The Rich and the Wealthy, Part 2

To put it in proper perspective, the path of income inequality during the last century is marked by two main events: a sharp fall in inequality beginning with the onset of the "New Deal" programs in the mid 1930's Depression, and an extended rise in inequality that began in the mid-1970s and accelerated in the 1980s. Income inequality today is about as large as it was prior to the Great Depression.


Now rest assured, there are those who will insist that the wide gap of income -- and the even wider gap in wealth -- between the top few percent and everybody else, is quite natural.  Those who don't like it "obviously" have issues of some sort with capitalism, free enterprise, mom, apple pie, and the American Way.  I personally have nothing against someone being rich or wealthy, even obscenely rich or obscenely wealthy.  They managed to climb the ladder of success, I applaud them.  The problem is that after they climb to the top, they are effectively pulling the ladder up behind them.

I'm going to lay out some general facts about income distribution in the USA:

• The top 10 percent of households, with average income of about $200,000, received 42 percent of all pretax money income in the late 1990s.
• The top 1 percent of households, averaging $800,000 of income, received 15 percent of all pretax money income.
• The bottom 90 percent of households shared the remaining 68 percent of all pretax income

Since many of us are "math challenged," look at it this way:  in terms of income, if there were 100 people in a room with 100 seats, and the number of seats represented each person's pre-tax income, ten people would have 42 seats, just one of those ten people would have 15 of those seats... and the other 90 people would have to sit in the remaining 68 seats.  Another way to comprehend the distribution is via a video of the L-Curve, which is less than 4 minutes long.

Now, if you think the distribution of income is bad, the distribution of wealth is even worse!  Some facts about wealth distribution in the USA, and I'm talking about financial wealth distribution, which excludes the primary residences of each household:

• The wealthiest 20 percent of households owned 93 percent of total wealth in 2007
• The wealthiest 1 percent of households owned 43 percent of total wealth in 2007
• The bottom 80 percent of households split the remaining 7 percent of total household wealth

Using the same allegory again:  in terms of wealth, if there were 100 people in a room with 100 seats, and the number of seats represented each person's wealth, twenty people would have 93 seats, and just one of those twenty people would have 43 of those seats... and the other 80 people would have to sit in the remaining 7 seats. 

Many of those holding public office on the state or national level (or trying to get elected to those high offices) would have you believe that by voting for them, and not their "opponent," all of us who "work hard" and "pull yourself up by your own bootstraps" will join the privileged few (so don't raise taxes on the wealthiest Americans, you're going to be one of them... do you want YOUR taxes to be increased?).


Fact, most people do not understand how much the wealth of this country is owned by a small segment of the population.  A recent article describes this in greater detail. Truth is in a perfect world, everyone in this country has the OPPORTUNITY to be among the privileged few... but if it was ever possible for most of us to get there, the privileged few wouldn't be so few in number today.  If you're not there now, your chances of getting there by old-fashioned hard work are only a little better than buying a winning a million dollar lotto ticket. 


Fact is, those in power, or trying to get in power, are for the most part already wealthy or have wealthy connections.  Their objective is NOT for you to be come wealthy or powerful, but instead to simply get your vote so as to maintain and increase their own wealth and power.   And if you think about it, the wealthy don't need to try to get more wealth... who would they get it from, except from their other wealthy friends? (Yes, the top 1 percent tend to hang around other top 1 percent people, not around the bottom 80 percent).  No, as I've already said, it's not about the money.  So, "what do you get the person who has everything?"  The answer is simple: power.  More specifically, power without accountability.  Why the answer is so simple, at least to me, I will attempt to explain in the next one or two entries.