The 1 percent are richer than ever
We must decide as a nation whether allowing this trend to continue will nurture the vitality in our society needs to compete globally.
Popularobservationswouldn’tbecomecliches
if they didn’t have a ring of truth, and there’s no better way to illustrate this point than to consider the aphorism, “The rich get rich and the poor get poorer.”
Thiswastrue in 1832whenPresident Andrew Jackson vetoed a banking bill he said would “make the rich richer and the potent more powerful.”
It was still true eight years later when President William Henry Harrison complained, “It is true democratic feeling, that all the measures of the government are directed to the purpose of making the rich richer and the poor poorer.”
It was even true according to the Bible: “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath.”
As if we needed further proof, a new report by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University concludes that the income gap between the wealthiest 1 percent of Americans and the rest of the country widened to a record last year.
The study, as reported last week by The Associated Press, found that the top 1 percent of U.S. earners collected 19.3 percent of household income in 2012, their largest share in Internal Revenue Service figures going back a century. The report notes that the richest Americansmay havebeenhithardestbytherecessionthatbegan in2007, with their incomes dippingmore than36 percent because of plummeting stock prices, but since then their portfolios have rebounded nicely, thank you very much.
Because of rising corporate profits and a resurgent stock market, the top 1 percent have gobbled up 95 percent of the income gains since 2009. This has left slim pickings for the 99 percent so vociferous during the short-lived Occupy Wall Street movement and the 2012 presidential campaign.
At the time, former Massachusetts Gov. Mitt Romney, the Republican presidential candidate whoseestimatednetworthof$250millionplaced him squarely in the 1 percent camp, ill advisedly andperhaps unintentionallybadmouthedthe99 percent on more than one occasion.
Responding to one protester at a campaign rally who demanded to know what Mr. Romney would do to support the 99 percent, “seeing as how you are part of the one percent,” the candidate angrily replied, “Let me tell you something. America is a great nation because we’re united. And those who’re trying to divide the nation, as you’re trying to do here and as our president’s doing, are hurting this country seriously. The right course for America is not to divide America andtry todivide us between oneandanother; it’s to come together as a nation. And if you’ve got a better model — if you think China’s better, or Russia’s better, or Cuba’s better, or NorthKorea’s better— I’m glad to hear all about it. America’s right and you’rewrong.”
That sentiment is all well and good if you are the former head of a private equity investment firm who owns multiple mansions and a fleet of luxury vehicles, but not so good if you are struggling with mortgage payments, haven’t had a raise in years or, worse, can’t find a job.
In the months after its origins at New York’s Zuccotti Park in 2011, the Occupy Wall Street movement gained a worldwide following by focusing on economic inequality, but the protest has since fizzled because of failed leadership, illdefined goals and an intolerance by officials for crowds of demonstrators taking over their public parks. After police broke up Occupy encampments in New York and other large cities most members dispersed and the movement has all but disappeared fromthe headlines.
Whatever its failures as an organization, the Occupy movement fairly condemned business practices and tax laws that rewardedWall Street at the expense of Main Street, and the recent rallies by those trying to make ends meet on minimumwage show that little has changed.
In fact, economists found that the gap between rich and poor has been widening steadily. In 1973 the top 1 percent’s share of income stood only at 7.7 percent, compared to 19.3 percent last year. The growing global economy, in which the U.S. labor force is competing against that of Third World countries, may have driven down workers’ wages, but it hasn’t slowed down the incomes of corporate executives and international investors.
As Berkeley’s Emmanuel Saez, one of the report’s authors, observed,“We need to decide as a society whether this increase in income inequality is efficient and acceptable.”