Economic inequality in America: how bad is it?

Real bad. On PBS NewsHour last night, correspondent Paul Solman went to the line outside the Letterman show in NYC and showed people three different pie charts representing the possible distribution of wealth in three different countries. Most people figured the most equal of those was the US. It wasn’t. The US was the most unequal: the top 20% own 84% of the wealth in America, and the bottom 40% have only 0.3%. Land of the increasingly screwed, more like it.

Watch video here (or at YouTube) download MP3 here.

(thanks, Patti Parson)


  1. The only reason most Americans put up with the status quo is that they have no idea what their status really is.

    1. Or maybe they actually go outside and observe their surroundings to come to their own conclusions. Before speaking for most americans I would suggest talking to a few more americans, especially the ones you don’t agree with. 

      1. Or maybe they actually go outside and observe their surroundings to come to their own conclusions. Before speaking for most americans I would suggest talking to a few more americans, especially the ones you don’t agree with.

        I’m not speaking for other Americans, they spoke for themselves in this study. What they said revealed that they have very little idea of how big this disparity really is, in part because most Americans do develop their view of reality by observing their surroundings. If the balance of your checking account has less than nine zeroes in it, odds are “your surroundings” don’t include the people who actually control most of the country’s wealth.

        1. No all the study shows in the study participants didn’t find the pie chart matched their experience. Most Americans did not take the study. 
          Yea I know don’t look at the man behind the curtain. But really who cares if Joe down the street has more stock options than I do? If I take his money what would I do with it? How is that any different that letting Joe spend it? If I have enough do I really need Joe’s money? Tell me what you would do with Joe’s money that would make this world a better place. 

          1. …the study participants didn’t find the pie chart matched their experience.

            Wrong. The pie chart represented the experience of all Americans, it just didn’t match their perception.

          2. I have nothing to add that you haven’t already said, and said both rationally and evenhandedly throughout this discussion.

            Hat tip.

  2. The gap is not the issue. The issue is how many poor people there are. I don’t begrudge the rich people their wealth, I just want the poor to be better off.
    Watch the beginning of this video:

    1. It’s not just a “wealth” gap, it’s a power gap. If a trust fund baby can accumulate as much power to pass laws, influence markets, dictate media coverage, elect representatives etc. as a million of his contemporaries then the whole idea of a democratic republic becomes a farce.

  3. Surely Freedonia is a mathematically impossibility. If the top 20% of the population has the same level of wealth as each of the other fifths then the average dollars per capita in each fifth will be exactly the same, i.e. it would be impossible to sort them in to top to bottom in terms of wealth as they’d all have exactly the same.

    1. It’s not a mathematical impossibility – it just means that the sorting is at most arbitrary (equally valid no matter how you sort), or at least so slight that the diferences are obscured by only showing two significant figures (e.g. the top quintile might control 20.08% of the wealth, and the bottom only 19.88%).

      In the latter case, people can be wealthier than one another, but it everyone is so close that if you left a generous tip at breakfast, you might go down a quintile or two, and your waiter up a quintile or two.

      1. I think that it would be much more straightforward to assume that there are fewer people in the higher brackets than in the lower.

  4. What does it mean for those wealthy people to hold that wealth though, from a standard of living point of view?

    Obviously many wealthy people have very high standards of living, but the fact that they have control over vast amounts of value doesn’t mean they have it *all* walled up in a secret compound somewhere. There are a relatively few people who control the wealth represented by, say, Apple, but I am certainly able to benefit from what that wealth does.

    This isn’t to say that I couldn’t also benefit (possibly more) in other ways if wealth were distributed in less clumpy ways, but I’m not sure that people really get what it means for it to be distributed this way.

    There was a study i read about recently (maybe through boing boing) that observed that even if you completely exclude skill in investing, random chance favors accumulation of wealth. It would be interesting to build a tax system that is progressive in such a way that this factor in accumulation is balanced, so that accumulation of wealth becomes much more balanced toward those who continue to be successful, and less toward those who have been successful in the past.

  5. The other two choices were imaginary, though.  How does the US compare to wealth distribution in other countries?  And what is the standard of living like for each group?  Is our bottom 20% worse or better off than their bottom 20% / etc.

