For the last two years, I've been collaborating on a personal finance book called "Where Does It All Go?" (now entering third draft). Chapter 1 opens with a discussion about how many people live with the frustration of feeling that they have things worse than their parents or grandparents did, and surely this must be due to their own inadequacies and failings. As the Occupy protests and the many, many personal testaments on We Are the 99 Percent show, this sense is widespread and far from unfounded. It is much harder for Americans now than it was a generation or two ago.
In the book, my colleague and I detail four primary ways in which this is true. But sometimes, a single picture can be worth more than a long chapter passage, especially if that picture is interactive.
I came across The State of Working America site this morning and its interactive look at "When income grows, who gains?" There are many reasons why today's generation is worse off than its predecessors, and in the book, we don't even touch on what this graphic so profoundly illustrates: Most if not all of the economic growth in America is not going to 90% of the population.
As you can see, in my grandparents' time, the richest 10% of the country only got 30% of the growth. The other 70% went to the 90% masses -- people like us.
The truly disturbing aspect of this chart is not today's disparity between the top 10% or even 1% and everybody else. The really scary part is that the top 1% are experiencing exponential growth. Look at the general shape of the curve. That's not linear. It's exponential, and you can see the "knee" of the curve happen in the early 1980s, as President Reagan started relaxing many of the old restrictions on businesses. Those who controlled the businesses were able to profit immensely and gather nearly all of the growth to themselves, leaving the 90% to combat inflation in whatever ways they could find. This has left us with everything from emergency rooms overstuffed with the uninsured (supposedly) middle class to a nation ballooning in obesity from cheap, carbohydrate-laden foods.
Exponential growth is unsustainable in any closed system, and it's obvious to anyone with eyes that the current trend cannot last much longer. My deep hope is that the primary world governments will recognize this and see the Occupy protests for what they are: a wake-up call to the dangers of this trend, not the whining of some allegedly idle, rabble-rousing losers. The media, of which I am professionally a part, has been reprehensible in its disdain for the protesters. And yes, on the whole, the protests are disorganized, diffuse, and sometimes incoherent. But that doesn't make them wrong.
We need to see the trend, hear the rising sentiment, and appreciate that these protesters have gone to great lengths in the face of their own economic adversities to remain peaceful. This is possibly a last chance to listen, to "get it." Because if these protests peter out and we see more years of this exponential rise in the super rich while the general population is left to flounder and stagnate, the outcome is inevitable. Centuries of history show repeatedly and invariably that the only possible result is rending, tragic violence that no amount of money can contain.