U.S. Wealth Is Now the Most Concentrated at the Top Since 1916
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A new report shows that income in the U.S. in 2012 was more concentrated at the top than at any time since 1916.
A bit more than one twenty-fifth of all income in the U.S. is now being taken in by the top one-ten-thousandth of the U.S. population. That one rich statistical person is bringing in considerably more income than all of the poorest 2,000 people do in that same statistical 10,000 Americans.
We must go back nearly a hundred years to find a time when the top 0.01%, the top 1 in 10,000 people in the U.S., were making more than 4% of the nation’s total income, as they were in the latest calculated year, 2012. This figure of income-concentration among the top 0.01% was the all-time high 4.4% in 1916. In 1915, it was 4.36%. Before that, it was under 3%. And it has never again been anywhere near 4%, until 2012, when it broke through the 4% barrier yet again, for the first time in 97 years, at 4.08%. Other than in 2012, the highest it has been in recent decades was 3.53% in 2007, under Bush, at the peak right before the 2008 crash. This money-concentration is now more extreme than it was even then – even at Bush’s peak.
The details are being reported at the global academic database of income-distribution, which is called “The World Top Incomes Database,” and which is headed by the world’s four leading researchers on income-distribution: Tony Atkinson, Facundo Alvaredo, Thomas Piketty, and Emmanuel Saez.
Here is how this top-end income-figure has changed or evolved during the past century: After 1916, it gradually declined from 4.4% down to 1.67% in 1920. Then it rose again to 3.23% in 1928, right before the 1929 crash. Then, it gradually declined from there, to .97% in 1943. It then remained consistently between .97% and .50% until it reached back again above .97%, to 1.00% for the first time, in 1986, after which it passed 2% in 1992, and then passed the 3% mark in 2005.
However, after the 2008 crash, some people expected that this rise would stop, as it had stopped after the last crash; but, instead, it just continued rising under Obama, so that the 4% barrier was passed last year, in 2012.
This type of rise had never happened before – continuing to climb even after a Wall Street crash.
Evidently, the trillions of dollars in bailouts to Wall Street banks and to their top investors, which didn’t happen under President Franklin Delano Roosevelt during the 1930s, has been having the result that Wall Street and their friends could be expected to have sought: it has prevented them from sharing in the hardships that the public – who have bailed them out and are still experiencing lost jobs, lost pay, and lost wealth – are suffering through in the aftermath of 2008.
The top ten-thousandth of the U.S. population have done very well under President Obama’s leadership, even if they had predominantly voted for Mitt Romney, who promised them an even better deal. Wall Street donated overwhelmingly to the Republican Romney campaign, against Obama. A (supposedly) democratic election in 2012 offered American voters a choice between a hero for Wall Street, versus only an angel and savior for Wall Street; and voters chose Wall Street’s angel and savior, over Wall Street’s favorite. The result is now clear and undeniable, in the economic data.
It’s not like American democracy used to be. Perhaps the important question now is whether this is a real democracy at all – or is America now ruled by Wall Street, no longer really by Main Street?