The Real Inequality Scandal: Rich, Poor and MSM Gang Up On American Middle Class

Economic inequality has been much in the
press lately. For example, Timothy Noah wrote a

ten-part series
Slate trying to
explain the growth in

. Greatly to Noah`s credit, he dared consider
the role of immigration in his Part 3:

Did Immigration Create the Great Divergence?

(albeit inadequately, as

pointed out

generally, the discussion about inequality has been missing
half of the puzzle.

On the one hand, it`s safe to say that
over recent decades, the
have gotten very much richer.

farther up the pyramid you are, the faster the growth has
been. The rise in income has been slower for the top ten
percent than for the top one percent, and the top one
percent has lagged behind the top 0.1 percent.

And when
the statistical equivalent of an electron microscope comes
along, we`ll probably see that the top 0.1 percent have had
good cause to rue how slowly their wealth has mounted
compared to the skyrocketing fortunes of the top 0.01

On the other hand, for most American and
above all the poor,
have stagnated
in inflation-adjusted terms—and for
significant numbers, actually
The influx of

poor, unskilled immigrants
from abroad has certainly
swelled the number of people at the bottom of society and
exacerbated competition for jobs and housing among them.

Additionally, it`s notable that the rich have learned how to
use the poor as symbols to rationalize whatever they want to
get away with.

An example well-worth savoring: the 2003
Harvard lecture,

The American Dream of Homeownership
, by Angelo
Mozilo, CEO of Countrywide Financial, announcing that he
would lend $600 billion to minority and lower income
borrowers, in return for which he wanted mortgage regulators
to lift those

racially discriminatory
demands for

down payments
and documents—thus helping precipitate the

Minority Mortgage Meltdown.

Most public discussions of inequality have
been of limited utility because the fundamental measure is
not income or wealth, but
long-term standard of
. And that has two halves: how much you have to
spend and how much whatever you spend it on costs.

commentators have thought systematically about the second
half of the equation—the cost of living—even though we all
obsess over it in our own lives.

For instance,
for high school dropouts are similar in California, which
has the highest percentage of immigrants, to wages in states
with fewer immigrants.

But that doesn`t prove that immigration
has little impact on the standard of living among our less
fortunate fellow citizens. The

cost of living
in California is 48 percent higher than
in, say,

, a state with few immigrants. A key factor:
the cost of housing in California is 138 percent higher than
Tennessee. Land prices are driven by supply and demand.
Therefore, when the population goes up due to immigration,
the price of land goes up.

In this
article, I focus on the impact of the growing inequality at
the top and bottom of society on the cost of middle class

look at three major cost components of middle class life:
medical care, housing, and education.

  • Medical Care

What is the impact of increasing economic
inequality getting on the cost of medicine? Are the
ultrarich rapaciously bidding up the price of, say,
chemotherapy the same way they have bid up the price of

Gustav Klimt

Nah, not really.

is not something anybody wants to want to
hoard all for himself. Trust me.

In fact,

plastic surgery,
notoriously the most discretionary item
in medicine, has gone up less in price than most everything
else has.

  • Housing

How about the cost of housing? Are the
filthy rich

monopolizing more and more land
, as in olde

or in

before the 1910 Revolution?

Some—but not all that much. In 21st
Century America, the superrich generally don`t like to live
William Randolph Hearst
Hearst Castle,
each on their own lonely mountains. They tend to crowd in
near others of their rarefied ilk. Hence, they often take up
less space than you might imagine.

In Manhattan, the rich stack themselves on
top of each other. In Los Angeles, the median celebrity
whose home buying or selling is deemed worthy of the
Los Angeles Times`
real estate porn column lives on roughly
one or two Southland acres.

Consider, for example, Cher. That

energetic and enterprising veteran celebrity
offered her ocean-view

in Malibu for sale at $41 million. How much
bluff-top land do you get for $41 million?
One point seven acres

The rich
do often own huge vacation and investment properties in
scenic locations. Yet, those are typically too remote from
jobs, too laden with environmental restrictions, or in too
precipitous locations to be easily subdividable into middle
class neighborhoods.

  • Education

what about education? Do the fantastically wealthy crowd out
the middle class?

To some
extent, yes. I have been informed by several reliable
sources that a discreet donation of

$5 million
to Harvard can go a long way toward moving
one`s scion from the admissions waiting list to the accepted
list. Likewise, in Manhattan, a sizable gift can help get
your kid into a

fashionable kindergarten.

course, we all know that if you want to play the social
climbing game, there`s no end to how much you can pay. But
what if you don`t particularly care about climbing up—you
just don`t want your kids to be dragged down? In that case,
the rich don`t matter as much. Do middle class parents have
to pull their kids out of the schools that, say,

James Cameron
`s kids attend so they can learn? Do

roving gangs
of Bill Gates`s kids keep your kid from
shooting baskets at the

local park?


think about the costs imposed on the middle class by the
bottom of society—a bottom that has been greatly inflated in
relative numbers by immigration policy.

  • Medical Care

Do poor people not get chemotherapy when
they get cancer? Of course they do. We don`t live in some

Ayn Rand
society. Poor people generally get cheaper,
lousier health care than rich people, but they still get it.
The overall cost of health care to the economy is more
proportional to the number of people within the borders than
to their ability to pay.

