Global Wealth Inequality, what you never knew you never knew. The extreme truth about how wealth is divided globally. Inspired by the amazing "Wealth Inequality in America" video.

Production Company: Grain Media
Motion Graphics Artist: Nick Pittom

Say goodbye to the middle class, or at least, that’s what a majority of Americans believe. The U.S. middle class is shrinking, and more Americans don’t believe they will achieve that way of life, according to a study released on Wednesday by the Pew Research Center. Only 51 percent of all adults are considered middle class, down from 61 percent in 1971, but the study did find that part of the shrinkage came from more people joining the upper classes, which now represent 20 percent of the nation, up from 14 percent in 1971. But those aren't all of the gains: the lower-income group rose to 29 percent of all adults, up from 25 percent in 1971.

A new report before the "official" report on poverty in the U.S. is released gives a heads-up on what we can expect to be revealed. Yes, poverty is on track to reach levels not since before Lyndon Johnson's "war on poverty" in 1964.

Peter Edelman, director of the Georgetown Center on Poverty, Inequality and Public Policy spells out in this report exactly what's pushing the poverty rate ever higher; globalization, automation, outsourcing, immigration, and less unionization.

Via:

The Associated Press surveyed more than a dozen economists, think tanks and academics, both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.
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[...] Millions could fall through the cracks as government aid from unemployment insurance, Medicaid, welfare and food stamps diminishes.

"The issues aren't just with public benefits. We have some deep problems in the economy," said Peter Edelman, director of the Georgetown Center on Poverty, Inequality and Public Policy.

He pointed to the recent recession but also longer-term changes in the economy such as globalization, automation, outsourcing, immigration, and less unionization that have pushed median household income lower. Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson's war on poverty, launched in 1964, that created Medicaid, Medicare and other social welfare programs.

One item not mentioned as an issue in the economy is the absolute greed of the wealthy corporations and CEOs. Take for example the Caterpillar Corporation seeking steep concessions from its workers even when business is booming.

Then there are the corporate raiders whose greed, and cruelty, know no bounds. Take Mitt Romney's Bain Capital, for example:

I don't think it's my imagination that the wealthier these greedy corporations become, the deeper into poverty the rest of us fall.

David Koch is hosting a fundraiser for millionaire Mitt Romney at his Hamptons estate Sunday evening. You could have come over to Koch's house today to meet Mitt Romney, assuming you had a spare $50,000 lying around. How do the elite afford those $50,000 tickets? Tax rates for the super-elite, the top .01%, have fallen in half since Mitt Romney’s father ran for president; or to put it differently, after tax income for this group has doubled due to policy alone. And bear in mind that the US economy flourished just fine under those 60-70 tax rates.

Not only have taxes on people such as Mitt Romney plummeted since 1960, they've risen flor nearly every income group except for the poor and very poor. The Bush tax cuts were especially generous to the uberwealthy, which isn't really a surprise.

Peter Adamson with the Office of Research at the United Nations Children’s Fund (UNICEF), discusses the international data contained in Report Card 10, a first-ever analysis of new data from the European Union's Statistics on Income and Living Conditions household surveys reveals the extent of child poverty and child deprivation in the world’s advanced economies.

As debates on austerity and social spending cuts rage, some 13 million children in the EU, plus Norway and Iceland, are found to be "deprived", lacking basic items necessary for their development.

Meanwhile, 30 million children live in relative poverty in 35 countries with developed economies. Of the 35 wealthy countries studied by UNICEF, only Romania has a child poverty rate higher than the 23 percent rate in the U.S.:

Particularly striking in Report Card 10 are the comparisons between countries with similar
economies, demonstrating that government policy can have a significant impact on the lives of children. For example, Denmark and Sweden have much lower rates of child deprivation than Belgium or Germany, yet all four countries have roughly similar levels of economic development and per capita income.

“The report makes clear that some governments are doing much better at tackling child deprivation than others,” said Mr. Alexander. “The best performers show it is possible to address poverty within the current fiscal space. On the flip side, failure to protect children from today’s economic crisis is one of the most costly mistakes a society can make.”

