The American Dream isn't dead--it just moved to Denmark.
We like to think of ourselves as living a classless society, but it isn't true today. As the Brookings Institution has pointed out, America has turned into a place Horatio Alger would scarcely recognize: we have more inequality and less mobility than once-stratified Europe, particularly the Nordic countries. It's what outgoing Council of Economic Advisers chief Alan Krueger has dubbed the "Great Gatsby Curve" -- the more inequality there is, the less mobility there is. As Tim Noah put it, it's harder to climb our social ladder when the rungs are further apart.
And it's getting worse.
Inequality is breeding more inequality. It's a story about paychecks, marriage, and homework. Now, it's not entirely clear why the top 1 percent have pulled so far away from everyone else, but there's a long list of suspects. Technology has let winners take, if not all, at least most, in fields like music; deregulation has set Wall Street free to make big bonuses off big bets (and leave taxpayers with the bill when they go bad); globalization and the decline of unions have left labor with far less leverage and share of income; and falling top-end tax rates have exacerbated it all. But high-earners aren't just earning more today; they're also marrying each other more. It's what economists romantically call "assortative mating" -- and Christine Schwartz, a professor of sociology at the University of Wisconsin, estimates inequality would be 25 to 30 percent lower if not for it.
Marriage is widening inequality today, and keeping it wide tomorrow. Well-off couples get married more, stay together more, read to their children more, and otherwise have more time and money to spend on their children's education. As the New York Times points out, economists Richard Murname and Greg Duncan have found that high-income couples have poured resources into the educational arms race at a prodigious pace the past generation. For one, the amount of time college-educated parents spend with their kids has grown at double the rate of others since 1975; for another, high-income households invested 150 percent more in "enrichment activities" for their kids from 1972 to 2006, compared to a 57 percent increase for low-income households.
It's paying off. As Jonathan Cohn of The New Republic points out, early cognitive development has long-lasting consequences that can leave less-lucky children behind from the moment they start school -- and keep them there. But even when kids from low-income households do outperform those from high-income households, it's far from a guarantee that they'll end up earning more as an adult. Indeed, Matt Bruenig highlights the chart below from the Pew Economic Mobility Project that shows that rich kids without a college degree are 2.5 times more likely to end up rich than poor kids who do graduate from college.
This chart is a bit hard to follow, but the message isn't: it's hard to rise, and harder to fall in our "meritocratic" society. The red columns show which income quintiles people who didn't graduate from college end up in based on which one they were born into; the blue columns shows the same for college grads. As you can see, there's only a 10 percent chance that a college grad from the bottom quintile will end up in the top quintile, but a 25 percent chance that a non-college grad from the top quintile will stay there.
This is one part obvious and another part mystery. Now, it's no secret that the rich are different from you and me -- they have more money to leave to their kids -- or that they have a special jobs program called "working for dad". Miles Corak, a professor of economics at the University of Ottawa, found that almost 70 percent of the sons of Canada's top 1 percent had worked where their fathers worked. In other words, it's clear enough why so many well-off kids who don't get a college degree stay well-off. But it's less clear why higher education isn't more of a path to prosperity for low-income children.
Well, what kind of higher education are we talking about? As Caroline Hoxby of Stanford and Christopher Avery of Harvard show in a recent paper presented at the Brookings Institute, very few high-achieving students from low-income households end up even applying to a selective college. (Here, "high-achieving" is defined as the top 10 percent of overall test-takers on the SAT I or ACT, and a "selective" college is one of the top 236 schools in the country.) This, of course, is not how high-achieving, high-income students play the college admissions game. They follow their guidance counselors' advice, and apply to a few "reach" schools, a handful of "match" schools, and a "safety" school or two. As you can see in the chart below from Hoxby and Avery, this optimal strategy means applying to schools with median SAT I scores mostly in line with their own, and a few much lower -- say, 20 percentiles or so lower. The clump to the far left, around 95 percentiles lower, are, in this case, largely specialty schools, like art or music academies.
It's a totally different game for high-achieving, low-income students, because nobody tells them how to play it. Aside from magnet school kids, they mostly don't have parents or teachers or counselors with much experience applying to selective colleges. Nor do many know, despite the best efforts of the schools to inform them otherwise, that the most selective colleges have very generous financial aid packages that can take tuition all the way down to zero. Indeed, Harvard is pretty much free, including room and board, for students whose parents make $65,000 or less.
