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Guest Post: Wealth Inequality in America
Submitted by John Aziz of Azizonomics,
Plenty of talk has gone into the rising income inequality that America has experienced since the early 1970s. But income is merely a wealth flow, and the truer measure of equality is the distribution of net worth and financial wealth (the wealth stock).
The historical change is clear: the bottom 80% have gotten considerably poorer both in financial wealth and in terms of total net worth:
This widening gap between the rich and everyone else is not a case of people being rewarded for their talents. Some income and wealth disparity is an inevitable effect of the market process. But the reality of today is more of a case of oligarchs harnessing the power of government bailouts, monetary policy, corporate subsidies, pork, quantitative easing, barriers to entry, favourable regulation, SuperPACs, Citizens United, lobbyists, market-rigging (etc, etc, etc) to get whatever they want.
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Damn, another progressive talking point shot all to hell. I hope it dawns on a few more million folks this election, both left and right, up and down, black and white, that they are being played like a cheap fiddle. I suppose by the time it dawns on the ass's of the masses they will find themselves being fed into the wood chipper feet first.
booboo
I would like to see a longer timeline chart.
A gold standard, or silver standard, would end this shit. No one is going to hand over a $10 million dollar bonus in gold to some useless fuck who knows how to screw people.
This explains in a way that even my 3 year old can understand http://occupymonopoly.blogspot.com/2012/10/monopoly-occupy-version.html
Actually what's annoying as shit is the realization that WE [the people who are awake and seeing the Ponzi-looting] are the tallest nails in society.
Becoming hammer resistant is a priority.
Americans are armed with cheep booze and remote controls.
Be scared world, we're coming....
And drones, REMOTE controlled drones ...
What is that LT. Colonal? The drone operators are flying out of Nevada? what is that, the Drone itself was shot at? what is that, an attack on the drone is an attack on Nevada? What is that sir!? Nevada is part of the United States? So there was an attack on the United States? get the NSA, FBI, etc. in here asap ...
All morals aside, and maybe it's better anyway . . .
Drop the big one now.
For the time being, I suggest that they view Superstorm Sandy as a mild-mannered surrogate.
So what's new?
Exactly..
Been this way for thousands of years...
Trimmed Hedge
People don't understand that for the majority of humankinds existence we have lived under an Aristocracy.
People don't understand that a good portion of the world still lives under an Aristocracy.
Why is an Enlightened Despot worse than a nation full of dumbass voters?
An enlightened despot is probably the perfect form of government, but what about when they die? And how many Caligulas do you suffer through to get a Trajan or a Charlemagne?
Best (or would it be worst) case scenario 1 - if your lifespan coincides with the despot's lifespan.
Despots die. That's why we need a robot despot.
That's the joke, dude.
The matrix has everyone and they'll never realize it.
The time is coming when a man who has a can of beans and a place to hide will be considered wealthy.
buzzsaw99
Only to the less capable insane homeless people.
Confucius say man with can of beans and hiding place only stay hidden to man without nose.
Maybe have to have a woman too, unless you smoke enough pot.
I'm a fairly good looking chap, I bet I can whore myself if needed.
hmm. going to buy some more ammo.
The Russians lined them against a wall and shot them, the French invented the gillotine, FDR taxed them 90% on the war profits they made.
I wonder what Jamie Dimon and company would prefer?
In Athens, police arrested Greek journalist Kostas Vaxevanis for breach of data protection laws after he revealed the names of 2000 wealthy Greeks with HSBC bank accounts in Switzerland.
"Instead of arresting the tax evaders and the ministers who had the list in their hands, they’re trying to arrest the truth and freedom of the press," said Mr Vaxevanis.
http://www.telegraph.co.uk/finance/financialcrisis/9639512/Germany-rattl...
I think they should publish a list of the home addresses of every reporter in Greece, so we can have freedom of the people.
But who needs financial assets when you have malt liquor and food stamps??
I'm gonna get me one of them EBT cards, if I haveta steal it.
We are seeing the most expensive campaign in history. That doesn't bode well for things getting better any time soon. Outside of some sort of apocalyptic reset, who has some real answers?
I submit:
Shrink government.
Far more progressive taxes after government has been shrunk considerably.
Publicly funded elections.
I favor a flat tax of 0% for everyone.
Publicly funded elections will produce the same trash we have now. Garbage in, garbage out, as Carlin once said.
Taxes or lack thereof are not the problem. The problem is more basic: coercion.