    Just saying “it’s skewed” isn’t communicating whether or not the bulk of the population still has clean water, good food, secure shelter, the resources to seek fulfillment, etc.

    1. Only the first one was fictional, and naturally so.  The middle option represented Sweden’s distribution of wealth.

  6. So if I read the charts right, the second wealthiest quintile of Americans controls as much of the US’s wealth as the very poorest quintile of Swedes controls of Sweden’s wealth – because that’s basically all the wealth left in the US economy after accounting for the top quintile.

    That is mindboggling.

    @dculberson – Sweden is imaginary? I could swear I went there.

  7. The country’s taxes must be fixed
    And I know what to do with it!
    If you think you’re paying too much now
    Just wait till I get through with it!

    1. “wylkyn: Warren Buffet proposed (e.g in Int’l Herald Tribune last Monday) to maintain tax rates for 99.7% of the population- even reduce them a bit.  Then raise taxes on millionaires and raise them higher on billionaires – so that they are paying about the same proportion of their income in tax as the rest of the country. 

    1. So you are telling us that people just don’t know how bad they have it. Good thing you keep drumming it into their heads.

      The fact that most people aren’t aware of this disparity is a symptom of the disparity itself. If an über-rich media mogul like Rupert Murdoch thought this was an issue most people should be aware of then it would be common knowledge by now.

      Drumming this into people’s heads is exactly what we need to get a real shot at change. If most voters understood the extent of this disparity then we might see some real blowback against legislators who oppose tax hikes for the wealthy.

  8. In some ways, I think the chart would be better if it simply talked about the top 5% (and everyone else). It’s not the top 20% hoarding all that equally among themselves, IIRC. The insanity comes from It’s the gap between the uberly super wealthy (top 1-2%) and everyone else.

  9. Silly, silly people. Don’t you know? humans are made from internalized culture and social structure.
    Environmental programming, if you will. And who makes culture, who makes the social structures that order our lives? very, very wealthy people do.
    Duh. So of course most people are unaware of the true situation.

  10. We hear about this time and time again. My question is this: what in the crap is to be done about this? Or, is it already too late?

  11. 1. they still have news on teevee?

    2. why did the woman anchor turn into a man 1:30 in to the clip?

    3. good to see two Harvard profs have an opinion on this issue, because they so rarely get heard, and there aren’t really any academics – like maybe Joseph Stiglitz or Paul Krugman – outside of Harvard who would have anything interesting to say on this, and it’s not like Harvard academics like Larry Summers or John Campbell have had anything to do with causing the problem in the first place, or anything like that. 

    1. To your 3, academics are shunned for speaking out, and just as in medicine are called “quacks”. Anyone who points out what is really going on in America is seen as “communist”, “anti-American” or just crazy. Also many University academics would lose tenure for saying anything other than their nice testing scores. Thankfully our good schools still encourage critical thinking, (Such as Harvard, MIT) sadly this is diminishing though.

  12. I hope PBS keeps running with this story.

    I agree with some of the early comments that the “entitlement culture” encompasses much much more then those of us stuck at the bottom.The rest of America bailed the rich out out after all, and those entitled blowhards still won’t take ownership of their own problems. Give me a break.     

    1. Oh Dear Lawd, I agree with Goblin.  What’s the world come to?  Maybe American Spring is coming….

  13. My apologies, Sweden is of course a real place, except it’s too awesome to be real.  [actually, I just glazed over after seeing “freedonia.”  Sorry.]

  14. This is based on this paper [] that might answer some of the questions above. The premise is, if you were to dropped into a society at any level, how would you want wealth to be distributed, so that there was sufficient incentive to work hard but that those at the bottom, for whatever reason, were not living in squalor. The results showed most Americans think they live in a more equal society than they do and that their ideal distribution looks like Sweden. 

  15. The fact that the top X% have Y% of the wealth while the bottom Z% have a small fraction of that is not evidence of anyone being screwed. How big is the pie, and how much has the size changed over time? Who is in the bottom/top quantile-of-choice? And how much quantile mobility is there? A goodly number of the folks in the bottom are from other countries in which wealth and the standard of living are much, much worse.

    1. A goodly number of the folks in the bottom are from other countries in which wealth and the standard of living are much, much worse.

      Oh, it’s just immigrants and minorities getting f***ed over? I guess that’s OK then. They’re already used to it, after all.

