The book "Winner-Take-All Politics" is on my list of must-reads for my year of reading about income inequality. The other day, I expressed concern that growing inequality was proof that the U.S. economic system isn't properly distributing its rewards. But today's Foreign Affairs review of "WTAP" crystalizes my concerns further: It's not just that the rewards aren't properly distributed -- neither are the risks:
The wealthiest Americans, among them presumably the very titans of global finance whose misadventures brought about the financial meltdown, got richer. And not just a little bit richer; a lot richer. In 2009, the average income of the top five percent of earners went up, while on average everyone else's income went down. This was not an anomaly but rather a continuation of a 40-year trend of ballooning incomes at the very top and stagnant incomes in the middle and at the bottom. The share of total income going to the top one percent has increased from roughly eight percent in the 1960s to more than 20 percent today.
This is what the political scientists Jacob Hacker and Paul Pierson call the "winner-take-all economy." It is not a picture of a healthy society. Such a level of economic inequality, not seen in the United States since the eve of the Great Depression, bespeaks a political economy in which the financial rewards are increasingly concentrated among a tiny elite and whose risks are borne by an increasingly exposed and unprotected middle class.
There's more to the review and the book to wrestle with, but this is the point I'm pondering for now.