How The Top 9.9 Percent Is Leaving The Rest In The Dust

With Ray Suarez

Forget the top one-percenters, it’s the top 9.9 percenters who are holding everyone else down. We'll look at the argument.

Matthew Stewart, philosopher, author of several books and former management consultant.

On who makes up the top 9.9 percent:

"So we all know about rising inequality at this point. But when you take a closer look at the numbers, it turns out that some of our illusions about who they are — are inaccurate. There's this tiny sliver - it's much smaller than 1% - 0.1% that have been the big winners in the economy. They're playing a critical and sometimes destructive role in our economy.

But then when you look below that, you have people who are certainly wealthy, by most people's standards... but they're not going to the casino, and they're not the Donald Trumpsters of the world — they look more like ordinary people. It's more likely to be your divorce lawyer, or your dentist, or your doctor, or MBAs with opaque job titles, as I call them. They're doing good work. When one draws attention to the privileges that they have, it provokes a lot of defensiveness.

"They look more like ordinary people. It's more likely to be your divorce lawyer, or your dentist, or your doctor."

Matthew Stewart, on who makes up the top 9.9%

They — we — have a certain blindspot. We don't seem to be aware that we're participating in a process. This is a process of class separation. In a way, the real villain isn't any group of people. It's the process that separates classes and leads them to defend their turf and to act against the interest of the whole."

On the American economy, and getting ahead:

"I think that we're seeing the symptoms of an economic imbalance. I think low economic growth and low economic performance is actually tied to this question: it's both an effect and a cause. What's happening is that we have significant sectors of the economy — and they're skewed towards those with lots of credentials — that can claim monopoly rents, we have significant monopolies in our technology and financial sector[s], these are the root causes of what we're seeing. They generate excess cash. How does this excess cash filter around through our society? Well, we compete, basically, to get it. And that's what causes a lot of these distortions, the weirdness of the education marketplace...

"The real question is: why? Why do we have to go through a crazy amount of hoop jumping to give our kids good opportunities?

"We have to put in the extra effort, we have to go through all this anxious activity in order to secure that extra advantage."

Matthew Stewart

I think that the answer is that the rewards are not actually linked to the merit that we're putting in. So we have to put in the extra effort, we have to go through all this anxious activity in order to secure that extra advantage. And that drives everybody to work harder, drives everybody to compete more vigorously in order to secure these nice little slots that sort of give you a ticket into the monopoly machine. But at the end of the day, it ends up being quite destructive. It ends up separating the classes and leading to political instability."

On higher education:

"We do have this myth that college is the ticket. Here's the reality: college is the ticket for a certain subset at the top. That's why people compete so vigorously and sometimes viciously to get into that sliver at the top. For the people who are down below, you may get a great education, but the idea that you're going to be able to latch onto those special premiums that are out there offered in the economy — that, I don't think has that much basis...

It does turn out that if you go to the 50 or so most selective colleges, your earnings down the road are likely to be substantially higher — and I mean on the order of two to three times higher — than they are for the average college goer.

So the idea that college is the ticket, isn't backed up by the numbers — it's certain kinds of college are the ticket[s], and to the rest, you should consider for education, which, by the way, I'm all in favor of. But you need to look at the economics very closely."

The Atlantic: "The 9.9 Percent Is the New American Aristocracy" — "One of the hazards of life in the 9.9 percent is that our necks get stuck in the upward position. We gaze upon the 0.1 percent with a mixture of awe, envy, and eagerness to obey. As a consequence, we are missing the other big story of our time. We have left the 90 percent in the dust—and we’ve been quietly tossing down roadblocks behind us to make sure that they never catch up.

Let’s suppose that you start off right in the middle of the American wealth distribution. How high would you have to jump to make it into the 9.9 percent? In financial terms, the measurement is easy and the trend is unmistakable. In 1963, you would have needed to multiply your wealth six times. By 2016, you would have needed to leap twice as high—increasing your wealth 12-fold—to scrape into our group. If you boldly aspired to reach the middle of our group rather than its lower edge, you’d have needed to multiply your wealth by a factor of 25. On this measure, the 2010s look much like the 1920s."

The New York Times: "Some Colleges Have More Students From the Top 1 Percent Than the Bottom 60. Find Yours." (From 2017) — "Students at elite colleges are even richer than experts realized, according to a new study based on millions of anonymous tax filings and tuition records.

At 38 colleges in America, including five in the Ivy League – Dartmouth, Princeton, Yale, Penn and Brown – more students came from the top 1 percent of the income scale than from the entire bottom 60 percent.

Roughly one in four of the richest students attend an elite college – universities that typically cluster toward the top of annual rankings.

In contrast, less than one-half of 1 percent of children from the bottom fifth of American families attend an elite college; less than half attend any college at all."

Remember when Occupy demonstrators split America in two? The one percent and… everybody else? Do the millions of families making a solid six-figure income, angling to get their kids into the best school districts and colleges really share the challenges of families struggling to keep a roof over their heads? Our guest says it’s time to worry about the 9.9 percent, who aren’t worried about all boats rising, just their own.

This hour, On Point: A new American aristocracy?

- Ray Suarez