Taking Stock Of The Most Affluent Among Us (Demo)

On November 13, 2013, Sam Pizzigati writes on NationOfChange.org:

The richest Americans are raking in about 1,000 times as much money as the bottom 90 percent, not counting their secret stashes.

For typical Americans workers, this workplace has become steadily less rewarding. The latest Social Security figures, released last month, show annual wages for the median — most typical — American worker down $980 in 2012 from five years earlier. In effect, notes analyst David Cay Johnston, these typical workers are now working 52 weeks a year for what would have been — in 2007 — 50 weeks of pay.

But these numbers don’t tell the full story of America’s income inequality. Social Security statisticians only tally paycheck data. Their work doesn’t count income from dividends, interest, capital gains, and profits from business operations. Over in America’s elite corner offices, by contrast, the pay keeps pouring in. The ranks of Americans making over $5 million a year grew 27 percent in 2012. The actual compensation this cohort collected soared 40 percent over what the $5 million-plus crowd pocketed in 2011.

University of California economist Emmanuel Saez’s latest calculations, released this past September, show that taxpayers in America’s most affluent 0.01 percent grabbed an average of 993 times more income in 2012 than taxpayers in America’s bottom 90 percent.

In 1975, this lofty top 0.01 percent only averaged 114 times the income of America’s bottom 90 percent.

The data from Social Security relates only to income derived from wages and salaries. The rich, on the other hand, are rich because their primary source of income is derived from dividends, interest, capital gains, and profits from business operations they OWN. The continual concentration of ownership of corporate productive capital assets will continue to reward the wealthy ownership class and exclude the “99 percent” who make up the majority of American citizens.

As a result the decline of income necessary to support oneself and a family household unit will continue to pose financial challenges to Americans. Conventional wisdom says there is only one way to earn a living, and that’s to work––the basis for Social Security accumulated over a lifetime, Yet job opportunities, especially that pay decent wages and salaries to support a family household unit,  are constantly disappearing. Furthermore, the reality that is ignored by leadership and academia is that tectonic shifts in the technologies of production are exponentially destroying jobs and devaluing the worth of labor as “machines” replace people as the means of producing products and services.

The solution is to educate people about the source of income and wealth accumulation that makes one rich––capital ownership. Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.

Structural reform is needed in America to significantly expand private sector individual capital ownership financed with the future earnings of investment. We need to embrace “full production” rather than “full employment.” As a result, in the relative short term “full employment” will occur because every person willing and able to work will be needed to build a future economy that will support general affluence for EVERY citizen. At the same time corporations will benefit from the populous support to keep labor input and other costs at a minimum in order to maximize profits for the owners––which will consist of both the current ownership class and a new, ever expanding ownership class that ultimately comprises EVERY citizen. With such structural reform America will be able to compete more effectively on a global basis as American corporations will be able to operate far more efficiently with less costly overhead. Such structural reform will put us on a path to prosperity, opportunity, and economic justice without taking from those who already own and destroying the principles of private property, and without having to rely on redistribution of wealth and income to support the masses needing taxpayer-supported government welfare sourced from tax extraction and national debt .