Inequality Delusions

In the U.S., there is much residential segregation by class, enforced by zoning laws. I have read that in Europe, there are often neighborhoods with a mixture of small and large homes. I wonder this explains at least part of the discrepancy between reality and belief in the U.S.

See link below for chart.

http://krugman.blogs.nytimes.com/2014/08/20/inequality-delusions/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1

Paul Krugman
Aug. 20, 2014

Via the FT, a new study compares perceptions of inequality across advanced nations. The big takeaway here is that Americans are more likely than Europeans to believe that they live in a middle-class society, even though income is really much less equally distributed here than in Europe. I’ve truncated the table to show the comparison between the U.S. and France: the French think they live in a hierarchical pyramid when they are in reality mostly middle-class, Americans are the opposite.

As the paper says, other evidence also says that Americans vastly underestimate inequality in their own society – and when asked to choose an ideal wealth distribution, say that they like Sweden.

Why the difference? American exceptionalism when it comes to income distribution – our unique suspicion of and hostility to social insurance and anti-poverty programs – is, I and many others would argue, very much tied to our racial history. This does not, however, explain in any direct way why we should misperceive real inequality: people could oppose aid to Those People while understanding how rich the rich are. There may, however, be an indirect effect, because the racial divide empowers right-wing groups of all kinds, which in turn issue a lot of propaganda dismissing and minimizing inequality.