A recent post noted the U.S. was grouped at the bottom of the OECD countries in terms of social justice. A reader asks, how does the U.S. stand compared to the “1000 lb. gorillas” in terms of population – India and China – and other nations in, for example, South America?

The “social justice” rankings look at a number of different factors, including poverty, education, health services, intergenerational equity, and income inequality. The GINI index is used to measure income inequality. Overall social justice ratings are not available for all nations, but the GINI index is compiled for most of the world’s nations – by the CIA, no less! While the GINI Index may not be a perfect measure of social justice, there’s a pretty good correlation between the two, and it’s the best we’ve got.

The CIA World Factbook explains the GINI Index “measures the degree of inequality in the distribution of family income in a country.” The Big Picture highlights where the U.S. stands:

There we are at #39 (out of 136 – the lower the ranking, the more unequal), right next to Bulgaria and Cameroon. The CIA’s ranking of the 136 countries listed is here.

China is #52 at 41.5, India #80 at 36.8. Russia is #51, at 42.2. Fine company the U.S. finds itself in – we’re not close to even rubbing shoulders with the European countries from whom we claim to have inherited the mantle of civilization and global leadership.

It wasn’t so long ago the U.S looked quite a bit better.

A GINI rating of o.39, which the U.S. sported about 30 years ago, would today put us in the same company as Mauritius, Malawi, and Mauritania. Now there’s something to aspire to! With a little more work we might be able to match Moldova, and then maybe even Yemen!

But we’re moving in the other direction. Banana republic, here we come!

The 34 member countries of the Organization for Economic Co-operation and Development (OECD) -including the U.S. – have set as their mission “the increase of general well-being“.

So how is the U.S. doing, compared to other member states? According to a report by the Bertelsmann Stiftung, not at all well. The U.S. is at the bottom of the list, in the same company as Greece, Chile, Mexico, and Turkey – as seen in this chart posted by Charles Blow at the New York Times.

Blow levels a fierce and damning indictment:

We are slowly — and painfully — being forced to realize that we are no longer the America of our imaginations.* * *

We have not taken care of the least among us. We have allowed a revolting level of income inequality to develop. We have watched as millions of our fellow countrymen have fallen into poverty. And we have done a poor job of educating our children and now threaten to leave them a country that is a shell of its former self. We should be ashamed.

According to the Congressional Budget Office, the very richest of us have been taking more and more while everyone else has had to settle for less and less.

The graph below from Barry Rizholtz The Big Picture showing that household income for all but the very, very richest has barely budged since 1979.

The CBO reports that incomes for “households” in all income groups have risen since 1979 – but that doesn’t mean that people are richer or better off. Much of the increase in “household” incomes is explained by more women entering the work force, forming dual income families.

But the additional household income doesn’t ensure that families are better off financially. Remember back when one income was enough to support a decent life?

Increasing income can disguise increasing poverty if the increase is eaten up by rising costs. For most people, energy and health care costs are growing faster than incomes, leaving less and less money for everything else despite increasing GDP.

And then there’s the fact that real average incomes in the U.S. have stopped growing at all, as seen in this chart posted by Michael Panzner at Financial Armageddon.

With more and more of a stagnant pie going to the top 1%, everyone else has no choice but to get by with less and less.

For the past 30 years or more, America has been obsessed with economic growth above all else. And acquiring wealth is the ultimate sign of virtue, as evidenced in the speech prepared by House Majority Leader Eric Cantor for presentation at the University of Pennsylvania’s Wharton School of Business, cancelled when the school opened attendance to the first 300 who showed up – and activists from Wall Street movement took up the invitation.

There are politicians and others who want to demonize people that have earned success in certain sectors of our society. They claim that these people have now made enough, and haven’t paid their fair share. But, pitting Americans against one another tends to deflate the aspirational spirit of our people and fade the American dream. I believe that the most successful among us are positioned to use their talents to help grow our economy and give everyone a hand up the ladder and the dignity of a job.

In an op ed at the Washington Times, Cantor reiterates that objecting to income inequality is “class warfare” that gets in the way of growth.

