Friday, August 24, 2018

The Plutocrats in Power

A plutocracy is a political system which pays little more than lip-service to average people’s problems and instead works diligently at protecting the wealth and power of the already powerful wealthy. In 2008 the housing bubble popped and turned into an economic earthquake. In America 9 Million lost their jobs, many more suffered wage cuts and worsened conditions at their work-places. Millions of families lost their homes. The political system rushed to rescue of the elites whose frauds and financial manipulations had created the crisis.

Since March 2009, the share values of publicly traded companies in the United States have increased over 320 percent, creating, in the process, more than $18 trillion in new wealth. The bulk of that new wealth has ended up in the pockets of America’s affluent. The nation’s wealthiest 10 percent, as NYU economist Edward Wolff has detailed, holds 84 percent of the nation’s stock value, up from 81 percent in 2007.  

The enormous tax break for Corporate America enacted last December has 2018 corporate second-quarter profits up nearly 25 percent over 2017 levels.

And that surge comes above and beyond three decades of rising corporate profits. Between 1984 and 2014, calculates London School of Business analyst Simcha Barkai, the share of the nation’s output going to corporate profit more than tripled. In 2014, that increase shoved $1.35 trillion extra into the pockets of shareholders and business owners, the equivalent of $17,000 for every worker in America’s corporate sector.

The vast majority of Americans who own either no stock at all or precious little? As of 2016, the most recent year with full data available, the overall wealth of the median American household is sitting 34 percent below that household’s net worth just before the Great Recession began.

The nation’s richest 0.01 percent now hold 9.9 percent of the nation’s total wealth — and 11.2 percent once we take into account the assets America’s wealthiest have stashed in offshore tax havens.

The 2008 crash and its aftermath, researchers from the Federal Reserve Bank of San Francisco calculate are going to end up costing the average American $70,000 in lifetime income.

“This is the decade,” says the German economist Moritz Schularick, “in which wealth inequality has increased the most in U.S. history.”

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