The U.S. administration and the Federal Reserve, cheered on by economists-for that bit of academic gilding, and by journalists-who supply 'Progressive' cred and political cover, have been directly increasing the wealth gap to the great detriment of the non-asset holders and the economy as a whole.
I say keep it up.
For a contrary opinion...
From PBS NewsHour's Business Desk blog:
Citizen ownership, often demonized as "socialist," has a pedigree dating to the American Revolution. "Scene at the Signing of the Constitution of the United States," oil on canvas by Howard Chandler Christy, 1940, via Wikipedia Commons.
Paul Solman: "Using tech playbook, oil drillers shower employees with stock." So read a recent article in Reuters.
But as Joseph Blasi of Rutgers and Richard Freeman of Harvard emphasize in Friday's post, worker ownership is as new as fracking, but as old as America itself. George Washington, a slave owner, remember, believed that broad-based worker ownership would ensure "the happiness of the lowest class of people because of the equal distribution of property."
John D. Rockefeller encouraged worker ownership. George Eastman (of Eastman Kodak) helped invent stock options.
These and other rather surprising facts are in Blasi, Freeman and co-author Doug Kruse's new book, "The Citizens Share," which Freeman told me about recently when I interviewed him for the NewsHour.
"The Alternative American Dream: Inclusive Capitalism." That was the headline of an extremely popular post on our Making Sen$e Business Desk by long-time worker ownership activist Chris Mackin this summer. Now, Freeman and Blasi, in a sense, follow up.
Richard B. Freeman and Joseph R. Blasi: The fact is indisputable: productivity -- output per worker -- nearly doubled over the past 30 years. Yet the real pay of most workers increased much more slowly, and the hourly pay of many groups of non-supervisory workers barely budged at all. So what happened to the gains of higher productivity?
They showed up in an increased share of income accruing to owners of capital and in the pay of top earners, whose compensation consists disproportionately of -- guess what? -- stock options and stock grants that give them a share of the increased growth and income that comes from capital. The net result of this shift has been the well-documented increase in the wealth and income of a small number of Americans and American families, while the income and wealth of most Americans has grown little, if at all.
Here's the latest census data: the top 10 percent of earners received 46.5 percent of all income in 2011, the largest slice of the pie since 1917. But the persons who benefited most from recent economic growth constitute an even small minority of the top 10 percent. Yes, the upper 1 percent whom the Wall Street Occupiers made famous gained more than their fellow travelers in the top 10 percent. But among the upper 1 percent, the real winners were those in the upper 0.1 percent, whose share of national income increased from 3.1 percent (1972) to 11.3 percent (2012). Had the share of the upper 0.1 percent remained as 30 years ago, the income for all other Americans, including the rest of the upper 1 percent, would have increased by about 8 percent in the past three decades.
But even this is not the full story of the increased inequality of income. Within the upper 0.1 percent, the biggest gainers were those in the upper 0.01 percent -- one American in 10,000 -- whose share of income increased from 1.2 percent (1972) to 5.5 percent (2012).
As for capital income -- capital gains on stocks and bonds, dividends and interest -- the latest Internal Revenue Service report on the country's top 400 taxpayers is an egalitarian's nightmare. In 2009 these persons, who make up .00028 percent of all persons filing individual tax returns, earned 16 percent of all net capital gains, 6.5 percent of all dividends and 3.2 percent of all interest income. And that's 400 people.
As a result, a larger social problem looms: high-rising inequality is transforming the U.S. from an economy and polity based on a broad middle class to a feudal society dominated by a small number of super-wealthy "lords of the manor."
Reading through the original arguments for a United States of America suggests that this level of inequality threatens not only our economy -- who will buy what the wealthy produce? -- but the health of our democracy as well. One does not have to be a modern radical to worry. Back in the 1770s, the Founding Fathers worried deeply about the dangers to the new democracy of concentration of wealth.
James Madison warned that inequality in property ownership would subvert liberty, either through opposition to wealth (a war of labor against capital) or "by an oligarchy founded on corruption" through which the wealthy dominate political decision-making (a war of capital against labor). John Adams favored distribution of public lands to the landless to create broad-based ownership of property, then the critical component of business capital in the largely agricultural U.S. Current levels and trends in inequality would almost certainly have terrified the founders, who believed that broad-based property ownership was essential to the sustenance of a republic....MUCH MORE