Ultimately, the system will bankrupt itself because it is immoral....not because someone found the optimal balance between taxes and spending.
The solution, in my mind at least, is to not play the silly game. Don't vote & live like the state does not exist.
I'm not sure, but I think I disagree with everything you have said. For one thing, you must pay property taxes unless you live on the water in an unregistered boat. I would also point out that the national defense is a good idea. We fuck with the world so they spend less time wanting to fuck with us. Ain't seen any invaders, other than everyone south of the TX-NM-AZ-CA border of course. Public elections work, and juries work too. Beyond that, government is pretty much a continuous process of mostly failure.
Snake or alligator?
Why? Why would the water be immune to the ravages of a legalized monopoly on coercion?
Why? Define "good." What is a nation?
Why give any money/power to that which is continuously engaged in providing solutions to problems it creates in the first place?
We fuck with the world so they spend more time wanting to fuck with us.
There, fixed that for ya. Because that is the end result, the USA making enemies where ever we go in with our drones, bombs and tanks. More terrorists have been created since 9/11 than existed then.
Current Federal spending is roughly $3.6 trillion.
Current population is roughly 310 million.
Which means we currently spend roughly $11,600 per capita.
If we can get that down to say $7,500 and limit future growth to no more than the moving three year average rate of inflation, THEN I would agree to tax hikes whose proceeds went to pay down the roughly $16 trillion in accumulated debt. I'd allow spending above the per capita line if Congress declares an actual war (not just police actions) or GDP indicated an economic contraction was in place for 2 or more quarters.
Current Federal spending is roughly $3.6 trillion.
Current population is roughly 310 million.
Which means we currently spend roughly $11,600 per capita.
I wonder what the amount per capita is when you consider all state and federal taxes. It must be like 20,000 per person in government revenue spent on each individual. Is it any wonder that this system doesn't work?
What is it per taxpayer? Productive taxpayer. Note the term productive. This does not the average bureacrat, Solyndra employee, riding the back of productive taxpayers.
There's no finessing the problem. It ain't about the money, it's about the culture. Urban culture results in collectivist political views, i.e., dependency. So long as we have an increasingly urban culture, we will have an increasingly collectivist governance. Ultimately, the solution to a quality life for the greatest percentage of the people will be based on a smaller population that lives in a self-reliant culture. If you don't live there now, just do it.
The only reason they are piss at the Greek Journalist is that now the people have proof of their treason!
Maybe Golden Dawn is exactly what Greece needs. I agree with your "treason" characterization and I suspect that Golden Dawn supporters will, too.
I think you're in the wrong room.
Libertarian Marxism is Anarchism. Government is crashing the ship and its time for the Bourgeoise (that's you) who know where things are going to help the Revolution makes sure we survive these psychotic parasites (The Ruling Class [Banksters, Central Banksters and the Liberal Buerocrats who protect them]). Not all of you will be in the elect forever. Hedge Accordingly.
And Fuck You Bernanke!
You lost me at Libertarian Marxism. But, I've had 3 beers.
Have a few more and maybe it will help. From what I've read, you've got nowhere to go but up.
Fuck those guys.
Clever name, toady, wish I had thought of it first. Unfortunately, your comment is anything but clear or clever. Fuck which guys, dammit?
The 80%
I'm in it just for the anger.
You need most of the 80% to be somewhat content and have some real hope of success if they work hard. The majority obey the laws, but it may not always be so. Bread and circuses will only get you so far. Some people ain't into all that.
This is nothing new, every civilization looks like this before the collapse. Wealth gets concentrated into the hands of a few, cities over build, and resources are stripped. We have thousands of years of precedent. The stakes get higher with each collapse.
Yeah, nothing new, since, that is the same old Neolithic civilization social pyramid system ... BUT, on super steroids! The current system has been ASTRONOMICALLY AMPLIFIED IN SIZE, and that is new, although all of that quantitative pumping and pumping has, so far, not driven any significant qualitative changes. We just have WAY MORE than ever before, of what was always there.
The social pyramid system now looks like a cartoon, rather than something which could exist in the real world. The shape of the pyramid has been getting steeper and steeper, and the pyramidion top has sprouted an gusher fountain, or anntena, that shoots way up, beyond the stratosphere, into outer space.
The REAL system is a social pyramid, that became global electronic fiat money fraud, backed up by atomic bombs. That has enabled and driven the old-fashioned social pyramid system to grow, and grow, and grow, so that the shape now is an extremely steep-sided pyramid, with the extremely wealthy becoming so extremely wealthy that one would need logarithms to graph that shape out! (Otherwise, the graph of the distribution of wealth ends up with such a wacko scale that it looks like a ridiculously impossible cartoon shape!)
