It's becoming a world of superrich, and everyone else
A video lecture offers many interesting insights into a rapidly growing income gap that's now a global phenomenon.
If you have a spare 15 minutes or so and want some interesting insights into what's behind the growing income gap between the rich and the middle class, you might want to watch a video that's been making the rounds across the blogosphere.
Freeland discusses how the emergence of a new class of plutocrats -- people whose extreme wealth lets them dominate governments and societies -- has become a phenomenon not only in the West but in China, Russia, India and even in "cozy social democracies like Sweden, Finland and Germany."
"In the 1970s, the (top) 1% accounted for about 10% of the national income in the United States," she tells her audience. "Today their share has more than doubled, to above 20%." But what's even more striking, she says, is how the top 0.1% now accounts for more than 8% of the nation's income.
One factor behind these changes, Freeland says, is political: Lower taxes, deregulation, privatization and weaker legal protections help push more income to the very top of the economic totem pole. This "crony capitalism," she says, may benefit well-connected insiders but doesn't help the greater society.
She cites two other issues that are fueling income inequality: the technology revolution and globalization. A person with an innovative idea, she says, now has access to a global consumer market of billions. As a result, "if you are very, very smart and very, very lucky, you can get very, very rich very, very quickly." Freeland points as an example to David Karp, the 26-year old founder of Tumblr, who recently sold his company to Yahoo (YHOO) for $1.1 billion.
This class of superrich isn't just made up of just tech superstars who can take their skills and ideas to the highest bidders, she says. It also includes a pantheon of superstar bankers, lawyers, architects, cooks and even people like Bernard Toutati -- dentist to celebrities, Russian oligarchs, sports stars and very well-heeled captains of industry.
A major downside of all this is how the middle class has lost its financial footing in the West as new technologies and globalization quickly make once-solid industries obsolete but haven't replaced them with enough new jobs. "When was the last time you used a travel agent?" she asks.
Freeland admits that "there's no economic rule that translates economic growth into widely shared prosperity." But she fears society is ending up as a place "in which a few geniuses invent Google (GOOG), and the rest of us are employed giving them massages."
There's a bright side to all this, she says, in that "we are living through an era of economic evolution comparable in scale to the Industrial Revolution." And as happened during the Industrial Revolution, Freeland says, we'll witness transformational changes to society that make the new economy work for everyone -- and not just the superrich.
As the article states, the super rich own the Government. Almost all Govt decisions, benefit the super wealthy. The only time the Government is interested in the middle class, when it is time to vote, for candidate A, that supports the wealthy, or candidate B, that also supports the wealthy.
There is only one way that this will end, when Americans finally say enough is enough, and take matters into there own hands.
Be smart with your purchases and get only what you really need until you are out of debt.
". . . we'll witness transformational changes to society that make the new economy work for everyone -- and not just the superrich."
Hate to bust yer rose-tinted bubble, but your successful outcomes may well include a global slavery on a global plantation. Pray you and yours wind up in "the big house" and not "the fields."
No we won't. That is just a dream.
Thank you, all those global governments giving the super rich more "toys" (money) to collect and play with. Collecting money the world over and watching the "less fortunate" scramble for the crumbs. The future is clear and it looks a lot like the past. Soon your "royalty" will rule over you and make all of you (if they haven't already) their economic slaves to toil away your pitiful lives for crusts of bread.
That's what happens when you play monopoly..... and you aren't one of the winners.
Lack of regulation is not the source of cronyism, but the opposite, creating regulations with loopholes for your friends is the source of cronyism.
Over regulation to the point of confusion let political favors go by unnoticed. Simple/stupid is the best.
Before many turn this into a Red vs Blue debate, please keep in mind this problem is not just an "American" trend, it is global.
Sure, here in America, we can keep our American rich under control if we had the stamina and fortitude (and ousted lobbyists), but then that won't stop the rest of the worlds super rich from ruling the game.
Once upon a time, being middle class meant owning a home to raise your kids while you drive off in your car from your one income earner household, looking forward to your vacation and finally your pension to retire with when you hit 65, after sending your kids to college.
Now it's a two earner family with maybe one child living in a rented appartment / condo having no vacation (because you're working while on it), no pension, hoping that So-So Security still be there when you're over 67 and beyond.
You and your child can't afford college and your progeny will be subjected to a life even more limited with a job that doesn't even pay a living wage and has to be on public support to survive living with you into their 30's and beyond with no hope of starting a family, or getting married.
Ahhh, the American Dream.....
And here more sad news - The manufacturing jobs that government pay for them to come back end up employing robots than create jobs. More benefit to the riches again.
Republicans are still waiting for a dribble down theory to ever work! Austerity lost jobs in every country that agreed with the righties! How can anyone of mediocre intelligence ever come to the conclusion that cutting taxes, by killing jobs, will ever pay down government debt?
The rich get richer, and they take the money to the Caymans. The profits are not recirculated within the towns where the profits are made, so taxes can cover government investments? How can our communities ever grow, when there is no money recirculated in, except by low wage jobs? Isn't this how ghettos are created? No investment into communities kills the communities! This is what the "righties" promote! Republicans promote less government and less investment into communities, killing twice as many cities!
you got it right.... the rich are generally very smart. Note: When "Joe Six Pack" inherits or wins a lot of money; it's all gone in three years... same with "Super Jocks" and most overnight Media Stars. Many rich start out with nothing and build empires selling "Stuff" to the so called "Poor" who are infatuated with sports. movies, gadgets, and kicking back.
The great equalizer is that the "Poor" are probably more happy.. :)
"Freeland admits that "there's no economic rule (government) that translates economic growth into widely shared prosperity" Of course this is a correct, and obvious, but idiotic statement.
The concept of "shared prosperity" necessitates government regulated mandates, confiscation of private property, and loss of individual freedom.
The only thing America had going for it, that other economies and governments didn't have, is the constitution of the United States, which grants individual freedom and limits the powers and reach of government. And now our out-of-control government is is in the midst of taking away those basic rights, with the unreachable goal and promise of "shared prosperity".
Pay no attention to that man behind the curtain, for I am the great and powerful Oz.......
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