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Downward Mobility, or What Happened to the American Dream—Part II

The Data Tells The Story

Read part 1 of the series here.

“Statistical evidence already suggest that the American dream is fading.” –The Wall Street Journal, March 31, 1989

In 2016, Donald Trump announced his candidacy in a meandering speech which is widely remembered for his comments about Mexican immigration.  Immigration was, of course, central to Trump’s 2016 success. But the theme with which he closed the speech animated his campaign and gave Trump’s candidacy its central expression. 

“Sadly, the American dream is dead,” Mr Trump declared as he announced his candidacy.  He would “Make America Great Again!”  The brash billionaire exploited underlying economic and cultural insecurities–the pervasive sense of American decline–and rode the wave to the White House. 

One of the more interesting recent books about contemporary politics was Tim Carney’s ”Alienated America,” which analyzed the rise of Donald Trump by studying his core constituency in the GOP primaries.  Carney theorized that the breakdown of civil society and the disintegration of social connectedness, which is augmented and reinforced by the economic and demographic devastation wreaked on the working class, has become a breeding ground for the political populism that produced Donald Trump and will likely create more men like him. 

Carney synthesized a good deal of academic research with shoe-leather reporting and storytelling to weave a narrative that describes Trump’s strongest supporters as White Evangelicals who no longer attend church. The disappearance of constructive community life which has gone hand-in-glove with economic stratification has left many Americans untethered. 

In short, the American dream of a home and family through honest labor is now far out of reach for many, especially an increasing number of low-status men.  Meanwhile, the  post-national, post-industrial “winners” barely shield their disdain and contempt for Middle America, which is visceral and profound.  And as Charles Murray chronicled in “Coming  Apart,” the “winners’ ‘ are increasingly separating themselves from the hoi palloi they detest.

But the outlines that Murray described in 2013 and Trump made a political issue in 2016 have been present since the rise of the Neo-Liberal order beginning in the late 1980s. 

In 1990, Republican strategist Kevin Phillips argued in “The Politics of Rich and Poor” that the tax, trade, and regulatory policies of “Reaganomics” had produced a concentration of wealth in a new financialized ruling class, producing inequality, mountainous debt, and the gobbling up of American assets by foreigners.  

Leftist intellectual Christopher Lasch described the growing divide starkly in 1995 calling it a “Revolt of the Elites.”  “Middle Americans, as they appear to the makers of educated opinion, are hopelessly shabby, unfashionable, and provincial, ill informed about changes in taste or intellectual trends, addicted to trashy novels of romance and adventure, and stupefied by prolonged exposure to television,” Lasch wrote. “They are at once absurd and vaguely menacing.”

The polarity between the Ruling Class and the serfs they rule was also noted on the political right. Writing in 1996, Sam Francis articulated the divide and called for a Middle American Revolution predicated on a middle-class consciousness:  

“The significant polarization within American society is between the elites,  increasingly unified as a ruling class that relies on the national state as its principal instrument of power, and Middle America itself, which lacks the technocratic and managerial skills that wield control of the machinery of power.” wrote Francis. “Other polarities and conflicts within American society—between religious and secular, white and black, national and global, worker and management—are beginning to fit into this larger polarity of Middle American and Ruling Class. The Ruling Class uses and is used by secularist, globalist, antiwhite, and anti-Western forces for its and their advantage.”

Samuel Francis, “From Household to Nation”

But the counterrevolution did not come and America has grown more polarized ideologically, culturally, racially, and economically.  The process of stratification has amplified in recent years and the lock-down and race-infected politics inspired by Covid 19 and the 2020 BLM riots have strengthened the hand of the Ruling Class, enriching oligarchs even as the middle class continues to struggle and shrink.

According to recent research, 573 new billionaires have been created since the beginning of the scamdemic–or one every 30 hours.  Billionaires have seen their total net worth soar by $3.8 trillion, or 42%, to $12.7 trillion.  The world’s 10 richest men, who have greater wealth than the poorest 40% of humanity combined, saw their wealth double, from $700 billion to $1.5 trillion– a rate of $15,000 per second. 

Yet as the rich grow richer, most Americans worry about the future.  According to a recent NBC News poll, 75 percent of U. S. adults think the nation is on the wrong track.  The number represents the highest number of unsatisfied Ameircans since the 2008 recession.    Only 16 percent are satisfied with the direction of the country.  Yet the press is full of dire warnings about “White Supremacy” and “insurrection” rather than the decimation of America’s middle class.  

