I first saw a graph like this during a talk I was watching
on YouTube by the political scientist Robert Putnam from Harvard University. It
is a graph of several economic and social indicators for the 20th
and early 21st centuries. I decided to reproduce the chart so I went
out and located the various data sets in databases on the web and from papers
by Putnam and others and then I plotted the data. My addition to the graph is
the National Debt as a percentage of GDP. So this graph shows the trends in
Income Equality (which is just the % of wealth held by the top 1% plotted
upside down); Generosity (charitable giving as a % of income); Social Capital
(Measure of community involvement through membership in organizations like PTA,
Elks, Lions club etc); Union Membership and finally the National Debt (as % of
GDP). Some of the data I could find in databases online, Income Equality, Union
Membership, Debt, but the other two, the social indicators I digitized from
papers by Putnam and others. The data are all in percentages and have been
scaled to show the trends and not the absolutes. The first thing that should be
noticed right away is that from roughly the early 1950 to around the mid to late
1970,s early 1980s there was this 20-30 year period when the country shows a
lot of unity as a nation. For example, wealth equality was very high. Oh, there
were rich people (but maybe only 1 or 2 so called billionaires). Charitable
giving was high, Social Capital, and Union Membership were all in unison and
high and the National debt as a percentage of our GDP was on the decline. This
was the post war era and there was a real sense of community. But then things began
to change starting in the mid to late 70s – the era of the Carter Malaise. I
marked 1987 because that marks a sharp drop in wealth inequality possibly
triggered by the Reagan tax cuts, which saw massive upward movement in all
wealth brackets but especially the upper brackets and just for fun I tossed
onto the graph a relative plot (scaled to the maximum) the number of
billionaires since 1970 (There is sparse data for the years before 1987 but in 1970s
there was really only 1 – J. Paul Getty). The number of billionaires track,
well as one would expect the decline in Income equality (it really should be
called wealth inequality but I am following Putnam here). The number also
follows, again as would be expected, major economic trends – note the decline in
the number during the housing market downturn.
People can take away from this graph any number of things. One
can also chose to speculate on the why the trends are the way they are; I have
my own opinions. The graph indicates well major historic events – WWI, The
Great Depression, WWII and a little the Korean War. It is hard to dispute
though this relatively stable era from about 1950 to the mid-to-late 1970s. In
the mid-60s President Johnson Inaugurated the Great Society and declared war on
Poverty and Vietnam and that marked the beginning of the rapid rise of the
Welfare State and the beginning of a war that would mire us in Southeast Asia
for 10 years. Both events were a great dividing period in American society. It
was probably the first time in our history where wealth became a truly blatant
divider – if you were well off you could go to college and get the college deferment
– thus buying your way out of service and this wasn’t just for the
conservatives it was across the political spectrum. The beginning of the 70s
see marked down turns in Social Capital, Charitable giving and even,
interestingly Union Membership. Putnam had other data that I haven’t found yet,
on Political Consensus; in the 1960s there were not a lot of ideological differences
between the two parties. For example, today Kennedy would be seen as a
conservative Republican. Even Johnson, despite his social engineering
proclivities was a strong pro-American that was truly concerned about the
plight of the poor and of minorities. The beginning of the decline of Income
Equality lags by another 5 or 10 years the downturns in the social trends. The 1980s
marked the rise of oil wealth (Remember the show Dallas, popular in the 1980s).
The 1980s were also significant because that is when Personal Computers arrived
on the scene – Hooray Bill Gates – the beginning of the Technology rich. Also,
with the arrival of Ronald Reagan to the White House we saw the first real cut
in income taxes since Kennedy nearly 20 years earlier. Finally people started
keeping more of their money – and especially those that could make a lot of
money – Oil Tycoons and the Bill Gates’s. It was probably about that time that
having a college education began to have real value, especially in the
technology areas. Oil companies were hiring college students with BS in
physics, chemistry and engineering at high wages to go out and work in the
fields looking for new deposits of oil. If you were a New Mexico Tech graduate
in the late 70s early 80s with a degree in physics – got to work for
Schlumberger hunting for oil.
I was growing up in the 60s and 70s and I remember when we
lived in Portland Oregon. We were poor living on state assistance. My dad was
never around. Across the street lived a family, the Nunn’s, a Father, a mother,
and two children. The father had a solid job. They were buying their home and
he had a boat that he would take me and his son out on to fish on the
Willamette River. Economic differences were not important. We were all just
kids in the community.
Another general comment on the graph and one that indicates
why I am not a supporter of my own party the ObamaRepublican or the Obamacrats,
is the fact that all indicators, social and economic have gone south and remained
south during the current administration and all back to those following Reagan.
The improvements seen after the 70's represent not changes for the good in our
socioeconomic circumstances but big upheavals in our economy - the dot-com
bubble burst, the globe-comm bubble burst, the housing-bubble burst. Other
economic changes, like sequestration have had huge effects. People applauded
that but small businesses and middle-class professionals suffered as the big
Aerospace companies pulled back their small business and consulting contracts,
which put millions of professionals out of work - and me, almost - I worked the
last few years at more than full time for less than full time pay to contribute
to my family. The real fact of the matter is, the government in all of its
stupid and ignorant ways is the LARGEST by far, determiner of socioeconomic
fate of Americans - by FAR since probably Wilson, wielding his new found
government wealth via the income tax - but certainly under FDR if found wings
that have had long term negative impact on society as a whole.
I know that people today like to
downplay the significance of social changes but the fact is they are important.
I don't support the conservative view of traditional marriage as between a man
and a woman because I support anything that brings two people together that
love each other and especially if they are raising a child and providing love
and support. The graph shows that charitable giving began declining in the late
1960s and early 1970s - well, DUH, so began the rise of the Welfare State. This
isn't a to say that that state wasn't important, it was - my family benefited
from it and I am grateful for it, but it should have been just a hand up - not
a hand-out. Today we argue about minimum wages and the benefits of raising them
but we don't argue why so many people become so dependent on a minimum wage job
as a career. Those that should be working the minimum wage jobs shouldn't need
to rely on it as their livelihood - they should be the kids getting their first
jobs and learning jobs skills.
Why the decline in union
membership during the same time frame as the other declines. Union jobs
provide(d) high paying jobs, many, if not most, skilled jobs. Well, about that
same time frame Unions become less about the workers and more about themselves
- as all bureaucracies tend to do. It is sad to see the Union upper leaders
making 7-figure salaries and the workers making 5-figure salaries - no one
seems to mention that one when complaining about CEO salaries.
Another thing to notice from the
chart is that during the first term of the Bush administration there were some
positive trends. 9/11 United the country and Bush's tax cuts stimulated the
economy, but then Iraq kicked in; the loosening of lending requirements by the
democrat congress kicked in (the stimulus for the housing market crash) and
then all hell broke loose - and under the Obama the rich keep getting richer.
Obamacare was a huge tax increase on the lower middle class and working poor.
