On September 12, 2013, Richard (RJ) Eskow writes on NationOfChange.org:
Five years after the financial crisis, it’s become increasingly apparent that the government didn’t rescue “the economy.” It rescued the wealthy, while doing far too little for everyone else.
That didn’t happen by accident. Our government’s response was largely designed by – and for – the wealthiest among us, and it shows. Here’s one highlight from a new analysis: The highest-earning Americans saw their income rise by nearly one-third in a single year, while the needle barely moved for 99 percent of us.
This post-crisis inequality is amplifying an ongoing wealth grab that was already decimating middle-class and lower-income Americans.
Recovery for the Rich
New figures on wealth inequality from economists Thomas Piketty and Emmanuel Saez show that the top 10 percent earned more than half of our nation’s income. That hasn’t happened since they started tracking these figures a century ago.
What about the bottom 99 percent? After being left out of the post-crisis boom, they finally saw an increase in their earnings last year – but it was only a paltry 1 percent.
By contrast, income for the top 1 percent rose 20 percent. And the really rich, the top 0.01 percent, saw their income soar by more than 32 percent.
Recession America
These recent gains build on decades of wealth transfer from the majority to the already-wealthy minority. That shift has replaced the productive earnings of lower- and middle-class Americans with the far less fruitful gains of the already rich. While income to the “99 percent” is largely spent on goods and services, creating jobs and growth, income to the already-wealthy is increasingly sitting idle.As the Economic Policy Institute recently observed, “The median worker saw an increase of just 5.0 percent between 1979 and 2012, despite productivity growth of 74.5 percent—while the 20th percentile worker saw wage erosion of 0.4 percent …”
What’s more, the pace of inequity seems to be accelerating. In his write-up of their new research, Emmanuel Saez notes that the top 1 percent saw their income nearly double between 1993 and 2000, rising 98.7 percent, while income for the rest rose by 20.3 percent. Over the last four years the top 1 percent saw their income rise by 31.4 percent, while the bottom 99 percent only saw real growth of 0.4 percent.
Wages for the American majority have stagnated. Official unemployment figures have been unusually high for an extremely long time. As Annie Lowrey reminds us in The New York Times, workforce participation is the lowest it’s been in 35 years. Long-term unemployment is still at record highs. The jobs people are getting are lower-wage service jobs. The economic value of employee benefits like health-care coverage and pension plans are being drastically reduced.Productivity and profits have soared. But employees aren’t sharing in the spoils.
Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.
The reason the rich are rich is that in large measure their income is derived through dividends, capital gains, interest and rent, through their ownership of wealth-creating, income-generating productive capital assets. The 99 percent class of Americans are essentially propertyless as related to ownership of productive capital assets and are solely dependent on wages and salaries from jobs. The growing rich-poor gap is being propelled by tectonic shifts in the technologies of production that are destroying jobs (thus expanding the available pool of workers competing with each other) and devaluing the worth of labor and by globalization, which shifts employment to other countries where labor is less costly as well as regulations and controls.
The role of physical productive capital is to do ever more of the work, which produces income. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
The result is the consumer populous is increasingly not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.
The problem is NOT the ownership of property. It is the MONOPOLY of ownership of property by the few. It is NOT the ownership of stocks, technology, or other assets that is the problem. It is the MONOPOLY of ownership of wealth-creating, income-generating productive capital assets. What is needed is NOT redistribution of the wealth, it is the “DISTRIBUTION” of opportunity for ordinary Americans, without savings or assets to pledge, to acquire viable, income-generating ownership shares in FUTURE economic asset formation, with the capital credit loans paid for with the earnings of the investments. In the final analysis it is broadened ownership simultaneously with economic growth that should be our focus, which will strengthen our political democracy. because money follows ownership as does power.
For solutions see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.
http://www.nationofchange.org/recovery-rich-recession-rest-1378994927#comments
