The result? Fed data for 2007, the latest year of record, reveals two more Great American Obscenities; (1) The net worth of the bottom 50% barely exceeds that of the Forbes 400; $1.6 trillion vs. $1.5 trillion and (2) the net worth of the top 1% exceeds that of the bottom 90%; $21.9 trillion vs. $18.4 trillion.
Why is this important? There are two reasons. First, we are failing as a Republic. An ancient Greek historian, Plutarch , from whom our own actual system of Government a plutocracy is named, wrote, "An imbalance between the rich and poor is the oldest and most fatal ailment of all republics."
The second reason is that we now recognize that as a society's income inequality goes up, so too do the health and social problems of that society. Richard Wilkinson and Kate Pickett, coming from a background in epidemiology and public health, meticulously researched Life Expectancy, Math and Literacy, Infant Mortality, Homicides, Imprisonment, Teenage Births, Trust, Obesity, Mental Illness-including drug and alcohol addiction, and Social Mobility in Canada, Singapore, Japan, New Zealand, Australia, and each of the Western Europe countries.
They plotted two scales from low to high. On one scale each country was ranked on the ten factors above. Income inequality for each country was plotted on the other scale using the Gini coefficient as its index. .
If within any given group, all of the income accrued to a single individual, the Gini index for that group would be one. If, on the other hand, the income were divided equally amongst them, the Gini index would be zero.
We know now that lower indices always do better, i.e., greater health, greater social justice.
For the record, the U.S. Gini index has been increasing since 1968. The UN and the CIA provide a Gini index for more than one-half of the world's countries. The U.S. index is currently .41 and .45 respectively from these two organizations, about the same as Turkmenistan, Senegal, Uruguay, and the Ivory Coast. Ginis for Western Europe range from a low of .23 for Sweden a high of .36 for the United Kingdom.
As revealed in Richard Wilkinson and Kate Pickett's The Spirit Level (2009), the U.S. ranked worst in all (the 10 health and social factors earlier listed) but three, second worst in one, fourth worst in one, and about in the middle on one, ie, we failed big time.
The same results were obtained within the U.S. when similar analysis was conducted using the Gini index for each of the 50 states. The higher Gini state indices provided a worse health and social index. The lower Gini state indices provided a better health and social index. For rich countries, or states, high income alone did not improve health or social justice. Equality of income was the dominant factor.
Few have laid out the case in a more compelling fashion than Tony Judt. In his New York Review of Books, noting the massive shifts of wealth in America these last decades, he writes: "Inequality, then, is not just unattractive in itself; it clearly corresponds to pathological social problems that we cannot hope to address unless we attend to their underlying cause. There is a reason why infant mortality, life expectancy, criminality, the prison population, mental illness, unemployment, obesity, malnutrition, teenage pregnancy, illegal drug use, economic insecurity, personal indebtedness, and anxiety are so much more marked in the US and the UK than they are in continental Europe."
"The wider the spread between the wealthy few and the impoverished many, the worse the social problems: a statement that appears to be true for rich and poor countries alike. What matters is not how affluent a country is but how unequal it is. Thus Sweden and Finland, two of the world's wealthiest countries by per capita income or GDP, have a very narrow gap separating their richest from their poorest citizens and they consistently lead the world in indices of measurable well-being. Conversely, the United States, despite its huge aggregate wealth, always comes low on such measures. We spend vast sums on health care, but life expectancy in the US remains below Bosnia and just above Albania."
To conclude: Income distribution is a function of Government policy. Capital has been favored over labor forever in this country. Since the mid-70's, however, labor received no benefit, zero, from the enormous gains in productivity. All the productivity gains went to executive management and owners. This process was accelerated with Reaganomics and has not slowed since.
Our nation is a plutocracy and the rich have grown richer while the poor have grown poorer. Never have so many been governed by so few to the benefit of the few. History will ultimately judge the Government's path of the last three to four decades as a road to perdition. A growing number of citizens will attest to already being there.
