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Plutocracy in America: How Increasing Inequality Destroys the Middle Class and Exploits the Poor
A hard-hitting analysis of how the disparity between wealth and poverty undermines the common good. The growing gap between the most affluent Americans and the rest of society is changing the country into one defined―more than almost any other developed nation―by exceptional inequality of income, wealth, and opportunity. This book reveals that an infrastructure of inequality, both open and hidden, obstructs the great majority in pursuing happiness, living healthy lives, and exercising basic rights.
A government dominated by finance, corporate interests, and the wealthy has undermined democracy, stunted social mobility, and changed the character of the nation. In this tough-minded dissection of the gulf between the super-rich and the working and middle classes, Ronald P. Formisano explores how the dramatic rise of income inequality over the past four decades has transformed America from a land of democratic promise into one of diminished opportunity. Since the 1970s, government policies have contributed to the flow of wealth to the top income strata. The United States now is more a plutocracy than a democracy. Formisano surveys the widening circle of inequality’s effects, the exploitation of the poor and the middle class, and the new ways that predators take money out of Americans’ pockets while passive federal and state governments stand by. This data-driven book offers insight into the fallacy of widespread opportunity, the fate of the middle class, and the mechanisms that perpetuate income disparity.
A government dominated by finance, corporate interests, and the wealthy has undermined democracy, stunted social mobility, and changed the character of the nation. In this tough-minded dissection of the gulf between the super-rich and the working and middle classes, Ronald P. Formisano explores how the dramatic rise of income inequality over the past four decades has transformed America from a land of democratic promise into one of diminished opportunity. Since the 1970s, government policies have contributed to the flow of wealth to the top income strata. The United States now is more a plutocracy than a democracy. Formisano surveys the widening circle of inequality’s effects, the exploitation of the poor and the middle class, and the new ways that predators take money out of Americans’ pockets while passive federal and state governments stand by. This data-driven book offers insight into the fallacy of widespread opportunity, the fate of the middle class, and the mechanisms that perpetuate income disparity.
- GenresPoliticsNonfiction
272 pages, Hardcover
First published August 6, 2015
10 people are currently reading
75 people want to read
About the author
Ronald P. Formisano
9 books2 followersA specialist in the field of United States political culture and politics in the nineteenth and twentieth century and a founder of the “ethnocultural school” of US political history, Ron Formisano was the William T. Bryan Chair of American History at the University of Kentucky, where he taught from 2001 until his retirement in 2014. He earned a BA at Brown University and an MA from the University of Wisconsin–Madison before receiving his PhD from Wayne State University. Formisano also taught at the University of Florida (1990-2001), Clark University (1973-1990), and the University of Rochester (1968-1973).
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Displaying 1 - 6 of 6 reviews
January 27, 2016
This is not the first book I have read on inequality recently (the other being "Saving Capitalism" by Robert Reich), and it probably won't be the last. Inequality is undermining the very democratic fabric of this country. As a result, it shouldn't be a surprise that so many authors are trying to open the eyes of US citizens via their writing about the pervasive conditions bringing it about, as well as the actions that need to be taken sooner, rather than later, to reverse course.
As for those to whom this book is targeted, well, they probably have other burdens on their minds. Most likely, they're worried about their jobs, their bills, and, in short, survival. It's clear that since the 1970s, the majority of America's wealth is going to the top 1 percent, and any gains since the near-financial collapse of 2008 have funneled up to them. Unlike most Americans, corporate CEOs and Wall Street bankers and hedge fund managers have been receiving unprecedented salaries and bonuses since 2008, and not a single individual risk taker has been held accountable or criminally liable.
Yet beyond these things, what are average Americans losing? According to Author and Historian Ronald Formisano, "Inequality rises, and as it does, unions decline, life expectancy for low-income people is reduced, social mobility atrophies, wages for the bottom 50 percent go down, the middle class shrinks, the children of the affluent swamp elite universities and colleges, residential segregation by income expands, and so on."
