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November 2011 A glimpse into the last decade's effect on consumers.
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AMERICAN AUDITA Walk Down Uneasy Street
EURO RSCG WORLDWIDE
November 2011
Prosumer Reports is a series of thought leadershippublications by Euro RSCG Worldwide—part of a globalinitiative to share information and insights, including ourown proprietary research, across the Euro RSCG networkof agencies and client companies.
Euro RSCG Worldwide is a leading integrated marketingcommunications agency and was the first agency to benamed Global Agency of the Year by both Advertising Ageand Campaign in the same year. Euro RSCG is made upof 233 offices in 75 countries and provides advertising,marketing, corporate communications, and digital andsocial media solutions to clients, including Air France,BNP Paribas, Charles Schwab, Citigroup, Danone Group,Heineken USA, IBM, Kraft Foods, Lacoste, L’Oréal, Merck, PSA Peugeot Citroën, Pernod Ricard, Reckitt Benckiser, sanofi-aventis, and Volvo. Headquartered in New York, Euro RSCG Worldwide is the largest unit of Havas, a world leader in communications (Euronext ParisSA: HAV.PA).
For more information about Prosumer Reports, please visit www.prosumer-report.com or contact Naomi Troni, global chief marketing officer, at [email protected].
Follow us on Twitter @prosumer_report.
2 Prosumer Report, November 2011 American Audit 3
Table of Contents
In summer 2011, Euro RSCG Worldwide commissioned its latest global Prosumer research study, surveying more than 7,000 adults in 19 countries worldwide. “American Audit” looks at the U.S. findings, examining the cultural and social context in which Americans live, work, communicate, and consume. The sample of 500 Americans (249 men and 251 women) answered a battery of more than 120 questions, and their responses were analyzed to identify what motivates them, inspires them, scares them, and bores them. We are living in a world of overstimulation and constant communication, of occupied Wall Street and unemployed Main Street, and it is against this backdrop that we explore these trendsightings and the opportunities that sit on the horizon for brands and causes.
What a Difference a Decade Makes
The American Woman’s Well-Being Deficit
Modern Life: Worried Sick
Arab Spring, American Fall
The Great Divides
The American Dream, Deferred
A Way Out
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“This research shows that the relentless march of progress is leaving in its path heightened concerns about people’s health, well-being, even the structure of society. Due to new technology, a changing economy, and longer life spans, modern Americans are coping with issues that would have been unfamiliar to past generations. As marketers, we have our work cut out for us: helping consumers to manage these areas of concern and using our skills to help nudge society in a healthier direction.”
—Tom Morton, Chief Strategy Officer, Euro RSCG New York
American Audit 5
In only 10 years, public opinion on politics, the economy, and the once-infallible American Dream has experienced a seismic shift. Americans’ worries have refocused and intensified, and sociopolitical divides have grown steeper and more jagged in every domain—online, within schools and churches, and among pockets of irate protesters. War-weary and worried sick, the American people are fundamentally different now compared with a decade ago.
Yet, among other revelations gleaned from Euro RSCG Worldwide’s new Prosumer research, we found that despite a decade of hard knocks, most Americans remain optimistic that things will get better. Is this only wishful thinking? It’s too soon to tell, but if America’s history is any indication, then anything is possible.
What a DifferenceA Decade Makes
Remember the Long Boom? How about Y2K? And might
you recall as far back as the early to mid-1990s, when the
United States felt on top of the world? Having stared down
the Soviet Union and won, it had then stepped in to kick
Saddam Hussein out of Kuwait and went on to help contain
and end the Balkan conflict. U.S. technology was developing
at warp speed, Silicon Valley was changing the world, and
the fledgling Internet was connecting people everywhere.
Unemployment during the last year of the decade stood at
4.2 percent.
Those pre-2000 times came with their share of worries,
though. By 1998, President Bill Clinton was facing
impeachment in connection with the Paula Jones and Monica
Lewinsky scandals. Parts of the country seemed to take it to
heart, feeling disappointment and disgust with the nation’s
morals. You might recall that George W. Bush campaigned on
a promise to “restore honor and dignity to the White House.”
