Other nations have taken steps to address wealth inequality. The United States, for its part, has been content to let the problem grow.
The richest 1 percent own nearly half of all global wealth.
Let’s get our heads around that. Only a tiny fraction of the roughly 7 billion people in the world accounts for 46 percent of the estimated $241 trillion in money, property and other material resources available.
The richest 10 percent, meanwhile, can claim 86 percent of global wealth, leaving 90 percent of the world’s population to divvy up whatever’s left.
These extraordinary figures were included in a report this week from Credit Suisse Research Institute. It found that the gravy train is chugging along, but with relatively few passengers.
Former Labor Secretary Robert Reich has been sounding the alarm over wealth inequality for years. He’s at the center of a recent documentary, “Inequality for All,” which explains the problem in frightening detail.
“When so much of the purchasing power, so much of the economic gain, goes to the very top,” Reich told me, “there’s simply not enough purchasing power in the rest of the economy.”
That has profound implications. In the United States, consumer spending accounts for about 70 percent of all economic activity. If most consumers are getting by with less, the inevitable outcome is that they’ll have fewer dollars to pump into the economy.
Robert Reich speaks of inequality of opportunity in America. And he is absolutely correct in is assessment. But his solution is a “redistribution” solution rather than FUTURE “distribution” solution. Never does he suggest that we implement policies that broaden private sector individual ownership of FUTURE productive capital growth to provide income security for EVERY American, and to create “customers with money” to spend on the products and services the economy is capable of producing.
Infographics on the distribution of wealth in America, highlight 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 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.
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.org/income-solution-slow-private-sector-job-growth-1378041490.
