AHC: U.S. has LOWEST income inequality in the developed world

[TNF]

With a POD after January 8, 1964 (LBJ's declaration of a 'War on Poverty') make the United States the nation with the lowest income inequality in the developed world by 2012.

[Plumber]

Humphrey wins in '68, Reagan goes down in defeat in '72, Chuck Percy wins in '76, Scoop Jackson wins in '80.

[pieman3141]

I'm also assuming that the cost of living is pretty manageable by all levels, right?

[TheMann]

^ I'd actually go with a Nixon victory in 1968, and the 1972 election proving that the Democrats have to move intelligently. Nixon doesn't resign and rides Watergate out and gets impeached as a result, Gerald Ford has to face a primary challenge from Ronald Reagan and as a result fails. Ted Kennedy never has the Chappaquiddick accident, and he beats Jimmy Carter in 1976 Democratic primaries and is elected. He serves two terms, passing a major health care reform act in 1978 among other achievements. His VP, Henry M. Jackson, proves to be a major supporter of national defense and does most of the foreign duties very well indeed, while Kennedy focuses on domestic issues.

Reagan wins the primary in 1980 but loses the election, which many in the GOP blame on the divisive influence of the "Moral Majority". Scoop Jackson dies of a heart attack in 1983 as in OTL. In the 1984 primaries, the surprise winner is the charismatic Governor of Arkansas, William Jefferson "Bill" Clinton. Clinton follows much of Kennedy's economic policies, which work very well in the 1980s. After their fourth-consecutive presidential loss in 1988, where George H.W. Bush and Orrin Hatch are beaten badly by Clinton, the Republicans switch out their hard conservative line and take a much milder tone in the late 1980s and early 1990s. Much-improved financial limits legislation comes in the aftermath of the massive Savings and Loan crisis, but the GOP, now having shed the "smaller government" line in favor of "government that works" and "efficient government", comes down hard on the Democrats, calling them too soft and complacent. Richard Lugar is the beneficiary of this and the Republicans defeat the Democrats in 1992. The plan by the GOP to run a moderate course is blown up by the hard-right, led by Newt Gringrich and Jesse Helms, who make a serious attempt to primary Lugar in 1996. This fails, but it ultimately costs Lugar re-election, allowing Lloyd Bentsen to rise to the Presidency in 1996. Bentsen, however, suffers a stroke in 1998 which harms his mobility and his health, and he resigns the Presidency on January 25, 1999, as a result of his illness. Vice-President Al Gore takes up the Presidency.

The GOP finally purges the last of the far-right in the aftermath of their loss in 1996. Gingrich oversees a massive, crushing loss in 1998 which sees the Democrats with a 62-38 majority in the Senate and 268-166 loss in the House and resigns as House Speaker in disgrace, though he had lost control of his party before then. The Democrats look to chart much more moderate positions, and the payoff comes quickly.

Gore struggles to hang on to a good position as President, and is soundly beaten by Arizona Senator John McCain in 2000, with McCain and Lincoln Chafee rising into the White House. Similar to the Kennedy/Jackson years, McCain spends most of his time on foreign policy issues and allows Chafee to run the domestic issues, a decision to which both men greatly benefit, and the pair are the first Republicans to be re-elected to the White House in 2004, soundly thumping Senator John Kerry and the scandal-plauged Senator John Edwards. The Republicans and Democrats still disagree on many things, but Chafee spends much of his time navigating waters between the two sides, and as a result the animosity that had been a hallmark of the 1980s-90s GOP disappears over time.

I'll get to the economics portions after I do a bit of research.

[d32123]

There are plenty of ways to make the level of income inequality lower than it currently is but you would need a revolution or radical reform to the economic system to make it the lowest.

[Æsir]

Originally Posted by d32123

There are plenty of ways to make the level of income inequality lower than it currently is but you would need a revolution or radical reform to the economic system to make it the lowest.

While Humphrey winning in 1968 may be understating the problem, I think this may be overstating it. While there was a substantial amount of reforming involved I'm sure (I'm not sure if you could call it radical or not, and that's sort of in the eye of the beholder) Scandinavia didn't really need a revolution to get OTL's lowest income inequality.

[d32123]

Originally Posted by Æsir

While Humphrey winning in 1968 may be understating the problem, I think this may be overstating it. While there was a substantial amount of reforming involved I'm sure (I'm not sure if you could call it radical or not, and that's sort of in the eye of the beholder) Scandinavia didn't really need a revolution to get OTL's lowest income inequality.

