AMERICAN AUDIT
A Walk Down Uneasy Street
EURO RSCG WORLDWIDE
November 2011
Prosumer Reports is a series of thought leaders...
2		 Prosumer Report, November 2011 American Audit 3
Table of Contents
In summer 2011, Euro RSCG Worldwide commissioned its...
American Audit 5
In only 10 years, public opinion on politics, the economy, and the once-
infallible American Dream has ex...
Remember the Long Boom? How about Y2K? And might
you recall as far back as the early to mid-1990s, when the
United States ...
8		 Prosumer Report, November 2011
In fundamental and disturbing ways, the past decade has
given Americans reasons to doub...
Among the thousands of images from the Great
Depression of the 1930s, Dorothea Lange’s “Migrant
Mother” has prevailed as t...
Modern Life:
Worried Sick
American Audit 13
Worries About Loss
in Modern Life
The Euro RSCG survey asked respondents to ra...
14		 Prosumer Report, November 2011
Another set of statements highlighted threats and trends that might become threats in ...
16		 Prosumer Report, November 2011
Just a few months ago, we were writing about the
protest bug sweeping through the Arab...
22,000
September 2010
80,000
September 2002
14,000
September 2000
170,000
September 2001
Figures for American Flag lapel p...
The Great Divides
The former French leader General Charles de Gaulle
once said something along the lines of: How can
you e...
20		 Prosumer Report, November 2011 American Audit 23
we’re losing the ability to engage in civil debate;
people aren’t as...
24		 Prosumer Report, November 2011
The American Dream is anchored by
the belief and implicit promise that
with hard work ...
Republican defeat in 2008 triggered the mobilization of the
Tea Party and unflinching opposition to President Obama in
Con...
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Prosumer American Audit

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November 2011
A glimpse into the last decade's effect on consumers.

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Prosumer American Audit

  1. 1. AMERICAN AUDIT A Walk Down Uneasy Street EURO RSCG WORLDWIDE November 2011 Prosumer Reports is a series of thought leadership publications by Euro RSCG Worldwide—part of a global initiative to share information and insights, including our own proprietary research, across the Euro RSCG network of agencies and client companies. Euro RSCG Worldwide is a leading integrated marketing communications agency and was the first agency to be named Global Agency of the Year by both Advertising Age and Campaign in the same year. Euro RSCG is made up of 233 offices in 75 countries and provides advertising, marketing, corporate communications, and digital and social 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 naomi.troni@eurorscg.com. Follow us on Twitter @prosumer_report.
  2. 2. 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 ................................................................................. 5 ............................................................. 10 ................................................................................................ 12 ............................................................................................... 16 .................................................................................................................. 20 ...................................................................................... 24 ................................................................................................................................. 26 “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
  3. 3. 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 Difference A Decade Makes
  4. 4. 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
  5. 5. 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
  6. 6. 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’s Well-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.
  7. 7. Modern Life: Worried Sick American Audit 13 Worries About Loss in 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
  8. 8. 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
  9. 9. 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.”
  10. 10. 22,000 September 2010 80,000 September 2002 14,000 September 2000 170,000 September 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.”
  11. 11. 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
  12. 12. 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
  13. 13. 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 American Dream, 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.
  14. 14. 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.
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