The Elephant in the Room...

[inna]

...Rampant and Accelerating Income and Wealth Inequality


From the 2008 OECD Report (I'd love to look at their 2009 data, but it's not available yet):
www.oecd.org/els/social/inequality
http://www.oecd.org/dataoecd/47/2/41528678.pdf

The United States is the country with the highest inequality level and poverty rate across the OECD, Mexico and Turkey excepted. Since 2000, income inequality has increased rapidly, continuing a long-term trend that goes back to the 1970s.
(Figure: Income inequality and poverty continue to increase, especially since 2000)

 Rich households in America have been leaving both middle and poorer income groups behind. This has happened in many countries, but nowhere has this trend been so stark as in the United States. The average income of the richest 10% is US$93,000 US$ in purchasing power parities, the highest level in the OECD. However, the poorest 10% of the US citizens have an income of US$5,800 US$ per year – about 20% lower than the average for OECD countries.

 Redistribution of income by government plays a relatively minor role in the United States. Only in Korea is the effect smaller. This is partly because the level of spending on social benefits such as unemployment benefits and family benefits is low – equivalent to just 9% of household incomes, while the OECD average is 22%. The effectiveness of taxes and transfers in reducing inequality has fallen still further in the past 10 years.

 Wealth is distributed much more unequally than income: the top 1% control some 25-33% of total net worth and the top 10% hold 71%. For comparison, the top 10% have 28% of total income.

From http://www.mybudget360.com/top-1-percent-control-42-percent-of-financial-wealth-in-the-us-how-average-americans-are-lured-into-debt-servitude-by-promises-of-mega-wealth/ :

Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression: http://www.huffingtonpost.com/2009/08/14/income-inequality-is-at-a_n_259516.html

However, tax burden fell disproportionately:

Data released by the IRS in January showed the average tax rate paid by the richest 400 Americans fell by a quarter, to 17.2%, and their average income doubled to $263.3 million through the first six years of the Bush Administration. ( http://www.businessweek.com/magazine/content/09_51/b4160024923208.htm )

And the worst thing is that the process of upward transfer of wealth has been only accelerating....


I highly recommend reading the entire article:

An Introspective Look at the Future of America

http://www.informationclearinghouse.info/article24316.htm


It's too long to quote, but here's a couple of excerpts:

As we close out 2009 and look forward into 2010 and beyond, this has been a year of near financial catastrophe and monumental change, none of which benefited America or ordinary Americans. Late in 2008 and throughout 2009, events have happened in the US which would have been labeled unfathomable just a few short years ago, and yet already these monumental changes are expected to be filed into the memory hole and Americans are expected to believe nothing has changed.
...
Although they have been somewhat successful in reducing the insolvency of the banking system, they have effectively created a giant wealth transfer mechanism whereby all the money that disappeared in the collapse was re created out of thin air and given to the banks and wall street. I think of it as a sort of shell game. The money disappeared from Mom and Pop's 401k and re appeared on the balance sheets of the banks via freshly created new money (debt). As a result, we have something still called "free market capitalism" which is not free market capitalism at all. We have emerged from this crisis with a sort of financial oligarchy where a few entities who control all the wealth and power also control politics and media. Understanding this will help to understand issues like "healthcare reform" which will involve you paying more and getting less, with the primary beneficiaries being the oligarchies who control health care and insurance.

The one major point I have to make at this time is throughout 2009, there was no action taken that put the average citizen in a better position, but instead during the course of the year there was a gigantic wealth transfer from the citizens to the banking system, effectively orchestrated by the so called "people's representatives" who are in fact, all owned by the banking system and Wall Street with half a dozen or so oligarchies and lobbyists in a public display of fraud, malfeasance and corruption that sets a new historical precedent.

Read the entire thing, it's worth the time: http://www.informationclearinghouse.info/article24316.htm

[bbinacan]

1. It appears I'm in the top 10%

but it sure doesn't feel like it.

[Aviation Pro]

4. I hear you....

...it's all relative to one's expenses especially if one paid for primary degrees and advanced degrees through the scam known as "financial aid."

The next banking crisis will be a collapse of the student loan business.

[bertman]

12. Reading this I was thinking the same thing, bbinacan. Hard to fathom.

[grantcart]

2. We need an elephant gun.

[varelse]

7. we need to paint a bullseye on that sucker

no one seems willing to even look at it, let alone aim.

[inna]

3. Plutocracy Reborn

http://www.thenation.com/doc/20080630/extreme_inequality

[patrice]

5. It appears that some few have waaaaaay more of nothing than the rest of us do.

[G_j]

6. "corruption that sets a new historical precedent"

that says it.

[Uncle Joe]

8. Kicked and recommended.

Thanks for the thread, inna.:thumbsup:

[leftstreet]

9. K&R Well worth the read

Thanks for posting

[amborin]

10. great post! KNR

[Nikki Stone1]

11. Herein lies the problem

Thanks for posting this.

[Skidmore]

13. Well, we're under the top third by a bit.

Amazing how well you can learn to live on your income if you have to and don't need fancy doodads.

[RoadRage]

14. "Top 5%"...

It's funny how being in the top 5 or 10% sure feels different if you live in say, Columbia, MO vs. NYC or San Francisco. $150,000 a year sounds like a lot.... but it's ultra rich in some area's vs. downright middle-class in others.

And, I have a feeling that the richest of the rich and the poorest of the poor tend to be in some of the same area's (on the large costal cities) where more in the midwest and southeast probably tend to float along in the middle.

I'd be interested to see where the wealth distribution in this country resides.