But the politics of division have reared up, fueled by efforts to incite class warfare. * * * Yet last week, the president called for more stimulus spending paid for by higher taxes and more job-killing regulations. The past two years have shown that this is no way to create jobs. In lieu of more wasteful stimulus spending, we should go all-in on ways to invigorate growth.

Economists don’t take trickle-down economics seriously – why do politicians? The consequences have manifested themselves over the last thirty years, for everyone to see. But the idolizing of economic growth enables us to pretend that inequality doesn’t matter.

The idea that exponential growth can continue indefinitely on a finite planet is insane. The consequences of pursuing it – most alarmingly, global warming and attendant climate change – are catastrophic. The social and ecological predicaments we find ourselves in can be addressed only if we let go of the idea of growth and instead embracing degrowth.

Via Barry Ritholtz at The Big Picture and Michael Panzer at Financial Armageddon, a link to 22 charts at min.us illustrating just how unequal the U.S. has become.

Over the last ~40 years, essentially all of the income growth in the U.S. has gone to the top 10%.

The income tax rate for the top bracket has fallen from 70-90% to below 40% – while effective tax rates are much lower. Effective tax rates for corporations have fallen steadily, with many companies paying no tax at all. As a result, a very small percentage of Americans own almost all the wealth in the U.S..

In the U.S., it’s a new Gilded Age.

The level of inequality in the U.S. is much higher than in any other Western nation. The U.S. is now comparable to Mexico and China, in the same league with the nations of Central and South America.

We’ve become a banana republic, and in more ways than one. As Tom Engelhardt at TomDispatch puts it, welcome to post-legal America. As reflected in our foreign policy, our national security apparatus, and our too-big-to-jail financial and corporate elites, the idea of a nation based on the rule of law has become nothing more than nostalgia for, or sentimentality about, a long-lost past.

Michael Panzer at Financial Armageddon posts this most telling chart:

Ain’t free market fundamentalism grand?

In January, sales at gas stations accounted for 10.34% of all retail sales, according to the Commerce Department. That’s the highest level since October 2008.

In July 2008 – just before the big crash – gasoline prices exceeded $4.15 a gallon and gas station sales accounted for 12.47% of retail sales. When gasoline prices last rose to $3.25 a gallon, in March 2008, gas station sales accounted for 11.55% of all retail sales – significantly more than now.

Fuel prices aren’t all that’s been soaring – food prices have, too. The United Nations Food and Agriculture Organization reports global food prices reached an all-time high in January 2011.

Last year, unusual and extreme weather – too hot or cold, or too dry or wet, due in part to global warming-induced climate change – affected major food producers and exporters around the world, from Russia and Ukraine to Canada and the U.S., Germany, Australia, Pakistan, Argentina and the countries of Southeast Asia.

Food riots have started again. Political unrest, stoked by rising food prices, is sweeping the Middle East and North Africa, threatening the stability of the world’s oil supplies. Egypt, Tunisia, Yemen, Libya and Bahrain have seen political uprisings. There have been demonstrations in Algeria, Jordan, Iraq, Morocco, and now Oman. Were instability to spread to Saudi Arabia, the world would tremble indeed.

The world’s food supply is highly dependent on oil.  In a back-of-the-envelope calculation, Paul Chefurka estimates the operation of the world’s food supply consumes about 23% of the world’s oil.

Oil shortages mean food shortages. Food shortages lead to political upheaval, disrupting oil production. Meanwhile in the U.S., we’re burning over one-third of our corn crop – one-sixth of the world’s supply of corn – to run our cars.  This chart is via Early Warning.

Running our cars and trucks is once again on the verge of becoming so expensive that the cost will blow up the economy.

And oh yes, in the U.S. the disparity of wealth between the rich and the rest has never been greater.

Leading indicators of revolt in the Middle East and North Africa include corruption, unemployment, and the percentage of household income spent on food.

Rising inequality in the U.S. is one measure of corruption. As the hijacking of the bailout by the banksters conclusively evidences, democracy in the U.S.  – with a big assist from the Supreme Court in Bush v. Gore and Citizens United – is nothing more than a sideshow and the U.S. is now demonstrably an oligarchy.

