Over a decade ago, economists Thomas Piketty and Emmanuel Saez helped launch the problem of "the top one percent" into the political mainstream, as shorthand for the idea that the very rich were sucking up most of the fruits of economic growth. Their original papers breaking down the stunning scale of American inequality were picked up by Occupy Wall Street in 2011, which made "we are the 99 percent" one of their signature chants.
This has unsurprisingly inspired a cottage industry of one-percenter apologia. The very rich themselves, along with the think tanks and foundations they fund, have made quibbling with Piketty and Saez practically an entire academic discipline. Recently, The New York Times' David Brooks tried to scapegoat the top 20 percent, while the American Enterprise Institute's Lyman Stone pinned the blame on the entire Baby Boom generation. Neither are convincing.
Brooks asserts that "the big divide in America is not between the top 1 percent and the bottom 99. It’s between the top 20 percent and the rest." He lambastes the "highly educated Americans who are pulling away from everybody else and who have built zoning restrictions and meritocratic barriers to make sure outsiders can’t catch up."
He provides no evidence for this whatsoever, and the argument collapses when subjected to the slightest scrutiny. For one thing, as economist Gabriel Zucman points out, it is simply false to say the top 20 percent as a whole are "pulling away" from the rest.
Growth in American inequality over the last generation is very obviously concentrated at the tippy-top of the income distribution. From 1980-2014, the top 1 percent as a whole did very well, but the top 0.1 percent did about twice as well again, and the top 0.001 percent about four times as well. Meanwhile, the following four percent (that is, the top 5 percent excluding the top 1 percent) only gained moderately. The following 5 percent (top 10 to the top 5 percent) are treading water. And the bottom half of the top 20 percent actually lost ground over this period.
Brooks' reference to "highly educated" is just as wrong. The implication here is that people with advanced degrees are earning lots of money with their fancy diplomas while mobilizing to cut off access to education for everyone else. But as economist Marshall Steinbaum writes, this model of income as explained by "human capital" doesn't work at all. The top one percent are not notably better educated than even the top 25 percent, and there are vast income differences between people with the same degrees depending on where they work. Inequality is far more about which people happen to land in very profitable firms, and especially who owns lots of wealth that throws off vast sums in capital gains. Since the year 2000, all the of income gains of the top one percent have come from capital income.
Brooks himself is almost certainly a one percenter. New York Times columnists get a handsome salary, and they can probably make even more than that doing speaking gigs, writing books, and teaching classes about humility at Yale. A few years ago he sold his mansion for nearly $4.5 million.
That brings me to Stone. Brooks' reference to "zoning restrictions" was likely inspired by Stone's essay in The Atlantic arguing that the Boomers "ruined everything" through their "rush to respond to a social ill with control, with extra rules and procedures, with the commanding power of the state." He cites zoning three-quarters of the country for detached single-family homes, requiring occupational licenses for many jobs, and throwing millions in prison.
Now, Stone is partly correct about many things. Effectively banning dense housing in most of the country is a bad thing. And mass incarceration is of course a terrible atrocity — and one which missed the likely actual driver of the 20th-century crime wave, namely lead poisoning.
But occupational licensing is not a Boomer-specific phenomenon (there were medieval guilds hundreds of years ago, after all), and it is nowhere close to the top of the list as to why the working class is struggling, if it even is a problem in the first place. Indeed, disruptions of taxi regulations through Uber and Lyft led to a collapse in worker wages and market chaos. A recent working paper found that occupational licensing reduces gender and racial wage gaps. Labor is not a commodity and treating it like one is not a magic route to better wages.
More importantly, Stone's account of Baby Boomers' supposed rush to over-regulate everything completely passes over instances in which democratic state power was withdrawn from the economy. The New Deal put in place an enormous regulatory apparatus that was largely dismantled starting in the 1970s. Nowhere does Stone mention the deregulation of trucking, airlines, telecommunications, or finance, nor the abandonment of anti-trust regulations. Monopolies are not mentioned, and neither is the Great Recession. Unions are mentioned only once in passing.
These are howling absences in an article purporting to blame the plight of young people on "commanding state power." It's like writing an article on sea level rise without mentioning carbon dioxide.
At any rate, one can criticize the political choices of the top 20 percent who aren't part of the top one percent. As I have argued, they are constantly taken for a ride by the real oligarchs, who use them as a convenient cudgel to beat back social insurance, only to turn on a dime and use them to pay for massive tax cuts.
But the inescapable reality is that over the past generation or so, the economy has been structurally rigged to benefit the very rich almost exclusively. The fact that conservatives must twist themselves into such ludicrous contortions to pin the blame on others is itself compelling evidence that an oligarchy of the top one percent is the real problem with the American economy.