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Want to Know Where the Economy Is Going? Watch The Top 10%

January 19, 2023

Want to Know Where the Economy Is Going? Watch The Top 10%

Should the wealth effect reverse as assets fall, capital gains evaporate and investment income declines, the top 10% will no longer have the means or appetite to spend so freely.

Soaring wealth-income inequality has all sorts of consequences. As many (including me) have noted, the concentration of wealth and income in the top 0.1% has enabled the few to buy political influence to protect their interests at the expense of the many and the common good.

In other words, extreme wealth-income inequality dismantles democracy. There is no way to sugarcoat this reality.

But the concentration of wealth and income isn’t limited to the top 0.1% or top 1%. The top 5% and top 10% have increased their share of household wealth and income, too, and this has far-reaching consequences for the economy, as the top 10% accounts for the bulk not just of income but of spending.

According to the Federal Reserve, ( Distribution of Household Wealth in the U.S. since 1989), the top 1% owned 22.7% of all household wealth in 1989. Their share increased to 30.6% in 2022. The share of the 9% below the top 1% (90% to 99%) remained virtually unchanged at 37.4%. The top 10% own 68% of all household wealth.

But this doesn’t reflect the real concentration of income-producing assets, i.e. investments. Total household wealth includes the family home, the F-150 truck, the snowmobile, etc. What separates the economic classes isn’t their household possessions, it’s their ownership of assets that generate income and capital gains.

As the chart below shows, the top 10% own the vast majority of business equity, stocks/bonds and income-producing real estate, between 80% and 90% of each category.

This means the tremendous increases in asset valuations of the past two decades have flowed almost exclusively to the top 10%, with the important caveat that the vast majority of the gains in income and wealth have flowed to the top 0.1%, top 1% and top 5%.

…click on the above link to read the rest…

Inequality Could Be Addressed By Removing Our Options

August 11, 2021

Inequality Could Be Addressed By Removing Our Options

Recently I stumbled upon an interesting and informative YouTube video on the environment that gives information on both sides of the question, “is there a climate change crisis?” A fella who has studied this subject indicated there is not and what we are being told by many so-called experts is more hype than truth. An example is that while he agreed that the earth’s oceans were being over-fished, he saw the answer to be growing more of our fish in fish farms. As far as the sea rising, he reminded viewers that Holland is nine feet below sea level, surrounded by dikes, and doing fine.Still, the world is changing, and as I delved deeper into his views of how society should face its current challenges I became a bit disturbed. Conceding he was generally a liberal, he espoused the message it would be a win-win for the environment to bring the rest of the world into the modern world and it is our duty to do so. While he didn’t just come out and say it, this would address inequality across the world at our expense it “kinda would.”

Does This Look Familiar?

To me, this equates to putting us in a row of buildings or little boxes, rationing our food and energy use, and providing people with endless superficial entertainment including virtual travel opportunities and calling the experience life. This promise, where they take away your right to drive or own anything in exchange for more leisure time and less work is a trap well set. Unfortunately, it has the potential to gain traction when put before those on the bottom, often, these people have little to lose.…click on the above link to read the rest of the article…

Will Civilization’s Response to COVID-19 Lead to a More Sustainable, Equitable World?

May 4, 2020

Will Civilization’s Response to COVID-19 Lead to a More Sustainable, Equitable World?

What better time to shift our thinking and actions away from a hyperconsumptive, inequality-widening, environmentally-detrimental era than the 50th anniversary of Earth Day.

Having been shaken to our collective core by the COVID19 pandemic, can we muster the will to make major changes in how we rebuild our systems, to truly transform how we function as a society for the betterment of Earth and her inhabitants? What cause is more just, fair, and wise? And what time is better to shift our thinking away from a hyperconsumptive, inequality-widening, environmentally-detrimental era in which we find ourselves – the Anthropocene – than the 50th anniversary of Earth Day, the 22nd of April 2020?

A proposition has been coalescing in my mind for years, but drew strength from recent essays by notable thinkers, which I’ll briefly mention for context.

