I recently read the June 2018 eye-opening and lengthy article by Matthew Stewart in The Atlantic, “The 9.9 Percent is the New American Aristocracy” It weighed on me and I want to offer some thoughts.
The basic premise is that the concept of the 1% vs. the 99% promoted by Occupy Wall Street and others is too simplified. In Stewart’s formulation there is the 0.1% — the truly super wealthy, who claim 20% of all wealth in America, the next 9.9% who hold close to 60% of wealth, and the remaining 90% who hold 20%. The 9.9% represents a “New American Aristocracy” that is self-perpetuating, building and retaining its power, and bound for a fall.
In between the top 0.1 percent and the bottom 90 percent is a group that has been doing just fine. It has held on to its share of a growing pie decade after decade. And as a group, it owns substantially more wealth than do the other two combined. In the tale of three classes (see Figure 1), it is represented by the gold line floating high and steady while the other two duke it out. You’ll find the new aristocracy there. We are the 9.9 percent.
Why it matters:
By any sociological or financial measure, it’s good to be us. It’s even better to be our kids. In our health, family life, friendship networks, and level of education, not to mention money, we are crushing the competition below. But we do have a blind spot, and it is located right in the center of the mirror: We seem to be the last to notice just how rapidly we’ve morphed, or what we’ve morphed into.
The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game we’re playing, everybody loses badly in the end.
Part of what was interesting about the article was the matter of self-recognition and scorekeeping. The article is long on descriptive statistics and anecdotes regarding this top tier, shorter on prescription and recommendations. Nevertheless, a few of the characteristics that Stewart identified had some resonance for me.
As of 2016, it took $1.2 million in net worth to make it into the 9.9 percent; $2.4 million to reach the group’s median; and $10 million to get into the top 0.9 percent.
For scorekeeping, that puts us more or less in the middle of the 9.9 percent, say around 95%. For most of my life, I’ve been very content to score a 95% on most anything. I know there are always some super-achievers who work harder and can do better, but I figure if we’re doing better than 95% of the population, we’re doing pretty well. And even better on a global basis.
We are also mostly, but not entirely, white. According to a Pew Research Center analysis, African Americans represent 1.9 percent of the top 10th of households in wealth; Hispanics, 2.4 percent; and all other minorities, including Asian and multiracial individuals, 8.8 percent—even though those groups together account for 35 percent of the total population.
Tick that box for being born white. Disturbing if not exactly surprising that the African American and Hispanic percentages are so low.
We 9.9 percenters live in safer neighborhoods, go to better schools, have shorter commutes, receive higher-quality health care, and, when circumstances require, serve time in better prisons. We also have more friends—the kind of friends who will introduce us to new clients or line up great internships for our kids.
Most important of all, we have learned how to pass all of these advantages down to our children. In America today, the single best predictor of whether an individual will get married, stay married, pursue advanced education, live in a good neighborhood, have an extensive social network, and experience good health is the performance of his or her parents on those same metrics.
Tick that box, too. It was never baldly stated but seemed somehow obvious that the easiest path to staying well off was to marry (and stay married to) someone else well off. And one of the easiest, most natural ways to find other well off people was from the pool at your (elite, private) high school or college.
The mother lode of all affirmative-action programs for the wealthy, of course, remains the private school. Only 2.2 percent of the nation’s students graduate from nonsectarian private high schools, and yet these graduates account for 26 percent of students at Harvard and 28 percent of students at Princeton.
I’m surprised that only 2.2% graduate from nonsectarian private high schools, and including religious-affiliated private schools probably doesn’t raise the percentage by much. While we said we sent Allie to just such a private school to give her a better education and more personalized teacher attention, truth be told at least part of it was also to have her associate with a “better” crowd. We don’t know yet if or who Allie will decide to marry, but if I’m to be honest I do at least wish that it will be someone who can offer the prospect of a continued level of wealth and not rely on her as the major family breadwinner — not that she can’t handle it, but just of the sake of reducing the pressure over a lifetime.
The article nods to the notion of “gilded zip codes” which highlights our society’s tendency to group into clusters of like-minded and like-affluence neighborhoods. Yes, tick that box, too. I’ve certainly noticed that to be the case, though I’m not sure about the strangling and killing parts.
Zip code is who we are. It defines our style, announces our values, establishes our status, preserves our wealth, and allows us to pass it along to our children. It’s also slowly strangling our economy and killing our democracy.
Finally, the article points to the political impact and divisions that manifested themselves in Trump’s victory. This was striking to me. I didn’t realize the extent to which voting patterns followed income and education patterns.
The counties that supported Hillary Clinton represented an astonishing 64 percent of the GDP, while Trump counties accounted for a mere 36 percent. Aaron Terrazas, a senior economist at Zillow, found that the median home value in Clinton counties was $250,000, while the median in Trump counties was $154,000.
…the distinguishing feature of Trump’s (white) voters wasn’t their income but their education, or lack thereof. Pew’s latest analysis indicates that Trump lost college-educated white voters by a humiliating 17 percent margin. But he got revenge with non-college-educated whites, whom he captured by a stomping 36 percent margin. According to an analysis by Nate Silver, the 50 most educated counties in the nation surged to Clinton: In 2012, Obama had won them by a mere 17 percentage points; Clinton took them by 26 points. The 50 least educated counties moved in the opposite direction; whereas Obama had lost them by 19 points, Clinton lost them by 31.
