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A cause for concern?. Wealth hasn’t trickled down The richest fifth in the USA are 8.55 times richer than the poorest fifth. The richest 10% own nearly.

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Presentation on theme: "A cause for concern?. Wealth hasn’t trickled down The richest fifth in the USA are 8.55 times richer than the poorest fifth. The richest 10% own nearly."— Presentation transcript:

1 A cause for concern?

2 Wealth hasn’t trickled down The richest fifth in the USA are 8.55 times richer than the poorest fifth. The richest 10% own nearly 50% of all income. The Gini Coefficient is named after Corrado Gini, an Italian economist. The Gini Coefficient is derived from a statistical formula and expresses the degree of evenness or unevenness of any set of numbers as a number between 0 and 1. A Gini Coefficient of 0 would indicate equal income for all earners. A Gini Coefficient of 1 would mean that one person had all the income and nobody else had any. In 2009, the USA had a Gini Coefficient of 46.6, one of the highest in the world.

3 The American Dream: Still in business? The credit crunch and its recession has forced a rethink of what traditional capitalism in the USA is all about. Many in America are questioning what they've always been taught, that the next generation will always be better off than the one before it, that hard work will produce rewards and the freedoms to have a good lifestyle. Detroit struggles as recession bites In a 2010 survey for The Economist magazine, 50% of Americans thought the next generation would have a lower standard of living, double the share that thought living standards would rise.

4 Obama’s Fiscal Stimulus In the aftermath of the credit crunch, new President Barack Obama sought to save the American economy. In February 2009, the US Senate approved President Obama's fiscal stimulus package of $787 billion in tax cuts and public spending. Yet, the recovery remains fragile. Unemployment remains high at 9.5% (July 2010). Business confidence is low, although house prices have recovered. Obama’s recovery plan

5 Re-defining the American Dream. Is greed still good? " Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge has marked the upward surge of mankind”. Gordon Gekko, Wall Street, 1986 So, in the aftermath of the credit crunch, the American Dream has effectively been re-written. The US Government has bailed out the banks and major companies such as General Motors. Government support for both individuals and organisations is now a mainstream political belief. Who’d have thought it? Greed is Good

6 Middle America gets squeezed “The American Dream is no longer just being deferred, it is being eliminated for many people who work hard, play by the rules, and yet nonetheless see themselves falling further behind.” Dr Amy K. Glasmeier Pennsylvania State University. This new political consensus has come about by the “middle class squeeze”. Obama’s election was partly because Americans believed his social democratic approach represented the best way out of the crisis.

7 Poverty 36.5m Americans are living in poverty. Americans are deemed poor if their pre-tax income falls below a certain amount—for example, $20,614 for a family of four. Home Ownership Falling

8 Health Care As medical costs soar and recession bites, more firms are opting not to provide their staff with coverage. President Obama promised to provide health insurance for all Americans by the end of his first term as President. In March 2010 he signed his historic plan into law. Around 32 million Americans are expected to be entitled to have health insurance for the first time. The plan will not be cheap. It is expected to cost $940 billion over 10 years. President Bush’s tax cuts for the wealthy will be discontinued. Not all Americans are pleased at the health care bill. Some are angry that their taxes will be used to pay for those who will not look after their health. The 2009 CIA World Factbook estimates that the USA ranks 180 (out of 224 nations) in infant mortality rates. The USA has a greater number of deaths in infancy than Cuba, the European Union, Taiwan, Canada, New Zealand, Australia, South Korea, Israel, Hong Kong, Japan, or Singapore (which has the lowest infant mortality rate).

9 Education: Still separate after all these years High-income and middle-class white parents are using the housing market to buy a better education for their children. They have moved in droves to suburban school districts that are outside the city. Other affluent families have quit the public system entirely, and use private schools instead.

10 Crime America jails more people than any other country in the world. 1 in 20 American men have had “prison experience”. The figure for black men is close to one in six. Aggressive sentencing laws, particularly for drug offences, mean that the proportion of cons and ex-cons has doubled since 1974, from 1.3% of the adult population to 2.7%. Crime across America is rising. Unless something changes (2/3 of prisoners are re-imprisoned within 3 years) 1 in 3 black men are expected to go to prison once in their lifetime. Crime in Baltimore Part OneCrime in Baltimore Part Two

11 The politics of the center Excuse the American spelling! The vast American middle class are concerned about poverty, but, in general, do not see it as the Government’s job to tax and spend their income. They are concerned about the numbers of people with no health insurance but are wary of a British NHS “socialised” system of health care. They want good public schools but will move away from the city (or pay) to put their family first. They are concerned about crime but are wary of non-penal solutions even though incarceration doesn’t appear to be slowing down crime rates. This all creates a politics of the centre. Barack Obama and the Democrats skilfully caught the public mood. But at the other end of the American spectrum, the right-wing Tea Party Movement have grown in support. The Tea Party supporters believe in as little government intervention as possible. The reality is that both Democrats and Republicans will move towards the center in the run up to the 2010 mid-term elections.

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