The Opportunity Dodge

Economic Policy Institute

Working Economics Blog

Posted April 10, 2015 at 10:00 am by Lawrence Mishel

The Opportunity Dodge

This piece originally ran in The American Prospect.

We think of America as the land of opportunity, but the United States actually has low rates of upward mobility relative to other advanced nations, and there has been no improvement in decades. Creating more opportunity is therefore a worthy goal. However, when the goal of more opportunity is offered instead of addressing income inequality, it’s a dodge and an empty promise—because opportunity does not thrive amid great inequalities.

It is important to distinguish between opportunity (or mobility) and income inequality. Concerns about mobility relate to strengthening the chances that children who grow up with relatively low incomes will attain middle-class or higher incomes in their adulthood. To address income inequality, on the other hand, is to focus on whether low- and middle-income households improve their share of the economic growth generated in the next two decades. Rising inequality is best illustrated by the fact that while the top 1 percent only received 9 percent of household income in 1979, this group gained either 38 percent (using the CBO’s comprehensive measure) or 60 percent (using tax data on market-based incomes) of the income growth between 1979 and 2007. That is, the top 1 percent received four to six times its expected share of all the income growth.

The opportunity dodge is popular with centrist and conservative politicians. Conservatives, for the most part, consider income outcomes to be the result of meritocracy. “I don’t care about income inequality per se; I care about opportunity inequality,” Arthur Brooks, head of the American Enterprise Institute recently said. “I want everybody to have a chance to be mobile, to rise, for everybody to have a chance to earn success.” Likewise, Jeb Bush’s highly touted speech to the Economic Club of Detroit keyed in on “the opportunity gap.” Left unsaid is that groups losing out from income inequality are judged to have not exerted sufficient effort, to have inadequate skills, or to have pursued counterproductive behaviors (such as not getting married).

Centrist Democrats sometimes address opportunity instead of income inequality to avoid confronting the top 1 percent’s capture of the lion’s share of income growth. After all, addressing runaway executive pay and a runaway financial sector—the main causes of the top 1 percent’s income gains—smacks of redistribution; and besides, those folks are their donor base. Talking about opportunity also allows a politician to avoid confronting ongoing wage suppression and the imbalance of bargaining power that has led to stagnant wages for college graduates and non-college graduates alike over the last dozen years. As Representative Scott Peters of the House New Democrat Coalition recently said, “To the extent that Republicans beat up on workers and Democrats beat up on employers—I’m not sure that offers voters much of a vision.”

Improved early-childhood education or access to college—the opportunity agenda—will enhance the upward mobility of today’s children (especially if coupled with policies that improve the availability of good jobs), and help them prosper as adults. However, it will do nothing to enable today’s families to share in economic growth. That’s what makes it a “dodge” to pursue opportunity but ignore income inequality: It is at best changing the subject and, in Larry Summers’s characterization, it is evading the tougher issue of who has bargaining power in the economy.

The opportunity dodgers also ignore that income inequality and intergenerational mobility are closely linked. The so-called Great Gatsby Curve comparing opportunity with equality shows that mobility is less in countries with the greatest inequality. So we will not be able to foster more opportunity and mobility without also addressing income inequality. Policies to increase mobility usually focus on more and better education, including starting earlier (quality early-childhood education) and extending education through community college or a four-year degree. Yet one of the most robust and long-standing social science research findings is that family background—the circumstances in which children grow up—greatly shapes educational advancement. So, promoting education solutions to mobility without addressing income inequality is ultimately playing pretend.We can’t substantially change opportunity without changing the actual lived circumstances of disadvantaged and working-class youth.

Success in school is not as easy for someone facing poverty, especially the concentrated poverty that racial segregation produces. These are children who frequently change schools due to poor housing; have little help with homework; have few role models of success; have more exposure to lead and asbestos; have untreated vision, ear, dental, or other health problems; have parents with the greatest stress; and live in a chaotic and frequently unsafe environment. For them, opportunity is not enough unless the foundations of success are established.

Acknowledging that income inequality and poverty greatly affect schooling success means we need to improve the circumstances of poor children’s lives by providing stable, adequate housing and healthy, safe environments. Decent income for their parents is essential. If we fail to improve these circumstances, promoting mobility and opportunity through more and better education is a false promise and is simply posturing.

Last, it is important to recognize that some people are always going to end up on the bottom and middle rungs since—except in Lake Wobegon—somebody has to be below average. Economic policy must also be concerned that low- and moderate-income families have decent incomes, health care, and retirement. The opportunity dodgers are really saying they do not care how low- and middle-income families actually live.