But, again, they either aren't told or don't remember this -- or think other things are more important. Maybe they want to stay close to home to help their parents or be near a significant other. Maybe they just don't believe they could get into a top-tier college. Whatever the reason, the vast majority of high-scoring, low-income students don't apply to selective schools, but opt instead for community colleges or small state schools. As you can see below, there's little concept of applying to "reach", "match" and "safety" schools. And insofar as there is, it's not strategic; applications are pretty evenly distributed across the three groups. Still, that's far better than the mountain of applications to un-selective schools that you don't really need to apply to.
This is how the American Dream ends. Not with a bang, but a whimper of elite school applications by poor kids. Like it or not, the Ivies and other top schools are our conduit to the top, and far too many low-income students who should be there are not. As David Leonhardt of the New York Times points out, only 34 percent of high-achieving, low-income students attend a selective college versus 78 percent for high-achieving, high-income students. This has to be the most boneheaded way we as a society perpetuate the people at the top. The deck is already more than stacked against kids growing up in low-income households -- their parents often aren't as involved or even around -- and we're not helping the ones who do succeed to succeed more.
There is plenty to be done. We can help parents, help parents help their kids, and help kids once it's time to pick colleges. Of course, the first step in any plan to reverse inequality is, simply enough, more redistribution. But not just more redistribution; smart redistribution. Thinking small, something like a bigger Child Tax Credit or Earned Income Tax Credit would give working families a bit more security -- which, regardless of whether people invested it in their children's education, would help their kids.Thinking bigger, something like a universal basic income -- that is, cutting checks to make sure everyone has a minimum income -- would put a floor under low-income households, and, just maybe, could make lower-income men more marriageable. It sounds utopian now, but as Dylan Matthews of the Washington Post points out, it's an idea with a bipartisan heritage: none other than Milton Friedman endorsed the negative income tax.
The second step are smart interventions to help new parents. Actually, President Obama's call for universal, high-quality pre-kindergarten is somewhere in-between these first and second steps. As Jonathan Cohn has chronicled, we know that daycare is a disaster in the U.S. now, and that top-notch pre-K can make lasting impacts, but we don't quite know how to scale that up. It might be that universal pre-kindergarten is less high-quality, and more high-quantity, but even that would help working families' budgets more -- and let parents look for work without having to worry about who will look after their kids. And, of course, it might do much more than that. But it's not just about helping low-income parents juggle their jobs and children; it's about helping them do the things they don't realize they need to do. The Providence Talks program, which the New York Times recently highlighted, could be a good model here: nurses and social workers ask new parents to record all the things they say to their babies to try to get them to talk more and use more words with their infants.
The last step is by far the easiest. It's just giving high school students better information about what colleges match their scores, and what colleges costs what given different family incomes. Right now, high-achieving, low-income students get all kinds of glossy brochures from colleges looking for socio-economic diversity if they send their scores in to the College Board, but it can be hard for them to know where to start or what to trust without much adult guidance. In other words, there's a needed public good we're not providing -- a government site (and maybe mailing list) that clearly shows students what they need to know about different schools to make an informed choice. And it sounds simple -- well, that's because it is -- but schools can help by waiving their application fees for low-income students, and maybe entirely. Fees don't do much to dissuade high-income students from mass applying to schools, but they do stop low-income ones from sending out nearly as many, if any, applications as they should. In other words, stop creating barriers to the students you say you want the most!
Ask anyone about inequality, and you're likely to hear three words in response: education, education, education. Oh, and education. And it's true: school should be the ladder out of poverty. But too often it's not; if anything, the reverse. We need to stop failing early and failing late. In other words, we need to reach kids during those formative years before school begins, and to keep kids who are thriving in high school to keep thriving in the right college.
If we don't, the American Dream will be just that.
