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Will the friction between the tectonic plates of income inequality cause a social/political earthquake? (Image: Institute for Policy Studies)
Despite the ongoing scrutiny of income inequality and a plethora of advocacy efforts aimed at reversing the trend, the redistribution of wealth upward continues at a dizzying pace.
That's the conclusion of an analysis released today of the Forbes 400 list of the wealthiest Americans. Conducted by the Institute for Policy Studies (IPS), the report indicates that the net worth of the top 0.1 percent of the US population continues to swell:
The United States is becoming, as the French economist Thomas Piketty warns, a hereditary aristocracy of wealth and power....
The level of U.S. wealth inequality has grown so lopsided that our classic wealth distributional pyramid now more resembles the shape of Seattle’s iconic Space Needle.
The bulge at the top of our wealth “space needle” reflects America’s wealthiest 0.1 percent, the top one-thousandth of our population, an estimated 115,000 households with a net worth starting at $20 million. This group owns more than 20 percent of U.S. household wealth, up from 7 percent in the 1970s. This elite subgroup, University of California-Berkeley economist Emmanuel Saez points out, now owns about as much wealth as the bottom 90 percent of America combined.
Our wealthiest 400 [as analyzed by the study of the Fortune 400 wealthiest individuals in the US] now have more wealth combined than the bottom 61 percent of the U.S. population, an estimated 70 million households, or 194 million people.That’s more people than the population of Canada and Mexico combined.
Chuck Collins, a senior scholar at the Institute for Policy Studies and co-author of the study, talked with BuzzFlash about how this increasing income-and-asset chasm is impacting current political developments:
Donald Trump is a good example of tremendous wealth, born on third base, inherited advantage, remaking himself into a self-made man. He is disconnected from the stories of those who are immigrants and those not born with a silver spoon in their mouths, those who have to economically struggle. How many Muslim immigrants has he met who are trying to make a living and survive?
I think that extreme inequality means that people across the economic divide do not generally interact, so the wealthy live in a parallel universe; they don't regularly get to know people who are not like them. They have a gated mentality.
As societies pull apart and become more unequal, you have a progressive populism but you also have a regressive populism. That is Trumpism. It tries to deflect those feeling economic pain and vulnerability from blaming the wealthiest. and diverting that into an anger toward the poorest … and "outsiders." It's a symptom of the same polarization.
The report offers some revealing insights into racial economic disparity in the US:
- The Forbes 400 now own about as much wealth as the nation’s entire African-American population - plus more than a third of the Latino population - combined.
- The wealthiest 100 households now own about as much wealth as the entire African American population in the United States. Among the Forbes 400, just 2 individuals are African American - Oprah Winfrey and Robert Smith.
- The wealthiest 186 members of the Forbes 400 own as much wealth as the entire Latino population. Just five members of the Forbes 400 are Latino including Jorge Perez, Arturo Moreno, and three members of the Santo Domingo family.
As Collins told BuzzFlash:
Right now, we are operating under a rigged set of rules. Wealth is power, so the greater wealth concentrates the greater power. You have a political system captured by the billionaires. You have pressure from the bottom and progressives to reverse the economic inequality - and at some point the tectonic plates are going to collide.
Collins and his co-author Josh Hoxie offer some suggestions for initial steps to restore income and assets to the majority of the US population. However, given the vast ability of the richest Americans to influence elections through campaign contributions - which was exponentially augmented by the Supreme Court Citizens United decision - the majority of elected officials in Congress appear even more determined to keep the redistribution of income flowing in only one direction: up.
By Truthout