Under whatever system of health finance
that eventually evolves, those who can afford to pay will,
one way or another, subsidize the medical care of those who
can`t, just as they do now. Currently, that shows up as
taxpayer subsidies to the Emergency Rooms that the indigent
poor use as a primary health care supplier, higher insurance
premiums as hospitals pass through unreimbursed costs,
and/or outright closure of Emergency Rooms and even

The bulk of taxes are paid by the bulk of
people i.e. the middle class. And it is
middle class communities,
and their

, that are the first to experience immigrant

  • Housing

What about housing? Do poor people take up
space? Yes, in fact, more than you would think. The
essential problem with being poor in 21st Century America is
less that you can`t buy enough stuff and more that you can`t
afford to get away from other poor people. Those who can
afford to move away from the poor, do, driving up housing
costs elsewhere. That sections of

Detroit are reverting to forest,
while the Detroit
suburbs are booming, is only the most extreme example of the
centrifugal impact of the poor. In Memphis, tearing down

downtown housing projects and
giving the poor
Section 8
rental vouchers made downtown safe for the affluent, but
simply drove crime into the inner suburbs.

Moreover, it has been national policy for many years to

disperse the poor
from the inner cities. In California
in the last decade, easy credit from Countrywide and the
like generated a rolling exodus outward from South Central
Los Angeles into the exurbs and even into Arizona and
Nevada, as zero down payment mortgages gave countless people
hope that they could get their kids into a school district
away from kids
like …

their kids.

  • Education

Unfortunately, as

Buckaroo Banzai
pointed out,
“No matter where you
go, there you are”.
people with no money started buying en masse into exurban
Southern California neighborhoods with homes
“worth” a half
million dollars because of their
“good schools”,
those schools were suddenly not quite so good anymore. And,
very suddenly, those homes weren`t worth a half million
dollars anymore, contributing to the financial crash of

All of
which does not mean, however, that the rich have no share in
the blame for the costs the poor impose upon the middle

As Rawlie Thorpe
tells Sherman McCoy
in Tom Wolfe`s novel

Bonfire of the Vanities
“If you want to live
in New York … you`ve got to insulate, insulate, insulate.”

The increase in income and wealth inequality means the rich
are both more insulated from the problems of ordinary
Americans. And, oddly, they are more influential over the

The latter is most noticeable in the
decline in skepticism about the rich among journalists. For
example, it ought to be completely obvious to even the most
naïve newshound that

the enthusiasm among the rich for mass immigration
financially disinterested.
Yet, the concept of conflict
of interest is fading away among today`s journalists.

In the mid-20th Century, the press was
more skeptical of the plutocrats because the class conflict
was so apparent in how they dressed, spoke, and behaved. In
His Girl
era, the rich put on pompous upper class
manners, while reporters indulged in the cynicism of the
socially marginal.
Ben Hecht,
a Chicago reporter turned Hollywood screenwriter,

his first view of a newsroom in 1910:
“hats tilted, feet up
on top of typewriters, faces breathing out liquor fumes like
. Hecht

summarized the reporters of his youth:

“They sat, grown and
abuzz, outside an adult civilization, intent on breaking
windows. There was, I am sure, neither worldliness nor
cunning enough among the lot of us to run a successful candy
store. But we had a vantage point. We were not inside the
routines of human greed or social pretenses. We were without
politeness. … Our noses were full of the odors of chicanery
and human fatuousness.”

Journalists today, though, tend to be
respectable, elite-educated, professional, conformist
—more offended by uncouth opinions
than by the self-interested hypocrisy of the upper class

Both the rich and the reporters have the
same upper middle class casual manners. The rich don`t dress
for dinner in

boiled shirts

, and watch chains anymore, while reporters don`t
wear hats indoors., Everybody affects an easy equality—so
it`s simple for the billionaires to seduce the media by
graciously treating them, during interviews or at the

annual Davos conference for plutocrats and pundits
, as

course, they aren`t equal. But this flattery that the
zillionaires direct at the journalists, this pretense that
we`re all in the same social class—the educated
enlightened—makes it easier for the media to endorse the
agenda of the rich.

Thus in

Waiting for
new documentary about school reform that has been widely

in the elite media, the conventional wisdom
about the necessity of spending vastly more on

fixing bad schools
is espoused onscreen by various
journalists, educators, and Bill Gates. A Rip Van Winkle who
had been asleep from 1935 wouldn`t be able to tell from

dress or speech
which of the many interviewees clad in
Dockers khakis is(or rather
world`s richest man.

Not surprisingly, the documentarian,
shows no cynicism whatsoever about the
altruistic purity of Gates`s motivations. In fact,
Guggenheim is happy to relate Gates` excuse for why

hired all those

H-1B visa programmers
from India instead of hiring
Americans. You see, Gates just had to import foreigners
because American schools were so bad that there weren`t any
programmers left in America. He
had to!

In a Ben Hecht-scripted movie, a reporter
would have whispered out of the side of his mouth to another
reporter that, sure, Gates
had to hire cheap
labor from abroad to boost his net worth from $49 billion to
$50 billion.

that kind of cold-eyed realism toward the rich on the part
of the press has largely given way to warm, fuzzy feelings
of class solidarity—

assumption that we elites are all working to help the poor,
unlike those

horrible bigots in the middle

In a famous formulation, Yale economist
William Graham Sumner described modern social policy as a
process whereby “A
and B put their heads together to decide what C shall be
made to do for D.”
He described C as

“The Forgotten Man.”
The American middle class
continues to be forgotten. But what`s new here is that B is
our supposedly independent Main Stream Media.

[Steve Sailer (email
him) is

movie critic

The American Conservative

His website

features his daily blog. His new book,