Book Summary Preview : MONEY

The Big Idea

America’s gulf between the rich and poor has grown wider than ever. The disparity between the income of men and women, white and black is still evident, while the number of self-made millionaires has grown along with the number of individuals who take home $100,000 a year. Indeed, there are more millionaires, but there are also more neglected children, more single mothers, and more citizens in prison. The founding fathers of the United States Constitution outlined how the nation would grow with an economy that would acknowledge “diversity in the faculties of men” and such has occurred in the years that followed the statements of James Madison and Alexander Hamilton. Here are the facts about who has the money in the world’s most powerful nation.

The Beginning of Money and Capitalism

Two centuries ago Alexander Hamilton wrote that when America made the necessary shift from an agrarian to an industrial society, its scientists, inventors, and engineers would be honored for creating a demand for articles, for challenging their imaginations and intellect to put on the market products that were designed to arouse the response of the purchasing public, and henceforth the consumerist nation was born.

How much Money do you really need?

In a Roper-Starch survey conducted in 1995, Americans said they needed just $25,500 a year to get-by, $41,100 to live in reasonable comfort, and $102,000 to fulfill all their dreams.

The Consumer Identity

Our wardrobes, the food we eat, where we travel, and what music we listen to, form only part of our purchases that define our personalities. By our purchases and possessions we make an attempt to persuade the world that we are original, unique, and that we truly exist.

Technology and Choice

Capital owners and managers are always looking for new technologies to recast the human experience. Capitalism ushered in the automobile, air-conditioning, television, commercial aviation, the computer, and the birth-control pill. The Pill, for example, is a biochemical technology that played a crucial role in shaping American society as we know it today. It signaled the freedom to choose careers other than motherhood. The American capitalist society holds freedom of choice first. New inventions and new products create new jobs and careers, while phasing out obsolete ideas, technologies, and lifestyles.

The Inequality Index

Finland is the most egalitarian nation in the world, according to a widely used measure of inequality, which computes how far the rich and poor in one country are from the national median income. The United States comes in thirteenth place with the highest inequality index or income disparity after Finland, Sweden, Belgium, Netherlands, Norway, Switzerland, New Zealand, France, United Kingdom, Australia, Canada, Italy, and Ireland. America’s rich receive more than their counterparts in other countries, but her poor get so much less.

In New York’s Chenango County, the deputy sheriff starts at $16,000 a year. A Vermont radio news director gets $17,000, in Albuquerque, New Mexico, an airline reservationist makes $14,000. How do Americans get by on so little?

Three Nations: Rich America, Middle Class America, and Poor America

There are more young couples living together today than in any time in America. Young people share quarters with one or more roommates. Those from affluent homes receive subsidies from parents. A large number continue to live at home. People are having less children.

In 1970 a single income would suffice for a full household. More Americans own two cars instead of one, more Americans travel to Europe than in 1970, and today the laser printers, multiple CD changers- even coffee costs more than the days of typewriters and turntables. More Americans are ordering takeout food and eating out than in 1970.

In 1995, the threshold for one person living alone was $7,763 or about $150 a week. A single parent with two children came to $12,278 or $236 a week. One would be more likely to get by in a rural than urban area, where being poor is less evident, and there is not much available for purchase.

America’s Widows

Among the aged poor, women outnumber men by 3 to 1. They are mostly widows living alone who make do on reduced pensions.

The Rise of the Inmate Population

America has a growing group of men who have never had any steady employment, at least of the legal kind. They lack a high school level of literacy and the social deportment most employers expect. Many are released from the prison system and fail to find any employment, because of their criminal records. Positions like school janitor, taxicab driver, or security guard, which would be ideal for those seeking a fresh start are unavailable to these men because of their criminal history.

Competing with those “Fresh off the boat”

One reason why unemployment persists even when jobs are available is immigrants are willing to take wages that citizens of longer lineage would never consider. The long-term unemployed are unwilling to take the jobs offered to immigrants, so the poor Americans feel they must receive more, simply because they have been “American” longer.

The $100,000 Life

In 1995, 6.3 million American families or 9% of the total were taking in $100,000 a year. Only one in six of these households earns the money through a single breadwinner, usually a well-paid husband. The rest are households where Dad makes $52,498, Mom brings in $33,501, and Sis contributes $17,221 from her earnings at the local mall.

Power Couples

Two-income homes are now found in all economic levels. Even if the husband makes $100,000 a year, the wife still works in about 60% of all marriages. The category includes $20 million-dollar couple Bruce Willis and Demi Moore, the Clintons’ $316,074, many CEO couples, and Washington’s well-paid couples.

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