Following up on my earlier post about the Wealthiest Americans of All-Time, the U.K.’s Guardian has a story that puts a real face on this issue of increasing wealth inequality in the U.S. -- Welcome to Richistan, USA:

In 1985 there were just 13 US billionaires. Now there are more than 1,000. In 2005 the US saw 227,000 new millionaires being created. One survey showed that the wealth of all US millionaires was $30 trillion, more than the GDPs of China, Japan, Brazil, Russia and the EU combined. . . .

It is they who are responsible for the rebirth of the butler industry, which was all but dead in the Seventies and is now facing a shortage of trained staff. So keen is the demand that many can expect to earn a six-figure salary when they graduate from booming butler schools.

Then there is the runaway feeder-industry of luxury consumer items. The new ultra rich turn up their noses at Rolexes; the sought-after brand is Franck Muller, which sells a high-end timepiece for $736,000. Or try a Mont Blanc pen, encrusted in jewels, for $700,000. Louis Vuitton’s most exclusive handbag sells for $42,000. Only 24 were ever made and none ever touched a shelf as all were pre-sold to Richistani clients.

In places such as Manhattan and Los Angeles, restaurants and bars outdo themselves in excess. New York’s Algonquin Hotel has a $10,000 ‘martini on a rock’ (it comes with a diamond at the bottom of the glass). City eateries sell burgers for more than $50. One offers a $1,000 omlette. In Los Angeles there is a craze for Bling mineral water - at $90 a bottle. . . .

The growth of such a large super-rich class, coupled with a deepening poverty in many communities, is starting to tear at the fabric of society. Even some of the most wealthy - like Gates and Buffett - have spoken openly of the needs to address the massive ‘inequality gap’ that they have come to exemplify. . . In a speech last month Buffett - the third richest man in the world - pointed out that his tax rate was 17.7 per cent of his income while his secretary was taxed at 30 per cent. . . .

Defenders of low tax for the very rich point to the theory of trickle-down economics - the spending power of the rich benefiting the poor. But while the super-rich have boomed, the earning power of the average and poor citizen has not nearly matched the performance of the elite. In 2005 the top one per cent of earners in the US gained 14 per cent in income in real terms, while the rest of the country gained less than one per cent.

Of course, many would say that the U.S. is the land of opportunity, the perfect meritocracy, and so if people work hard and become wealthy, good for them -- they deserve it.

That would be fine if the U.S. was indeed the land of equal opportunity and a perfect meritocracy. But inevitably, it is not -- far from it. I really don’t have the time here to go into the specific details about why the U.S. is not the land of equal opportunity -- people can start by taking any introductory sociology class on social inequality or social problems to get the basic information.

All I can really do here is to comment that as the article points out, the U.S. is indeed in the process of becoming two separate societies -- one for the wealthiest 1% of the American population, and a second one for the bottom 95% of us. Instead of being divided by race, the primary method of social differentiation is likely to be wealth (although race will still be a primary factor in this process, since almost all of the wealthiest 1% are indeed White).

Can anything be done? On the one hand, I was a somewhat encouraged when, earlier this year, President Bush admitted to an audience of Wall Street executives that wealth inequality is a growing problem in our society. Also, as the article says, several of the wealthiest 1%, like Warren Buffett, have also admitted that wealth inequality is unfair and is a problem that needs to be addressed.

On the other hand, the trends are undeniable. Wealth inequality has continued to get worse each year and there seems to be no letup in sight. In other words, expect things to get worse -- much worse -- before they get better, if at all.