Dream Hoarders – A SavvyReview

Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What do to about It

Hardcover: 156 pages

Publisher: Brookings Institution Press (2017)

Richard V. Reeves (born in the UK in 1969) is a senior fellow in Economic Studies at the Brookings Institution in Washington DC. Between 2010 and 2012, he was director of strategy to the UK’s Deputy Prime Minister. He has also been director of Demos, the London-based political think-tank, principal policy advisor to the Minister for Welfare Reform, research fellow at the Institute for Public Policy Research, among other roles. He is a former European Business Speaker of the Year. A former journalist on the Guardian and Observer newspapers, Reeves is a contributor to The Atlantic, National Affairs, Democracy Journal, the Wall Street Journal and the New York Times.

British by birth, Reeves has lived in the United States since 2012 and became a citizen in 2016. He notes he always hated the walls created by social class distinctions in the United Kingdom. The American idea of a classless society was very attractive to him. Unfortunately however, as he notes early in the book – and details in eight chapters over 156 pages – it has been disheartening to learn that the class structure of his new homeland is more rigid than the one he left behind, particularly at the top. Quite the indictment of our current form of Capitalism and the resulting inequalities.

Most Americans would probably say ‘middle class’ when asked which class they would assign to themselves. Surveys suggest only about 2% acknowledge that they’re ‘upper class.’ However, if your household income is above $112,000 – most of the readers of this blog and other bloggers I communicate with on social media outlets I would imagine – you are in the top fifth of the distribution. If that income is above $200,000, you slide even higher, into the top tenth.

The Problem of the Upper Middle Class

Perhaps not surprisingly, the image of an expansive middle class has existed for quite some time. America’s self-image is that of a middle-class nation. If the vast majority belong to the middle class, we would effectively be a classless nation. That is a noble and refreshing idea. Reeves believes that is not the case. In fact, he suggests America is deeply and increasingly divided along class lines. The top fifth, those belonging to the upper middle class and upper class, are separating and segregating from the bottom 80 percent.

Reeves contends the image of America as a ‘classless’ society is in danger, if not already evaporated. Most importantly, affluent Americans are increasingly living separate and distinct lives. He attributes this new, rigid class structure to the actions of the top 20 percent, the upper middle class.

The Divide

The divide can be easily measured in dollars. As noted in Chapter 1: Hoarding the Dream, since 1980, the top 20 percent has seen more growth in market income ($4 trillion) than the bottom 80 percent combined ($3 trillion). The class divide can also be seen in education, as most students at selective colleges are from families in the top fifth.

The persistent myth of a universal middle class allows affluent Americans to deny their privilege, to unfairly hoard opportunities, and to resist redistribution. As an example, Reeves notes the affluent live in upscale neighborhoods and are often protected by zoning laws that insist, for example, on single-family homes. He also notes, in Chapter 6: Opportunity Hoarding, “The IRS is generous when we sell our expensive homes too, giving us a break from any tax on capital gains. Half the value of this tax break goes to those of us in the top income quintile. Thanks, Uncle Sam!” In a number of ways our tax system helps richer people buy bigger houses near the best schools … which exacerbates the segregation.

Final Thoughts

At the end of the day Reeves believes the first step in adequately addressing the widening inequality in American society is for those occupying the uppermost rungs to acknowledge their own position. Unfortunately, I have my doubts if that will ever happen. And if it does, the hard part – making changes that would likely impact their own station in life – will require quite the effort on the part of the upper middle class.

Potentially of interest, particularly for those inclined to challenge his conclusions, Reeves utilizes a fair number of graphs to illustrate the how and why of inequality; and an extensive Notes section provides a listing of the numerous references.

Reeves provides lots of food for thought; particularly for those comfortably ensconced in the upper middle class. Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What do to about It is available at Amazon in Kindle and Hardcover editions.

 

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

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