Humanizing Capitalism

Meghan Kallman pleads that “Crises require a radical form of solidarity.” as she questions whether a capitalist system can address the looming threats of climate change, and more importantly prioritize social relationships above the search for wealth. Her perspectives on how these relationships germinate best at the community level are encouraging.

Darren Walker summarizes the August 2019 statement emanating from 181 CEOs of the Business Roundtable:  “…leading the way toward a more equitable, humane, and democratic economic system…” (because in the U.S.) “…the three richest Americans collectively own about as much as the bottom half of the population combined…” This group is attempting to redefine the purpose of a corporation, committing to “…lead[ing] their companies for the benefit of all stakeholders – customers, employees, suppliers, communities, and shareholders.”

Nate Hagens writes that COVID-19 “exposes economic, cultural, environmental fallacies” of our existence, suggesting we all become more compassionate in our work, play, and interactions. I applaud his many suggestions for individual action.

Reallocating Resources

…click on the above link to read the rest of the article…

Localisation: A strategic solution to globalised authoritarianism

April 9, 2019

Ladakhi girls. Photo credit: Helena Norberg-Hodge

Localisation: A strategic solution to globalised authoritarianism

For those who care about peace, equality and the future of the planet, the global political swing to the right over the past few years is deeply worrying. It has us asking ourselves, how did this happen? How did populism turn into such a divisive and destructive force? How did authoritarianism take over the political scene once again?

From my 40 years of experience working in both industrialised and land-based cultures, I believe the primary reason is globalisation. When I say globalisation, I mean the global economic system in which most of us now live – a system driven by continual corporate deregulation and shaped by neoliberal, capitalist ideologies. But globalisation goes deeper than politics and the economy. It has profoundly personal impacts.

Under globalisation, competition has increased dramatically, job security has become a thing of the past, and most people find it increasingly difficult to earn a liveable wage. At the same time, identity is under threat as cultural diversity is replaced by a consumer monoculture worldwide. Under these conditions it’s not surprising that people become increasingly insecure.

As advertisers know from nearly a century of experience, insecurity leaves people easier to exploit. But people today are targeted by more than just marketing campaigns for deodorants and tooth polish: insecurity leaves them highly vulnerable to propaganda that encourages them to blame the cultural “other” for their plight.

Let me illustrate how this happened in Ladakh, or Little Tibet, where I first visited as a young woman and where I have worked for over four decades. Situated in the Indian Himalayas, Ladakh was relatively isolated—culturally and economically—until the late 1960s. When I arrived in the early 70s, a campaign of Western-style development had just been launched by the Indian government — giving me the opportunity to experience what still remained of the ancient culture, and to observe the changes that came with modernisation.

 …click on the above link to read the rest of the article…

Equality: A Beneficial Alternative to Collapse

September 13, 2018

Equality: A Beneficial Alternative to Collapse

What future shall we choose? Equality or inequality? Deep democracy or more limited forms? Sustainability and wise stewardship of resources, or exploitation for profit? You have a good idea of where current systems are taking us. A viable alternative path exists, and that path is science based.

InMarch 2018, Bloomberg news reported that income inequality in the United States had hit a disturbing new high. Not unlike atmospheric carbon dioxide, income and wealth inequality in the United States have been rising since at least the 1980s, under Democratic and Republican presidents, and Democratic and Republican Congresses. The Occupy Wall Street movement crystallized public attention on inequality in 2011 with its slogan “We are the 99 percent.” In 2014 the French economist Thomas Piketty wrote a masterful book on the subject that became a global best seller. His take-home message? Capitalism itself produces severe income inequality.

Yet with all the written words and public discourse on inequality, very little attention has been paid to its complement, income and wealth equality (or near-equality, essential equality). That discussion is long overdue.

Obviously, severe inequality of income and wealth benefits those at the top. But what about everyone else? Pick any dividing line, say the 70th, 80th, 90th, or even 99th percentile of family income or wealth. It’s difficult to argue that inequality helps those below the line as much as those above it. If it benefits everyone evenly, there would be little reason to prefer the 60th over the 40th percentile, for example, or the 90th over the 60th.

But we do have preferences. We toil and sweat, even sometimes step on each other’s heads, in hopes of climbing one rung higher. Higher is almost always preferred to lower, all else being equal. That’s because wealth has real benefits.