I'm not an expert on Scandinavia at all but I'm sure someone else could explain how the Nordic system of capitalism developed and why it's not possible to replicate here to the same level of success.

[BigWillyG]

Does this require changing just the US? It seems like changing the European countries at the top would be somewhat easier.

[superkuf]

Originally Posted by d32123

I'm not an expert on Scandinavia at all but I'm sure someone else could explain how the Nordic system of capitalism developed and why it's not possible to replicate here to the same level of success.

The scandinavian countries are small and centralized states that had existed (in different ways) since medieval times. A lot of young, entrepernurish/dissatisified people left their countries in late 19/early 20th century, thereby making the population more "equal". The countries were fairly dense populated with a lot of poor people, that had little or no chance to leave the state of poverty.

The US, on the other hand, is populated by the people that disliked Scandinavia and wanted to take a huge chance by emigrating. It is a new country without old structures, it is federal which means huge local differences (and an eternal power struggle between cental and local authority), it has historically suffered from lack of working people that lead to big possibilities to advance from a state of poverty to prosperity (also slavery and labour-saving inventions) and is a huge country with very different possibilities/needs.

To, with this background, assume that the US could get the lowest income inequalities is absurd. The only way to achive that would be that the 13 colonies stayed english and never (or at least in after year 1900) developed
any "americaness". But it would be very difficult - mr X could always move west to avoid taxes, regulations and government, which mr X in Scandinavia was unable to.

[Socrates]

The greatest problem the US has that Scandinavia had to face is the fact the US had a very large chunk of the population that only escaped legal discrimination against them in the 1960s, and, due to racial division, did not have middle class support for helping them out afterwards. Perhaps if you have someone like George Romney become a Republican President, there could be a bipartisan focus on economic efforts.

Certainly healthcare would help. Another thing you may want to address is the war on drugs, which has basically destroyed poor inner city communities.

[deamy]

Scandinavia was not made equal by all entrepreneurs migrating.

That may be true for Russia, but in in fact, Sweden had, and still have, unproportionally many big industries for its size. Entrepreneurial people in the 19th century had no problem pursuing their ideals in their country. See the inventions that came at the time, such as the dynamite, ball bearings, gas-fired lighthouse, safe matches, several tools, etc. A lot of mechanical industry was built across the country by these people, and some remains amongst the largest in Europe today.

Most of the Swedes migrating in the 19th century were poor farmers and came from Småland, an area with lots of wood but poor land. They were not discriminated or oppressed minorities. They were just tired of a life with hard work and long, cold winters. The dream of a new life in America became quite tempting, but it was actually not much better as a quarter of the migrants returned.

Sweden was made equal by a social democrat majority that ruled the country or most of the 20th century. High taxes, a very large welfare state with a very high quality (thus popular), and a lot of large and profitable (sometimes state-owned) enterprises that shared their profits, made it work.

Norway could be said working a bit like that today, with a huge state-owned oil industry that employs much of the population while ploughing all the profits into the development of the country.

Have the US nationalize the big industries, raise taxes, and implement a new welfare model with free schools, healthcare, support for the poor, etc etc. and you could very well have similar wealth inequality today.

May be too late by the 60:ies, but why not the 30:ies?

[MerryPrankster]

Guaranteed minimum income? That would raise the income of the poorest, although that wouldn't reduce the income of the richest.

Maybe if there's no Watergate scandal:

http://www.prospectmagazine.co.uk/bl...-failed-ideas/

[Derek Jackson]

I think avoiding Vietnam would help as would strengthening the Unions

[Hörnla]

That is an interesting discussion. I agree that there are structural differences between the US and those highly developed European countries mentioned until now which make an extremely low income inequality impossible without applying radical measures (such as Communist revolution or nuclear war).

America as a huge "empty" continent offered from the beginning of colonization far more possibilities to grow rich than Europe ever could. And the amount of wealth US citizens overall possessed makes it the more difficult to distribute it equally. (And I would overall claim that from at the latest 1914 to some point in the last quarter of the 20th century, American had an incredible edge on the general standard of living even on NW-Europe)

But under which circumstances could we see the USA with a not widening, but stable or closing income inequality? The challenge would be to keep the general economic growth at par with OTL....or even surpassing it.

