Income Inequality Worst Since 1917


No Wonder the Poker Game is Ending: The Wealthiest Have Taken All of the Chips

Washington’s Blog
Saturday, August 15, 2009

A new report by University of California, Berkeley economics professor Emmanuel Saez concludes that income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression.

The report shows that:

Income inequality is worse than it has been since at least 1917
“The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007″
“In the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.”
As others have pointed out, the average wage of Americans, adjusting for inflation, is lower than it was in the 1970s. The minimum wage, adjusting for inflation, is lower than it was in the 1950s. See this. On the other hand, billionaires have never had it better.

As I wrote in September:

The economy is like a poker game . . . it is human nature to want to get all of the chips, but – if one person does get all of the chips – the game ends.

In other words, the game of capitalism only continues as long as everyone has some money to play with. If the government and corporations take everyone’s money, the game ends.

The fed and Treasury are not giving more chips to those who need them: the American consumer. Instead, they are giving chips to the 800-pound gorillas at the poker table, such as Wall Street investment banks. Indeed, a good chunk of the money used by surviving mammoth players to buy the failing behemoths actually comes from the Fed…

This is not a question of big government versus small government, or republican versus democrat. It is not even a question of Keynes versus Friedman (two influential, competing economic thinkers).

It is a question of focusing any government funding which is made to the majority of poker players – instead of the titans of finance – so that the game can continue. If the hundreds of billions or trillions spent on bailouts had instead been given to ease the burden of consumers, we would have already recovered from the financial crisis.

As Marc Weisbrot writes in the Guardian:

John Schmitt and Nathan Lane showed that the United States is not the nation of small businesses that it is regularly dressed up to be for electoral campaign speeches and editorials. If we look at what percentage of our overall labour force is self-employed, or what percentage of manufacturing workers or high-tech workers are employed in small businesses – well, the US ranks at or near the bottom among high-income countries.

As economist Paul Krugman noted after reading the study: “One more American myth bites the dust.”

In other words, the idea that America has more small businesses than other countries is false. More small businesses would be good, as it would mean that more of the “little guys” would have poker chips to play the free market game with.

Similarly, breaking up the big banks would lead to more competition and allow smaller banks to fill the lending needs of individuals and small businesses

Comments

Popular Posts

Exactly 60 Years Since the Death of Pope Pius XII. The More Time Passes the More It Seems as if EVERYTHING happened in October of 1958. The Death of Pope Pius XII, Fear on the Part of the US Government Of the Election of a traditional Pope, the TWO Occasions of White Smoke ---- October 26th and 28th, and the Disappearance of Sister Lucy.

Criminal Case: Sister Lucy Truth Facial Recognition Report Soon to be Released, Dossier of Medical Experts, Handwriting Analysis Planned, New State of the Art Website to Display Results, and Cyber Security Experts to Protect information.

Stranger Things: The Unusual Friends of Giovanni Battista Montini --- Isn't it Strange to think that if we did half of what these post-Vatican II popes did, we would ALMOST CERTAINLY GO TO HELL .....No wonder "Sister Lucy" had to be Cut and Pasted into Photos with him in 1967. Read Below Selections from Randy Engels' Article, "Paul VI and the Church's Paradigm Shift on Homosexuality."

There WAS an Imposter. On the Day of the Miracle of the Sun, We Publish Our First of Many Expert Reports. A Plastic Surgeon's Judgment on the Case of the Two Sister Lucys.

The Secret that Made the Messenger a Refugee and Undesirable. Melanie Calvat's Life of Contradiction and the Message of Punishment and Warning for the World. On this September 19th, Let Us Not Forget the Sorrowful Lady who Spoke of Our Time and of the Time to Come. She told Us "Rome Will Lose the Faith." It has.

Exclusive: New Introduction to Fr. Paul Kramer's Renamed Book, "To Deceive the Elect" Presents the Most Explicit Argument I have Seen on the Question of the Legitimacy of Francis. Presents First-Hand Account of Fr. Nicholas Gruner's Rejection of the Legitimacy of Francis' Papacy.

Found Out! Brian McCall Fired as Dean at Law School For Articulating Common-Sense in the Secular Realm. Welcome, Brian to the Other Side of the Tracks --- Sort of.

Fr. James McLucas, formerly of Christendom College and The Latin Mass Magazine, Indicted by Pennsylvania Grand Jury on Allegations of Sexual Abuse of Children.