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Occupy Wall Street is not known for the precision of its economic analysis, but new research on income distribution in the United States shows that the group’s sloganeering provides a stunningly accurate picture of the economy. In 2010, according to a study published this month by University of California economist Emmanuel Saez, 93 percent of income growth went to the wealthiest 1 percent of American households, while everyone else divvied up the 7 percent that was left over. Put another way: The most fundamental characteristic of the U.S. economy today is the divide between the 1 percent and the 99 percent.

It was not ever thus. In the recovery that followed the downturn of the early 1990s, the wealthiest 1 percent captured 45 percent of the nation’s income growth. In the recovery that followed the dot-com bust 10 years ago, Saez noted, 65 percent of the income growth went to the top 1 percent. This time around, it’s reached 93 percent — a level so high it shakes the foundations of the entire American project.

How has the top 1 percent been able to decouple itself from the nation beneath it? To begin, much of its income comes from investments in funds and firms that are raking in profits from overseas ventures in economies like China’s, which weathered the downturn better than ours. Much of those firms’ profits also derive from their reduced labor costs — the result of layoffs and paycuts. Finally, as Saez points out, there has been “an explosion of top wages and salaries” since 1970. In that year, 5.1 percent of all wages and salaries paid in the United States went to the wealthiest 1 percent. In 2007, the share going to the wealthiest 1 percent had more than doubled, to 12.4 percent.

The consequences of this concentration of wealth and income extend beyond the purely economic. A middle class enduring prolonged stagnation isn’t likely to fund projects the nation needs to undertake — such as rebuilding our infrastructure or increasing teacher pay — or, ultimately, to retain its faith in the efficacy of democracy. The rise of super PACs, the low rates of taxation on capital gains and hedge fund operators, the ability of the major banks to fend off reform — all testify to the power of a neo-plutocracy beyond democratic control. (more…)

Americans, the political scientists (and common sense) tell us, are ideologically conservative and operationally liberal. On the level of ideology, they’re opposed to government’s intervention in the economy. On the level of daily life, they support such universal government programs as Social Security and Medicare.

But this split between abstract beliefs and the concrete needs of daily life doesn’t just apply to government programs: It applies to government regulations as well. Last Thursday, the Pew Research Center for the People and the Press released a survey that revealed what Pew termed “Mixed Views of Government Regulation.” But “mixed,” in this case, means anti-regulatory in matters of ideology and pro-regulatory in practice. Asked whether they believed that government regulation of business was necessary to protect the public or that such regulation usually does more harm than good, just 40 percent answered that regulation was necessary, while 52 percent said it did more harm than good.

But then came the specifics. Pew asked whether federal regulations should be strengthened, kept as is, or reduced in particular areas. When it came to food production and packaging, 53 percent said strengthen, 36 percent said keep as is, and just 7 percent said reduce. In environmental safeguards, the breakdown was 50 percent strengthen, 36 percent keep as is, 17 percent reduce. In car safety and efficiency, the split was 45, 42, and 9 percent. In workplace safety and health, it was 41, 45, and 10 percent. And with prescription drugs, it was 39, 33, and 20 percent.

Pew then followed up by asking whether there were too few regulations on particular kinds of businesses, the right amount, or too many. For the oil and gas industry, 44 percent said too little, 14 percent the right amount, and 36 percent too much. For banks and financial institutions, it was 43 percent too little, 20 percent just right, and 30 percent too much. For the health insurance industry, the breakdown was 40,18, and 37. (more…)

If Mitt Romney becomes the Republican nominee and ­faces off against Barack Obama in November, we may finally be able to answer a question that has vexed students of American politics since the heyday of George Wallace: Which elite do white, blue-collar Americans hate more?

Despite Newt Gingrich’s apparent surge in South Carolina, Romney remains the odds-on favorite for the Republican nod. And a Romney-Obama contest would pit the very personification of the two elites that generations of Americans have been brought up to loathe: the paper-shuffling, unfeeling banker, utterly out of touch with most Americans’ concerns, and who comes from inherited wealth to boot; and the cool, academic social engineer who is culturally estranged from the white working class and isn’t opposed to governments helping racial minorities.