A history of the first African American White House—and of what came next
In the waning days of President Barack Obama’s administration, he and his wife, Michelle, hosted a farewell party, the full import of which no one could then grasp. It was late October, Friday the 21st, and the president had spent many of the previous weeks, as he would spend the two subsequent weeks, campaigning for the Democratic presidential nominee, Hillary Clinton. Things were looking up. Polls in the crucial states of Virginia and Pennsylvania showed Clinton with solid advantages. The formidable GOP strongholds of Georgia and Texas were said to be under threat. The moment seemed to buoy Obama. He had been light on his feet in these last few weeks, cracking jokes at the expense of Republican opponents and laughing off hecklers. At a rally in Orlando on October 28, he greeted a student who would be introducing him by dancing toward her and then noting that the song playing over the loudspeakers—the Gap Band’s “Outstanding”—was older than she was.
Unlike past presidents-elect, Donald Trump hasn’t expanded his support since the election. His belligerent attitude toward his critics may be one reason why.
Donald Trump always seems most grounded in chaos. He thrives on contradicting his aides, surprising his allies, disparaging his opponents. He revels in the tempest.
This combustible approach has touched a chord with his base of primarily non-college-educated and non-urban white voters who have felt eclipsed both economically and culturally and slighted by the nation’s leadership. But he will arrive at his inaugural Friday facing more resistance in public opinion than any newly elected president in the history of polling, and with lingering clouds over his legitimacy—symbolized by the surprisingly widespread House Democratic boycott of the ceremony. Trump’s agenda is polarizing enough, but the intensity of that opposition appears rooted even more in his relentless belligerence toward any critical voice or institution.
More clues that the Facebook founder is eyeing a run for office
There’s a long-running theory that Mark Zuckerberg has presidential aspirations. It makes sense to wonder. After all, if the civically engaged and ambitious billionaire leader of the most powerful media company on the planet wanted to take on a new challenge, why not try running a country? It’s not like he has many other opportunities for a promotion.
But only in recent weeks has a Zuckerberg run for the American presidency started to seem like a legitimate possibility. First there was his personal challenge for 2017: Zuckerberg’s aiming to visit and meet with people in all 50 states by the end of the year.
And not just that, but he framed the exercise in a way that sounds, well, political: “Going into this challenge, it seems we are at a turning point in history,” he wrote in a Facebook post. “For decades, technology and globalization have made us more productive and connected. This has created many benefits, but for a lot of people it has also made life more challenging. This has contributed to a greater sense of division than I have felt in my lifetime. We need to find a way to change the game so it works for everyone.”
And the bright side of rising pessimism about the American Dream
One of the hallmarks of America’s supposed exceptionalism is its citizens’ extraordinary optimism. A 2014 study found that Americans were more likely to describe their day as "particularly good" than any rich European country. Nothing reflects this sunniness like the enduring parable of the American Dream, the idea that, only in America, even the poorest can transform their fortunes through hard work.
But there is a dark and deeply ironic element to American dreaminess. Americans are “too optimistic” about the odds of poor citizens getting richer “relative to actual mobility in the U.S.,” according to a new paper by the economists Alberto Alesina, Stefanie Stantcheva, and Edoardo Teso. As a result, Americans are less likely to support large federal anti-poverty programs—programs that would actually help the American Dream become reality for more people—since they believe that they are already living among throngs of Horatio Algers.
The president-elect’s filings with the Federal Election Commission offer the best (and only) glimpse into what he owns and owes. Here they are for the first time in a searchable, easy-to-read format.
One hallmark of President-elect Donald Trump’s behavior is a tension between brazen exhibitionism and near-total opacity. Trump is highly outspoken, especially on Twitter, and has been in the public eye for decades; his supporters and surrogates frequently maintain that these make him transparent. However, when it comes to any information that could help hold Trump accountable, such as the details of his policy positions, he has not been forthcoming, a tendency which poses an enormous threat to a system of governance built on the idea of checks and balances.
Among the most notable manifestations of this opacity is that, during the 2016 presidential campaign, Donald Trump broke decades of tradition by refusing to release his tax returns. Although he initially said he would release them, as the campaign wore on, he and his staff began proffering a number of explanations for why he didn’t. Though none of those excuses held up under scrutiny, Trump still hasn’t released the returns, which means that, though he is vastly wealthier than any of his predecessors, the American public knows significantly less about his finances than it has about any president’s since Richard Nixon. Given that Trump is entering the presidency with a business empire of unprecedented scale—and potential conflicts of interest of unprecedented complexity—the dearth of information significantly restricts the public’s understanding of how his financial entanglements may influence his decision-making in office.
