A new class warfare

Marketplace Staff Nov 6, 2006

KAI RYSSDAL: The elections tomorrow that are going to have national impact will be decided in a couple of dozen close contests. Congressional districts and a couple of Senate seats. But many of the races out there are anything but close. In New York, Attorney General Eliot Spitzer’s far ahead of his Republican opponent in the gubernatorial race. Spitzer’s got a high-class resume: Princeton, Harvard Law. A couple of years at a high-power corporate law firm. But he’s made his political name by going after Wall Street. Commentator Matt Miller says if Spitzer does win tomorrow there will doubtless be imitators.

MATT MILLER: Spitzer’s rise has been fueled in part by something utterly new in American politics: economic resentment at the bottom of the top 1 percent of the income distribution. This has created a powerful new constituency that loves the way this tough prosecutor has taken on sleazy self-dealing among today’s plutocrats.

What we have here, in other words, is a new brand of class warfare — not between the rich and the poor, but between the lower upper class and the ultrarich.

Now, ordinary workers never revolt. They’re resigned to the idea that the rich get richer.

But the most cherished illusion of today’s lower upper class is that market capitalism is a meritocracy.

These are professionals — lawyers, doctors, engineers and executives. By dint of education and hard work, they live better than 99 percent of anyone on the planet.

But these folks also can’t help but notice how many people with credentials like their own are living in the kind of Gatsby-like splendor they’ll never enjoy.

If people no smarter or better than you are making $50 or $100 million while you’re working yourself ragged to scrape by on a few million — or, God forbid, $400,000 — that stings.

And the fallout is everywhere. Lower uppers see ultras bidding up real estate prices to the point where they can’t rent a decent place for the summer.

They see the ultras raising the ante for private school slots to the point where they can’t get their kids enrolled.

There’s only so much of this indignity a smart, vocal elite can take before the seams burst.

Especially when it’s clear to them that some ultras, including many CEOs and hedge-fund managers, are reaping the rewards of rigged systems while company values plunge. Spitzer has tapped into this sense of injustice.

It may seem far-fetched to think posh professionals will lead a revolt against extreme inequality. But with a figure like Eliott Spitzer headed to a governor’s mansion it’s now possible. Shame as a strategy to constrain avarice may just come back into fashion.

KAI RYSSDAL: Matt Miller’s a columnist for Fortune Magazine.

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