Tag Archives: Inequality

The 85 — Too Few to Have So Much When Too Many Have So Little

Michael Parenti

The world’s 85 richest individuals possess as much wealth as the 3.5 billion souls who compose the poorer half of the world’s population, or so it was announced in a report by Oxfam International. The assertion sounds implausible to me.  I think the 85 richest individuals, who together are worth many hundreds of billions of dollars, must have far more wealth than the poorest half of our global population.

How could these two cohorts, the 85 richest and 3.5 billion poorest, have the same amount of wealth? The great majority of the 3.5 billion have no net wealth at all. Hundreds of millions of them have jobs that hardly pay enough to feed their families. Millions of them rely on supplements from private charity and public assistance when they can. Hundreds of millions are undernourished, suffer food insecurity, or go hungry each month, including many among the very poorest in the United States.

“The number of people living in poverty is growing at a faster rate than the world’s population. So poverty is spreading even as wealth accumulates. It is not enough to bemoan this enormous inequality, we must also explain why it is happening.”

Most of the 3.5 billion earn an average of $2.50 a day. The poorest 40 percent of the world population accounts for just 5 percent of all global income. About 80 percent of all humanity live on less than $10 a day. And the poorest 50 percent  maintain only 7.2 percent of the world’s private consumption. How exactly could they have accumulated an amount of surplus wealth comparable to the 85 filthy richest?

Hundreds of millions live in debt even in “affluent” countries like the United States. They face health care debts, credit card debts, college tuition debts, and so on. Many, probably most who own homes—and don’t live in shacks or under bridges or in old vans—are still straddled with mortgages. This means their net family wealth is negative, minus-zero. They have no  propertied wealth; they live in debt.

Millions among the poorest 50 percent in the world may have cars but most of them also have car payments. They are driving in debt.  In countries like Indonesia, for the millions without private vehicles, there are the overloaded, battered buses, poorly maintained vehicles that specialize in breakdowns and ravine plunges. Among the lowest rungs of the 50 percent are the many who pick thru garbage dumps and send their kids off to work in grim, soul-destroying sweatshops.

The 85 richest in the world probably include the four members of the Walton family (owners of Wal-Mart, among the top ten superrich in the USA) who together are worth over $100 billion. Rich families like the DuPonts have controlling interests in giant corporations like General Motors, Coca-Cola, and United Brands. They own about forty manorial estates and private museums in Delaware alone and have set up 31 tax-exempt foundations. The superrich in America and in many other countries find ways, legal and illegal, to shelter much of their wealth in secret accounts. We don’t really know how very rich the very rich really are.

Regarding the poorest portion of the world population—whom I would call the valiant, struggling “better half”—what mass configuration of wealth could we possibly be talking about? The aggregate wealth possessed by the 85 super-richest  individuals, and the aggregate wealth owned by the world’s 3.5 billion poorest, are of different dimensions and different natures. Can we really compare private jets, mansions, landed estates, super luxury vacation retreats, luxury apartments, luxury condos, and luxury cars, not to mention hundreds of billions of dollars in equities, bonds, commercial properties, art works, antiques, etc.—can we really compare all that enormous wealth against some millions of used cars, used furniture, and used television sets, many of which are ready to break down?  Of what resale value if any, are such minor durable-use commodities, especially in communities of high unemployment, dismal health and housing conditions, no running water, no decent sanitation facilities, etc? We don’t really know how poor the very poor really are.

Millions of children who number in the lower 50 percent never see the inside of a school. Instead they labor in mills, mines and on farms, under conditions of peonage.  Nearly a billion people are unable to read or write. The number of people living in poverty is growing at a faster rate than the world’s population. So poverty is spreading even as wealth accumulates. It is not enough to bemoan this enormous inequality, we must also explain why it is happening.

But for now, let me repeat: the world’s richest 85 individuals do not have the same amount of accumulated wealth as the world’s poorest 50 percent. They have vastly more. The multitude on the lower rungs—even taken as a totality—have next to nothing.