The REAL world is the result of the runaway triumph of frauds, to such an extent that what should seem to be preposterous and impossible, actually EXISTS.
Of course, there is nothing new in the social pyramid system having an extremely wealthy 1%, who own most of the resources, while 99% own practically nothing in comparison, and there have been surges up and down in those ratios during history. However, what the 0.1% and the 0.01% represent now, compared to the billions of people with almost nothing, makes our social pyramid system so lopsided and disproportionate as to beggar imagination!
Personally, the way I expect this to play out is that the 0.1% plan on genocidal world wars, and democidal martial law, as their "solutions" to these REAL problems. There IS going to be significant qualitative changes, that will finally be forced by the pumping up and up of the quantitative factors! However, the most probable of those qualitative changes will be dramatic changes in the murder systems, or drastic changes in the death control factors.
Those who believe that the bottom are going to revolt effectively appear to me to be unrealistic. Furthermore, the only way that that could work, to make things actually get better, rather than way, way worse, would be IF, IF, IF the bottom 80% were to take back, or accept more direct responsibility for their own death controls.
My point is that the runaway social pyramid system, that we are in now, is a combined money/murder system, where the debt controls actually depended on the death controls. The triumph of the methods of organized crime were able to take control over governments, so that those governments used their power to monopolize robbery in ways that were directed to benefit the most wealthy, and very actively worked to rob the vast majority more and more, faster and faster, and to transfer that wealth to those at the top of the social pyramid system, which had effectively taken control of the governments, through corrupting the politicians, and brainwashing enough of the people to believe in the bullshit that the mass media were feeding them.
Since money is backed by murder, the only real solutions to these problems require changing the murder systems, in one way or another, sooner or later. There are NO other genuine solutions to these runaway frauds, which are powered by almost complete corruption of governments, having effectively privatized the power to tax, and the power to create money out of nothing, in ways that those who benefit from that have no accountability or responsibililties for doing that, since the whole system became based on the indirect triumphs of corrupting the political processes, and fooling enough of the people, enough of the time, so that the power of "We the People" ended up, more and more, being used against the vast majority of the People.
Therefore, it was an extreme understatement, although correct, to say that: "The stakes get higher with each collapse."
One way or another, sooner or later, pumping up the Neolithic social pryamid system bigger and bigger, to become a more and more extreme manifestation of what it always was, as we feed electronics and atomic power into that system, IS going to eventually drive qualitative changes, which ARE going to be like nothing before in human history.
I like to day dream political science fiction miralces that transform the paradigms of our militarism, to make radically different murder systems, that enable radically different money systems, all of which are based on understanding and applying design science to these problems in ways that are no longer so totally dominated by the biggest bullies' bullshit views of looking at these problems. I like to day dream about political science fiction Translithic Civilization, to supercede the current Neolithic Civilization. However, I am quite sure that we will have to go through servere disruptions, and catastrophically stupid surges in old-fashioned kinds of death control, murder system eruptions, first.
So far, there is NOTHING NEW, just an oxymoronic scientific dictatorship, being applied to astronomically amplify the old style Neolithic civilization's social pyramid system! So far, there is just quantitatively more and more of what was always here before. The qualitative changes of state have not yet happened! WHEN those do, they must be, first and foremost, changes in the paradigms regarding the purposes of militarism, or the death controls done through the murder systems. THAT is what has been happening, in the ways that sovereign powers from the governments of states have been directed to become privatized, so that the power to rob and to kill has been channelled through our system to spectacularly enrich a few, while impoverishing many more.
That has to become a hyper-complicated transformation of both aspects of that situation. To some extent, the privatization of the power to rob and kill will engage in genocidal wars, and democidal martial law, while, also possible, although more improbable, since it requires an almost unimaginable creativity, the We the People have to radically transform their understanding of their powers to engage in collective murder systems, doing more responsible death controls upon themselves, so that can sustain revolutions in the money systems. In order to do that, we have to break through to radically different perceptual paradigms regarding militarism, and the purposes of warfare, in order to achieve those purposes in radically different ways. ... However, meanwhile, it continues to be way more probable that there will be nothing new, except for more of the same old social system, pumped up and up, by orders of magnitude more.