As always, there were people squawking that the end of the
world was nigh.
On the technology front, the Y2K bug gave many their first
taste of full-blown “techno panic”; there was, after all, an
endless number of abysmal scenarios
ascribed to the anticipated computer
glitch—everything from the prospect
of being eternally stuck in an elevator, to
air-traffic disruption and the shutdown
of water, money, electricity, and food
supplies. As the clock ticked past
23:59:99 to 00:00:00 on Jan. 1, 2000,
Americans and others around the
world held their collective breath.
Nothing happened. Or at least not
much worth reporting.
As the sun rose on the new millennium,
most Americans did not harbor any
serious doubts about the place of
their country in the world, their place
within their country, or their futures.
Most could talk about the American
Dream without irony. Little did they
know that when the clock ticked over
and the 21st century lurched forward,
the good times would begin to recede.
Let’s take a turn around 2000,just for old time’s sake
6 Prosumer Report, November 2011
“Even in the immediate aftermath, you could see that 9/11 was less momentous for some Americans who were at a safe distance from the carnage and grief. By late September, the ratings at CNN, then 24/7 terror central, had fallen by 70 percent.”
—Frank Rich, New York
8 Prosumer Report, November 2011
In fundamental and disturbing ways, the past decade has
given Americans reasons to doubt, and the American
mood has veered between gloomy and angry.
Technology stock euphoria soured spectacularly
between March and September 2000. The
presidential election of 2000 exposed hanging chads,
suffered through recounts and court battles, and
was ultimately decided on the narrowest of margins,
casting doubt over the entire process. The terrorist
attacks of 9/11 traumatized the nation and led to
American military involvement in Afghanistan and
Iraq at a huge cost in lives, material, money, and
reputation. Within months of the World Trade Center
being brought down, the Enron scandal rocked the
nation’s faith in corporate governance and ethics.
Four years on, Hurricane Katrina caused devastation
and raised serious questions about the nation’s
commitment to color- and income-blind equality and
capacity to cope with extreme events.
Then came the subprime crisis of 2007 and the
financial crisis of 2008, sending psychological shocks
from coast to coast and beyond with the collapse of
big financial institutions Bear Stearns and Lehman
Brothers, near-death experiences for others such
as AIG, and the exposure of Bernie Madoff, the
multibillion-dollar fraudster. Facing a crisis of epic,
unprecedented proportions, the U.S. government
bailed out not only the financial sector but also the
stricken auto industry. The turmoil in the business
world somehow felt linked with the woes of the
previous years.
In those first articulations about the Great Recession,
über-investor Warren Buffett called Wall Street’s
complex trading instruments “financial weapons of
mass destruction.” Edgy comedians sniped that “suicide
mortgages” caused much greater and more lasting pain
to Americans than the attacks of 9/11.
The United States has traversed valleys of gloomy
self-doubt before—just look to the Depression, the
tail end of the Vietnam War, and the conclusion
of the Carter presidency. America tends to remain
dramatically more optimistic than many other
countries would in the same situation. A June 2011
survey by Pew Research Center found 57 percent
saying that “as Americans, we can always find ways
to solve our problems and get what we want” as
compared with 37 percent who said, “This country
can’t solve many of its important problems.” Pew said
these numbers were little changed from previous
surveys. One caveat is that millennials in the survey
stood less tall: “Only about a quarter (27 percent) of
those younger than age 30 say the U.S. stands above
all other nations. That compares with 38 percent of
those ages 30 to 49, 40 percent of those 50 to 64 and
half (50 percent) of those 65 and older.”
America has a history of pulling through and
progressing to sunnier uplands, leading most
Americans to believe that this current period of
unease may also resolve itself in due course. At least,
that’s the way it usually works out in the movies.
