Tuesday, January 25, 2005

Wealth Inequality

One of the perspectives I've been exploring is the concentration of wealth, which seems to be the natural pattern that can take credit for just about every bloody revolution in history except for those started on religious grounds, the unifying theme of both religion and wealth being currency of power.

One place to start is to examine the current state of wealth distribution. Are we in fact clinging onto the steep walls of wealth inequality? There are plenty of statistics that suggest we are, but in this case I think the information needs to be visualized to really get a feel for the magnitude of the situation. The following chart summarizes the overall wealth inequality in the US as of 1998. I found this chart on a webpage offering the basic statistics of wealth inequality. (income and wealth inequality) at World Revolution.


(Share of national wealth by percentage of population. - Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000 (Original graph by Devesh Kumar))


This chart makes the isolation of the top 1% who's average wealth is $10 million, blantantly obvious. According to the Federal Reserve, in 1990 the richest 1% of America owned 40 percent of the nation's wealth, which not only exceeds the level of inequality in all other developed nations but it's also the most drastic inequality in U.S. history since the eve of the Great Depression, which leads me to consider the next thing... the trend. Is our inequality static, or does it change? Is it getting better, or worse?

According World Revolution, in the fifteen years between 1983 and 1998, the bottom 40% of Americans saw their wealth drop by 76%. In the same time period, the richest 1% saw their wealth increase by 42%. Thomas Frank, in his book, One Market Under God, explains part of what caused this increase for the wealthy by describing the stock market as "the economic engine that has generally made the rich so very much richer than the rest of us, first through the bull market of the eighties, then through the bull market of the nineties." This is because, despite how widely dispersed stock ownership has become in recent years, the vast majority of shares are still held by the wealthy. Lester Thurow, a conservative professor of economics, admitted during the dotcom bust that in the last four years of bull market, a full 86% of the market's advances went to the wealthiest 10% of the population. Frank also describes the patterns that may explain the drop for the not-so-wealthy Americans. He points out that during the nineties, stock prices consistently rallied upon reports of decreasing wages, while reports of even marginal wage increases was enough to "send the Dow into terrible fits and faints." Unfortunately, the gleaming promise of stock ownership for the workers, which amounted to a small percentage of the 14% of the market left over from the top 10%, wasn't enough to offset the total loss of wages, which excluded many of them from the stock market anyway. So the boom of the nineties was about Wall Street, not Main Street.



(The average wealth of the bottom 40% of Americans $1,000.)

Indeed, The Levy Economics Institute concluded by the end of the 1990's that "economic growth and prosperity no longer dramatically reduce[s] economic inequality." Recognizing this, the institute continues to maintain an active research program on the distribution of earnings, income and wealth. Something else that this institute does is bring into question the condition of well-being, and really, this seems like a good thing to consider.

Does it really matter that people are getting filthy rich? After all, for many people, the top 1% represents the promise of hard work in America (we love rags to riches stories). There is also the non-zero-sum theory that is often used to excuse the wealthy from any liability based on the assumption that wealth can be accumulated without taking it away from others. There is even the perspective that the wealthy class is actually a source of income for the lower classes. Personally, I agree with these theories in principal but I don't see them as being mutually exclusive with potential threat that concentrated wealth has on the well-being of people in the lower percentiles, especially when you consider the relativity of differing levels of wealth. If your investor gains 10% from a deal, it's still a non-zero-sum deal, even if you gain as little as 1% for yourself, but if that 10% pulls inflation up by 5%, then your well-being can still suffer.

Finally, knowing that I am personally outside the bottom 40%, does it even matter to me that the lower 40% is getting poorer? For me it does for several reasons. First of all, I don't think poverty should be tolerated in this day and age. Secondly, poverty for a few people can cause instability for more people and finally, I worry about what happens if wealth continues to concentrate in the top 1%. Will that 40% eventually turn into 60%? At some point will I be outpaced by the gravity well of wealth? Will it happen to my children if not me? Will the trend lead to economic collapse and/or revolution? Maybe it's a fear of the unknown, but looking at the statistics and charts I can't help but think... "hmmm, not good". More Info:

Unequality
Levy Economic Institute
World Revolution
 

Friday, January 21, 2005

Bush vs Tyranny in the World

It's the day after Bush's second inauguration where he gave a message to America. He wants to rid the world of tyranny. Whoooooowhee! One thing's fer sure, he never disappoints us when it comes to tall orders. In his last term it was all about ridding the world of terrorism - remember that?

Of course tyranny and terrorism are two entirely different things, but they have both existed in some shape or form since the beginning of history and I can't think of a single period of time where either of them did not exist somewhere in the world. Perhaps that's because they are both unfortunate results of human nature. There will always be people abusing their power and there will always be people fighting against the odds and taking desperate measures. I hardly think that Bush, in his big white hat, is going to magically rid the world of tyranny or terrorism. Which reminds me, whatever happened to all that talk about terrorism anyway? Bush did not mention the word once in his second inaugural address. See, this is where I find it so hard to take his rhetoric seriously. One year he's talking big about the eradication of terrorism and the next year he's talking about ridding the world of tyranny.

