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How inequality has soared in the US

The top 1 per cent now take home 23.5 per cent of all income.

If you want to get some idea of why the 99 per cent movement has attracted so much support in the US, just take a look at this graph. Over the last thirty years, the share of income taken by the top 1 per cent of Americans has risen from 10 per cent to 23.5 per cent. Even more remarkably, the share taken by the top 0.1 per cent (the top 14,988 US families, making at least $11.5m in 2007) has risen from 1 per cent to 6 per cent. Income inequality in the US is now at its highest level since 1928 (see this excellent Berkeley report for more data), when the top 1 per cent took home 23.9 per cent.

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As you'll notice, from the 1950s onwards, income distribution in the US remained broadly stable until the Thatcher-Reagan revolution. The neoliberal policies pursued by the Reagan administration - tax cuts for the wealthy (the top rate of tax was reduced from 50 per cent to 28 per cent), deregulation and privatisation, led to a dramatic rise in inequality.

Consequently, it's no surprise that even in the US, where the Tea Party has tilted the political spectrum rightwards, the majority of citizens support the aims of the 99 per cent movement. A recent Time/Abt SRBI poll found that 54 per cent had a "very favourable" (25 per cent) or "somewhat favourable" (29 per cent) view of the movement.

It was Alan Greenspan, a disciple of free-market guru Ayn Rand, who remarked in 2005: "This is not the type of thing which a democratic society - a capitalist democratic society - can really accept without addressing." Obama now has a huge political opportunity to win support for a renewed drive against inequality. He was memorably attacked during the 2008 presidential election for wanting to "spread the wealth" but the polls suggest that's exactly what the voters want him to do.

As for the UK, we're not doing much better. The richest 10 per cent now receives 31 per cent of national income and owns almost half of the country's personal assets, while the poorest 10 per cent takes home just 1 per cent of the total income. The coalition's decision to rely on spending cuts (which hit the poorest hardest), rather than tax rises, to reduce the deficit will inevitably widen the gap. Conservatives may criticise the Occupy London movement but they cannot deny that it reflects a grim empirical reality.

17 comments

Trevor's picture

"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."

So said Warren Buffett (then the world's wealthiest man) interviewed in 2006 by the New York Times.

Nathaniel Myers's picture

Do you mean the coalitions decision to rely on spending cuts, as opposed to tax increases? Not tax cuts, surely?

swatantra nandanwar's picture

The Aristocracy have never really gone away, the ancient ruling families are still around like the Duke of Westminster who owns a sizeable part of the country. The Landed gentry are still around taking the rents of the tenants.
Things won't change until the Monarchy itself is removed. The French did it in 1789 nd established the First Republic. They are now on their Fifth. When the PS get in we'll have the Sixth.
When the Revolution comes here we'll all be able to have servants, just like them.

Buckskins's picture

Wow!! How about that. We have the winners and whiners just like anyplace else. What did you think? Communists we ain't.

Dark Heart of Toryland's picture

Buckskins, you seem to be rather missing the point, which is that the neoliberal economic system has rewarded a very few winners grotesquely, at the expense of the rest of the population. That the rest of the population should not be happy about this is hardly unreasonable. And nor is it 'just like anyplace'; there are plenty of countries in the world which function perfectly well with very
much more proportionate levels of inequality.

Flashbuck's picture

That's the trouble with you hysterical left wing fascists - you're always looking at other peoples wealth and income thinking how to take it off them instead of generating your own.

Martin Horan's picture

And, of course, that kind of thing does not happen in Britain! The queen and her family have it as tough as everyone else.
I've lived and worked in the US and--true--they do love making money. But you can't impress them with what your father does because they'll ask you what YOU can do. And whoever you are, and wherever you come from, they will admire you if you've worked to achieve wealth. They won't be impressed if you've inherited your pile. Any idiot can get money that way (provided they have rich providers).

Freeman2's picture

'Obama now has a huge political opportunity to win support for a renewed drive against inequality.'

But as Wall Street and the banks are his biggest campaign finance backers, unlikely. The people, f*ck 'em.

Kavy's picture

You sound very histerica, Flashbuck.

I reckon it is time to tax the rich so we can get our money back. In fact, the rich need bringing under control before they destroy our world. And the power should be brought back to the rest of us, the majority, which is democracy. If the majority wish to tax the rich more then that is our demacratic right and fascists/ anarchists like you will just have to lump it.

Dark Heart of Toryland's picture

Flashbuck, actually, it's the financial sector and the corporate shysters who spend the most time looking at other peoples wealth and income [and] thinking how to take it off them. People of a leftist persuasion would simply like to see some of their ill-gotten gains being recovered.