You might get an idea if you watch the first minutes of Michael Moore's "Capitalism - a love story" in which he describes his childhood memories of a life as the son of a single breadwinning worker at a GM plant in the 50s/60s which he perceived as more affluent than what the American Middle Class faces now. (And which is very much in tune with the picture of American life we Europeans received via TV/cinema up until ca. the 1990s).

I guess that more trends have to be changed during the last decades than Moore himself might imagine. A few come to mind, but they may be dead ends, too. Besides, changing the economy of (at least back then) such a pivotal economy will have major butterflies across the globe.

E.g., if the answer might be not to go into the direction of free trade, therefore keeping manufacturing jobs at home (giving the American employee a better bargaining position); this would change the rest of the world very much.
Or if the US doesn't lead the way to de-regulating the financial markets, would the UK do so instead? With what consequences?

I am not saying that these are the roads to take, but some people might do so.

I would like to add that a core point in any speculation on that is that IMHO, the USA are how they are because a sufficient number of US citizens are convinced that that's how the US should be.
What I want to say is that any change from OTL which is not happening by accident has to "win the hearts and minds" of the Americans.

Last but not least, I come with a possible path. How about .... wait for it ... free and ecellent higher learning as a national goal - formulated as part of the great society, or of the new deal, or on some other platform later; however, it should be a principle later on accepted by both parties as a cornerstone of America's status as the world's #1 superpower.

The situation should be, assuming that it is managed competently, that the US High School and College system will by 2012 fare among the very best educational systems in the world while the overwhelming majority of schools and colleges do not have to rely on tuition fees above a token level. (Basically that is the German self-image of our system before international surveys showed us the less glamorous truth - we assume here that the US do a lot better).


1. The sums necessary are not utopian for the federal/state/communal budgets (I assume here the costs are shared under whatever scheme while avoiding blatant regional differences in quality).
2. It doesn't necessarily involve a direct transfer of wealth such as selective taxation of the rich or benefits to the less wealthy. Compared to such measures, or any infringement on entrepreneurship, it should be more in tune with the American mentality.
3. It would take a great financial strain off the Middle Class.
4. It would create more social upwards mobility.
5. It would certainly not make American products worse or less innovative than in OTL. Therefore, more jobs are generated either for Americans or at least by American companies.

-> point 3 to 5 would IMHO create at least less income inequality than OTL

And gee, perhaps they even get better politicians. Just kidding.

[Deckhand]

Originally Posted by BigWillyG

Does this require changing just the US? It seems like changing the European countries at the top would be somewhat easier.

Dragging everyone down to the US level would work i suppose.

[MrwBrightside]

Kill everyone but two people, and ensure that they have no inequality between them. Perfection.

[BigWillyG]

Originally Posted by Deckhand

Dragging everyone down to the US level would work i suppose.

Ok. I was thinking having Western Europe fall to Communism through popular fronts in the '70s and '80s would do the trick.

[wolf_brother]

I'm going to say this likely requires a more successful FDR, as a start. At the least you're going to need an institutionalized dominance of the Democratic Party, specifically of the New Deal coalition - which means the Dems winning in 1952, somehow. Perhaps Stevenson sticks to his guns about running for re-election as Governor of Illinois, and without other moderate dark horses left Truman and the Democratic party bosses are forced to accept Kefauver, and/or the GOP selects Taft over Ike via no Fair Play agreement.

[BigWillyG]

Originally Posted by Socrates

The greatest problem the US has that Scandinavia had to face is the fact the US had a very large chunk of the population that only escaped legal discrimination against them in the 1960s, and, due to racial division, did not have middle class support for helping them out afterwards. Perhaps if you have someone like George Romney become a Republican President, there could be a bipartisan focus on economic efforts.

Certainly healthcare would help. Another thing you may want to address is the war on drugs, which has basically destroyed poor inner city communities.

Have the '60s counter-culture become straight edge so you avoid Rockefeller drug laws and butterfly away the crack epidemic as a start? Or maybe have the reaction to the high level of drug use from the '60s-'80s be decriminalization or legalization rather than increasing laws and the War on Drugs?

[Hörnla]

I am Not advocating that, but restricting Immigration fiercely might Be a Trick. It might also have negative consequences, But Change the Labour market without a steady influx of People to fill the lowest and worst-paid Level of Jobs, These will either Not come up, Be better paid or Be sourced out abroad.

The downside is that we might have a smaller market of... Let me say 290 Million Americans in *2012.