An unimaginably lavish average American home. Photo by Flickr user Kevin Armstrong.
Welcome back to Life Inside the Bubble, a newsletter about class, wealth, and privilege. If you haven’t already, please subscribe below:
The nature of journalism, especially the kind of progressive-shaded journalism I’ve spent most of my career doing, is that you spend a lot of time writing about poor people. If you aren’t profiling specific people suffering under the weight of poverty, you’re discussing them indirectly by writing about politics and policy through the lens of, how can we relieve the worst effects of American inequality? It’s common to cite stats about the 31 million people in the US who lack health insurance, or the 32 percent of Americans who can’t cover a $400 emergency expense with their savings. This is what you’re supposed to do as a reporter: identify the problems faced by the most vulnerable, point to injustices in need of righting, push the reading public’s face into the worst, most vicious aspects of a society that can be pretty fucking vicious.
If you’re like me and you follow a bunch of progressive outlets and writers on Twitter and try to “stay of top of the news,” the impression you get is that America is a hellscape of poverty and degradation, with rural and urban communities alike abandoned and exploited by a state in thrall to the country’s biggest, most amoral corporations, where the police are literal fascists and you could be shot at any time by a lunatic because high-powered weaponry is easier to access than healthcare.
Stories about this side of America are common because for one thing, they certainly aren’t wrong. For another, if you want the U.S. to limit the supply of guns or provide access to medicine, it helps to bang the drum about how bad things are. Unavoidably, however, when every left-of-center outlet is sounding the same doomful note. it gets a little bit… I don’t want to say repetitive? But the negative, crisis-centric aspect of journalism, for all its power and importance, obscures some ordinary aspects of American life that inform our politics and culture.
Namely, a lot of Americans are rich.
The latest edition of Credit Suisse’s Global Wealth Report pegs the number of millionaires in the U.S. at almost 22 million. That means around 7 percent of the population—America has nearly as many millionaires as people who lack health insurance. Now, if that number seems high, it’s because Credit Suisse, unlike some other wealth-counting entities, includes the value of homes in their estimates of net worth. A record 8 percent of U.S. homes are worth more than $1 million, and in desirable big cities that percentage is much higher: more than a third of homes in Seattle, New York, and Los Angeles are worth that much, and more than half of homes in Oakland and Anaheim. In San Francisco, nearly 90 percent of homes are valued at $1 million. If you own property in the Bay Area, it’s more than likely that you’re a millionaire, at least on paper.
Below millionaires are those with net worths that are merely healthy, not overflowing. A research group stupidly called Spectrem found there were 33 million U.S. households worth between $100,000 and $1 million, a full quarter of the population. American households in the top quintile of annual income (distinct from wealth) earn at least $141,000, and those in the quintile below earn at least $86,000. That’s 40 percent of all households—nearly 50 million households, not people—who I would describe as “doing pretty well for themselves.” (This DPWFT category is disproportionately white and Asian, while Black and Hispanic Americans are more likely to be in the bottom two income quintiles. And the racial wealth gap is even more pronounced.)
Obviously these statistics don’t paint a complete picture. There are some people with low incomes who are still solidly in the bubble of privilege and wealth: retirees who own their homes outright and have savings but aren’t earning much anymore, or young adults at the start of their careers who are essentially being bankrolled by affluent parents. And someone could have a million-dollar home but due to some misfortune can’t keep up mortgage payments, making them less wealthy than they might appear in Credit Suisse’s statistics. There are also people outside of the top two income quintiles who live in parts of the U.S. where the cost of living is lower and might be relatively well-off compared to their neighbors. It seems to me that maybe about a third of Americans (probably more) are in the bubble—insulated from the worst of life’s misfortunes, at no risk of becoming destitute. They’re especially comfortable by global standards. According to Credit Suisse, 55 percent of the world’s population has a net worth of $10,000, a category of people who overwhelmingly live in Africa or Asia.
It’s not news that the U.S. is a wealthy country. It’s been this way for my entire lifetime and decades before that. In the past half-century, the U.S. has become increasingly unequal, with the top 1 percent, really the top 0.01 percent, growing their share of the country’s wealth as the people below them suffer. That’s why the old Occupy Wall Street “We are the 99 percent” chant is so powerful—it’s a call to action against the few who exploit the many. But it’s not *pushes up glasses* exactly a complete picture of the economic situation. The 1 percent may have a disproportionate amount of money and power, but the 20 to 30 percent of Americans below them are doing just fine. Maybe they aren’t buying condos in buildings named, like, Veritas off of their Goldman Sachs bonuses, but they own a two-bedroom house with a yard in the Phoenix suburbs and are proud of their status as the number-three salesperson at the local Subaru dealership. And this class of people is standing in the way of the progressive movement.
After Occupy, there was a resurgence of genuine left-wing politics inspired not just by those protests and the media coverage of them, but by the disillusionment and hopelessness that was in the air following the 2008 financial crash. There was a sense among millennials like me that we were financially fucked by the poor planning and outright malice of the generations who had gone before, a pessimism encapsulated by the widespread belief that we would never be able to own homes. That feeling of despair—and anger at the establishment—was transmuted into hope by Bernie Sanders’s 2016 presidential run, and support for the socialist-adjacent politicians like Alexandria Ocasio-Cortez who followed in his wake. Medicare for All became the rallying cry of this movement, but it was never about healthcare policy per se. What the Bernie moment in time was about was transforming America into a better place for everyone1.
