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September 12, 2013
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New research from inequality experts Thomas Piketty and Emmanuel Saez has revealed that we now have the biggest gap between the rich and rest of America since economists began tracking data a century ago.
This isn’t supposed to happen following an economic crisis. After the Great Depression, Roosevelt’s New Deal programs worked to prevent wealth from piling back up at the top. And over the past two decades, the percentage of income claimed by the wealthy dropped after each recession. But in the aftermath of the Great Recession, the top 1 percent has gobbled up nearly all of the income gains in the first three years of the “recovery" — a stupifying 95 percent. Economic inequality is even worse than it was before the crash. In fact, last year the rich took home the largest share of income since 1917 with the exception of only one year: 1928.
Is this an accident?
Let's take a look at the years from 2009 -2012. While working people were sweating it, the richest Americans have enjoyed a fabulous ride. For example, if you were in the top 1 percent in 2012, lucky you — your income soared on average by 20 percent . And if you were in the top 0.01 percent, you probably bought a bigger yacht because your income was up by more than 32 percent on average . As for everybody else? They shared a measly 1 percent rise.
In other words, the rich are getting richer, and the rest of us are frozen in economic purgatory.
For despite all the talk of the Federal Reserve’s “quantitative easing” driving soaring stock markets and a post-crisis economic boom, 99 percenters have seen their real incomes going down and their living standards depressed. Ordinary, hard-working people are not getting a slice of the pie, they're barely getting a sliver. (Cue Obama’s apparent pick for the next Federal Reserve chair, the crony capitalist, bank-loving Larry Summers.)
The bailouts, which handed boatloads of money to bankers, can’t be blamed entirely on President Obama. But ever since then, the policies of his administration have pretty much fixed things so that those who caused the crisis have benefited, while those who didn’t paid for it. He has surrounded himself with Wall Street apologists as economic advisors, despite the existence of extraordinary economic minds like Nobel laureate Joseph Stiglitz who could offer sound and sensible guidance. Every chance Obama has to correct this mistake, he seems to double down and brings on another 1 percenter.
To be fair, Republicans have been the most ardent promoters of “trickle-down” economics and austerity policies that leave regular people behind. But centrist Democrats have done little to forge a different path. A few courageous progressive voices, like Elizabeth Warren's, get drowned out by a chorus of “Let’s Make a Deal” politicians eager to screw the bulk of the population and reward the rich while filling their campaign coffers. Policies like cutting our social insurance programs and allowing the rich to evade taxes are hidden behind clever marketing campaigns: For hedge fund billionaire Pete Peterson, for example, who counts deficit committee co-chairs Alan Simpson and Erskine Bowles as his errand boys, the name of the game is “fixing the debt.”
What these plutocrats are really doing is fixing your financial future so that more money can be sucked out of your pockets to line theirs. Obama’s decision to focus on deficit reduction rather than job creation is the sure sign his administration sings the tune of the wealthy. The wealthy wanted deficit reduction, while the rest of us wanted investment in jobs, schools and infrastructure, as Northwestern University’s Benjamin Page and his team of social scientists have shown in their extensive research on public opinon. But we didn’t get it. Instead we got job insecurity and nightmare retirement prospects.
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