Authors: Don Peck
1.
three Citigroup analysts
Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Research, Citigroup Global Markets, Inc., October 16, 2005.
2.
The report was a hit
Angela Barnes, “Want Wealth? Invest in the Uber-Rich,” Scripps News, October 4, 2006; Ajay Kapur et al., “The Plutonomy Symposium—Rising Tides Lifting Yachts,” Citigroup Research, Citigroup Global Markets, Inc., October 2006.
3.
on the eve of the recession
Analysis by Emmanuel Saez and Thomas Piketty in “Income Inequality in the United States, 1913–2002,”
Quarterly Journal of Economics
118, no. 1 (2003): 1–39, updated at
http://www.econ.berkeley.edu/~saez/
; Updated Tables and Figures, “Table A6: Top Fractiles Income Levels (Including Capital Gains) in the United States,” July 2010,
http://www.econ.berkeley.edu/~saez/
.
4.
Income inequality usually shrinks
The Gini coefficient, perhaps the most widely used measure of income inequality, rose from 0.463 in 2007 to 0.468 in 2009, a small increase. See U.S. Census Bureau, “Selected Measures of Household Income Dispersion: 1967–2009,”
http://www.census.gov/hhes/www/income/data/historical/inequality/
taba2.pdf
.
5.
The top 1 percent
Emmanuel Saez, “Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2008 Estimates),” July 17, 2010,
http://www.econ.berkeley.edu/~saez/saez-UStopincomes-2008.pdf
.
6.
Corporate profits have marched
Catherine Rampell, “Corporate Profits”; Wall Street Journal/Hay Group, “2009 CEO Compensation Study,”
Wall Street Journal
/Hay Group, November 15, 2010,
http://www.haygroup.com/ww/services/index.aspx?ID=2589
.
7.
According to
Forbes “The Forbes 400: The Richest People in America,”
Forbes
, September 16, 2010.
8.
Even in the financial sector
Nelson D. Schwartz and Louise Story, “Pay of Hedge Fund Managers Roared Back Last Year,”
New York Times
, March 31, 2010; Susanne Craig and Eric Dash, “Study Points to Windfall for Goldman Partners,”
New York Times
, January 18, 2011,
http://dealbook.nytimes.com/2011/01/18/study-points-to-windfall-for-goldman-partners/?hp
.
9.
The crisis may have begun
“Employment, Hours, and Earnings from the Current Employment Statistics Survey (National),” U.S. Bureau of Labor Statistics; Mike Mandel, “Why Financial Jobs Have Fared Relatively Well,” Mandel on Innovation and Growth (blog), May 19, 2010,
http://innovationandgrowth.wordpress.com/2010/05/19/financial-jobs/
.
10.
“Finance Firms Rev Up Hiring”
Brett Philbin, “Finance Firms Rev Up Hiring,”
Wall Street Journal
, June 28, 2010; U.S. Bureau of Labor Statistics, “Current Population Survey”; Patrick McGeehan, “New York Rebounds From Slump, Unevenly,”
New York Times
, August 30, 2010.
11.
The recession, meanwhile
Emmanuel Saez, conversation with author, 2010.
12.
Anthony Atkinson, an economist
Anthony Atkinson, conversation with author, 2010.
13.
The Boston Consulting Group
Nathaniel Popper, “Millionaires Make a Comeback,”
Los Angeles Times
, June 11, 2010.
14.
“The rich seem to be”
Saez, conversation.
15.
Since the crash
Gabriel Sherman, “The Wail of the 1%,”
New York
, April 19, 2009,
http://nymag.com/news/businessfinance/56151/?imw=Y&f=most-viewed-24h10
.
16.
Treasury committed
Timothy Lavin, “The Fed’s Cash Machine,”
Atlantic
, May 2009,
http://www.theatlantic.com/magazine/archive/2009/05/the-fed-apos-s-cash-machine/7386/
.
17.
Because of these actions
Louise Story, “Wall Street Pay,”
New York Times
,
http://www.nytimes.com/info/wall-street-pay/?scp=2&sq=Louise%20Story%20Wall%20Street%20Pay&st=Search
.
18.
Wall Street’s response
John Heilemann, “Obama Is From Mars, Wall Street Is From Venus,”
New York
, May 22, 2010,
http://nymag.com/print/?/news/politics/66188/
.
19.
