Timothy Noah: Why the Rich Are Getting Richer and the Middle Class Is Disappearing
The “Great Divergence” is a term coined by Nobel-prize winning economist Paul Krugman to describe the trend, over the past 30 years or so, of skyrocketing income inequality in the United States -- of the rich getting richer and the poor getting poorer and the middle class growing ever narrower.
Timothy Noah's new book by that name examines, in detail, the reasons for that divergence, digging into issues from tax policy to the decline of labor unions to globalization, pulling them all together to paint a picture of three decades of incremental change that have left many of us, at the end, wondering about just what hit us.
Noah doesn't just leave us in despair, however—he offers solutions for reversing the trend, including universalizing education and revitalizing the labor movement. Mostly, though, his book is a wake-up call for those who haven't yet felt the crisis in their personal lives: we all need to care about income inequality, because whether we like it or not, it impacts our entire society .
He took some time to talk to AlterNet about anger and resentment, about outsourcing and income taxes, student debt and the misperceptions many liberals hold about the labor movement.
Sarah Jaffe: I wanted to start with something you said at the end of the book about America being a meaner place today, how that may be fueled by resentments from the Great Divergence. I thought that was an interesting comment to make. Can you talk a little bit about that?
Timothy Noah: Sure. I think what I said was that America was an angrier place in the Sixties, but it’s a meaner place today. People were angry in the Sixties about injustices, but today I think, to some extent, the lack of anger reflects a kind of meanness and the resentment of other groups. By meanness I mean that kind of tribal hostility that’s grafted into American politics as the middle class and the affluent have become strangers to one another.
SJ: You make the point in the book that some people want to solve the income inequality crisis with socially unequal solutions, and that we need to recognize that income inequality is breeding social inequality and social distance.
TN: I do think that income-based inequality breeds social inequality. There are some people who say you can separate them – Mickey Kaus makes that argument – but I don’t think you can. If you look at societies that have a lot of social equality, they tend to have a lot of economic equality too. The US has a fair amount of social equality, but I think you could question whether that tradition is now being compromised by the advent of things like gated communities.
SJ: You go through, chapter by chapter, these different causes of the Great Divergence. Right now, during the presidential campaign, we're hearing a lot about outsourcing and its impact on the jobs we still have in this country. One of the interesting points that you made was that there are certain high-skill jobs that are just as easy to outsource as the low-skill jobs that we’re used to thinking of as vulnerable.
TN: Outsourcing will remain a problem for the American economy, but it may cease being a contributor to income inequality as more and more high-skilled jobs are outsourced. There’s an important caveat to that, which is that we have not yet seen how the affluent will wield their political power in order to prevent outsourcing . There is some evidence in the past, when something like this has come up, that the affluent have a much greater ability to control government policy. We may find that many of the same affluent who have been lecturing the working class for decades now about the virtues of free trade will change their views of free trade once it’s their jobs on the line.