Chart Of The Day: The Death Of America's Middle Class

Tyler Durden's picture

There is one chart that everyone should see that is part of Reuters' must read special series: The Unequal State of America: Redistributing Up - it is the chart we have said over the past 4 years is the only one that matters for America - that showing the flattening of America's wealth distributon Gaussian curve, aka the plunder and accelerating destruction of America's middle class, at the expense of the poorest and the wealthiest. This is nothing but the inevitable outcome of a co-opted, conflicted and controlled marionette government, which does the bidding of the wealthiest lobby powers (read corporate shareholders and Wall Street), partitioning the bulk of the wealth to the richest, while sending the scraps to the poorest in order to keep itself in power due to the power of the ever poorer, democratic majority. Alas, since there is never a free lunch, and since the Fed does not create wealth but through its currency debasement merely accelerates the transfer of wealth, someone ends up footing the bill? Who? None other than that part of the US population which made the United States of America the greatest country in the world, and is now watching it implode first slowly, then fast.

The chart in question:

How does Reuters frame this ever so critical topic that only impairs the ever more disenfranchised, ever declining middle class, and thus few actually bother discussing:

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government's help. And the rich are getting richer because of it.

 

The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 - a ratio of 54 to 1.

 

That gap is up from 39 to 1 two decades ago. It's wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression.

 

Americans have just emerged from a close presidential election in which the government's role as a leveling force was fiercely debated. The right argued the state does too much; the left, too little. The issue is now at the center of tense negotiations over whose taxes to raise and what social programs to cut before a Jan. 1 deadline. And the government's role will be paramount again next year if Congress takes up tax reform.

 

The federal government does redistribute wealth down to struggling Americans. But in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too - especially in the nation's capital.

 

The beneficiaries are not the billionaire financiers and celebrities who
have come to personify income inequality in the 21st century. Yet the
Washington elite are just as much part of the trend, having influenced
laws and decisions that alter the entire country's distribution of
income.

Read more here.

In summary: crony capitalism for the wealthiest, scrappy socialism for the poorest, and everyone else (that soon to be extinct creature known as the middle class) left to fend for themselves.

Some other charts:

 

And:

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Seer's picture

WTF would the govt want people earning less?  You earn less then you pay less taxes!  The govt wants MORE!

Your logic sucks.  I suppose it's due to xenophobia.

The handwriting on the wall says this: you've got too much debt; your job (if you have one) is likely meaningless in that it's not something that the future wants; you're old and unfit and unable to do physical work.  Thought that the party would last forever?  Sucker!

prains's picture

damn hellnation dem dere illegals, doh!

Seer's picture

Apparently more people believe that the govt wants us to pay LESS taxes...

It appears that xenophobia (knee-jerking emotions) trumps logic.  Turn off the lights...

Bobbyrib's picture

Apparently you don't understand that the government serves the corporations and that they want to flood the labor markets to bring down the cost of labor. There is a reason we import so many H1B visas, while thousands of Americans that can do the job sit on unemployment, or worse yet live on savings/foodstamps and welfare.

Also if you observe what Obama does instead of what he says, you could see that he continued the Bush tax cuts through the end of this year. Why would he do that if he wanted to collect more in taxes? It's all about pinning the new taxes on who you want to pay while enriching your friends. How much did GE pay in taxes last year?

adr's picture

or that the Unions became part of the left wing control apparatus and are nothing more than an enrichment tool for union bosses and politicians.

Today's Union workers are part of the most unproductive sectors of the economy. Working less hours for greater pay, while producing the least amount possible, as cheap as possible in order to work for the shortest time possible, as to end up taking home the greatest amount possible in the form of a pension to no longer work, yet make as much or more than a person still working.

Unions had a pupose, but once they were co-opted into becoming a political tool, they lost their relevance. Today a Union pensioner is no different than a ghetto welfare queen. The real economy can't survive with them.

Seer's picture

"Today's Union workers are part of the most unproductive sectors of the economy. Working less hours for greater pay, while producing the least amount possible,"

And what do you consider to be "productive?"

Lots of grocery workers are unionized.  You think that They don't work hard?

Blasting workers and blasting unions are different things.

Unions were always about CONTROLLING WORKERS.  Most people have it backward.  FDR helped the fascists by promoting unions.

The formula is always the same: concentrate power; concentration of power = FAIL!

TheFourthStooge-ing's picture

ratso, failing to use the proper punctuation for ending a question, asked:

Doesn't anyone find it odd that the death of the middle class correlates so well with the destruction of the unions started by Regan and followed upsince then by right wing zealots like Grover Norquist and the tea party crazies.

When you say that Regan started the destruction of unions, what particular time period are you referring to? Was it during his tenure as Secretary of the Treasury (1981 to 1985) or while he served as Reagan's White House Chief of Staff (1985 to 1987)?

brettd's picture

Unions were dying long before RR came along.

(See the launch of VW, Honda & Datsun in the 60's & 70's...aka:  Competition).

