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Only 1% of World's Population Grabbed 82% of all 2017 Wealth

posted by martyb on Saturday January 27 2018, @12:43PM   
from the I-got-mine!-And-Yours.-And-Yours.-Annnnnd-yours,-too. dept.

canopic jug writes:

The 1% grabbed 82% of all wealth created in 2017

More than $8 of every $10 of wealth created last year went to the richest 1%.

That's according to a new report from Oxfam International, which estimates that the bottom 50% of the world's population saw no increase in wealth.

Oxfam says the trend shows that the global economy is skewed in favor of the rich, rewarding wealth instead of work.

"The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system," said Winnie Byanyima, executive director of Oxfam International.

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Original Submission

• Re:Yes and no Re:Yes and no (Score: 0) by Anonymous Coward on Saturday January 27 2018, @02:23PM (1 child)

  by Anonymous Coward on Saturday January 27 2018, @02:23PM (#628863)

  those governments are a big source of such bubbles. I guess the dotcom and real estate bubbles of the past two decades are a bit ancient for you to remember.

  ??? [adamsmith.org]

  Parent

• Re:Yes and no (Score: 1) by khallow on Saturday January 27 2018, @05:10PM

  by khallow (3766) on Saturday January 27 2018, @05:10PM (#628960) Journal

  The obvious rebuttal to that is when has a bubble turned out different? There are things like superexponential growth, risk insensitivity, etc that are classic signs of a bubble and the bubble need not be in a material good. Notice the peculiar claim that supposedly makes Tulipmania not a bubble:

  1. Tulip speculation used futures contracts, which were illegal. The threat of being excluded from trading was sufficient to get people to pay for small losses, but buyers of futures contracts could and did default on large losses, with backing by the courts.
  
  2. Buyers paid only one-twentieth of each contract price up to a maximum of 3 guilders.
  
  3. The main evidence for a bubble in the classic stories consists of very high prices paid for specific rare bulbs in the winter of 1637, prices hundreds or thousands of times higher than prices for those bulbs years or decades later. (There are no price data immediately after the crash.) Garber documents that other rare tulip varieties continued to command high prices long after the mania, even to the present day, and that "bulb prices decline fast: it is their nature." The first bulb captures the present value of its offspring. Prices then decline rapidly as the supply expands, and newer varieties still are introduced.
  
  4. There was a fundamental shock: "In France, it became fashionable for women to array quantities of fresh tulips at the tops of their gowns. Wealthy men competed to present the most exotic flowers to eligible women, thereby driving up the demand for rare flowers. Munting (1696, 911) claims that at the time of the speculation a single flower of a particular broken tulip was sold for 1000 guilders in Paris. This was a final demand price for a consumption good and not the [speculative] asset price of the bulb."
  
  5. The myth tells of a large inflow of foreign money, lending to speculate in tulips, and economic distress after the crash. There is no evidence for these parts of the story, especially (and most importantly) the last. Shares in the Dutch East India Company rose from 229 in March 1636 to 412 in 1639.

  So first, we have use of future contracts, high leverage, high prices, and a triggering shock (surge in popularity), classic ingredients of a bubble (the actual paper [chicagobooth.edu] then goes on to mention gambling in the pubs as well - widespread involvement by a clueless public is another warning sign) Yet it can't be a bubble because? Apparently, because the financial information is no longer there to show exactly what happened. Classic argument from ignorance.
  
  Then we see that the blogger claims the dotcom bubble and the real estate crisis weren't bubbles because of some pretty lame reasoning (from an earlier post [adamsmith.org]):

  Has not the second wave of cyber firm success (Facebook, Google, arguably Apple) been even more impressive than the first wave? It may well be only 25% or 10% likely that Uber turns out to be one of these behemoth firms, through network effects, first mover advantages, name-recognition or whatever—but even if the chance is small the potential rewards are huge.

  The problem with that assertion is that it was quite clear beforehand that most of the junk in the dotcom stocks didn't have the potential to become the next Microsoft. Similarly, he rationalizes the real estate crisis away:

  These charts show [actually they didn't show] that housing construction was actually well below historical levels in the 1990s and 2000s, both in absolute terms and relative to population. It is difficult to see how someone could claim that the 2008 bust was caused by too many resources flowing toward housing and subsequently needing time to reallocate if there was no bubble in housing to begin with.

  But looking at the actual charts shows that mid 2000s real estate was higher than earlier in the 2000s and the 1990s, just as one would expect from oversupply followed by a sharp drop during the recession that followed in 2008. Further, these figures don't show what the blogger wants them to show. A better figure is the home ownership [wikipedia.org] rate. For the link which shows the US rate, this peaked in mid 2000s with a decline starting around the beginning of 2007 with a large 4% drop from that time (69% peak home ownership rate to 65% today).

  Parent