Summary: The Fed gives us bad news about America. It should be headline news. More important, it should be news that shocks Americans into action. The process can begin with you.
Changes in U.S. Family Finances from 2013 to 2016
Evidence from the Federal Reserve’s
Survey of Consumer Finances.
From the Federal Reserve Bulletin, September 2017.
This report provides pages of horrific news about America. If we had real elections, this information would be rich fodder for debate among the candidates. The two graphs that follow reveal the bottom line about how America has changed, and will continue to change unless we retake the reins. A new Gilded Age has become, as the 1% gain an increasing share of America’s income, wealth — and (inevitably) political power.
The top 1% grab all of America’s income growth – and take away from what we got.
“The share of income received by the top 1% of families was 20.3% in 2013 and rose to 23.8% in 2016. The top 1% of families now receives nearly as large a share of total income as the next highest 9% of families combined (percentiles 91 – 99), who received 26.5% of all income. This share has remained fairly stable over the past quarter of a century. Correspondingly, the rising income share of the top 1% mirrors the declining income share of the bottom 90% of the distribution, which fell to 49.7% in 2016.”
The top 1% are much richer than the bottom 90%. And getting more so.
“The wealth share of the top 1% climbed from 36.3% in 2013 to 38.6% in 2016, slightly surpassing the wealth share of the next highest 9% of families combined. After rising over the second half of the 1990s and most of the 2000s, the wealth share of the next highest 9% of families has been falling since 2010, reaching 38.5% in 2016. Similar to the situation with income, the wealth share of the bottom 90% of families has been falling over most of the past 25 years, dropping from 33.2% in 1989 to 22.8% in 2016.”
Conclusions
America has one of the most powerful engines of innovation and economic growth in the world. New business methods, new technology, new marketing ideas. And since 1970 the resulting gains have been skimmed off by the 1%. This was controversial when I first wrote about rising inequality in 2008 (note the comments of conservatives asserting that it can’t be so). But now that it is incontrovertible, our reaction to it becomes as important as the facts.
For decades we have been fleeced without protest. Rather than fight, we elect more Republicans determined to further depress wages, crush unions, reduce worker protections, and many other policies that boost inequality.
What kind of people allow this? Let’s look at this from the perspective of the 1%. They see our passivity, apathy, and gullibility — and so they logically believe themselves best suited to rule America. That is the hidden truth of American politics. It is unflattering to us and so unmentioned by journalists. America is well-governed in the best interest of its stakeholders. We are just not among them. For details see…
- The good news: America’s politics are neither polarized nor dysfunctional. That’s also the bad news.
- Our fears are unwarranted. America is in fact well-governed.
We can change this (if we act soon). The Founder’s political machinery remains idle but potentially powerful, needing only our energy to set it in motion. For ideas about you can do see Reforming America: Steps to New Politics.
For More Information
If you liked this post, like us on Facebook and follow us on Twitter. See all posts about increasing income inequality and falling social mobility, especially these…
- Why Americans should love Tolkien’s Lord of the Rings – we live there,
- Why Elizabeth Bennet could not marry Mr. Darcy. Nor could your daughter.
- When marriage disappears: rising inequality as the threat to the family.
- See America’s income inequality grow during 1979-2011, a driver of Campaign 2016.
- Warning: the income gap between races is widening in America.
