Relax, there’s economic growth…for some
by Ellen Rocco on March 10th, 2012
One percent of pie
Our friend Hank Hofmann, over on the Ontario side of the NCPR coverage area, sent me a very interesting article from Friday’s Globe and Mail. It focuses on the work–and conclusions–of Emmaneul Saez, University of California, Berkeley. In case you’ve never heard of this academic data-cruncher, well, neither had I. But you do know the outcome of some of his earlier work: the notion of the 1% at the top of our economic hierarchy.
I have a feeling that there is a parallel example of the direction we’re heading in–rich get much much richer, while everyone else sees economic decline–somewhere back there in our human history. No doubt, multiple examples. Where do you see parallels?
Human history is replete with rich getting richer and poor getting poorer scenarios from the beginning of written history to the present. My thoughts as to why this is true arise from the concept that humans are pack animals, as are wolves, and as do wolves we tend to want a leader to direct the rest of us in our tasks to ensure the survival of the species. During our hunter gatherer days of small nomadic bands composed of familiar members these leaders likely were afforded some benefits the majority were not; but, as the accumulation of vast wealth was not a principal goal among such bands they were likely “of the people”. About 10000 years ago an un-leveling invention changed our “leaders” perceptions of themselves; agriculture. No longer confined to small bands of nomadic hunter gathering, more or less stationary human pockets exhibiting rapid population growth became the norm along with egotistical psychopathic leaders.
As human inventions proliferated so too did the numbers of egotistical psychopathic leaders which we currently refer to as supervisors, bosses, Fuehrer, President, Minister, Senator, CEO, …. Unfortunately for the “underlings” the leaders of the various groups, now so large as to demand “sovereignty” over claimed territories and populations have discovered that taking the major portion of the wealth pie for themselves requires “war” both “hot” and “cold” within and without their nation states. Not to worry; though, an exponentially increasing human population provides plenty of cannon fodder for their escapades.
For a graphic illustration of the contempt with which the psychopathic leaders have toward the underlings take a gander at the images in this link, courtesy of a commenter on the James Howard Kunstler blog, created by a Chinese tourist while in India. Warning! Warning! Warning! these are very very graphic images that may not be something all folks can stomach. The photos illustrate the abject living conditions of a portion of the Indian population! http://www.chinasmack.com/2010/pictures/filthy-india-photos-chinese-netizen-reactions.html
Economic growth for the US and Europe means more and more humans in other countries being looked at as chattel to be used up and thrown away such as the Chinese assembling high tech toys for today’s youth. It has made Apple Corp. the most valuable company on Earth; what is it doing for the Chinese who live 8-10 to a room working 12-16 hour days starting when they are what 10, 12 14 years old, thrown away in their 20’s because they were no longer fast enough to satisfy Steve Jobs when he was alive.
When Jesus said, “The poor you will always have with you,” he could have just as easily said, “The rich you will always have with you.”
The reason is simple, economic wealth is always about percentages. For the rich to be rich, there must be the poor. Just look at the lottery. For someone to win, many must lose.
I like this pie chart, but want it accompanied by another showing how much that tiny slice gets.
People like to pretend that this doesn’t happen, or that it can only happen somewhere else. The truth is that it creeps ever closer. There are cities in America with large and growing homeless populations. There are cities with high school graduation rates below 30 percent. There are corpses in the street in towns just south of America’s border…How much closer would you like it to be before we can see it. Poverty drags the whole nation, the whole world, all of humanity down, and the rich cannot be proud if they admit to this.
What percentage of the wealth of the top 1% remains in the capital markets and is used by the rest of the pie to generate jobs and other economic activity? This isn’t the old days where you stored your riches in the dungeon.
I will take a stab at my own question.
Since the Globe and Mail article describes how the upper income levels were disproportionally affected to a greater degree than lower income levels by the financial crisis I would say that they must keep much of their net worth in the market:
“But Prof. Saez shows that while the financial crisis hurt those at the top more than anyone else – the income of the 1 per cent plummeted 36.3 per cent between 2007 and 2009, compared with an overall average fall of 17.4 per cent”