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That was a pretty shocking statistic, but the truth is even worse (since the average wealth is skewed by the fortunes of the rich and may not give a good picture of how the average citizen is doing). A better statistic is median wealth -- the wealth of a citizen at the 50% mark (where half of the population does better and half the population does worse). And when median wealth is taken into consideration, Canada looks even better. The median wealth in Canada is $89,014, while the median wealth in the U.S. is only $52,752.
And the bad news doesn't stop there. As the top chart shows, there are at least 16 other countries with a higher median wealth than the United States, and in most of those countries the median wealth is quite a bit higher. How can this be? Did the recession hit the United States harder than it did other countries? No. The truth is that the United States had already begun to fall behind many other countries long before the recession hit.
The bottom chart can give us a big clue as to what is happening. As you can see, while the growth in income percentage among the richest 1% of citizens has remained fairly flat in most other countries, it has grown enormously in the United States. This means that while the incomes of the richest citizens in other countries grew, so did the incomes of workers in those countries (keeping the percentages of income constant since the rise in income was shared among all groups in society).
That did not happen in the United States. Thanks to the trickle-down economic policies instituted by the Republicans (and aided by too many blue dog Democrats), the richest 1% of Americans were able to hog most of the growth in income (instead of the growth in productivity being shared by all income groups). Over the last 30 years, the income of the richest 1% has grown by over 270%, while worker wages have grown very little (and have actually lost quite a bit in buying power).
This has resulted in a vast inequality of both wealth and income in the United States, and is primarily responsible for the dropping median wealth of its citizens. This must change, because the current path the U.S. is on will lead to a nation of a few rich people and a lot of poor people (with no middle class). America may still be the richest nation in the world, but most of those riches are going only to the already wealthy while very little "trickles down" to the rest of America. Is this really the kind of country we want?
You blame "trickle down ecomomics," and I certainly amd not going to defend that totally bogus theory in any way. It is, however, not at all that simple. I would refer you to an article by Robert Reich. He can be a bit of a nut at times, but this is something that he has precisely right. The US has misunderstood and mishandled the whole concept of globalization.
ReplyDeleteOther countries have mobilized their workforces to offer reasons for global corporations to bring jobs to that country, the US has not done so. There are plenty of countries, Germany and South Korea for instance, whose wage structure is equal to or higher to ours, and the US is still shipping jobs there. Those countries have infrastructure, human and physical, that we no longer have.
And even now we are not fucused on jobs, or on creating an environment which will create capital to attract jobs; we are focused on silliness like cutting spending, maintaining a vast defense, fighting terrorism, preventing abortion, who can or cannot marry whom...
I do agree that we have let our infrastructure crumble -- both physical and human. We have cut funding for education and refused to repair and rebuild our roads, bridges, ports, etc., but that is one aspect of the short-sightedness of trickle-down. It is centered on cutting taxes for the rich today, not planning for tomorrow. And the lack of job creation is also a part of it -- creating a large and desperate pool of workers, who will work for depressed wages. As for the huge spending on the military budget, that's just another way to funnel money to numerous corporations -- and has little to do with supporting the troops or making their lives easier.
ReplyDeleteThe rest (terrorism, abortion, gay marriage, etc) are just fear tactics to divert attention from trickle-down and its horrible effect on most of the population.