The Atlantic

The 47%: Who They Are, Where They Live, How They Vote, and Why They Matter

When you talk about the 47%, you are talking overwhelmingly about senior citizens on Social Security and poor working families.

• DEREK THOMPSON
 
•  SEP 18, 2012
 
•  BUSINESS

In secretly recorded comments, Mitt Romney told a private fundraiser that the 47% of American who pay no federal income tax "dependent on government" and predicted they will "vote for the president no matter what."*

Let's not talk about what the comments mean for Romney's election chances. Let's talk about everything we know about "The 47%."

Who They Are

In 2011, 47% of Americans paid no federal income taxes. Within that group, two-thirds still pay payroll taxes. The rest are almost all either (a) old and retired folks collecting Social Security or (b) households earning less than $20,000. Overall, four out of five households not owing federal income tax earn less than $30,000, according to the Tax Policy Center.

Here's another, slightly wonkier, way to think about the 47%. Divide the group into two halves. The first half is made tax-free by credits and exemptions, the vast majority of which go to senior citizens and children of the working poor. The half that you're left with is so poor, they wouldn't owe federal income taxes even if there were zero tax expenditures.

There are some not-so-poor outliers, like the 7,000 millionaires who paid no federal income taxes in 2011. But for the most part, when you hear "The 47%" you should think "old retired folks and poor working families."

Where They Live

From David Graham, here is the graph of the 47% -- a.k.a. "non-payers" -- by state. The ten states with the highest share of "non-payers" are in the states colored red. Most are in southern (and Republican) states. Meanwhile, the 13 states with the smallest share of "non-payers" are in blue. Most are northeastern (and Democratic) states.

How They Vote

The easiest thing to say about this map is that "non-payers" ironically seem more likely to vote Republican and "payers" seem more likely to vote Democratic. But we can't say that for two reasons.
The first reason is that low income earners are much more likely to vote Democratic, even within Republican states. In 2008, Obama lost Georgia by 5 percentage points but he won 70% of voters who earned less than $30,000 -- which is precisely the demo most likely to owe no federal income tax. Obama lost Mississippi by 14 percentage points, but picked up 66% of voters who earned less than $30,000. As a general rule, Republicans win among richer voters -- both in the red states and the blue. [Graph below via Super-Economy]

The second factor that complicates our efforts to determine how the 47% vote is that this group is divided between older people and poorer working families. Older people vote in higher numbers. But families earning less than $20,000 voted 30% less than the national average, while households earning more than $150,000 were 30% more likely to vote than average. That data and more is in the Wikimedia Commons graph below. [Editor's aside: Voter turnout is also highly correlated with variables like race, but I don't have data on the 47% broken down by those demographics.]

Why the 47% Meme Matters

Mitt Romney's off-the-record comments were inelegant. But they were also part of a long trend of Republicans attacking the 47% as lazy, or playing by a different set of rules, or not fully contributing to the country. Michele Bachmann went after the non-payers. So did Rick Santorum. And Sen. John Cornyn.
The 47% aren't lucky ducks cheating the system. They're mostly poor working families getting pilloried by the political party that wrote the rules they're following. If the 47% are the monster here, then Republicans helped play the role of Dr. Frankenstein. "Non-payers" have grown in the last 30 years because of marginal tax rate cuts and credits like the EITC passed under Republican presidents and continued by both parties in Congress.
It would be one thing to ask poor working families to pay higher taxes if Republicans were trying to raise money to improve government services. Quite the opposite, Romney's tax plan would, if passed, either reduce revenue or come out neutral by raising taxes on upper-middle class families. Meanwhile, his budget would gruesomely gut Medicaid and income-support programs below their projected 2020 levels.
I don't care about Romney's secret admissions. An 18-month campaign offers a downright luxurious amount of time to say dumb things. But I do care about Romney's public statements and his public stances. In February, Romney told a reporter he was "not concerned about the very poor" because they have a safety net. In August, he backed a budget that slashes the projected growth of that safety net. If only neglecting the plight of low-income families were the sort of thing Romney tried to keep a secret.
___
*Here's the full quote: "There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what...These are people who pay no income tax."

ECONOMY

Inequality is Fundamental to U.S. Capitalism: Tweaking the Edges Will Accomplish Nothing

The poorest Americans have no realistic hope of achieving anything that approaches income equality. They still struggle for access to the basics.

By Steven W. Thrasher / The Guardian

December 5, 2015

Photo Credit: nito

The economic hoarding by those at the top has been termed “income inequality”, but that’s neither a strong nor accurate enough phrasing. I have never heard poor people complain about “income inequality”; poor people complain about being screwed out of housing , or about working more hours for less pay or about having to choose between medicine and food.

