The good folks at Inequality.org continue to do a great job of documenting America’s obscene and metastasizing wealth and income gaps. This week, in their online newsletter Too Much, they highlight as fascinating comparison between French and U.S. households when it comes to wealth. As you can see, Americans top the French when it comes to average wealth because the rich here are so much richer and all of their holdings gets factored in. When one looks at median wealth however (i.e. the wealth of the most typical adult) the French leave us in la poussière. This graphic from the Too Much website tells the grim story.
The good people at Inequality.org have stashed several nuggets of powerful information in today’s edition of Too Much: An online weekly on excess and inequality that will make you want to pound the table, but the story on the newest edition of Forbes magazine’s richest 400 gazillionaires is perhaps the most amazing — especially this little vignette on one of the richest of the plutocrats, former Oracle CEO Larry Ellison:
Take Larry Ellison, the third-ranking deep pocket on this year’s Forbes list. Ellison just stepped down as the CEO of the Oracle business software colossus. His net worth: $50 billion.
What does Ellison do with all those billions? He collects homes and estates, for starters, with 15 or so scattered all around the world. Ellison likes yachts, too. He currently has two extremely big ones, each over half as long as a football field.
Ellison also likes to play basketball, even on his yachts. If a ball bounces over the railing, no problem. Ellison has a powerboat following his yacht, the Wall Street Journal noted this past spring, “to retrieve balls that go overboard.”
And if Ellison’s ridiculous wealth doesn’t get you a little fired up, check out this graph from the same story showing just how rapidly he and his peers are leaving the rest of us in their wake:
In case you missed it, the Associated Press is reporting new and disturbing news (click here to see the article in the Greensboro News & Record) about the impact that the nation’s mushrooming economic divide between the rich and everyone else is having on education:
Education is supposed to help bridge the gap between the wealthiest people and everyone else. Ask the experts, and they’ll count the ways:
Preschool can lift children from poverty. Top high schools prepare students for college. A college degree boosts pay over a lifetime. And the U.S. economy would grow faster if more people stayed in school longer.
Plenty of data back them up. But the data also show something else:
Wealthier parents have been stepping up education spending so aggressively that they’re widening the nation’s wealth gap. When the Great Recession struck in late 2007 and squeezed most family budgets, the top 10 percent of earners — with incomes averaging $253,146 — went in a different direction: They doubled down on their kids’ futures.
Their average education spending per child jumped 35 percent to $5,210 a year during the recession compared with the two preceding years — and they sustained that faster pace through the recovery. For the remaining 90 percent of households, such spending averaged around a flat $1,000, according to research by Emory University sociologist Sabino Kornrich.
“People at the top just have so much income now that they’re easily able to spend more on their kids,” Kornrich said.
The article continues:
The disparity in spending patterns creates a hurdle for reducing income inequality through additional education — the preferred solution of many economists.
Thomas Piketty, the French economist whose exploration of tax data helped expose the wealth gap, has argued that education “is the most powerful equalizing force in the long run.”
In short, the article provides a sobering confirmation of what critics have long been saying about the conservative movement’s successful, decades-long campaign to disinvest in and privatize our public education system — namely, that it’s expediting the demise of our middle class society.
The fallout from our nation’s decades-long effort to slash taxes on wealthy individuals and profitable corporations (and the public structures those taxes once provided) continues to spread. The Washington Post reports that the growing gap between the super rich and everyone else is directly and negatively impacting state government budgets:
Income inequality is taking a toll on state governments.
The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue, according to a report being released Monday by Standard & Poor’s.
Even as income has accelerated for the affluent, it has barely kept pace with inflation for most other people. That trend can mean a double whammy for states: The wealthy often manage to shield much of their income from taxes. And they tend to spend less of it than others do, thereby limiting sales tax revenue….
Rising income inequality is not just a social issue,” said Gabriel Petek, the S&P credit analyst who wrote the report. “It presents a very significant set of challenges for the policymakers.”
Stagnant pay for most people has compounded the pressure on states to preserve funding for education, highways and social programs such as Medicaid. The investments in education and infrastructure also have fueled economic growth. Yet they’re at risk without a strong flow of tax revenue.
The good people at Too Much, the online newsletter of Inequality.org have another sobering but powerful article this week. The rather amazing and disturbing finding: the wealth of the average American family is up over the last 25 years, but the wealth of the median family has actually dropped. If this finding leaves you scratching your head, it boils down to the fact that the rich have become so rich that they’re dragging up the overall average even though typical families are faring worse. This is from the article:
The growing wealth of these affluent, the new Fed data show, is driving up America’s average family net worth. But straight averages can mislead — and even deceive. If nine people each have zero net worth and a tenth person holds a fortune worth $10 million, the average person in that 10-person group will be a millionaire.Medians, by contrast, tell us more about how everyday people are truly faring. At the median point, half the people in any distribution have more, half less. In 1989, the new Fed Survey of Consumer Finances details, the median — most typical — U.S. family held $84,800 in net worth, after adjusting for inflation.
In 2013, America’s most typical families held only $81,200, 4 percent less.