It is clear that the United States is no longer a country in which the lower class had the same opportunities as the upper class. Over the past half decade, the wealth gap in the U.S has been on a consistent rise with the rich getting richer and the poor getting poorer. This dynamic has created a very toxic divide in the country and has further split the country politically. According to the Pew Research center, over the last 50 years, the highest earning 20% of households have steadily brought in a larger share of the country’s total income, meaning that the majority wealth generated through income belongs to only 20% of the country’s population. But not only that, the wealth gap between the wealthiest households and poorest households has more than doubled in the last 30 years. Further on to display the unfairness in the capitalistic system that is the United States, the U.S has the highest income inequality of all the G7 nations which includes the United Kingdom, Italy, Japan, Canada, Germany and France. Although incomes throughout all classes have been growing the disparity shows in the rate at which the individual classes’ incomes grow. Pew Research goes on to state that from the year of 1970 to 2018, the median middle class income had risen 49 percent from 58,100$ to 86,600$, while the median income for upper class households had risen 64 percent from 126,000$ to 207,400$. These numbers are hard facts that oppose the idea that the United States is the land of equality and opportunity, it shows that that in the U.S, the only way to succeed if one has the money to generate more wealth by taking advantage of the less fortunate and exploiting their labor. Now is this not this classism?
The topic being discussed is whether or not the U.S financial and economic system perpetuates the injustice of class discrimination which I believe it definitely does. The Google definition of class discrimination includes individual attitudes, behaviors, and systems of practices or principles that benefit the upper class at the expense of the lower class. By the looks of the wealth trend among classes, it is obvious seeing one class benefiting, while another is suffering, so by the definition of classism it can definitely be argued that the financial policies in the U.S are based around a classist structure. These policies stem from the root of the United States economy, which is the idea of capitalism. The goal of this Op-Ed is not to argue whether or not capitalism is good or bad, rather take a look at certain events that have occurred within the capitalistic structure and show the classism embedded in those events.
The first of which was a recent scandal involving the stock trading app Robinhood, which is ironic with the tale of Robinhood being a man of the people. Robinhood was a trading app founded recently in 2013 and unlike most trading platforms, it was targeted towards everyday people with its simple to use interface. Robinhood soared in popularity with the app being most new traders go to options of stocks. However in January, it turned out that Robinhood was not so much for the people after all. What happened was that certain companies such as Gamestop, AMC, Blackberry, and Nokia weren’t doing so well at the time. In stock trading when a company is believed to be under performing or headed towards bankruptcy, the big financial institutions will often bet against these companies which is known as shorting a stock. They basically borrow a stock from a lender which they then sell, and when the stock price drops they buy it back to return to the lender, pocketing the difference. The important point to remember is the key to making money by shorting is that the price of the stock in the future needs to go down. Since these certain stocks were deemed underperforming by the hedge funds and banks, they attempted to go on a short position. This is where the internet came in. A large group of everyday investors that had a forum on the website reddit, known as wallstreetbets, found out about the intentions of these large financial institutions for those underperforming stocks and banded together to start buying shares of the stocks and in doing so the stock prices rose at the expense of the banks and hedge funds. This soon gained a lot of publicity and media attention and even people that were not a part of the forum began buying shares of these stocks. As the prices of these stocks began to soar, these everyday people that bought the stocks began to make money like they never had before. There were stories of people that were able to pay off their college debt, credit card debt, and even the mortgage on their homes but all of this came to a sudden stop. Since the big financial institutions like the banks and hedge funds were losing a ridiculous amount of money, they began coordinating with trading platforms such as Robinhood to halt all trading on certain stocks, only allowing holders to sell what they owned which would inevitably drive the price down so they could make the money they had intended on making. This caused major uproar and backlash in the financial community because it was seen as market manipulation. No one seems to care if the regular person loses money in the stock market, but as soon as the investment banks and hedge funds begin to lose money it’s a big issue? The unfairness of the whole situation was pretty clear and Robinhood attempted to give reasons for them halting trading, but it was clear that the app that was supposed to be “for the people” was just for the hedge funds after all. What was even more frustrating was that there were seemingly no consequences for this market manipulation, they had every legal right to do what they did, so it seems to me that the financial markets are not a fair place where people can go to make money, rather it is always in favor or the upper class with the wealth. This incident showed that the policies in the financial markets are favored towards the upper class at the expense of the lower class and it without a doubt fits the definition of classism.
Another instance of class discrimination in the financial market was the 2008 financial crisis. The crisis occurred when the banks working with mortgage lenders, began to give out widespread subprime mortgages. Basically taking advantage of people and giving them mortgages on homes they couldn’t afford in the first place. They did so in order to sell off these subprime mortgages to other investors knowing that what they were selling were empty investments. Since these mortgages were not going to be paid off, it eventually all came crashing down in 2008. The values of homes dropped, people lost their jobs and it became the worst financial crisis in history since the great depression. But no one was held responsible, and once again the banks were let off from government funding and not one person went to jail even though what had happened was corrupt. The wealthy got to consequences from their greedy attempt to take advantage of the working class Americans.
The government had always been at the side of the upper class and the big financial institutions when they make mistakes while letting everyday people fend for themselves. From these two instances we can see that policies and principles set by the government along with the securities and exchange commission (which monitors the markets and trading) clearly favor the upper class. It’s as if their mindset is who cares if regular people lose money, as long as the rich are making more.
This is clear class discrimination within our financial system and economy where the regular person has no voice. When Gayatri Spivak wrote “Can the Subaltern Speak” we see how those who are marginalized or do not have power have no voice and cannot get their opinions heard. In the U.S, where money is power, those without the money are the subaltern. Their voice goes unheard and the government who is supposed to protect its citizens, sides with the wealthy. In order to combat this, major reform needs to occur within financial institutions and new policies need to be enacted that prevent large financial institutions from getting away with taking advantage of everyday people. Presidential candidates such Bernie Sanders had the right idea in mind by running his campaign on the premise that the big banks were evil and needed to be abolished. So to answer the question Yo, is the financial system of the United States Classist? Yes, and these incidents should be a remembrance that this will continue to happen unless we have reform with the aid of new leadership that is really for the people.
References: Pew Research Center