Seer's picture

The downward spiral started in 1971 when the US essentially declared bankruptcy (and realized that it's oil exports had peaked).  No matter how you slice it it's kind of hard to overcome these two things.

Go Tribe's picture

Someone will figure out how to leverge that density,

Freddie's picture

Hope & Change.

Jamie Foxx - I like killing white people in movies.

TheFourthStooge-ing's picture

Yeah, I heard that on the radio while flipping through stations. I think it was on the Mullah Michael Savage show.

prains's picture

frieddie

assuming you're white i don't see the problem

game theory's picture

Real estate prices in DC area suggest that DC is draining the whole country dry while devaluing the dollar and telling us all that we owe our freedom to their munificence.  

Seer's picture

Always the same, isn't it?

Rome.  Moscow.

THE core failing is in stimulating growth (which isn't sustainable) in order to prop up a group of elites.  This requires expanding resource extraction/collection: eventually the wall is hit where the price becomes too steep (locals won't give precious resources away) and war happens (and wars never seem to pay for themselves).

kaiserhoff's picture

It will only get worse.  I noticed a couple of years ago that the illegals (20 to an apartment) were displacing the blacks in the Virginia suburbs.  Going third world, or maybe Calipornia.

CH1's picture

Yeah, let's blame the brown people! That'll fix things fast!

Maybe we can round em all up and ship em out! That'll make us feel REAL powerful!

adr's picture

show me the city that went brown or black that looks better, with a more vibrant economy than it did before the invasion. And no, a more vibrant drug trade does not count as economic progress.

GFKjunior's picture

The reason is the welfare state.

 

Texas alone proves your wild assertion false. But I'm sure you didn't really have any facts, just talking out of your ass.

 

"Let's blame anyone but the Bankers!"

MachoMan's picture

"show me the city"

"Texas alone"

Fail.

GFKjunior's picture

Yes because Austin, Dallas, San Antonio and Houston are not large cities...

 

Which each have growing, strong economies while maintaining a steady stream of immigrants.

 

Goner's picture

I could not really find a good source for this so if anyone has a better one, please share. While I agree with both of your general points. I think most know Texas is a little different than the rest of the US

I only looked at the first two (Austin and Dallas) and while they may maintain a steady steam of immigrants. The makeup as a whole of neither city is not changing much.

Austin in 2000 had 65.36% white - http://austintx.areaconnect.com/statistics.htm

Austiin 2010 had 68.3% white- https://en.wikipedia.org/wiki/Austin,_Texas#Demographics

Dallas in 2000 had 50.83% white -http://dallas.areaconnect.com/statistics.htm

Dallas in 2010 had 50.7% white - http://quickfacts.census.gov/qfd/states/48/4819000.html

Just Ice's picture

Site I like to use for city centric data:  http://www.city-data.com/

AGuy's picture

With all of the people leaving CA for TX, I wonder if TX will be transformed from a capitalist state into a socialist state. I have no idea why TX has blocked iimigrants from CA yet.

 

Seer's picture

Ever wonder whether you're mistaking the symptoms with the problem?

It's about sustainability.  How fucking long do you think we could continue with the two (white) people per 2,000 sq ft homes?

Rent in cities tend to be outrageous (thanks to the high-rent rollers).

Cities are, by their very definition, unsustainable as they require importing from the countryside.

I suppose that people can continue with their xenophobia if it makes them feel better.  It won't, however, change reality.

prains's picture

show me the city that went brown or black that looks better

 

your toilet bowl for one

kaiserhoff's picture

I was referring to income inequality, the SUBJECT of the piece, but yeah, the great unwashed problem works as well.

By the way, scientists have determined that smoking crack is bad for primates.

Michaelwiseguy's picture

It seems the only way to get rid of the filth in Washington DC is for the congress critters to die of old age. Thank God Senator Inouye D-Hawaii is no longer crawling around the planet and infecting our lives.

The 74,000 page IRS tax code needs to be thrown in the trash. Yeah, like that will happen.

Seer's picture

And you're one stupid motherfucker if you think that TPTB aren't just going to restock.

But, hey, it's great to look like one of the boys and spout off all sorts of hatred, doesn't it? (it's the only time I've seen you garner more green arrows than red)

"The 74,000 page IRS tax code needs to be thrown in the trash. Yeah, like that will happen."

And what are you personally doing to move this forward?  Fucking talk, talk, talk... fucking pussies.

I am quite certain that the "tax code" will one day vanish.  It will do so due to complete collapse (due to collective opulence- read "due to totally unsustainable standard of living").

Bobbyrib's picture

You seem to be a liberal trying to disguise yourself as an anti-government poster. GFY.

