The income of many people around the world has considerably increased due to the economic globalization of the last 50 years. However, these income gains are unevenly distributed. A study by Dr. Valentin Lang, junior professor of political economy at the University of Mannheim, and his co-author Marina M. Tavares of the International Monetary Fund shows that the top 10% of the national income distributions, in particular, have benefited from this development.

In their study, published in The Journal of Economic Inequality, the researchers tried to answer the questions if and how the globalization of the last 50 years has affected inequalities between people worldwide.

Their research found that globalization has led to greater income inequalities within many countries. The gap between rich and poor has widened particularly in countries that have become more integrated into the global economy, such as China, Russia and some Eastern European countries. At the same time, globalization has reduced inequality between countries. The differences between countries therefore play an increasingly minor role in the global inequality rate.

“The influence of globalization on income inequalities worldwide was greater than we had expected,” summarizes Valentin Lang, junior professor of International Political Economy at the University of Mannheim and author of the study. “We were particularly surprised that these differences were mainly due to the gains of the richest and that the lower income groups benefited little or not at all.”

Increasing skepticism towards globalization

The study also shows that globalization in its early and middle stages led to considerable income increases in the individual countries but that the growth effects diminish as the degree of globalization increases…

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

Wealth Gap And The Road To Serfdom

March 29, 2024

Wealth Gap And The Road To Serfdom

One of the most interesting conundrums is the surging wealth gap in America. Despite two of the largest bull markets in history since 1980, most Americans struggle with making ends meet and are unprepared for retirement. Such a reality starkly differs from the belief that rising asset prices benefit the masses.

For example, in a recent St. Louis Federal Reserve Bank analysis, total household wealth was $139.1 trillion, covering 131 million families. Of that total wealth, 74% was owned by just 13.2 million families, or roughly 10% of the population.

Notably, this measure of wealth includes the equity of the family’s home. While home equity is essential, it is not readily spendable without taking on debt to extract the value. Therefore, Americans’ “liquid wealth” is far more unequally distributed. However, such is hard to fathom given the endless parade of media and social media influencers extolling the virtues of “building wealth through investing.”

Interestingly, that survey came after the Government injected nearly $5 trillion into the economy, a massive surge in deficit spending, and the Fed’s $120 billion monthly injections doubled asset prices from the March 2020 lows. Unsurprisingly, in February, Fidelity published its latest analysis showing the number of retirement accounts with balances of more than $1 million surged toward a record. To wit:

“The number of seven-figure 401(k) accounts at Fidelity Investments jumped 20% in 2023’s final quarter to 422,000, marking a sharp recovery from the previous quarter’s 7.7% drop.

Gains in the stock market helped swell retirement balances last year as the S&P 500 advanced 24% following 2022’s 19% decline. The impressive run was powered in large part by the so-called “Magnificent 7” stocks that now make up roughly 30% of the market-cap weighted S&P 500 Index. The only time when the ranks of 401(k) millionaires at Fidelity was higher was in 2021’s fourth quarter, when there were 442,000 such accounts. Elsewhere, the number of seven-figure IRAs is at a record 391,600 accounts.” – Bloomberg

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

Introduction to Power by Richard Heinberg

December 23, 2021

Introduction to Power by Richard Heinberg

Richard Heinberg’s latest title, Power is an exploration of humanity’s power over nature and the power of some people over others. Power traces how four key elements developed to give humans extraordinary power: tool making ability, language, social complexity, and the ability to harness energy sources — most significantly, fossil fuels. Today, we take an excerpt from Power that explains how Richard started on the journey of writing this book.

Excerpted from the introduction to Power

Many people are searching for a magic formula to save the world from the converging crises of the 21st century. Climate change, economic inequality, air and water pollution, resource depletion, and the catastrophic disappearance of wildlife threaten to upend society while destabilizing our planet to such a degree that it may be impossible for future generations of humans to persist. What if we could solve all these problems with one simple trick?

Don’t hold your breath. A single solution doesn’t exist: it’s not socialism or capitalism, it’s not renewable energy or nuclear power, it’s not religion or atheism, and it’s not hemp. However, I believe there is a single causative agent in back of most of our troubles, the understanding of which could indeed help us emerge from the hole we’re rapidly digging for ourselves.

