The Week In News: The Rich Got Richer

The Congressional Budget Office released a study this week that revealed a huge shift in the nation's wealth distribution. The top 1 percent of the country's earners more than doubled their take of the nation's wealth in just 30 years. James Fallows, national correspondent with The Atlantic, joins weekends on All Things Considered host Guy Raz to discuss that story and others from the past week.

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GUY RAZ, host: It's WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

President BARACK OBAMA: The truth is we can no longer wait for Congress to do its job. The middle-class families who have been struggling for years are tired of waiting. They need help now. So, where Congress won't act, I will.

RAZ: President Obama from his weekly video address this morning on his current struggle with congressional Republicans to pass his jobs bill. James Fallows of The Atlantic joins me now as he does most Saturdays for a deeper look at some of the stories we're following. Jim, hello.

JAMES FALLOWS: Hello, Guy.

RAZ: This past week, Jim, the nonpartisan Congressional Budget Office released its study on the wealth distribution in this country. And it said basically said, the top 1 percent - these are the most prosperous Americans - they more than doubled their take of the nation's wealth over the last 30 years. And for much of the rest of America, its share of wealth has declined, in many cases, dramatically.

FALLOWS: I thought this was quite a significant study, partly because of the CBO's nonpartisan status, but also because it showed that over the last 30-plus years, that is the conscious lifetime for most Americans. There have been a quite profound shift in the nature of the American economic distribution that for the top 1 percent, as you said, their share after tax - and this is the crucial point - after all the sort of progressive taxes we have, they went from having roughly $1 out of every 12 of the American income distribution, to roughly $1 out of every six. It is almost about three and a half times more money went to the top 1 percent of Americans as to the bottom 20 percent.

And it also showed that mobility was somewhat less feasible than the past, other studies have shown this too. And so, we see that over a generation in which the taxing philosophy has changed for Americans through the supply side model of trying to leave more money in the hands of the upper income groups so they can create more jobs, changes in regulation, changes in globalization, the result has been a more polarized American income distribution than any time in modern American history.

RAZ: Mm-hmm. Jim, sticking with economics and economics across the pond, as a China watcher, you must be intrigued by what's happening in Europe as we speak. The European Union is essentially asking China to finance its sovereign debt crisis.

FALLOWS: Yes. And I think that China is in the same dilemma when it comes to how to approach the Europeans (unintelligible) been, over the last four or five years, dealing with the U.S. Because on the one hand, Chinese domestic politicians who do after all have politics to contend with even in this communist authoritarian country, they recognize that they don't want the savings that have been not used for China's own domestic welfare but invested overseas. They don't want to answer their own people's complaints about sort of wasting them on the profligate Europeans after they have wasted them on the profligate Americans.

On the other hand, they recognize that for the growth of the international economy and for China's long-term increasing influence around the world, they need to play some part here. So, I think they will play a part, but it will come with conditions.

RAZ: But it gives China, as you alluded to, a pretty significant amount of power.

FALLOWS: It gives them power, but they would point out power with complications because it makes them increasingly hostage to the vagaries of European finance and European politics in the way they have been to in the American financial system. So, yes, it's an increase in power but with all of the sort of thorny aspects that come with a larger global role for China.

RAZ: Hostage because, of course, they can't call in those debts because then all the dollars they hold will be worthless.

FALLOWS: Exactly so.

RAZ: Jim, let me move to domestic politics and the race for the GOP presidential nomination. Two polls released this week have Herman Cain leading the pack. He is still pretty far behind in money, though. It's been back-and-forth for months now. What do you make of these polls and Herman Cain?

FALLOWS: There was that marvelous ad for Herman Cain this past week showing his campaign manager doing a Marlboro man smoking into the camera, making the point there's never really been a campaign like this. And that is true in a broader sense than Herman Cain really wants to remind people of. He's never held elective office of any sort or at least, I guess, post-high school or college. And really, the last president that we had who was in that situation was Dwight Eisenhower, who after all had commanded the largest fighting force in the world history for a number of years.

Herman Cain, in addition to that background, he has an economic and tax policy, which he's been trying to sort of explain away over the last week or two. And he has made clear in foreign policy, that's something he would educate himself about once he took office if elected. And so, the fact that he is still ahead of Mitt Romney, the more sort of obvious credentialed, experience former governor, suggests something about the strains within the Republican Party as Herman Cain's appealing to its heart and Mitt Romney is appealing to some of its practical sensibility of what would be an electable candidate.

RAZ: James Fallows is national correspondent for The Atlantic. You can find his blog at jamesfallows.theatlantic.com. Jim, thanks so much.

FALLOWS: Thank you, Guy.

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