There are probably other factors that Stewart could have identified, including the urban-rural divide, and perhaps a gender role…to lay more of the blame on older white males. As it is, he appears to be describing me pretty well as a member of this so-called New American Aristocracy. So what? This is where I think Stewart’s article is weaker. He’s described a condition but doesn’t offer much clarity about its implications or what to do about it.
Stewart implies that we are headed toward a 1929-style market crash, depression and social upheaval. He skates close to Steve Bannon and the Fourth Turning crowd, at least as a straw-man threat. There are some general exhortations to right the wrongs of inequality, that there are steps that governments should take but Stewart says it ultimately comes down to individual responsibility of those in this new aristocracy.
We need to peel our eyes away from the mirror of our own success and think about what we can do in our everyday lives for the people who aren’t our neighbors. We should be fighting for opportunities for other people’s children as if the future of our own children depended on it. It probably does.
Overall, I think Stewart may be onto something with his identification on the 9.9% as a cohort that is distinct from the 0.1%. But I would posit that there’s not a whole lot new about it, and I find his prescription and conclusions unsatisfactory. Jordon Weissman in Slate is not likewise not impressed with Stewart’s analysis, and points to similar arguments made earlier, and evidently better, by Richard Reeves in his book Dream Hoarders. Weissman offers some solid arguments that indeed it is the 1% who have been the very notable winners of the last several decades, highlighted by this chart:
I will note, as an aside, that I have no way of validating either of the charts presented above. I’m taking them at face value, as the authors seem to have done. I’m reminded of Mark Twain’s quote, “Facts are stubborn things, but statistics are pliable.”
In the end, does it matter whether the “problem” is the 1% or the 9.9%? Well, yes, in terms of the types of behavior changes and sacrifices the society as a whole should demand. Before we get to that, let me offer some personal reflections.
I knew when we were in Hong Kong that we were swimming in a much more rarified pool than we did in New Jersey. In New Jersey we were “upper middle class”; in Hong Kong we were rubbing elbows with the elite, at least by virtue of Exxon’s corporate expense account. We knew that having a standalone house with a yard, a car, driver, and two live-in (and wonderful) servants (hard to even type that word, but what else to call Ah Chen and Ah Ying? Domestic helpers? Caregivers?) was high luxury and not something that would last for us. We would hobnob from time to time with the staggeringly wealthy — the Kadoories, Hotungs, Sidney Gordon, C.Y. Tung, M.W. Lo (who had the tennis court where they filmed “Enter the Dragon“) — but knew that we were interlopers, there on borrowed time.
This was a formative time in my youth, and I had a sense that it was a special few years that I was unlikely to replicate in my lifetime. But I came away with several lessons. One was that life at the very top was nice in short bursts, but it was also wasteful, decadent, extravagant, required a hell of a lot of income/wealth, and did not point toward happier lives (later shorthand: “Mo’ money, mo’ problems”). Life in the next tier down — the upper end of American middle class with the ability to travel and occasionally splurge — offered most of the benefits at a more affordable price, and was plenty good compared to any other point in history. It seemed a more achievable goal to maintain a life in that tier, and I wanted to ensure any of my children would have a shot at the same level, to get the same deal I did. So, in a sense, I set my sights on the 9.9% sweet spot pretty early in my life.
I’m pretty pleased that I’ve been able to maintain that general level of affluence for our family through our careers and with luck through our retirement, and been able to offer pretty much the same deal for Allie. In the period where I was making a lot of money, I could also see ourselves starting to veer toward more dangerous levels of greed, excess consumption and wastefulness. I came to a sense of “enough”. We had more or less enough to stay comfortable and splurge occasionally. In the era of 2008 economic collapse and advent of Obama, I was motivated to “give back” through AmeriCorps and then FIRST. After eight years of reasonable success capped with a demoralizing effort to pass the torch, I had enough of that as well.
I recognize this narrative sounds smug and self satisfied. Guilty, I suppose. But the questions at hand are the impact and consequences of this “new aristocracy” for today and the near future. Is there some point at which there will be a general uprising of the masses against this aristocracy? While discontent is in the air, it seems we are a long way from revolution. There seems to be a greater drive toward fixing the system through the ballot box rather that overthrow the whole system. That seems a healthier and saner path. We are, I think, a long way from the point where revolution seems the best choice, even for the most downtrodden — I’m thinking about black communities in Baltimore and elsewhere that seem closest to the tipping point, and legitimate reasons to be so. Even there, the stronger sentiment seems to be to work things out within the “system” at least for the time being. It behooves society as a whole to make things better before they get worse.
I’ve tried for several weeks to come up with some deep thoughts to move this discussion forward toward solutions. Such thoughts and solutions are not easily forthcoming. At a minimum, it will be fodder for future posts. The problems are systemic, most manifest in a sclerotic and divisive political culture. I suspect solutions begin with wresting some balance from the 1% who have disproportionately benefited, building social/government structures that people trust, and an international order that values peace and community over nationalism and zero-sum gamesmanship. How to get there from here is going to take further thought.
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