The Rise of the New Global Elite

F. Scott Fitzgerald was right when he declared the rich
different from you and me. But today's super-rich are also
different from yesterday's: more hardworking and
meritocratic, but less connected to the nations that granted
them opportunity-and the countrymen they are leaving ever
further behind. 

By Chrystia Freeland 
The Atlantic
January/February 2011

This article available online at:

http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

IF YOU HAPPENED to be watching NBC on the first Sunday
morning in August last summer, you would have seen something
curious. There, on the set of Meet the Press, the host, David
Gregory, was interviewing a guest who made a forceful case
that the U.S. economy had become 'very distorted.' In the
wake of the recession, this guest explained, high-income
individuals, large banks, and major corporations had
experienced a 'significant recovery'; the rest of the
economy, by contrast-including small businesses and 'a very
significant amount of the labor force'-was stuck and still
struggling. What we were seeing, he argued, was not a single
economy at all, but rather 'fundamentally two separate types
of economy,' increasingly distinct and divergent.

This diagnosis, though alarming, was hardly unique: drawing
attention to the divide between the wealthy and everyone else
has long been standard fare on the left. (The idea of 'two
Americas' was a central theme of John Edwards's 2004 and 2008
presidential runs.) What made the argument striking in this
instance was that it was being offered by none other than the
former five-term Federal Reserve Chairman Alan Greenspan:
iconic libertarian, preeminent defender of the free market,
and (at least until recently) the nation's foremost devotee
of Ayn Rand. When the high priest of capitalism himself is
declaring the growth in economic inequality a national
crisis, something has gone very, very wrong.

This widening gap between the rich and non-rich has been
evident for years. In a 2005 report to investors, for
instance, three analysts at Citigroup advised that 'the World
is dividing into two blocs-the Plutonomy and the rest':

     In a plutonomy there is no such animal as 'the U.S.
     consumer' or 'the UK consumer', or indeed the 'Russian
     consumer'. There are rich consumers, few in number, but
     disproportionate in the gigantic slice of income and
     consumption they take. There are the rest, the 'non-
     rich', the multitudinous many, but only accounting for
     surprisingly small bites of the national pie.

Before the recession, it was relatively easy to ignore this
concentration of wealth among an elite few. The wondrous
inventions of the modern economy-Google, Amazon, the
iPhone-broadly improved the lives of middle-class consumers,
even as they made a tiny subset of entrepreneurs hugely
wealthy. And the less-wondrous inventions-particularly the
explosion of subprime credit-helped mask the rise of income
inequality for many of those whose earnings were stagnant.

To read more, go to
http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

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