Let's not forget about the increasingly troubling signs in some areas over voting (challenges to registered voters, long lines at polling places, and some would suggest an electoral college that awards an election to the candidate who didn't win the popular vote). Or the issue of unbridled campaign financing by big donors and PACs.
The list goes on and on. When people suggest that the game is rigged, they're onto something, and this book provides plenty of documentation as to just how we got there. It's mandatory reading for anyone who still cares about the American dream before it fades away completely.
As for those to whom this book is targeted, well, they probably have other burdens on their minds. Most likely, they're worried about their jobs, their bills, and, in short, survival. It's clear that since the 1970s, the majority of America's wealth is going to the top 1 percent, and any gains since the near-financial collapse of 2008 have funneled up to them. Unlike most Americans, corporate CEOs and Wall Street bankers and hedge fund managers have been receiving unprecedented salaries and bonuses since 2008, and not a single individual risk taker has been held accountable or criminally liable.
Yet beyond these things, what are average Americans losing? According to Author and Historian Ronald Formisano, "Inequality rises, and as it does, unions decline, life expectancy for low-income people is reduced, social mobility atrophies, wages for the bottom 50 percent go down, the middle class shrinks, the children of the affluent swamp elite universities and colleges, residential segregation by income expands, and so on."
Let's not forget about the increasingly troubling signs in some areas over voting (challenges to registered voters, long lines at polling places, and some would suggest an electoral college that awards an election to the candidate who didn't win the popular vote). Or the issue of unbridled campaign financing by big donors and PACs.
The list goes on and on. When people suggest that the game is rigged, they're onto something, and this book provides plenty of documentation as to just how we got there. It's mandatory reading for anyone who still cares about the American dream before it fades away completely.
May 15, 2020
A person’s degree of support for inequality in wealth and income is a good indicator of where he or she falls on the political spectrum. Those on the left oppose the Gilded Age level of economic inequality we have today, while those on the right not only defend it, but support policies to increase it.
The evidence of widening inequality is difficult to credibly deny, though conservatives predictably say it’s not as bad as it seems. They also say “so what? It’s the invisible hand of the free market at work, where people are rewarded for their contributions.” Ronald Formisano challenges that view.
In Plutocracy in America, Formisano describes the growing wealth chasm as well as the repercussions of that inequality. “Inequality is the root of social ills,” said Pope Francis. Formisano argues that our vast and growing inequality leads to a variety of social ills, which includes a shrinking middle class, declining life expectancy for Americans who struggle economically, more sluggish social mobility, politics dominated by powerful elites, and growing residential segregation by income.
As wealth becomes more concentrated, the middle class is shrinking, down from 61 percent of adults in 1971 to 51 percent in 2011. Declining home ownership is one symptom. Downward mobility is the grim reality that contributes to the opioid epidemic and the drop in life expectancy among working class whites.
As the gap between haves and have-nots has gotten wider, upward social mobility has gotten more difficult. Americans have less opportunity to move up the ladder today to higher classes than did earlier generations of Americans. There is also less mobility now than in Canada, Scandinavia, and most other affluent nations.
It’s easy to see that the concentration of wealth is unhealthy for a democratic republic. Abundant research shows that the preferences of the affluent are far more likely to become public policy than the preferences of the average American. Large campaign donations influence the recipients, much as they deny it. “Money – the mother’s milk of politics – is the root of representational inequality,” writes political scientist Larry Bartels. Supreme Court decisions striking down limits on big donations are “less about free speech than about giving those few people with the most money the loudest voice in politics,” said the New York Times. Political inequality is growing.
When it comes to health, Americans don’t compare well to their counterparts in other affluent nations. Their life expectancy is “one of the lowest among the richest countries,” says one economist. The factor most responsible for the US health disadvantage is “the vast and rising inequality in wealth and income,” according to the US Institute of Medicine.
The main driver of rising inequality is the surge in CEO compensation, according to the influential economist Thomas Piketty. Labor’s slice of the pie has gotten smaller as wages have stagnated. The benefits of productivity growth used to be widely shared, back when unions were strong. Now most of the profits go to a tiny percent at the top.
