The New Class-Based American Plutocracy

       According to WalletHub's Analysis

The New Class-Based American Plutocracy

Middle and lower classes haven’t got a prayer of fair and equitable political or economic influence

“I can’t think of one person in a relationship that I would want for myself… I’ve done it before and prefer focusing on me and my own needs.” 

The ready explanation of one woman deciding permanently against marriage.

Increasingly, Americans feel abandoned by society and are learning to make it on their own. I have long maintained that the standard metrics of the well-being of our nation are heavily skewed to measure averages and data that give excessive weight to those with extreme wealth or income. If you have nine people each making $100K/year and one making $10M/year, the average annual earnings of that cohort is $1,090,000. That reality reveals the serious flaw in the averaging effect of Gross Domestic Product, a number used by nations everywhere as their metric of relative national success. Likewise, federal statistics reveal how US stock ownership is allocated: The top 10% of Americans hold 93% of all stocks, the highest level ever recorded. Meanwhile, the bottom 50% of Americans hold just 1% of all stocks. This spread has been roughly the same for years. Yet our media dwells heavily on these two metrics, as if they mattered for most of us.

There are pundits who suggest that the only reason TACO Trump (“Trump always chickens out”) announced a last-minute ceasefire with Iran on April 7th (“destruction of the Persian civilization day”) is that the stock market was severely plunging, looking for a turnaround sign. The volatile stock market seems to rise and fall at even the slightest news about Trumps unilaterally declared WAR on Iran. But those market changes really only impact the rich, yet Trump watches that metric like a hawk. In fact, the mega-wealthy make fortunes as oil prices soar, as the demand for replacement munitions as the WAR eats up our stockpiles of weapon systems and underlying arms, and as government contractors are pressed for more.

When you combine the double-whammy of Trump’s WAR – as he demands that Congress add 50% to last year defense budget while cutting Medicaid, Medicare, SNAP and Social Security to the bone to accommodate his military ambitions – and the invasion of artificial intelligence into the American workplace, it is clear that our entire economic, political and even our social structure is being forever transformed without the consent of most of the nation. The basic lesson: unless you are very rich, you do not matter in this reconfigured United States. There’s no question that in Trump-world, money buys previously unheard-of political influence and privileged economic access. The Trump family even seems to brag about their billion-dollar growth since the Donald became President.

Trump’s WAR has further moved that bar of American homeownership from the economic reality of most of us. Between tariffs increasing the cost of building materials to the rapidly rising interest rates directly attributable to a WARtime economy, Americans are finding themselves struggling to pay for ordinary consumables, with fuel prices leading the way, and much less likely to seek a home of their own. Add AI disruption to the mix, and millions of lower middle level and clerical jobs are clearly at risk. The April 7th Realtor.com reveals a short “think-piece” memo from OpenAI, which underscores the obvious: “As AI becomes more productive, it could leave behind ordinary households who are more exposed to job loss, weaker safety nets, and higher utility costs—but it doesn’t have to be that way, according to a new memo from OpenAI… In the 13-page report, Industrial Policy for the Intelligence Age: Ideas to Keep People First, the company warns that AI could wind up ‘controlled by, and benefiting only a few,’ unless governments act fast to spread the gains more broadly…

“Housing is especially exposed to this shift through the link between job security and demand, the public funding that supports housing assistance and other safety-net programs, and the rising cost of essentials like energy. OpenAI’s answer is striking: Taxes tied to automated labor, a public wealth fund that could distribute returns directly to citizens, and rules meant to keep households from subsidizing AI infrastructure… At the core of the housing market's exposure is the connection between job security, income, and housing demand.”

The impact of this WAR/AI double-whammy is pernicious, to say the least, as former Obama economic advisor, Jennifer M Harris (writing for the April 8th NY Times) warns: “Inequality is such a fact of American life that it’s easy to shrug off. But we are in uncharted terrain. The amassed wealth of today’s tech titans makes the Rockefellers and the Vanderbilts look quaint. Over the past two years, 19 households have added $1.8 trillion to their coffers, the economist Gabriel Zucman told me — roughly the size of the economy of Australia.

“Into this fragile state enters artificial intelligence. It threatens to make a bad situation much worse… Left on its current course, A.I. could deliver a bleak picture: lower- and middle-income jobs automated away, with top earners remaining unscathed. Income shifting from middle-wage workers doing the bulk of the labor toward those wealthy enough to bankroll the technology. Growth headwinds. Worsening affordability. So, too, a federal government less able to respond, thanks to a shrinking tax base…For any society in which this much wealth gets concentrated in so few hands, and is then so easily parlayed into political clout, the question becomes one not just of economics but of basic civic standing. At some point soon, we are no longer sharing in self-government.”

As stunning negative as this trending data clearly is, we may be missing some very interesting trends, even as our indigenous population is shrinking due to record low birthrates, as faith in our system has fallen so low that even the desire for young Americans to get married is vaporizing: “As of 2023, the last data available from Pew Research Center, there were about 111 million single adults ages 18 and up in the United States. That was a sizable increase from 70 million in 1990… There is now consensus among researchers that after years of a steady decline in marriage rates the institution has lost its luster for many… ‘I used to say we didn’t know if marriage was being delayed or foregone,’ said Richard Fry, a social and demographic trends researcher at Pew. ‘I think the evidence is pretty clear now. It’s not just that adults are delaying marriage.’ Increasingly, he said, they are dismissing it.” Tammy LaGorce, writing for the March 29th NY Times.

I’m Peter Dekom, and there is a very good reason why Americans continue to fall farther down on the annual international happiness index.