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The rich get richer and the poor get poorer, goes an old proverb. Now comes an anaysis of IRS data that seems to confirm it.
While the financial meltdown of 2008 dealt a big setback for both rich and poor, those on the bottom rungs of the income ladder were set back further, according to the Center on Budget and Policy Priorities.
The economic expansion from 2002 through 2007 helped boost most everyone's paychecks. But the top one percent, whose incomes rose nearly two-thirds, did a lot better than the bottom 90 percent, whose incomes were up just 4 percent. The Panic of 2008 sharply reversed that trend - clipping 20 percent off the earnings of the 1 percent richest while shaving 7 percent off the income for the bottom 90 percent. But even after the market meltdown, the top one percent was earning 30 percent more than in 2002 - while the bottom 90 percent lost ground by 4 percent.
Over the longer term, the average pre-tax income for the bottom 90 percent is $900 lower than it was in 1979, according to the CBPP. That compares with gains of more than $700,000 during the same period for the upper one percent crust.
The richest of the rich - the top .01 percent - also took a big hit during the 2008 meltdown - which clipped their income by 25 percent. But that still left them 68 percent ahead of where they were in 2002.
Big losses in 2008 at the top of the money pile helped narrow the so-called "wealth gap" - but only slightly. That means the share of income flowing to the top one percent is still higher than it's been since 1929.
As another proverb goes: "The more things change, the more they stay the same."
For more graphs on the wealth gap, check out the full report.
Leave a Comment:
Consolidating the banks to a few powerhouse banks like WellsFargo, BofA, Chase, Sachs and have conrol over all wealth worked out great, didn't it? Enjoy your fees...lol
The politicians did it all under your noses....lol
What a bunch of sheep
Jack, I'm with you, but you act as if this is something new or beyond the understanding of what is known. Take any business 101 class in college or live to be say 25 and you know that "the bank doesn't keep the money in the vault". The banking system, capitalism and socialism for that matter relies on the increase in demand or aka consumption. When you invest at a consumption level today, you need more consumption tomorrow to make money on your investment. The bank works the same way. When they give out a loan they in a REAL sense are investing in cumsuption. Yes, the banks spawn and encourage that human desire to borrow from tomorrow to comsume today. Always remember this...A dollar today is worth more than a dollar tomorrow...That is called inflation!
kpokeefe
When a bank is able to take your deposits and give you less than a percent in interest for keeping it there, then lend it back to you and others under credit at a much higher interest rate, it becomes a Ponzi scheme. Monies are created without using real money.
Madoff is in jail because the goverment does not want competition.
That's not a Ponzi scheme. You can google the term and get a complete definition. The reason the bank charges a higher rate for loans than you get on your deposits is primarily due to two factors. 1. Credit risk - while your deposits are protected by the government/FDIC (up to a certain limit that 99+% of accounts will never hit), the bank may not get the entire principal of the loan back. 2. Duration risk - you can get the money you deposit back at any time while the bank cannot get their money back early. Typically they will loan the money for a few years. If rates go up then they are stuck with the lower rate they are currently receiving on the loan they made.
Like Duh! What else is new?
Anderson-2548421
FDIC is the insurer? My guess is that they needed a bail out too?
Kaptain,
They will eventually need a bailout but for now the fees they've charged the banks over the years has covered the losses on failed banks. You touch upon an important point in both of your comments - 1. The fact that the Fed has kept rates at 0 (meaning you and I get basically 0% for our savings) has allowed banks to make money by paying 0% to you and me and receive a lot more from the loans they make (or the Treasury notes/bonds they buy). They call this a steep yield curve and a monkey running a bank could make money in this environment. This is basically a bailout of the banks at the expense of savers. This is not as highly publicized as the explicit bailouts we saw in 2008. I agree with you 100%.
kpokeefe, banks do not only give out the original deposit, they create money out of nothing and then give it out. The problem is here. The borrowed money is the money supply. But it needs to be paid back with interest. Because when we borrowed, banks created only the principal, but now they are asking for principal + interest to be paid back. Banks are money factories. They do not merely loan out deposits. They loan out multiples of that!
Bernanke has already tripled the base money supply. Throughout 20th century, FED printed 800 billion dollars. Then in a few months in 2009 FED printed more and increased the money supply to more than 2 trillion. And where is the inflation? The problem is our money supply is not just printed money. Just the savings deposits at commercial banks are more than 4 trillion:
http://research.stlouisfed.org/fred2/series/SVGCBNS
Where did the difference come from? We printed 2 trillion but bank deposits are 4 trillion. Hmmm. It was created as credit by the banks when we borrowed. It is debt money. It can deflate and that is the problem. Here is how banks created money in the form of debt, and how it deflates:
http://www.kondratieffwavecycle.com/credit-inflation/
Total bank credit is more than 9 trillion now.
http://research.stlouisfed.org/fred2/series/TOTBKCR
This has principal + interest to be paid. How is this going to be paid when base money supply is 2 trillion and velocity of money is going down? It is a bankrupt scheme and Bernanke is printing money to save the runners of this ponzi scheme.
