horatio alger, social mobility, and gini indexes

Horatio Alger is famous for the many novels he wrote that conveyed the idea that hard work  and moxie would result in a rags to riches ( or at least middle class) success, that is, a slice of the American Dream. 

Unfortunately, while many Americans believe we are still the land of opportunity, and are exceptional, it is not the case. 

http://fortune.com/2015/09/30/america-wealth-inequality/

We have become as class stratified as many other countries we think ourselves superior to, and data confirms this.

When  combined with the fact that America has a poor gini index, I see the potential for troubled times ahead. Gini index is a calculation of how evenly, or equitably income is distributed through the population. A zero index mean everyone has exactly the same income, and a one would be all income to one person, and nothing to everyone one else. Obviously, there are no ones, but comparisons and trends still can tell us how GNP is being shared.

Gini index does not tell the whole story, as a nation could be desperately poor, but very equitable about it, for  zero score, but that isn't a situation to strive for. 

http://www.the-crises.com/income-inequality-in-the-us-1/

You can see the run up in the late 20s and 30s, till speculation and overreach caused the great depression( OK, it was a bit more complicated than that  http://www.ushistory.org/us/48.asp) at which point things remained more equal with help from the New Deal and WW2, but took off again in the 80s. 

That chart shows the evolution of the U.S. gini index over time, but how does the U.S. compare to the rest of the world? Well, it turns out from my brief study, it is complicated. Data from many countries is suspect, or calculated differently, or spotty and out of date, so it's hard to do comparisons. Just generally, from the sites I did find, the U.S. is rather high compared to the developed countries, but I saw several different results. Here is one. 

So what made me look in to this?

I was traveling a while ago, and picked up a Wall Street Journal for the first time in several years. It still is the paper of record for the wealthy and the elite. After I skimmed through the headlines and main section, I found a section headed "Mansion". I thought, weird, some sort of special edition? No, it turns out that this is now the header for the WSJ real estate section. And it's just what you would think, a real estate section focussed on only the very top of the housing market, and the woes of trying to find that perfect mansion.

Most intriguing and maybe telling for what is on the minds of the wealthy, there was an article titled "Luxury for the Apocalypse". It described a large planned community going in in Texas that was comprised of underground condos, with a secure perimeter and many self reliance features. There are similar ones in development in other states as well. 

In the past, and not just here in the U.S., when there is too much inequity in society, revolt, violence, and rebellion can occur. At some point, it doesn't take gini comparisons, or other data crunching, it is in the wind. Sometimes you don't need a weatherman to know which way the wind blows.  The wealthy are aware of this, even as they continue to work the system. 

So, what's a poor working stiff to do? Pay attention to history, and plan accordingly.