Posts Tagged ‘Obama’

wealth

Everyone knows wealth in the United States is unequally distributed, even more than the nation’s income (and that’s saying something).

For example, according to a new report from the Congressional Budget Office [ht: ja],

In 2013, families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent. Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt.

But, wait, it gets worse. The distribution of wealth among the nation’s families was more unequal in 2013 than it was in 1989. For instance, the difference in wealth held by families at the 90th percentile and the wealth of those in the middle widened from $532,000 to $861,000 over the period (both in 2013 dollars). The share of wealth held by families in the top 10 percent of the wealth distribution increased from 67 percent to 76 percent, whereas the share of wealth held by families in the bottom half of the distribution declined from 3 percent to 1 percent.*

Yes, that’s right: in 2013, the bottom half of U.S. families held only 1 percent of the nation’s wealth.

wealth-percentiles

And it gets even worse: from 1989 to 2013, the average wealth of families in the bottom half of the distribution was less in 2013 than in 1989. It declined by 19 percent (in contrast to the 153-percent increase for families in the top 10 percent). And the average wealth of people in the bottom quarter was thousands of dollars less in 2013 than it was in 1989.**

poor wealth

So, let’s get this straight. The share of wealth going to the top 10 percent of households, already high, actually increased between 1989 and 2013. And the share held by the bottom 50 percent, already tiny, fell. And, finally, the average wealth for families in the bottom half of the distribution was less in 2013 than in 1989 and many more of them were in debt.

Now, to put things in perspective, the United States had Democratic presidents (Bill Clinton and Barack Obama) during thirteen of the twenty-four years when workers and the poor were being fleeced.

And now they’re being asked to vote for one more Democrat, with the same economic program, because it will “make history”?

 

*To be clear, a large portion of the decline in wealth for the bottom 50 percent occurred after the crash. Still, compared with families in the top half of the distribution, families in the bottom half experienced disproportionately slower growth in wealth between 1989 and 2007, and they had a disproportionately larger decline in wealth after the 2007-09 recession.

**In 1989, families at or below the 25th percentile were about $1,000 in debt. By 2013, they were about $13,000 in debt, on average. Overall indebtedness also increased during the same period: by 2013, 12 percent of families had more debt than assets, and they were, on average, $32,000 in debt.

cartoon-manning

Special mention

download 183442_600

Not so fast!

Posted: 18 August 2016 in Uncategorized
Tags: , , , ,

real wages-revised

Everyone has read or heard the story: the labor market has rebounded and workers, finally, are “getting a little bigger piece of the pie” (according to President Obama, back in June).

And that’s the way it looked—until the Bureau of Labor Statistics revised its data. What was originally reported as a 4.2 percent increase in the first quarter of 2016 now seems to be a 0.4 decline (a difference of 4.6 percentage points, in the wrong direction).

What’s more, real hourly compensation for the second quarter (in the nonfarm business sector) is down another 1.1 percent.

So, already in 2016, the decline in real wages has eaten up more than half the gain of 2.8 percent reported in 2015 (and after a mere 1.1 percent gain in 2014).

And, since 2009, real hourly wages have increased only 4 percent.

Workers may be getting a little bigger piece of the economic pie since the official end of the Great Recession but the emphasis should really be on “little.”

 

P.S. I’m not a conspiracy theorist by nature. And I don’t plan to start now. As far as I’m concerned, the revision in the real-wage data should not be understood as any kind of deliberate manipulation by the Bureau of Labor Statistics. But it does represent a cautionary tale about the precision of the numbers we use to understand what is going on in the U.S. economy—and about the willingness of some (like Paul Krugman) to dismiss workers’ anxiety about the state of the economy.

GIGEconomyAriailW

Special mention

183230 sbr080716dAPR

les_glaneuses_2419149

Special mention

182727_600 sw0724cd_590_356

Depositphotos_21212781_original

The game is rigged—and Americans damn well know it.

As Emily Blazon explains, the idea that the game is rigged has a long history in the United States.