Growing economic inequality rests upon three popular myths, belief in which accounts for so little protest of the status quo. One myth is the American Dream, which claims there is better opportunity for success in the US than elsewhere. “Only in America” the politicians say. Most Americans don’t realize that mobility has diminished and almost all other advanced countries have greater socioeconomic mobility.
A second myth is that equal opportunity is the American way. There is no equal opportunity for the nearly one in four children who grow up in poverty, a higher percentage than any other OECD nation. Opportunity is highly unequal in the elite universities filled mainly by offspring of the wealthy. Research shows that “unequal chances are real and persistent across generations.” As Paul Krugman puts it, the USA is a nation that “preaches equality of opportunity, while offering less and less opportunity to those who need it most.”
A third myth is that poverty and wealth are meritocracy at work; people get their just desserts from the invisible hand of the free market. This view ignores the impact of laws and policies that are shaped by lobbyists to bestow tax loopholes and subsidies on the well-to-do. These deductions and subsidies add up to over a trillion dollars, which is the result of policy choices, not the free market. Conservatives don’t worry that the rich will become dependent on government largess. Meanwhile, state and local taxes are mostly regressive, taking a bigger share of income from those who can least afford it.
Then there is white collar crime, such as the financial abuses that led to the Great Recession, for which no individuals were prosecuted. Companies paid fines, banks got bailed out, and executives got bonuses. The just desserts theory also ignores the growing role that inheritance plays as the source of great wealth. Greater inequality means social class plays a bigger role in a person’s success or lack thereof. The rich give their offspring advantages to all but guarantee the next generation will also prosper, regardless of merit, even if that means bribing college officials.
What should be done? James Madison believed that extremes of wealth and poverty should be resisted. Madison proposed “political equality among all,” and “withholding unnecessary opportunities” from the favored few to prevent an “immoderate and especially an unmerited accumulation of riches.” The law should “reduce extreme wealth…and raise extreme indigence.”
It does not seem likely right now that Madison’s prescriptions will be followed. Opportunity will remain highly unequal, and our political system is becoming increasingly plutocratic. Formisano does an impressive job of putting this era in historical context, and in describing the consequences of living in “the land of the free to be unequal.” ###
The evidence of widening inequality is difficult to credibly deny, though conservatives predictably say it’s not as bad as it seems. They also say “so what? It’s the invisible hand of the free market at work, where people are rewarded for their contributions.” Ronald Formisano challenges that view.
In Plutocracy in America, Formisano describes the growing wealth chasm as well as the repercussions of that inequality. “Inequality is the root of social ills,” said Pope Francis. Formisano argues that our vast and growing inequality leads to a variety of social ills, which includes a shrinking middle class, declining life expectancy for Americans who struggle economically, more sluggish social mobility, politics dominated by powerful elites, and growing residential segregation by income.
As wealth becomes more concentrated, the middle class is shrinking, down from 61 percent of adults in 1971 to 51 percent in 2011. Declining home ownership is one symptom. Downward mobility is the grim reality that contributes to the opioid epidemic and the drop in life expectancy among working class whites.
As the gap between haves and have-nots has gotten wider, upward social mobility has gotten more difficult. Americans have less opportunity to move up the ladder today to higher classes than did earlier generations of Americans. There is also less mobility now than in Canada, Scandinavia, and most other affluent nations.
It’s easy to see that the concentration of wealth is unhealthy for a democratic republic. Abundant research shows that the preferences of the affluent are far more likely to become public policy than the preferences of the average American. Large campaign donations influence the recipients, much as they deny it. “Money – the mother’s milk of politics – is the root of representational inequality,” writes political scientist Larry Bartels. Supreme Court decisions striking down limits on big donations are “less about free speech than about giving those few people with the most money the loudest voice in politics,” said the New York Times. Political inequality is growing.
When it comes to health, Americans don’t compare well to their counterparts in other affluent nations. Their life expectancy is “one of the lowest among the richest countries,” says one economist. The factor most responsible for the US health disadvantage is “the vast and rising inequality in wealth and income,” according to the US Institute of Medicine.
