The 6 Economic Facts of Life in America That Allow the Rich to Run off with Our Wealth
Do you ever wonder why it takes the average family 47 years to make as much as a hedge fund honcho makes in one HOUR?
Does it bother you that in 2010, after the crash, the top 25 hedge fund chiefs made as much as 685,000 teachers who educate 13 million children?
Are you worried that cutting government debt means raising your social security eligibility age and cost of living adjustment, so that you have to work longer and receive lower retirement benefits?
Have no fear. The super-rich are spending hundreds of millions of dollars to sell you their economic fabrications. Why so much inequality? They say because the rich have the most important skills and you don't. Why so much unemployment? They say it's because our skimpy unemployment insurance keeps people from looking for work. Why so much government debt? They say it's because you have too many "entitlements." Why the Wall Street crash? They blame poor people for buying homes they couldn't afford.
In short, the super-rich want us to believe that any effort to tax them a bit more or control Wall Street will only kill more jobs and harm our economic well-being. And most of all they don't want us to know the six economics facts of life that explain how the super-rich are running away with our nation's wealth.
1. The super-rich are stealing our fair share of productivity. The U.S. economy is enormously productive. Since 1947, the amount of goods and services we produce per hour of labor has risen by nearly 300 percent. That's because as a nation, we blend together a potent mix of effort, skills, technology and organizational capacities. Our enormous productivity is why we are the richest nation on earth.
Yet, why don't we feel that rich? Why are we told we must tighten our belts?
Until the mid-1970s, the more productivity increased, the higher the real wages of the average working person (after taking out the impact of inflation). As a result, our standard of living doubled in 25 years. But, as you can see from the chart below, after the mid-1970s, productivity (the red line) continued to boom, but the average wage stalled.
It wasn't an accident, or market forces, or an act of God. It was a result of human polices designed by and for the rich. Tax cuts for the rich, financial deregulation, support for moving jobs overseas and union-busting combined to give the super-rich more and more of our economy's productivity gains. In 1970, the top 100 average corporate executive earned $45 for every $1 earned by the average worker. By 2006 it had jumped to a whopping $1,723 to $1. That's the very definition of greed run wild.
Think about this: If the average wage had continued to rise along with productivity as it did after WWII, your real wage today (after inflation) would be twice as high!
We've been had.
2. Americans really want a wealth distribution more like Sweden's. Here's a nightmare fact of life the super-rich don't want you to know. Two researchers recently tried to find out just how much economic inequality Americans were comfortable with. Michael Norton of Harvard Business School and Dan Ariely of Duke University conducted a nationwide poll with more than 5,000 respondents to see how Americans saw our current level of equality, and what level they wanted to see. (“ Building a Better America – One Wealth Quintile at a Time”)
The results were startling. First, virtually all Americans greatly underestimated the degree of inequality in our economy today. They had no idea how extreme the U.S. wealth distribution really is -- which goes to show you what a good job the super-rich have done in mis-educating us.