This American Dream

James Kwak and Simon Johnson have parallel essays commenting on Ariana Huffington's new book, Third World America.

The title alone reminds me of what used to be said of the United Kingdom — that it was the world's wealthiest Third World country. (I remember this from the 1980s, but I don't know when it began or whether people still speak of the UK so.) Paul Krugman, speaking with Eliot Spitzer and Bill Maher on HBO in September, 2009, effectively said the US is going the way of a Third World country:

Sometimes I wake up and think I'm in a Third World country.... The American Dream is not totally dead, but it's dying pretty fast."

In his essay, James Kwak notes a couple of nice quotations Huffington pulls from Tocqueville's Democracy in America, including what struck him as "the general equality of condition among the people."

Of course, Tocqueville was missing one group — the slaves. Hardly a minor oversight. Neither was he particularly concerned with the denial to women of the vote or the right to own property. But these can be "controlled for" in a comparison of American ages.

It would be interesting to gauge at what time in American history wealth was most unequally (and at what time most equally) distributed.

If you just confine yourselves to people who were allowed to own property and allowed to vote (that is, people treated substantially equally in law), then at what time were people most unequal.

The disparities in distribution today, if not the greatest ever, must be pretty close — and getting closer. I think the following position can reasonably (and forcefully) be made:

For thirty years, since the Reagan administration, formal and substantive democracy have been under attack in the United States. Protections for the individual, especially the less advantaged "commoner" (for want of better expression) have been deliberately worn down. The government, especially the executive branch, has steadily and successfully sought more power. Obama has not departed from the pattern from Reagan through to Bush in the slightest. Indeed, government intrusions into the lives of Americans have accelerated under Obama. Far from having a tax and social policy aimed at promoting greater equality, we have seen seen the US government repeatedly act to redistribute wealth from the middle class up to the wealthiest Americans. We have an increasingly wealthy Congress. Those members who do not start among the wealthiest do whatever they can to join — witness Charlie Rangel's crimes.

Above all, the culture of separation is being institutionalized. Wealthy versus The Rest of Us. And government and corporate leaders show almost no concern about this at all. Indeed, they appear, in large measure, to be endorsing the two-state America.

The question may now be: Just how un-democratic will the US become?