NEW YORK ( TheStreet) -- New U.S. Census data supports one fact that many struggling-to-make-ends meet Americans on Main Street have long been living with on a daily basis: the income gap is widening. In fact, the U.S. income gap last year grew to a record level.

The top 20% of the income bracket -- those making more than $100,000 each year -- pocketed 49.4% of all U.S. income. Those below the poverty line amassed 3.4% of U.S. income, according to Census data compiled in an AP wrap on the distressing state of U.S. income affairs. The income gap was double the level tracked in 1968, and by another Census measure, it was the highest income inequality since the Census Bureau began tracking the data in 1967.

It also placed the U.S. in the unenviable position of being No. 1 among developed Western nations in income inequality.

At the same time, philanthropic giving from the richest of the rich American has also been a staple of the news this year. Do extreme income inequality and increased giving from U.S. billionaires go hand in hand, and cancel each other out in the end? This wasn't Henry Ford's idea when he pioneered the working wage for every man, arguing that he had to pay the Ford worker enough to buy the car that the worker helped to manufacture or the economic system had lain the seeds for its own destruction.

Though long before the creation of the Ford Foundation and its elite non-governmental organization crowd -- recently ridiculed by Berkshire Hathaway ( BRK.B) chief operating officer Charlie Munger as doing less for the world than Costco ( COST) -- the likes of Andrew Carnegie and Ford also placed themselves in the business of actively deciding what was in the best interest of the common man.

Carnegie, unlike Ford, fought against wage increases for workers -- fought against wage increases with murderous consequences -- making the argument that he knew better than the worker what to do with all the money he was making, and the workers would waste any increased wages on drink and leisure.

Henry Ford, his pioneering ideas for the workplace left aside, also employed a private police force that made it the business of Ford ( F) to spy on workers at home and punish, often with brute force, any worker who spent his working wage on leisure activities like a pint of beer or shot of liquor.
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Big-Hearted Billionaires: All Heart or Nothing but Show?

Indeed, there is always something paternalistic about the attitudes of the Charlie Mungers, Henry Fords and Andrew Carnegies of the world, whether that paternalism takes the form of Munger's dismissal of the world of organized "elite" philanthropy, or Carnegie and Ford's belief that their enormous wealth proved they knew better, and gave them the right to act on that belief in deciding on the life to which the worker was entitled. Go out to the middle of America today, to little towns in Oklahoma, and you'll still hear people talking about Carnegie's "a library for every rural town" philanthropic idea as the greatest moment in the early history of U.S. philanthropy.

Warren Buffett famously remarked that there is indeed a class war, and the affluent class is winning it.

The richest Americans are getting richer, and it's not just in the Census data but in the latest release of the Forbes ranking of the 400 richest Americans. Buffett, with $45 billion in net worth, was No. 2 behind Bill Gates of Microsoft ( MSFT), who was in the No. 1 spot with a net worth of $54 billion.


There was no change in the No. 1 and No. 2 spots occupied by Gates and Buffett. However, at a combined wealth of $1.37 trillion, the 400 richest Americans saw their wealth increase by 8% over last year, and that wasn't necessarily a memorable economic year for many Americans.

It's not a coincidence that Gates and Buffett have been on a big charitable giving drive this year to convince billionaires to commit a majority of their fortunes to charity.

Yet only two of the ten richest Americans, Larry Ellison of Oracle ( ORCL) and Michael Bloomberg have taken the Buffett/Gates charitable pledge.


It also wasn't a surprise that Facebook founder Mark Zuckerberg, whose wealth increased by 245% in 2009, the largest increase of any of the 400 Richest Americans, announced on the same day as the Forbes' list release that he was donating $100 million to Newark's school system. Zuckerberg didn't come in for derision as a result of the gift, but as a result of the donation being announced with much fanfare on an episode of Oprah, and concurrent with the release of a movie that didn't have the nicest things to say, or portray, about the face behind Facebook.
Vote Now About the Big-Hearted Billionaires
Big-Hearted Billionaires: All Heart or Nothing but Show?


Sometimes the boom is lowered on the rich when the boom is deserved. Disgraced hedge fund manger Raj Rajaratnam of Galleon Group, now facing 185 years in prison for insider trading, disappeared from the Forbes 400 this year.

Yet the richest of the richest are more and more in control of the income pie, and are once again -- as in the heyday of the first barons of American capitalism -- placing themselves at the forefront of charitable giving. The Buffett/Gates GivingPledge initiative is the most prominent example of this dichotomy, which it can be argued by a rational capitalist is inherent in a functioning capitalist system.

The fortune amassed by Facebook's Zuckerberg, and his first big charitable gift, is just the newest face on this age-old issue. And the issue goes back well beyond the 20th century American experience. Egyptians pharaohs were in the habit of having the charitable gifts of grain they made to the poor during times of catastrophic droughts or flooding engraved on stone tablets, which are arguably the first quantitative accounts of billionaire charitable giving in the history of civilization.

Should one sit back and applaud the philanthropic efforts of the billionaires even as a record number of Americans are being nickel-and-dimed into an existence of extreme poverty? One of the Buffett/Gates billionaire pledges, George Kaiser, has made it his goal to donate his fortune to U.S. charitable institutions. This might not be where charitable giving gets the most bang for its buck -- that's clearly in the developing world -- but Kaiser's belief does point to another wrinkle in the debate. As the richest in American become richer, their philanthropic dollars don't necessarily work their way back to those falling below the poverty line in the U.S.

Are the issues entirely separate and unfair to place side by side for anyone whose name is not Hugo Chavez?

Or do the philanthropic efforts simply provide a smokescreen for the likes of Facebook's Zuckerberg to alter what otherwise might not be such a positive public image?

Let's look at it this way: Do you think the big-hearted billionaires are "all heart" or "nothing but show"? Take our poll below, and see what TheStreet thinks.

Do you think the big-hearted billionaires are all heart ... or nothing but show?

All heart
Nothing but show

--Written by Eric Rosenbaum in New York.

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