“Inequality” sounds like something that happens by accident and can be remedied by fiddling around the edges. It is not as if the rich are a little more equal and the poor a little less equal, and if we shift a bit we’ll all come out in the middle. What we’ve been calling “income inequality” might be better understood as a war waged by US political and economic policy on the poor.

A new report from the Institute for Policy Studies issued this week analyzed the Forbes list of the 400 richest Americans and found that “the wealthiest 100 households now own about as much wealth as the entire African American population in the United States”. That means that 100 families – most of whom are white – have as much wealth as the 41,000,000 black folks walking around the country (and the million or so locked up) combined.

Similarly, the report also stated that “the wealthiest 186 members of the Forbes 400 own as much wealth as the entire Latino population” of the nation. Here again, the breakdown in actual humans is broke down: 186 overwhelmingly white folks have more money than that an astounding 55,000,000 Latino people.

The disparities in wealth that we term “income inequality” are no accident, and they can’t be fixed by fiddling at the edges of our current economic system. These disparities happened by design, and the system structurally disadvantages those at the bottom. The poorest Americans have no realistic hope of achieving anything that approaches income equality; even their very chances for access to the most basic tools of life are almost nil.

President Lyndon Johnson’s so-called War on Poverty didn’t angle to take anything from the rich so that the poor could see equality. It was designed to keep some of the poor just alive enough that they wouldn’t rebel, and designed to let other poor people perish as an object lesson to the rest of us to keep scampering.

Income inequality is better termed structural racism. White people earn more money with less education than black people and consistently have half the unemployment of black people. And, as new research has shown, “family wealth” predicts outcomes for 10 to 15 generations. Those with extreme wealth owe it to events going back “300 to 450” years ago, according to research published by the New Republic – an era when it wasn’t unusual for white Americans to benefit from an economy dependent upon widespread, unpaid black labor in the form of slavery.

Income inequality is better viewed as structural sexism. Women earn 78 cents on the dollar overall compared to white men, but black women only earn 64 cents and Latinas 56. Women are also routinely discriminated against economically for bearing children.

Income equality is better viewed as structural child abuse. In the United States, one in five children needs government help to eat. As Aisha Sultan recently wrote in the Education Writers Association, if a 30-child classroom looked like the nation at large, seven of the children would be living in poverty, six would be victims of abuse and one would be homeless. These kids aren’t just unequal; they are never offered the opportunity to achieve equality.

Income inequality is better viewed as economic genocide, which shortens the lives of the poor. As the New York Times bluntly put it last year, “where income is higher, life spans are longer”. For one of the most jarring examples of how this plays out, look no further than the Ferguson Report, which shows how just in St Louis County, the average life expectancy ranges from 91 in the whitest neighborhood to 56 in the poorest, blackest neighborhood.

Too often, the answer by those who have hoarded everything is they will choose to “give back” in a manner of their choosing – just look at Mark Zuckerberg and his much-derided plan to “give away” 99% of his Facebook stock. He is unlikely to help change inequality or poverty any more than “giving away” of $100mhelped children in Newark schools.

Allowing any of the 100 richest Americans to choose how they fix “income inequality” will not make the country more equal or even guarantee more access to life. You can’t take down the master’s house with the master’s tools, even when you’re the master; but more to the point, who would tear down his own house to distribute the bricks among so very many others?

The Trump campaign: The art of the demagogue

The Trump campaign

The art of the demagogue

The Republican Party regularly sees insurgents in its primaries. A self-funding one who seems capable of saying almost anything, though, is something new

Sep 5th 2015 | NORWOOD, MASSACHUSETTS, AND WASHINGTON, DC | From the print edition

• 

DONALD TRUMP is not going to be 

America’s next president. The vagaries of the electoral college notwithstanding, the next occupant of the Oval Office will be someone who wins a lion’s share of the 130m or so ballots cast in November next year. And though Mr Trump has spent weeks leading the field of Republicans with White House ambitions, no survey suggests that 60m Americans, or indeed anything like that number, are willing to vote for him.

The remarkable thing is not that Mr Trump is not going to be president, but that such a thing should even need saying. This spring it would have seemed self-evident. Mr Trump was then just a rich, oft-married businessman, reality-television star and controversialist. His name conjured up associations such as “arrogant” and “blowhard”—still the words that most readily spring to the minds of voters who are asked about him, according to a Quinnipiac University poll.

