Wealthiest Americans Only Winners in Recovery, Pew Says … The U.S. economy has recovered for households with net worth of $500,000 or more, a new study shows. The recession continues for almost everyone else. Wealthy households boosted their net worth by 21.2 percent in the aftermath of the recession, according to the study released today by the Pew Research Center. The rest of America lost 4.9 percent of household wealth from 2009 to 2011. – Bloomberg/Pew
Dominant Social Theme: Things are getting worse not better. These are insoluble problems, though President Obama is doing his best.
Free-Market Analysis: The previous article in today's issue, also from Bloomberg, explains to us that "luck" is what determines socioeconomic status and that because luck is inevitably unfair we need government to even things out.
The idea that government is necessary to combat the unfairness of life is what we call a dominant social theme. This article, excerpted above, is also a dominant social theme.
It does not suggest a solution but merely reinforces the problem, which is the seeming intractable nature of capitalism in creating winners and losers. Here's more:
… The report underscores the nation's growing income inequality, with the top 13 percent of households recovering their losses from the 18- month recession that ended in June 2009, and the rest of the country continuing to hemorrhage wealth.
"The results are entirely sensible, but depressing," said Richard Fry, a Pew senior research associate and co-author of the study by the Washington-based organization. "It's a stark story of two Americas."
Average household net worth across all income levels increased 14 percent to $338,950 from 2009 to 2011, the latest figures available from the U.S. Census Bureau.
The Pew report, based on the Census Bureau's Survey of Income and Program Participation, reinforces a body of evidence that the U.S. is becoming a nation of haves and have-nots.
One of the most common measures of income inequality, the Gini coefficient, has risen in the last generation. The coefficient is a number between 0 and 1, with a zero indicating that all income is shared equally and a one representing complete concentration of income.
Income inequality in the U.S. grew to 0.477 in 2011, according to the Census Bureau, a 20.2 percent increase from the 0.397 measured in 1967.
The gap between rich and poor is most pronounced in the Bridgeport, Connecticut, metropolitan area, about an hour from Wall Street. The Gini of 0.535 measured there is approximately the same as the national rate for Thailand, surpassing the figures for Zimbabwe and Chile.
This last point is especially noteworthy. More than almost any other state in the union, Connecticut is aggressively communitarian. A noxious combination of a state income tax, rising local taxes, relentless de-industrialization, fervent bureaucratic environmentalism, monopoly socialist politics and bottomless corruption makes Connecticut all but unworkable.
The Southern tip of Connecticut is filled with Wall Street's super-wealthy. The rest of Connecticut teems with urban poor living in the squalor of the state's once-proud blue-collar production centers. Connecticut was once the brass capitol of the world. Early cities pioneered mass production of wool.
Today, Connecticut in particular is a poster child for the kind of progress that socialism inevitably spawns. A numerate few securitize empyrean stacks of derivatives that now total in the billions of trillions. Everyone else scrambles for depreciating assets whittled away by price inflation, inordinate taxation and relentless regulation.
It is no wonder that income inequality grows. The system is set up to encourage it – though the Pew survey predictably does not provide reasons.Perhaps we are to believe that there are no reasons. Life is unfair and the environment is conducive to that unfairness.
But in fact there ARE solutions. Simple ones. At the root of all this inequity is the monetary system itself. End the Fed – do away with monopoly central banking – and you will end this sort of inequality. Deprived of revenue the beast will starve.
Surveys like Pew's encourage a sense of hopelessness. But it is clear what needs to be done.
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