Stop saying America is wealthy
“The United states and other wealthy Nations….” is such a common saying.
Stop.
America is not a wealthy country.
A quick look at the wealthy: the top 10% is not exactly rolling in dough. $166K annual income gets you into the top 10%. Now what? You’re in a semi-exclusive club of 32 million members. Well, let’s say you climbed into top 1% box, so you made $421K last year. There are 3.2 million of you in America. You own 43% of the loot. But it certainly isn’t evenly spread among the 1%ers. The bottom of the 1% is really not reveling in any kind of excess.
Before we go insane analyzing numbers: all countries have *some* very wealthy people. You don’t consider Uzbekistan wealthy because of its 20 wealthiest people who have insanely high net worth. You measure a country’s success by a number of indices, some financial, some non-financial, like the Happiness Index. The most pertinent financial index is certainly the GDP per capita and the PPP (purchasing power parity adjusted) median household income index.
The Covid leaders — the countries with the worst containment record — are all crowded, poor, dirty countries. India, Brazil, Mexico, Indonesia, oh, and USA.
Let’s first look at the income curve. The median US salary in 2019 was $59K. That means half the people made less than that. If you aren’t living with your mom, what are you going to do on $59K a year? Ok you want to call me a snob and you want to say stuff should be cheaper and you want to say $59K should be ample — but no. This is not wealthy people territory.
There are many great countries ranking lower that USA in GDP per capita, so we’re not bottom of the table, we’re just not on top either.
America is not top of the pops. However, it is also not as far down as you might think if you were touring some of the poorer counties in the poorer states. The roads and public infrastructure are in ruins. Schools look neglected, and a glance at the kids and families in poor areas will tell you this school is not performing. Housing in poorer areas across America looks terrible. It’s privately owned, and nobody has any money so they can’t fix a broken window or broken tiles on the roof.
Why is it that a country much lower down on the GDP per capita rankings can have gleaming newroads, hospitals, schools and beautiful infrastructure?
I put it to you that America is at a crossroads. One way forward leads to an economic collapse on the scale of the great depression. The middle class which is already largely hollowed out since about 2003 will complete its implosion, and the median income will go down to horrible new lows — not third world levels but kind of Argentina / Ukraine / Turkey levels. America rebuilds better than any country in modern times, so maybe two decades later a new middle class will emerge, maybe not. Another way forward is a green new deal kind of regime to replace the current administration. This wouldn’t bump up the median income directly, but by providing a general living wage and a minimum wage, it would also raise the middle class by helping them not fall into poverty (a 50+ year old administration worker being laid off and falling into retail worker poverty for example). A third way forward might be one where without any cathartic event or generalized recession, the wealth continues to migrate from the middle and the poorest to the wealthiest, further crunching the middle and lowering the median household income, which will push more people off the table of middle class and down into the catch-all of general poverty. This is where you have a proper third world country. Median income so low that you can’t live in a decent house or drive a nice car, and you cannot afford education for your kids. It doesn’t matter that the wealthiest have palaces made from whales’ eyeballs and silverback gorilla fur.
When the inequality argument comes up in America it immediately sounds like a call to action to save the poorest people, and sometimes an almost communist cry to eliminate billionaires, punishing them for stealing from the poor. A more levelheaded discussion is how do we lift more people from poor to middle class, and how do we nurture industries to remain competitive instead of creating winner-takes-all markets. You can’t fault Amazon for wanting to own the world. They have used the money well, have invested in systems and infrastructure that further defends their position at the top. Same with the other tech giants. Most first world countries have antitrust laws for a good reason. Monopolies are bad for everyone. Instead of promoting communist ideas like stripping Jeff Bezos of his wealth and giving it to the people, we could help smaller companies build niches that erode Amazon’s dominance, one market at a time.
Capitalism is broken down, waiting for the tow truck. It’s not dead. It’s been here before. Almost every industrial revolution has created massive concentration of wealth, followed by widespread socialist thinking and programs that help build a new middle class, followed by another industrial revolution. Welcome to 2020. We’re in the middle of the 4th and 5th industrial revolutions, concurrently! We must expect a massive change to take place in our civilization, and we must expect that America will lead it.
America is not falling apart. It is leading the world into a difficult, confusing and traumatic revolution where technology is not always our friend, labor and jobs aren’t necessarily part of the future, and we have no idea — yet — what the middle classes will be doing do pay the bills.
