Home > Plutonomy, upward income redistribution > Divergence at the top – the 0.01%

Divergence at the top – the 0.01%

February 12, 2014 Leave a comment Go to comments

from David Ruccio

divergence-top

As Annie Lowrey explains,

It is not just that the rich have pulled away from the average American. It is that the richer you are, the more you have pulled away. . .

The higher a household is on the income scale, the more likely it is that a big chunk of its earnings come from investments rather than wages. Managers at Wall Street firms tend to take home options and shares, for instance, and chief executives often get stock as part of their compensation packages. . .

For now, it is a very good time to be very, very rich. The 1 percent are doing well. The 0.01 percent — they’re doing even better.

And Mark Gongloff adds,

Ronald Reagan helped start the ball rolling by slashing taxes on the rich, and his economists claimed the wealth would trickle down to the rest of us. Something has trickled down on us, all right, but it wasn’t wealth: The average income of the bottom 90 percent is actually lower today, adjusted for inflation, than in the late 1970s. The top 0.01 percent makes now roughly 1,000 times as much as the bottom 90 percent, up from about 120 times as much in the late 1970s.

And many of the factors driving this inequality — over-inflated executive pay, a bloated banking sector, low taxes

  1. F. Beard
    February 12, 2014 at 9:09 pm
    Reply

    Bloated banking sector? Sure, because banks are HEAVILY privileged by government.

    How about 100% private banks with 100% voluntary depositors? Or is ethical money/credit creation just TOO EXTREME?

  2. Thomas A. Coss
    February 12, 2014 at 9:21 pm
    Reply

    Hopefully your not suggesting that the top 0.01% got there because they somehow looted people like me? Nor, I hope, you’re not thinking that they’re some how a billion times smarter. This is a symptom of crony capitalism husband by a government that has grown too large and to invasive.

    The best thing the top 1% can ever hope for is for the government to try to fix the problem, and should they decide to do so, just watch as the gap widens.

    • F. Beard
      February 12, 2014 at 9:56 pm
      Reply

      The best thing the top 1% can ever hope for is for the government to try to fix the problem, and should they decide to do so, just watch as the gap widens.

      Baloney. The government could easily reverse much of the damage by:

      1) Banning new credit creation, at least temporarily. This would be massively deflationary as old credit was repaid with no new credit to replace it.

      2) Metering out new fiat to the entire population at a rate equal to the repayment of existing debt till all deposits are 100% backed by reserves less borrowed reserves.

      The above would greatly reduce private debt without adding to public debt and without significant price inflation risk.

      You were saying?

      • justaluckyfool
        February 13, 2014 at 8:22 pm

        REPLY: …Baloney. The government could easily reverse much of the damage by:
        “DO FOR YOURSELVES WHAT YOU ALLOW THE CENTRAL BANK TO DO FOR THE BANKS !
        LOAN YOUR MONEY AND CHARGE A TAX ON IT, then give the people the gain.”

        Read more comments by Justaluckyfool ( http://bit.ly/MlQWNs )
        ( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)

        The Fed must become a Central Bank Working For The People (CBWFTP) instead of working for the Private For Profit Banks (PFPB) and MUST take away from any other entity
        the ability to issue sovereign currency which based upon todays rules is ” a CB liability”.
        Why would you not want betterment of the common good?
        Why not challenge, improve, endorse;
        GOOGLE:
        ” A Central Bank Working For The People (CBWFTP)
        instead of for Private For Profit Banks (PFPB).”
        If something in a system can cause ‘systemic failure’,wouldn’t you consider that to be such a major problem that because of its awesome capability , that is : Destruction of the entire system that it should be consider perhaps as the cause of , if not all, maybe most problems.
        We have legislated self destruction by allowing Private For Profit Banks to issue our sovereign currency and also allowing Private For Profit Banks to tax that issuance. This is their weapon of mass economical and political destruction that allows inequality, injustice and servitude.
        We MUST separate our central bank from the private for profit banks.

      • F. Beard
        February 13, 2014 at 9:47 pm

        Government should not be in the business of borrowing or lending – period! Why?

        1) A monetary sovereign has absolutely no need to borrow money since it can create it at will. So any borrowing is welfare and mostly for the rich since they can afford to lend the most.
        2) The rich are by definition the most so-called “creditworthy” so if lending is based at all on the ability to repay then again we have welfare for the rich.

        Otoh, equal or even means tested GRANTS from the monetary sovereign do not favor the rich over the poor.

        Moreover, private money can be created as shares in Equity with no need for borrowing, much less usury, nor fractional reserves, nor a central bank, nor government deposit insurance.