In this section

• The art of the demagogue
• Time to strike fear

Reprints

But since he announced in June, after months of speculation, that he was going to seek the Republican nomination, his fortunes have changed (see chart). He has not only gained a lot of support—between a quarter and a third of Republican voters back him in recent polls—but he has also gained it from across the party. It is not just Tea Party folk and whites without a college education who like him; so do a lot of evangelical Christians, who might be expected to look askance, and many self-described moderates. And even those who do not support him see him more favourably than they did. In Iowa, which has an early voice in the process by which a candidate is selected, the number of Republicans who would “never” back Mr Trump fell from 58% in May to 29% in August.

Billionaire with a pitchfork

Outspoken populists often disrupt the early stages of the Republican Party’s search for a candidate. In 1996 “Pitchfork Pat” Buchanan nearly won the Iowa caucuses and beat the eventual candidate, Bob Dole, in the New Hampshire primary. In 2012 a series of “anyone-but-Romney” candidates passed through the limelight. But such enthusiasms normally collapse as the party establishment imposes order and the insurgents reveal their flaws. Mr Trump has flaws aplenty, including a thin skin, short temper and a policy platform of bumper-sticker depth and subtlety.

This time, though, things look different. Mr Trump is not fighting a single establishment champion, like Mr Dole or Mitt Romney, but a slate of politicians vying for that position. Because of loosened campaign-finance rules it will be much easier for deep-pocketed backers to keep chosen candidates afloat during this election season than it has been in the past, and this means that the field, which includes big-state governors, serving senators and the establishment’s supposed favourite, Jeb Bush, a former governor of Florida and the brother and son of presidents, may be winnowed out only slowly. In the meantime the focus remains on the self-funded Mr Trump. And nothing he says, no matter how outrageous, seems to alienate the voters who see him as a champion.

Party grandees still hope that Mr Trump’s campaign will eventually stall or flame out. But they are beginning to accept that they cannot stop him on their own. He remains a long-shot for the nomination, but it is striking that prominent conservatives in Washington no longer dismiss the idea of a Trump candidacy out of hand. And even if it does not come to that, the Trump insurgency has already reopened wounds that party leaders do not know how to heal. Grassroots Republicans and the politicians they elect may be united in their loathing for Barack Obama and the Democrats. But many rank-and-file Republicans do not share the pro-trade, free-market ideology that dominates the party’s upper echelons and the ranks of those who routinely fund its operations. The grassroots also suspect that party leaders could have done much more to thwart Mr Obama, if they were not so cowardly or inept. Mr Trump did not invent those divisions, but he is exploiting them masterfully. And when he goes—if he goes—they will be wider than ever.

When the race for the Republican presidential nomination first got under way, conventional wisdom held that it would be a purity contest, with challengers facing grassroots wrath if they strayed from conservative orthodoxy. Until Mr Trump leapt into the fray those predictions were proving correct. The rest of the contenders sound like the chorus from a classical tragedy, offering the same account of the country’s woes. The members of the chorus all lament that the American dream of upward mobility is fading; all blame Mr Obama, big-government Democrats and bossy Washington bureaucrats for smothering economic growth. The electorate’s concern about immigration prompts loud rhetoric about the need to secure the border, but waffling about how best to fix a system so broken that 11m or so foreigners live in the shadows without legal status. The candidates waffle because they know that the rank-and-file conservatives who vote in their primaries are a long way to the right of the general population.

Mr Trump ignores the differing demands of the primary- and general-election contests. When it comes to the border he outswaggers and outsnarls the chorus, not just calling for a wall but promising he will force Mexico to pay for it by “impounding” all remittances derived from “illegal wages” and, if needs be, cancelling visas for Mexican CEOs and diplomats. Unlike the chorus, though, he is equally forthright about what comes next. He would deport all 11m foreigners living in America without legal papers (though he would try to let the “really good” ones back in quickly), and would end automatic citizenship for children born on American soil to immigrants without legal papers. This plays well with activists incensed that Mr Obama has used his presidential powers to shield millions of migrants from deportation in what they see as a tyrannical assault on the rule of law. It will do nothing to improve the dismal 27% of the Hispanic vote won by the Republican candidate in 2012.

Often addressed to large crowds (his record to date, set in deeply conservative Alabama, has been put at 30,000), Mr Trump’s swaggering, ad-libbed speeches describe an America beset by simple problems. If working Americans can no longer find jobs for life in a factory, it is not because emerging markets or robots offer unprecedented competition. It is because the country is being betrayed by chump-like politicians who let ruthless foreign governments roll over them. Mexico is accused of sending its worst criminals to America. China only undercuts America because it cheats. Who should sort such things out? Who but the author of “The Art of the Deal”, the business book that he calls his second-favourite of all time. (“Do you know what my first is?” he asked fans in Michigan. “The Bible! Nothing beats the Bible!”)