Michael Parenti is an author of note who is known for the classic text on political science and American government “Democracy for the Few”. His work can be found at http://www.michaelparenti.org. This post was first published at COMMON DREAMS and distributed by PORTSIDE (See Links below)

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Poverty Doesn’t Just Happen

Economic inequality is the cause of poverty. We will never overcome poverty until we take on its root cause in inequality. Peter Marcuse discusses structural issues in the economy which tend to institutionalize poverty:

Exploitation at the work place. Keeping the pay for workers as low as possible is an inherent part of running a business and making a profit: the lower wages are, the higher profits are. Employers are “job creators” only against their will; the fewer workers they need use to produce a different product or service, the better off the employer is. The high pay for business executives and dividends to shareholders are directly at the expense of the workers in their businesses. .

Exploitation at the consumption end. Increasing the demand for ever more consumers goods, of course necessarily paid for out of wages, increases the profits of the producers of those goods and the wealth of the owners of the firms that produce them. Inducing demand artificially, through advertising and the wide array of cultural patterns of the kinds long documented by sociologists and economists, supports the consumption exploitation of poor (as well as middle class) consumers, to the benefit of the rich.

Exploitation at the financial end. Where, after all, do extraordinary profits of hedge fund managers and bankers come from? Ultimately, of course, from the prices paid by the purchasers of the goods and services they are financing. Their interest and dividend incomes and high salaries are really based on the profits of those making their money from more direct exploitation of the poor.

Exploitation of the benefits of land ownership, an obvious and pervasive monopoly, paid, as economists put it, by rent not for anything that the recipient of rent payments has produced or done, but solely extracted by him through the possession of something in limited supply for which there is demand. Property owners and developers are among the richest of the rich (think Donald Trump), in large part because they are able to benefit from the speculative increases in the pries of land which they own.  Ultimately, those benefits are paid for in the prices consumers pay and the rents that tenants pay, a regressively distributive system enriching land owners at the expense of all others.

All four of these forms of exploitation are among the primary causes of poverty and, centrally, inequality.

Digging deeper into what a war on poverty ought to be about would lead to examining, not only how the poor might be directly helped, but also how the rich might be constrained in those actions that keep the poor in poverty. Digging deeper into how inequality might be reduced would lead not only to measuring the extent to which it is reflected in income inequality and be ameliorated by boosting the incomes at the bottom rungs of the ladder of opportunity but would lead also to the same concern for limiting the way the rich get to the top of the ladder to begin with.

The dispute between Governor Cuomo and Mayor de Blasio over the financing of pre-kindergarten for poor children is a vivid example of the difference, Cuomo’s insistence on paying out of general funds, does help to alleviate poverty, but it also avoids de Blasio’s proposal for  paying through a dedicated tax on incomes over %$500,000 addresses inequality directly. Thus Cuomo may alleviate poverty but de Blasio aims further directly to reduce inequality, looking both at the top and the bottom of the ladder. Reducing poverty is much less controversial than reducing inequality, which confronts more basic vested interests.

Readers can take a look at Marcuse’s analysis at pmarcuse.wordpress.com

Enough Is Enough, Too Much Is Too Much

Never have so few had so much.

The gap between the SuperRich and the rest of us has never been greater. The Pharoah of ancient Egypt, the Shah-in-Shah of the Persian Empire, the Great Khan of the Mongols, and the Sultan of the Sublime Porte were closer in wealth and incomes to the lowest peasant than the SuperRich are today in relationship to the average worker.

Oxfam, the international charity, has issued a study finding that the world’s 85 richest individuals have the equivalent wealth of Half of the World’s Population. 85 = 3.5 BILLION! The Math is correct but it is so very wrong.

The total wealth of the the richest ONE-PERCENT has 65-TIMES what is possessed by the least-wealthy FIFTY-PERCENT.

This is economically unsound, it is politically disastrous and morally wrong. If Socialism is what they will call a remedy to this outrage then Socialism is what is required. If we need to abolish Capitalism in order to correct this then Capitalism deserves to be junked.

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FFI See http://www.mcclatchydc.com/2014/01/20/215140/worlds-richest-85-people-have.html

Wealth Inequality in America

The Top ONE-PERCENT possess 40% of the national wealth, the Bottom EIGHTY-PERCENT possess 7% !

