FOUR LOST DECADES: WHY AMERICAN POLITICS IS ALL MESSED UP
By John Cassidy/ The New Yorker/ September 17, 2012

Why is Washington so screwed up? Some people blame the Tea Party, others blame the lobbyists; my culprit is the economy. Countries with healthy economic systems tend to have polities that function pretty well. (The United States of the postwar era is a good example.) Countries with dysfunctional economies tend to have dysfunctional political systems, in which radical groups look for someone to blame and rival interest groups fight over the spoils. And that, sadly, is where we are now.
On Monday, I wrote about the lopsided nature of the economic recovery that began in 2009. On Tuesday, the Census Bureau released its annual update on income, poverty, and health-insurance coverage, which showed that in 2012 the income of the typical American household held steady, at about fifty-one thousand dollars. The poverty rate also remained pretty much the same, at fifteen per cent. And the percentage of people who don’t have health coverage dipped a little bit, to 15.4 per cent.
Those were the headlines. But the really interesting stuff was in the body of report, which contains data on incomes going back half a century. What these numbers show, or rather confirm, is that in economic terms much of middle America has experienced four lost decades. Since its founding, the United States has been a country based on enterprise, hard work, and material progress. But for forty years now, the engine that generates across-the-board rises in living standards has been stalled, with incomes stagnating at the bottom and in the middle while growing rapidly at the top.
It’s not a new story, of course. Still, for anybody seeking to comprehend modern American politics, its importance can’t be overstated. Here are some of the Census Department’s figures:
- In 1973, a typical American household—one squarely in the middle of the income distribution—earned $48,557 in inflation-adjusted dollars. In 2012, the typical household earned $51,017. Over forty years, that’s an overall gain of roughly five per cent. To put it another way, it’s a difference of about $47 a week, which equates to an annual rise of about $1.18 a week.
- Men have borne the brunt of wage and income stagnation. The comparable earnings of many male workers have fallen. In 1973, a typical American man who worked full-time and year-round took home $51,670. In 2012, the median full-time, year-round male worker earned $49,398. That’s a difference of $2,272, or about $44 a week.
- Within the pattern of overall stagnation, white Americans have done better than some other racial groups, but not by very much. In 1973, the median income of non-Hispanic white households was $51,338; in 2012, it was $57,009. That’s an increase of about eleven per cent over forty years.
- Since the Clinton years, whites (like other racial groups) have seen their incomes fall, and quite substantially. In 1999, the typical non-Hispanic white household earned $60,849, which is $3,840 more than the typical non-Hispanic white household earned in 2012.
- At the top of the income distribution, things look very different. Forty years ago, a household in the ninety-fifth percentile of the income distribution—i.e., a family with nineteen families below it for every one above it—earned $133,725. In 2012, a household at the same spot in the income distribution earned $191,156. That’s an increase of forty-three per cent.