We are going through a series of hyper-complicated bifurcation points with respect to all of these things, since, sooner or later, in one way or another, pumping up the established systems with quantitatively more and more of the same old stuff, MUST eventually drive some sudden breakthroughs, or breakdowns, to qualitatively different systems, of one kind of another!
"Are those lazy slacker union jack-offs taking the day off at One57?
So the crane collapsed, big deal, get to work already; it's just a little wind you mules!
I'm ready to move into my 87th floor Penthouse NOW! I'm raiding your Union Pension Fund and skimming your Mom's retirement accout to pay for the Trophy Wife but she's just about on board so bust a nut for me will 'ya!?!?"
(/sarc)
Tread carefully my friends. Equality of wealth is no measure of economic viability and certainly not of ethics.
The true measure you seek is equal opportunity to earn as permitted by one's own abilities.
Mankind, being part of nature, finds itself in a perpetual state of inequilibrium. Even the ideal, a true laissez-faire system with minimal or no state intrusion, will possess the the highest highs and the lowest lows.
Awesome. Totally agree.
I don't disagree with you. On the other hand, a Dickensian London is unacceptable. Without a large thriving middle class, we are just a bigger Mexico, with possibly even more horrors. We must preserve the middle class while allowing the natural competition and rewards that you speak of. You have probably profited greatly from the rule of law and an orderly society. You may actually believe that it was entirely by your own cunning. I have news for you. You wouldn't last a day in the jungle that you espouse.
+1 on your comment with a caveat. We must do nothing, it is all up to me and you as individuals.
What if the most defining ability to earn becomes the land you own?
I wonder if gap would really be so bad if the federal dipshits hadn't spent 16 TRILLION FUCKING DOLLARS?!
16 trillion is just the shortfall.
Wealth is two things: storage of property and a generator of income. I store a lot of property, all debt free. Land, houses, equities and cash. None of it raises my standard of living. A certain amount of it goes out as costs, like labor to remodel a house, or property taxes, or insurance, or time lost managing it. Wealth doesn't produce a lot of income to most holders of wealth. You have to be very wealthy to afford managers the like of Bain Capital. At that level of expertise, investing is a life or death struggle and . . . no thanks anyway. You win, you win big, sometimes, but if you lose, you're Jon Corzine. Who doesn't hate him? Can you think of a super-wealthy person you think highly of? Celebrities excluded. Nobody likes rich people. But in my experience, too many people act like they like rich people when rich people are around.
A conclusion of your comment AynRandFan "None of it raises my standard of living" brings the question.
What are the standards of measurement for living?
For me the questions come..
Do I/you love this life mostly?
Do I/you have good family and friends about?
What are the things I/you do not have that could make us love this life?
How could reality be better suited to our existance?
How may we live to make this happen?
Is it already happening but we just can's see it yet?
Yes but The Dictator told me about how with all this hope and change going forward that soon I could be rich too if I would just let the government do its redistribution thing. And like a good little Marxist I believed him because that all the riches money would be comfiscated and everyone would be equal and happy and all have the same things....
Looks like top 1% are really not such a huge problem but, rather, next 19% are the ones who are expanding on behalf of both 1% and 80%.
Just looking at the charts.
"Looks like top 1% are really not such a huge problem..."
Oh really? Thanks for clarifying that for everyone.
What could possibly go wrong?
Reality is never wrong. It is always the way it is.
Ah yes, the zero sum school of economics.
What precisely is the "correct" wealth or income distribution and what makes it "correct" vs any other level?
And who gets to decide what is "correct?"
As countries become more and more socialist wealth moves from the rural and suburban areas toward the centers of government. The Socialist governments gather the wealth from all over the country and then concentrate it in the great cities. The people are then forced to migrate with the wealth and you get great rings of humanity surrounding the imperial cities. This has been repeated over and over in history. It is happening here.
Parts of Oz are three feet underwater right now. May want to move the Imperial city to higher ground.
What strikes me, beyond the obvious disparity between the bottom and the extreme top, is how amazingly stable the middle tiers are. (If you can call everything from 80% to 99% "middle tiers.")
I'm searching hard for a conclusion. How about this one: A small group of rich, a big group of poor and just enough middle class to service the rich.
The "Third World" economic model. The model that most of the world's population lives under and has always lived under. The ultimate "reversion to the mean" for dwellers of the US.
I'm not saying we're a Third World country. Our "poor" have a better standard of living than the "middle class" in most parts of the world. But our wealth distribution seems to be gravitating towards similar break points. Playing the same distribution game, just at a higher overall level.