The public-relations initiatives
John Arlidge, “I’m Doing ‘God’s Work.’ Meet Mr. Goldman Sachs,”
Times
(London), November 8, 2009,
http://www.timesonline.co.uk/tol/news/world/us_and_americas/
article6907681.ece
; Simon Johnson and James Kwak,
13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
(New York: Pantheon Books, 2010), 182; Reid Pillifant, “Lloyd Blankfein Is Taking Matters into His Own Hands,”
New York Observer
, May 3, 2010,
http://www.observer.com/2010/daily-transom/lloyd-blankfein-taking-matters-his-own-hands
.
20.
J. P. Morgan took
Ron Chernow,
The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
(New York: Atlantic Monthly Press, 1990), 73–77, 122; Johnson and Kwak,
13 Bankers
, 26.
21.
the economic historian Richard Sylla
Richard Sylla, conversation with author, 2010.
22.
the actions of Wall Street’s
Johnson and Kwak,
13 Bankers
, 159.
23.
Concerned with the optics
Heilemann, “Obama Is from Mars.”
24.
elite attitudes seemed different
Barbara Kellerman, conversation with author, 2010; Barbara Kellerman, “Chief Executive Pay Needs to Get Real,”
Harvard Business Review
blog, May 13, 2008,
http://blogs.hbr.org/kellerman/2008/05/chief_executive_pay_needs_to_g.html
.
25.
Even David Brooks
David Brooks,
Bobos in Paradise: The New Upper Class and How They Got There
(New York: Touchstone, 2000), 271–73.
26.
the defining characteristic
For more on the rise of the meritocracy, see Chrystia Freeland, “The Rise of the New Global Elite,”
Atlantic
, January/February 2011,
http://www.theatlantic.com/magazine/print/2011/01/the-rise-of-the-new-global-elite/8343/
.
27.
In his final book
Christopher Lasch,
The Revolt of the Elites and the Betrayal of Democracy
(1995; repr., New York: W. W. Norton, 1996), 4, 40.
28.
modern elites tend to
Ibid., 41.
29.
Bill Gates was one of
Bill Gates, interview by Walter Isaacson, “Conversation With Bill Gates,” Aspen Ideas Festival 2010,
http://www.aifestival.org/audio-video-library.php?menu=3&title=667&action=full_info
.
30.
In a recent essay
Freeland, “The Rise of the New Global Elite.”
31.
But in Aspen
Michael Splinter, interview by David Bradley, “Turning Innovation Into Industry,” Aspen Ideas Festival 2010,
http://www.aifestival.org/audio-video-library.php?menu=3&title=581&action=full_info
; Tom Wilson, panel moderated by Ronald Brownstein, “Is America Still the Land of Opportunity? Taking a Hard Look at the Middle Class,” Aspen Ideas Festival 2010,
http://www.aifestival.org/audio-video-library.php?menu=3&title=634&action=full_info
.
32.
David Hale
David Hale, panel discussion, “Views on America’s Economy: At Home and Abroad,” Aspen Ideas Festival 2010.
33.
Onstage, Bill Gates
Bill Gates interview.
34.
The Bill & Melinda Gates Foundation
Bill & Melinda Gates Foundation, “2009 Annual Report: Grants Paid Summary,”
http://www.gatesfoundation.org/annualreport/2009/Pages/grants-paid-summary.aspx
; “More U.S. Billionaires Pledge to Give Away Wealth,” Reuters, December 9, 2010.
35.
But the town has not escaped
Diane Tegmeyer, “Madoff Scandal Hits Aspen,” CNNMoney, December 22, 2008,
http://money.cnn.com/2008/12/22/news/companies/madoff_aspen.fortune/
index.htm
; David Streitfeld, “Biggest Defaulters on Mortgages Are the Rich,”
New York Times
, July 8, 2010.
36.
She showed me
Brent Gardner-Smith, “Banks Seek to Foreclose on Base Village,”
Aspen Daily News
, July 9, 2010,
http://www.aspendailynews.com/section/home/141390
.
1.
In his 1996 book
William Julius Wilson,
When Work Disappears: The World of the New Urban Poor
(1996; repr., New York: Vintage Books, 1997), xiii. Citations refer to the Vintage edition.
2.
most urban black men
Ibid., 31.
3.
As inner cities shed
Ibid., 27.
4.
Wilson’s research shows
Ibid., 140–42.
