Income Gap Hits Widest Point Since 1920s
As we hit the 5 year anniversary of the financial crisis where Wall Street got a nice taxpayer funded bailout and no consequences for stealing people’s homes, it seems all is not well for the 99%. Not only did most Americans lose a considerable amount of their net worth when the housing market crashed, due to most lower class Americans’ largest asset being their home, but the income gap has now reached levels not seen since the 1920s.
The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s. The very wealthiest Americans earned more than 19 percent of the country’s household income last year — their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.
Sluggish growth and an upper class that snakes about half of all income. What a great economy.
In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent. The richest Americans were hit hard by the financial crisis. Their incomes fell more than 36 percent in the Great Recession of 2007-09 as stock prices plummeted. Incomes for the bottom 99 percent fell just 11.6 percent, according to the analysis.
But since the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.
To break this down a bit, the top 1% own everything now so when the financial markets recover all those gains are going to them, not you. Rising Dow? Means nothing to you, it is just the 1% getting richer. The wealth doesn’t trickle down and ketchup isn’t a vegetable.
But what’s worse is that the 1% hit a consumption limit – they can only buy so many cars, meals, homes – so the only way they can benefit from their wealth is to invest in financial assets which inflates those assets into bubbles. Then the bubbles pop, and in theory, they should eat the losses. But what we all know, or should know by now, is that the 1% refuses to eat the losses and instead use what is left of their wealth to buy favors in Washington to make them whole at your expense. It is a pretty awful system, especially if you are in the 99%.
And now due to the destruction of the labor movement, wages have frozen and even more income from production is going to the top 1% who are re-inflating the financial markets and having a great time doing so as the corporate profits to wages ratio is massive. This while America continues to have record unemployment and underemployment.
The 99% do not have a seat at the economic table as Washington ignores their needs and bends over backwards to help the 1% campaign contributor class. And when you aren’t at the table you are on the menu.