That causative agent is power—our pursuit of it, our overuse of it, and our abuse of it. In this book, I argue that all the problems mentioned above, and others as well, are problems of power. We humans are nature’s supreme power addicts. Power—the ability to do something, the ability to get someone else to do something, or the ability to prevent someone else from doing something—is everywhere in the human world…

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

Can Any Nation-State Survive the Era of Inequality and Scarcity?

December 8, 2021

Can Any Nation-State Survive the Era of Inequality and Scarcity?

We have an extraordinary opportunity to transform our unsustainable “waste is growth” economy and toxic inequality to sustainable systems that optimize well-being rather than collapse.

The possibility that the United States could fragment is no longer a marginalized topic. Maps displaying various post-U.S. regional configurations accompany essays exploring how and why a break-up of the U.S. would be a solution to regional and ideological polarization, for example, Max Borders’ recent article, Dear America: It’s Time to Break Up.

But two forces larger than political polarization may fragment nation-states across the globe, including the U.S.: inequality and scarcity. Inequality and corruption go hand in hand, of course, as the wealthiest few influence the state to protect their monopolies and backstop their speculative gains.

Inequality also goes hand in hand with the collapse of nation-states, as this seminal paper explains: Human and nature dynamics (HANDY): Modeling inequality and use of resources in the collapse or sustainability of societies.

The parasitic elite can accumulate the majority of income, wealth, political power and resources in eras of expanding abundance, as what’s left is enough to support an expanding populace that consumes more per capita every year, i.e. broad-based prosperity.

But once abundance transitions to scarcity, the economy and society can no longer sustain the dead weight of its outsized parasitic elite. The parasitic elite believes its bloated share of resources, wealth and power is not only sustainable but can be expanded without consequence, and so it deploys all its formidable power to keep the status quo unchanged even as scarcity lowers the living standards of the bottom 90% and hollows out the economy.

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

Why is the world protesting so much? A new study claims to have some answers.

November 10, 2021

Why is the world protesting so much? A new study claims to have some answers.

Activists wearing cutouts of world leaders’ faces outside the COP26 summit on Nov. 2 in Glasgow, Scotland. (Peter Summers/Getty Images)

Are we in a historic age of protest? A new study released Thursday that looked at demonstrations between 2006 and 2020 found that the number of protest movements around the world had more than tripled in less than 15 years. Every region saw an increase, the study found, with some of the largest protest movements ever recorded — including the farmers’ protests that began in 2020 in India, the 2019 protests against President Jair Bolsonaro in Brazil and ongoing Black Lives Matter protests since 2013.

Titled “World Protests: A Study of Key Protest Issues in the 21st Century,” the study comes from a team of researchers with German think tank Friedrich-Ebert-Stiftung (FES) and the Initiative for Policy Dialogue, a nonprofit organization based at Columbia University and adds to a growing body of literature about our era of increasing protests. Looking closely at more than 900 protest movements or episodes across 101 countries and territories, the authors came to the conclusion that we are living through a period of history like the years around 1848, 1917 or 1968 “when large numbers of people rebelled against the way things were, demanding change.”

But why? Here, the authors highlight one particular problem: democratic failure. Their research found that a majority of the protest events they recorded — 54 percent — were prompted by a perceived failure of political systems or representation. Roughly 28 percent included demands for what the authors described as “real democracy,” the most of any demand found by the researchers. Other themes included inequality, corruption and the lack of action over climate change. But the study’s authors say policymakers do not respond adequately.

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

The Path to a Livable Future Cannot be the Path We’re On

October 21, 2021

The Path to a Livable Future Cannot be the Path We’re On

Stan Cox has pulled off quite a feat with his latest book The Path to a Livable Future: A New Politics to Fight Climate Change, Racism, and the Next Pandemic. In a relaxed, inviting style, Cox sets unorthodox ideas in a persuasive human and environmental context.

Cox explains:

“The path to a livable future now involves not just reforming an unjust system, or budgeting a little more here and there to ‘underserved’ communities, but abolishing marginalization itself. By co-creating movements from all sectors of society, we organize in ways that are inclusive, open, democratic, and diverse. This is how we become unstoppable, and how we seed our present struggles with the dignified future we collectively envision.” [Italics added]

To be clear: Cox aims to promote radical action in the best sense, that is, by getting down to basics, to roots. Here is Cox:

In my previous book, The Green New Deal and Beyond, I focused tightly on the climate emergency and national public policies that will be necessary to end it. In this book, which zooms out to a wide-angle view of an entire society in rapid flux, I look to the movements now demanding the kind of transformation that’s necessary to get us all through the multiple, entangled emergencies that finally captured the nation’s attention in 2020.

