For Those Who Work For a Living, the Level of Inequality In The U.S. Is “Probably Higher Than In Any Other Society at Any Time In The Past, Anywhere In The World”

Worst Inequality In History Leads to Dynastic Wealth … And It Will Only Get Worse Unless We Change Policy

Inequality in the U.S. is now the highest ever recorded in the country.

Inequality in America today is twice as bad as in ancient Rome, worse than it was in Tsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.

Economist and inequality expert Thomas Piketty notes that – according to an important measure – inequality in America today is the worst in world history:

For those who work for a living, the level of inequality in the U.S. – writes Piketty – is “… probably higher than in any other society at any time in the past, anywhere in the world …”

In other words, there might have been some squalid country in the distant past where the disparity between people without any job and the king was higher than between a jobless American and the top fatcat in the U.S.

But the spread between the minimum wage American worker and the American oligarch is the greatest in world history.

Indeed, inequality in America has become so extreme that the “99% versus the 1%” meme is grossly inaccurate … because it’s really the .01% versus the 99.99%.

Paul Krugman notes:

A lot of what we know about inequality actually comes from [Piketty], because he’s been an invisible presence behind a lot. So when you talk about the 1 percent, you’re actually to a larger extent reflecting his prior work. But what he’s really done now is he said, “Even those of you who talk about the 1 percent, you don’t really get what’s going on. You’re living in the past. You’re living in the ’80s. You think that Gordon Gekko is the future.”

And Gordon Gekko is a bad guy, he’s a predator. But he’s a self-made predator. And right now, what we’re really talking about is we’re talking about Gordon Gekko’s son or daughter. We’re talking about inherited wealth playing an ever-growing role. So he’s telling us that we are on the road not just to a highly unequal society, but to a society of an oligarchy. A society of inherited wealth, “patrimonial capitalism.”

***

So we are going probably, unless something gets better, we’re going to look back nostalgically on the early 21st century when you could still at least have the pretense that the wealthy actually earned their wealth. And, you know, by the year 2030, it’ll all be inherited.

In other words, we’re going from oligarchy to dynastic royalty.

Nobel prize winning economist Robert Shiller and Former Goldman Sachs managing director Nomi Prins also say that inequality may get much worse than it is now.

Postscript: Mainstream economists like Krugman – who long discounted the importance of inequality – now finally admit that runaway inequality destroys the economy.

Unfortunately (and ironically), the policies which they push are the very thing causing extreme inequality in the first place.

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  • Phyllis Anishuntz

    Growth itself is the problem. Why take the Krugman so seriously anyway? It seems the gold bug liberatarians along with the traditional conservatives want the focus on someone who is easy to discredit, and otherwie is no threat to the staus quo. Growth itself is the problem, Capitalism has failed and you aren’t getting yours.

    • paul

      Don’t you mean the obsessive notion of growth? Growth not as a part of a healthy economy, but as the end-all-be-all?

  • frankie p

    So, in summary, as the size and role of centralized government grows, more and more money flows into the pockets of the ultra-rich. This is not surprising, as government is the easiest thing for these ultra-rich to manipulate to their advantage.

    • paul

      So true, Frankie. Multi-national corporations, for example, and global banking families, have no ability whatsoever to manipulate things to their advantage.

  • David Mowers

    In short, if you issue money and only loan it first to the wealthiest citizens and let it “trickle down” from there you find amazingly that those persons who first get said monies stay wealthy and become even more wealthy while everyone else becomes poorer.

    What we need is equality in banking. We need loans direct from the Federal Reserve to the poor and middle class for any reason, not just a socialized and subsidized plans to support the mortgage bond market. Americans own their bank that issues their money…why don’t Americans get access to that money when it is issued?

    Does Soros, Romney, Trump, Zuckerberg, Forbes, do any of these families need cheap credit and capital? Don’t they all have their own money? Why can’t we loan money to people who don’t have any assets so that they, like our rich, can use the money to build businesses and futures for themselves?

    WTF IS WRONG WITH THIS COUNTRY?

    • ann onymouse

      You seriously need to get educated if you really believe “Americans own their bank that issues their money”…. Nothing could be further from the truth.

      • David Mowers

        “The Federal Reserve is owned by the taxpayer.” -Tim Geithner

        That was stated two months ago on CNN. Point-blank. Read their charter.

  • naaammm

    Compound interest is a tax on the poor and a subsidy for the rich. The wealthy use business as a front for pimping human labor and extracting value created by the worker. Land and real estate is rented out by those who have too much to those who pay forever in order to own nothing.

    Until compound interest is abolished, and employee ownership is standard, and rent is transformed into equity ownership, this nightmare will continue to get worse.

    If it continues to get worse, we will see World War 3, and even the rich won’t be able to buy a place that’s safe and not radioactive.

 

 

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