WHEN YOU GET CAUGHT BETWEEN GOD AND NEW YORK CITY - 4
Above:Note that it was not during the Great Depression that the top 10% share plunged but during and after World War II when ordinary folks were started doing well.
Below: Note the extraordinary growth between 2009 - 2011 of the Top 1%.
Above: A large part of the reason for our current disparity - cuts in marginal tax rates.
Below: Is there a direct correlation here?
Below: What Americans think wealth distribution is (top bar) and what we see as the ideal distribution (bottom bar).
Below: But here's the REAL deal:
Below: Actual Distribution of Wealth
Above: Back in the 1970's CEO's earned around 40 times the average worker's pay. Today it's close to 400 times.
All righty then. As I've said many times, I can't prove that what these charts catalog is directly related to the Milton Friedman/Chicago School of Economics Free Market conservative economic policies we've had in place for the last thirty years. But I don't see any other explanation on the horizon either.
You will read and probably already have, many economists and media pundits defending this skewed distribution of wealth and income. Typically they argue that it's the wealthy who are the job creators and the wealthy who invest money that expands the economy. To me this line of reasoning is no different than saying that Romney's Bain Capital was a job creator. It wasn't. We have a consumer economy and rich people don't keep buying cars or houses or boats every year. Maybe four or five of each and they're done. They do invest heavily in stocks, bonds and mutual funds which, indirectly at least, does flow to corporations. And Wall Street brokers, of course. On the other hand, if there is reduced effective demand for goods and services as happens during recessions, companies aren't going to produce goods and services that they can't sell. It's really the rest of us who keep the economy pumping, not the rich, and the more disposable income we have to spend, the more the economy grows.
Of course, our economic situation is influenced by a myriad of factors - trade laws, labor force participation rates, wages, Federal, state and local laws, etc. etc. - but looking back over the past thirty years it would seem that public economic policy benefits have been highly skewed in favor of the wealthy. Maybe it's time to rethink where we're going.