    2. Valid questions.  For one thing, when adjusting for inflation, the middle class’ income has actually declined over the last 30 years.

    3. I’m sorry: if the top 20% of the population own 84% of the wealth and the bottom own  0 .3%, I think changes over time, quintile mobility, country of birth – they pale into insignificance in the face of such blatant inequality. The survey shows that most American agree. And where there is money goes power and where there is disparity of power, the little guy is getting screwed.  Perhaps you didn’t see the tape the whole way through? I found Richard Freeman, at about 9 minutes in, particularly interesting on this issue. 

  16. It would be interesting to compare this to the wealth gap in France right before the revolution of 1789.

  17. an analysis of the effect of the concentration of wealth:

    Looking for mechanisms (like tax, salary caps, etc…  there are “big government” and “small government” approaches that are equally valid) to address this problem isn’t class warfare- it’s optimizing the efficiency of society.  Or, if it must be perceived as class warfare, then it needs to be acknowledged that any transition from the status quo is indicative of class warfare.  For the last 20 years we have been rapidly transitioning to a state where the wealth is concentrated on a very few.  If taxing the rich is class warfare- it is a defensive act in response to a class war campaign by the rich against the poor for the last 20 years.

    1. Oh! The Equality Trust are brilliant. I was about to bring them up. It’s worth mentioning they have recent publications which show how violence is greater in less equal societies
      From the article:

      The relationship between inequality and homicide has been found in
      many di erent settings|among developed and developing countries,
      both between and within countries. Relationships between inequality
      and violence are stronger when comparing whole societies and tend to
      be weaker when looking at small areas [1].
       Several studies have found that small reductions in income inequality
      cause large reductions in homicide.
       Inequality a ects homicide, whereas a society’s average income level
      does not.
       The relationship between inequality and homicide seems to be part of
      a more general divisive e ect of inequality which weakens the social
       Almost two-thirds of the higher homicide rates in southern (as com-
      pared to northern) states of the United States are attributable to their
      greater income inequality. There are lower rates of homicide in the
      Canadian provinces than in the states of the USA as a result of their
      smaller income di erences [2]

      and how income inequality has changed over the last 50 years or so:

      from the article:

       UK income inequality increased by 32% between 1960 and 2005. Dur-
      ing the same period, it increased by 23% in the USA, and in Sweden
      decreased by 12%.
       In the 1960s Sweden and the UK had similar levels of income inequal-
      ity. By 2005 the gap between the two had increased by 28%.
       Since the 1980s income inequality in the United States and the UK
      has increased substantially and has returned to levels not seen since
      the 1920s.
       The growth in inequality in the last 30 years has been driven by the
      top 1% of wage incomes.
       Inequality measures drawn from standard household surveys underes-
      timate income inequality by as much as 10 percentage points, due to
      the under-representation of the top 1% of incomes.
       There is scope for governments to tackle inequality. Large income
      inequalities are not inevitable; Sweden owes its high levels of equality
      to policies introduced since the 50s.

      I think it’s worth recommending that people have a look at figure 3 on the trends and measures paper. It floored me first time I saw it.

      Edit 18/08/11 @ 12:46 BST: Fixed Broken Link and added some more stuff.

  18. Everyone should study and pass along these fantastic charts from Mother Jones:

    It’s the Inequality, Stupid

    Step One: Surrender the myth that America is a democratic nation with equal justice and opportunity for all. Only then can we begin to extricate ourselves from this evil system that seizes assets from the majority and redistributes wealth upwards towards the tiny sliver of the superrich at the top.

    1. I remember seeing those charts discussed.  At the time, a number of people mentioned an “80/20 rule” as meaning the inequalities are inevitable rather than concerning.  Here, though, the chart for Sweden makes it perfectly clear just how much lower levels are possible.

    2. Everyone should study and pass along these fantastic charts from Mother Jones

      Will do!  Thanks for that link!

