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Attitudes changing on divide between rich and poor
A Pew survey says Americans now think the conflict between rich and poor is more important than between whites and blacks or immigrants and the native-born. Here, people attend a service at Judson Memorial Church on National Homeless Persons Memorial Day on Dec. 21, 2011 in New York City.
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Kai Ryssdal: There's been a not-so-subtle subtext in the economic discourse the past couple of months. Sort of along the lines of the haves versus the have-nots. There's been Occupy Wall Street. All that talk by Democrats in Congress about a millionaire's tax. We saw it up in New Hampshire with that whole conversation about vulture capitalism and the Republican nomination.
And it's all sinking in. Americans now see the divide between rich and poor as one of the most serious social problems we have. A new survey from the Pew Research Center says the wealth gap tops race, age and immigration. Marketplace's Mitchell Hartman has our story.
Mitchell Hartman: This is the kind of thing that gets social scientists really excited.
Rich Morin: Perceptions of strong class conflicts have surged in the past two years -- up 19 percentage points. That's a dramatic change in a relatively short period of time.
Rich Morin of the Pew Research Center says even back in the midst of the recession, Americans were still saying immigrants versus native-born was our most serious conflict. Now, it's rich versus poor.
The conflict's certainly on Florence Reinerman's mind. She's retired from managing labs at a university and we met outside her apartment in downtown Portland, Ore. It's near the city park that Occupiers took over for their tent camp during the fall.
Florence Reinerman: I think people are thinking about it more because it's been put in our face. If they don't think about it they're a little strange. Why for example...
And then Reinerman talked my ear off about how unfair Social Security taxes are when million-dollar earners pay the same amount as middle-income people like herself.
But she doesn't necessarily fault the wealthy for playing by the existing rules. And that's consistent with a surprising finding from the Pew report -- roughly half of Americans think the rich got that way from 'their own hard work, ambition or education,' rather than simply being born wealthy. And the perception many have that the rich more or less earned and deserve their wealth hasn't diminished at all through the recession and all the talk of class conflict.
I'm Mitchell Hartman for Marketplace.
There has been a lot of talk about the growing gap between the rich and the poor, but most commenators avoid the obvious answers. While there are certainly multiple causes for the growing gap, the primary causes are obvious but never discussed by commenators who have agendas to push.
If you are talking about the growing gap in the last few years since the beginning of the recession, then the answer is the recession. Recessions always hit the middle and lower class harder because they are the ones who lose their jobs. The wealthy either live off their wealth and don't work or they own the company. Either way they don't lose their jobs. That is something nobody will ever change.
If you are talking about the growing gap in the last 10 or 20 years, the answer is likewise obvious: divorce and single parenthood. I am a divorce lawyer and I can tell you that divorce is almost always financially devastating for both spouses. I heard recently that the divorce rate for the wealthy class is virtually unchanged from where it was 50 years ago, while the divorce rate for the middle and working classes has skyrocketed. Taking 2 people on moderate incomes, who are doing rather well, and then putting them in separate houses with duplicate mortgage/rent, utility payments, etc. will substantially lower the standard of living of both such people.
The devastating fact that most children are now born out of wedlock means that these children grow up in households with one income rather than two incomes. It should be no surprise that these children suffer immensely from the choice of their parent to divorce or have a child (or at least have unprotected sex) without first making sure they are in a stable 2 income household.
Therefore, the ones at fault for the growing gap between rich and poor is first and foremost the middle and working class who choose financial instability through divorce and single parent-hood. It is a conscious decision. Quite frankly, it is debatable how much help we should give such people because then you just encourage more instability in the family structure and the children are always the ones who suffer most from such poor choices.
Based on personal experience, I believe there is a misunderstanding about venture capital and hedge funds in particular. They are not "vulture capitalists." Vultures, like the one picking at a road-kill squirrel on the road near our farm yesterday, eat the already dead. Venture capitalists and hedge funds do not like to deal with "dead" firms, they prefer preying on the healthy ones, luring them into their grasp then sucking them dry of their lifeblood (money of course) before discarding the carcass. Thus, I call them "vampire capitalists."