5.
death rate of young black men
Samuel H. Preston and Emily Buzzell, “Service in Iraq: Just How Risky?”
Washington Post
, August 26, 2006,
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/25/AR2006082500940.html
.
6.
Many of those row houses
Maria Kefalas, conversation with author, 2010.
7.
These sorts of problems
Bill Bishop,
The Big Sort
(New York: Houghton Mifflin, 2008), 136–41.
8.
Appalachia has long been
Lawrence E. Wood and Gregory A. Bischak,
“Progress and Challenges in Reducing Economic Distress in Appalachia: An Analysis of National and Regional Trends Since 1960,” Appalachian Regional Commission, January 2000, 19; Lawrence E. Wood, “Trends in National and Regional Economic Distress: 1960–2000,” Appalachian Regional Commission, April 2005, 27, 43. Also, see “West Virginia: State Profile” in
Almanac of American Politics
,
http://nationaljournal.com/almanac/2008/states/wv/wv_profile.php
.
9.
It has since come down
Bishop,
The Big Sort
, 137.
10.
In McDowell County
U.S. Census Bureau, “American Community Survey, 2005–2009: Educational Attainment.”
11.
That’s less often the case
Mark Mather, “Households and Families in Appalachia,” Population Reference Bureau, May 2004.
12.
Abuse of drugs
Bishop,
The Big Sort
, 136–41.
13.
The weight of this recession
Anna Turner, “Jobs Crisis Fact Sheet,” Economic Policy Institute, 2010; Hanna Rosin, “The End of Men,”
Atlantic
, July/August 2010,
http://www.theatlantic.com/magazine/archive/2010/07/the-end-of-men/8135/
.
14.
In January 2011
U.S. Bureau of Labor Statistics, 2011, “Labor Force Statistics From the Current Population Survey: Employment-Population Ratio,” U.S. Bureau of Labor Statistics, 2011.
15.
The proportion of young men
Michael Greenstone and Adam Looney, “The Problem with Men: A Look at Long-Term Employment Trends,” Brookings Institution, December 2, 2010,
http://www.brookings.edu/2010/1203_jobs_greenstone_looney.aspx
.
16.
And as the sociologists
Maria Charles and David Grusky,
Occupational Ghettos: The Worldwide Segregation of Women and Men
(Stanford: Stanford University Press, 2004), 312.
17.
the ratio of women to men
U.S. Bureau of Labor Statistics, e-mail message to author, December 27, 2010. Findings are based on unpublished data from the Current Population Survey.
18.
U.S. manufacturing still employed
U.S. Bureau of Labor Statistics, “Employment, Hours, and Earnings from the Current Employment Statistics Survey (National),” 2011.
19.
“Forty years ago”
Rosin, “The End of Men.”
20.
And men have yet to adjust
Greenstone and Looney, “The Problem with Men.”
21.
In her 2010 Atlantic essay
Rosin, “The End of Men.”
22.
“I’m deeply concerned”
Bruce Weinberg, conversation with author, 2010; Lex Borghans, Bas ter Weel, and Bruce A. Weinberg, “People People: Social Capital and the Labor-Market Outcomes of Underrepresented Groups” (NBER Working Paper 11985, January 2006).
23.
women are more likely than men
Borghans et al., “People People.”
24.
women are also struggling
U.S. Bureau of Labor Statistics, “Household Data: Table A-10. Selected Unemployment Indicators, Seasonally Adjusted,”
http://www.bls.gov/news.release/empsit.t10.htm
.
25.
while employment among women
Greenstone and Looney, “The Problem with Men.”
26.
“I like it outside”
Frank Massoli (pseudonym), conversation with author, December 2010.
27.
Between 2007 and 2010
Information provided by e-mail to author by the National Domestic Violence Hotline, January 14, 2011.
28.
More common than violence
George Akerloff and Rachel Kranton,
Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being
(Princeton, NJ: Princeton University Press, 2010).
29.
Many working women
Kathryn Edin, conversation with author, 2009.
30.
The national divorce rate
Brad Wilcox, conversation with author, 2009; National Marriage Project, “The Great Recession and Marriage,” University of Virginia, February 2011, 4; National Marriage Project, “State of Our Unions 2009,” University of Virginia, 2009.
31.
Among couples without
Edin, conversation.
32.