  19. Here is something to chew on.  Sorry for the length but I think it’s very instructive.
    Everything below quoted from this article:'s_wealth_–_what's_it_going_to_take_to_get_it_back
    As mentioned before, just look at the first full year
    of the crisis when workers lost an average of 25 percent off their 401k. During
    the same time period, the wealth of the 400 richest Americans increased by $30
    billion, bringing their total combined wealth to $1.57 trillion, which is more
    than the combined net worth of 50% of the US population. Just to make this
    point clear, 400 people have more wealth than 155 million people combined.
    Meanwhile, 2009 was a record-breaking year for Wall
    Street bonuses, as firms issued $150 billion
    to their executives. 100% of these bonuses are a direct result of our tax
    dollars, so if we used this money to create jobs, instead of giving them to a
    handful of top executives, we could have paid an annual salary of $30,000 to 5
    million people.

    So while US workers are now working more hours and have
    become dramatically more productive and profitable, our pay is actually
    declining and all the dramatic increases in wealth are going straight into the
    pockets of the Economic Elite.

    If our income had kept pace with compensation
    distribution rates established in the early 1970s, we would all be making at
    least three times as much as we are currently making. How different would your
    life be if you were making $120,000 a year, instead of $40,000?

  20. At this point and time, there is absolutely no denying that income — and, more importantly, wealth — inequality in America is a HUGE issue. Major. Gigantic. Historic.

    The top simply has so much of both that the American Dream has become the American Myth because it simply isn’t true any more. It’s damn near impossible to improve one’s economic position without an insane amount of luck — heck, even for a group like, say, top athletes, luck is one of the most important factors (e.g., not getting a freak injury, being drafted by a team that helps develop skills, etc.).

    For everyone else, all they can do is work hard, perhaps get lucky enough to raise their income by a couple percentage points a year, pray to whatever god or gods they believe in that they’re not cast aside for a cheaper worker as soon as the company’s quarterly profit-and-loss statement isn’t impressive enough to get the CEO his or her huge bonus, and maybe — just maybe — they’ll wind up … well, dead even after the increase in the costs of stuff like health care, food, and energy are factored into the equation.

    So …because only the willfully ignorant and/or blindly ideological can deny that the problem exists, the question becomes: How do we best solve it?

    IMHO, the loss of worker advocacy* is the biggest culprit, along with tax laws that allow those at the top to skirt the rates the rest of us have to pay. *There’s a reason, after all, that CEOs have been paid in stock options more and more since the 1980s — and it has nothing at all to do with company performance.)

    So treat ALL income as, well, income and tax it accordingly, raise top rates back to where they were under St. Ronnie Reagan, and change labor laws to favor labor over companies (e.g., allowing for more collective bargaining), and we’d be on our way to fixing the fiscal disaster we currently face.

    (* Note the use of “worker advocacy” rather than “unions.” Sadly, since unions are run by people, they have historically found themselves in the same position as the corporations they went up against: greed by those running things. But by allowing workers to bargain as a whole, but without the entrenched leadership structure of a union, some of that could be mitigated. Of course, this only applies in the U.S., where “union” has, sadly, become a bad word. In other nations, unions are simply necessary to protect the workers, and any negative aspects are outweighed by the benefits. Again, all IMHO.)

    P.S. Sorry for the thesis, but this issue is one of the ones I hammer relentlessly, and will until things get fixed.

    1. what’s wrong with that guy’s face?

      Professor Ariely was badly burned in an explosion as a teen. That the program would choose to interview him based on his expertise in the field rather than how photogenic he was is one of the giveaways that it aired on PBS instead of one of the cable news networks. (The other giveaway is that they covered this story at all.)

      1. Very well said, Brainspore.  This is probably one of the best comment threads in the history of boing boing and people like you are really helping.

  21. The even bigger issue is that the wealth gap continues to grow and the rate of growth continues to accelerate. Our society has become fundamentally unequal and that inequality is self-perpetuating.

    It’s very easy to see where the central cause is if you look at the data:
    Starting approximately 35 years ago the wealth generated by improvements in worker productivity became increasingly captured by the wealthiest people. Instead of worker productivity producing higher incomes for workers it began producing ever higher incomes for the owners of businesses. Effectively, our society has been restructured in a way that the economic gains generated from work are largely siphoned away from the actual workers.
    Generally the majority of additional wealth generated from increases in worker productivity have been siphoned away and whatever remained produced higher incomes for workers. This is how we grew a middle class, the rich grew richer while the poor grew relatively less poor.
    Our society is now in a situation where working produces ever greater wealth with ever declining reward for the workers, the rich grow richer while everyone else grows poor.

