Friday, December 18, 2015

Billionaire Bonanza

The United States is divided into two classes: the wealthy (topped by the extremely rich) and everybody else, according to a new report, “Billionaire Bonanza: The Forbes 400 and the Rest of Us.”

Over the last decade, a huge share of America’s income and wealth gains has flowed to the top 1/10th of the richest 1 percent – the wealthiest one out of a thousand households,” write co-authors Chuck Collins and Josh Hoxie. “The median American family has a net worth of $81,000. The Forbes 400 own more wealth than 36 million of these typical American families.”

“The top 1/1,000th of our population, an estimated 115,000 households, with a net worth starting at $20 million, owns more than 20 percent of U.S. household wealth,” says the report, which uses the Forbes 400 list and Federal Reserve data. “America’s 20 wealthiest people – a group that could fit comfortably in one single Gulfstream G650 luxury jet – now own more wealth than the bottom half of the American population combined, a total of 152 million people in 57 million households.” 

The researchers, from the Institute for Policy Studies (IPS), added, “The level of U.S. wealth inequality has grown so lopsided that our classic wealth distributional pyramid now more resembles the shape of Seattle’s iconic Space Needle. The bulge at the top of our wealth ‘space needle’ reflects America’s wealthiest 0.1 percent.”

Collins said, “The United States is becoming, as the French economist Thomas Piketty warns, a hereditary aristocracy of wealth and power. Josh and I believe that these statistics actually underestimate our current national levels of wealth concentration. The growing use of offshore tax havens and legal trusts has made the concealing of assets much more widespread than ever before.”

The division is perpetuated by money’s influence. "We are operating under a rigged set of rules,” Collins said. “Wealth is power, so the greater wealth concentrates the greater power. You have a political system captured by the billionaires. You have pressure from the bottom and progressives to reverse the economic inequality – and at some point the tectonic plates are going to collide.”

“We can have democracy in this country or we can have great wealth concentrated in the hands of a few, but we cannot have both.” U.S. Supreme Court Justice Louis Brandeis, 1941

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