If you look up Ponzi Scheme you will find that it describes Social Security to a "T". Your benefits are not paid with the funds that you and your employer paid in as that money has long since been squandered. Your benefit, if there is one when you retire, will be paid with current revenues not anything in your so called account.
Oldfox, I worked for one of the largest banks in the world. I'm pretty sure I know what I'm talking about. Name me one government service that isn't a ponzi scheme? Where do you think the government birthed their ideas for entitlement programs? BANKS! Even your water bill if you live in an urban environment is a ponzi scheme. Do you really think the added fees for reconditioned infrastructure is collected and placed in a LOCK-Box? Nope! Here in the city of Atlanta in the county of Fulton, I pay $450 per month to flush the toilet. At least 60% of my bill is to revamp the decaying water infrastructure. Do you think they are doing it? Hell no! They are using that money to pay other costs they are behind on. It is called financial modeling. When the market doesn't return what it was supposed to return then federal, state and local governments must pilfer off of other government programs and services collected to meet the DEMAND in other entitlements! Think of teachers, police and fireman pension programs. You will hear alot about this in the future!
Nice try Schoen, but you are not correct, high income does not necessarily translate to wealth. The charts you use are based on income levels. Someone's net worth may or may not relate to their current level of income. Someone who is retired could have $100 million of net worth all invested in tax-free munis and have no taxable income. Conversely, someone with no net worth could win a $1 million lottery, pay half of it in taxes, pay off their debts, take a vacation, and be left with a few hundred thousand in net worth.
peter
technically, you are correct in stating that wealth and high income are not the same thing. but you're missing the point: for the vast majority of citizens, earnings play a much bigger role in their day-to-day lives. the article is pretty clear (and accurate): chances are that you haven't seen much of a real (inflation-adjusted) increase in income over the past decade. unless you were doing pretty well to begin with, that is.
besides, how many $100M retirees or lottery winners are there, anyway? my guess is that its not enough to make much of a difference compared to the entire population. let's not confuse the issue here...
Seriously, we are going to compare the bottom 90% to the top 1%. The top 1% are those that will probably rarely be impacted as badly by a downturn, but this is a minute portion of the population. How about we compare the top 50% to the bottom 50% - I bet there would be little difference. I also agree with Peter that income is not the same as being "rich". To say the rich got richer, you would have to look at net worth. Talk about a useless comparison!
I can't handle this just before the weekend. More suffering for the rich. They still don't have everything. We must cut their taxes.
Dont worry soon the bottom 25% will vote the Republicans into office. Lets give Social Security to Wall St also. I for one dont need my $1600 a month check. Better spent on a 10k sq ft house for the wealthty than me living. And I mean LIVING!
Good luck seeing your social security the way politicians are raiding that money for other stupid stuff. I agree with the people looking to reform or abolish it. I pay $300 a month and almost $4000 a year into this crap. What kind of investment is this when that chances of seeing it are slimmer and slimmer by the year?? Give me back MY money so I can put it in my TSP account for ME and my family to use. If the government cant keep its paws off this money then do it away with it completely! FDR started this crap and LBJ raided it. Thanks Democrats!
Curious. To use the Republican/Tea Party term, it would appear that this massive "redistribution of wealth" coincides with the Reagan presidency. Thank you supply siders.
Regarding the the word parsing about the difference between income and wealth, the one thing that multiple studies have shown is that in the past 25 years, while more and more wealth is concentrated in the hands of fewer people, most American households are worse of in terms of real income.
Reaganomics has created a new feudalism. I have never understood all of those middle class and poor that support the economics that have hurt 90% of us over the years. I feel no need to help out a handful of billionaires that only care about themselves and don't give a damn about our country as a whole.
Without government rules i.e. intelectual property rights and such, those that are wealthy today would not be. They benefit the most by a lot from the intelectual property laws. These laws are good for society, but those that benefit the most should pay up.. Let the tax rate for the top 1% lapse to the historical norms we had under Reagan and before.
Lets have a graph showing the salaries of federal and state employees compared to the same economic level of employees in the private sector. This comparison should also include all employer paid benefits, pensions and at what age you can retire with full benefits.
I can tell you that state employees, on average, make less than their private-sector counterparts. Federal employees, not sure.
I agree and let's have people prohibited from collecting multiple pensions or benefits like Sen McCain. Geez Full military disability, SS, plus another. This is killing this country with people scamming the system.
Here you @!$%#s go with this bull@!$%# again. How about a comparison of executive salaries to the average worker in the company?
