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New Study Finds the Wealthy Are Different

On average, high earners have a very different idea of what makes a just society.

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The United States is not the first country to experience what the authors call a “ self-reinforcing phenomenon” of increasing inequality and declining mobility.

Historically, prosperous societies tend to fall apart under the burden of widening inequality. But gaping disparities in wealth and income are rarely the cause of their unraveling, at least not directly. It's the nexus between economic and political inequality that ultimately tears at the social fabric of a nation.

According to MIT economist Daron Acemoglu and Harvard scholar James Robinson, co-authors of Why Nations Fail: The Origins of Power, Prosperity, and Poverty , gross economic and political disparities create a classic vicious cycle. Wealth becomes concentrated at the top, where it is leveraged into political power to advance the narrow interests of rarified elite. “When politics gets thus hijacked,” write Acemoglu and Robinson, “inequality of opportunity follows, for the hijackers will use their power to gain special treatment for their businesses and tilt the playing field in their favor and against their competitors.”

With the field so tilted, those at the top continue to grab a greater share of income, and more political clout, which leads to the vast majority of us losing not only an opportunity to climb the economic ladder, but also our collective voice. The “best bulwark” against this vicious cycle, according to the authors, is to make sure “that those whose rights and interests will be trampled on have a say and can prevent it.”

Today, we are surrounded by evidence that this fraying of the social contract is well underway in the United States, which is leading the developed world in economic inequality. Larry Bartels, a political scientist at Princeton, examined lawmakers' responsiveness to the interests of various constituents by income, and concluded:

In almost every instance, senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators' roll call votes ( PDF).

And in the wake of Citizens United, a Sunlight Foundation analysis of spending during the 2010 midterms found that the most rarified elites – the top 1 percent of the top 1 percent of households, or about one out of every 10,000 Americans – accounted for almost a quarter of all political spending in the United States, including direct donations to candidates and financing outside PAC spending.

According to the report:

The One Percent of the One Percent are not average Americans. Overwhelmingly, they are corporate executives, investors, lobbyists, and lawyers. A good number appear to be highly ideological. They give to multiple candidates and to parties and independent issue groups. They tend to cluster in a limited number of metropolitan zip codes, especially in New York, Washington, Chicago, and Los Angeles.

In the 2010 election cycle, the average One Percent of One Percenter spent $28,913, more than the median individual income of $26,364.

That kind of lopsided influence means the cycle of rising inequality feeding into undemocratic political outcomes will continue until the national will is there to do something real to address the widening gap.

The Demos report offers a series of recommendations toward that end, including:

  • Limiting the influence of money in politics. That includes a call for a constitutional amendment to undo the damage wrought by Citizens United and related decision deregulating campaign finance.

  • Protecting voting rights, and making it easier for people to register.

  • Making corporate America responsive to a larger group of shareholders, including a firm's workers.

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