…click on the above link to read the rest of the article…

Have We Hit Peak Inequality?

December 14, 2015

Have We Hit Peak Inequality?

These 400 billionaires are wealthier than 190 million of their fellow Americans.

When should we be alarmed about so much wealth in so few hands?

The Great Recession and its anemic recovery only deepened the economic inequality that’s drawn so much attention in its wake. Nearly all wealth and income gains since then have flowed to the top one-tenth of America’s richest 1 percent.

The very wealthiest 400 Americans command dizzying fortunes. Their combined net worth, as catalogued in the 2015 Forbes 400 list, is $2.34 trillion. You can’t make this list unless you’re worth a cool $1.7 billion.

These 400 rich people — including Bill Gates, Donald Trump, Oprah Winfrey, and heirs to the Wal-Mart fortune — have roughly as much wealth as the bottom 60 percent of the population, or over 190 million people added together, according to a new report I co-authored.

That equals the wealth of the nation’s entire African-American population, plus a third of the Latino population combined.

forbes-magazine-cover-donald-trump

Forbes Magazine Cover

A few of those 400 individuals are generous philanthropists. But extreme inequality of this sort undermines social mobility, democracy, and economic stability. Even if you celebrate successful entrepreneurship, isn’t there a point things go too far?

To me, 400 people having more money than 190 million of their compatriots is just that point.

Concentrating wealth to this extent gives rich donors far too much political power, including the wherewithal to shape the rules that govern our economy. Half of all political contributions in the 2016 presidential campaign have come from just 158 families, according to research by The New York Times.

The wealth concentration doesn’t stop there. The richest 20 individuals alone own more wealth than the entire bottom half of the U.S. population.

This group — which includes Gates, Warren Buffet, the Koch brothers, Mark Zuckerberg, and Google co-founders Larry Page and Sergey Brin, among others — is small enough to fit on a private jet. But together they’ve hoarded as much wealth as 152 million of their fellow Americans.

…click on the above link to read the rest of the article…

When the Aristocracy Leaves the Commoners in the Dust, The Empire Is Doomed

October 8, 2015

When the Aristocracy Leaves the Commoners in the Dust, The Empire Is Doomed 

We all know the barriers between the commoners and the Elite rise higher every year, despite the claims of the corporate media and the Power Elite aristocracy.

Historian Peter Turchin identified “the degree of solidarity felt between the commons and aristocracy” as a key ingredient of the Republic of Rome’s enormous success. Turchin calls this attribute of social structure vertical integration, a term that usually refers to a corporation owning its supply chain.

In Turchin’s meaning, it refers to the sense of purpose and identity shared by the top, middle and bottom of the wealth/power pyramid. One measure of thisvertical integration is the degree of equality/inequality between the commoners (shall we call this the lower 90% of American households by income?) and the Power Elite aristocracy (top .5%, or perhaps top .1%).

The vertical integration of the Roman Republic’s social strata is striking. In his book War and Peace and War: The Rise and Fall of Empires, Turchin tells this anecdote:

“Roman historians of the later age stressed the modest way of life, even poverty of the leading citizens. For example, when Cincinnatus was summoned to be dictator, while working at the plow, he reportedly exclaimed, ‘My land will not be sown this year and so we shall run the risk of not having enough to eat!'”

Can you conjure up the image of any presidential hopeful in a field actually working to grow food for his/her family?

Turchin goes on to say this vertical integration is a feature of all successful empires:

“(This) lack of glaring barriers between the aristocracy and the commons seems to be a general characteristic of successful imperial nations during their early phase.”

…click on the above link to read the rest of the article…

Alternatives to Capitalism

August 28, 2015

Alternatives to Capitalism

alternatives-capitalismIt is said that capitalism believes in competition but hates competitors. With this thoughtful book, Robin Hahnel and Erik Olin Wright aim to strengthen the resources of anti-capitalist politics against the charge that ‘there is no alternative’. While there is a debate on the left over the value of engaging in utopian planning of the kind represented by this book, Hahnel and Wright present their approach as supporting radical politics, building confidence rather than distracting from current struggles. The thinking and action inspired by real-world examples (such as participatory budgeting in Porto Alegre) underlines the point. We need concrete inspiration; we need to believe that ‘another world is possible’. In Erik Wright’s words, ‘We need … utopian longing melded to realist thinking about the dilemmas and constraints of building viable alternatives to the world as it is.’

