Truth in Media Global Watch Bulletins

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TiM GW Bulletin 98/1-1

Jan. 1, 1998

The Rich Get Richer; the Poor Get Poorer in the "Land of the Free"

The Great American Divide Widens

Also, TiM Readers' Reaction to This Bulletin Follow...





"The border runs not between the peoples, but between top and bottom."

English translation of a crude hand-painted sign on a run-down building in East Berlin, not far from the "Checkpoint Charlie" crossing which once divided East and West; July 1995:

"Nowhere is this (class difference) more pronounced than in the U.S.  This is where the rich get richer, the poor get poorer, and the Great American Divide between the relative 'haves' and 'have nots' has been growing wider and deeper in the last 30 years."

This writer's March 9 WASHINGTON TIMES column, titled "Plutocrats of the New World Order"

 PHOENIX, Jan 1 - By now, everybody knows that the streets of New York are not paved with gold, as the early immigrants used to think. Instead, they are increasingly marked by misery, as the rich are getting richer and the poor are getting poorer. Nowhere is the desecration of the "American Dream" more visible than in the "financial capital of the world," the Gotham City - host both to Wall Street and the United Nations crowds.

As Bill Clinton and his entourage used a South Bronx neighborhood in New York for a confidence-boosting photo-op; as Wall Street celebrated another "bull" market year; as the economists hailed the supposed strength of the U.S. economy, especially in the face of the Asian banking crisis, the Washington-based Center on Budget and Policy Priorities released a devastating report.

The income inequality has been growing in 48 of the 50 states. Only in Alaska and North Dakota has the gap between the incomes of the richest and the poorest residents narrowed over the past 20 years.

Between the late 1970s and the mid 1990s, the incomes of UPPER-income families with children INCREASED in every state. On average, incomes of the RICHEST fifth of families increased by 30 percent after adjusting for inflation. In sharp contrast, incomes of the POOREST fifth of families with children DECREASED in 44 of the 50 states for an overall DECLINE of 44 percent. Nor did the so-called "middle class" fare much better. The incomes of MIDDLE income people DROPPED by 22 percent during the same period.

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And guess where the Great American Divide, which separates the rich and the poor, is the widest? New York!

The states in which the gap between the incomes of the HIGHEST-income and LOWEST -income families with children is greatest are New York, Louisiana, New Mexico, Arizona, Connecticut, California, Florida, Kentucky, Alabama, and West Virginia (in order of the highest discrepancies), the Center on Budget and Policy Priorities said.

Nor was New York leading the nation only for the high-to-low income ratios. During the past two decades, the gap between HIGH-income and MIDDLE-income families with children grew the most rapidly in New York, Indiana, Arizona, California, Georgia, Connecticut, West Virginia, Texas, Pennsylvania, and Tennessee (again, in order of the highest discrepancies).

Once again, New York was No. 1 in this "plutocracy ratio!"

"Robust economic growth in recent years has done little to turn around the long-term trend toward increasing inequality," said Kathy Larin, co-author of the report and a policy analyst at the Center on Budget and Policy Priorities (COB).

The latest Census data mere confirm the earlier trends. In an August 1997 report, for example, the same Washington-based research organization noted that, the WEALTHIEST ONE percent of Americans received as much after-tax income in 1994 as the BOTTOM 35 percent of the population - COMBINED. And that the TOP 20 percent of the population had nearly as much income as the BOTTOM 80 percent.

Between 1977 and 1994 - the first and last years for which COB office had issued such statistics - the share of the national after-tax income received by the top one percent of the population rose substantially. In 1977, the bottom 35 percent of the population had nearly twice as much after-tax income as the top one percent, the analysis found. By 1994, these two groups had essentially the same amount of income.

The COB's analysis shows that in 1994, the 2.6 million wealthiest Americans (the top one percent of the population) had as much after-tax income as the 88 million with the lowest incomes (the bottom 35 percent of Americans). Similarly, the 52 million Americans with the highest income (the top fifth) received 49 percent of the nation's after-tax income, nearly as much as the other 206 million Americans.

"Income has become much more concentrated among a relative handful of the wealthiest Americans," noted Isaac Shapiro, a senior fellow at the Center and co-author of the report. Shapiro said that the average after-tax income of the top one percent of families equaled $374,000 in 1994, or 15 times the average after-tax income for the middle fifth of families, which stood at $25,650.

In fact, the COB study UNDERSTATES the width of The Great American Divide. The Census data used for its report did NOT include capital gains income in its definition of family income, understating the incomes of the top fifth of families who receive most capital gains income.

The Census data also did NOT reflect earnings above $100,000 for any one job, further understating income of the top elite.