The main driver of rising inequality is the surge in CEO compensation, according to the influential economist Thomas Piketty. Labor’s slice of the pie has gotten smaller as wages have stagnated. The benefits of productivity growth used to be widely shared, back when unions were strong. Now most of the profits go to a tiny percent at the top.
Growing economic inequality rests upon three popular myths, belief in which accounts for so little protest of the status quo. One myth is the American Dream, which claims there is better opportunity for success in the US than elsewhere. “Only in America” the politicians say. Most Americans don’t realize that mobility has diminished and almost all other advanced countries have greater socioeconomic mobility.
A second myth is that equal opportunity is the American way. There is no equal opportunity for the nearly one in four children who grow up in poverty, a higher percentage than any other OECD nation. Opportunity is highly unequal in the elite universities filled mainly by offspring of the wealthy. Research shows that “unequal chances are real and persistent across generations.” As Paul Krugman puts it, the USA is a nation that “preaches equality of opportunity, while offering less and less opportunity to those who need it most.”
A third myth is that poverty and wealth are meritocracy at work; people get their just desserts from the invisible hand of the free market. This view ignores the impact of laws and policies that are shaped by lobbyists to bestow tax loopholes and subsidies on the well-to-do. These deductions and subsidies add up to over a trillion dollars, which is the result of policy choices, not the free market. Conservatives don’t worry that the rich will become dependent on government largess. Meanwhile, state and local taxes are mostly regressive, taking a bigger share of income from those who can least afford it.
Then there is white collar crime, such as the financial abuses that led to the Great Recession, for which no individuals were prosecuted. Companies paid fines, banks got bailed out, and executives got bonuses. The just desserts theory also ignores the growing role that inheritance plays as the source of great wealth. Greater inequality means social class plays a bigger role in a person’s success or lack thereof. The rich give their offspring advantages to all but guarantee the next generation will also prosper, regardless of merit, even if that means bribing college officials.
What should be done? James Madison believed that extremes of wealth and poverty should be resisted. Madison proposed “political equality among all,” and “withholding unnecessary opportunities” from the favored few to prevent an “immoderate and especially an unmerited accumulation of riches.” The law should “reduce extreme wealth…and raise extreme indigence.”
It does not seem likely right now that Madison’s prescriptions will be followed. Opportunity will remain highly unequal, and our political system is becoming increasingly plutocratic. Formisano does an impressive job of putting this era in historical context, and in describing the consequences of living in “the land of the free to be unequal.” ###
December 2, 2015
Plutocracy in America is a fascinating book that provides a comprehensive overview of how the various laws in America through the years have managed to benefit more and more of the upper fifth to the top 1% of Americans. Mr. Formisano had chapters focusing on various aspects of life, such as health and wellness, wealth and worth, political power, and what it means to be middle class, to show the ways that most Americans are suffering more than ever. Even for the top % of earners health is even down as they have their own sleeping woes and such. The writer makes the claim that if everyone were sharing in better earnings and more wealth than EVERYONE could benefit. Sadly if things keep going like they are, then the people who are in the bottom will stay trapped in the bottom, and there will be less vertical movement between classes, and the top 1% or less carry most of the earnings, most of the wealth, and most of the political power in America. It is stated that if wages remain low (for everyone from hourly workers at fast food places to even some professionals with advanced degrees in engineering and other positions) or hours are decreased then there is less money to be spent around as people are using it for just the essentials rent (if they arent behind), payday loans and fees, and bad food. Or they go into debt. The book is eye opening and not just for one in a certain political class but even both (as it shows in some cases even democrats are swayed to appeal to the people and groups that gave them the most money on their campaigns while avoiding many desires of the common man).
