Winners Take All
IT IS a tired cliche to describe the 1980s as the era of selfishness, ostentation and greed. Ever since Nancy Reagan undertook to redecorate the White House and purchase new china while the rest of the country suffered the worst unemployment since the Great Depression, word has been out that Greed is In.
The Reagan tax breaks weighted in favor of the rich, the cuts in social welfare programs, the statistics on the growing inequality of income distribution in the U.S. and the routine tales of Wall Street corruption defined, for many Americans, the ethos of the 1980s.
But the curious coincidence of the rebirth of greed with what President Bush is fond of calling "the longestlived economic expansion in post-war history," (paid for, not incidentally, by the largest debt in human history) has covered this ethos in a cloak of morality. "Some people may be getting obscenely rich, but at least the country as a whole is benefiting."
This isn't the place to argue whether Reagan-era economic policies were a net gain or loss for the country. Obviously, economic growth is good and helps everyone. And just as obviously, some distributional inequities are necessary concomitants of a vibrant capitalist economy.
Nor is this the place to settle the argument about whether the country is actually becoming more polarized along economic lines. Democrats worry that the "middle class," as defined in terms of income, is shrinking. Republicans say that if it is, it's because so many people are getting rich. These debates could continue forever without any certain conclusion.
WHAT is certain is that the "middle class"--the broad spectrum of Americans for whom culture, outlook and life-opportunities are similar--is being bifurcated. The "two-tiered society" does not just describe two income brackets, but two ways of life and two ways of looking at life in America.
Admittedly, if you ask people to identify the "class" to which they belong, the professional making $70,000 and the secretary making $12,000 will say the same thing--"the middle class."
But without dwelling on the obvious, a huge social and cultural rift divides these two people. And the rift is becoming wider.
Those at the top, euphemistically called the "upper middle class," have worries that the economically marginal would consider luxuries: How to get the kids into "hot" colleges, whether to drink Tanqueray or Bombay with your Schweppes, how to dispose of your salary on the things that best demonstrate your good taste. These people are better described as "Winners."
It's been a banner decade for the Winners. They saw their taxes slashed in 1982 and 1986, of course. But that wasn't the best part of it. The best part was that their position as Winners became increasingly stable and hereditary.
After holding the line fairly well during the inflationary 1970s, college tuition galloped ahead of inflation in every year of the 1980s. This was during the same decade that federal financial aid came under the Reagan budget axe.
By happy coincidence, the Winners saw a college education become a more prohibitive class barrier at exactly the same time that it became a near requisite for economic success.
The Winners may pay lip-service to equal opportunity, but in reality, they revel in the stacked-deck advantages of starting life as Winners. Competitive admissions to pre-school and the explosion of SAT coaching were strictly 80s phenomena for precisely this reason.
THE HISTORICAL significance of the 1980s is that the Winners, in the rush to defend their privileged positions, forgot that the rest of society existed. Granted, the Winners do a lot of agonizing about the plight of the ghetto "underclass." And then there is the ever-present evidence of homelessness.
But somewhere along the line, the Winners stopped caring and learned to love life as it is. A few random examples:
In 1981, then-Senator Gary Hart proposed a bill to limit the tax deduction for business meals and entertainment by 30 percent and use the added revenue to restore Reagan's cuts in the school lunch program. Hart could only find two co-sponsors in the entire Senate.
The 1980s saw Democrats, the party of the people, standing up on the floor of the House of Representatives and lauding former Federal Reserve chair Paul Volcker for smothering inflation by throwing millions of Americans out of work.
In Ec 10 last year, Baker Professor of Economics Martin S. Feldstein '61 told his Harvard audience, "There's some good news this month: Unemploment edged upwards..." without anyone blinking an eye.
THE EC 10 example is classic. Feldstein's point was not that he likes unemployment, but that it was neccessary to throw a few hundred thousand more economically marginal Americans into the face of poverty in order to provide for the financial security of tenured professors and the rest of the bond-holding class.
You see, Winners derive enormous moral solace from believing that their self-interest is the same as society's interest. The success in the intellectual climate of the 1980s of George Gilder's Wealth and Poverty and Charles Murray's Losing Ground, two books which argue that helping the poor hurts everyone, bear testimony to the power of this sentiment.
It is a short intellectual distance from justifying one's own position at the top of the heap to protecting that position against any challenges from the bottom. And in the 1980s, America began walking in that direction.