Well said. I advocate minimal essential government as a first step. Reach a consensus on an optimum size for a middle class and adjust taxes to get there. There would be a great hue and cry from the rich, but they, too, would benefit from a strong healthy middle class.
How to lie with statistics - use percentages. That way nothing useful can be extracted from the results. These results do not tell you what the wealth of the bottom x% actually is or how it has changed. There is big difference between the wealth of the bottom 5 % of Egyptians and Americans.
This is just Marxist Clap-Trap propaganda to justify government redistribution a.k.a theft.
I'd like to see an addition to the pie charts: Who performs all the "usefull" labor in the country. I'll bet only 20% of the country actually produces anything anyone wants.
They'll be in the 80%.
The problem with thinking like that is that some of the 20% is producing things the 80% wants ... if the 80% stops being able to consume, the percentage of people who are truly useful starts dropping as well.
Or in other words, your usefulnes is not an intrinsic quality ...
As Bucky Fuller pointed out decades ago, much less than half of the population is in any sense "necessary" for the proper functioning of society. We're seeing the reality of his assessment in welfare, etc. come true.
How many times must we be reminded that the top is far outearning the bottom? I get it already and it sucks. I didn't even read the article since I've seen these charts 100 times on Zerohedge. This dead horse is being beaten mercilessly.
economics9698 As long as FRN still works. Any useless fuck who gets $10 million for anything can go out and buy $10 million in gold or silver.
What is your point?
The addition of 30,000.000 illegal residents cannot be helping that ratio of wealth of the bottom 80%.
BTW, why do they need "wealth" when it would only disqualify them for Obama Phones, free housing, free utilities, a shakey check and free cigarettes from Food Stamps?
John, you need to take a serious look into the demographic changes behind wealth distribution. The bottom 80% of today are not the same as in 1970. Nor are the wealthiest 10% the same 10% wealthiest in 1970. Poverty is increasing faster than our economy, even if runnning on all cylinders, can manage.
Poor people tend to have more children per generation than middle class and wealthy people. Welfare and other social safety nets instigated in the 1960's has exasperated this. And poor people tend to have more generations per century than middle class and wealthy couples. People living a middle-class or better lifestyle in almost every modern Western nation are not replacing themselves. We rely on immigration to increase our numbers.
The growth of an economy, if it's lucky, will follow the growth of the middle class and of skilled and/or educated immigrants. Poor people increase or decrease as a percentage of the population as their slices of their opportunity pie dictates, and as people move out of poverty, UNLESS decoupled from the broader economy through government handouts. If the poor increase fasater than the economy, faster than the middle class, then the economy no longer supports them. And if immigration goes unchecked then their pie gets cut into even smaller slices.
Since the mid-60's through 2008 or so, the US population had incresed by 50%, from 200 Million to 300 million. If reports I heard are correct, 40% of that growth was from immigrants or descendants of immigrants arriving since the 200 million mark. That means the 200 Million already here in the early 60's only increased by 30%, or 60 Million, without immigration. Black population, a good indicator of growth in impoverished groups, grew from about 17 Million to 35 Million or so, more than doubling. The non-black, non-post-1960 imigrant population increased 40 Million, or just 20%.
What would the percentage of middle class blacks be today if the number of African Americans increased by only 20% with the national average in the past 50 years, instead of doubling? Would our inner cities be seething with violent, disaffected youth? And how bad can a nation be when it can absorb 40 Million immigrants and their progeny and have better unemployment numbers than most of Europe? Maybe we expect too much from our economy.
You are asking too many smart questions. Since to goal of this article is to deceive, you have not been taken in.
Marxism sucks. As Milton Freidman pointed out. "More Africans in (apartheid) South Africa owned cars than citizens in the USSR utopia." I'm sure if you produced thes charts for (apartheid) South Africa and the USSR, you would conclude that the USSR was better with respect to wealth disparity.
Marxism's realisation of equality is to bring everyone down to the lowest common denominator.
I could not have said it better. That and the remark that "elite" aren't getting richer based on meritocracy, but rather on the ability to screw people over.
But, it is also the people who are letting themselves getting screwed in the first place, and these elite have perfected the art of keeping the people "fat , drunk and stupid. " (Famous quote from a College President)
It's good to be at the top. I'm sure 99% of the 99% would be doing just what the financial elite are doing if they were given half a chance. In that case it's hard to really feel sorry for anyone except the hippie who likes his simple life - except that he doesn't want anyone's sympathy.
What happened to 1986?