In a report last August, the child poverty rate was at 20 percent in the United States, and this is an important passage to note on those findings:

"People who grew up in a financially secure situation find it easier to succeed in life, they are more likely to graduate from high school, more likely to graduate from college, and these are things that will lead to greater success in life,” Stephen Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, told the AP. “What we are looking at is a cohort of kids who as they become adults may be less able to contribute to the growth of the economy. It could go on for multiple generations.”

These reports should haunt every man and woman who enters a voting booth in November. "Second in child poverty only to Romania."

The one percent have become even wealthier than previously thought -- if you can imagine that -- especially the "super rich," who got richer faster than the "merely rich."

The rest of us, well, there's just not much left for us as usual.

Via:

NEW statistics show an ever-more-startling divergence between the fortunes of the wealthy and everybody else — and the desperate need to address this wrenching problem. Even in a country that sometimes seems inured to income inequality, these takeaways are truly stunning.

In 2010, as the nation continued to recover from the recession, a dizzying 93 percent of the additional income created in the country that year, compared to 2009 — $288 billion — went to the top 1 percent of taxpayers, those with at least $352,000 in income. That delivered an average single-year pay increase of 11.6 percent to each of these households.

Still more astonishing was the extent to which the super rich got rich faster than the merely rich. In 2010, 37 percent of these additional earnings went to just the top 0.01 percent, a teaspoon-size collection of about 15,000 households with average incomes of $23.8 million. These fortunate few saw their incomes rise by 21.5 percent.

The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation. The top 1 percent, whose average income is $1,019,089, had an 11.6 percent increase in income.

A comparison between the Clinton era (Remember all the jobs, the prosperity...*sigh.*), the Bush "recovery," *cough* and today is even more sobering:

As a result, the top 1 percent has done progressively better in each economic recovery of the past two decades. In the Clinton era expansion, 45 percent of the total income gains went to the top 1 percent; in the Bush recovery, the figure was 65 percent; now it is 93 percent.

The Wall Street executive continues by blasting House Republicans and their "unsavory stew" of highly regressive tax cuts, and large, unspecified reductions in discretionary spending. The GOP just isn't catching on.

The Roosevelt Institute’s Mike Konczal points out that in 2010, the first full year of the economic recovery, was very good if you were one of America’s richest 1 percent. In fact, that year the richest 1 percent captured 93 percent of the nation’s income gains:

Well, we finally have the estimated data for 2010 by income percentile, and it turns out that the top 1% had a fantastic year. The data is in the World Top Income Database, as well as Emmanuel Saez’s updated Striking it Richer: The Evolution of Top Incomes in the United States…The takeaway quote from Saez should be: “The top 1% captured 93% of the income gains in the first year of recovery.”…The bottom 90% of Americans lost $127, the bottom 99% of Americans gained $80, and the top 1% gained $105,637. The bottom 99% is net positive for the year because of around $125 in average capital gains. They can take comfort in efforts by the Right to set the capital gains tax to 0%, which would have netted them an addition couple dozen bucks.

And while the 1 percent who have "suffered" lower bonuses whine about cutting back on luxuries, those of us in the 99 percent are still clawing and scratching just to keep going at all. I'd offer cheese to go with their "whine," but frankly, I can't afford to be so generous.

[H/T ThinkProgress]

Bruce Bartlett on Where the Right Went Wrong from BillMoyers.com on Vimeo.

Bill Moyers talks with conservative economist Bruce Bartlett, who wrote "the bible" for the Reagan Revolution, worked on domestic policy for the Reagan White House, and served as a top treasury official under the first President Bush. Now he's a heretic in the conservative circles where he once was a star. Bartlett argues that right-wing tax policies -- pushed in part by Grover Norquist and Tea Party activists -- are destroying the country's economic foundation.

BILL MOYERS: Heather McGhee speaks of how the neoliberal economic experience of the last 30 years – including cutting taxes on the rich and waiting for the wealth and prosperity to trickle down -- has left her generation of Millennials standing under a spigot someone forgot to turn on. After a few drips and drops, it went dry. So did the very notion of equal opportunity for all. And today we’re living in a country deeply divided between winners and losers. Nowhere is that more evident than in our tax system – so distorted by loopholes, exemptions, credits, and deductions favoring the already rich and powerful that it no longer can raise the money needed to pay the government’s bills.

