Victory in our time!
They said it couldn't be done, they said that people in a "Democracy" would never allow it to happen but, in the past 5 years we have actually taken 15% of the income AWAY from the bottom 90% of American wage-earners and re-distributed it to the top 10% and, since there are much less of them, it has boosted our top 10% incomes by 115% over the same period!
In the words of the great Winston Churchill (as redefined by the Conservative Bible): "Never was so much taken from so many for so few." As you can see from the chart above, the Reagan Revolution successfully reversed years of gains for the average American and began shoveling all of the economic progresss to the top 10% for the last 30 years but only in the last 5 has this policy gone into overdrive as we have begun to actively TAKE the money from the bottom 90%, Look how rich that makes us – no wonder we are all voting to keep this policy going!
As noted by Zero Hedge:
"Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim: namely, higher asset prices (especially the prices of stocks, bonds and high-end real estate), which are generally owned by taxpayers in the upper-income brackets.
The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s money printing and ZIRP, the economy would either be softer or actually in a new recession."
It's not just our Fed, of course, this morning we are getting more doveish noises from the ECB press conference as Draghi promises MORE FREE MONEY (for those of us with the credit scores or balance sheets to qualify) and that is already (8:30) pushing our Futures up half a point in pre-market trading. We're still watching our bounce levels (and shorting /TF at 1,130), as there hasn't been any actual policy change to back up the BS.
If you happen to be in the top 10% (family income over $160,000) and don't feel 125% richer, that's because you are simply "too lazy" to be in the top 1% (family income over $1,000,000) who are, according to a new study by the ECB, much richer than previously thought.
Rather than holding 30% of the total household wealth in the US, as is often cited, the top 1% actually have more like 37% – over 20% more money than previously estimated while the top 5% (family income over $3M) hold over 60% of America's wealth. This does not, unfortunately, leave much money for the other 95% – try not to be one of them!
“We always suspected there was some low-balling of the top 1 percent,” said Joseph Stiglitz, a Nobel-prize winning economist and author of “The Price of Inequality. ‘‘There’s a growing sense that our system is rigged and unfair.’’
Of course, it's obvious that the people with greater incomes are able to accumulate more wealth. After all, how much "wealth" can we expect a family of 4 to accumulate when they are living with the bottom 90%'s average income of $29,840 (every Dollar counts when the figure is that low!).
396 Americans (the top 0.000001%) have $1Tn, 2.3% of America's wealth. That still leaves $49Tn the other 309,999,604 of us but the top 3.1M take 37% of it ($18.5Tn) and another $18.5Tn goes to the next 31M people to round out the top 10% leaving just $12Tn for the bottom 279M people or $43,000 each compared to 1,225,806 for the average top 10%er, 5,967,741 for the average Joe in the top 1% and all of them are just a little jealous of the 396 guys who have an AVERAGE of $2.5 BILLION, EACH!!!
In fact, the chart above needs to be updated because, according to the OECD, the top 1% of Americans (15M wage earners) now take home 20% of the country's income vs the 10% illustrated on the chart above. That's very much in line with the trend the ECB noted, that 15% of the bottom 90%'s wealth has been transferred to the top 10% (mostly the 1%) in the past 5 years alone.
Since no family can actually live very well in America on $29,840 a year, the bottom 90% tend to go into debt in order to get luxuries like cars, homes or college educations. They borrow this money from the people who have it, the top 1%, and they pay the top 1% interest and that is how more and more money siphons up from the bottom 99% to the top 1%. The poorer we make the bottom 99%, the more money they have to borrow from us to live and the more money we make – BRILLIANT!!!
Lowering the tax rates on investment income insures the top 1% gets to keep the wealth that is transferred to them without having to "give back" unless they choose to. Over the past 30 years, the rules have changed and the laws have been enacted that have, as you can see from the first chart, accelerated that wealth transfer to the point where we have set new World records for inequality – beaten only by biblical accounts of slavery but, don't worry, we'll get there!
As long as we're on the winning side of this game, we should cheer on the status quo. After all, it's very hard for us to get $1M from Carlos Slim, Bill Gates or the Koch Brothers (in fact, we tend to give them a lot of money) but it's pretty easy for us to get money from people who are poorer than us, isn't it? That's how the system is designed and, if you want to "win", then you need to use the system as it's designed.
That's why NFLX's stock pops when they raise their prices and why almost any stock pops when they lay off employees or run tax inversion schemes. We REWARD the kind of behavior that benefits the rich at the expense of the poor, including companies that are "clever enough" to destroy the environment without incurring any penalties. That then incentifies companies to lobby to allow them to destroy more of the environment and move more labor overseas and evade more taxes – it's what we tell them to do when we vote with our investment accounts!
We (in the top 1%) need to start caring about this stuff because we've reached a tipping point where we are now destroying the bottom 90%, which ultimately renders then unable to buy the goods and services we sell them. Even those of us who wisely cater to the top 10% (I do) have to worry about their ability to pay us being compromised if their bottom 90% customers can no longer pay them. The deflation we're seeing around the globe is just the tip of that iceberg our economy is heading towards.
So congratulation to the GOP for fostering 30 years of incredible gains for those of us on top of the food chain. Unfortunately, I don't think America can stand another 4 years of these policies without a complete collapse of the bottom 90%. Maybe we should care, just a little.
FUN PROJECT: Email this article to your Congressperson and ask them simply "What are you doing about income inequality?" and see what kind of response you get. If you get a response at all, it is likely to be a form letter (you can add specific questions to check to see if anyone actually reads it) but, even those letters can be very amusing – send them to us, and we will print the best ones!
