Mind The Gap... And The Disintegration Of Social Cohesion

A prescription for the end of American social cohesion?

I travel a lot; I even have a travel blog, separate from this one. I started when I was 13 by hitchhiking to Florida from Brooklyn. That led me to Afghanistan, Sri Lanka, Nepal, Mali, Bali, Tierra del Fuego... And you know what I'm seeing a lot of lately? Social and economic bifurcation-- not a uniformly expanding middle class but something that is very alien to the American way of thinking: a very wealthy class and a very poor class, with not much in between. This is what I wrote after a recent trip to Delhi, capital of India.

Four years ago after spending some time in Delhi again I wrote that "wherever I went on the streets there were always clusters of small, very dark, very skinny people. They're everywhere, but no one seems to notice. There are hundreds of millions of them-- more of them in India than the entire population of the United States! And no one seems to notice them. They don't own anything but the rags on their backs and I've never been able to figure out how they exist. The begging can't possibly support them, even if every tourist and every trendy call center-walla gives (far from the case; no one notices them). I didn't cry the whole time I was in India. It was simply too horrible to fathom. Families laying in the filth and dust with stray dogs night after night, wrapped in their rags, bundled around a little fire burning garbage. Delhi's cold. I've been seeing it since I started coming to India in 1969. It's just unfathomable. Has anyone cared about these millions and millions of people since a right-wing religious fanatic assassinated their champion, Mahatma Gandhi 60 years ago?" And walking right through their clusters were taller, well-fed, often lighter-skinned, well-dressed modern men talking on cell phones... not noticing.

India seems so far, doesn't it? Not just in terms of distance, in terms of our experience. Italy is less far, of course, by either measurement. Yesterday's Guardian made a similar point about division between haves and have nots there-- the 99% vs the 1%. The headline was catchy: Berlusconi said Italy's restaurants were full. Actually it's the charity canteens. Europe and America are undergoing a serious shrinkage of the middle class, one that has been consciously engineered by the 1% for their own benefit. In America, it's Obama's and the Democratic Party's biggest failing that they have been unable to reverse it and in Europe the center left parties are also failing miserably in the same way, as we pointed out yesterday in regard to Spain, where a far right government is about to be voted in by a frustrated electorate eager to punish the inept Socialists who have failed them.

Seeing the growing queues outside the charity food distribution centres needs no explanation. Which is why Silvio Berlusconi's attempt to downplay the economic crisis by conjuring up the image of full restaurants resulted in such national uproar.

What are actually full in Italy are the charity canteens. The number of Italians forced below the poverty line has risen so dramatically that many charities are struggling to cope. Like the Caritas one in Rimini. It is now feeding more than 200 people. Every day. By the end of the year it expects to have provided 85,000 lunches. In 2010 it served up 74,000.

The new poor are mainly pensioners, or divorced fathers who cannot support themselves, their former wives and children. Like Antonio, a 44-year-old unemployed decorator forced to queue for a meal. "Nobody is spending any money on their houses. Everybody is postponing what can be postponed. There is no work, and if you get any they don't pay for months."
There are also entire families who ask for a charity "pacco spesa," a package with pasta and bread, or help to buy children's schoolbooks.

"It's a complete change of lifestyle also for the middle classes who are getting used to an inexorable slide towards poverty," says Maria Laura Rodota, social commentator for the newspaper Corriere della Sera. "People take turns to host dinner parties instead of going to restaurants. They swap houses instead of going on holiday. Those who had money have taken it out of the country. A friend who works as an intermediary in Berlin is bombarded by requests from people wanting to buy flats there. Those who have more money are buying in London. And in Switzerland banks are working 24/7 with new Italian clients."

Traditionally, Italians are savers. Now, according to a recent poll, 48% are very worried about what could happen to their savings.

In the reigning confusion one thing is clear: the absolute contempt for the political class. The "caste," as it is known, which is seen as incompetent and corrupt. Three Italians out of four consider Berlusconi responsible for the crisis.

I was thinking about it this weekend because the teabagger running for the Republican Senate nomination in Michigan, Clark Durant, an ignorant and bigoted sociopath who polls around 3% among Republicans, voiced the Republican "solution." He told a GOP audience in Grand Rapids Thursday that the gap between rich and poor should grow.

"I think it should be wider," said the Republican candidate, according to the Grand Rapids Press. "Does anybody think Steve Jobs should not be (sic) in the 1 percent? He made life better for the 99 percent of the rest of us. You want to create opportunities for people with their unique gifts," added the former Michigan Board of Education president. He also said Occupy Wall Street protesters should "go find a job."

A wealthy charter school operator and a hypocritical religious fanatic, Durant is the embodiment of what the Republican Party has to offer, not just to Michigan, but to the whole country. What he said aloud about a desire to see the gap widen between the 1% and the rest of us is the basis of Republican fiscal and economic policy going back decades. After being discredited by the Great Depression, it laid low until spring up again under Reagan and blooming in full force under Bush-- ergo, the Great Recession. Today Ayn Rand acolyte Paul Ryan has made himself the chief spokesperson for the kind of rampant engineered inequality that has led to the worst bifurcation since the Great Depression.

America's 99 percent are not just imagining it. The gap between the incomes of the rich and poor in this new Gilded Age is strikingly broad and deep, according to an October report from Congress' data crunchers.

The study by the Congressional Budget Office, released this week, found that income has become dramatically concentrated, shifting heavily toward the top earners between 1979 and 2007.
And although incomes at all levels have risen some, they've skyrocketed for the very wealthiest of earners.

At the other end of the scale, Americans in the bottom fifth of earners saw their incomes increase by less than 20 percent across the nearly three decades. Incomes for those in the middle 60 percent climbed by less than 40 percent over the same span.

Things start to look especially good for the top fifth of earners, who saw their cash flow jump by 65 percent.

But it's among the top 1 percent where the growth was breathtaking. That contingent saw their incomes spike by 275 percent.

"It is really stunning the degree to which rewards have been concentrated at the top," said Josh Bivens, an economist at the left-leaning Economic Policy Institute. "We have now returned to Gilded Age levels of inequality."

The CBO report revealed some other stark facts. While incomes did rise up and down the ladder, the explosive growth for the top 1 percent so vastly outweighed the expansion further down that the top 1 percent's share of the nation's total income more than doubled to just over 20 percent.

The hoarding at the top was so great that even after accounting for taxes, the "income received by the 20 percent of the population with the highest income exceeded the aftertax income of the remaining 80 percent," the CBO found.

There is no way to right America's economic problems without addressing this. And Obama refuses while the Republicans-- and not just Durant and Ryan-- are eager to make it worse. Is it any wonder so many people are turning to the Occupy Movement?