Among the people who saw this crisis coming was the conservative economist Bruce Bartlett, the supply-side champion who wrote the manifesto for the Reagan Revolution. Bartlett became a senior policy analyst in the Reagan White House and a top official at the Treasury Department under the first George Bush. Yet for all those credentials, he is today an outcast from the very conservative ranks where he was once so influential. That’s because Bruce Bartlett dared to write a book criticizing the second George Bush as a pretend conservative who slashed taxes but still spent with wild abandon.

The subtitle says it all: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy.

For his heresy Bartlett was sacked by the conservative think tank where he worked. Undaunted, this card-carrying advocate of free markets and small government has been a prolific writer for popular and academic journals and has just published a new book: The Benefit and the Burden: Tax Reform - Why We Need It and What It Will Take. It’s a layman’s guide through the jungle of a tax system that, thanks to rented politicians and anti-tax ideologues like Grover Norquist, enable the one percent to make off like bandits while our national debt soars sky-high. I talked to Bruce Bartlett soon after he had finished his new book.

Continue reading »

Federal officials laughed at warning signals, and gushed that Alan Greenspan was totally awesome as the economy headed towards the biggest iceberg in about 70 years. Reading the Federal Reserve transcripts- available here - was much like watching "The Titanic," without the Grammy winning theme song or the romantic sex scenes between Kate Winslet and Leonardo DiCaprio.

Via:

As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”
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Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments.

And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated, an opinion now held by a much smaller number of people.

Meanwhile, by the end of 2006, the economy already was shrinking by at least one important measure, total income. And by the end of the next year, the Fed had started its desperate struggle to prevent the collapse of the financial system and to avert the onset of what could have been the nation’s first full-fledged depression in about 70 years.

The transcripts of the 2006 meetings, released after a standard five-year delay, clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.

I had friends already losing their jobs and homes in 2006. The people who should have been looking out for us, they were laughing. George W. Bush even put a medal on Alan Greenspan.

Timothy Geithner is, as you're probably all aware, our Secretary of the Treasury, and Ben Bernanke our current Chairman of the Federal Reserve, as well as the central bank of the United States.

Alan Greenspan (Or Mr."Terrific" as Geithner referred to him) is the former Chairman of the Federal Reserve of the United States from 1987 to 2006, first appointed by Ronald Reagan. Greenspan held economic views influenced by Ayn Rand, need I say more? Probably not, but I will. He also supported the idea of the privatization of Social Security, and deficit-spurring tax cuts.

Senator Harry Reid (D-NV) once referred to Greenspan as “one of the biggest political hacks we have in Washington.”

According to a new report from the Congressional Research Service, the lowering of the capital gains tax - a part of the 2003 G.W.Bush tax cut package - was the biggest driver of income inequality from 1996-2006.

Via Jared Bernstein:

The lowering of the capital gains tax, pushed through as part of the Bush tax cut package of 2003, was the biggest driver of income inequality from 1996 to 2006, according to a recent report from the Congressional Research Service. While the Bush tax cuts as a whole contributed to rising inequality, it was the change in policy toward capital gains — which were once taxed at normal income rates but are now taxed at 15 percent for the rich — that played the largest role in exploding the income gap. While after-tax income increased by an average of 25 percent for Americans as a whole, lower earners saw a much smaller increase and the top 0.1 percent’s income, driven by lower capital gains tax rates, nearly doubled

Bernstein adds:

I think a lot of people sense that there’s something unsettling about this shift from labor income to capital incomes. It seems endemic of a society that devalues work while providing outsized rewards for speculation and asset accumulation. The CRS findings place that sensibility in the context of hard data.

Jared Bernstein’s areas of expertise include federal and state economic and fiscal policies, income inequality and mobility, trends in employment and earnings, international comparisons, and the analysis of financial and housing markets. You can follow him on his website here.