Status Uncertainty and Economic Disparity

Over at Crooked Timber Daniel Davies is writing on the recent Chris Mooney book The Republican War on Science from a meta-structural point of view. Mr. Davies asks what are the factors that allow for a potentially receptive audience to swallow cod liver oil from the propagandists of the right. His fundamental thesis is that the state of flux and change leads Americans to seek out simplicity and idea-values syncronization. However he is stumped as he nearly ends his essay with the following question…..

I don’t know why the politics of status insecurity are more common in the last remaining great world power, or why they have got more rather than less influential since the end of the Cold War, but I suggest that this is the root of the troubled relationship between American politics and American science, and that because of this, the Republican War on Science is likely to get worse rather than better.

Distribution of power, resources and stability matters. The net increase of influence has been large both proportionally and absolutely since 1989 or 1991, choose whatever date you want, although I think that we are seeing some backsliding due to Iraq and our current account deficit in the past couple of years. However this distribution of new power has not been even or at least remotely proportionate.

Barry Ritzhotz notes that the technological, trade, cultural and organizational changes that have accelerated in the past twenty years and are leading towards a significant re-ordering of the economy are concentrated on a distinct and large superset of people:

Two groups seem to be bearing the brunt of economic change: the middle class,
and those who have entered into the work force over the past 20 years place

The American mythos that hard work, a good idea, and being first to market opens up the opportunity to switch between classes by advancing within society is no longer reflective of the actual experience in America. There has been an increase in stratification and familial path dependency in America over the past thirty years. It is harder to get ahead unless one is already ahead economically, and today that means having parents that were ahead of the curve twenty years ago.

We have seen a reacceleration of income disparaity and non-supervisory wages for the past five years barely beating inflation. Over the past generation, wages for the typical American have barely moved, and family incomes are only increasing due to higher intensity of work. There are more duel income families today than thirty years ago despite insignificant changes in total take-home pay.

What wage and income gains that have been achieved in an environment of high productivity gains are not being evenly distributed. The Center on Budget and Policy Priorities notes that in 2003, the overwhelming benefits of an mediocre economic expansion went to the top 0.1% of the population.

The long term trends, again according to the CBPP are almost as skewed as this one year picture:

Over the past twenty five years then, the trend has been going against the typical American who is not part of the top five percent. These trends have accelerated in the past five years of the Bush mis-administration, but they are underlying currents of uncertainty and risk aversion as taking risks to get ahead have become much more expensive for a lower probability of advancedment in this time period than in the immediate post-war time period.

On top of these macro side issues, there has been a series of policy and societal reorganizations that have increasingly led to a transferrance of risk and uncertainty from large organizations and governments towards the individual. The most notable has been the explosion of the 401(K)/403(b) defined contribution tax advantaged savings plan with the concurrent fall of the defined benefit plan. This trend is continuing, as Andrew Samwick notes that the most recent pension bill coming out of Congress further weakens defined benefit plans. The push for Health Savings Accounts and the privatization of Social Security are two other policy initiatives that seek to transfer risk off of society and onto the individual. Finally, the increase in ARMS as encouraged by Allen Greenspan transfers interest rate risks off of institutions and the broader market and onto marginal borrowers.

These trends are hammering the middle class and the young(ish) and have been for the past twenty five years. Under times of stress, either absolute or relative, the tendency is for groups to seek simplicity even if that includes high levels of cognitive dissonance and mental gymnastics. For these reasons, I think that the politics of insecurity have increased in America over the past twenty years despite the relief that was provided by the end of the Cold War.

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