Why inequality is a ticking time bomb – for poor and rich

Riots may ensue as more poor Americans recognize their "miserable" long-term prospects.

JARED DIAMOND: Inequality is one of the big problems of the United States. But it's also a big problem of the world. To start with a problem for the United States, inequality with the United States, everybody knows by now the numbers the 1% or 0.1% of the people have 80% of the money in the United States. One might say if you're rich, you might say well, "Isn't that sad? But those poor people, they're poor because they're lazy and they're not trying hard and the American dream is rags to riches. They're poor because it's all their fault."

Well, the big reason that they are poor is because they are getting crummy educations, because American support for education has declined, because where you live is tied to the quality of the school where you're at. And if you get a crummy education, you're going to end up with a crummy job and you're going to end up poor. In the United States the correlation between the income of parents and the income of their children when they grow up is higher than in any other country in the world, meaning that if you want to be rich, if you are a child and you want to be rich, the best thing to do is to be born to rich parents. There's is a cruel joke which says if you are a baby, choose your parents carefully, because that's the best predictor of whether you end up rich or not.

You can say so what difference does it make for the rich people if there are all these unhappy unproductive poor people? Well, in my lifetime in Los Angeles, twice I've experienced riots in my city of Los Angeles, where the riots broke out in the center of the city where there were lots of poor people, miserable, recognizing that they didn't have any long term prospects. And they started rioting and they burning, they started burning. Sections like Beverly Hills that the rioters would spread out of the center of Los Angeles and start wrecking Beverly Hills. So what did the police do in Beverly Hills? The only thing they could do was to string up strips of this yellow plastic police tape across the main boulevards with signs that said rioters keep out.

Well, at the time of the last riots, the rioters, it happened, did not invade Beverly Hills. But you can bet there will be more if there's Inequality continuing in the United States, there'll be more riots. And the next time the rioters are going to invade Beverly Hills and they will be burning and doing other bad things there. And yellow strips of plastic police tape will not keep them out. So what does inequality mean for the United States? It's really bad for those Americans at the lower end of the spectrum, but it's going to be bad, and maybe fatally bad, for rich Americans.

  • How bad is wealth inequality in the United States? About 1 percent of Americans hold 80 percent of the money.
  • In the United States, the correlation between the income of parents and the income of their children when they grow up is higher than in any other country in the world.
  • One of the big underlying reasons for poverty is receiving a crummy education, which in turn leads to crummy jobs. When people recognize their miserable long-term prospects, they are more likely to partake in riots.

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