Boy, now there's a shocker ... !
Wow, what a blinding flash of the obvious.
greed, jews ,banking. wake up people, slavery never went anywhere. 99 percent of us are slave to the one percent whose only morals are those of greed power and control. And WE gave it to them.
Spend your food stamps wisely.
It will get far worse.
It will never get better.
But it always ends in violent slave revolts.
Greed is mans nature, it is just that some of us are better at it than honest people.
hang on, the worst is yet to come.
If history is any indicator you are entirely correct. The pieces are starting to come together.
Good news, Democrats can own weapons also! Im going to the BIG houses with my 30:6. Only a revolution against the RICH (Republicans In CHarge) will make a difference. It might take 50 more years but it will happen. The only bad thing is will your kids in the MILITARY listen to their parents or follow the orders of their Commanders?
TG Gray-you are a bigoted, ignorant, fool who blames others for your pathetic situtaion.
Huh????
Huh???? is not an intelligent response to anything. My post concerns TG Gray's anti-semitic blame on jews for his situation. For his and your information "the jews' do not own or run the banking system, contrary to those who hold such ignorant opinions.
Oh, now I get it. Thanks for sharing.
Facts are facts and something the rich do not want us slaves to know.
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
The Wealth Distribution
In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010).
In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.
The wealth has always been held in relatively few hands. Where have you been?? 25 years ago the percentages of wealth held by various groups is close to what it is today. The top 1% have about 35% of the wealth. the next 19% have about 47% of the wealth. And the bottom 80% have about 18%. Almost 50% of taxpayers don't pay any income tax because their incomes are not high enough to pay any. How much wealth do you think they have?? But that is how it has always been, nothing new.
So... this is just OK with everybody.? No stand up? No marching in the streets? No moving toward parity? The working class made these people rich. A frog in water at a slow boil...that's what we've become? Sad. Then that's what we deserve. We can shut this down with a little common ground. Not mindless Tea Bagging. A real financial movement on the part of the masses. Think about it. I don't have the answers, but someone must. Mass labor strikes? Everyone across the country stops paying interest on a loan for a month? We are being raped by financial institutions. We changed the world in the sixties, we can still do it! I'm tired of being trickled on!
Im with you Rusty
Its the same story that it has been for centuries. Global feudalism. Wealthy families fighting amongst themselves while keeping a jack boot on the necks of their "assets". Global feudalism has its tentacles deeply embedded in American capitalism. The wealthy families continually buy off our politicians and leave those who produce their wealth for them to suffer on all occasions. Even our so called "intelligence community" is nothing more than a great whore since they get their information from changing and shifting wealthy families. There was a time when the wealthy families needed our middle class to act as a buffer between themselves and the poor who give them their wealth but with the need breed of technocrats and armaments available they no longer need a middle class. The wealthy families of today can openly and giddily stomp on the face of the poor with their heavily armed "police" and other "paramilitary" units. Nothing will change until the poor in this country mature, unite and educate themselves. I say this: when teargas is thrown at you, throw it back.
Rustyboy Im in Florida too. Maybe we should get together.
Might be an interesting conversation. Let's continue on Newsvine and feel each other out. There has to be a peaceful, yet deliberate way to address this growing injustice.
The entire American people are waking up Rusty. We are not a stupid people. We should only do what we have to. I live in Clearwater.
Our government is fiscally irresponsible becasue we've allowed it to happen. We all have been guilty at some time in our life of buying something we didn't need or couldn't afford.
Dave Ramsey has the best take on it. Get out of debt and don't borrow again. When we become a cash society instead of a credit society the banks will have to figure out another way to make money. Starve them just like they have bled us dry. We all could learn a little fiscal constraint and start means testing benefits programs. Should I pay a fireman a pension of $100K a year at 42 years old, but a policeman get $35K under the same set of rules. We've gotten wacked out of proportion. Political pensions in general are killing us and it will get only worse. I'm beginning to wonder should a government worker get a pension and SS? Why?
Here is something to remember: Unity can start with just 2 people. Just 2 people willing to die for what they believe in. Remember Vietnam. The Vietnamese drove the corrupt wealthy families out of their country even though it took 20 years. If it takes that long then so be it.
You actually regard what happened in Vietnam as a good outcome? Do you know anything about the millions of people killed by the communist government after the end of the war?
Why is it people who have no talent, no ability, cannot offer any value to anyone else worth paying for, are constantly so eager to destroy the "rich"?
Instead of constantly trying to tear other people down, maybe you should focus on building yourself up.
Stop being a destroyer and blaming everyone else for your problems. You don't get a second life. Don't be a coward. Stand up man!