Simply put, The Green New Deal and Beyond [April 22, 2020] is a ‘top-down’ approach grounded in national public policy, whereas The Path to a Livable Future is a ‘bottom-up’ approach grounded in grassroots movements collectively joined. The two books work in tandem to describe the essential ‘transformation’ Cox champions. However, that is just the beginning. Early on, Cox writes:

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

5 Signs a Civilization is About to Fail

October 11, 2021

5 Signs a Civilization is About to Fail

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…

I Now Track the Most Important Measure of the Fed’s Economy: the “Wealth Effect” and How it Impacts Americans Individually

April 13, 2021

I Now Track the Most Important Measure of the Fed’s Economy: the “Wealth Effect” and How it Impacts Americans Individually

The Fed provides the data quarterly, I dissect it at the stunning per-capita level.

The Federal Reserve is pursuing monetary policies that are explicitly designed to inflate asset prices. The rationalization is that ballooning asset prices will create the “wealth effect.” This is a concept Janet Yellen, when she was still president of the San Francisco Fed, propagated in a paper. In 2010, Fed Chair Ben Bernanke explained the wealth effect to the American people in a Washington Post editorial. And in early 2020, Fed Chair Jerome Powell pushed the wealth effect all the way to miracle levels.

Today we will see the per-capita progress of that wealth effect – what it means and what it accomplishes – based on the Fed’s wealth distribution datathrough Q4 2020, and based on Census Bureau estimates for the US population over the years. Here are some key results. At the end of 2020, the per-capita wealth (assets minus debts) of:

The 1% = $11.7 million per person (green);
The next 9% = $1.6 million per person (blue);
The 50% to 90% = $263,016 per person (red line at the bottom).
The bottom 50% = $15,027 per person. That amount of wealth is so small it doesn’t show up on this per-capita chart that is on a scale of wealth that accommodates the 1%.

The total population in 2020, according to the Census Bureau, was 330 million people. The 1% amount to 3.3 million people. Back in 2000, the population was 283 million people, and the 1% amounted to 2.8 million people. So the 1% has grown by 473,000 people because the population has gotten larger. And the 50% – the have-nots, as we’ll see in a moment – have grown by 24 million people.

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

Powell, Do You Even Know What The Economy Is?

March 23, 2021

Powell, Do You Even Know What The Economy Is?

To Clarify, Main Street Is Not Wall Street

After all the destructive policies we have seen coming out of the Eccles Building, it may be time to ask Fed Chairman Jerome Powell, “Do you even know what the economy is?” All the easing and stimulus has taken us to a place we could call Bubbleville. It has bolstered asset prices and speculation but done little to help Main Street or generate a strong economy. This destructive force was unleashed long before Covid-19 came into the picture and hanging our economic misfortunes on the pandemic may sound reasonable but is far from accurate.History shows that misguided financial policies often end in a crisis, in this case, it is likely to play out in massive inflation. Milton Friedman knew a bit about this, he said; The government benefits the first from new money creation, massively increases its imbalances, and blames inflation on the last recipients of the new money created, savers and the private sector, so it “solves” the inflation created by the government by taxing citizens again. Inflation is taxation without legislation.

https://www.youtube.com/watch?v=PeIeFUJ9EY

A comical Progressive Insurance commercial has a smooth-faced fella going on about his beard and apologizing for how he looks. Finally, a coworker asks him, “Jamie, do you even know what a beard is?” Over the months we have watched Fed Chairman Jerome Powell time and time again cut rates and increase the Fed’s balance sheet. This has hurt savers, forced investors into risky investments in search of yield, damaged the dollar, encouraged politicians to spend like drunken sailors, and increased inequality.