The Data

Counterintuitively,  the American economy continues to generate untold wealth. Aggregate U.S. household net worth skyrocketed to a record in the fourth quarter of 2021.   Between early 2000 and the end of 2021, the estimated net worth of American households and nonprofit institutions soared from $44 trillion to $150  trillion.  What explains the economic (and hence political) polarization and sense of decline?

Before the era of globalization, “prosperity” meant that an increasing gross domestic product (GDP) was paired with advances in productivity, increases in jobs, and higher wages. That is no longer the case.  

Even  as the American economy produces great wealth, that wealth is not evenly distributed and is skewed towards  the nation’s super wealthy. The richest four hundred U.S. citizens now have more wealth than 185 million of their fellow Americans com­bined.  The average net worth of American households stands at an eye-popping $692,007.  But the median net worth is a more modest $97,300. 

According to the work of Raj Chetty, a kid graduating from high school in 1958 had a 90% chance of earning more money than his parents.  But children born in the 1980s have just a 50% chance of outpacing the earnings of their parents.  

The United States has less social mobility than nearly all other Western nations.  The fact is that “socialist” economies like Denmark have far higher social mobility than the “capitalism” of the United States. A broken educational system, insane immigration laws, mindless trade policy, the imposition of diversity and multiculturalism and a regulatory state on steroids have created a bloated aristocracy. 

Though there has been significant growth and wealth creation, structural changes have produced an economy with  a much wealthier upper class while incomes for roughly the bottom sixty percent are essentially stagnant and unchanged since the 1960s despite continuing increases in productivity.  

Since 1973, productivity and wages have continued to diverge  dramatically.  More worrisome is the trend toward stagnancy.  The economy has grown much more slowly in the last two decades than in the post-WWII period.  In a brilliant 2016 piece,  Nicholas Eberstadt pointed to the troubling trend:  “With postwar, pre-21st-century rates for the years 2000–2016, per capita GDP in America would be more than 20 percent higher than it is today”.

There has also been a decline in labor-force participation.  Peaking in early 2000 at 67.3% America’s overall work rate for Americans aged 20 and older has undergone a near continuous decline, plunging more than 5% to 62.2 in April of this year.  An estimated one-third of America’s working-age males are not working.

A recent analysis of Federal Reserve data shows that “ the median college-educated millennial with student debt is only earning slightly more than a baby boomer without a degree did in 1989.”  Upwards of 40% of recent college graduates have jobs that don’t require a degree at all. In 2018, half of all college grads made under $30,000 annually, and another recent study suggests that most underemployed graduates remain that way for the long term.

In 2016, Charles Hugh Smith wrote a piece for The American Conservative arguing that a standard of living common in the 1960s was now largely out of reach for most Americans.  Smith proposed a dozen financial conditions and assets that were widely considered an attainable norm in the 1960s (access to health care, reliable vehicles, significant equity in a home, etc.).  Smith estimates that an income of $120,000 is necessary to meet the 12 thresholds of membership in the middle class.

Oren Cass has proposed a “Cost-of-Thriving Index (COTI)”, which consists of the largest expenditures a middle-class family of four might face: rent for a three-bedroom house, a health insurance premium, a car, and a semester of public college tuition.  Cass compared the cost of these goods to median weekly earnings for men working full-time, yielding the number of weeks required to cover these costs.

In 1985, a typical American man needed 40 weeks of income to cover his family’s major costs, leaving 20% of his income for other things; in 2022, it was 62 weeks. A man working a comparable full year does not come to close to covering that same set of essentials as in 1985.

Economic deprivation combined with the breakdown of family and community has led to a significant increase in “deaths of despair” among working class whites.  According to Anne Case and Angus Deaton, “a lack of steady, well-paying jobs for whites without college degrees has caused pain, distress and social dysfunction to build up over time.  The mortality rate for that group, ages 45 to 54, increased by a half percent each year from 1999 to 2013.” Most of these deaths are the result of drugs, alcohol and suicide.  

The data are clear that the American middle class is shriveling and for many the “American Dream” is literally dying.  In America as in Europe, the middle class was the creator and carrier of nationalism–its demise is a death knell of the nation it produced.  

But is the death of the middle class and the American Dream a result of natural causes or has it been engineered–and how?  







One response to “Downward Mobility, or What Happened to the American Dream—Part II”

  1. […] shrinking for decades and the trend has picked up speed in the new millennium as I showed in my last piece. A 2014 Pew study, titled “America’s Shrinking Middle Class: A Close look at Changes […]


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