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America – A Nation of Millionaires

February 3rd, 2008 · 1 Comment ·

In the current election one of the big issues, as always, is the economy. The Democrats have a spin they want to put on the economy – that everyone is losing their jobs, that people are getting poorer and that our futures are in danger. They see the American dream vanishing away and becoming less and less attainable. The problem is that many of their claims are just dead wrong and even their own figures and their strongest evidence turns out to work against them.

Some of the misrepresentations are obvious.

Complaints of outsourcing and immigration costing jobs and lowering wages are belied by simple factual data available from the Bureau of Labor Statistics, which show hourly wages steadily rising (up $2.38/hour since 2001) and unemployment at a historically low level (4.7% in August). Not only are people not losing their jobs, taking the chronically unemployed into consideration we basically have no real unemployment and have reached the point where a lot of businesses are actually having trouble finding workers at all.

They claim that the middle class is vanishing away because the number of people in the middle class is down 1.5% and middle class total income is down 3%. The implication is that the middle class is being forced downwards and into poverty. What they neglect to take into consideration is the fact that the middle class is contracting primarily because the middle class is getting richer and rapidly moving up in wealth and income to the point where they no longer fit the old definition of the middle class. The whole class is moving into a higher income range and our definition of the class needs to be expanded upwards because the entire group is richer than it was a few years ago. And just as people in the middle class are getting wealthier you see the same thing in lower income brackets where the most successful in those brackets are moving up in income.

During the last 5 years we’ve gained a record number of millionaires. In 2001 we had 2.1 million people classed as being of ‘High Net Worth’, basically meaning owning a million dollars in real assets. Today that group has expanded to 8.9 million. The super-rich are only a tiny portion of this group. The majority are people who’ve recently moved up from the middle class to the bottom level of the rich. Having a million dollars in assets doesn’t put you on instant easy street. You still have to work to maintain and expand your fortune. We could call these people the ‘working rich.’ They haven’t yet gotten to the point where their wealth is self-sustaining.

In that same 5 year period there has also been a dramatic increase in the number of people in the upper middle class, those who have a net worth of between $100,000 and $500,000. That group has grown to an astonishing 24.5 million people, about a fifth of the total population. This group has added about 700,000 members in the past year and also seen their average debt drop by about 8%. Their individual income is up, reaching $64,600 a year on average, plus they are relatively young, so in the natural course of work and earning, they will almost inevitably also join the High Net Worth group with over $1 million in assets within the decade.

What these statistics show, and what the left is desperately trying to hide, is that America is more and more becoming a nation of millionaires. Upward mobility has never been stronger, and the opportunities to become wealthy through hard work and creativity are greater than ever before. The appearance of increasing wealth in the upper class isn’t because the rich are getting richer, it’s because more people are getting rich and the American dream is working.

Income mobility isn’t just strong at the top of the economy. Despite somewhat deceptive complaints that mobility is not increasing, the level it has been stable at for several decades is one which represents strong movement from the lower income groups into the higher ones and much less downward mobility from high income groups into lower ones. As found in a Congressional study, within a decade 85.8% of those in the lowest 20% of wage earners had moved up one or more quintile in income, 60.1% of those in the second lowest group had moved up one or more quintiles and 47.3% of those in the middle income group had moved up into a higher group. What’s more, in the period studied 14.7% actually moved from the lowest income group to the highest in just ten years. As Senior Economist Christopher Frenze who headed up the study concluded, “The empirical data support the view of the market economy as a dynamic and open society which provides opportunity to those who participate.”

Despite this climate of upward mobility and increasing wealth, the Democratic party has made this fiction of economic privation and stagnation a lynchpin of their capaigns nationwide. In a vital midterm election, staking your party’s future on an economic crisis which anyone who’s in touch with his community or reads a newspaper can tell does not exist is a remarkably poorly conceived strategy. As always, it remains, in the immortal words of James Carville “the economy, stupid,” but that tactic of building political success on economic failure only works if the economy is actually failing. Lying about the economy and talking it down when prosperity is so widespread it’s practically obscene just makes you look like an idiot. People expect politicians to lie to them, but when they do it in ways which are so transparent as to insult the intelligence of the voters they’re likely to have their strategy turn around and bite them in the ass at the polls.

Dave Nalle has worked as a magazine editor, a freelance writer, a capitol hill staffer, a game designer and taught college history for many years. He now designs fonts for a living and lives with his family in a small town just outside Austin where he is ex-president of the local Lions Club. He is on the board of the Republican Liberty Caucus and Politics Editor of Blogcritics Magazine. You can find his writings about fonts, art and graphic design at The Scriptorium. He also runs a conspiracy debunking site at IdiotWars.com.

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