I found it to be a shocking read and one that generally stays on the mind. Some facts will probably always haunt the reader while most others (rural and education segregation, gated communities keeping wealthy from everyone else, low wages at MickeyD's and Walmart where the higher ups are taking in millions in salary + compensation, professors (adjunct) being paid at levels comparable to being in poverty or less than it and getting no benefits), if one has been following the news, wouldn't truly be surprising (corporations have managed to sometimes avoid paying tax or have a -% of how much tax they paid (because they get some federal money due to workers on government assistance), or people in the top % (people making more than the average median income of $23.5mln paying little to no taxes), university presidents using university money to raise wages of administrators but not others, and wasting money on private purchases splurging on expensive fine dining and multithousand dollar umbrella holders)
The book is fairly up to date as well incorporating data as new as late 2014, some mentions of how minimum wage is increasing and some aspects of the provisions of the ACA.
Where the book could be stronger is in the amount of information. While reading chapters seem to go by incredibly fast. Even though the writer is presenting information, it made me wonder if they could have shown even more data and stats. More tables and graphs would have been useful. Additionally properly labeled and clearly presented graphs would have been beneficial. There is one table in the book that would leave wondering wondering, first why is it important (it wasn't even referenced in the text), and secondly, what is it showing? It was hard to make out what the importance of the graph was (corporate tax as a portion of GDP).
Overall a must read book on inequality and money in America in 2015. Wont be a best nonfiction book of the year but was a great easy to get into book on the subject.
I found it to be a shocking read and one that generally stays on the mind. Some facts will probably always haunt the reader while most others (rural and education segregation, gated communities keeping wealthy from everyone else, low wages at MickeyD's and Walmart where the higher ups are taking in millions in salary + compensation, professors (adjunct) being paid at levels comparable to being in poverty or less than it and getting no benefits), if one has been following the news, wouldn't truly be surprising (corporations have managed to sometimes avoid paying tax or have a -% of how much tax they paid (because they get some federal money due to workers on government assistance), or people in the top % (people making more than the average median income of $23.5mln paying little to no taxes), university presidents using university money to raise wages of administrators but not others, and wasting money on private purchases splurging on expensive fine dining and multithousand dollar umbrella holders)
The book is fairly up to date as well incorporating data as new as late 2014, some mentions of how minimum wage is increasing and some aspects of the provisions of the ACA.
Where the book could be stronger is in the amount of information. While reading chapters seem to go by incredibly fast. Even though the writer is presenting information, it made me wonder if they could have shown even more data and stats. More tables and graphs would have been useful. Additionally properly labeled and clearly presented graphs would have been beneficial. There is one table in the book that would leave wondering wondering, first why is it important (it wasn't even referenced in the text), and secondly, what is it showing? It was hard to make out what the importance of the graph was (corporate tax as a portion of GDP).
Overall a must read book on inequality and money in America in 2015. Wont be a best nonfiction book of the year but was a great easy to get into book on the subject.
October 3, 2015
A bien-pensant left-populist synthesis of the causes and consequences of growing inequality in the United States. Hard to find much to disagree with about the analysis, but also nothing original: Tocqueville and Aristotle as the lodestars, a general discussion of how inequality converges with and enables political exclusion, undertheorized hand waving toward connections between growing inequality (are we talking about wealth, or income? -- well, both, and Formisano tacks between the two as if they formed a single kind of problem). Very literal international context, except on social outcome statistics, but these are barely contextualized and used only to show that the US scores poorly on variable social welfare indicators -- never mind that wealth inequality has growth within most nations over the past 40 years.
August 19, 2018
Sobering details about inequality in the United States. If you don't think this is a valid issue, you probably deny climate change as well, in which case I don't like you. This is not a book to read if you want to feel uplifted, but this is a book to read if you want to pay attention to a much overlooked topic which, when actually mentioned in mainstream media and such, is usually done so in a way that diminishes its actual effect on human beings, but don't let that deter you from educating yourself about how things aren't as simple as the government and media make it seem. It's a good book to read if you care about human beings and want to learn more about the world, whether it makes you sad, mad, or whatever, I recommend reading this book.
February 22, 2016
This is a must-read - non-partisan look at the state of our country.
Displaying 1 - 6 of 6 reviews