Unemployment? While the “official” rate is stated to have fallen to 9.0% – but that number would be over 11% were it not for millions of people allegedly dropping out of the labor force over the last year. And the more revealing U-6 rate is running at 16.1%.

And food costs? Over the 12 months, the food index has risen 1.8% with the “food at home” index up 2.1%; both 12-month changes are the highest since 2009. More tellingly, there has been a dramatic increase in hunger in the United States in the last three years and a record 14+% of the population is on food stamps. Maybe the rich can still buy food, but it’s getting harder and harder for everybody else as their incomes are dropping even as food prices rise.

If food prices are not yet making Americans scream, Americans are much more sensitive to rising prices at the pump – God help anyone who would interfere with our love affair with our cars. The energy index has increased 7.3% over the last 12 months, with the gasoline index up 13.4%. Crude oil prices have been fluctuating around levels last seen just before the 2008 spike to $147/barrel. One additional geopolitical spark could set off an explosion, the likes of which we’ve never before seen.

How long before growing inequality in the U.S. results in riots and unrest?  Is what we’re seeing in Wisconsin a mere harbinger of more serious struggles to come?

Our politics – whether local, national, or international – is laughably incapable of confronting reality. Here in Oregon, even a “progressive” governor has abandoned his environmental roots and embraced “economic development,” a policy direction reiterated by his newly-appointed natural resources adviser saying the focus will be “on jobs, not mainstream environmental issues.”

Lives, both of humans and political entities, are now at stake. But we’re still thinking within the old paradigm of “growth.” How long can it be before we at last drop the pretense, and acknowledge, and openly and honestly deal with the new paradigm reality has dealt us?

David Korten has an extraordinarily perceptive and moving article in Yes! titled The Illusion of Money: real wealth or phantom assets? exploring the difference between real living wealth and phantom financial wealth – and points out that in the long run only real wealth matters and brings happiness.

Real wealth has intrinsic value. Examples include fertile land, healthful food, knowledge, productive labor, pure water and clean air, labor, and physical infrastructure. The most important forms of real wealth are beyond price and are unavailable for market purchase. These include healthy, happy children, loving families, caring communities, a beautiful, healthy, natural environment.

Real wealth also includes all the many things of intrinsic artistic, spiritual, or utilitarian value essential to maintaining the various forms of living wealth. These may or may not have a market price. They include healthful food, fertile land, pure water, clean air, caring relationships and loving parents, education, health care, fulfilling opportunities for service, and time for meditation and spiritual reflection.

The fact that in the U.S. it’s mainly phantom financial wealth that is idolized and protected by our political system is a measure of how far the U.S. empire has already fallen from the heights of its glory days.

Think of the trillions spent propping up the financial system, while the ecological and social systems that sustain us remain ignored and untended. Faced with a crisis and limited resources, our leaders threw the real economy overboard, believing that the illusory wealth of Wall Street was what really mattered.

The first hint that something was very wrong with our civilization was in the early 1970s (corresponding with peak oil in the U.S.). That crisis was dealt with by jettisoning the dollar’s link to anything real, and by selling our souls to the Saudis and Middle Eastern oil. The crisis appeared to have been averted, and was followed by 30+ years of stability. But below the surface, the economy was rotting out, and for the first time millions of Americans were growing poorer rather than richer. John Michael Greer pinpoints the beginning of the first wave of catabolic collapse at 1974:

[T]he question is simply when to place the first wave of catabolism in America – the point at which crises bring a temporary end to business as usual, access to real wealth becomes a much more challenging thing for a large fraction of the population, and significant amounts of the national infrastructure are abandoned or stripped for salvage. It’s not a difficult question to answer, either.

The date in question is 1974.

The current crisis is the beginning of the second wave of catabolic collapse.

At some point, we’ll have to let it all go: the far-flung military bases, the carrier battle groups, the manned space programs, the financial superstructures that girdle the globe, the freeway networks with potholed pavement and crumbling bridges, maybe even the creaking electrical grid that powers our TVs, computers, video games, and air conditioners.

