy or childbirth as Canadian women. And, while our universities are still the best in the world, children in other industrialized countries, on average, get a better education than ours. Most sobering of all: A recent O.E.C.D. report found that for people aged 16 to 24, Americans ranked last among rich countries in numeracy and technological proficiency.
Economic mobility is tricky to measure, but several studies show that a child born in the bottom 20 percent economically is less likely to rise to the top in America than in Europe. A Danish child is twice as likely to rise as an American child.
When our futures are determined to a significant extent at birth, we’ve reverted to the feudalism that our ancestors fled.
“Equality of opportunity — the ‘American dream’ — has always been a cherished American ideal,” Joseph Stiglitz, the Nobel-winning economist at Columbia University, noted in a recent speech. “But data now show that this is a myth: America has become the advanced country not only with the highest level of inequality, but one of those with the least equality of opportunity.”
Consider that the American economy has, over all, grown more quickly than France’s. But so much of the growth has gone to the top 1 percent that the bottom 99 percent of French people have done better than the bottom 99 percent of Americans.
Three data points:
• The top 1 percent in America now own assets worth more than those held by the entire bottom 90 percent.
• The six Walmart heirs are worth as much as the bottom 41 percent of American households put together.
• The top six hedge fund managers and traders averaged more than $2 billion each in earnings last year, partly because of the egregious “carried interest” tax break. President Obama has been unable to get financing for universal prekindergarten; this year’s proposed federal budget for pre-K for all, so important to our nation’s future, would be a bit more than a single month’s earnings for those six tycoons.
Inequality has become a hot topic, propelling Bill de Blasio to become mayor of New York City, turning Senator Elizabeth Warren into a star, and elevating the economist Thomas Piketty into such a demigod that my teenage daughter asked me the other day for his 696-page tome. All this growing awareness is a hopeful sign, because there are policy steps that we could take that would create opportunity and dampen inequality.
We could stop subsidizing private jets and too-big-to-fail banks, and direct those funds to early education programs that help break the cycle of poverty. We can invest less in prisons and more in schools.
We can impose a financial transactions tax and use the proceeds to broaden jobs programs like the earned-income tax credit and career academies. And, as Alan S. Blinder of Princeton University has outlined, we can give companies tax credits for creating new jobs.
It’s time to bring the American dream home from exile.
By: Nicholas Kristof, Op-Ed Columnist, The New York Times, May 14, 2014
“Bootstrapping Your Way To The Top”: The Myth Of Rags To Riches
In the latest version of SimCity, a computer game that let’s you pretend to be an urban planner, city residents are born into an economic class and there they remain for life. This may have been done for simplicity’s sake, but the scenario makes the popular computer game disturbingly similar to the situation of most Americans.
The latest report from Pew Charitable Trusts, “Purusing the American Dream,” deals a stunning blow to any romantic notions of bootstrapping your way to the top. It turns out only 4 percent of those raised in the bottom 20 percent ever climb into the top 20 percent. Rather, people raised on one rung of the income ladder are likely to stay pretty close to it as adults. As the report notes, “Forty-three percent of Americans raised in the bottom quintile remain stuck in the bottom as adults and 70 percent remain below the middle class.”
The report, from a non-partisan group that’s far from ideological, shows that while in absolute numbers, the vast majority of Americans are making more than their parents, those increases are rarely enough to help move Americans up the class ladder. In other words, even after adjusting for inflation, most Americans make more than their parents—but few have actually been able to change their socio-economic class. (The report uses the ladder analogy, and the rungs represents 20 percent marks.) That’s because the rich are getting richer faster; income growth has been disproportionately high among those who are already in the top 20 percent. That makes the distribution of classes significantly uneven, finds the report. “The difference between the size of the rungs between the two generations means that while the vast majority of Americans exceeded their parents’ family incomes, the extent of that increase—particularly at the bottom—was not always enough to move them to a different rung of the income ladder.” For 20 percent of Americans, they’re making more money than their parents but are still in a lower class rung.
Among African Americans, the cycle of poverty is even worse. They’re more likely than whites to get stuck in the bottom income quintile—more than half of blacks born in the bottom rung of the income ladder stay there as adults, compared with 33 percent of whites. Even more disturbing: Fifty-six percent of blacks raised in middle class families fall to the bottom two quintiles as adults.
The report confirms what many see in their daily lives: if you’re born rich or born poor, you’ll probably stay that way for the rest of your life. Right now, the American Dream seems to be just that—a myth with little relation to the reality. The implications are impossible to overstate. Our country’s identity is heavily rooted in the idea of economic mobility, and as far back as Alexis de Toqueville, commentators have discussed the importance of that belief. Conservative political rhetoric goes cheerfully on, of course, assuring us that anyone can be successful in this great country if they so choose. Meanwhile our public institutions are increasingly punitive to the poor: Whether it’s the humiliations of getting welfare or the difficulties of escaping student loan debt, we make the poor (and increasingly, the middle class) pay for the sin of not getting born in the right rung of the ladder.
Unlike a computer game, however, a static class system isn’t inevitable and doesn’t have to be permanent.
By: Abby Rapoport, The American Prospect, July 11, 2012
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