"Striking it Richer," a paper by Emmanuel Saez (an economist at UC Berkeley) looks at the way that the dividends of the slow US "economic recovery" have been distributed. Saez finds that 121% of the economic gains since 2009 have been captured by the richest 1% of Americans -- in other words, despite economic growth, the poorest 99% of Americans actually got poorer through the "recovery."
This confirms a pattern that Matt Stoller highlighted: that income inequality increased more under Obama than under Bush. And the new Saez paper also describes how it came about. In short form, income to the top 1% is significantly influenced by capital gains. Remember, the tax reporting is not clean here: rising equity and bond markets help all those private equity and hedge fund professionals, who are able to get capital gains treatment for what ought to be labor income. But the paper also stresses that the lower orders were hit hard in the aftermath of the global financial crisis than in the dot-bomb era, which also saw a big drop in capital gains. That isn’t as hard to understand. The collapse of the dot-com mania didn’t impair the real economy overmuch because it was not fueled in a meaningful way by borrowings. By contrast, the housing bubble, and more important (in terms of damage to the financial system) the much housing exposure created synthetically by CDOs that consisted entirely or mainly of credit default swaps was highly geared, hence when it collapsed, it took credit providers down with it.
Yes, Virginia, the Rich Continue to Get Richer: the Top 1% Got 121% of Income Gains Since 2009 [Yves Smith/Naked Capitalism]
The votes in the Indiana presidential election primary tonight are still being counted, but GOP Party chairman Reince Priebus has already declared Donald Trump the “presumptive GOP nominee” after Ted Cruz dropped out of the race. Trump needs 1236 delegates to formally get the nomination, and he’s well on his way. John Kasich hasn’t ended […]
People who fear the TSA’s airport body scanners might start driving more instead of flying, and that will raise the number of traffic deaths. That’s the argument behind a new legal challenge filed against the Transportation Security Administration today over the much-loathed airport security scanning machines. We have blogged about them zillion times here at […]
A state judge in the Brazilian state of Sergipe has ordered all mobile phone operators in the country to block Facebook-owned WhatsApp for 72 hours, nationwide. Those five telecom providers put the ban into effect today, and it affects about 100 million people. In Brazil, WhatsApp is the most popular messaging app.
You may not love Microsoft Word, but you’ve definitely used it. Other than being one of the most ubiquitous programs on the planet, it’s been the go-to word processing system for more than a quarter-century because it’s as basic as it gets. But occasionally, you’ve got assignments that beg for a lot more options than simple […]
Almost everyone has their smartphone in a case of one kind or another. Beyond simple protection, finding a case that can charge your phone on its own, but doesn’t feel like it’s also adding a couple pounds to the phone’s weight is the tricky part. Billed as the world’s thinnest battery case, the ThinCharge iPhone […]
You never know when new projects, ideas or opportunities can drop into your lap at a moment’s notice. That may require you to learn a new programming language like Python. Or maybe you need a primer on 3D game development. Or you might realize you could use a serious brush-up on iOS mobile creation.Point is, […]