State of the Union (Part Five)

Well, we have had full illustrations of how wrong I have been about many things regarding our country. Now we get to the part the confirms what I have been saying on here for awhile.

As Federal Reserve chairman Ben Bernanke noted in a 2007 speech, "the share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42% in 1979 to 50% in 2004, while the share of income received by those in the bottom fifth of the distribution declined from 7% to 5%. The share of after-tax income garnered by the households in the top 1% of the income distribution increased from 8% in 1979 to 14% in 2004."

No one can look at this and say it bodes well for social cohesion. In fact, I'm not even sure it bodes well for innovation. Consider this.

A typical senior partner in a high-end ­investment-banking, corporate-law, or ­management-consulting firm can now expect to make upwards of $1 million per year. In the stratosphere of the economy, the increases in wealth have been mind-­boggling: Even after the recent market meltdowns, there are about 30 times as many American billionaires today as there were in 1982.

So, what then, is the intrinsic motivation for these billionaires? Why do they need to work? I get the argument that people in the welfare state are less motivated to work. Why should they when they have everything paid for by the government?

But why should the wealth elite work to innovate and keep our country competitive in the global marketplace when they have everything paid for by their wealth? Time and again, I hear how lazy people are and how if you take care of them, they will do NOTHING. Isn't that exactly what is happening right now? I submit that slovenliness knows no economic bracket.

Rising inequality would have been easier to swallow had it been merely a statistical artifact of rapid growth in prosperity that substantially benefited the middle class and maintained social mobility. But this was not the case. Over the same period in which inequality has grown, wages have been stagnating for large swaths of the middle class, and income mobility has been declining.

And all of this feeds into the growing deterioration of our culture in general. This is why I have been stating for awhile that "there is no middle class." There isn't! It's some wealthy people and the rest of us who live paycheck to paycheck...worrying constantly about unpaid leave, sick days, and the rising cost of health care.

The divisive effects of this cluster of trends — ­rising income inequality and reduced income mobility, some degree of ­middle-class wage stagnation, increased personal debt, and increased class stratification of stable social behavior — are only intensified by climbing rates of assortative mating and residential segregation, as well as an increasingly crude and corrosive popular culture combined with the technology-driven fragmentation of mass media.

The last bit says it all. We are a culture that has shifted dramatically from intrinsic motivation to extrinsic motivation. This motivation...this desire...knows no economic bracket as well. Someone who makes 15K a year has a cel phone and the latest ipod. So does someone who makes 1 million dollars a year. It's all the same mindset. We want the latest gadget and then in a year we want the next one. In fact, we are encouraged to throw the old one out because it's "sucky and not cool."

Until we begin to do things for the joy of doing them (intrinsic value), we will continue to decline.

So, is there any hope. Well, according to Manzi....no and then yes...which we will see next.