Since the dark, scary days of autumn 2008, Americans haven’t gotten much in the way of uplifting news, apart from the killing of Osama bin Laden in May 2011. Otherwise, it’s been political trench warfare in Washington, D.C., over matters such as healthcare reform and the budget-deficit ceiling. The job market remains bleak, with unemployment sidelining 9.1 percent of the workforce and the number of involuntary part-time workers climbing to 8.8 million from 8.4 million in August. Suffering, too, are the 2.6 million now off the unemployment rolls because they had not searched for work in the previous four weeks. Confidence further sank when one of the big ratings agencies, Standard & Poor’s, downgraded U.S. government debt to AA+ from AAA in August, and there’s widespread talk of China overtaking the United States as the world’s top economic power.
“The country’s blood banks collected close to 600,000 more units in the fall of 2001 than they would have without the attacks. But blood cannot be used more than a few weeks after donation, and more than 200,000 of the 9/11 units were simply discarded.”
—“The Encyclopedia of 9/11,” New York
Among the thousands of images from the Great
Depression of the 1930s, Dorothea Lange’s “Migrant
Mother” has prevailed as the most powerful. Millions of
American men and women were suffering, yet it’s this
picture of a woman—her sun-browned face seemingly
furrowed with a mix of despair and determination as
three young children huddle against her—that continues
to resonate with citizens today.
American women have come a long way since the 1930s.
A decade after “Migrant Mother,” Rosie the Riveter
rolled up her sleeves and got down to the business of
epitomizing the strong, confident woman who worked in
factories as part of the American war effort. After back-
to-the-home domesticity in the late 1940s and the 1950s,
women increasingly progressed through education and
into the workforce. In the 1960s, women’s liberation and
birth control offered women power both personally and
professionally, and by the late 1990s, the media had taken
note of how women were starting to outnumber men in
some colleges and professions.
After decades of stop-and-go, but steady, progress, it’s
women who seem to be feeling the angst most acutely in
the years since 9/11 and on through the Great Recession.
In virtually every survey that Euro RSCG Worldwide has
conducted since 2001, the data show American women
are consistently more worried, fearful, and pessimistic than
American men. And it’s not just our surveys.
Picture Credit: Dorothea Lange/NARA
The American Woman’sWell-Being Deficit
American Audit 11
In both a 2008 and 2010 survey conducted by
the American Psychological Association (APA),
women reported higher levels of stress than
men across the board. In its 2010 national stress
survey, the APA noted, “Though they report
similar average stress levels, women are more
likely than men to report that their stress levels
are on the rise. They are also much more likely
than men to report physical and emotional
symptoms of stress.”
The data suggest that the gains women have
achieved come at a cost. As author Christine
Hassler puts it in a Huffington Post article, “We
expect that not only are we supposed to have
it all but do it all at 100 percent: the career,
relationship, children/family, all while looking
good, doing good and being good.”
Though there’s not yet an iconic image of the
21st century American that can stand alongside
“Migrant Mother” or Rosie the Riveter, the data
in Euro RSCG’s research paints a clear enough
picture of the zeitgeist of American women now.
Modern Life:Worried Sick
American Audit 13
Worries About Lossin Modern Life
The Euro RSCG survey asked respondents to rate their levels of worry about different aspects of modern life on a scale of 1(not at all worried) to 5 (extremely worried). One series of statements highlighted losses. The biggest worry for women was loss of respect for elders: 53 percent of them rated themselves extremely or very worried about it (versus 35 percent of men), which was followed by loss of trusted leaders/role models (49 percent of women rated themselves extremely or very worried versus 38 percent of men).
Across nearly every statement women were more worried than men were; they felt all the losses more keenly than did men.
On September 18, 2001, Graydon Carter, the editor of Vanity Fair, declared, “I think it is the end of the age of irony.” And irony never really did make a comeback after 9/11.
Chart shows percentage of extremely worried and very worried
14 Prosumer Report, November 2011
Another set of statements highlighted threats and trends that might become threats in the future. Here, too, for all statements, women consistently showed more worry than did men. The biggest concern was problems with the healthcare system—57 percent of women were extremely or very worried about this (versus 48 percent of men)—followed by crime/random violence—54 percent of women were worried, versus 41 percent of men.
Compared with men, women were particularly worried about crime/random violence and terrorism.