Mr Trump is not just throwing red meat to the right. He takes a karaoke-club approach to politics, belting out crowd-pleasing hits from across the political field. His attacks on corporate bosses seeking cheap foreign labour at the expense of unemployed Americans would not sound out of place in a rustbelt trade-union hall. He charges hedge-fund bosses with paying too little tax thanks to loopholes that he would scrap, increasing their tax bills to fund tax cuts for middle-earners. “I know hedge-fund guys, they are friends of mine, they pay no tax,” he says. These positions probably explain why a poll by Bloomberg Politics and the Des Moines Register, a newspaper, found more Republicans in Iowa classing him as a moderate than as a conservative.

On health care Mr Trump promises to repeal Obamacare, just as the chorus does. But in a televised debate which, on August 6th, delivered Fox News the largest audience in its history, he went on to praise Canada and Scotland for their state-funded health systems—another conservative heresy. Not that he is advocating anything along those lines, or indeed anything specific at all; he just says that he will replace Obamacare with “something terrific”.

Mr Trump shows no sign of caring whether he qualifies as a conservative. He is very clear, though, that he does not want to be thought of as a politician. He says that big businesses and their lobbyists bend both parties to their will through corrupting donations. Those hedge-fund friends who pay no tax, he says, “are all supporting Jeb Bush and Hillary Clinton”. Why should he care, though? He does not need their money. In a deft touch, Mr Trump forgoes promises to reform Washington or clean up the corridors of power. Instead he tells the cynical, angry voters that because he is “really rich” he cannot be bought. In interviews with Trump supporters, this insider-outsider status is one of his strongest selling-points. It makes him a man who can both look the hated elites in the eye and kick them in the crotch.

Experience not required

Mr Trump is less interested in the size of government—which the chorus always deplores—than in who runs it: “stupid” politicians who “talk the big game” until they reach Washington. There, in his oddly sexualised telling, politicians are rendered “impotent” by their excitement of wandering the gilded, high-ceilinged halls of power. In a telephone interview with The Economist (see article) he mimics an awestruck elected official calling his wife from the capital and simpering: “Darling, I’ve arrived.”

It is a scorn his supporters share. Two-thirds of Republicans in Iowa told a recent Monmouth University poll that the country needs an outsider president, rather than someone with government experience. Add Mr Trump’s support to that of the two other contestants in the Republican field who have not held office, Ben Carson, a retired neurosurgeon, and Carly Fiorina, a former boss of Hewlett-Packard, a technology firm (see Lexington), and they account for more than 50% of the voters likely to make a choice in Iowa and New Hampshire.

As befits an anti-politician, Mr Trump has poured particular scorn on Mr Bush. On August 31st his campaign released a video showing mugshots of Hispanic migrants accused of murder over a recording of Mr Bush saying that some migrants entered America illegally in an “act of love” for their families. “Forget love. It’s time to get tough,” the ad concluded.

Mr Bush has begun to mount a counter-attack, pounding Mr Trump as a closet liberal whose plans would increase the power of Washington. The tactic rests on a belief that the dominant force in modern American politics is intense partisanship, and that undermining Mr Trump’s credentials as a Republican is thus a lethal blow.

In the past generation, the number of Americans who call themselves consistently conservative or consistently liberal has doubled. Ideology and identity have coalesced, so that partisans do not just think alike about taxes or Iran, but live in the same neighbourhoods and have like-minded friends. Partisanship may yet curb Mr Trump’s rise.

An awareness of this may be why Mr Trump’s tactics are becoming more conventional, and more conventionally right-wing. His campaign has started touching on themes from the late 1960s, another era of bitter politics and widespread disenchantment in Middle America. The businessman points to rising murder rates in some large cities as proof that a recent focus on police killings and abusive arrests has left officers “afraid to talk to anybody”. Most police are “phenomenal people” and law and order is suffering, says Mr Trump, calling some cities “powder kegs ready to explode”. He has begun using the phrase “silent majority” to describe his supporters, four decades after Richard Nixon started using it to rally conservatives.

Mr Buchanan, who as one of Nixon’s speechwriters coined that phrase, hails Mr Trump for tapping into a mood of renewed nationalism. “The country is on fire,” he says. His main advice to Mr Trump is to rule out an independent or third-party candidacy if he fails to secure the Republican nomination—something which Mr Trump refused to do when pressed during the Fox News debate. Mr Buchanan warns that a third-party run instantly loses the support of those whose chief concern is stopping the Democrats. “If I were counselling Trump I’d tell him to stay inside the Republican Party,” he says. “It’s the only avenue that he has to the presidency of the United States.” As The Economist went to press it seemed possible that Mr Trump was about to make a statement on his intentions.

