I didn’t notice much when a terrific storm slammed into parts of New York City on Thursday evening. I was working at my computer in a quiet apartment on the Upper West Side of Manhattan. The skies darkened and it began to rain, and I could hear thunder. But that’s all. I made a cup of coffee and kept working.
The movers and shakers of our society seem similarly oblivious to the terrible destruction wrought by the economic storm that has roared through America. They’ve heard some thunder, perhaps, and seen some lightning, and maybe felt a bit of the wind. But there is nothing that society’s leaders are doing — no sense of urgency in their policies or attitudes — that suggests they understand the extent of the economic devastation that has come crashing down like a plague on the poor and much of the middle class.
I think this is an important point that doesn't get made enough. When making policy decisions, members of congress and the chattering class are insulated from the concerns of much of the nation. Why do I say this? As of 2008, there were 238 millionaires in congress. That's a slightly higher ratio (44% vs <1%) than in the nation as a whole. Even those that aren't millionaires make a comfortable salary with lots of nice benefits. Journalists writing for the major news outlets or fellows at the major think tanks are similarly comfortable.
What's more, people tend to hang out with the same type of people. College graduates have an unemployment rate of under 5%, compared to people without a high school diploma, 14% of whom are unemployed. But the people shaping opinion and conventional wisdom in our political system are emphatically from the former group, and likely have little interaction with the latter.
Both our policy-makers and the movers and shakers they listen to are insulated from the full cost of the recession, just like Mr Herbert was insulated from the storm. It's folly to think that doesn't have an effect on policy.
EDIT: Brad Delong has a post along the same lines up. Yes, $455,000 is rich.