How the Stinking Rich Ate the Economy

[xchrom]

http://www.theatlantic.com/business/archive/2012/02/how-the-stinking-rich-ate-the-economy/253187/

"If a $100,000-a-year household thinks itself to be middle class," the neoconservative writer Irving Kristol once wrote, "then it is middle class." This sentiment is widely held, but it makes no mathematical sense. Any family whose income exceeds that of 90 percent of all other families cannot sensibly be called anything but rich. To believe otherwise would oblige you to judge your child mediocre when his teacher gives him an A.

But within the top decile distinctions are nonetheless worth making.

-- The Rich, defined as the top 10 percent, which today means everyone making $109,000 or more, increased their share of national income during the Great Divergence from about one third (34 percent) to nearly one half (48 percent).

-- The top 5 percent (Basically, Undeniably, Really, and Stinking Rich; today, everybody making at least $153,000) increased their share from 23 to 37 percent.

-- The top 1 percent (Undeniably, Really, and Stinking Rich; today, everybody making at least $368,000) more than doubled their share of the national income from 10 to 21 percent.

-- The top 0.1 percent (Really and Stinking Rich; today, everybody making at least $1.7 million) tripled their share of the national income to 10 percent.

-- The top 0.01 percent (the Stinking Rich; today, everybody making at least $9.1 million) nearly quadrupled their share of income during the Great Divergence, from 1.4 to 5 percent.

Notice a pattern? The richer you are, the faster you expand your slice of your country's income. Or as Emmanuel Saez put it to me, "The [inequality] phenomenon is more extreme the further you go up in the distribution," and it's "very strong once you pass that threshold of the top 1 percent."

[Calamitas Loxodonta]

1. Income inequality does not even begin to address the scale of inequality.

The "wealth gap" is more illustrative. Even amoung the 1 percent it is very top heavy. In fact a few hundred billionaires actually own the entire world..or at least a controling interst of it.
One family (The Walton's) have more net worth than 40% of all Americans combined.
If you look only at income, the outlandish scale of the true inequality remains hiddin.

I agree with the thrust of your post. Thank-you for bringing forth the alarming stats. I think we do need to recognize that often high income earners perform important and difficult roles. They are often uniquely talented and productive. It is not wrong that some people make more than others, it is the scale of the disparity and increasing plight at the bottom which most concerns.
My issue is when they exploit workers, consumers, the environment or the treasury to enrich themselves and their Billionaire masters.

[saras]

2. Kind of silly, setting up strawmen to beat them down

There are two different definitions of "middle class"
The original, technical one, was those who did the enforcement work for the upper class. If you do productive work, even if it's high-level intellectual work, you're working class. This includes many research scientists, for example. If your job consists exclusively of managing others, of ensuring that others do what they're supposed to do or what the economic powers that be want them to do, then you're middle class. If you don't have to do jack shit but hire trustworthy attorneys and accountants to remain wealthy, you are upper class, owning class, ruling class, however. If you're upper class, you can choose to play with money if you want - some do, some don't.

There's a completely different one common in America, which has nothing to do with your role in society, and everything to do with Mrs. Grundy and our hatred of working people and the poor. This is the definition by which the most degraded of at-will laborer claims to be middle class because they can own a car, or rent a private home instead of a tenement, or whatever other arbitrary goal they erect.

There's nothing magical about 90%, and no reason to automatically define that point as "rich". It entirely depends on the shape of the WHOLE CURVE. Rich, in practice, ought to mean that you're one of the major players. Its not about what you can do with your private life, it's how much weight you have in the game. If you can't even bump the table, let alone throw the game, you're NOT a major player. And your average $100k salaried worker doesn't have ANY significant weight in the game, except perhaps through OWS.


"To believe otherwise would oblige you to judge your child mediocre when his teacher gives him an A."
This, unfortunately, is REALLY FUCKING COMMON. I want my children to meet Finnish, Canadian, Japanese standards, not just American. What I commonly see as A work at the university I'm attending, I often don't think should even be PASSING work.