Romney is the model of everything in modern American capitalism that makes people pine for the kinder, gentler capitalism that his father personified. As the head of American Motors, George Romney, Mitt’s pop, made cars. Mitt makes deals. As Michael Tomasky noted this week, George Romney refused a bonus of $100,000 after American Motors had a good year in 1960, saying that no top executive needed to make more than his $225,000 annual salary ($1.4 million today). Romney the lesser has a fortune estimated in the hundreds of millions for his work in private equity, extracting vast amounts of money from the firms — successful and not — that Bain Capital took over. The younger gets all manner of tax breaks that his father never could, apparently availing himself of the special rate for private equity and hedge fund managers that, he admits, has brought his rate down to around 15 percent.

Worse yet, Romney comes off as a walking, talking compendium of upper-class cluelessness. His offer of a $10,000 bet to Texas Gov. Rick Perry, his dismissal of his yearly speaker fees (around $370,000) as pocket money, his equation of corporations and people — these and other off-the-gold-cufflink comments depict a guy whose points of intersection with the lives of most Americans are few and far between. A rich kid who became a bean counter: Could anything be worse? (more…)

After months in which the Republican candidates for president have dominated the nation’s political discourse—likely, to their own detriment— President Barack Obama retook center stage Tuesday night with a State of the Union address that was the overture to his own re-election campaign. His theme was the indispensability of collective action—of national purposes advanced by public commitments to such mega-goals as the reindustrialization of America, with the burdens and rewards shared equitably by all. (At times, the speech sounded like a rebuttal to Maggie Thatcher’s assertion that there is no society, just individuals.) At the same time, however, Obama vowed to go it alone, if needs be, in reaching those goals—or, more precisely, that if congressional Republicans weren’t going to help him, he’d call them out again and again.

The speech mixed Thomas Jefferson (attacking finance) and Alexander Hamilton (fostering domestic manufacturing, making the case for public investment in new energy technology) and Harry Truman (running against a do-nothing Congress). There’s nothing new in Obama’s mix of Jefferson and Hamilton, but Harry Truman is a welcome, if belated, addition to Obama’s repertoire. With the polls showing the public clearly fed up with the congressional GOP, however, Obama took out after them even in his opening remarks and his peroration—contrasting the sense of common purpose he ascribed to our armed forces who came home from Iraq and the Navy Seals who killed Osama bin Laden with the arguments that paralyze Washington. Even if Mitt Romney didn’t at times seem like a latter-day version of Thomas Dewey in all his posed stiffness, the transformation of Obama into Truman looks well under way.

The Hamilton streak was pronounced as well. Obama not only proposed to restructure corporate taxes to penalize offshorers and give a break to domestic (particularly high-tech) production, he also announced for the first time a trade-enforcement unit to investigate and litigate violations of trade laws. Oddly, the U.S. has no such office now—if a company, union, or industry is hurt by, say, China’s illegal subsidies to an industry, it is they, not the government, who has to bring the case and amass the evidence. Obama’s new unit would give the government the ability to do that itself. His further proposal to match the governmental assistance that other nations give to their exporters needs some fleshing out: By one estimate, China has provided $40 billion in subsidies to its solar-power industry. Is Obama proposing to go that far? Whatever the details, Obama has committed himself to a broad industrial policy to help manufacturing. (more…)

Hard though it be to believe, a Wall Street Journal editorial Monday actually had the temerity to criticize Fox News. Not by name, of course—Murdoch editorialists are nothing if not discreet when going after other parts of the Murdoch empire—but the criticism was directed at some unnamed organization that puts Sean Hannity and Bill O’Reilly on television every night.

The criticism came in an editorial on the late, lamented Herman Cain campaign. After noting that Cain was in no way ready for prime time, the editorial asserted that Cain had too many flaws to take on President Barack Obama. At that point, the Journal dipped its toe, gingerly, into criticism of the right-wing media. Cain’s unelectability, it said,

is the weakness that the talk-radio establishment overlooked when it dismissed the sexual-harassment accusations against Mr. Cain as one more left-wing conspiracy. Whether true or not, the accusations resulted in settlements by the National Restaurant Association, where he had been CEO. These were facts on the record. They were bound to come out, especially if he won the nomination.

And it wasn’t just the talk-radio establishment that was to blame for trying to dismiss the Cain brouhaha. (more…)