Extreme Inequality

In 2006 two economists turned their critical faculties on a surprising phenomenon: diplomatic parking tickets in New York City. The pair found remarkable variation among the diplomatic corps of different countries. Kuwait's UN delegation led the pack, racking up an astounding 246 tickets per diplomat between 1997 and 2002. At the other end of the spectrum, Denmark's diplomats didn't get a single ticket. The economists discerned that the number of parking tickets per delegation tracked with Transparency International's corruption index. Diplomats from high-corruption countries like Kuwait got loads of tickets; those from low-corruption countries like Denmark got few or none.

What the economists failed to note is that corruption itself tracks with another phenomenon--a nation's level of economic inequality. Dramatically unequal countries like Kuwait tend to be hideously corrupt. Countries like Denmark--by most measures, the most economically egalitarian country in the world--tend to be honest and transparent. Because of the principle of diplomatic immunity, even the careless Kuwaitis were not technically breaking any laws. Still, their parking violations speak volumes about their sense of social cohesion, or what strangers owe one another as members of civil society.

It's this type of elite misbehavior--self-serving though not always technically illegal--to which David Cay Johnston turns in Free Lunch. Johnston is a Pulitzer Prize-winning tax reporter at the New York Times. His recent articles have exposed the gaping economic inequality of George W. Bush's America and given the lie to the apologists' explanation that the new inequality stems from globalization or increasing returns to education. His analysis of tax data, which he recapitulates in Free Lunch, shows that it is not merely the poor and middle class who are being left behind. Even those Americans in the ninety-fifth and ninety-ninth percentiles on the income scale haven't received outsized economic benefits over the past twenty-five years. The only people leaping ahead in winner-take-all America are in the top 1 percent--and more specifically the top .1 and .01 percents. In a sense, it's not surprising to see Johnston's work in the Times. Even its well-educated readership is just treading water in this economy. The big winners read the Wall Street Journal.

Subscriber Login

User Name

Password

Subscribe Now!

The only way to read this article and the full contents of each week's issue of The Nation online is by subscribing to the magazine. Subscribe now and read this article -- and every article published since for the past five years -- right now.

There's no obligation -- try The Nation for four weeks free.

• Get The Nation at home (and online!) for 68 cents a week!
• If you like this article, consider making a donation to The Nation.
• Reprint this article. Click here for rights and information.