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Showing Original Post only (View all)Forget the 1% [View all]
It is the 0.01% who are really getting ahead in AmericaThe Economist, Nov 8th 2014
EXCERPT...
A new paper by Mr Saez and Gabriel Zucman of the London School of Economics reckons past estimates badly underestimated the share of wealth belonging to the very rich. It uses a richer variety of sources than prior studies, including detailed data on personal income taxes (which the authors mine for figures on capital income) and property tax, which they check against Fed data on aggregate wealth. The authors note that not every potential source of error can be accounted for; tax avoidance strategies, for instance, could cause either an overestimation of the wealth share of the rich (if they classify labour income as capital income in order to take advantage of lower rates) or an underestimation (if they intentionally seek out lower yielding investments for their tax advantages). Yet they believe their estimates represent an improvement over past attempts.
The results are enough to make Mr Piketty blush. The authors examine the share of total wealth held by the bottom 90% of families relative to those at the very top. Because the bottom half of all families almost always has no net wealth, the share of wealth held by the bottom 90% is an effective measure of middle class wealth, or that held by those from the 50th to the 90th percentile. In the late 1920s the bottom 90% held just 16% of Americas wealthconsiderably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929. From the beginning of the Depression until the end of the second world war, the middle classs share of total wealth rose steadily, thanks largely to collapsing wealth among richer households. Thereafter the middle classs share grew along with national wealth thanks to broader equity ownership, middle-class income growth and rising rates of home-ownership. The expansion of tax breaks for retirement savings also helped. By the early 1980s the share of household wealth held by the middle class rose to 36%roughly four times the share controlled by the top 0.1%.
From the early 1980s, however, these trends have reversed. The ratio of household wealth to national income has risen back toward the level of the 1920s, but the share in the hands of middle-class families has tumbled (see chart). Tepid growth in middle-class incomes is partly to blame; real incomes for the top 1% of families grew 3.4% a year from 1986-2012 while those for the bottom 90% grew 0.7%. But Messrs Saez and Zucman reckon the main cause of falling middle-class net worth is soaring debt. Rising home values did little to raise middle-class wealth since mortgage debt also soared. The recession battered home prices but left the debt untouched, further squeezing middle-class wealth.
The really, really rich get much, much richer
On the other side of the spectrum, the fortunes of the wealthy have grown, especially at the very top. The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealthback to the 1916 share, which is the highest on record. Those down the distribution have not done quite so well: the top 0.1% (consisting of 160,000 families worth $73m on average) hold 22% of Americas wealth, just shy of the 1929 peakand exactly the same share as the bottom 90% of the population. Meanwhile the share of wealth held by families from the 90th to the 99th percentile has actually fallen over the last decade, though not by as much as the net worth of the bottom 90%.
CONTINUED..
http://www.economist.com/news/finance-and-economics/21631129-it-001-who-are-really-getting-ahead-america-forget-1
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The big fish eat the smaller fish. That's capitalism. Now we are starting to see the bigger fish
rhett o rick
Nov 2014
#1
I got this right from the horses mouth. H. Clinton-Sachs will choose Goldman-Sachs as her running
rhett o rick
Nov 2014
#6
I am looking for the post that quoted Sen Sanders talking about the dangers of
rhett o rick
Nov 2014
#7
Bernie Sanders: “If I were to run for president, do you know how much money the Kochs would spend?
Octafish
Nov 2014
#10
Thank you so much. I didn't have it bookmarked. This is one of if not the most important
rhett o rick
Nov 2014
#12
I am willing to give her brave. What I said was, being brave isn't why she isn't afraid of the PTB.
rhett o rick
Nov 2014
#22
Well I did a bad job of being sarcastic back. I got your post, but wasn't sure you got mine.
rhett o rick
Nov 2014
#26
One more thing that I need straightening out. If I were to look at your turning
rhett o rick
Nov 2014
#28
If you walk with the biggest bully, you don't need to fear. If you challenge the bully, you'd
rhett o rick
Nov 2014
#45
Eventually there is only one fish left, and that fish then calls himself Emperor.
Odin2005
Nov 2014
#17
No wonder they can set in motion wars, "lone nuts" & whatever else they need to protect that wealth
villager
Nov 2014
#3
Recently...Water Cannons, Tear Gas Unleashed on 100,000 Anti-Austerity Marchers in Brussels
adirondacker
Nov 2014
#4
I remember in college, my political science teacher telling us he believed the U.S. was run...
C Moon
Nov 2014
#5
That is who I am always talking about, the .01%. People here don't fully realize what we are talking
Rex
Nov 2014
#14
Nothing pisses me off more than to hear these people talk about how hard they worked
SomethingFishy
Nov 2014
#23
When people tell me they got rich through 'hard work,' I always ask them "Whose?" - nt
KingCharlemagne
Nov 2014
#41