Tommy Gunner's picture

Jack Welch is the worst offender.  He not only ran the biggest fraud operation in history - that was bailed out after he left but he can also take credit (well done Jack) for bribing officials to change the laws so that GE could pay ZERO tax on billions

 

And btw Jack - your wife earns every penny when she lets your wrinkly old carcass get on top of her (or does she strap it on and get on top of you?)

vamoose1's picture

ten  hat  tips  to  you    if  i  ever   regrettably  met  the  sawed  off  little  grifter  id  kick  his   wrinkled thieving   ass  into   boston  harbor  with  a   hyperbaric  frozen  boot

ball-and-chain's picture

The middle class is dying out?

What a shocker.

I guess that's what happens when all the jobs are off-shored.

Peace.

http://www.angrysinner.blogspot.kr/2012/12/wednesday.html

Seer's picture

Look around you at the stuff you buy.  Tell me this, what is responsible for most of its manufacture, people or robots (automation)?

Most of the jobs that left the U.S. never landed on foreign shores.  Most of the jobs were replaced with automation.  Anyone who has had any real experience with corporations making major changes will KNOW that that is the point in which they tend to introduce a lot of labor reduction means.

People don't see this sucker play coming.  Corporations will all of a sudden look all patriotic and be coming back (dragging their robots with them, and the handful of human jobs as well).  Well, they're be doing so because the govt will give them all sorts of tax breaks- read "paid to come back."  It would be somewhat OK if not for the FACT that most will end up being kicked out of the foreign countries that they're operating in due to trade wars.  And when there really are no significant increases in jobs, then who will we blame.  Oh, sorry, I got a bit distracted with my iCrap (built by robots), what was that you were saying?...

calltoaccount's picture

NOT "at the expense of the poorest and the wealthiest"-- but to the benefit of the poorest and the wealthiest.

zerozulu's picture

And now they are after their guns.

Flakmeister's picture

Sacrificed at the altar of corporate greed....

adr's picture

Not corporate greed, Wall Street greed. There used to be corporations that used thier greed to produce better products and recruit better talent by paying more in wages. Sadly these corporations have been hunted to near extinction by the Wall Street public stock apparatus.

Functioning corporations have been replaced by zombies kept alive through fresh government cash injections, so they feed on the general populaton instead of turning on the people who created them.

Eventually it ends because there will be a point in time when the food runs out, and the zombies must eat each other.

Flakmeister's picture

Yeah, it was Wall St. that offshored our manufacturing base...

And it was Wall St. that caused corps to spin off their pure R&D units (you know the ones that came up with a lot of the fucking goodies that formed the basis of the economy 20 years down the road, Bell Labs, Xerox Park etc...)

Yeah Wall St. was a bunch of shysters but you are being a tad myopic...

adr's picture

The corporations that sold off our manufacturing base and spun off R&D did it in order to increase share prices to reward shareholders, specifically those who sat on the corporate boards. The death of the private corporation killed American productivity. It has become nearly impossible for a new private corporation to compete, unless you have secured venture capital fo en eventual IPO.

So yes it was Wall Street. The IPO engine has destroyed more American jobs than any other force in history. Which has also created more concentrated wealth than any other time in history, other than the Monopoly period of 1875-1910.

While the end of the period dominated by Rockefeller, Carnegie, etc gave rise to the true American middle class. The end of the Wall Street era will result in the destruction of the middle class, and the new society of peasants and nobles.

Flakmeister's picture

Dude, you must have been sleeping..

Uncle Miltie told us that greed was good and the Corporate Officers  lined their pockets...

Why don't you google about how many pension plans were looted to pay the pensions of the officers....

The middle class came out of WWII not the Gilded Age... Look up the historical GINI ratios for the states, the New Deal and WWII leveled the field (see the figure)

http://www.the-crises.com/income-inequality-in-the-us-1/

Edit: cleaned up the figure link

MeBizarro's picture

Exactly.  adr acts if Wall Street is the only sector of the economy that has political clout and lobbying power & influence.

Seer's picture

Oh, there's good greed and bad greed?

BIG = FAIL!

As long as there were shareholders who demanded growth the companies HAD to grow.  Think about all the "returns," the "pensions."  And then think about the fact that those closer to the actual physical resources that go into making products would have a better advantage in the longer-term.  This was ALWAYS going to break down just as it has.  Build up, from "success," and then the weight (call it the "big ship syndrome" if you like) would bring it back down.  And now that so many are burning through limited resources we're finding that growth just ain't possible any more.

Yeah, some companies probably met their demise prematurely, but the hollowing out is because most of the stuff that we're seeing isn't going to be around in the future.

Economies of scale in reverse.  Production of most things is going to drop like a rock.

Jim in MN's picture

Warning:  You may only bitch about yoonions and other racially endowed (poor) USAers. 

Global elite targeting STRICTLY VERBOTEN.

Lord Koos's picture

"...at the expense of the poorest and the wealthiest" ??? WTF -- the expense of the wealthiest?  They've done nothing but benefit.  Need an editor?

Unprepared's picture

Relax, Tyler just got carried by his own figure of speech... what was meant was "to the benefit of".

rosethorn's picture

These are key metrics that the FRB and administration are ignoring.