    Logically, the solution is to redirect the flow of wealth from the wealthy before their distortion of the economy produces a collapse of our society. Realistically, the solution is impossible because the wealthy rule our society and will only continue to aggregate more power, they will not voluntarily decrease the rate at which they capture generated wealth.

  22. If you want something slightly more mathematically sophisticated than a pie chart showing quintiles, read up on the Gini coefficient:
    The graph of how income disparity has changed over time is fascinating. The US has a Gini coefficient almost identical to China’s, with countries like Brazil and Mexico being much worse (although Mexico is clearly headed in the right direction, while the US and China are headed in the wrong direction). Meanwhile all the civilized countried of the world are way down at the bottom of the chart.

  23. I would point squarely at money itself as the problem, we’ve fooled ourselves as a culture into believing that money is itself a resource when in fact it is (at best) an abstract representation.

  24. Part of the denial comes from the fact that you NEVER see the faces of poverty aside from the accepted stereotype, the lazy/dumpy/unintelligent bozo with nothing to offer society. The stories that are ubiquitous are those of the wealthy.

    Even the poor don’t want to hear about the poor, as evidenced by popular culture and media. Just about every TV show or movie features wealthy people. Even movies about ‘average people’ don’t show average people. Just take any film about some single young female: She inevitably lives in a 1 million dollars apartment or cool studio and shops at cute frilly boutiques while her most pressing concern in life is romance. Not exactly the plight of the *average* young working class person. If you want to see characters in normal working-class digs and clothing, you better rent a foreign movie.

    The only other story about poor people allowed is the ‘from rags to riches’ one, only because it further cements the belief that anyone who works hard enough can soar to the top (so it’s your own fault for not being awesome enough if you’re poor) and that rich people are all self-made walking legends. It’s all about lionizing and legitimizing the rich at every opportunity so we don’t get any funny ideas, like expecting them to give back once in a damn while.

    Until the poor and the working class get properly and accurately represented, not only politically but also culturally, I do not have high hopes for a narrowing of the wealth gap. The countries who are more egalitarian are so because they culturally have more affection for the ‘little people’, for the simple living. I don’t think it’s a coincidence that they also happen to be countries that have higher regards for the environment.

    They acknowledge that value means much more than owning a suit and a skyscraper.

    1. This is, I suspect, the reason Fox killed Firefly.  Whedon has stated before that the executives complained about the main characters being “stepped on.”  Fox moved the show around from time slot to time slot several times and then put it up against a very popular show on another channel.  Networks do this when they want to get rid of a show that they’re otherwise contractually obligated to air.  “Whoops, the ratings went down!  Oh well, we’ll have to cancel it now.”

  25. The question of wealth distribution is critical. Not income distribution – wealth distribution. Crudely speaking, income is a dependent variable as one’s ability to earn income is roughly talent x effort x capital.

    This is why income can vary so widely between people even though none of us are millions of times more talented or more hardworking than others. This is why earnings very clearly rise with the amount of capital one directly influences. This is why economic inequality is increasing – wealth builds more wealth, which builds more wealth, which builds more wealth…

    1.  yeah, and actually that’s why taxes are so important – especially the estate tax. without the
      estate tax, for instance, all of the wealth just flows to the top and
      stays there.

      how did warren buffet, bill gates, steve jobs, etc. etc. get so rich if taxes are so punishing? people just have no idea how much wealth builds on itself. for instance, mitt romney is supposed to have a net worth of $250 million. if all of this money returns just 1% (a ridiculously conservative rate of return), he makes $6850/day, every day of the year. let’s say you were going to take half of that $2.5M every year. what is the difference between making $3425/day and $6850 per day in practical terms? pretty much nothing.

  26. A society that leaves 40% of its population in the gutter, fails to be a good society. A real problem is that a lot of the European democracies follow in the
    footsteps of the United States and income inequality is growing rapidly.
    As a European this causes a lot of discomfort to me. Our societies are beginning to fall apart (London, I am looking at you!)

    Also it seems that if a lot of wealth is concentrated in the hands of few people, this money seems to be used for rampant speculation and brings real world markets way out of balance. We seem to be leaping from crisis to crisis, each one sending stronger shock waves – and really soon entire states or unions of states may collapse economically.

