According to the 2015 wealth report by Credit Suisse, the global top wealth percentile now own half of all household assets in the world. The increased financialization of the world economy combined with political systems bent towards the wealthy has led to an incredibly unequal world where a relative handful of wealthy families control most of the resources on the planet.
Not surprisingly, the program followed by countries such as the United States and United Kingdom to respond to the 2008 financial crisis has actually made inequality worse. By bailing out the banks and doing everything possible to re-inflate financial markets, the rich have gotten much richer. The “recovery,” such that it is, has mostly been limited to financial assets and corporate profits which primarily benefit the wealthy.
In other words, the policy response to a Wall Street meltdown that caused a deep recession was to give massive amounts of subsidies and welfare to the financial and corporate sector, and now the economy is even more unbalanced and unequal than before the crisis.
Meanwhile, those not in the global plutocracy in the US continue to face economic hardships. On Thursday, the Obama Administration announced that for the third time in 40 years Social Security recipients, disabled veterans, and federal retirees will not receive a cost of living increase next year. The lack of an increase was justified by citing low gas prices.
Pensioners are not the only ones treading water. A 2014 report by the Social Security Administration shows that while there has been an increase in the number of jobs, the majority of individual workers are not benefiting much from rising wages. The only section of the workforce to see significant job gains were those making over $50,000 a year, and even among that section, it was those working in jobs paying $1 million to $50 million that saw average increases in pay after inflation.
Citigroup famously became the focus for the debate over economic inequality in 2005 when it issued a report [PDF] recommending clients invest in the “plutonomy” or businesses that serve the wealthy. Citigroup’s analysis was that the wealthy had captured the global political and economic system and had created an economy of their own that was largely immune to the ebb and flow of the overall system.
Hard to find fault with that theory today.