I’m using past tense not just because Sanders is too old to run for president again, but because that movement has crested and is now beginning to recede. The edgelords who would have been into Bernie a few years ago are dabbling in right-wing tropes for fun. Progressives lost the 2020 primary to a centrist candidate in Joe Biden, and although he made promises to enact a left-leaning policy agenda, that agenda has crashed up against the stubborn moderates who control the balance of power in Congress. Centrist candidates and recall measures against progressives have won on the local level in New York, Seattle, and San Francisco. A former Republican billionaire has an outside chance to win the Los Angeles mayoral race on a law-and-order message. Worries about crime, inflation, homelessness, and high gas prices may push voters (and finger-to-the-wind politicians) into more conservative territory.
Part of the reason progressivism is in retreat right now may be that the anger at the status quo that fueled its rise has faded. During the pandemic, Americans actually grew wealthier on average, and though this growth was concentrated among the top 1 percent of earners2, the top 40 percent saw their net worths increase thanks to a bump in the value of equities, pension plans, and real estate. The government stimulus checks and child tax credits provided a bump to everyone, even the white-collar workers who were able to work in relative safety from home and didn’t get laid off. And the old saw about millennials not being able to afford homes is not true any longer—a lot of my cohort bought homes during the pandemic, probably helped out by the above financial windfalls, and as of 2021, 48 percent of millennials owned homes, a sudden jump from 40 percent just three years earlier.
This prosperity has been quiet, as prosperity always is. You don’t march in the streets to celebrate increases to your 401(k). Articles don’t go viral if they’re about thirtysomethings earning the same upper-middle class merit badges their parents earned. If you are satisfied with your life you don’t spend your days posting online. With the Black Lives Matter protests, the January 6 insurrection, ongoing Republican threats to democracy, climate change, and the recent spate of mass shootings, the country feels on a knife’s edge. I’ve seen mainstream-ish pundits talk about a “civil war” as if that’s something just around the bend. Just 17 percent of Americans are satisfied with the state of their country, according to a recent Gallup survey—but maybe more tellingly, 85 percent were satisfied with their own lives.
This is not a country hankering for revolution, not really. A great many bubblers are actual, vote-for-Republican conservatives—I’m thinking here of the what author Patrick Wyman calls the “American gentry,” local elites who made their fortune in brick-and-mortar businesses like car dealerships. But even the “in this house we believe”-yard-sign motherfuckers who populate blue metropolises tend to be a little bit leery of big structural change. And who could blame them? The structure has been very good for them. Sure, some of them will be happy to support vague proposals like reparations for slavery or defunding the police, but hop over to your local Nextdoor page and check out what homeowners are talking about: tearing down homeless encampments, blocking any multifamily home that might “blight” the neighborhood, and in every way possible keeping their lives as they are.
A Democratic priority during the past few years, though not one they advertise much, has been to repeal the state and local tax (SALT) deduction cap. Under the old rules, you could deduct your payments to local and state governments from your federal taxes, but the Republican-passed tax bill in 2017 capped the amount you could deduct at $10,000—a change most people didn’t notice, since the only taxpayers forking that much over in taxes are essentially rich people in high-tax blue states. In other words, Republicans briefly abandoned their anti-tax principles to stick it to wealthy liberals. Democrats have since been doing the work of their donor class by fighting to get this cap lifted to $80,000, a move that would cost the government billions and benefit only the highest 10 percent of earners. Backers of the cap lifting include not just the usual bought-and-paid-for “centrists” but actual progressives like California Representative Katie Porter, whose Orange County constituents are no doubt griping about the cap. Bernie Sanders was one of the few prominent Democrats to object to the removal of the cap, and even he was apparently content with restoring SALT deductions for people making under $400,000 a year, noting in a press release that “In high tax states like New York and California housing is enormously expensive. …People are paying a whole lot in property taxes. I think we should deal with that to the degree that it impacts the… upper middle class.”
Unfortunately for those Californians unable to afford housing on their measly middle-class $300,000 salaries, the SALT cap repeal has withered in Congress, like most of the Democrats’ agenda. But the inclusion of a giveaway to the rich in a legislative package ostensibly aimed at climate change and family leave tells you a lot about the center of political gravity in the Democratic Party. And these SALT deduction havers didn’t have to march in the street to get leading Democrats to pay attention to them. Lawyers and people who are basically lawyers will always be the part of the Democratic coalition to get greased first.
I’m not saying the most pessimistic progressive critiques of America are wrong. We could be on the precipice of a dozen different crises: the earth could be getting dangerously hot just as American democracy collapses under pressure from an openly authoritarian Republican Party while law enforcement agencies turn into partisan right-wing actors. Maybe the appropriate response to this is the sort of transformational change that the left demands: abolish the Senate, pack the Supreme Court, dismantle the police and prisons, intentionally shrink our economy to reduce emissions, and all kinds of other stuff. If you accept that we are on the brink of catastrophe, radical action is the only rational response.
But how many Americans really feel, in their bones, to be on the brink of catastrophe? Not all that many, and we should be grateful for that. But those preaching structural change have to contend with the reality of that comfort, wealth, and privilege.
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And tearing down the cancerous establishment, of course—an aspect of the movement that was more appealing to some than the “making the world better” part.
This phenomenon was largely due to rich people having a lot of stock and benefiting from the markets rising thanks mostly to the skyrocketing share price of a few tech companies, like Amazon.
I get that this article is geared toward people in the bubble, people who are either in that 7% of millionaires or on their way to getting there, who maybe haven't thought very deeply about wealth/bubble privilege before. The reality feels a bit more complex to me than the picture you have (so far) painted. I get that you are trying to tackle aspects of the bubble one dimension at a time, so perhaps the intersectionality nuances will be coming later? For example, this (older but the principle still stands) article looks at the distribution of millionaire status by race, age, education. https://www.financialsamurai.com/chances-becoming-millionaire-by-race-age-education/. Something to consider for a future bubble post?