      • justaluckyfool
        February 13, 2014 at 11:00 pm

        Question @ F. Beard. “1) A monetary sovereign has absolutely no need to borrow money since it can create it at will.”
        Surely your definition of “money” must be “fiat currency” that can be created at will and unlimited. But “money” that is ” wealth” cannot create “money”.
        It is not the cost of government but the cost of issuance by ‘loans with taxation’ of money itself that has bankrupted the nations.If any country wishes to free itself from the shackles of debt and restore the prosperity it once had, it will need to take back its monetary sovereignty and issue its own money, either directly or through its own central bank.(This is the solution for any sovereignty).
        For any nation to be a Monetary Sovereignty….
        .. it must be the sole creator of its sovereign currency.
        …it must have the ways and means to control its sovereign currency for quality and quantity.
        …it must under modern money systems be fiat since its money is transferable “thru thin air”.
        …it must understand that it is the guardian of the value of the currency , if it wishes to be capitalistic; otherwise that nation will be totalitarian. As a guardian (recording and exchanging) it does not own the value of the currency it creates, it is the caretaker.
        …it must use that currency knowing that it must also return it back to the community (the rightful owners).
        …all transactions using sovereign currency must be “REAL”, meaning backed by 100% of issued sovereign currency.In order to prevent “systemic failure” it must make available the currency as loans at a fixed rate and duration in amounts deemed necessary to allow the private banking system to be solvent.

        We MUST separate our central bank from the private for profit banks.
        Excerpt from:
        http://realmoneyecon.org/lev2/answers.html
        Trust Banking System
        Under this system, banks would be divided into 2 totally separate parts or “windows”, one being the trust depository side and the other the credit side (lending and investments). In effect this could be called “Glass-Steagall on steroids”.

      • F. Beard
        February 13, 2014 at 11:16 pm

        In order to prevent “systemic failure” it must make available the currency as loans at a fixed rate and duration in amounts deemed necessary to allow the private banking system to be solvent.

        Screw that and screw private banks which should be 100% private with 100% voluntary depositors.

        Hint: Lending what one does not have is gambling and should NOT be subsidized by government.

      • F. Beard
        February 13, 2014 at 11:33 pm

        Under this system, banks would be divided into 2 totally separate parts or “windows”, one being the trust depository side and the other the credit side (lending and investments). jalf

        Screw that too. The monetary sovereign is the ONLY proper provider of a risk-free storage and transaction service for its fiat (a Postal Savings Service) and that service should make no loans and pay no interest AND government deposit insurance and the Fed should be abolished. The PSS should be free up to normal household limits on account size and number of transactions with big users like the banks and big business paying for every one else.

  3. Paul Grignon
    February 12, 2014 at 9:21 pm
    Reply

    It’s like the red-shift. The farther away you are from point zero, the faster you are traveling.

  4. Norbert
    February 13, 2014 at 9:27 am
    Reply

    The pulling away of the top 0.01 percent is partly an optical artefact caused by a non-logaritmic scale. The income of the top 0.01 percent increased about sixfold from around 1980. The income of the top 0.1 percent increas three- to fourfold, top 1% about threefold and about the rest you cannot read anything from the graph, except that it was always a hell of a lot lower.

  5. justaluckyfool
    February 14, 2014 at 5:30 pm
    Reply

    F Beard, ” The monetary sovereign is the ONLY proper provider of a risk-free storage and transaction service for its fiat (a Postal Savings Service)”
    But a service bank is still by any other name a service bank (Postal Savings Service).
    It should charge a fee for its performances but must have that portion of its ‘banking service” business separate and and 100% of funds in escrow-no FDIC needed but may purchase insurance from the FIRE sector as protection for the depositor.
    Banking is a valid business when properly operated and being subjected to civil and criminal law..

    • F. Beard
      February 14, 2014 at 5:54 pm
      Reply

      Borrowing, lending and usury are PRIVATE matters and should be left to individuals and their 100% private agents including banks. Any thing else is bound to violate Equal Protection Under the Law in favor of the rich (since they have the most to lend and are the most so-called “creditworthy”) unless the government is so lax in its lending that it is just giving fiat away anyway with no concern that it ever be repaid.

      The monetary sovereign should ONLY provide a risk-free storage and transaction service for its fiat and neither lend nor pay interest. And it can be argued that that service should be free up to normal
      household limits on account size and number of transactions with banks (since government deposit insurance and the central bank should be abolished) and other large users bearing all costs.

      Money/credit creation is a problem in ETHICS, not pragmatism. Tens of millions have died because of a failure to realize that.

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