I realize that is a contentious claim, and many would argue it runs directly contrary to the facts. After all, according to The New York Times, the top tenth of one percent income bracket in the United States saw their wealth increase by 21.5 percent, while the bottom 99 percent saw their incomes rise by just $80. However, just because you have a lot of money doesn't mean you're very rich.
Consider the phenomenon of people winning the lottery and ending up poorer than they were before they won. These people have a lot of money, but they don't have a lot of capital. Capital is defined as holdings which produce income. But when you win the lottery, you don't have any holdings which produce any income, despite a sudden spike in income. The income, then, becomes quite worthless. I would argue something similar is happening to the super-rich.
The economy has been growing at an average of about five percent since 1984. But the structure of the U.S. economy is vastly different than in the latter half of the 20th century. The United States between 1945 and 1991 was a country defined by its mass-mobilization against an easily defined external enemy: the Soviet Union. The consciousness of the people of the United States was unified by the threat of nuclear war, and there were ways to speak to that consciousness. People wanted to define themselves with the "us" rather than with the "them," so they did particularly American things. But people aren't doing these things anymore. That is what, I believe, is suggested by the fact of the decentralization of our economy, a fact which is supported by evidence.
It has been becoming increasingly easy to buy small, local products rather than large, mass-marketed products in our economy. And according to marketers, it is no longer relevant to try to mass-market products. What this points to is a decentralization of the economy, and we do not know whether it is reversible. It certainly doesn't feel reversible. Unfortunately for the super-rich, the most obvious effect of a decentralized economy is that massive centralization of wealth becomes less financially relevant, and suddenly, the super-rich feel more like the person who suddenly won the lottery rather than leaders of the economy.
Think about it. Our economy could grow at 20 percent a year, but if the super-rich can't find places to invest their money, it won't benefit them. And as markets become increasingly segmented rather than unified, it becomes harder and harder for a guy sitting in a penthouse in New York City to find the real money-makers in the economy. Granted, our economy is hardly so massively decentralized now that it is impossible to make money simply by having money. But in the future, it may be more and more difficult to do so. That, certainly, is the trend. And when you look at it this way, the tax cuts for the super-rich and economic policies favoring greater income inequality suddenly make a lot of sense. Certain members of the super-rich, I think, are probably sensing that they are becoming a dying breed, because their massive financial holdings are going to quickly lose relevance as the 21st century progresses and the economy further destabilizes.
The solution, I think, is for the super-rich to stop frantically grasping at more and more money, and rather, embrace their roles as leaders of the economy. They should restructure their holdings to favor local enterprises in localities they care about. This would help them maintain financial relevance in our economy. The fact of the matter is, the mere fact of being super-rich is becoming less and less a guarantee of income. This is because major corporations are becoming less and less relevant as economies become more and more localized. Americans no longer crave the unity they used to feel in the fifties knowing they were all watching the same television screen, so that feeling no longer is going to capitalize your assets.
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