Saturday, November 10, 2012

Is the American Dream dead?

The American Dream: What went wrong?

Anyone can get rich in America, said Mary Sanchez in The Kansas City Star. All you have to do is “pick a rich daddy.” Forbes magazine has released its annual list of the 400 wealthiest Americans, and though the editors touted the inclusion of Oprah Winfrey and a few other rags-to-riches billionaires as proof that “the American Dream is still very much alive,” the rankings actually prove the opposite. A recent study found that only 35 percent of the Forbes 400 were raised poor or middle class. The rest were “born on third base”—inheriting their fortunes, or starting their empires with a big head start from well-to-do families. Social mobility was once considered “the heart of the American Dream,” said Ron Brownstein in National Journal. Every generation was expected to be a little more successful and prosperous than their parents. But today, a child born poor in a European nation has a far better chance of making it to the top than one born poor in the U.S. Two thirds of American children born to the lowest-earning 20 percent of parents will stay stuck in the bottom 40 percent all their lives.
The rich, meanwhile, keep getting richer, said Joe Nocera in The New York Times. While the median household income dropped by 4 percent last year, the cumulative wealth of the Forbes 400 increased by a whopping $200 billion. One reason for this growing disparity is that the wealthy invariably move their millions into investments, which are taxed at the low, 15 percent “capital gains” rate. That’s because the rich effectively write the tax code, said Les Leopold in The wealthier they get, the more money they spend on political lobbying and donations, which buys them yet more tax breaks, loopholes, bailouts, and financial deregulation, thus enabling them to amass even more wealth. “Meanwhile, the middle class continues its slow decline.”
The real problem is our failing education system, said Laura Tyson in A college degree has never been more important for those who want to climb the income ladder—a college graduate today earns at least 75 percent more than someone with only a high school diploma. But as the gulf between rich and poor widens, children who grow up in poverty—amid dysfunctional adults, struggling schools, crime, and social chaos—simply can’t compete academically with kids from the affluent side of town. We’re perilously close to creating a “permanent underclass,” for whom the American Dream is a cruel lie.
Perhaps it always was, said Robert Samuelson in The Washington Post. There’s nothing wrong with optimism about the future, but the Dream backfires when government tries to guarantee that every American will “live better than their parents” and achieve “personal fulfillment.” The belief that everyone should own homes, for example, led the government to pressure and incentivize banks to give mortgages to millions of people who couldn’t afford them; the resulting housing bubble burst in 2008, nearly wrecking our economy. The belief that everyone should go to college led millions of students to take on huge debt for educations they didn’t complete or that didn’t lead to promised jobs. There’s a sobering lesson here: In the real world, not everyone can succeed, and the future isn’t always better than the past. “It’s time to retire the American Dream,” for it has become “an act of collective self-deception.”

Article from "The Week"

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