Obama Is Delivering America to the SuperRich

Shocking New Research Reveals Obama’s Legacy Could Be an America of Aristocrats and Peons

Warning: This story is going to make you very angry.
New research from inequality experts Thomas Piketty and Emmanuel Saez has revealed that we now have the biggest gap between the rich and rest of America since economists began tracking data a century ago.

This isn’t supposed to happen following an economic crisis. After the Great Depression, Roosevelt’s New Deal programs worked to prevent wealth from piling back up at the top. And over the past two decades, the percentage of income claimed by the wealthy dropped after each recession. But in the aftermath of the Great Recession, the top 1 percent has gobbled up nearly all of the income gains in the first three years of the “recovery” ­ a stupifying 95 percent. Economic inequality is even worse than it was before the crash. In fact, last year the rich took home the largest share of income since 1917 with the exception of only one year: 1928.

Is this an accident?
Let’s take a look at the years from 2009 -2012. While working people were sweating it, the richest Americans have enjoyed a fabulous ride. For example, if you were in the top 1 percent in 2012, lucky you ­ your income soared on average by 20 percent. And if you were in the top 0.01 percent, you probably bought a bigger yacht because your income was up by more than 32 percent on average.

As for everybody else? They shared a measly 1 percent rise.

In other words, the rich are getting richer, and the rest of us are frozen in economic purgatory.

For despite all the talk of the Federal Reserve’s “quantitative easing” driving soaring stock markets and a post-crisis economic boom, 99 percenters have seen their real incomes going down and their living standards depressed. Ordinary, hard-working people are not getting a slice of the pie, they’re barely getting a sliver. (Cue Obama’s apparent pick for the next Federal Reserve chair, the crony capitalist, bank-loving Larry Summers.)

The bailouts, which handed boatloads of money to bankers, can’t be blamed entirely on President Obama. But ever since then, the policies of his administration have pretty much fixed things so that those who caused the crisis have benefited, while those who didn’t paid for it. He has surrounded himself with Wall Street apologists as economic advisors, despite the existence of extraordinary economic minds like Nobel laureate Joseph Stiglitz who could offer sound and sensible guidance. Every chance Obama has to correct this mistake, he seems to double down and brings on another 1 percenter.

To be fair, Republicans have been the most ardent promoters of “trickle-down” economics and austerity policies that leave regular people behind. But centrist Democrats have done little to forge a different path. A few courageous progressive voices, like Elizabeth Warren’s, get drowned out by a chorus of “Let’s Make a Deal” politicians eager to screw the bulk of the population and reward the rich while filling their campaign coffers. Policies like cutting our social insurance programs and allowing the rich to evade taxes are hidden behind clever marketing campaigns: For hedge fund billionaire Pete Peterson, for example, who counts deficit committee co-chairs Alan Simpson and Erskine Bowles as his errand boys, the name of the game is “fixing the debt.”

What these plutocrats are really doing is fixing your financial future so that more money can be sucked out of your pockets to line theirs. Obama’s decision to focus on deficit reduction rather than job creation is the sure sign his administration sings the tune of the wealthy.

Making the rich richer is a terrible idea.
Making the rich richer is a terrible idea for several reasons. For one thing, it kills jobs. When regular people have money in their pockets to pay for things like food, clothing, or going to the movies, they are actually creating jobs. The taco stand can hire another cashier when people come in to spend their money on tacos.

But there are only so many tacos you can buy. If you have much more money than you can possibly spend, you’ll likely sock it away or invest in financial assets or start doing risky speculation, which doesn’t create any jobs. With banks deleveraging (cutting back on loans) and many companies fearful of borrowing given anemic rates of economic growth, your savings won’t be recycled. Even if you’re a rich person who builds a company, chances are you’re not creating very good jobs, and you’re also destroying plenty of them. High unemployment makes it easy to hold wages down and squeeze more and more work from desperate workers.

The foregoing excerpts are taken from Lynn Stuart Parramore’s article posted at ALTERNET dated September 12, 2013. AlterNet can be found at www.alternet.org

 

Poverty — It’s Not ‘Them’, It’s ‘Us’

Census figures provide an official measure of poverty, but they’re only a temporary snapshot that doesn’t capture the makeup of those who cycle in and out of poverty at different points in their lives. They may be suburbanites, for example, or the working poor or the laid off.