Worries About Threats
“On September 11 itself, the attacks needed no label. ‘The Towers,’ ‘The planes’—all sufficed. Soon enough, that changed. The next morning in the New York Times, an op-ed piece by Bill Keller was titled ‘America’s Emergency Line: 9/11.’ (When so many of us were thinking of firemen and cops, those three digits were doubly resonant.) The Washington Post’s Hank Stuever, on September 13, made it explicit: ‘Consider the date, 9/11, which reads as 9-1-1, which is keypad-speak for: Oh God no, help, please. Perhaps the day could simply be called Nine One One.’”
—Christopher Bonanos, New York
American Audit 15
Golden Years, Tarnished
The survey asked respondents to rate their levels of worry about different aspects of aging. The biggest worry for men and women was running out of money: 46 percent of women rated themselves very or extremely worried (versus 35 percent of men).
Across the 20 possible worries, men and women had equal levels of worry about being bored and losing the respect of others, while women showed higher levels of worry across all other aspects of aging. In short, American women are worried. Some are blatantly worried—nail-bitingly, can’t-sleep-through-the-night worried—while others feel an undercurrent of unease and twinges of worry that they may be unaware of until it’s time to think about traveling, decide which candidate to vote for, or whether to save or spend.
Chart shows percentage of extremely worried and very worried
Chart shows percentage of extremely worried and very worried
16 Prosumer Report, November 2011
Just a few months ago, we were writing about the
protest bug sweeping through the Arab world, parts
of Europe, and beyond. Protesters against the estab-
lished order had taken to the streets in Tunisia, Egypt,
Libya, Bahrain, Greece, Spain, Italy, and Chile, but
what about the United States?
As exceptional as ever, Americans are out of the
blocks a lot quicker than protesters in other countries,
and their protests are different. Other countries have
protested unemployment, job losses, and government
cutbacks; in contrast, the Tea Party has protested
government spending, taxation, and federal debt.
The protests in other countries have tended to have a
left-wing vibe, while the Tea Party movement leans
rightward and regards traditional Republicans as too
centrist.
Even so, the forces that drive the two sorts of protests
have much in common. Protesters in the Arab world
and Europe have shaken their fists at governments
for looking after their own interests at the expense of
ordinary citizens, which isn’t terribly dissimilar to the
original Tea Party protesters, who were ticked off that
their government had spent hundreds of billions of
dollars bailing out financial institutions. The Tea Party
movement now fans the flames of a whole range of
American grievances against the established powers of
government and finance.
The massive bailouts of financial institutions
prompted people of all political persuasions, not
just Tea Partyers, to observe tartly that the financial
system is “capitalism on the way up and socialism on
the way down” or “privatizing profits and socializing
risk.” A major complaint of Tea Party activists has
been against the socialism part of the equation.
Now, with the new “Occupy Wall Street” protest
groups that have spread from New York City across
the country and the world, Americans have their
own version of anti-establishment street protests.
The OWS website states, “Occupy Wall Street is a
leaderless resistance movement with people of many
colors, genders and political persuasions. The one
thing we all have in common is that we are the 99
percent that will no longer tolerate the greed and
corruption of the 1 percent.”
At first glance, the OWS protests look much more
party-like and populated with students than the
earnest Tea Party gatherings—much less likely to
catch the imagination of Middle America, as the
Tea Party did, or early initiatives of the Tea Party.
In early October 2011, an Economist blogger wrote:
“To the extent the Occupy Wall Street protests
are working, it’s because they do the same thing,
focusing attention on a different entity of tremendous
power which the mass of Americans resent and fear:
the financial industry. Many tea-partiers, of course,
are no fans of Wall Street either, and there are plenty
of people who would likely be at home in both a tea-
party protest and the Occupy Wall Street protest.”
Small and disorganized the protests might be, but just
three weeks after starting, they’ve caught the attention
of social media, traditional media, and politicians.
Arab Spring, American Fall
The Financial Times, in an opinion piece headlined “In Praise of Wall Street Protesters,” was pleased that the protesters did not have a clear manifesto or set of demands: “Bankers are adept at turning broad demands for changes in their behavior into trench warfare over detail…Better for Occupy Wall Street to remain outside the skyscrapers and committee rooms and instead keep camping on the edge, reminding the insiders of popular outrage. If they force politicians not to buckle to the complaints of the financial services industry, that will be something.”