But appeals to partisan purity may be surprisingly ineffective in peeling away those who admire Mr Trump. His fan-base is characterised not by the fidelity of its conservatism, but by the ferocity of its rage. Frank Luntz, a Republican pollster, says he was shaken by a focus group he held on August 24th for two dozen self-declared Trump supporters. They included folk on the hard right but also ex-Obama voters. Unemployed Americans rubbed shoulders with the affluent. But the group had three things in common, says Mr Luntz. They are “mad as hell” about the state of America. Mr Trump speaks their language. And they do not care what anyone else says about him.

The mad prophet of the airwaves

On August 28th Mr Trump visited the Boston suburb of Norwood for a rally at the home of Ernie Boch, a wealthy car dealer. It was not an obvious stop for a Republican in primary season; Massachusetts last voted for a Republican presidential candidate when Ronald Reagan was in the White House. Several in the throng said that they rarely vote Republican. But they roared at Mr Trump’s jokes, cheered as he condemned Mr Obama’s recent deal to curb Iran’s nuclear ambitions and applauded his grumbling about America’s “third world” airports and crumbling roads. Sharon Gannon, an estate agent and Democratic voter, enthused that “He says all the things we’re all thinking.” Doug Obey, a financial adviser, relished the fact that other Republicans and the media “don’t know how to handle him”.

If Republican leaders do not know how to stop Mr Trump it is partly their own fault. Theirs is a smaller-government, pro-business party that wins elections by posing as an anti-government insurgency. Now they are facing the consequences: millions of voters dazzled by a showman who presents the next election as a hostile takeover, offering to turn America around with his dealmaking brilliance as if Congress, the Supreme Court and limits to presidential power are mere details to be negotiated. The Trump fantasy will fade at some point. It has already revealed a democracy in real trouble.

ECONOMY

8 Ways the Super Wealthy Show Their Cruel Values and Desire to Destroy the Public's Safety Net

Researchers trace the super rich's biases and political values.

By Steven Rosenfeld / AlterNet

November 30, 2015

Photo Credit: jumpingsack/Shutterstock.com

The richest Americans increasingly are taking over the levers of power and shaping the political debate, despite opposing views held by a majority of Americans, a new and unprecedented academic study of the top 1 percent has confirmed.

The super-rich are more politically active than average Americans, financing and contacting elected officials and knowing many on a first-name basis. Their agenda, which is often cited by public officials across the country, emphasizes private profit-making and is skeptical of almost every public program to address economic inequality, thestudy by Chicago-based university researchers found. The top 1 percent's social agenda, while “more liberal than others on religious and moral issues, including abortion, gay rights, and prayer in school,” is still “much more conservative than the non-affluent on issues of taxes, economic regulation, and social welfare,” the researchers found.

Put another way, today’s top 1 percent generally do not believe the longtime conservative line that a rising economic tide will lift all Americans, but have a darker view in which one’s fate is tied to the survival of the fittest. They consider climate change a non-issue and most would cut federal and state safety nets and anti-poverty programs, shift taxpayer dollars into privatized education and do little to ensure access to higher education.

“We speculate that the striking contrast concerning core social welfare programs between our wealthy respondents and the general public may reveal something important about the current state of American politics,” the reportsays. “If wealthy Americans wield an extra measure of influence over policy making, and if they strongly favor deficit reductions through spending cuts—including cuts in Social Security and Medicare—this may help explain why a number of public officials have advocated deep cuts in the very social welfare programs that are most popular among ordinary Americans.”

The report’s authors take a neutral tone and protect the confidentiality of those interviewed. As they note in their opening, “there have been no scientific, representative surveys of the broader social and political attitudes and behavior of top U.S. income earners or wealth holders.” However, their data comparing the views of more than 100 super-wealthy Chicagoans and the general public leads to unmistakable conclusions about the presence of an American soft fascism placating today’s wealthy.

This is not to say that the super-rich get everything they want. There are many federal programs and activities they dislike that have been around for decades and cannot easily be dismantled. But if those interviewed by Northwestern University and University of Chicago typify the wealthiest Americans—and the researchers say they do—it is clear that today’s elite are somewhat aware of the plight of ordinary Americans, yet reluctant to personally sacrifice to improve society’s fortunes.     

