Friday, July 7, 2017

Can We Please Not Blame the Upper Middle Class for This Mess?


Richard Reeves is out with a new book, Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do about It, that as the subtitle suggests, blames the upper middle class--the top 20 percent--for "opportunity hoarding" and protecting their position at the expense of the bottom 80 percent. This theme appeals to folks like David Brooks who want to spread the blame around pretty widely for today's absurd levels of inequality. 

It's fair to say the top 20 percent has been doing better than bottom 80 percent but the rest of the story seems suspect. As Stephen Pearlstein notes in his review of the book:
Reeves also is too ready to think of economic advancement is a zero-sum game. While it is true that, at any moment, there are a limited number of homes in the poshest communities and a limited number of freshmen admitted to the Ivy League, that doesn’t mean society can’t create more posh communities or create more high-quality universities. And while it is a mathematical certainty that for every person who rises into the ranks of the top 20 percent of households by income there must be another who falls back, it does not follow that there is a limit on the number of Americans who can enjoy an upper-middle-class existence.
That's the key. Solid economic growth and decent policy--which may not be unrelated--are quite capable of delivering more and more people into what we know think of as an upper middle class standard of living (the potential for a "mass upper middle class" is discussed in pages 183-186 of my book).

And as the chart above shows, it is really the top 1 percent that have been making out like bandits since 1980. That is what we should worrying about--that and the policies that have gotten us to this state and that 1 percenters want to keep in place.

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