For one thing, she’s never attended or taught at a public school.
Betsy DeVos is likely to be confirmed as the next secretary of education. There’s nothing unusual about the Senate supporting a president-elect’s choice to lead the U.S. Department of Education. But DeVos is a more controversial choice than nominees in recent memory.
At his hearing, the outgoing education secretary, John King, faced friendly questioning from the senators on the education committee in charge of moving nominations forward, including from the Republican chairman, Lamar Alexander. King’s predecessor, Arne Duncan, was confirmed in the Senate by a voice vote. It’s not just Democrats who have had easy confirmations, either. Both of George W. Bush’s education secretaries—Rod Paige and Margaret Spellings—were also confirmed by voice vote and received praise during their hearings from Republicans and Democrats alike.
Republicans love to blame the Environmental Protection Agency for some of the country’s economic woes. Is that a fair assertion?
It was in the early days of Ronald Reagan’s campaign for president that America first started frequently hearing the term “job-killing regulations” in response to an increasing number of environmental laws. Reagan criticized the Carter administration for doing a terrible job with the economy, and said these failures were related to Carter’s “continuing devotion to job-killing regulation.” Reagan used this phrase a lot on the campaign trail, according to Cary Coglianese, a professor at the University of Pennsylvania and the editor of Does Regulation Kill Jobs?
Within a few years, other Republicans had picked up the term. As Coglianese writes, California’s governor Pete Wilson in 1991 blamed environmental regulation for imposing “job-killing burdens” on the state’s economy, for instance, and Oklahoma Senator Don Nickles called Clinton-era rules “the most intrusive, expensive and job-killing regulation handed down.” Michele Bachman, the congresswoman from Minnesota, in 2011 said she wanted to rename the Environmental Protection Agency “the job-killing organization of America” and Mitt Romney lamented that “Day by day, job-killing regulation by job-killing regulation, bureaucrat by bureaucrat, this president is crushing the dream.”
“Trump is absolutely trying to attack our democratic institutions and to make the country more authoritarian,” one Democratic lawmaker warns.
A steadily growing number of congressional Democrats are refusing to attend Donald Trump’s inauguration, sending a message of resistance at the outset of Trump’s presidency. It’s less clear, however, what exactly that message is, and whether it will do the Democratic Party much good as it attempts to find its way in the Trump era.
The high-profile protest was galvanized by the president-elect’s rebuke of civil rights icon John Lewis as “all talk” and no action” over the weekend after the Georgia congressman said he does not view Trump “as a legitimate president” and did not plan to attend Trump’s inauguration. At the latest count, more than 60 Democrats in Congress have now announced they will not show up. Painting a bleak picture of what the country now faces, some Democrats warn that the incoming Trump administration could fundamentally erode American democracy.
The president-elect filled out his Cabinet on Thursday by nominating former Georgia Governor Sonny Perdue for agriculture secretary.
Updated on January 19, 2017
A day before his inauguration, President-elect Donald Trump has filled out his Cabinet.
Trump on Thursday morning announced the nomination of former Georgia Governor Sonny Perdue as secretary of agriculture, completing a search that took the duration of his presidential transition.
Perdue, who served as governor from 2003 to 2011, grew up on a farm in Georgia and earned a doctorate in veterinary medicine. “Sonny Perdue is going to accomplish great things as Secretary of Agriculture,” Trump said in a statement. “From growing up on a farm to being governor of a big agriculture state, he has spent his whole life understanding and solving the challenges our farmers face, and he is going to deliver big results for all Americans who earn their living off the land.”
Lawmakers will question Rick Perry, the nominee for energy secretary, and Steven Mnuchin, the nominee for treasury secretary.
Senate confirmation hearings continue on Thursday, as Donald Trump’s inauguration is just one day away.
On the docket are Rick Perry, Trump’s nominee to head the Department of Energy, and Steven Mnuchin, the nominee for treasury secretary. Perry will testify before the Senate Committee on Energy and Natural Resources, and the Senate Finance Committee will hear from Mnuchin.
We’ll bring you the latest updates from Capitol Hill as events unfold. Also see our continuing coverage: