NBC News recently reported a “surprise” in Wal-Mart’s sales figures for this year:http://www.nbcnews.com/business/wal-mart-drop-sales-reveals-tale-two-consumers-6C10930050
We’ve been told that the recovery is finally settling in and consumers are now spending again. But Wal-Mart reported very cautious sales figures, and the article concludes that there are actually two different groups of consumers. Those at the higher end are indeed feeling secure and spending more. But the lower and middle folks are still pretty tight with their dollars.What is happening to Wal-Mart sales is just one small manifestation of an issue I discuss in The Golden Calf, the worsening income and wealth inequality of the U.S. ever since economism became our dominant ideology. A new twist on the familiar data is very nicely illustrated in this animation by Adam Mordecai on the Upworthy site:
Mordecai starts with data that I more or less covered in The Golden Calf, that 1) we have extreme inequality in how income and wealth are distributed in America, and 2) most Americans have no clue that this is so, and while they think that the rich are indeed a lot richer than the poor, they guess at an income distribution which is much more equal than what actually obtains. Indeed Mordecai editorializes and suggests that we’d be a heckuva lot better off as a society if instead of the truly lopsided wealth distribution that actually occurs, we had the much less lopsided but still notably unequal distribution that most Americans think is what’s true.
Now, here’s what Mordecai adds to the discussion, which he gets from studies done by Harvard business professor Michael I. Norton, whose work is reported on here:http://harvardmagazine.com/2011/11/what-we-know-about-wealth
Norton found out both what the real wealth inequality is, and what people think it is. But he then proceeded to ask people what they thought it should be. What he discovered, quite contrary to the dominance of economism as public ideology, is a widespread sense that ideally the wealth distribution ought to be more equal than what Americans assumed it to be (which once again is far more equal than what it really is). Also very interesting, Norton found that those who reported voting for George W. Bush did not vary all that much from those who reported voting for John Kerry in preferring a more equal distribution. As Mordecai stresses, once again, the distribution Americans describe as ideal and desirable is hardly a socialist nirvana; there is significant disparity between the rich and the poor. But what most Americans judge to be the way the U.S. ought to be is nevertheless wildly more equal than what it really is.Norton admits that some of this sense of justice depends on how you ask the question. He acknowledges that had the Bush voters been asked whether they supported redistributing wealth to reduce inequality, the majority would probably have said no.
My take-home message from all this is that despite the inroads that economism has made in reshaping what counts to most of us as basic common sense about public policy, it still seems true that most Americans would be really shocked if they actually understood what has happened to income and wealth inequality in recent decades, or even since the 2008 recession. It obviously serves important interests to be sure that most Americans never hear this factoid.