I think it's fine to declare a crusade, I would love to see measures taken to keep people all across the globe safe from terrorism and tyranny, but I would like it better if it was coming from a president that understands that it means nothing to talk about moving mountains unless you can actually prove that you can at least move a rock.

Besides, it's hard for me to avoid the feeling that with Bush it's really all about his damned war in Iraq. He just can't sell that story about Saddamn Hussein being responsible for 9/11 anymore, so instead of talking about terrorism, he's going to switch the focus to tyranny.

Whatever.
 


Archives:




Noteworthy:

* Current Post
* Inside the Patriot Act
* Luminosity of a Future City
* Arctic Drilling
* Human Decline
* Wealth Inequality
* Bush Sells Our Forests
* Healthcare and Terrorism
* Chemical Assault
* The Cuban Medical Industry
* The Endless War
* Do the Rich Need Tax Breaks?
* A Collapse of Some Kind
* Guantanimo Bay

* About the Picture
* More Stuff...
* About Metaspective



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Oxfam
Fourth Freedom Forum
UNEP
Union of Concerned Scientists
Surfriders Foundation
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Books That I am Reading:


The World Is Flat
A Brief History of the Twenty-first Century

Thomas Friedman

In this book Thomas Friedman continues his exploration of globalization and how the playing feild is leveling out.

War on the Middle Class
How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back

Lou Dobbs

This book is pretty much a print version of his TV program. This is what I call good investigative journalism


Books That I've Read Lately:


Catcher in the Rye


J.D.Salinger

My daughter is an avid J.D.Salinger fan and turned me on to this book. I'm glad she did. I read the first half on one airplane trip and finished the next half on the return flight. Salinger's naration is wonderful, his vivid style reminds me of Steinbeck.

Crash Proof
How to Profit From the Coming Economic Collapse

Peter D. Schiff

I've been reading the writing on the wall for some time now about the comming economic collapse and this book is one of those messages. I highly recomend this book for anyone interested in an easy to understand explanation of what is causing the crises and basic strategy for how to weather the storm.

A Peoples History of the United States: 1492 - Present


Howard Zinn

This book seems to draw a lot of criticism from people who point out that Zinn fails to present the complete picture, but I think that's the point. Zinn is simply filling in the gaps intentionally left by "politically correct" historians and in so doing, he sheds light on some of the real American heros who continue the "politically incorrect" American Revolution to this day. These heros are not the celebrated leaders and soldiers of the American Establishment who took the reins of exploitation from the British Establishment but the working class people who continued to stand up to exploitation regardless of what banner they wave. It's these working class people who continue to fight for liberty and justice and it's these unsung heros that we need to thank for our way of life and we can thank Howard Zinn for pointing them out, especially now that patriotism has somehow come to mean loyalty to a flag rather than to a principal.

Paradox Of Choice: Why More Is Less


Barry Schwartz

An interesting counter-view to the ever-so-popular notion that our vast array of options improves our culture.

Why I Am A Reagan Conservative


Edited By: Michael K. Deaver

I'm reading this book because I don't consider myself to be conservative. I suppose this is because I've been focused for so long on issues around which conservatives hold positions that I disagree with. But recently I've been looking beyond these issues in search of what I might agree are valid conservative positions and it seems the more I look the less I find, which is alarming to me considering the influence that conservatives have over the policies that effect our lives. Hopefully this book will provide me with some insight.

The Ayn Rand Reader


Ayn Rand: Edited by Gary Hull

I know, I know... what is Ayn Rand doing on this booklist? Answer: I read from as many perspectives as possible. Being a free thinker, I refuse to submit myself to a reading diet. Besides, I want to understand what it is that Ayn Rand fans are raving about and what institutes like ARI are pushing into our education systems.

A Thousand Barrels a Second
The Coming Oil Breakpoint and the Challenges Facing an Energy Dependant World

Peter Tertzakian

I've been trying to understand as much as I can about the coming oil crises. The author is Chief Energy Economist of ARC Financial, one of the world's leading private equity firms focused on energy. As far as I can tell so far, his book isn't a crack on politics or doom and gloom but a straightforward analysis of the realities of energy that so many people are ignoring.

TechGnosis
Myth, Magic & Mysticism in the Age of Information

Erik Davis

I've actually been reading the hardback version of this book, on and off, for long time now. The problem I have with this book is it's depth. Davis presents so many interesting ideas and references that I wind up placing a book mark and taking excursions into related materials. It can take me days to digest what Davis is saying in one sentence. Eventually, I always come back to the book, drawn in my Davis' poetic language of intellect. This book represents a true frontier for my mind.

