Inequality and the New Gilded Age

Krugman

Subtitle: The very rich are richer than people imagine.

Even now, most Americans don’t seem to realize just how rich today’s rich are. 

At a recent event, my CUNY colleague Janet Gornick was greeted with disbelief when she mentioned in passing that the top 25 hedge fund managers make an average of $850 million a year. 

But her number was correct.

One survey found that Americans, on average, think that corporate C.E.O.s are paid about 30 times as much as ordinary workers, which hasn’t been true since the 1970s. 

These days the ratio is more like 300 to 1.

Why should we care about the very rich? It’s not about envy, it’s about oligarchy.

With great wealth comes both great power and a separation from the concerns of ordinary citizens. 

What the very rich want, they often get; but what they want is often harmful to the rest of the nation. 

There are some public-spirited billionaires, some very wealthy liberals. But they aren’t typical of their class.

The very rich don’t need Medicare or Social Security; they don’t use public education or public transit; they may not even be that reliant on public roads (there are helicopters, after all). Meanwhile, they don’t want to pay taxes.

Sure enough, and contrary to popular belief, billionaires mostly (although often stealthily) wield their political power on behalf of tax cuts at the top, a weaker safety net and deregulation. 

And financial support from the very rich is the most important force sustaining the extremist right-wing politics that now dominates the Republican Party.

And financial support from the very rich is the most important force sustaining the extremist right-wing politics that now dominates the Republican Party.

That’s why it’s important to understand who we mean when we talk about the very rich. It’s not doctors, lawyers or, yes, authors, some of whom make it into “the 1 Percent.” 

It’s a much more rarefied social stratum.

. . . .

The class divide that lies at the root of our political polarization is much starker, much more extreme than most people seem to realize.