The top 20% of Americans own 93% of all financial wealth. . . .
This article also says that in fact the inequality is increasing:
From 2002 to 2006, the top 1% of Americans received two-thirds of the gain in national income.
A recent article in Smithsonian magazine says,
In recent decades certain high-end occupation incomes grew rapidly, while wages for lower-income and middle-class workers stagnated.
. . . . . . . . . . . . . .
[T]he rate of upward mobility has stagnated overall, as wages have largely failed to keep up with the cost of living. It is no easier for poor and working-class people to move up the socio-economic ladder today than it was in the 1970s; in some ways, it's more difficult.*
The Daily Finance article blames policies of the Federal Reserve system, specifically its keeping interest rates close to zero—which helps banks, who can borrow at an interest rate of almost nothing and then re-lend that money at 5%--thus making huge amounts of money. And this is at the expense of retirees and others who depend on interest from savings accounts and so forth for part of their income.
I credit the government and its economic policies with saving the U.S. and much of the world from total or near-total financial collapse in 2008; so I am not quick to criticize present government policies. But I have to admit that the Daily Finance article makes sense and is both sad and troubling. Furthering economic inequality is the last thing one expects from a Democratic administration.
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*"Ready Set Grow," Smithsonian, July-August 2010, p. 67.
Copyright © 2010 by Richard Stein
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