22,000September 2010
80,000September 2002
14,000September 2000
170,000September 2001
Figures for American Flag lapel pins gained from the distributor, A Better Idea. American Audit 19
It’s not just House apparatchiks who have taken
notice of OWS. As reported in the Los Angeles
Times, Vice President Joe Biden said OWS and
the Tea Party movement were both driven by
Americans’ sense that the system is not fair or
on the level, while President Obama thought it
expressed Americans’ frustrations that they’re
still seeing “some of the same folks who acted
irresponsibly trying to fight efforts to crack
down on the abusive practices that got us into
this problem in the first place.”
Now that politicians are showing empathy
for the OWS cause, how will the financial and
business realms respond to these grassroots
protests?
Euro RSCG Worldwide PR CEO Marian Salzman
thinks Wall Street’s response to so much
protesting will be very telling:
“People feel that Streeters are no better
than common criminals and should be
punished for robbing us all of our homes,
our dreams, our futures. What will Wall
Street do to not only rebound but also
rebrand as more and more protesters take
to the streets, cameras watching or not?”
Whether the frustration comes out as Tea Party or
Occupy Wall Street, the emotional drivers have a lot in
common. The OWS lament “Banks got bailed out, we got
sold out” could have come from either camp.
Tea Party activists have already had an impact on
American politics; a relatively small number of
energetic Tea Partyers have shaken up the GOP and
shaped its agenda. Will OWS have a similar impact on
the Democrats? It’s too soon to tell just yet, but there
are signs that the movement is gaining traction fast.
Representatives Raúl M. Grijalva and Keith Ellison,
co-chairs of the Congressional Progressive Caucus (CPC),
lined up behind OWS with a statement of solidarity:
“We have been inspired by the growing grassroots
movements on Wall Street and across the
country. We share the anger and frustration of so
many Americans who have seen the enormous
toll that an unchecked Wall Street has taken
on the overwhelming majority of Americans
while benefitting the super wealthy. We join the
calls for corporate accountability and expanded
middle-class opportunity...Throughout the
summer, CPC Members listened to Americans
nationwide describe how it feels to be on the
wrong side of the wall between the rich and
the rest of us…We heard compelling stories of
Americans struggling to live the American dream
while CEOs and the super rich were given more
taxpayer handouts.”
The Great Divides
The former French leader General Charles de Gaulle
once said something along the lines of: How can
you expect to unite a country that has over 300
different cheeses?
De Gaulle was, of course, talking about France, but,
applying the same thinking to the United States,
a leader might have asked: How can you expect to
unite a country that uses nine standard time zones,
is geographically fragmented by mountains, rivers,
plains, and vast deserts, and includes dozens of
major ethnic groups, cultures, and religions?
Division is part of the package in a country
where stone-cold-sober Mormons live in the state
neighboring Las Vegas and where well-heeled D.C.
legislators and lobbyists work in a city with the
fourth-highest poverty rate in the country.
Division and diversity have always been part of
the essential makeup of the United States. The
country’s efforts to bridge these wide divisions
have been at times heroic and tragic, and certainly
historical. That’s why it’s called the United States.
That’s why the American flag represents each state
as part of a whole and why the motto on the Great
Seal is “E pluribus unum” (“Out of many, one”).
That’s why students recite the Pledge of Allegiance.
Yet over the last decade or two, American public
discourse has homed in on the opposite trend—on
the growing polarization of Americans: Red versus
Blue, Conservatives versus Liberals, Pro-Life versus
Pro-Choice, Wall Street versus Main Street, Rust
Belt versus Sun Belt, Coasts versus Hinterland.
Americans are both fascinated by and fearful
of these divisions. The Civil War of 1861–1865
pitted North against South and still resonates for
many. The Civil Rights movement in the 1960s
pushed racial divisions to the forefront of public
awareness, and the presidential election of Barack
Obama has shown that for many Americans race
is still a divisive issue. The growth of Spanish-
speaking communities has added another racial
fracture into the mix. In post–9/11 America,
attitudes toward Islam and Muslim-Americans
have surfaced as yet another divisive issue.
