WHEN WILL WE WAKE UP?
THE BOTTOM 90 PERCENT OF AMERICANS ARE POORER TODAY THAT THEY/WE WERE IN 1987
THAT IS NOT THE CASE WHERE MOST OF OUR COMPETITION IS CONCERNED. THEY HAVE BEEN GETTING BETTER OFF. WE HAVE BEEN LOSING GROUND. WE CONTINUE TO DO SO.
WHY IS THIS SO HARD TO UNDERSTAND?
You know, although I wear an economics hat, primarily I’m a thriller writer with strong military interests and connections—so I don’t particularly like dwelling upon this Great Country’s decline. That said, I’m somewhat shaken by the fact that the Mid-Terms are upon up us, yet no one still seems to be making an issue of the dire state of most of the U.S. population (at least as far as the economy is concerned). Instead, the media are rabbiting about Ebola—with a side dish of ISIS—and are ignoring the painful fact that most of us are getting poorer at quite a rapid rate.
All is not well in the land of the (legally) drugged, and the home of the free (but heavily indebted). And I wouldn’t be too sure about the ‘free’ bit. Try forming a union tomorrow—or complaining about chemical pollution, and see where that gets you. Powerful people will do their best to wreck your way of life—and I wouldn’t count on the Supreme Court helping you out (unless you are rich).
Good people! I’ve got news for you. The state of our economy—as far as most of us are concerned—constitutes a CLASS A crisis which should have our pulses racing and sweat beading upon out foreheads to such an extent that the entire nation—well 90 percent of us—will have to be quarantined!
The deep blue line is us and you will notice that it is going DOWN! The light blue line is the top 1 percent (the ultra rich) getting ever richer—which is why it is going UP!
The ultra rich can afford to pay whatever and whoever in order to rig the system in their favor—and that is exactly what they do.
So much for democracy. We are now a plutocracy—a country governed by the rich for their own benefit—where less affluent mortals are scarcely listened to. Formal academic research backs up that finding, by the way. Most of us really are irrelevant when it comes to policies.
Here is what Wonkblog says.
It started in the 1980s when the top 1 percent awoke from their long postwar slumber, thanks to the combination of lower taxes, financial deregulation, and new technology. It wasn't a total disaster for the bottom 90 percent. Even as most Americans saved much less, accumulating far less wealth, stock markets and housing prices continued to rise. Until they didn't, coming crash down in 2007 and 2008.
The problem was that middle class doesn't own that much in stocks, but went into debt to buy lots of housing. So the housing crash turned their biggest financial asset into an albatross, wiping out their equity but not their debt. And the housing recovery hasn't done much to fix this, since it's struggled to move beyond the "nascent" stage.
Stocks, meanwhile, collapsed during the crisis, but came back soon thereafter. The middle class, in other words, missed out on the big bull market in stocks, but not on the even bigger bear one in housing. That's why the recovery has restored so little of the wealth that the recession destroyed. In fact, the bottom 90 percent have actually kept losing net worth the past few years, in large part, due to rising student loan debt.
It's been a lost 25 years for the bottom 90 percent, but a lost 15 for the next 9 percent, too. That's right: altogether, the bottom 99 percent are worth less today than they were in 1998.
But this isn't a story about the top 1 percent running away from everybody else. It's a story about the top 0.1 — scratch that, the top 0.01 percent — doing so. You can see that in the chart below, again based on data from Saez and Zucman, of each group's share of US wealth. Indeed, since 1980, the top 0.01 percent's piece of the wealth pie has increased by 8.6 percentage points, while the next 0.09 percent's has done so by 5.4. The bottom 99 percent, meanwhile, have seen their wealth share fall an astonishing 18 percentage points.
Source: Saez and Zucman
Here's a bit of historical perspective: the top 1 percent now own over 41 percent of all the wealth in the country. That's the most since 1939. Although it's still well below the all-time high of 51 percent set in 1928.
In other words, this new Gilded Age might get even more Gilded.
Matt O'Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at The Atlantic.