“Most of our respondents fell into or near the top 1 percent of US wealth-holders,” the survey says. “Their average (mean) wealth was $14,006,338; the median was $7,500,000... To give a further idea of their economic standing: respondents’ average income was $1,040,140. About one third of them (32.4 percent) reported incomes of $1,000,000 or more.”

What follows are eight takeaways from the report, "Democracy and The Policy Preferences of Wealthy Americans," starting with the fact that the top 1 percent are very politically active, which accounts for their outsized influence on what the federal government’s role should be and the resulting rhetoric by many elected officials in Congress and Republican-controlled state governments.   

1. The wealthy are more politically active than typical citizens. Ninety-nine percent vote in presidential elections and “a large majority (84 percent) said they pay attention to politics ‘most of the time.’ Asked how many days of the week they talk politics, the median response was five days.” Moreover, they give money to political campaigns and organize fundraising events in ways that dwarf average Americans and yield access and influence. 

From the report:

“Fully two-thirds contributed money to politics, giving an average of $4,633 to political campaigns or organizations over the previous twelve months. (By comparison, in the American National Election Study survey conducted shortly after the 2008 presidential election, just 14 percent of the general-population respondents reported having contributed money to a candidate, party, or Political Action Committee.) A remarkable 21 percent of our wealthy respondents solicited or 'bundled' other peoples’ political contributions—not an activity that is common among ordinary citizens.”

2. The wealthy want government to act on their behalf. It would be wrong to suggest that the top 1 percent hate all government. Instead, as the report shows, they want it to do their bidding and adopt policies and laws that benefit their bottom line.  

“The wealthy were particularly likely to initiate contacts with members of Congress,” the report said, adding that many know their elected officials. “Most of our respondents supplied the title or position of the federal government official with whom they had their most important recent contact. Several offered the officials’ names. We see no particular reason why their high frequency of contacts with congressional representatives should be atypical of wealthy Americans elsewhere in the country.”

Probing deeper, the report said that economic self-interest was the primary reason for being involved in the political process:

“They want to know how government policy will affect their businesses and investments. One key finding is that, for contacts that could be coded, just under half (44 percent) acknowledged a focus on fairly narrow economic self interest: ‘to try to get the Treasury to honor their commitment to extend TARP funds to a particular bank in Chicago;’ ‘to better understand the new regulations of the Dodd-Frank Act and how it will affect my business [banking/finance];’ ‘Fish and Wildlife...permitting on development land;’ ‘on behalf of clients, seeking regulatory approvals;’ ‘I own stock in several banks. I was concerned about legislation he was drafting that I think could be harmful for the banks.’"

3. Their agenda reflects wealth creation. When asked to prioritize their concerns, the list of issues reflects the factors they perceive affecting wealth creation, not the general welfare of most Americans. When asked what issues were “very important,” 87 percent said the federal budget deficit; 84 percent said unemployment; 79 percent said education; 74 percent said international terrorism; 70 percent said energy supply; 57 percent said health care; 56 percent said child poverty; 52 percent said loss of traditional values; 36 percent said trade deficits; 26 percent said inflation; and 16 percent said climate change.   

Mostly, the top 1 percent are obsessed with federal spending. “One-third (32 percent) of all open-ended responses mentioned budget deficits or excessive government spending, far more than mentioned any other issue. Furthermore, at various points in their interviews many respondents spontaneously mentioned ‘government over-spending.’”

One finding that sums up this attitude is that 58 percent favored “cuts in spending on domestic programs like Medicare, education, and highways in order to cut federal budget deficits,” compared to 27 percent of the general public.

4. Biggest schisms on economic issues.Some of the biggest differences between the top 1 percent and average Americans concern economic insecurity. Only 43 percent agreed that “government must see that no one is without food, clothing, or shelter,” compared to 68 percent of the general public. Only 40 percent support a living minimum wage, “so that no family with a full-time worker falls below official poverty line,” compared to 78 percent of the general public. Only 23 percent agree “the government should provide a decent standard of living for the unemployed,” compared to 50 percent of the general public. Only 19 percent agree that “the government in Washington ought to see to it that everyone who wants to work can find a job,” compared to 68 percent of the general public. Only 8 percent agree that “the federal government should provide jobs for everyone able and willing to work who cannot find a job in private employment,” compared to 53 percent of the public.

5. The wealthy support education, but not public schools. The very rich and the general public both support investing in education, but diverge on key specifics. The researchers found that a majority of the 1 percent and the general public would pay more taxes for pre-K and kindergarten; support merit pay for teachers; support charter public schools; support taxpayer-funded vouchers so parents can send their kids to private or religious schools; and support giving high school students the option of vocational training to start work immediately after graduating.

