Very nice reading in the Financial Times this week.
One of my favorite topics since I themed the year with our 2010 Outlook “A Tale of Two Economies” and in the years before that I’ve been bitching about the topic of wealth disparity in America to the point where even arch-Conservatives Alan Greenspan and David Stockman are now forced to agree with me. So that’s two down, 99,999,998 to go! That’s right, just 1/3 of our fellow countrymen now identify themselves as Republicans or Republican’ts, as they are affectionately known on Capitol Hill – where they block every possible effort to change the status quo that’s been eating away at our nation and destroying the middle class for an entire decade now.
How bad are things for the Middle Class? Well, the FT points out that, since Nixon took us off the gold standard in 1973 and began the long, slow death-march of America from Creditor to Debtor nation, the real (inflation-adjusted) incomes of the bottom 90% of American families have risen just 10% – TOTAL. Over the same period of time (37 years) the real average income of the top 1% has TRIPLED with the top 0.1%, gaining a full factor of 10 – exemplified by the average CEO’s salary rising from 26 times the median income to over 300 times today.
How did 300,000 of our fellow Americans get to be worth as much as 30M (1/4) US workers? It was bad enough when 140M workers would have to contribute 2% of the profits of their labor to support top management but now it seems the top 1% are skimming 20% off the top – that’s just nasty! Even worse, the pie isn’t growing as real wages are up just 10% overall – it’s just the top 0.1% are taking a much larger slice of it than ever before, leaving the bottom 99.9% to fight over the remaining crumbs.
“Nowadays in America,” says the Times, “you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Britain on some measures. To invert the classic Horatio Alger stories, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe. Combine those two deep-seated trends with a third – steeply rising inequality – and you get the slow-burning crisis of American capitalism. It is one thing to suffer grinding income…
