In 2002, the Bush administration’s National Security Strategy of the United States famously declared that there was now “a single sustainable model for national success: freedom, democracy, and free enterprise.” Around the world, and at home, this claim finds ever fewer takers. It is not hard to see why.
In the past few years, the United States has launched a systematic assault on freedom, abroad and at home, as part of the war on terror. The United States has invaded and now occupies by force not one but two countries. This was once considered to be the highest crime under international law. The United States now sees it as legitimate to kidnap, imprison without charge or trial, torture and murder people around the world.
A new Pew Center poll finds that since 2002 favorable views of the United States are lower in 26 of 33 countries for which there is data. The impression of American support for freedom and democracy in particular seems to have withered. Pew reports that majorities of people in 43 out of the 47 countries they studied now believe that the United States promotes democracy mostly where it serves its interests.
The world and Americans themselves see that American democracy is in trouble at home. The president and vice president consider themselves and act as if they are above the law. Congress has failed to act as a check. Even with a majority in Congress now held by the Democratic Party, the wars in Afghanistan and Iraq continue. The prison camp at Guantanamo is still open. The courts have largely been silent as basic civil liberties have been violated. The US government has secretly and without warrant collected the phone records of millions of Americans. Surveys show that only about a third of Americans now believe “most elected officials care what people like me think.”
The Economics of Rich and Poor
International polling also finds that U.S. policies are widely seen as increasing the gap between rich nations and poor nations. Pew finds that in 32 out of 47 countries, more than half the people surveyed believed that the United States widens the divide between rich and poor. The poll finds widespread negative attitudes, in 22 out of 47 countries, toward American ways of doing business. There is particular dislike of the American model both in the wealthy societies of Western Europe and Canada, and in Latin America, which has suffered from U.S. economic policies for many decades.
The sense that U.S. economic policies are a problem is another area where international opinion and U.S. opinion are largely in accord. Polls showed in 2003 that almost 75% of Americans believed that the gap in incomes between rich and poor was larger than it had been 20 years before, and a majority thought this to be a “bad thing.” A March 2007 poll by the Pew Center found 73% of Americans believe that “today it’s really true that the rich just get richer while the poor get poorer.” Earlier this year, even President Bush admitted for the first time that “income inequality is real -- it's been rising for more than 25 years.”
The data suggests these judgments are well-founded. The wealthiest 10% of American households had almost half of the nation's total income while 90% of families shared the other half. But even within the rich there is marked inequality. The top 1% of households had about half of the income of the top 10%, and the top 0.1% of households actually received nearly half of the share going of the top 1%.
The rise in inequality seems to be picking up pace. In 2002, the top 1% of U.S. households owned just over 50% of corporate wealth. In 2003, they owned almost 60%. And, they are getting wealthier. From 2003 to 2004, the real average income for the top 1% of households grew by almost 17%. For the remaining 99%, the average gain was less than 3 percent. The top 1% made over one-third of all income gains in 2004, even more than they did in the year before. All of the income gains in 2005 went to the top 10% of households, while the bottom 90% saw their income decline. The top 1% held a bigger share of total income than at any time since 1929.
The gap between the richest and the rest has become even more dramatic since. As The New York Times pointed out recently, 25 American financial hedge-fund managers each made over $240 million in 2006 for a total of almost $6 billion. The highest earner among them made $1.7 billion last year. For comparison, half of all American families had an income of less than $44,000 in 2006.
The hedge-fund managers may be the new financial hyper-elite in terms of income but more typical corporate bosses have also done very well. A study of executive pay found that the median executive salary at 350 large public companies was $6.8 million in 2005 (that is to say half of these executives earned more than this).
Workers have not done so well. The Institute for Policy Studies and United for a Fair Economy track the gap between bosses and workers. The current gap in annual incomes is 411-to-1. This compares with a gap of 107-to-1 in 1990. In 1980, the gap was only 42-to-1. The pace has clearly quickened from one decade to the next.
It is no surprise then that polls find two-thirds of Americans now believe corporations make too much profit. Three-quarters see corporations as too powerful and almost 60% view them as concerned more with profit rather than the public interest.
American Dream or Illusion
Despite these widespread feelings about the economy, 60% of Americans support the statement that “I’m pretty well satisfied with the way things are going for me financially,” according to the March 2007 Pew poll. More than 70% of Americans believe that “the strength of this country today is mostly based on the success of American business.” Over half of Americans think the United States should be promoting American business practices around the world.
How are we to understand these contradictions? At heart may be the illusion of the American dream. A 2005 poll found that 40% of Americans believe that the chance of upward class mobility had risen during the last 30 years, and another 35% said it had not changed. Only about 20% understood that class mobility has declined in each of the past three decades. In fact, fewer American families moved up the income ladder during the 1990s than the 1980s, which in turn saw less upward movement than the 1970s.
As inequality at home worsens, what will Americans do about the withering of the American dream? To hang on to what they have and try to get what they can, no matter what it takes, will mean opposing immigration reform, supporting corporations, and wanting their government to sustain the global empire that brings some benefits in the form of cheap goods, cheap energy, especially oil, and services. There are many politicians in both Democratic and Republican parties who are willing to offer this path: their only real disagreement may be how much force to use to sustain the American way of life.
With American policies for managing global and national politics, society and economy in crisis at home and abroad, there is a desperate need to create alternatives that encompass all of these challenges. It is time to think about the world after the American Century.
Zia Mian is a physicist with the Program on Science and Global Security at the Woodrow Wilson School of Public and International Affairs at Princeton University and a frequent contributor to Foreign Policy In Focus (online at www.fpif.org).
