According to Pugh Research, the belief that your kids will not be able to do as well or prosper as one`s own success, has reached new highs. And there is distinct writing on the wall as to why this is true. First and foremost, 1% of the US population now controls 25% of the wealth . And given the extension of the Bush tax cuts, lowering of Estate taxes, and continuing growth of capital gains-tax rate compensation among top executives and earners , and the return to to gilded prosperity on Wall Street – that 25% may well breech 30% in a short period. Truly a very select rich get very much richer at the expense of most everybody else. But unemployment is stuck at the òfficial 9.5% but in reality with people under-employed and leaving the work force it is more like 20% unemployment. And yet jobs , though diminished from their horrific level of 2007-2008, continue into 2011. And the BRIC countries will keep manufacturing wages low and basic job insecurity high for many years to come because Brazil, India and China have nearly 1.5 billion workers for whom the minimum wage in the US is a fortune to them.
But now one of the bedrock beliefs in the US – if you studied hard and got a college education you would do – well this is hitting the rocks. The NYTimes has a leading article asking Is Law School a Losing Game? Given the huge costs and the outsourcing of law positions to India, the prospects for legal jobs are not good as supply exceeds demand. And the same can be said of the the MBA as Business Week documents the tough realities of return on investment for MBA`s. It s a case of MBAs, Breaking Even is a More Distant Dream. More broadly, Business Week has looked carefully at the return on investment for a college education and has found that there are too many college and universities where that is a losing proposition – 20 Schools with High Tuition, Low ROI.
In sum, getting a college education is no longer the sure ticket to prosperity. It is ironic that with the election of President Barack Obama, the epitome of American upward mobility, also marks the era when that upward mobility has taken a distinct turning point for the worse. The problem is that the G.O.P., who have bonded even closer to the Superrich, are not about to to tax the wealthy.This despite the fact that superwealthy have drawn so much from the US budget especially in the past three years. These withdrawals include bailout money at $3.3 trillion and now with their outsized pay subject to even less taxation even though large chunks of it come courtesy of the ordinary taxpayers who are subsidizing the Fed Window access and other continuing banking supports to the tune of hundreds of billions of dollars. In short, the US is going through an wealthy elitism and moral defeatism that is worse than that of the Great Depression; but unfortunately will insure that your kids will not be able to do as well as you have.