FAIR USE NOTICE

FAIR USE NOTICE

A BEAR MARKET ECONOMICS BLOG

DEDICATED TO OCCUPY AND THE ECONOMIC REVOLUTION

OCCUPY THE MARKETPLACE

FOLLOW ME ON FACEBOOK

This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in an effort to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. we believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law.

In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml

If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

FAIR USE NOTICE FAIR USE NOTICE: This page may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. This website distributes this material without profit to those who have expressed a prior interest in receiving the included information for scientific, research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107.

Read more at: http://www.etupdates.com/fair-use-notice/#.UpzWQRL3l5M | ET. Updates
FAIR USE NOTICE FAIR USE NOTICE: This page may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. This website distributes this material without profit to those who have expressed a prior interest in receiving the included information for scientific, research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107.

Read more at: http://www.etupdates.com/fair-use-notice/#.UpzWQRL3l5M | ET. Updates

All Blogs licensed under Creative Commons Attribution 3.0

Wednesday, July 30, 2014

What Recovery? You Probably Became Poorer In the Last 10 Years


Home



  ECONOMY  
comments_image 200 COMMENTS


From 2003-2013, ordinary Americans lost a third of their wealth.


Photo Credit: Shutterstock.com
You sense it when you look at your retirement account. You feel it when the bills come in. According to new research supported by the Russell Sage Foundation, your instinct is right: you are very likely getting poorer.
For the study, researchers gathered information on families in the middle of the wealth distribution continuum. What they found is that in 2003, the inflation-adjusted net worth for the typical household was $87,992. Fast-forward 10 years: that figure is down to a mere $56,335.
Ordinary Americans got 36 percent poorer in just a decade.
The Great Recession and the bursting of the housing bubble did their damage, but a long list of additional factors have helped funnel money out of the hands of regular Americans and into the pockets of the rich, including deregulation, high unemployment and job insecurity, the shareholder value trend in which corporations focus on manipulating stock prices while throwing workers under the bus, the reduced influence of unions, the shredding of the social safety net, privatization, and tax structures which favor the rich.
And once the inequality train leaves the station, it only gathers speed until something stops it. As Thomas Piketty has recently emphasized, the rich get richer faster than you and me because of the rate of return on their wealth.
Underlying all of this is the spread of faulty economic thinking throughout academia, political circles and the mainstream press. Neoclassical economics, or so-called free-market ideology, essentially serves as the official justification for inequality, promoting mythologies about the rich as the great job creators (when they are actually job destroyers), the presumed benefits of inequality such as innovation (check the Scandinavian countries to debunk that one, where innovation thrives but inequality does not), and a host of similar nonsense.
The upshot is that regular people have endured one of the worst periods in recent memory. It will not surprise you to learn that during the same decade of 2003-2013, the rich were partying down. In the 95th percentile of wealth distribution, people got 14 percent richer.
To put all this in perspective, let’s take a look at another 10-year period, from 1937 to 1947. This decade witnessed something called the “Great Compression,” when income inequality in America plunged. The tax structure was addressed so that the rich paid their share, unions became a powerful force and regulation helped stabilize the financial sector and corporate America. Workers won protections and America’s middle-class blossomed and Americans enjoyed a period of low inequality for the next three decades.
By the 1970s, what’s known as the "Great Divergence” kicked off, with the rich gradually gobbling up more and more of the country’s wealth.
The authors of the Russell Sage study do not have much hope that America’s wealth disparity will get better any time soon: "The American economy has experienced rising income and wealth inequality for several decades, and there is little evidence that these trends are likely to reverse in the near term."
As we can see from the Great Compression, it doesn’t have to be this way. Things won't get better on their own, however: Inequality needs an intervention.
Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture." She received her Ph.D. in English and cultural theory from NYU. She is the director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.

No comments:

Post a Comment