But we’ve already seen who will be getting screwed. The financial bailout confirms that it won’t be any different this time around.

These graphs posted by Charles Hugh Smith at Of Two Minds show just how skewed the distribution of wealth has become in the U.S over the past 40+ years.

The vast majority of assets held by the Baby Boom generation are in the top 5% of households, and most of the remaining assets are owned by the 15% tranch just beneath the top 5%. The bottom 80% don’t have much home equity or directly owned bonds or stocks.As Abraham Lincoln stated in the Gettysburg Address, our nation was founded on the proposition that all men are created equal. A nation so unequal as the U.S. has become cannot long endure.

This chart, posted by Alexander Liddington-Cox in an article in the Business Spectator, provides graphic evidence of how whacked the U.S. has become.

This graph puts the US “defense” budget at $US 711 billion in 2009. But that doesn’t include a number of “off-budget” items that, on some estimates, push US “defense” spending above $US1.3 trillion.

And hardly a peep from anybody in the U.S., politicians or citizens alike, that there’s anything wrong here, that such misdirected profligacy is anything but normal and necessary. At the same time – thanks in no small part to military spending – U.S. government debt has spun beyond any point where servicing that debt might seem a reasonable possibility. Increasingly, state and local governments are facing bankruptcy. With President Obama himself leading the charge, social safety net programs protecting low and middle income people – most appallingly, social security – are under attack while the wealthy get more and more – and Obama’s undeclared war on social security is set to be escalated. Public employee pension programs are under attack, and private pensions are disappearing. And the division of wealth in this country has reached extremes not seen since the Gilded Age of the late 1920s. This growing inequality of wealth is itself a major cause of the financial crisis.

Credit: The Nation

Matt Taibbi observes in his new book Griftopia:

What has taken place over the last generation is a highly complicated merger of crime and policy, of stealing and government. . . . The financial leaders of America and their political servants have seemingly reached the cynical conclusion that our society is not worth saving and have taken on a new mission that involves not creating wealth for all, but simply absconding with whatever wealth remains in our hollowed-out economy. They don’t feed us, we feed them.

The reality is, there is zero chance that the U.S. political system will act, any time in the foreseeable future, to reign in, much less dismantle, the American Empire; or to restore democracy and redress the redistribution of wealth towards the wealthy that has occurred in this country over the last 30 years. It’s time to admit the sad truth: the quiet coup is a fait accompli. The Republic is dead.

Don’t be too quick to hail, “long live the Empire.”  The days of the Empire are numbered.

Barry Ritholtz has published this graph at his blog The Big Picture showing how badly skewed income distribution in the U.S. has become.

Particularly disturbing is that people don’t have a clue about how badly they’ve been screwed by the rich and powerful.

There has been a class war raging in this country, and the rich have won. Most Americans desire a much more equal society, but they’ve been so propagandized and browbeaten they’ve instead taken common cause with their oppressors. It’s like the Stockholm syndrome writ large.

Rural life is extremely energy intense, especially in terms of oil. Exurban living – people living “consumer lives with prettier views” – depends on very long supply lines. Alex Stefan at Worldchanging explains why the exurban lifestyle is not only not “green”, it is at risk in an environment where energy prices can go nowhere but up.

[W]e know that big, dense cities are greener; that the energy used in shipping food is a small portion of its overall impact, that transit is more energy efficient than driving (and indeed, that cars are the largest contributor to climate change), and that the benefits of urban living in compact, walkable, wired communities can extend far beyond living in smaller homes, served by more efficient infrastructure and not owning a car, to include a dramatic overall drop in one’s environmental impact. What’s more, we know why these things are so[.]

Unfortunately for people living in rural areas, we know a lot more about how to live a prosperous-yet-low-impact urban life than we do about how to live a rural life of equal prosperity with a small ecological footprint. Rural areas are poorer than urban areas, and offer fewer opportunities. Envisioning how people in rural areas  will be able to prosper and live decent lives  in an environment bereft of cheap and abundant energy is a challenge that has yet to be faced.