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My “Wealth Effect Monitor” & “Wealth Disparity Monitor” for the Fed’s Money-Printer Economy: December Update

December 28, 2021

My “Wealth Effect Monitor” & “Wealth Disparity Monitor” for the Fed’s Money-Printer Economy: December Update

Billionaires got more billions, bottom half of Americans got peanuts and inflation.

My “Wealth Effect Monitor” uses the data that the Fed releases quarterly about the wealth of households. The Fed, after having released the overall data for the third quarter earlier in December, has now released the detailed data by wealth category for the “1%,” the “2% to 9%,” the “next 40%” (the top 10% to 50%) and the “bottom 50%.”

Wealth here is defined as assets minus debts. The wealth of the 1% ($43.9 trillion, according to the Fed) is owned by 1% of the population. The wealth of the “bottom 50%” (only $3.4 trillion) gets split across half the population. My Wealth Effect Monitor takes this a step further and tracks the wealth of the average household in each category.

The average wealth in the 1% category ticked up by only $121,000 in Q3 from Q2, after skyrocketing over the prior five quarters, to $34,478,000 per household (red line). In the bottom 50% category, the average wealth ticked up by $6,800 $53,600 (green line). And get this: About half of that “wealth” at the bottom 50% is the value of consumer durable goods such as cars, appliances, etc. Even the top 2% to 9% (yellow), have been totally left behind by the explosion of wealth at the 1%:

Note the immense increase in the wealth for the 1% households, following the Fed’s money-printing scheme and interest rate repression in March 2020.

A household is defined by the Census Bureau as the people living at one address, whether they’re a three-generation family or five roommates or a single person. In the third quarter, there were 127.4 million households in the US, per Census estimates.

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

Rising Social Disorder Is Inevitable: Here’s Why

January 30, 2018

Rising Social Disorder Is Inevitable: Here’s Why

We can do better, and if we don’t, the only possible output of such an unequal system is increasing social disorder.

We are in a very peculiar point in history. On the one hand, we’re reassured that all is well because Every One of the World’s Big Economies Is Now Growing. (NY Times)

Yet at the same time, we read that “Something Is Very Wrong With The Global Economy”: Richest 1% Made 82% Of Global Wealth In 2017 and are asked, Can the World Survive a Winner-Take-All Global Economy?

Even the authors of the rah-rah NY Times piece on the wonderfulness of the global economy expressed concern that this “growth” may not be distributed any more equally than the previous 10 years of “recovery.”

We already know absolutely nothing will change because neither the inputs nor the feedback loops in the economy have changed. As Donella Meadows explained in her seminal paper Leverage Points: Places to Intervene in a System, the only ways to change a system’s outputs (in this case, widening income and wealth inequality and rising social disorder) is to change the inputs or add a new feedback loop.

The status quo has not changed the inputs or added any new feedback loops, so the output of the system–extremes of widening income and wealth inequality–cannot possibly change.

The portmanteau word “precariat” (precarious + proletariat) describes much of the modern work force–those in the less specialized sectors of the gig economy, informal/black market economy or in the traditional corporate-employment economy but with irregular work hours and little in the way of benefits.

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

The Billionaire Boom: 82% of Global Wealth Produced Last Year Went to Richest 1%

January 25, 2018

The Billionaire Boom: 82% of Global Wealth Produced Last Year Went to Richest 1%

Photo by Nathaniel St. Clair

Forida is a 22-year-old sewing machine operator in a clothing factory in Dahka, Bangladesh. She often works 12-hour days producing clothes for brands such as H&M and Target. Sometimes, during busy production cycles, the hours are even longer.

“Last year, I worked until midnight for a full month,” Forida explained. “I used to feel sick all the time. I was stressed about my son and then after I got home from work, I had to clean the house and cook and then go back to work again the next morning. I would go to bed at 2am and get up at 5.30am each day.”

Even with the combined income from her husband, Forida’s family barely had enough food to eat.

Meanwhile, a CEO from a top clothing brand would have to work only four days to earn what a garment worker in Bangladesh earns in a lifetime.

Forida’s story is included in a report released today by the anti-poverty organization Oxfam. The report, Reward Work, Not Wealth, reveals how the global economy empowers the richest 1% while hundreds of millions of people struggle to survive.

Oxfam found that 82% of the global wealth produced last year went to the richest 1% of the world’s population. In other words, four out of every five dollars of wealth created in 2017 went into the pockets of the 1%.

While a new billionaire was created every other day, the 3.7 billion people making up the poorest half of the world’s population saw no increase in their wealth last year.

“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system,” said Winnie Byanyima, the Executive Director of Oxfam. “The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors.”

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

Few jobs despite booming Mozambique economy – Features – Al Jazeera English

December 4, 2014

Few jobs despite booming Mozambique economy – Features – Al Jazeera English.

Maputo, Mozambique – Beto Magumane Cossa was orphaned at 14 when his father was killed by a woman with whom he was having an affair.

Alone and with no other family living in Magude, a rural district 155km from the capital Maputo’s shopping malls and luxury hotels, Beto lived off the money his brother sent home from working as a miner in South Africa.

Life was difficult but manageable – the money his brother sent home was enough to keep Beto clothed and fed. If things got tight, the neighbours helped Beto out by giving him food. But a few years after their father’s death, Beto’s brother returned home sick with HIV/AIDS and couldn’t work. Beto tried to find a job to support them both, but no one would take him on.

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

 

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