Fraziel1's picture

Flasbuck gets let out of the asylum once or twice a week to make a post and then they take him away again.

Fraziel1's picture

i read somewhere recently, might have been on here, that if you invested in a pension in the uk and also invested in a pension in the netherlands using exactly the same amount of money, your pension would be approx 50% higher in the netherlands. Why? because the greedy bastard multi millionaires that run these funds take so much of your money in fees over here. Sheer greed and even flashbuck,deranged and half mad as he is, should be able to see that.

Nodbod's picture

It used to be Kings that took everything as it was their right (in their eyes, obviously). Now it is politicians and the mega-wealthy. It was the tax payers money that saved RBS and Lloyds, but the mega-wealthy seem to think that it is "their's" when it will be sold off (given away!). Likwise the NHS was bought and paid for by the majority, for the majority. Smacks of socialism so we (the government) will sell off the money making bits to their mates. The NHS is mine, bought and paid for by me and mine; not the government's. The Tory slogan - we never forget it's not our money - is damn right. Their mantra should go on to "but we'll do our best to get it!"

I do not want to rule the world, I do not want to have all the money, I want to be able to live and work for a fair day's pay, pay my taxes, in a decent society for all. I do not want to overthrow capitalism, I just believe that if the megawealthy want to continue living here, perhaps they may like to divvy up their share. They make use of the roads, police and defense just like the rest of us.

Eddy S's picture

the simple fact is that inequality in the uk increased substantially under labour the coalition will criticise our record, huges increases in immigration also affect those on lower income and skills as there is more competition for the same jobs.

one of the key lessons isn't that we need higher taxation for higher government spending on admin non-jobs but that rules should be placed for the sensible management of an economy, when an economy grows above trend then it should run a government budget surplus - this means that politicians cannot play politics with the economy.

in addition we should move gov't spending from admin non-jobs to growth enhancing infrastructure spend, fresher ideas to drive education standards (rather than driving standards lower with grade inflation), waiver fees for engineering graduates rather than those on arty/farty degrees and making the UK the number one destination for start-ups in the world.

the future is competing with china and india.

Gideon Polya's picture

The sequestration of 24% of US wealth by the greedy 1% of Americans has deadly consequences, noting that the US with 4.5% of the World's population consumes about 25% of the World's resources.

Thus it can be estimated from UN Population Division data that currently 18 million people die avoidably from derivation and deprivation-exacerbated disease each year on Space Ship Earth with the 1% in charge of the flight deck (the figure was 16 million in 2003; see "Body Count. Global avoidable mortality since 1950": http://globalbodycount.blogspot.com/ ).

Within the US, it is estimated that about 1 million Americans (overwhelmingly from the 99%) die from preventable causes each year due to the greed of the 1%. Thus about 1 million Americans die preventably each year from poverty, deprivation or violence (e.g. 30,000 Americans are killed by guns each year; 44 million Americans live in poverty and the difference between infant mortality rates between Singapore and the world's richest country, the US, indicates that about 20,000 US infants die avoidably each year; about 20,000 Americans die annually from lack of medical insurance; and about 1 million Americans die preventably each year from these causes and related lifestyle choices such as drinking, smoking and obesity-linked problems) (see: http://mwcnews.net/focus/editorial/14040-us-afghan-war.html ).

And then there is the morbidity (illness) and sheer misery of the 99% in America. Thus 1.2 million Americans are HIV-1 positive (see: http://www.medicinenet.com/script/main/art.asp?articlekey=145112), 5 million Americans are at least 2 months behind in their repayments months and over 1 million Americans are expected t lose their homes in 20011 (see: http://finance.yahoo.com/news/Over-1-million-Americans-seen-apf-19378625... ).

Warmonger, war maker and war criminal Barack "Mr 1%" Obama runs the US and much of the World for the American 1%. The Bush-Obama War on Terror, based on 9-11 (3,000 dead in an atrocity almost certainly due to the US Government; see "Experts: US did 9-11": https://sites.google.com/site/expertsusdid911/home ), has so far killed 200,000 Americans (plus 0.9 million people globally, including 12,000 British and 3,000 Australians) who have died opiate drug-related deaths due to US restoration of the Taliban-destroyed Afghan opium industry (see UN ODC World Drug Report).

Hugh Markey's picture

There are a lot of log-cabin billionaires out there. Placement such as Nixon and LBJ, OK they ended up with millions, are now being replaced by GENUINE billionaires. No need for an avatar to front for the wealthy MR Big.
The magnetic draw of the American Dream is still attracting Latin Americans by the million and these disaffected peoples will end the day of the billionaire president one way or another.
The example of Gaddafi is not that outrageous. Disillusioned people will do terrible things.

Wake Up!

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