Why Your Parents Didn't Need to Occupy Anywhere

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.

The graph's total data spans from 1917 to 2008. I picked the segment from 1950 to 1975. This was the prime of my grandfather's life, after he'd served in World War II, received G.I. funding through a Master's in Business at Harvard, and started his professional career. In this 25-year span, his family went through periods of boom and bust. I've heard stories of holidays where the kids got little more than fruit, and I know they came to Oregon in the late 1960s with barely $5,000 to their name. But my grandfather worked like mad, paid his fair share, and it all worked out.  He lived in a world where advances in the overall economy fell across all demographics. They ate well, took vacations, built up savings, owned their homes, and always had good health care.

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.

This is my generation, today. I started my career in 1990. In my generation, the masses got only 5% of the growth. Everything else went to the 10% richest, and, as you can see, the top 1% took nearly all of that.

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.