In its current usage, “rigged” exposes a structure that is rotten to the core and lights a match to burn it down. Dating back to the 19th century, the word “rig” has meant “a trick, a scheme”; it also carries an association of expert hands setting up equipment or tinkering with machinery. To rig a fleet (or jury-­rig another conveyance) connotes competence and pluck. But the “rigging” Sanders and Trump have in mind involves a swindle, and it has been deployed in American politics at several points over the last century, including in the Great Depression. Calling for an inquiry into the stock market in The Washington Post in 1932, a Republican senator attributed its gyrations to “a rigged game of crooked gambling pools.” In the wake of Watergate in the 1970s, “rigged” appeared frequently in the press. Liberal leaders, some newly elected after the scandal, attacked not only Nixon but also campaign finance, the primary process and government agencies as being controlled by corporate and political elites.

Right now, as in the past, many Americans believe the game—in both politics and economics—is rigged.

RIgged02

According to a recent Reuters/Ipsos poll, about half of American voters believe that the system U.S. political parties use to pick their candidates for the White House is “rigged,” and more than two-thirds want to see the process changed

FT_16.02.10_econSystem_party

At the same time, according to a Pew Research Center poll, a substantial majority of Americans (65 percent) say the economic system in the United States “unfairly favors powerful interests.” Fewer than one third (31 percent) say the system “is generally fair to most Americans.”

And given the mutual influence of politics and economics—those at the top of the economy who have an inordinate influence on political issues and candidates, while the rules of the economic game are set and reinforced by political elites—it’s reasonable to conclude that the game as a whole is rigged.

President Obama demonstrated he was acutely aware of the problem in his 2016 State of the Union address:

democracy breaks down when the average person feels their voice doesn’t matter; that the system is rigged in favor of the rich or the powerful or some special interest.

And that’s why the rich, the powerful, and the special interests who benefit from the current system are spending so much time these days, as they have throughout the history of U.S. capitalism, trying to convince the rest of the people the game is not rigged.

Obama-SS

President Obama has finally come out in favor of expanding Social Security benefits:

It’s time we finally made Social Security more generous and increased its benefits so today’s retirees and future generations get the dignified retirement that they have earned.

Clearly, the ground has shifted—within the Democratic Party and, in particular, with Obama, who as late as 2012 was willing to cut Social Security (as part of an ill-fated attempt at “entitlement reform”).

As Daniel Marans, Arthur Delaney, and Ryan Grim explain, there were many progressive groups involved in fighting against attacks on Social Security—in the midst of Bowles-Simpson austerity fever and the progress made by Third Way advocates inside the Democratic Party—which then turned to expanding Social Security benefits.

Elizabeth Warren played an important role in shifting the discourse on Social Security.

So has the success of Bernie Sanders’s campaign for president.

Although the discourse on Social Security had been moving left for some time, it is impossible to ignore the role that the current presidential election cycle likely played in Obama’s timing.

The presidential race has been characterized by waves of economic populism in both major parties. Even presumptive Republican nominee Donald Trump claims he will not cut Social Security benefits.

On the Democratic side, Sanders has made his career-long devotion to Social Security a centerpiece of his campaign. The Vermont progressive touts legislationhe first introduced in March 2015 to enact an across-the-board expansion of benefits.

Hillary Clinton expressed support for targeted increases in Social Security benefits rather than across-the-board expansion. Sanders and progressive groups demanded she clarify that this included ruling out benefit cuts of any kind, since some bipartisan reform plans — including that of the Bowles-Simpson commission — couple major benefit cuts with modest increases for poor and vulnerable groups. . .

“Bernie has marshaled millions of people against cuts and for expansion and showed the power of those people in the Democratic Party,” said Neil Sroka, communications director of Democracy for America, another key progressive group in the Social Security fight.

poll-SS

At least on this issue, in the face of pressure from Warren and in response to the Sanders campaign, Obama and the rest of the Democratic Party have finally caught up with the overwhelming majority (85 percent) of Americans who (according to a recent Associated Press-NORC Center for Public Affairs Research poll [pdf]) believe protecting the future of Social Security is extremely or very important for the next administration.