It’s the difference between reality and our perception of reality.

Here’s the first one…

Matthew Yglesias points out how this affects, well…everything.

What’s interesting here is the extent to which the public vastly overestimates the prosperity of lower-income Americans. The public thinks the 4th quintile has more money than the median quintile actually has.  And the public thinks the 5th quintile has vastly more wealth than it really has.You can easily see how this could have a giant distorting effect on our politics.

 The thing that is so curious about this, including the bolded portion above, where Americans think the “middle class” actually exists in large number and has more money than than the “upper middle class”, when in reality the “middle class” has less money than most Americans think the “lower middle class ” has.

(note: for simplification purposes these are my definitions: Top 20% = “upper class”  ;  Next 20% = “upper middle class” ; Next 20 % = “middle class” ; Next 20% =  “lower middle class” : Bottom 20% “broke-ass muthas”.   It should also be noted that very few analysis on this subject include simple, quantifiable, definitions of these terms.)

I’m going to, like Yglesias, largely ignore that “ideal” section.   Compiling aggregate information from “perfect scenario” descriptions by individuals seems far to open to error.

But look at the rest?  I’ve noted before here that there has been a (to me) alarming trend of accumulated wealth in this country for the last 30 years (covered here, briefly), but this complete lack of self-perception about the extent of issue explains a great deal more.

It is because of this flawed perception that lawmakers can go on TV and, with a straight face, say, we need to cut taxes on that oppressed minority of wealthy people so they might send a few scraps on down the chain.   The scraps haven’t been coming for the last 30 years in reality, but the perception is that it works just fine.

We continue to ship off jobs overseas, increasing the wealth at the top and the congestion at the bottom, but, because of the perception, anyone trying to do something about it…

President Obama has complained that the U.S. tax system encourages companies to invest and hire abroad, but a bill that would have ended certain tax credits and deferrals to companies expanding or moving overseas was voted down in the Senate last week.

…all you hear is cries of “socialism” and any measure that might provide some relief, and bring reality back in line with something that resembles our perception of it….is defeated.

We pass a bill that tries to get some modern medicine to that slice of 20% that is so small you can’t even see the slice of 20% above it…and all you hear (sadly and largely from that 20% hiding the bottom 20%) is “socialism” and “more tax cuts for the wealthy”.

We see a “Tea Party” allegedly coming from these downtrodden folks, and their main “success story”, doesn’t even know what the minimum wage *is* in this country, only that it is too high (he’s also against unemployment insurance for people other than his wife).  The other main “success story” is busy trying to buy off her other opponent by giving access to high-ranking officials…all the while running as an “outsider”.   And the third has to explain her rampant paranoia and insider information about a secret Chinese takeover.   A fourth has decided that the invisible 20% is actually sucking up all the money by having babies.

All of these folks feel the reality of the graph I put up, and this is the emotion they play on for popular support.   Unfortunately they also have the same perception as I posted above, and therefore are *trying to solve the wrong problem*.   

Making it so United Health can, once again, cancel policies at a whim, and making it so Goldman Sachs can, once again, trade in the dark (both nasty practices have been “changed” since Jan 21, 2009) will do nothing to address this issue. 

Both will make it worse, and that, my friends, is when the snake *really* starts to eat itself.

We should have seen the bullet whiz by our faces as a country and come together.  Instead, we tear ourselves apart, and the gaps just keep growing.