20 Prosumer Report, November 2011
“What I say to parents at memorial services is ‘You can’t do anything about Johnny. The priest says he is in a better place. Okay, you believe that, you believe that. But you can build a better world for him. So start a memorial fund, or just have a good life. And make sure his kids don’t grieve.’”
—New York City Mayor Michael Bloomberg
20 Prosumer Report, November 2011 American Audit 23
we’re losing the ability to engage in civil debate;
people aren’t as willing to consider other points of
view anymore,” 60 percent of Americans agreed, with
the highest numbers among the 46-to-65 cohort (69
percent), women (62 percent), and Prosumers (70
percent).
Anyone who’s ever interacted online knows all too
well about flame wars, trolls, and cyber-bullying.
Interacting with one another remotely through
computer screens and digital devices can make
Americans less civil. Emotional Intelligence expert
Daniel Goleman coined the term cyber-disinhibition to
describe the effects of Internet-based communications
in which the usual face-to-face social checks on
negative behavior are absent; when online people
feel less bound by the normal social conventions of
politeness.
When it comes to online discourse about politics,
it turns out that the disagreements get especially
vicious. Just look at a study conducted by a group
of networks and systems researchers at Indiana
University. They investigated online polarization by
examining 250,000 Twitter messages in the six weeks
leading up to the 2010 U.S. congressional midterm
elections. In their report, the researchers concluded,
“Our experience with this body of data suggests that
the content of political discourse on Twitter remains
highly partisan. Many messages contain sentiments
more extreme than you would expect to encounter in
face-to-face interactions, and the content is frequently
disparaging of the identities and views associated with
users across the partisan divide.”
Many of the divisions in American life were
once played out in local communities and in the
mainstream media: TV, newspapers, magazines, and
books. Clashes of opinion could get pretty strident,
but their frequency and intensity were constricted
by the limitations of the media themselves; outlets
were far fewer in number and only “insiders” could
get their opinions out to the American public.
Now, in the America of social media and multi-
channel TV, the divisions in American society are
a lot more apparent; they are writ large, often and
intensely. With so much content available, and so
many ways to access it, there’s a selective pressure
favoring high-energy, extreme views expressed
with language and emotional force that would have
been unthinkable little more than a decade ago.
In Euro RSCG’s research of 500 Americans, 41 percent
of respondents said they were very or extremely
worried about the loss of civility and politeness in
public life, versus 25 percent who were worried
only slightly or not at all. Not all segments of the
population were equally concerned. A majority
(54 percent) of the 46-to-65 cohort were worried,
compared with 35 percent of the 18-to-30 cohort;
older Americans can contrast today’s attitudes and
behavior with times gone by, whereas younger
Americans have grown up with public ranting and
cussing. Far more women than men expressed
worry about the loss of civility—47 percent versus
36 percent—both reflecting and feeding American
women’s underlying anxiety about the way things are
going. Americans are even more worried about the
tone of debate. Considering the statement “I worry
24 Prosumer Report, November 2011
The American Dream is anchored by
the belief and implicit promise that
with hard work and determination
anybody can make good, regardless
of race, creed, or color, and regardless
of whether they began penniless.
People from other countries, including
neighboring Canada, are often
surprised by how much Americans
tolerate the relative lack of job
security and social safety nets in
the United States. For their part,
Americans accept and even value this
risk as the price of the freedom they
cherish, upholding it as a necessary
condition of the can-do dynamism that
has made America great. Being free
to succeed also means being free to
fail. Sure enough, the past decade has
delivered its share of American Dream
icons, especially in technology: Google
founders Sergey Brin and Larry Page,
Facebook founder Mark Zuckerberg,
and the much-missed Steve Jobs,
co-founder of Apple, who was given up
for adoption at birth and later dropped
out of college.
Nonetheless, the economic storm that
began in 2007 and 2008 has prompted
some Americans to wonder whether
the American Dream is just one big
house of cards.
