Inequality in the US is now reaching (or even surpassing) that of the Gilded Age.
Secondly, what happened then?
Early next week, my new book It Could Happen Here will be released by HarperCollins. The book is an in-depth look , based on a historical analysis, of the implications of our historically high levels of economic inequality for the nation’s ultimate, long-term political stability. As economic inequality grows, nations invariably become increasingly politically unstable: Should we complacently believe that America will be different?
A central conclusion of the book is that once economic inequality reaches a self-reinforcing cycle it is halted only by inevitably controversial, hard-fought, bitterly opposed government action. Senator Jim Webb encapsulated this idea, when he wrote in his book, A Time to Fight: Reclaiming A Fair and Just America:
“No aristocracy in history has decided to give up any portion of its power willingly.”
In 1928, economic inequality was near today’s levels. Franklin Roosevelt succeeded in reversing the trend toward the continuing concentration of wealth, but it was a turbulent battle. In 1936, while campaigning for his second term and speaking at Madison Square Garden, FDR told the crowd:
“Never before in all our history have these forces [Organized Money] been so united against one candidate as they stand today. They are unanimous in their hate for me and I welcome their hatred.
Thirdly, there's one huge difference between FDR's time and current America - the present American political system is dysfunctional, and unable to handle any major economic or political reforms in the face of entrenched self-interest by powerful minorities.
Simply put, there is no chance of a new New Deal. It's not going to happen. The populist swell is being captured by the Teabaggers, who are useful idiots lead by the coporations and lobbyists funding them to work against the interests of the middle- and working-classes; the Republicans are corporate whores busy sticking spanners in the works whenever they can; and the Democrats are a collection of corporate whores and ineffective blowhards who couldn't organise a piss-up with the Tui Brewery girls giving them instructions.
So where does that leave the US? I don't know, but it doesn't look good. The income equality appears to have surpassed 1927 - and is still accelerating, as seen in the recent recession. There's no room for political solutions. And populist anger is being co-opted by the right, helped by the general ignorance of the sort of people the Teabaggers appeal to and the apparent horror they have for any discussion which involves looking good and hard at income and classes in the US.
My guess is that the economic dysfunctionality will continue to deepen and hurt, but the rage it generates will be channelled towards warfare, scapegoating and still more authoritarian "solutions". Watch for Islam to be blamed for economic problems. If Obama is a one-term loser, as I suspect he will be, the next Republican President will probably be in line with Bush Jr, and the damage to the US irrevocable. I don't want to use the "f" word - but you can see the possibility looming. God knows how China or Europe will react.
Me, I'm going to go play Planetfall and pretend I never had this thought.