U.S. citizenry, in mass, responds only to crisis. There are but four potential crises ahead:
(1) Extended unemployment of a much larger number of people; an unemployment rate in the range of 15 - 20% perhaps.
(2) Hyperinflation, as the dollar is superseded as the reserve currency of the world.
Why is this important? There are two reasons. First, we are failing as a Republic. An ancient Greek historian, Plutarch , from whom our own actual system of Government a plutocracy is named, wrote, "An imbalance between the rich and poor is the oldest and most fatal ailment of all republics."
The second reason is that we now recognize that as a society's income inequality goes up, so too do the health and social problems of that society. Richard Wilkinson and Kate Pickett, coming from a background in epidemiology and public health, meticulously researched Life Expectancy, Math and Literacy, Infant Mortality, Homicides, Imprisonment, Teenage Births, Trust, Obesity, Mental Illness-including drug and alcohol addiction, and Social Mobility in Canada, Singapore, Japan, New Zealand, Australia, and each of the Western Europe countries.
They plotted two scales from low to high. On one scale each country was ranked on the ten factors above. Income inequality for each country was plotted on the other scale using the Gini coefficient as its index. .
We know now that lower indices always do better, i.e., greater health, greater social justice.
For the record, the U.S. Gini index has been increasing since 1968. The UN and the CIA provide a Gini index for more than one-half of the world's countries. The U.S. index is currently .41 and .45 respectively from these two organizations, about the same as Turkmenistan, Senegal, Uruguay, and the Ivory Coast. Ginis for Western Europe range from a low of .23 for Sweden a high of .36 for the United Kingdom.
As revealed in Richard Wilkinson and Kate Pickett's The Spirit Level (2009), the U.S. ranked worst in all (the 10 health and social factors earlier listed) but three, second worst in one, fourth worst in one, and about in the middle on one, ie, we failed big time.
The same results were obtained within the U.S. when similar analysis was conducted using the Gini index for each of the 50 states. The higher Gini state indices provided a worse health and social index. The lower Gini state indices provided a better health and social index. For rich countries, or states, high income alone did not improve health or social justice. Equality of income was the dominant factor.
Few have laid out the case in a more compelling fashion than Tony Judt. In his New York Review of Books, noting the massive shifts of wealth in America these last decades, he writes: "Inequality, then, is not just unattractive in itself; it clearly corresponds to pathological social problems that we cannot hope to address unless we attend to their underlying cause. There is a reason why infant mortality, life expectancy, criminality, the prison population, mental illness, unemployment, obesity, malnutrition, teenage pregnancy, illegal drug use, economic insecurity, personal indebtedness, and anxiety are so much more marked in the US and the UK than they are in continental Europe."
"The wider the spread between the wealthy few and the impoverished many, the worse the social problems: a statement that appears to be true for rich and poor countries alike. What matters is not how affluent a country is but how unequal it is. Thus Sweden and Finland, two of the world's wealthiest countries by per capita income or GDP, have a very narrow gap separating their richest from their poorest citizens and they consistently lead the world in indices of measurable well-being. Conversely, the United States, despite its huge aggregate wealth, always comes low on such measures. We spend vast sums on health care, but life expectancy in the US remains below Bosnia and just above Albania."
To conclude: Income distribution is a function of Government policy. Capital has been favored over labor forever in this country. Since the mid-70's, however, labor received no benefit, zero, from the enormous gains in productivity. All the productivity gains went to executive management and owners. This process was accelerated with Reaganomics and has not slowed since.
Our nation is a plutocracy and the rich have grown richer while the poor have grown poorer. Never have so many been governed by so few to the benefit of the few. History will ultimately judge the Government's path of the last three to four decades as a road to perdition. A growing number of citizens will attest to already being there.
U.S. citizenry, in mass, responds only to crisis. There are but four potential crises ahead:
(1) Extended unemployment of a much larger number of people; an unemployment rate in the range of 15 - 20% perhaps.
(2) Hyperinflation, as the dollar is superseded as the reserve currency of the world.
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