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

bruce wilds, advancing time blog, jerome powell, fed, us federal reserve, bubble, financial policies, fed balance sheet, inflation, taxation, inequality

Instability

January 27, 2021

Instability

In every century the same thing happens at one point or another. Society loses the plot and gets caught up in a mania, a grandiose exercise in self delusion. It can be political, it can be religious, and yes it can be economic. Sometimes these manias are confined to regions or small groups of people, sometimes they are vast in reach and impact and have global consequences. We can all think of examples. Religious? How about witch burnings? Politics? How about Nazism? Economics? How about all the manias that had fervent believers and adherents that with the hindsight of time were completely insane? The South Sea Bubble, the Tulip mania, the 1929 mania, etc. All of these bringing about vast social instability versus the previous status quo with often disastrous consequences.

And whatever we got going here is now approaching a similar frantic delusion that appears to infect everyone.

All of these manic periods have something in common: Believing in something absolutely even though it is either completely wrong or unrealistic. Seeing reality becoming untethered.

I’ve long argued that central banks aiming to be a stabilizing force are actually bringing about societal instability. Occupy Wall Street, Black Lives Matter, the storming of the Capitol, angry Trump voters, angry Democrat voters and yes even Gamestop reddit buyers may all have different causes and triggers and motivations, but they actually have one thing in common: They are angry, angry at a system that has screwed them over, a sense of deep pervasive injustice and inequality, a fissure that keeps widening with every central bank intervention program.

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

Dalio- The United States Is At A Tipping Point That Could Lead To Revolution Or Civil War

December 2, 2020

Dalio: The United States Is At A Tipping Point That Could Lead To Revolution Or Civil War

It was almost exactly ten years ago that we first predicted that the Fed’s “moronic” QE which has sparked an unprecedented class, income and wealth divide, “positions US society one step closer to civil war if not worse.” This prompted Time magazine to mock our forecast, although we doubt the author, currently at Bloomberg where pretty much every financial op-ed writer eventually ends up, is laughing today after an almost identical assessment of the current situation, if ten years delayed, was published by a far more “respected” by the likes of Time commentator, Ray Dalio.

In the latest installment of his ongoing series on the changing world order published on his LinkedIn page, Dalio finally turned to ground zero in what will be the conflict of the 21st century – class and power struggles – and mused if the U.S. is at a tipping point that could move it from what he says is “manageable” tension to a full-blown revolution.

“People and politicians are now at each other’s throats to a degree greater than at any time in my 71 years,” Dalio wrote noting that disorder is rising in a number of countries. “How the U.S. handles its disorder will have profound implications for Americans, others around the world, and most economies and markets.”

“It is in this stage when there are bad financial conditions and intensifying conflict,” wrote Dalio. “Classically this stage comes after periods of great excesses in spending and debt and the widening of wealth and political gaps and before there are revolutions and civil wars. United States is at a tipping point in which it could go from manageable internal tension to revolution and/or civil war.”

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

What Are You Going To Do As Our Money Dies?

August 27, 2020

What Are You Going To Do As Our Money Dies?

Central banks are killing our currency to protect the already-rich

In our recent article It’s Time To Position For The Endgame, Chris Martenson explained how the US Federal Reserve and its sister central banks around the world have been engaged in the largest and most egregious wealth transfer in all of history — one that has been drastically exacerbated by the covid-19 pandemic.

The official response, tremendous monetary stimulus by the central banks paired with massive fiscal stimulus from national legislatures, has been pitched as “saving the system”.

Yet, in reality, it has merely served to accelerate the transfer of capital from the public into the pockets of the already-rich.

Anyone with eyes can see how the central banks have abandoned all pretense of monetary fiduciary responsibility and have simply cranked their printing presses up to “maximum”:

In concert with this surge of liquidity, national legislatures have added their own emergency measures. In the US alone, the CARES Act pushed nearly $3 trillion in fiscal stimulus into the system, and will highly likely soon be followed by another $1-3 trillion depending on which party’s bill gets passed.

Despite these staggering sums, the amount of money trickling into the average US household has been meager and is drying up.

Instead, these $trillions are mostly finding their way into the coffers and share prices of corporations. We have seen the fastest and most extreme V-shaped recovery in the history of the financial markets since the March swoon. The major indices are now back to record all-time-highs, despite the major carnage covid-19 has wreaked on the global economy.

So who benefits from that? Oh yeah, the people who own those companies. The already-rich.

Remember: 84% of all stocks are owned by the top 10% of households.

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

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