| The term red pill and its opposite, blue pill, are pop culture terms that have become a common symbol for the choice between the blissful ignorance of illusion (blue) and embracing the sometimes painful truth of reality (red). |
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- Expatriation in the Wake of the Facebook IPO
- Run, Saverin! Run!
- Brazil and the Spirit of Liberty
- Immune to the Financial Crisis
- Data Show US Economy is Improving
- Why the World’s Unemployed Youth are Flocking to Brazil
- “Jon Corzine – What’s Going On?”
- Correction Fighting: How Feds Prolong Economic Depressions
- British Pound Sterling Losses “Safe-Haven” Status
A Look at the Top 1% Shows Shift to Finance, Stability Within its Ranks and High Political Engagement
The Economist took a look at the top one percent and “the changing complexion of America’s rich.” It highlighted Mitt Romney as a reflection of this change, because “the wealthiest 1% of Americans not only get more of the pie,” but also because “they are increasingly creatures of finance.” There have been wealthy presidential candidates before, but Romney represents “the first candidate from the world of high-octane finance.”
The Economist writes of the shift to finance, “According to an analysis of tax returns by Jon Bakija of Williams College and two others, 16% of the top 1% were in medical professions and 8% were lawyers: shares that have changed little between 1979 and 2005, the latest year the authors examined (see chart). The most striking shift has been the growth of financial occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005. Their representation within the top 0.1% is even more pronounced: 18%, up from 11% in 1979.” A graphic from the New York Times also focuses on the occupational distribution of the top one percent.
Also indicative of the shift to finance, it appears that the wealthiest of the wealthy are now employed in financial occupations, a change from years past. “[Steve] Kaplan [of the University of Chicago] and Joshua Rauh of Northwestern University note that investment bankers, corporate lawyers, hedge-fund and private-equity managers have displaced corporate executives at the top of the income ladder. In 2009 the richest 25 hedge-fund investors earned more than $25 billion, roughly six times as much as all the chief executives of companies in the S&P 500 stock index combined.”
What does a household in the top one percent make? “The average household income of the 1% was $1.2m in 2008, according to federal tax data.” But The Economist notes, “The ultra-rich skew that average upwards: admission to the 1% began at $380,000 in 2008.” Of course, income is not the only measurement of wealth: “Measured by net worth, rather than income, the top 1% started at $6.9m in 2009, according to the Federal Reserve, down 23% from 2007.”
The Economist cites Mr. Kaplan, who argues that the move to finance largely accounts for the growth in the wealth gap. “Updating a series developed by Thomas Piketty and Emmanuel Saez, Mr Kaplan notes that the share of income going to the 1% reached an 80-year high of 23.5% in 2007, only to sink to 17.6% in 2009 as the financial markets deflated (see chart). The trend is even more pronounced for the top 0.1%, whose share of total income rose to 12.3% in 2007 but sank to a still disproportionate 8.1% in 2009.”
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Unemployment for Those Who Earn $150,000 or More is Only 3%, While Unemployment for the Poor is 31%
Boeing CEO Jim McNerney succinctly summarized a recent study by Northeastern University’s Center for Labor Market Studies regarding unemployment rates for different income brackets:
The Center analyzed the labor conditions faced by income-grouped U.S. households during the fourth quarter of 2009.
In the face of one of the worst economic environments in memory, those in the highest income groups had nearly full employment levels, with just a 3.2 percent unemployment rate for households with over $150,000 in income and a 4 percent rate in the next-highest income group of $100,000-plus.
The two lowest-income groups — under $12,500 and under $20,000 annually — faced unemployment rates of 30.8 percent and 19.1 percent, respectively.
The study – published in February – notes that the poor are suffering Depression levels of unemployment:
Workers in the lowest income decile faced a Great Depression type unemployment rate of nearly 31% while those in the second lowest income decile had an unemployment rate slightly below 20% …. Unemployment rates fell steadily and steeply across the ten income deciles. Workers in the top two deciles of the income distribution faced unemployment rates of only 4.0 and 3.2 percent respectively, the equivalent of full employment. The relative size of the gap in unemployment rates between workers in the bottom and top income deciles was close to ten to one. Clearly, these two groups of workers occupy radically different types of labor markets in the U.S.