In 2011 that snapshot showed 12.6 percent of adults in their prime working-age years of 25-60 lived in poverty. But measured in terms of a person’s lifetime risk, a much higher number — 4 in 10 adults — falls into poverty for at least a year of their lives.

The risks of poverty also have been increasing in recent decades, particularly among people ages 35-55, coinciding with widening income inequality. For instance, people ages 35-45 had a 17 percent risk of encountering poverty during the 1969-1989 time period; that risk increased to 23 percent during the 1989-2009 period. For those ages 45-55, the risk of poverty jumped from 11.8 percent to 17.7 percent.

Higher recent rates of unemployment mean the lifetime risk of experiencing economic insecurity now runs even higher: 79 percent, or 4 in 5 adults, by the time they turn 60.

By race, nonwhites still have a higher risk of being economically insecure, at 90 percent. But compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76 percent enduring periods of joblessness, life on welfare or near-poverty.

By 2030, based on the current trend of widening income inequality, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity.

“Poverty is no longer an issue of ‘them’, it’s an issue of ‘us’,” says Mark Rank, a professor at Washington University in St. Louis who calculated the numbers. “Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need.”

SOURCE: Minneapolis Star-Tribune (July 28, 2013)

http://www.startribune.com/politics/217290641.html?page=2&c=y

Imagine a BILLION Dollars, If You Could Spend $ 10,000 a Day, You’d Need 274 Years to Spend It

Michael D Yates, “The Great Inequality”, MONTHLY REVIEW (May 2012), excerpt:

Perhaps a story and some striking facts will serve to sum up the grotesque nature of our skyrocketing income inequality. When I was a boy, I was amazed to learn in my encyclopedia how large a sum was one billion dollars. If a person spent $10,000 a day (my encyclopedia used $1,000 a day, but that was a long time ago), it would take 100,000 days to spend a billion dollars, just under 274 years. In 2009, Pittsburgh hedge fund manager, David Tepper, made four billion dollars. This income, spent at a rate of $10,000 a day and exclusive of any interest, would last him and his heirs 1,096 years! If we were to suppose that Mr. Tepper worked 2,000 hours in 2009 (fifty weeks at forty hours per week), he took in $2,000,000 per hour and $30,000 a minute. This means that he would have paid his social security tax for the entire year in about four minutes of his first workday. Today there are many individuals who, while not as rich as Tepper, make millions of dollars in a single year, enough money to secure them against any calamity.

Others are not so fortunate. In 2010, more than 7 million people had incomes less than 50 percent of the official poverty level of income, an amount equal to $11,245, which in hourly terms (2,000 hours of work per year) is $5.62. At this rate, it would take someone nearly three years to earn what Tepper got each minute. About one-quarter of all jobs in the United States pay an hourly wage rate that would not support a family of four at the official poverty level of income.

If incomes are unequal and becoming more so, the same can be said for a more important, though related, statistic—wealth. Simply put, wealth, for our purposes, is the money value of what we own at a given point in time. It includes houses, cars, computers, cash, stocks, bonds— anything convertible into cash. If we subtract what we owe from what we own, we get net worth. Wealth is important for many reasons. Some types of wealth, such as stocks and bonds, generate income, such as dividends, interest, and capital gains. A good deal of the income of people like David Tepper is saved and converted into wealth, which in turn, generates income, and so on, indefinitely. If incomes are unevenly divided, and if rich households save a bigger fraction of their income than do poor ones, wealth will get steadily more unevenly divided, even if the income distribution remains stable. Wealthy individuals with a lot less than Tepper can live, and live well, without ever working, simply by spending some of the income that derives from their wealth. Some wealth represents possession of the means of production, such as factories, land, banks, and the like, and such ownership is obviously important in terms of economic power. Even more mundane forms of wealth such as automobiles and houses can provide security and aid us in earning our incomes. Wealth can be used as collateral for loans; the more of it we have, the more we can borrow and the more favorable the terms of the loans. Wealth can be inherited and thus passed down, with its advantages intact, to future generations. Our capacities to work and earn wages, on the other hand, die with us.