The book sets out two approaches to anti-capitalist utopian thinking, taking the form of a dialogue between the two authors (embedded in a shared commitment to radical conceptions of equality and democracy). Each sets out a position and provides a constructive and reflective commentary on the other’s contribution, and a response to the points raised about their own.

Hahnel’s proposal is for a system of participatory economics, originally developed with the US activist and radical economist Michael Albert. This is essentially a bottom-up method of production and consumption planning. In this book, he focuses on the mechanisms by which individual producers and consumers would collectively elaborate an agreed annual plan, without the need for markets or hierarchical central control. A little more detail on the content of the proposed system at the outset of his dialogue with Wright would have been helpful, although he does provide useful references to his extensive writing on participatory economics elsewhere.

 

…click on the above link to read the rest of the article…

Economic inequality: 10 reasons why we can’t beat it

May 22, 2015

Economic inequality: 10 reasons why we can’t beat it

Even the OECD says inequality is bad. But making it go away is much tougher

It almost feels like an old story. Ever since the economy crashed in 2008 a growing chorus of voices has warned that inequality was wiping out the middle class and damaging society.

This week the Organization for Economic Co-operation and Development, the rich countries` think-tank, made headlines for declaring that growing inequality is not only bad for social cohesion, but is actually cutting points off economic growth.

If we all agree, why is it such an intractable problem? The story is complex, but here are just a few reasons why inequality is so hard to fix.

1. Equality where?

While inequality within rich countries has been getting worse, many point out that global inequality has been shrinking.

Countries like the U.S. and Canada used to consume a majority of the world’s wealth. As the rich and middle class in places like China and India get a bigger piece of the action, some argue that morally, increasing global equality outweighs a relative decline in wealth by some people in the rich world.

2. Free trade and globalization

The push to create open trade between countries means that the low- and unskilled workers of rich countries are increasingly competing directly with workers in China, Bangladesh, Vietnam and India. Even within North America, industrial jobs often move to where wages are lowest, meaning middle class industrial jobs disappear.

3. Automation

Even in developing countries, manufacturers are replacing jobs withrobots and automation. Here in North America, computerized processes are already taking jobs done by factory workers, clerical workers and even professionals as clever software learns to search legal titles and write simple news stories.

 

 

…click on the above link to read the rest of the article…

 

SOLVING CRIME AND INEQUALITY, WITH A SEED

March 23, 2015

SOLVING CRIME AND INEQUALITY, WITH A SEED

A sense of community itself goes a long way towards building the kind of trust and equality necessary for safer and more just communities. [1] Indeed, many of today’s social improvement programs, from arts to sports, to jobs, housing and political forums, are choosing to base their efforts on community cultivation, as strong communities are often springboards for social and economic well being. [2]

But what if this kind of trust and community could be built while simultaneously undertaking another type of cultivation, the kind where individuals work gently and carefully together to cultivate the land. What would the benefits be?

Is it possible for a humble seed and a patch of soil to be the catalysts for stronger, healthier, more equal urban communities?

Countless studies have shown — and frankly if they didn’t, then common sense should show — that through cultivating a relationship with the land, individuals and communities learn how to be better connected to each other, and more appreciative of life at a basic level. [3, 4, 5, 6, 7]

To forget how to dig the earth and to tend the soil is to forget ourselves.
— Mahatma K. Ghandi

In the years we have spent producing the Final Straw film, Suhee and I have seen repeatedly, that in the community garden in general — and the natural farm mentality specifically — there is an understanding of self paired with anappreciation for all life which can not be learned anyplace else. As an active participant in this learning where we create harmonious relationships and nurture other living things, individuals are also, sometimes unknowingly, creating the building blocks for a society which has far less crime and conflict.

…click on the above link to read the rest of the article…

 

 

Olduvai IV: Courage
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Olduvai II: Exodus
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