This Phoenix, Arizona, couple with arnsmall child bring home about $30,000rnper year. Yet they could not afford to buvrnChristmas presents this year.rnNow, not putting more cash into somernmerchant’s pockets is no great loss. Butrnkeeping a young family constantly on arntreadmill without a respite is an Americanrntragedy of the 1990’s. Especiallyrnwhen, as if adding insult to injur,’, we seernbillionaires like Ted Turner get a taxrnbreak for donating $ 1 billion to the UnitedrnNations, while middle-class Americansrnlike Dawn and Marty often have tornresort to buying even milk and bread onrncredit.rnNor is this some sort of a regional phenomenon.rnHere is, for example, an excerptrnfrom a letter I received from arnnewspaper editor in the nation’s capital:rn”In Washington, the level of incomernrequired to achieve a ‘middle-class’rnstandard of living—e.g., a single familyrnhome in a decent neighborhood,rnenough money to raise at least two childrenrnresponsibly, etc. —is about $80,000rnannually, fiardly a ‘middle-class’ wage.rnIf I recall correctly, government statisticsrndefine a ‘middle-class’ family income asrn$34,000 or so Meanwhile, the ‘plutocrats’rnare moving into garish $600,000-rnmillion-plus homes with more squarernfootage than a small English castle, drivingrntwo or three $50,000 luxury cars, andrnkeeping their kids out of the dead-endrnpublic schools.”rnClearly, the rich are getting richer, thernpoor poorer. Phoenix, Washington, andrnmany other American cities have theirrnown “Great American Divide” stories,rnbut nowhere is the desecration of thernAmerican Dream more visible than inrnthe “financial capital of the world,”rnGotham Cit^’—host both to Wall Streetrnand the United Nations.rnAs Bill Clinton and his entouragernused a South Bronx neighborhood inrnNew York for a pre-Christmas photo-oprnin early December; as Wall Street celebratedrnanother “bull” market year; as therneconomists hailed the supposed strengthrnof the American economy, especially inrncontrast to the Asian crisis, the Washington-rnbased Center on Budget and PolicyrnPriorities (COBPP) released a devastatingrnreport. Income inequality has beenrngrowing in 48 of the 50 states. Only inrnAlaska and North Dakota has the gap betweenrnthe incomes of the richest and thernpoorest residents narrowed over the pastrn20 years.rnBetween the late 1970’s and the mid-rnI990’s, the incomes of upper-incomernfamilies with children increased in everyrnstate. On average, incomes of the richestrnfifth of families increased by 30 percentrnafter adjusting for inflation. In sharprncontrast, incomes of the poorest fifth ofrnfamilies with children decreased in 44 ofrnthe 50 states for an overall decline of 44rnpercent. Nor did the so-called “middlernclass” fare much better. The incomes ofrnmiddle-income families dropped by 22rnpercent during the same period.rn”Robust economic growth in recentrnyears has done little to turn around thernlong-term trend toward increasing inequality,”rnsaid Kathy Larin, co-author ofrnthe report and a policy analyst atrnCOBPP. And guess where the GreatrnAmerican Divide, which separates thernrich and the poor, is widest? New York.rnThe ten states where the gap is greatestrnbetween the incomes of the highest-incomernand lowest-income families withrnchildren are (in declining order) NewrnYork, Louisiana, New Mexico, Arizona,rnConnecticut, California, Florida, Kentucky,rnAlabama, and West Virginia, thernCOBPP report said. New York is alsornleading the nation in terms of the gap betweenrnhigh-income and middle-incomernfamilies with children. During the pastrntwo decades, the gap widened mostrnrapidly in New York, Indiana, Arizona,rnCalifornia, Georgia, Connecticut, WestrnVirginia, Texas, Pennsylvania, and Tennessee.rnIn other words. New York isrnAmerica’s “plutocracy capital.”rnThe latest census data merely confirmrnthe earlier trends. In an August 1997 report,rnfor example, the same Washingtonbasedrnresearch organization noted thatrnthe wealthiest one percent of Americansrnreceived as much after-tax income inrn1994 as the bottom 35 percent of thernpopulation —combined. The top 20rnpercent of the population had nearly asrnmuch income as the bottom 80 percent.rnBetween 1977 and 1994-the firstrnand last years for which COBPP issuedrnsuch statistics—the share of the nationalrnafter-tax income received by the top onernpercent of the population rose substantially.rnIn 1977, the bottom 35 percent ofrnthe population had nearly twice as muchrnafter-tax income as the top one percent.rnBy 1994, these two groups had essentiallyrnthe same amount of income. “Incomernhas become much more concentratedrnamong a relative handful of the wealthiestrnAmericans,” noted Isaac Shapiro, arnsenior fellow at COBPP and co-author ofrnthe report. The average after-tax incomernof the top one percent of familiesrnequaled $374,000 in 1994, or 15 timesrnthe average after-tax income for the middlernfifth of families, which stood atrn$25,650.rnIn fact, the COBPP studies understaternthe width of the Great American Divide.rnThe census data used for its report didrnnot include capital gains income as familyrnincome, for example, understatingrnthe incomes of the top fifth of familiesrnwho receive most of the capital gains income.rnThe census data also did not reflectrnearnings above $100,000 for anyrnone job, further understating the incomesrnof the American elite.rnOn the other hand, partly offsettingrnthose factors was a corresponding omissionrnfroin the data of welfare benefits,rnsuch as food stamps, which poor familiesrnmay receive. In all, however, thernCOBPP said its report “understates incomerndisparities between the top andrnmiddle fifth, and, to a lesser degree,rnthose between the top and bottom fifth.”rnIn other words, the United States is evenrnmore of a plutocracy than these alarmingrnnumbers suggest. And the disparities betweenrnthe rich and the poor are approachingrnthose in some other countriesrnbefore their elites were sent to the dustbinrnof histor}’ by the common folk upsetrnover “taxation without representation.”rn”It’s a few years down the line, but ourrnclass disparity and age disparity (wealth,rnprivileges, and tax break for the non-poorrnelderly, which is about 40 percent of thernelderly) will split the population not justrnalong class lines but also along generationalrnlines,” writes a college professorrnin Pennsylvania. “It’s gonna get uglyrnin about 20 years, maybe sooner.” Itrnmay happen sooner —when the BabyrnBoomers start cashing en masse their retirementrnchecks. Many will discover thatrnthis money is gone, since by then thernWall Street Ploover will have sucked itrnout of the pension funds.rnWhen will that happen? Probablyrnwithin the next ten years. So, if you’re arnBaby Boomer counting on spendingrnyour old age in an easy chair funded by arnbig business pension, consider an earlyrnretirement. Then follow it up with somernsort of Golden Age entrepreneurial venture,rnthe new Golden Parachute ofrnAmerica’s dwindling middle class.rnBoil Djurdjevic heads up Annex Researchrnfwwvv.djurdjevic.comj, which analyzesrngeopolitical affairs, and Truth in Mediarn(www.beograd.com/truth).rn48/CHRONICLESrnrnrn