Above Photo: Steve Lambert, an artist living in Jamaica Plain, Massachusetts, created this sign in 2012 to find out from people in the Greater Boston area what they thought of this question. (Photo: Nate Goldman/WBUR)
America has always been great for the richest 1%, and it’s rapidly becoming greater. Confirmation comes from recent work by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman; and from the 2015-2016 Credit Suisse Global Wealth Databooks (GWD). The data relevant to this report is summarized here.
The Richest 1% Extracted Wealth from Every Other Segment of Society
These multi-millionaires effectively shifted nearly $4 trillion in wealth away from the rest of the nation to themselves in 2016. While there’s no need to offer condolences to the rest of the top 10%, who still have an average net worth of $1.3 million, nearly half of the wealth transfer ($1.94 trillion) came from the nation’s poorest 90% — the middle and lower classes, according to Piketty and Saez and Zucman. That’s over $17,000 in housing and savings per lower-to-middle-class household lost to the super-rich.
Put another way, the average 1% household took an additional $3 million of our national wealth in one year while education and infrastructure went largely unfunded.
It Gets Worse: Each MIDDLE-CLASS Household Lost $35,000 to the 1%
According to Piketty and Saez and Zucman, the true middle class is “the group of adults with income between the median and the 90th percentile.” This group of 50 million households lost $1.76 trillion of their wealth in 2016, or over $35,000 each. That’s a $35,000 decline in housing and financial assets, with possibly increased debt, for every middle-class household.
Housing Wealth for the 90% Has Been Converted into Investment Wealth for the Plutocrats
In the 1980s, the housing wealth of the bottom 90% made up about 15 percent of total household wealth (Figure 8 here and Page 41 here).
In the 1980s, the corporate equities owned by the richest .01% made up about 1.2 percent of total household wealth (Figure 8 here).
Housing was 12 times greater than super-rich stock holdings back then. Now they’re nearly equal. The home values of 112,000,000 households have been reduced to just over 5 percent of total wealth, while the stocks and securities of the richest 12,000 households are approaching 5 percent of total wealth. Our homes have turned to dust, and the plutocrats have turned the dust into gold.
Even the Wages of the Poorest Americans Have Been Transferred to the Plutocrats
It’s bad enough that the poorest 50% of America have no appreciable wealth, but their income has not increased in 40 years (see Table 1 here). More evidence comes from Pew Research.
As Piketty, Saez, and Zucman note, the richest 1% and the poorest 50% “have basically switched their income shares.” They explain, “We observe a complete collapse of the bottom 50% income share in the US between 1978 and 2015, from 20% to 12% of total income, while the top 1% income share rose from 11% to 20%.”
Making America Great for 1% of Us
In his book, Glass House: The 1% Economy and the Shattering of the All-American Town, Brian Alexander describes today’s America through the lens of his hometown of Lancaster, Ohio, which had been a leading glasswares manufacturer. But the town started falling apart in the 1980s. A major glasswares company was bought up with borrowed money by private equity firms, which then cut jobs and wages, allowed manufacturing facilities to fall into disrepair, stopped contributing to pensions, moved company headquarters out of state, and demanded tax breaks to keep the glassware plant in Lancaster.
Capitalism as usual. Yet 59 percent of Lancaster’s county voted for Trump. Alexander explains that the people of Lancaster “remained captured by an ultra-conservative, anti-tax philosophy that prevented them from raising funds to repair the crumbling streets..”
Delusions persist about the power of the market and the dangers of governing ourselves. The business media has conditioned us to fear the words ‘social’ and ‘public,’ as if they connote evil or ineptitude or anti-Americanism. But the public good depends on cooperation. Society fosters individual accomplishment, not the other way around.
The obscene transfer of wealth and income to the plutocrats won’t end until we demand a return to the Commons, where we work as a society rather than allow predatory plutocratic individuals to control us. There are 112 million households in America that are giving thousands of their hard-earned dollars to the 1%, and we have finally begun to fight back, together, as a massive force of Americans who refuse to let the theft continue.