[robertpaulsen]

15. The words of George Carlin bear repeating at this time.

"Not too bright, folks. Not too fucking bright. But if you talk to one of them about this, if you isolate one of them, you sit 'em down rationally, you talk to 'em about the low IQ's and the dumb behavior and the bad decisions; right away they start talking about education. That's the big answer to everything: Education. They say, 'We need more money for education. We need more books, more teachers, more classrooms, more schools. We need more testing for the kids!' You say to 'em, 'Well, you know, we've tried all that and the kids still can't pass the tests'. They say, 'Aw, don't you worry about that, we're gonna lower the passing grades!' And that's what they do in a lot of these schools now, they lower the passing grades so more kids can pass. More kids pass, the school looks good, everybody's happy; the IQ of the country slips another two or three points and pretty soon, all you'll need to get into college is a fucking pencil! 'Gotta pencil? Get the fuck in there, it's physics!' Then everyone wonders why 17 other countries graduate more scientists than we do. Education!

Politicians know that word; they use it on you. Politicians have traditionally hidden behind three things: the flag, the Bible and children. 'No Child Left Behind! No Child Left Behind!' 'Oh really, well it wasn't long ago you were talking about giving kids a Head Start! Head Start, Left Behind, someone's losing fucking ground here!' But there's a reason. There's a reason. There's a reason for this. There's a reason education sucks and it's the same reason it will never, ever, ever be fixed. It's never going to get any better, don't look for it, be happy with what you got. Because the owners of this country don't want that.

I'm talking about the real owners now. The big, wealthy...The real owners, the big wealthy business interests that control things and make all the important decisions. Forget the politicians, they're an irrelevancy. The politicians are put there to give you the idea that you have freedom of choice. You don't. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They've long since bought and paid for the Senate, the Congress, the statehouses, the city halls. They've got the judges in their back pockets, and they own all the big media companies, so they control just about all of the news and information you get to hear. They've got you by the balls! They spend billions of dollars every year lobbying – lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else.

But I'll tell you what they don't want. They don't want a population of citizens capable of critical thinking. They don't want well-informed, well-educated people capable of critical thinking.
They're not interested in that! That doesn't help them. That's against their interests. That's right! You know something? They don't want people who are smart enough to sit around the kitchen table and figure out how badly they're getting fucked by a system that threw them overboard 30 fucking years ago. They don't want that! You know what they want? They want Obedient Workers – Obedient Workers. People who are just smart enough to run the machines and do the paperwork but just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it. And, now, they're coming for your Social Security money. They want your fucking retirement money. They want it back, so they can give it to their criminal friends on Wall Street. And you know something? They'll get it. They'll get it all from you, sooner or later, because they own this fucking place. It's a big club - and you ain't in it! You and I are not in the big club.

By the way, it's the same big club they use to beat you over the head with all day long and they tell you what to believe...All day long, beating you over the head in the media, what to believe, what to think and what to buy...The table is tilted, folks! The game is rigged! And nobody seems to notice, and nobody seems to care! Good honest, hard-working people! White collar, blue collar... Doesn't matter what color shirt you have on! Good honest, hard-working people continue...These are people of modest means!...continue to elect these rich cocksuckers who don't give a fuck about them! They don't give a fuck about you! They don't give a fuck about you!They don't care about you! At all! At all! At all! Yeah! You know? And nobody seems to notice, nobody seems to care. That's what the owners count on. The fact that Americans probably will remain willfully ignorant of the big red white and blue dick that's being jammed up their assholes every day! Because the owners of this country know the truth - it's called the American Dream: because you have to be asleep to believe it."

[defendandprotect]

17. Agree . . . and the coup that took JFK also took our "people's" government and Democratic Party--!!!

[robertpaulsen]

19. That's a whole other elephant in the room. n/t

[blindpig]

16. No surprises

This is how capitalism works, the tendency towards accumulation by the capitalist is inexorable, to the detriment of the rest of us and our environment. Ain't no fixing this, it is how capitalism works.

Tear it down.

[stevebreeze]

18. just guess who is most likely to donate to politicians?

do ya think it might just be to protect their relative financial advantage over the rest of us?

[hay rick]

20. It's worse than that...

From the OECD article: "Wealth is distributed much more unequally than income: the top 1% control some 25-33% of total net worth and the top 10% hold 71%. For comparison, the top 10% have 28% of total income."

Sadly, this understates both the inequality of wealth and incomes.

On wealth- from a 2003 interview with Edward Wolf, Professor of Economics at NYU http://www.multinationalmonitor.org/mm2003/03may/may03interviewswolff.html

"Things are even more concentrated if you exclude owner-occupied housing. It is nice to own a house and it provides all kinds of benefits, but it is not very liquid. You can’t really dispose of it, because you need some place to live.

The top 1 percent of families hold half of all non-home wealth.

The middle class’s major assets are their home, liquid assets like checking and savings accounts, CDs and money market funds, and pension accounts. For the average family, these assets make up 84 percent of their total wealth.

The richest 10 percent of families own about 85 percent of all outstanding stocks. They own about 85 percent of all financial securities, 90 percent of all business assets. These financial assets and business equity are even more concentrated than total wealth."

The "net worth" comparison dilutes the greater inequality found in the ownership of financial assets. Meanwhile, for many middle class families, "home equity" is little more than a comforting fiction.

The OECD article is unclear on the source of "the top 10% have 28% of total income" statistic, but it looks understated to me. From Wikipedia, citing 2007 data (http://en.wikipedia.org/wiki/Household_income_in_the_United_States):
"Over one quarter, 28.5%, of all income was earned by the top 8%, those households earning more than $150,000 a year."

Comparing adjusted gross income from individual income tax returns (2007- see Table 5, http://www.taxfoundation.org/news/show/250.html) shows an even greater disparity with the top 1% receiving 22.06% of all income and the top 10% receiving 47.32%.

[Hannah Bell]

21. kick