In other words, the United States of America is an even greater plutocracy today than the alarming numbers would suggest. Or that some other countries had been before their elites were eventually sent to the dustbin of history by the common folk who rebelled against such "taxation without representation."

So far, however, there is no evidence that the NWO crowd have learned anything at all from history. As Bill Clinton departed Dec. 30 for his 14th consecutive "Renaissance Weekend," a Hilton Head, SC, annual seaside summit of some 1,500 members of the U.S. government, business and media elite, the President's main preoccupation seemed to have been reconciling the "multicultural" differences between his new dog, Buddy, and his cat, Socks.

"I am going to have them totally reconciled with each other," Clinton declared to reporters aboard Air Force One, according to a NEW YORK TIMES Dec. 31 report.

Is anyone else, besides this writer, discerning the traces of the French kings prior to the 1778 French Revolution in this Clinton one-liner? Or of the former Russian Czar, Nicholas II; or of the former Austrian Emperor, Franz Josef II, prior to their demise?

No, we did not mean to elevate, by comparison, this sorry Vietnam draft-evader to the level of the relatively honorable aristocratic European kings. We merely wanted to point out what history teaches us can happen to the great powers once their feet stop touching the ground; once they begin to think that they can walk on water.

For the sake of the "American Dream," let us hope that Clinton tries to walk on water at one of the Hilton Head golf course's holes.

 APPENDIX - How Disparities Grew

Average After-Tax Income


ACTUAL - 1994

If it had stayed the same as in 1977




Lowest Fifth $7,175 $9,829 ($2,654)
Second Fifth




Middle Fifth $25,651 $27,448 ($1,797)
Fourth Fifth $37,226 $39,129 ($1,903)
Highest Fifth $80,417 $71,736 +$8,681
Top One Percent $373,131 $241,176 +$132,955

On the other hand, if the richest one percent of the population had received the same share of the after-tax income in 1994 as in 1977, the group would have received $146 billion less in income, or $133,000 less per family. The share of the national after-tax income that the top one percent of the population received jumped from 7.3 percent in 1977 to 11.4 percent in 1994.


Our report, "The Great American Divide Widens" (TiM GW Bulletin 98/1-1, 1/01/98)  elicited a number of thoughtful comments from the Truth in Media readers. Here is a selection of some of them, along with the TiM editor's replies.


From ERIC PETERS, Washington, DC (the writer is an editor at a Washington newspaper):

Bob, your points are well taken - especially as regards the "middle class," which appears to be vanishing. In Washington, for example, the level of income required to achieve a middle class standard of living - e.g., a single family home in a decent neighborhood, enough money to raise at least two children responsibly, etc. - is about $80,000 annually. Hardly a "middle class" wage...

If I recall correctly, government statistics define a "middle class" family income as $34,000 or so. Well, try and support a family on that anywhere near a major metropolitan area! Hell, $34,000 in DC is barely enough to keep a small apartment and pay for pizza and beer. I know!  For the numbers to have any meaning, "middle class" family income would have to be put in the $60,000 and up range.

Most people in the DC Metro area fall into one of three categories:

1) The "have it mades," who pull down six figure-plus salaries and can afford single family homes (avg. price: $250,000 and up), new cars ($20,000 and up) and all the best things for their children;

2) The "drowning middle class," i.e., the people who 20 years ago could buy the homes in the suburbs and afford to raise families but who today are crowded into overpriced townhouses ($150,000 will buy a s...hole in the distant DC suburb of Manassas, with 1-2 hour commuting times into the city), if they are lucky - or tiny condos - and drive older cars, etc. These people are barely treading water economically although most are college educated, white collar workers who earn between $25,000 and $60,000. They are so heavily taxed and face living costs so high they can afford to save little and thus live tenuously, from paycheck to paycheck. In practical terms, they are worse off materially than semi-skilled blue collar workers of the 1960s.

3) Finally, there are the "underproles," a group comprised of the uneducated, increasingly unemployable (in a high-tech society) manual workers who cannot earn enough money to make working worthwhile - at least not in terms of American concepts of dignified living. Hence, they languish on the periphery of society, mired in   drugs, hopelessness and violence. Their ranks are growing as members of group 2 ("drowning middle class") lose their economic footing .

As a practical matter (at least here in the DC area), the middle class I grew up in during the 1970s and early 1980s has been exterminated.

As a teenager in the early 1980s, all my friends and I lived in nicely sized, single family homes, had mothers who did not need to work - and could afford all of life's necessities and many luxuries besides. Yet none of my friends' fathers were titans of business, high priced lawyers or well-paid DC lobbyists. Most were middle managers, government workers, etc. who earned the 1997 equivalent of under $60,000 per annum.

