‘Bipolar Inequality’: Did Americans Sign Up For This?

For the past few weeks, the questions about Occupy Wall Street have been about its direction and policy positions.

“Where are the protesters taking this thing?” media-types ask. “What are their demands?” people want to know.

The real question? Why are we trying to blast past the reason that people are down at Zuccotti Park, or in Madrid’s main square, or on the streets of Tokyo? — A combination of high unemployment (and maybe even moreso, underemployment), income inequality and easy access to the offending economic data has made people angry enough to get out and protest.Gallup conducted a poll in early October which showed that 44 percent of Americans felt the economic system is unfair to them, while 54 percent feel it’s fair. Not surprisingly, Americans split along levels of economic achievement, with those who made more finding it more fair for them versus those with lower incomes.

The real shock with a question like that is the fact that the result was close: after all, Gallup was essentially polling on our system of economic capitalism. The basic idea is that things are fair by default, and as long as one works hard to achieve their goals then they can and should be rewarded for it.

In an interview with TPM, Gallup Editor-in-Chief Frank Newport said that in their data, Americans have long been deferential to inequality that’s been earned by those who achieve it through those traditional means. “There’s still a norm of equality in this county,” Newport said. “If people input more into the system [have and develop talent, work at it, become successful] and get outputs, they should be compensated.”

However, he said, Americans also feel that those individuals should pay more in taxes. Using a metaphor based around NFL quarterback Tom Brady, Newport said Americans don’t mind him making millions of dollars a year after working hard to actualize his talent. But they think he should be taxed at a higher rate.

Enter the policy side of what may be driving favorability toward Occupy Wall Street.

In an email to TPM, Harvard Government Professor Jeffry Frieden said that the extended period of recovery is due to the type of economic downturn the country is still facing. “The recovery has been very slow because this is not a typical cyclical downturn, a recession like so many others,” he wrote. “Instead it is a massive debt crisis, and debt crises are different.” And because the problem is so connected to the public debt, the debate about how to address the issue makes its way into the political sphere and into the American consciousness.

“Every debt crisis leads to major political conflicts over who will pay the price of dealing with the debt burden,” Frieden wrote. “One way or another, the accumulated debts will have to be addressed — either by writing some of them off, or by paying them off. Will the burden be borne by taxpayers? Government employees? Financial institutions?…I think that, in the context of our financial difficulties, OWS may reflect the fact that many Americans feel that too much sacrifice has been demanded of working people and the middle class, and too little of the financial community and the wealthy.”

Diane Lim Rogers, Chief Economist at the fiscally hawkish Concord Coalition, made similar points about the more reckless economic policies of the past decade: Much of the distaste with both Washington and Wall Street comes back to fact that DC is simply unwilling to change course.

“The difference is that during the Clinton years the rising tide was lifting all boats,” Lim Rogers said in an interview with TPM. “Low-income households were still doing better. Even then, the rich did really well, despite their taxes being raised.”

But what’s different now is that income inequality isn’t a political tenet of the left: it’s truly hurting people. Lim Rogers said the poverty rate is actually of more concern than the rich doing better given the circumstances.

“The outrage is not that the rich are richer,” she said. “It’s that the poor have gotten poorer — the inequality has become bipolar.”

Which could help explain why when OWS provided the spark, many Americans didn’t discount the movement as disaffected liberals who have no real point: it’s a real issue borne out by the numbers. Gallup’s Newport explained that the issue of income inequality isn’t something that is volunteered when the polling outfit asks Americans what issues matter most to them — that’s usually the territory of broader concerns like jobs, health care, education and national security. But people are so frustrated now that groups like OWS, and the Tea Party before them, can define that anger more clearly.

“Americans are frustrated and looking for a displacement,” Newport said “Big business and big government are sources of ire for Americans.” Which, he said, provide some interesting parallels on the two movements. Both have things within them that resonate with people: by and large people agree that government is too big, yet they agree that the wealthy should pay more in taxes, which utilizes governmental intervention. Gallup’s own polling showed that most people aren’t necessarily aligning themselves with movements, but clearly they are hitting a chord within the frustration those same Americans are experiencing.

While Gallup showed that only 22 percent of Americans considered themselves supporters of OWS, other polls have shown larger amounts of support. Because, as Lim Rogers points out, the movement has centered on a more inclusionary focus.

“As the definition of the rich keeps shrinking, the movement feels like it gets more spirited,” she said. “OWS is getting the support of most americans, because how can you disagree with the fact the top 1 percent has done well, but that poverty is increasing. I’m not surprised that OWS is doing well, and I think it’s justified. What Americans may not have a grasp of is that we are all part of the problem, because we continue to support politicians that support these policies.”

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