It's not destruction, it's reclamation. There is a positive force here, but it takes a willingness on the part of a society to right the wrongs perpetrated by an elite ruling class. Every country has a right to defend its civilian population from the excesses of the few and seemingly righteous in their deliverance of good on the benefit of those in control. As you say "Stand up man!"
I agree with you Rusty. We have to stand up sooner or later or there will be nothing left but peasants and the ruling class. Just like Vietnam. The wealthy first try fear and intimidation. Then they try violence. They are the first to commit violence because they can. If violence doesnt work then they abandon the situation just like they did in Vietnam. Today our nation is being strangled by a few but this wont last forever.
With the Tea Party today we see the fragmentation of the wealthy families in our corrupt Republican party. This entire gang in this country is giddy to the point of derision at the way they have raped our country. Only in America with a people so pacific could this have been allowed to happen. A people so dumbed down as to be senseless. The french have more sense than us for gosh sake. We have been so intimidated and made to be so frightened so long by our would be "masters" that individually we will do anything just to survive. I say it is long past time to unite. Shut down wall street and k street permanently. Shut them down by any means necessary.
Why does this article focus on "pre-tax" income? What difference does it make what we earn BEFORE the government gets its share, shouldn't it matter more what the *after-tax* income comparisons are? Let's be real!
Where is "Retired Navy, Feisty, FlyNavy, Berreca, Nakita" and others in this conversation? Give us your input. It's time. I look for your voice in this discussion.
Rusty even though email is entirely non-secure and I ignore most that I get you are always invited to contact me at Yoda2937@Gmail.com anytime you would like to discuss the issues confronting us in the world today. I would be glad to hear from you. I value your thoughts as you have presented them.
I have to go now. I am an old man and it is past my bedtime. I hope to hear from you sometime Rusty. Take care of yourself. In life do only what you have to. Conserve energy always. Ciao for now!
Which is why "We the People" need to demand a return to the old days of more tax brackets (not fewer) to strengthen our badly tattered social safety-nets.
http://supratruth.newsvine.com/
So, how much exactly do you want ta get paid for washing dishes or cashiering? If ya want to get in a higher earning tier do what I did. Work your ass off, take extra duties, do your job and more everyday, and learn something new everyday. That will make the manager look very good and the owner more money and the kicker is you get to keep all the skills you acquire. Working a straight 8, and partying on the weekends will get you right here bitching on the vine about the haves having all the wealth. The upper tiers are resentful because they are the ones taking all the responsibility, extra hours/ duties and financial risks and have to pay all the taxes too.
That's all great jed except people figure out pretty quickly that the game is rigged against them. What's broken is your paycheck, you aren't paid enough and nobody wants you to know that. Health costs have been freely escalating according to an unregulated market for better and better service, so naturally it cost more, a lot more. The real problem is your paycheck isn't keeping up and it hasn't been keeping up for about three decades now so you can't afford the things that have been increasing in cost in a free and unregulated market. Easy credit and government subsidized home loans made you think you could afford things. That was an illusion, you can't.
If you want less government in your life, put more money in your paycheck. If you want to be able to really afford that house, save up for a downpayment and furnish it nicely, demand more pay for the goods and services you produce, you deserve it. There was a day without credit cards. There was a day when a middle class American could save up for what they wanted in a resonable amount of time. There was a day when Americans actually saved money in a bank, imagine that! They could do those things because they were paid adeguately, and those times were considered "prosperous". This was before wages and salaries were used by industry and the government as tools to keep inflation down, at least that has been the excuse. As employees became more and more efficient aided by technology, companies made higher and higher profits, they netted more and more product for less and less cost. And a lot of that cost savings came out of your pocket. Don't you get it? You are not paid for what you produce. You are giving your life and your work away at a discount, is it any wonder that everything is so expensive, is it any wonder that you can't afford housing, healthcare, education for your children?
Even mice don't run on a treadmill without a reward, Capitalist do not give their products away, they demand a fair and reasonable price. Why should American workers do any less? We have a recession because people cannot truly afford anything.
Yes Jed, we ALL know that almost every single rich person EARNED it. There's no such thing as spoiled pig @!$%#ing rich @!$%#s who were given everything their entire lives.
interest = slavery
Hows them ideas workin out for ya, son? Ain't puttin any more food on the table are they? The world ain't fair, never was,never will be. If I want to make more money I put my back into it after I negotiate a fair pay scale for what my skills produce. My skills are not easily found, I made sure of that because that increases their value. I was not born withthese skills, nor did I learn them in school. I busted my ass for them. Worked extra, longer and harder than the competition. Now I am in the top 5% earner tier with a formal education ending in the 8th grade. But guess what? I take all the risks too. If the business does not make increased profit in any year I will make less than the yard guys that work for me. It's about the bottom line son, pure and simple. Always has been, always will be. When you can get your head wrapped around that concept you will be on your way.