As mentioned earlier, it is impossible to approach the standard of living I and my contemporaries enjoyed growing up on a salary of $60,000. $120,000 would be more like it - and that would be cutting it close.

I'll use myself as an example: I earn about $50,000 - but would need to double that to appreciably improve my standard of living (e.g., to be able to move from renting a 30 year-old small house in a so-so neighborhood to a qualifying for a "nice" house in a safe neighborhood). I cannot afford a decent new car - that is, anything better than a crappy little economy subcompact ... (thankfully, I get free "press cars" to drive every week); a family is inconceivable to me (because I don't believe in shunting kids of to day care or allowing them to rot in public schools) .... unless I manage to make six figures somehow.

Meanwhile, the "plutocrats" are moving into garish $600,000-million-plus homes with more square footage than a small English castle, driving two or three $50,000 luxury cars and keeping their kids out of the dead-end public schools, where children of the middle class are consigned to vegetate and acquire their PC-indoctrination in mindlessness.

GOPers love to point out that consumer baubles (electronic goods, for instance) are cheap and available to even the poorest person. Yes - but durable goods, particularly real estate - are slipping  farther and farther out of reach. Is the person in a tenement with a "boom box" and a laptop better off materially than the single family homeowner of 20 years ago? I doubt it.


It's not just in DC that the middle class has been wiped out. It seems to be the case in most cities. Here in Phoenix, for example, the ARIZONA REPUBLIC carried a gut-wrenching story about a young couple (Dawn, 25 and Marty, 27 respectively) with a small child who could not afford to buy any Christmas presents this year even though both work (they bring home about $30,000 per year).

Now, not putting more cash into some merchant's pockets is no great loss, as far as I am concerned (see my bracketed comment below). But keeping a young family constantly on a tread mill without a respite is a tragedy. Dawn works as a preschool teacher at a local private Christian school. Marty is a laborer at a retail distribution center.

[Re. Christmas gifts: This year, for example, after returning from Singapore (you may have caught my story "Materialism Without Idealism" about it - TiM GW Bulletin 97/12-2, 12/08/97), I told my wife and children that I would not be buying them any gifts this year. Instead, I donated an equivalent amount of money to the needy in Serbia, Russia and (Catholic) Ireland - the three Christian countries where people are suffering even more than here.]

And then, as if adding insult to injury, we have the likes of Ted Turner donating $1 billion to the United Nations while the likes of Dawn and Marty often have to resort to buying even milk and bread on credit cards!

As for the future outlook, I am afraid it doesn't look good, despite all the soap about the economic prosperity which I've read in the morning papers. Here is a reaction, for example, I got to the same above piece from a professor at Pittsburgh's Duquesne U. (incl. my reply):


(The writer is a professor at Duquesne University; our replies are show in "blue").

At 09:39 AM 1/1/98 -0500, you wrote:

Bob: Marie Antoinette said "Let them eat cake."

...while she still had a talking head! :-)

It's a few years down the line but our class disparity and age disparity (wealth, privileges, and tax break for the non-poor elderly which is about 40% of the elderly, you ought to know since you are in Phoenix) will split the population not just along class lines but also along generational lines. It's gonna get ugly in about 20 years, maybe sooner.

You're right. It may happen even sooner - when the Baby Boomers start cashing enmasse their retirement checks, I figure in about 10+ years time. Many will discover that there is no money there, since by then the Wall Street Hoover will have sucked it out of the pension funds.

I don't know if being an ostrich is an advantage or a disadvantage? Sometimes, people tell me that it's best not to know such grim things.

I, on the other hand, keep hoping that being able to anticipate some events may be helpful to some people. If they are ready to help themselves, that is. I've seen it so many times with my business clients - you tell them about some unpleasant news or forecast, you recommend what they can do to help themselves, yet they do nothing until it is either too late or much more difficult to recover.

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Also, check out... "Canadian Banks Speculating Against Canadian Dollar""Election '98: Much Ado About Nothing""A Spoof on Goof: ABC Adds God to Its Editorial Lineup," "Taking a Little Bite Out of the 'Big Apple'", "Greenscam's Meriwether Bailout,"  "Wall Street's Conquest of America,"  "Yeltsin-IMF Deal: Feeding Drugs to Drug Addict", "Like Watergate, Cover-up Worse Than Original Crime," "Death Merchants 80; U.S. Taxpayers 19" , "The Great American Divide Widens", "Was Buchanan Robbed in Louisiana, Iowa, Arizona?"

Or Djurdjevic's WASHINGTON TIMES columns: "When Will Wall Street's Bubble Burst?""Russia, IMF, and Global House of Cards""Rekindling NATO to Fuel Cold War..." or his CHRONICLES column: "Wiping Out the Middle Class."