The feeling of prosperity many Americans enjoyed until the
bust owed a lot—literally—to plenty of easy credit, which
dried up in 2008. Behind the bubble of credit, the majority of
Americans have suffered a steady decline in real income. The
2010 “Income, Poverty, and Health Insurance Coverage in the
United States” report from the U.S. Bureau of Census says real
median household income was $49,445 in 2010, a 2.3 percent
decline from 2009. Since 2007, median household income
has declined 6.4 percent and is 7.1 percent below the median
household income peak that occurred in 1999.
Ordinarily, ever-hopeful Americans would be willing to tough
it out through a downturn, choosing to believe that backsliding
on the ladder of prosperity is only the flip side of going up.
However, as the Great Recession grinds on, even the eternal
optimists have begun to question the country’s unwieldy
financial structure. Both Tea Party and Occupy Wall Street
activists have thought long and hard about all the money in
the news: Who pays, who benefits most, and what are the
implications?
Nobel laureate economist Joseph Stiglitz made waves with a
2011 Vanity Fair article headlined “Of the 1 percent, by the
1 percent, for the 1 percent,” in which he outlined how the
wealthy few have become wealthier while the majority have
become poorer. According to Stiglitz:
“The upper 1 percent of Americans are now taking in
nearly a quarter of the nation’s income every year. In
terms of wealth rather than income, the top 1 percent
control 40 percent. Their lot in life has improved
considerably. Twenty-five years ago, the corresponding
figures were 12 percent and 33 percent. Virtually all U.S.
senators, and most of the representatives in the House,
are members of the top 1 percent when they arrive, are
kept in office by money from the top 1 percent, and know
that if they serve the top 1 percent well they will be
rewarded by the top 1 percent when they leave office.”
The AmericanDream, Deferred
American Audit 25
Reflecting on social mobility and inequality,
The Economist said, “Parental income is a better
predictor of a child’s future in America than in
much of Europe, implying that social mobility
is less powerful.”
In other words, if the American Dream purports to
allow people to better their situations through hard
work, then other countries may offer a better shot at
attaining that dream.
However, all the pointy-head studies and learned
hand-wringing don’t much matter if ordinary middle-
class Americans ignore it or disbelieve it. The Pew
Economic Mobility Project also finds that despite the
bad economy, most Americans remain optimistic:
31 percent say they have achieved the American
Dream, 37 percent say they will reach it, and just
27 percent think they will not reach it; 54 percent
believe they will be better off 10 years from now, and
68 percent believe that their kids will be at least as
well off as they are now.
In a 10-part series of articles in Slate magazine
entitled “The United States of Inequality,” Timothy
Noah noted that a century ago, in the era of the
Rockefellers, the Vanderbilts, and the Carnegies,
the richest 1 percent accounted for 18 percent of
the nation’s income. Income distribution now is
more unequal than it was 100 years ago. In fact,
according to figures from the CIA, the United States
scores slightly better than Jamaica and Bulgaria but
slightly worse than Iran, Uganda, and Nigeria in
the inequality of family income. After interviewing
economists and researching the subject, Noah
concluded that growing income inequality is
due to a number of factors: immigration putting
downward pressure on wages, tax policy, trade
and globalization outsourcing to and importing
from lower-wage countries, and Wall Street’s and
corporate boards’ pampering of the extremely
wealthy, with greater shares of profits going to
remuneration and being channeled into finance.
Noah also blamed the education system for failing
to educate people well enough to meet the needs
of the changing economy: people with graduate
and postgraduate degrees were in relatively short
supply and could bid up their salaries, leaving the
less educated behind.
No matter the causes of the country’s income
inequality, Americans have always accepted that
some get rich and some don’t. While the poor in the
United States admire their rich and want to climb
the ladder to join them, the poor in other countries
reportedly envy and hate their rich and want to
bring them down. What counts for Americans
is the freedom to improve social mobility. The
trouble is, Americans’ social mobility has declined.
The nonprofit Pew Economic Mobility Project
reports that Americans and Canadians have similar
attitudes and aspirations about improving their
situations, with a similar emphasis on work ethic
and ambition; however, sons born to Canadian
fathers in the bottom third of the earnings
distribution are more likely to make it to the top
half of the distribution in adulthood than are sons
of comparably low-earning American fathers.