For both men and women
Christina Gibson-Davis, “Did Marriage and Fertility Get a Divorce? The Differential Association of Earnings on Marriages and Births” (presentation to Department of Human Development and Family Studies, University of North Carolina–Greensboro, February 2010).
33.
Many children are already
John Irons, “Economic Scarring: The Long-Term Impacts of the Recession,” Economic Policy Institute, September 2009, 4,
http://www.epi.org/publications/entry/bp243/
; Michael Luo, “Job Woes Exacting a Toll on Family Life,”
New York Times
, November 12, 2009,
http://www.nytimes.com/2009/11/12/us/12families.html
.
34.
But a large body of research
Sara McLanahan, “Children in Fragile Families” (working paper 09-16-FF, Center for Research on Child Wellbeing, Princeton University, 2009); W. Bradford Wilcox, “The Evolution of Divorce,”
National Affairs
, no. 1 (Fall 2009),
http://www.nationalaffairs.com/publications/detail/the-evolution-of-divorce; Edin, conversation
.
35.
One 2005 study
Avner Ahituv and Robert Lerman, “How Do Marital Status, Work Effort, and Wage Rates Interact?” (IZA Discussion Paper 1688, July 2005), 7, 30.
36.
jobless men take on
Edin, conversation.
37.
Even as weak job prospects
Algernon Austin, “Three Lessons About Black Poverty,” Economic Policy Institute, September 18, 2009,
http://www.epi.org/analysis_and_opinion/entry/the_lessons_of_black_poverty/
; Algernon Austin, conversation with author, 2009; “Labor Force Statistics From the Current Population Survey,” U.S. Bureau of Labor Statistics.
38.
Ellis Cose wrote
Ellis Cose, “The Good News About Black America,”
Newsweek
, June 7, 1999,
http://www.newsweek.com/1999/06/06/the-good-news-about-black-america.html
.
39.
But many of those gains
Michael Powell, “Blacks in Memphis Lose Decades
of Economic Gains,”
New York Times
, May 30, 2010,
http://www.nytimes.com/2010/05/31/business/economy/31memphis.html
.
40.
unemployment among black teens
U.S. Bureau of Labor Statistics, “Labor Force Statistics From the Current Population Survey.”
41.
With so few jobs available
William Julius Wilson, conversation with author, 2009.
42.
The sociologist Glen Elder
Glen Elder, conversation with author, 2009.
43.
In New York City
Community Service Society, “The Unheard Third Survey,” Community Service Society, 2010,
http://www.cssny.org/research/unheard_third/survey_findings/
.
44.
Wilson argues that
Wilson, conversation.
45.
Bad social norms spread
Bruce A. Weinberg, Patricia B. Reagan, and Jeffrey J. Yankow, “Do Neighborhoods Affect Hours Worked: Evidence From Longitudinal Data,” Department of Economics and Center for Human Resource Research, Ohio State University, August 2002.
46.
When a couple divorces
Rose McDermott, James H. Fowler, and Nicholas A. Christakis, “Breaking Up Is Hard to Do, Unless Everyone Else Is Doing It Too: Social Network Effects on Divorce in a Longitudinal Sample Followed for 32 Years” (working paper, October 2009).
47.
“The newest and perhaps”
National Marriage Project, “State of Our Unions 2010,” University of Virginia, 2010, ix–xi, 19–37,
http://www.stateofourunions.org/2010/SOOU2010.php
.
48.
The same pattern emerges
Ibid.
49.
attendance at religious services
Thomas H. Sander and Robert Putnam, “Still Bowling Alone?”
Journal of Democracy
21, no. 1 (January 2010): 9–16; National Marriage Project, “State of Our Unions 2010,” 45–50.
50.
Wilcox has tried
W. Bradford Wilcox, e-mail to author, February 10, 2011.
51.
The number of couples
U.S. Census Bureau, “Current Population Survey Reports: Families and Living Arrangements,” 2010; Rose M. Kreider, “Increase in Opposite-Sex Cohabiting Couples from 2009 to 2010 in the Annual Social and Economic Supplement to the Current Population Survey” (working paper, Housing and Household Economic Statistics Division, U.S. Bureau of the Census, September 15, 2010).
52.
In their 2009 book
Ron Haskins and Isabel Sawhill,
Creating an Opportunity Society
(Washington, DC: Brookings Institution, 2009), 65.
53.
one indication of the degree
Bishop,
The Big Sort
, 137–38.