Wednesday, October 21, 2015

Inequality watch: Is it "time for the pitchforks?" You betcha!

Credit Suisse issued a report on distribution of global wealth covered briefly by Common Dreams and featured in my Sunday blog. Now Paul Buchheit has a longer commentary on the Credit Suisse report also in Common Dreams, "New 2015 Wealth Data: U.S. Inequality at its Ugliest".

According to new Credit Suisse data, nearly 50 million of America's 243 million adults are part of the world's poorest 10%.

"OK", the equality of opportunity crowd replies, "in a capitalist economy there are bound to be winners and losers." (I made up this quote, but see my comments on George Will's defense. )

But the disparities are staggering. Here are the high points from Buchheit's review of the data.

  1. At the Bottom: Of the Half-Billion Poorest Adults in the World, One out of Ten is an American
  2. At the Top: The Richest 1/10 of American Adults Have Averaged Over $1 Million Each in New Wealth Since the Recession
  3. In the Middle: The US is the Only Region Where the Middle-Class Does Not Own Its Equivalent Share of Wealth
  4. In the Upper-Middle: For a Full 70% of Americans, Percentage Ownership of National Wealth is One of the Lowest in the World
  5. The Big Picture: Only Kazakhstan, Libya, Russia, and Ukraine Have Worse Wealth Inequality than the United States

Here are some other points from Buchheit's review.

About #1 - the poorest Americans:

That seems impossible, with so many extremely poor countries, and it requires a second look at the data, and then a third look. But it's true. In the world's poorest decile (bottom 10%), one out of ten are Americans, many of whom are burdened with so much debt that any remnant of tangible wealth is negated. Other nations have high debt, most notably in Europe, but without an excessive burden on their poorest citizens.

Incredibly, then, nearly 50 million of America's 243 million adults are part of the world's poorest 10%. In contrast, over 110 million American adults are among the world's richest 10%. (Emphasis in original.)

About #s 3, 4, 5 - our impoverished middle class:

The North American middle class, as defined by Credit Suisse, and of which the U.S. is by far the largest part, has 39% of the people but only 21 percent of national wealth. Every other region of the world shows the reverse phenomenon, with the middle class owning an oversized portion of national wealth.

Quoting from Credit Suisse:

The average wealth of middle-class adults in North America is barely half the average for all adults. In contrast, middle-class wealth per adult in Europe is 130% of the regional average; the middle class in China is three times better off in wealth terms than the country as a whole; and the average wealth of the middle class in both India and Africa is ten times the level of those in the rest of the population."

Bob Lord, blogger at Blog for Arizona, weighs in on the Credit Suisse data.

I’d like to think inequality can’t get worse than this, but it of course can.

Nonetheless, this is stunning. Forget about the comparisons to the gilded age. We’re past that now.

Paul Buchheit reports at Common Dreams that the bottom 70% of Americans own a mere 6.9% of our wealth:

That’s 70%. Not just the most impoverished, or the poorest half, but a full 70% of us are near the bottom of the world in percentage of wealth ownership. Just 6.9 percent of the wealth is owned by 70% of us. All other reporting nations range between about 13 and 30 percent.

That’s very close to a quarter billion people. To be more precise, it’s 235 million Americans. It’s roughly three percent of the entire world’s population.

Here’s another group that owns 6.9% of our wealth: The wealthiest 5,000 American households, or about 12,000 individuals. That’s not the 1%, or the .1%, or even the .01%. It’s roughly the .004%. That’s 4 out of every 100,000 Americans.

Or: Wealth of 70% = Wealth of .004%

Or: Wealth of 70,000 = Wealth of 4

Paul Buchheit concludes:

Barack Obama once said, "I believe America is exceptional." The inequality data proves him right.

Lord concludes:

If you’re not a numbers person, consider this visual: Imagine the entire country outside of Texas, California, New York and Florida. In other words, 46 of our 50 states. Now, imagine a crowd that doesn’t quite fill a basketball arena. The crowd in the basketball arena has as much wealth as the population of those 46 states.

And the momentum is all in favor of that crowd in the basketball arena. Unless and until ordinary Americans get out in the streets and demand the wealthy be taxed at double the levels they’re taxed now, things will get worse.

Time for the pitchforks, folks.

P. S.

The comments following Lord's post make for interesting reading, partly because "Thucky" is baaack. (Thucky = John Huppenthal, the disgraced ex-Superintendent of Public Instruction and secret blogger - aka troll.)

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