    Could it be that the Western lifestyle really is at risk of failing catastrophically if we allow these extremes to continue building up? Maybe in 100 years people will look back and tell stories about how the western capitalist economy was destined to fail, just like communism has failed before that.

  27. I don’t see the problem.  The top fifth creates jobs for the middle two-fifths, while the bottom two are  the ones on welfare.  Why should people who don’t work have nearly the same amount of wealth as the hard workers at the top?

    1. The top fifth creates jobs for the middle two-fifths, while the bottom two are  the ones on welfare.

      OK, that’s gotta be a troll. For the sake of my species I refuse to believe there’s anyone stupid or misinformed enough to think that a full 40% of the American public is contributing nothing to society and living off welfare.

    2. The top fifth creates jobs for the middle two-fifths

      If by “create jobs” you mean “condescend to loan out their otherwise hoarded capital because they cannot use all of it themselves but still want to get returns from it”, then yes. Sort of the way feudal lords “created jobs” for their serfs when they had them farm their land…

      Why should people who don’t work have nearly the same amount of wealth as the hard workers at the top?

      So the people at the top are billions of times more hardworking? And their kids just happen to almost always billions of times more hardworking than the kids of non-wealthy families? Remember we are talking wealth, not income.

  28. Damn Right.  The number of MILLIONAIRES has fallen each year under Obama.  Stick it to them.  We wont be free until we are equally poor.  Power to the ruling class.

  29. The pie chart for Sweden is actually income distribution, not the wealth distribution. The actual wealth distribution chart can be found in e.g.

    The only thing that Ariely’s “study” proved was that most Americans are completely and hopelessly innumerate, but surely everyone knew this already.

    Anyone advocating a society where the richest fifth owns only three times as much wealth as the poorest fifth is implicitly advocating a society where the average person, after three or four decades of work in adulthood, has to show for it only three times as much as what he started with in his twenties. In such a society, homeownership would be impossible, for starters. If you phrased the question this way, I doubt that majority of people in any country would support it.

    1. Anyone advocating a society where the richest fifth owns only three times as much wealth as the poorest fifth is implicitly advocating a society where the average person, after three or four decades of work in adulthood, has to show for it only three times as much as what he started with in his twenties.

      Capital does not get destroyed –  it is its allocation that we are discussing. The problem is that many people in their twenties start with nothing, while some start with a lot. How they then grow it is relatively irrelevant.

  30. “Where do you come up with such assumption?”

    From the implicit constraint that the people in their sixties can’t own more than three times wealth than the people in their twenties, which is necessary to reach the “Swedish” wealth distribution.

    The mathematics is simple, but obviously counterintuitive to most people. Even in a perfectly equal society where everyone earns the exact same salary and saves the exact same percentage of it, the wealth distribution would still be massively distorted because the old people have worked much longer than the young and thus have a lot more show for it, especially after adding the compound interest. This is no more unfair than the fact that in a staggered marathon race, people who have been running for three hours have together covered vastly more distance than people who have been running for five minutes.

    1. I get the point about the distribution part.  But what makes it impossible for people to own a house in this type of economy?  Won’t the house price be affected if people cannot afford them?

      Edit: actually, I did misread your statement. I got it now.

  31. The homeownership was a throwaway line and not at all the essential point of the argument, but here goes: a livable home requires a certain amount of labour, materials and land, and those who build the homes will not just give these away for free. With a very low upper limit to what a home can possibly cost (remember: at most three times the net worth of the average twentysomething), a home cannot be more than a simple shack.

    I guess there is some kind societal alternative around this by using a truly massive annual forced redistribution of wealth, but in such a society nobody would bother to do any work anyway, so again homes would not exist for anybody to own.

    1. I did find the link about wealth vs income distribution interesting.  

      I’m not sure about the accuracy of the shack portion (the quality of living being low, the absolute cost of building the house being too high) – it can’t be THAT bad in Sweden ;) I picked on the house statement because I’m questioning the price I will be paying for mine.