The Moon Is Down


John Steinbeck

Steinbeck is always an easy read for me. His characters and scenes are so vivid. But this book in particular has the added significance of having had an extraordinary impact as Allied propoganda in Nazi-occupied Europe. Despite Axis efforts to supress it (in Fascist Italy, mere possession of a copy of the book was punishable by death) hundreds of thousands of copies were secretly translated into numerous languages, printed on unnaccounted paper and smuggled across borders. This story, a triumph of ideas in the face of cold steel and brute force, offered hope for the "unconquered" people under foreign occupation and celebrated the unbreakable spirit of free people. I feel like I should be sending copies to Iraqis currently under US occupation, but that could easily be construed as an act of terrorism.

Confessions of an Economic Hitman


John Perkins

I've been able to put two and two together for some time, so nothing in this book astounds me but it does bring the workings of the international banks and corporations as well as the US government out of the speculations of so-called conspiracy theories and into the matter-of-fact narration of one man's career path as an economic hitman.

Collapse:
How Societies Choose To Fail Or Succeed
Jared Diamond

Facinating book. Jared Diamond's name is what caught my attention as I was killing time at the bookstore at the airport. I was very impressed with his documentary "Guns, Germs and Steel" and figured he would make this study of societal destinies equally interesting. I was 100% correct. I especially enjoyed the chapters on the collapse of the Polynesian societies, realizing the scale-relativity with the evolution of our global society.

Brave New World

Aldous Huxley

Of course... the third book in my dystopian trilogy.

The United States of Europe:
The New Superpower and the End of American Supremacy
T.R.Reid

An excellent perspective on the power that's rising in Europe as we Americans continue to sleep with visions of our own glory in our heads.

Imperial Ambitions:
Conversations with Noam Chomsky on the Post-9/11 World
Noam Chomsky, David Barsamian

As always, Professor Chomsky presents that calm and collected voice of logic that cuts through all the noisy rhetoric, half-truths, corporate funded media hype and emotionally driven spin sessions. Barsamian's interviews with Chomsky are clear, crisp and sober conversations.

Farenheit 451
Ray Bradbury

Figured I'd continue my journey through "negative-utopia" that I started with 1984. It does seem appropriate given the current state of America from which I found much more connection with Bradbury's vision than I did with Orwell's, especially the way in which the real source of oppression is not the government but the people themselves.

Cuba
A New History

Richard Gott

Just a straight forward history book, but Cuba has a facinating history that reaches back to the days of Columbus and offers everything from pirates to revolutions.

1984
George Orwell

It seemed like a good idea to refresh my memory of a mid-century perspective on where the world is headed. Although I found some relief in knowing that we have not followed the Stalinesque course to the letter, I nevertheless found much of Orwell's larger concepts ringing ever so true in 21st Century America, especially Orwell's concept of continuous war and Big Brother.

The Best Democracy Money Can Buy
Greg Palast

Easy read... Palast is a circus ring master showing us unbelievable things. Penetrating investigation with a sense of humor.

One Market Under God
Extreme Capitalism, Market Populism, and the End of Economic Democracy

Thomas Frank

After reading the Lexus and the Olive Tree, I felt I needed a counter-balance view of globalization and how the liberated capitalism that I see everywhere around me, breaking the chains of regulation, is riding the globalization wave.

20:21 Vision
Twentieth-Century Lessons for the Twenty-First Century

Bill Emmott

The author, Economist cheif editor, tends to present very objective and slightly outside views of American economics/politics. I think this renders a more accurate assesment of how we fit in with the rest of the world. The book is a tour of the major forces of the 20th century with emphasis on how they are currently shaping the 21st century.

The Lexus and the Olive Tree


Thomas Freidman

Damned good book! Really opened up my eyes to what globalization is all about. Freidman's style of writing is engaging and his explainations are straightforward. I can see why people regard this book as the essential primer on the subject. I can also see why people think he is "pro-globalization" but I tend to think he's not so much promoting it as just pointing out the inevitability of it. I highly recommend this book to anyone interested in understanding globalization.

The Gnostic Gospels


Elain Pagles

I thought it was good. Explains a lot about the gnostic strain of Christain faith.

Consilience


Edward O. Wilson

Facinating. From the moment he starts decribing the Ionian enchantment on the first pages. This book describes the interrelation of seperate bodies of knowledge and how it all comes together.

The History of Money


Jack Weatherford

Human culture is possessed and these are some involving stories about the demon we call money.

Other material of interest:

Origins of the Federal Reserve (PDF) - Murray N. Rothbard

Excellent account of the monetary imperialism that led to the creation of the Federal Reserve.

The Elkhorn Manifesto
R. William Davis

This is an open letter to Americans that provides a historical perspective on the U.S. government's prohibition of Marijuana. Without stating any position on that particular issue, I have nevertheless saved a copy of the letter here because of what I think are some valueable and verifiable references to to what I call the "corporate priority over the better interests of the nation".