Where they differ, however, is notable.

The top 1 percent have a strong bias against public schools, with only 35 percent agreeing that “the federal government should spend whatever is necessary to ensure that all children have really good public schools they can go to,” compared to 87 percent of the general public. On affirmative action in education, a slight majority of the wealthy, 53 percent, agreed that “it is the responsibility of the federal government to make sure that minorities have schools equal in quality to whites, even if it means you will have to pay more in taxes,” compared to 71 percent of the general public. Only a small slice, 28 percent, agreed “the federal government should make sure that everyone who wants to go to college can do so,” compared to 78 percent of the general public.

6. Social Security and other safety nets. Some agree that the most popular government safety net, Social Security, is needed but there is a reluctance among the super rich to raise benefits for recipients or to pay higher taxes to expand benefits.

Fifty-five percent agreed that “the Social Security system should ensure a minimum standard of living to all contributors, even if some receive benefits exceeding the value of their contribution,” compared to 68 percent of the general public. Yet only 47 percent said that the income tax cap funding Social Security—where people only pay taxes on the first $118,000 of their incomes—should be raised, compared to 60 percent of the general public. When it comes to privatizing some Social Security savings, 55 percent said people under age 55 should be able to invest some of these government-held funds, compared to 47 percent of the public. Notably, 33 percent would cut back on Social Security benefits, while 46 percent of the public would expand them.

There was a similar ambivalance on ensuring access to health care. Forty-one percent of the top 1 percent agreed that “it is the responsibility of the federal government to make sure all Americans have health care coverage,” compared to 48 percent of all Americans. The same number of the super rich, 41 percent, were “willing to pay more taxes in order to provide health coverage for everyone,” compared to 59 percent of the general public. Yet only 32 percent favored a “national health insurance, which would be financed by tax money, paying for most forms of health care,” compared to 61 percent of the general public. And 19 percent would cut back federal health care spending, while 44 percent of the general public would expand it.

On other anti-poverty safety nets, 28 percent would cut back spending on food stamps and 80 percent would cut farm subsidies.  No number was given for general public support of these programs.

7. Government should protect their wealth. On taxation and regulating capitalist excesses, the top 1 percent weren’t uniform anti-government libertarians, with 55 percent agreeing that, “the government has an essential role to play in regulating the market,” compared to 71 percent of the general public. But it seemed they favored regulation where it positively affected their investments.

Only 18 percent said that Wall Street needed “more federal government regulation,” compared to 45 percent of the public. Twenty percent of the super rich said “big corporations” needed “less federal regulation,” compared to 45 percent of the public. In contrast, 70 percent of the super rich that said “small business” needed less regulation, compared to 42 percent of the general public.

The responses also reflect their view that government should leave profitable industries alone. Only 5 percent said the oil industry needs more regulation, compared to 50 percent of the public. Only 4 percent said the health insurance industry needs more regulation, compared to 26 percent of the public. The remaining percentages—reflecting most respondents—replied, “don’t know.”       

8. Military interventions overseas not wanted. In general, the wealthy want the federal government to pick up the slack where the private sector does not invest—with the exception of overseas military involvement. The respondents “leaned toward expanding rather than cutting back only three of the 12 federal government programs we asked about: improving public infrastructure such as highways, bridges and airports; scientific research; and aid to education. Implicitly, at least, our wealthy respondents appear to appreciate governmental production of certain public goods. At a time when the U.S. was engaged in two costly wars and faced a relatively quiescent terror threat, however, they were much less enthusiastic about military or anti-terror spending. And they tilted toward cutting all the income-redistributive or social insurance programs we asked about.”

Money, Power and Influence

The findings of the University of Chicago and Northwestern University researchers underscore that not only do the wealthiest Americans have a different and more self-interested agenda than the general public, but they have been able to push the national political discussion—especially from Republicans and pro-corporate Democrats—toward the political right.

The result is what can be called a soft fascism. For the most part, the wealthiest people and industries in America have been able to go about their business unimpeded by government, even as they complain about over-regulation and federal constraints. While there are some super-wealthy individuals who told the researchers that they support social safety nets, as a group they are unwilling to divert some of their personal wealth into social programs that benefit less fortunate Americans.

Instead, they are active participants in a political culture whose rhetoric and policy agenda largely reflects their wealth-generating and pro-corporate concerns. Most Americans, in contrast, seem to be treading water wherever they are on the economic ladder and have diminished political influence.

Steven Rosenfeld covers national political issues for AlterNet, including America's retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).