Tuesday, November 18, 2014

And Now the Richest .01 Percent

              Research by Emmanuel Saez of UC Berkley and Gabriel Zucman of the London School of Economics shows that the richest one hundredth of one percent of Americans now hold over 11 percent of the nations total wealth. How do these super rich people spend their money? If you said politics you are correct. Of the spending of the .01 percent, political spending is the fastest growing. It is even growing faster than their wealth. A way to show how rich the .01 percent are, is that in 1978 the .01 percent was 220 times richer than the average American. In 2012 the .01 percent were 1120 times richer than the average American. Along with the rich getting richer, the bottom 90 percent are getting poorer. In the mid 1980s the bottom 90 percent held 36 percent of the nation's wealth. Now they hold less than 23 percent. Meanwhile, the .01 percent account for much of campaign donations. In the 2012 election the .01 percent accounted for 40 percent of all campaign contributions. The author of this article wanted to bring attention to this inequality in the distribution of income and representation in politics.

-            Does this inequality in the distribution of income show that the US/economy is going in the wrong direction?
-      Should such a small percent of the population be able to to influence politics so much?


NickK said...

Before anyone beats me to the punch: Huffington post, really?

I'd say it's the right direction, as it's just the result of our capitalist economic system. Socialism and Communism are both terrible and flat out don't work at such a large scale without a totalitarian government, and even then those systems work pretty poorly, resulting in awful lives for the subjects. What would be an issue is if these ultra rich were using their money to influence something which would have a terrible effect on the entire American populace, such as the sugar problem in our food industry and the somehow still ongoing net neutrality issue (gotta love that revolving door). Whether these people have the money isn't a problem, it's what they do with it.

I think they should be able to influence politics as much as they are able, as they've earned the ability to. Sure, it's not very democratic, but... meritocracy, natural faculties, etc etc.

CleoWienbar7 said...

While the flood of money into politics is worrisome, I think we should worry more about rebuilding the middle class. When citizens are no longer worried about being getting enough hours out of their minimum wage job(s), they will be able to focus more on politics and grand scale change.
I think that our main response to this phenomenon should be to increase focus on education, especially in service jobs. Trying to shore up unskilled factory jobs is really a lost cause. The forces of capitalism and globalization will eventually win out. Instead we should improve access to technical education and rebuild the middle class around skilled trades like building, mechanics and other services. I think the first step would be to expand community college classes to include these subjects. Often students have to go to for profit schools to get an education in the trades. These are usually mediocre and overpriced, and often lead to a useless degree and debt. Not everyone needs a four-year degree, but everyone should have the opportunity to gain real skills that they can use to support themselves and their families.

Jeremiah Rondeau said...

Income disparity is a horrible economic indicator. The important thing is that everybody is getting richer-- not which segments of the population are improving faster than others.

Take a look at the Forbes billionaires list:

The top fortunes include money made off Microsoft, Oracle, WalMart, Facebook, Google, Amazon, Mars (candy), etc. (even GoPro was mentioned).

All these companies did great things for America, which is WHY people bought them, and the founders got rich. This is not a problem. Should they have this much influence in politics? No-- but as long as the government is this big, the crew with the most money will buy the most influence.

David Diba Six said...

In all honesty currently we are not in a bad situation, people with money are doing good things such as creating very successful companies with beneficial products as state by Jeremiah, however I would want to point out one concern of mine- the combination of a richer rich and a completely Republican controlled congress with their very conservative economics. With this increased influence of the rich of the rich and the more pro-business, deregulation stances of conservative economists my largest concern for the future is the environment. Many conservatives believe that an economy is best when we are personally producing all of our energy (with the most readily available not environmentally friendly) and with companies that have more and more money to lobby to more people with those interests, I am hoping that we will not derail our effort to continue to become more dependent on perpetual energy sources rather than fossil fuels.

Alex Medwid said...

In theory I would agree with Jeremiah that income disparity doesn't mean much. If the top 0.1 percent begin to make twice as much and everyone else makes the same amount, income disparity has doubled. Thus it may not mean as much as it is purported to.

However, what this huge disparity shows is that tax law is not functioning correctly. The fact that it is even possible for such a small percent of the population to own such a large portion of the nation's wealth is a problem. Taxing such absurdly high capital gains far more would do very little to "discourage innovation" or "hurt job creation".

As far as money in politics goes, the federal government needs to do more work towards limiting it. However, I think that lobbying needs to be addressed before campaign finance because even with a well-financed campaign voters have the final say. However, voters have just about no impact on how lobbyists influence government officials, so that is what needs to be addressed the most.

Rene Chen said...

Though, if you think about it, .01% of the population control and possess unimaginable amounts of wealth, wealth that if started counting with your fingers, every dollar, a lifetime would not suffice for you to finish. It does indeed sound unfair. How can such a small population of people have ALL that money? Because those same people are the people that essentially build and maintain America's current economy. It does not necessarily mean that our economy is going in the wrong direction, in fact, it could even be going in the right direction, for the bigger the companies get, the more jobs they can provide, and more money is dispersed into the economy. Therefore, should those people who essentially own our economy, own the people who basically judges and govern our lives? No. But in reality, it is somewhat true. Corporate America plays a huge role in politics, and is indeed unfair to those who aren't corporate America, those who aren't making millions upon millions, billions upon billions, those who can't afford to contribute to campaigns or what have you. I believe that indeed, those .01%er's are important, probably even respectable people, but I do not think they should have as much influence as they do now in politics.