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As intense protests spawned by Occupy Wall Street continue to grow, it is worth asking: Why now? The answer is not obvious. After all, severe income and wealth inequality have long plagued the United States. In fact, it could reasonably be claimed that this form of inequality is part of the design of the American founding—indeed, an integral part of it.
Income inequality has worsened over the past several years and is at its highest level since the Great Depression. This is not, however, a new trend. Income inequality has been growing at rapid rates for three decades. As journalist Tim Noah described the process:
During the late 1980s and the late 1990s, the United States experienced two unprecedentedly long periods of sustained economic growth—the “seven fat years” and the “long boom.” Yet from 1980 to 2005, more than 80 percent of total increase in Americans’ income went to the top 1 percent. Economic growth was more sluggish in the aughts, but the decade saw productivity increase by about 20 percent. Yet virtually none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads.
The 2008 financial crisis exacerbated the trend, but not radically: the top 1 percent of earners in America have been feeding ever more greedily at the trough for decades.
In addition, substantial wealth inequality is so embedded in American political culture that, standing alone, it would not be sufficient to trigger citizen rage of the type we are finally witnessing. The American founders were clear that they viewed inequality in wealth, power and prestige as not merely inevitable but desirable and, for some, even divinely ordained. Jefferson praised “the natural aristocracy” as “the most precious gift of nature” for the “government of society.” John Adams concurred: “It already appears, that there must be in every society of men superiors and inferiors, because God has laid in the…course of nature the foundation of the distinction.”
Not only have the overwhelming majority of Americans long acquiesced to vast income and wealth disparities, but some of those most oppressed by these outcomes have cheered it loudly. Americans have been inculcated not only to accept but to revere those who are the greatest beneficiaries of this inequality.
In the 1980s, this paradox—whereby even those most trampled upon come to cheer those responsible for their state—became more firmly entrenched. That’s because it found a folksy, friendly face, Ronald Reagan, adept at feeding the populace a slew of Orwellian clichés that induced them to defend the interests of the wealthiest. “A rising tide,” as President Reagan put it, “lifts all boats.” The sum of his wisdom being: it is in your interest when the rich get richer.