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Federal Reserve Just Declared the American Dream Is Dead for Most Americans

Friday, March 17, 2017 12:01
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(Before It's News)

Free Thought Project – by Claire Bernish

Long the stuff of sardonic quip, it’s finally official: the putative American Dream — an iconic, white picket-fenced, rise-to-the-top-from-nothing bastion of hope for citizens and foreigners, alike — is officially dead.

In no small irony, the study divining what the vast majority of cynical Americans already knew came from the St. Louis Federal Reserve.  

Stanford economist Raj Chetty, author of the study, sought to measure “the probability that a child born to parents in the bottom fifth of the income distribution makes the leap all the way to the top fifth of the income distribution.”

For a person to go from ‘rags to riches,’ in other words, has become nearly impossible in America — upward mobility is now as quaint and anachronistic as a Norman Rockwell painting.

“In the United States,” Chetty found, “children born to parents in the bottom fifth of the income distribution have a 7.5 percent chance of reaching the top fifth. That compares to about 9.0 percent in the United Kingdom, 11.7 percent in Denmark, and 13.5 percent in Canada.”

While these percentages appear generally low, Chetty points out that, because you literally can’t have more than 20 percent of people in the top 20 percent, the otherwise slight differences in economic mobility between nations in actuality represent stark contrasts.

“One way to think about it is this: your chances of achieving the ‘American Dream’ are almost two times higher if you grow up in Canada relative to the United States,” he explains. Apparently the American Dream requires a name change.

For the study, Chetty and colleagues analyzed economic mobility by U.S. county — and the resulting mapped data evinces pronounced disparities not only by region, but in several places, by counties in the same metro area.

Americans in the Southeast have the least overall opportunity to rise from the bottom fifth in income to the top — at just 4.8 percent, the number is “lower than any other developed country” the researchers examined — while a swath through the Great Plains, south to Texas, and, to a lesser degree, the West, appear to offer the most optimistic chance for such an economic leap.

“Now, naturally the question of interest both to academics and policymakers is why does upward mobility differ so much across areas and, ultimately, what can we do about it?” the author queries.

“The first clues for us as researchers came from the fact that this spatial variation emerges at very early ages. In high mobility areas like Salt Lake City or San Jose, children from low-income families are more likely to attend college, and they’re less likely to have a teenage pregnancy. By the time they’re 16, 17, or 18 years old, a lot of these patterns have already emerged. The reason that’s important is that it points to factors that affect children not just once they’re in the labor market but before they start working. It suggests that childhood environment could be extremely important here.”

Low income, alone, does not predict an inability to move up the economic ladder — rather, several additional factors come into play which can cancel out the disadvantage of beginning in the bottom fifth of income.

“More mixed-income communities tend to produce better outcomes for kids from disadvantaged backgrounds,” and “areas with less income inequality tend to have higher rates of upward mobility,” the researchers found.

“We find that areas with more stable family structures — in particular, areas with fewer single parents — have substantially higher rates of upward mobility. Areas that are more socially cohesive, with large amounts of social capital, also have much higher rates of social mobility. Finally, as you might expect, areas with better public schools tend to have much higher rates of social mobility.”

Mitigating circumstances mean certain regions literally aren’t conducive to pulling oneself up by the bootstraps, as has often been criticized of the economically disadvantaged. That level of success — achieving income in the top quintile — cannot be achieved if all of the necessary conditions aren’t in place, as is the case in many areas of the U.S.

Incidentally, an additional finding speaks volumes on one wildcard factor tending to lend itself to the amassing of wealth — innovation. In preliminary findings from ongoing study, Chetty writes,

“We find that a child’s probability of becoming an inventor is strongly related to his or her parents’ income: children from rich families are 10 times as likely to become inventors as those from lower-income families. 

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The post Federal Reserve Just Declared the American Dream is Dead for Most Americans appeared first on From the Trenches World Report.


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  • Boo

    You know … we were here before in the 1800′s and again after the stock market crash and depression before WWII.
    Looks like we need a periodic kick in head in order to straighten our act out. Growth is painful … literally. And sometimes that’s what it takes to knock some sense back into our heads.

  • and what about the children born in the top 5th who were passed over for one singular child who has no children. is that our punishment for having children. i know a man who married a woman with five children. she didn’t like four of her children. so she kicked them to the winds. the youngest two daughters at the age of five and six. the two elder sons at seventeen and eighteen once someone found out what they were doing to the much younger two daughters. now this man she married had two children. both shot in the head. so out of seven children, only one will benefit. the one with no legacy who happened to marry a very well off mama’s boy who appears gay but is all in for the 1%. i guess that’s how you keep it in the family. and then pass it off to the hedge fund elite through churches upon death because they hate you that much. for daring to live this long. for daring to find happiness without money and power. for daring to let go of the horrible things that happened to them as a child and find God. oh, they read their bible every night. the church has all their money hidden in a trust while they pretend to stand righteous and devout. they are in their late eighties and nineties and still working hard to oreserve their legacy. for one singular child who could give a rat’s ass about the human race. or the planet. or Jesus. or God.

  • In 2008, I invented and patented (USP# 9051539B) the Scalable Biomass Engine. A system completely capable of making algae deliver on its promise and potential for everything from pharmaceuticals to biofuels and make a reasonable profit even with petroleum fuels retailing for $3/gal. The primary system input after water and plant food is Carbon Dioxide, and lots of it.

    I did this at my own expense at the public request of Barack Obama because of the (now exposed lie), problem of Climate Change. After 2 years of pounding on the WH door, I got a call from a WH staffer asking me to send enough information that the system could be modeled in a computer (something I needed to do but lacked the funds for), in consideration that the future of humanity demanded it, I complied. I never heard from then directly again.

    Indirectly, that next year and for 2 more after that, the promised grant funding to move forward was kept just out of reach by shifting requirements. Then, algae cultivation systems were excluded altogether by executive policy changes. Just short of an actual executive order which would have gained attention. Meanwhile, Obama was promising green jobs a plenty to get reelected.

    Then, the fun really began. I saw FBI agents staking out my home 4 time a year from then on. Every time I came close to making a private deal to move forward, it would suddenly implode with no reasons given and virtually no feedback at all. Only in the past few months have I learned that my efforts were being willfully suppressed because ignoring me wasn’t making me and my technology go away. Now, after being damaged by the federal government for 8 years, I’m destitute and now being a failed executive, unemployable.

    Since Trump took office, despite the need for creating jobs, not just repatriating jobs, I still get zero response from the WH. Algae has many markets. Most more profitable than biofuels. Yet, I still am unheard. I’ve also developed a wind powered technology to revive the ocean dead zones. From the Pacific to the Antarctic, NOBODY is willing to capitalize these technologies, even to enable third party certifications of efficacy.

    I never dreamed I would have my life ruined this way, and get to watch mankind be drowned in its own filth because I had failed.

    Please share this posting. My email is: [email protected]
    Serious Inquires Invited

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