Republican defeat in 2008 triggered the mobilization of the
Tea Party and unflinching opposition to President Obama in
Congress and across the country. The Republicans rode a wave
of grassroots discontent to take control of Congress in the 2010
midterm elections and stiffen opposition to the president and his
ambitions. The liberal euphoria that accompanied Obama’s 2008
election faded and was gradually replaced by disappointment.
With the economy floundering in a jobless recovery, the
nation was forced to endure the spectacle of the president
and House Speaker John Boehner playing chicken with debt-
ceiling negotiations that went down to the wire through July
2011. The high-stakes game in D.C. did not play well with the
public: according to a poll conducted for Pew Research Center
and The Washington Post, 72 percent of Americans regarded the
standoff negatively, using words such as ridiculous, disgusting, stupid,
frustrating, terrible, disappointing, childish, and a joke.
The next scheduled big event in American public life is the 2012
presidential election. With the economy in bad shape and no
political wins in his bank since 2008, Obama has been looking
every bit the one-term president, with an approval rating of
minus 20 as of October 29, 2011 compared with plus 29 in
January 2009 (Rasmussen Reports, Obama Approval Index).
However, some of his potential opponents dropped out of the
running even before the Republican primaries: experienced
operative Haley Barbour withdrew in April and Palin announced
in October that she would not run.
Conservatives won’t be getting excited about former
Massachusetts governor Mitt Romney; they may find Texas
governor Rick Perry a more interesting proposition, but he could
be too much for non-Texan, non-conservative Americans choosing
their next president.
The past three years have been an emotional roller coaster for Americans. The economic train wreck of 2007
to 2008 gave millions—including leaders—the feeling of staring into an abyss. In the run-up to the 2008
presidential election, conservatives were fired up by the sassy, rugged outsider appeal of Republican vice-
presidential candidate Sarah Palin. Liberals were inspired by the soaring rhetoric and “audacity of hope” of
Barack Obama.
A Way Out
Whoever wins in 2012 is unlikely to
find the state of the nation any better
than it is now, or than it was when
Obama won in 2008. As the satiric
publication The Onion reported in
November 2008:
“African-American man Barack
Obama, 47, was given the
least-desirable job in the entire
country Tuesday when he was
elected president of the United
States of America. In his new
high-stress, low-reward position,
Obama will be charged with such
tasks as completely overhauling
the nation’s broken-down
economy, repairing the crumbling
infrastructure, and generally
having to please more than 300
million Americans and cater
to their every whim on a daily
basis. As part of his duties, the
black man will have to spend four
to eight years cleaning up the
messes other people left behind.”
Whatever the candidates promise
and whoever wins, it’s unlikely that
ordinary Americans will expect
much from them. Recent CNN/ORC
International and USA Today/Gallup
polls show a continuing decline of
American trust in politicians and
26 Prosumer Report, November 2011
government to do what’s needed. Nevertheless, people expect things to improve somehow because, in America,
optimism is next to patriotism—a must-have virtue. The question is: How will this change happen?
At first glance, there’s no reason to take the Occupy Wall Street protests at all seriously. They involve just
a few hundred people, the vibe is more Woodstock redux than political movement, and the patience of
local people affected by the protests is wearing thin. Yet something about these protests is resonating with
influential people in the media and in politics—right up to the president. Plenty of people are annoyed that
OWS doesn’t have a clear program or set of demands, but that doesn’t seem to matter in terms of its viral appeal.
People are sympathetic to this particular protest because it seems to say: Something has gone terribly wrong, gross
unfairness has prevailed, and business and politics as usual aren’t working for ordinary Americans.
Wintry weather may soon put a stop to the outdoor protests and steal momentum from the whole thing or—under
the microscope of the media—Occupy Wall Street could morph and grow into something more enduring and
influential, especially if it takes hold through social media. This movement could become the X Factor of the year
ahead—unpolished, barely articulate, yet instinctively appealing. Stranger things have happened.