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Who exactly are the 1%?
The very rich in America increasingly work in finance, marry each other and care passionately about politics
MITT ROMNEY is not the first multi-millionaire to seek the presidency, nor the richest. Ross Perot, the record-holder, spent some of his billions earned from computer data on losing bids in 1992 and 1996. Since then men who owe their or their family’s fortunes to oil, sport, publishing, trial law, ketchup, beer and bestselling autobiographies have followed.
But Mr Romney, who earned his $200m or so as a private-equity executive buying and selling companies, is the first candidate from the world of high-octane finance. As such, he illustrates the changing complexion of America’s rich. The wealthiest 1% of Americans not only get more of the pie (see chart); they are increasingly creatures of finance.
The average household income of the 1% was $1.2m in 2008, according to federal tax data. The ultra-rich skew that average upwards: admission to the 1% began at $380,000 in 2008. The Congressional Budget Office puts the cut-off lower, at $347,000 in 2007, or $252,000 after subtracting federal taxes and adding back transfers. Measured by net worth, rather than income, the top 1% started at $6.9m in 2009, according to the Federal Reserve, down 23% from 2007.
Giving Voice Back to the People
In the two years since the Supreme Court handed down its decision in Citizens United v. Federal Election Commission, those of us who are concerned with the growing influence of special interests and corporations in our political process have seen our worst fears realized. Based on data gathered by OpenSecrets.org, a website that tracks money in American politics, spending by non-party committees during the 2010 Congressional elections (the first federal elections to occur after Citizens United) increased to approximately $304.7 million, four times the level of such spending in the 2006 Congressional elections.
Even more disturbing is the enormous increase in spending by outside groups not required to disclose their donors. In 2006, such groups spent approximately $875,000. During the 2010 elections, those groups spent an astonishing $133.3 million. That is over 150 times the amount spent in the 2006 elections and nearly double the amount spent during the 2008 Presidential and Congressional elections.
Now, in the 2012 election cycle, the amount of undisclosed and special interest money is increasing at an even more alarming rate. Indeed, in places like Iowa, New Hampshire, and South Carolina, we have seen an unprecedented number of outside groups attacking candidates in the Republican presidential race. Many of these groups are so-called “Super PACs” that can receive unlimited corporate and special interest money. Although barred from coordinating with specific candidates, many Super PACs in fact support an individual candidate. Just this week, one casino tycoon donated five million dollars to a Super PAC supporting Newt Gingrich that is being used to tear down his opponent’s record. These instances in which one person can so greatly impact an election by writing a check is only going to increase.
50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe
Even though most Americans have become very frustrated with this economy, the reality is that the vast majority of them still have no idea just how bad our economic decline has been or how much trouble we are going to be in if we don’t make dramatic changes immediately. If we do not educate the American people about how deathly ill the U.S. economy has become, then they will just keep falling for the same old lies that our politicians keep telling them. Just “tweaking” things here and there is not going to fix this economy. We truly do need a fundamental change in direction. America is consuming far more wealth than it is producing and our debt is absolutely exploding. If we stay on this current path, an economic collapse is inevitable. Hopefully the crazy economic numbers from 2011 that I have included in this article will be shocking enough to wake some people up.
At this time of the year, a lot of families get together, and in most homes the conversation usually gets around to politics at some point. Hopefully many of you will use the list below as a tool to help you share the reality… Continue reading
Occupy Wall Street Live Feed
Global Revolution brings you live streaming video coverage from independent journalists on the ground at nonviolent protests around the world. The team includes members of Mobile Broadcast News, Glassbead Collective, Twin Cities Indymedia and the alt.media ninjas that brought you Terrorizing Dissent and Democracy 101 documentaries. Currently broadcasting from #OccupyWallStreet protests in NYC that began on Saturday, Sept 17, 2011.
