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The One Percent Are Literally Rich Beyond Measure
We already know that the top one percent of income earners [sic] are getting more and more money while things stall at the bottom. But even so, the sheer amount we think they have is probably an undercount because it's so hard to measure.
The wealth of the most well-off people is under-counted because they hide it in tax shelters, keep it in foundations and holding companies, and don't respond to questionnaires, according to a Bloomberg analysis of recent research. Economist Gabriel Zucman had initially estimated that the top 0.1 percent, who have at least $20 million in net wealth, held 21.5 percent of all wealth in the United States in 2012, but after estimating what is hidden in offshore tax havens, that number is more like 23.5 percent.
Survey data is also faulty because the sample sizes are so small. The Federal Reserve's Survey of Consumer Finances found that the one percent held 34 percent of wealth in 2010, but that's more like 35 to 37 percent, according to a new paper.
Given the under-counting of data, this likely means that findings that wealth inequality had been dropping are wrong. With preliminary adjustments, the Gini coefficient, a measure of income inequality, stayed basically the same over recent decades. "With a 'top heavy' adjustment, the decrease in inequality - present when we use all other adjustments - almost entirely dissipates," according to a paper Bloomberg cites from December.
(Score: 3, Insightful) by hottabasco on Sunday August 10 2014, @07:23AM
"Why should we be concerned that the most competent, oldest, and wealthiest have a number of orders of magnitude more wealth than the people who suck at personal finance"
1. "competent": is wealth is gained through competence - at anything other than being competent at fucking other people over. I am thinking of the bankers here, but they are not alone in that. And if its gained at the expense of fucking other people over, are we OK with that?
2. "people who suck at personal finance" I am sure that some people who are poor are in that position because they "suck at personal finance", but to lump all people who are poor in that category sucks.
(Score: 2) by khallow on Sunday August 10 2014, @10:18AM
The answer is "yes".
Is the world made unfair because a person in a coma doesn't make as much as a CEO of a major corporation? Income inequality isn't about people who have substantial wealth-destroying disabilities, but rather able-bodied people.
(Score: 1) by hottabasco on Sunday August 10 2014, @11:06AM
your answer to point 2. seems to have very little to do with the question.
(Score: 2) by khallow on Monday August 11 2014, @10:06AM
There was only one question in that post. I was responding to point 2, not answering the question. My view here is that sure, you can contrive a situation where someone is poor through no fault of their own, such as a severe medical condition, like being in a coma. And there are a number of people who fall in these sorts of scenarios to some degree. I wasn't originally intent on labeling the entire poor as incompetent, though I think it is for the most part true.
(Score: 2) by Phoenix666 on Monday August 11 2014, @02:29PM
I used to work in Mutual Funds/Equities 25 years ago. There was a big push on personal finance then, with Kiplinger's as the standard bearer. The marketing message, pushed by them and many others, was to live below your means and invest the difference; that, we were told, was the path to middle class financial security. That wave crested with the failure of George W. Bush to privatize Social Security.
But what we know now, and are still waking up to every day, is that personal finance, trimming costs and saving the difference, is no path to financial security when the .01% have rigged the game to the extent that they are siphoning trillions of dollars out of the economy with total impunity. Forbes magazine reported in 2012 that an estimated $33 trillion have been squirrelled away in the Caymans alone.
How can an economy function the way it's supposed to when the fruits of its productive labor force are taken and not reinvested in the people that created that wealth?
Washington DC delenda est.