  32. I suspect that the “40% have only 0.3% of the wealth” is very wrong. For example, as one of that 40%, I have a million books, right here in this box. I have hot and cold running water, electricity, internet, a few tv’s, lots of clothes, food, stuff and junk. It’s enough that somewhere like africa or much of asia I’d be comfortably middle class. I think if you were to break it down into measureable critera,such as asking how many of the country’s houses does that 40% occupy, or how many cars, or tvs, or books, or canned goods, do they have, that the numbers would be way above 0.3%. I don’t know what the right way to measure it is, but I am deeply skeptical of the 0.3% figure. I think that somebody’s lying, to promote an agenda. Maybe I’m wrong.

    1. I suspect that the “40% have only 0.3% of the wealth” is very wrong. For example, as one of that 40%, I have a million books, right here in this box. I have hot and cold running water, electricity, internet, a few tv’s, lots of clothes, food, stuff and junk.

      The disparity is such that it’s hard for most people to even wrap their heads around. You own books, but people at the very top own publishing houses. You have running water, they have desalinization plants to fill the swimming pools on private island getaways. You have internet access, they own technology companies. You have TVs, they own movie studios. And every time you spend money on any of those things some portion of it goes toward making them even richer.

      It’s true that you are fortunate enough to have material wealth and security that far outstrips that of the average African, but that doesn’t change the fact that there is a tremendous imbalance of wealth and power in your own country.

  33. “I’m not sure about the accuracy of the shack portion (the quality of living being low) – it can’t be THAT bad in Sweden”

    Sapienti sat. Thank you and good night.

  34. have there ever been serfs as vociferous in defence of their serfdom as Americans? something very few dictators achieve.

  35. What is the absolute minimum wealth inequality that could exist in a society? As a baseline, how much wealth inequality would there be in a society where everyone earned the exact same salary, of which they then saved the exact same percentage? The answer is not the rather Orwellian named “Freedonia”, because even in this society, a person who has been working for 30 years would have accumulated more wealth than a person who has been working for one year, especially if you include compound interest, the most powerful force in the universe.

    With my morning coffee, I whipped up a simple Python script to model this. If I used 5% annual interest rate, the five wealth quantiles controlled 2,7,15,28 and 47% of wealth, respectively. If I used 10% interest rate, these wealth quantiles became 0,4,10,25 and 60%, respectively.

    So even in an impossibly egalitarian society of perfectly equal salaries for perfectly identical people, this is how much wealth inequality you necessarily get just from age differences. And yet even this baseline is unacceptable to many people. Once again: the only thing that Ariely’s study “proved” is that most Americans are utterly innumerate.

  36. I have told my friends this many times, and believe it to be true. Nothing will change until we have our own version of a French revolution. The power mongers have too much of a strangle hold on politics. Until the middle class realize they are no longer middle, but lower class, nothing will change.

    Until we are willing to look at politics as a civic duty instead of a career, and to view campaign contribution laws in light of the nastiness they represent, AND elect politicians who are willing to risk everything to do the RIGHT thing, nothing will change.

    It is truly a sad day to see smug politicians arguing over which benefit to the poor should go first, and how deeply, when there are millions of people who continue to lose money, homes and jobs because of the turmoil caused by Congress over a budget deal, and the recession that was made worse by the folly of Wall Street.

    Congress today, God help us all, seems more than willing to refuse many Americans the decency of a fair opportunity to make and build their own piece of the pie, or even have access to a doctor when they are sick, while at the same time refusing to increase even a miniscule the taxes of the super rich. It is mind-boggling how insane this is, and how obvious it appears, yet how willing Americans are to ignore it.

  37. Note the sources of information.
    •Letterman audience – tapings are mid-day so by definition they have the free time and excess resources to not be working.
    •Professors from upper level universities – who are by that level, often culturally immersed in the upper echelons of wealth.
    •Minorities and immigrants – typecast to point of definition as impoverished

    This creates such a dull caricature of a clear problem with really nuanced causes and it’s somewhat disappointing to see this from PBS.

    1. Professors from upper level universities – who are by that level, often culturally immersed in the upper echelons of wealth.

      Average salary is around $98,974 for professors, $69,911 for associate professors, $58,662 for assistant professors, $42,609 for instructors, and $48,289 for lecturers.

      Average CEO “salary” once you include all the bonuses and other perks?  Around 10 MILLION DOLLARS (and that’s a conservative estimate).

      End of story.  End of FUD.  Thanks for playing.

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