Wealth Inequality In America

Wealth Inequality In America

Studies have shown that Americans believe wealth inequality in this country is a major problem. Everyone is familiar with the graph that shows what Americans believe the distribution of wealth is versus what is actually is:

The graph above shows a more accurate visual representation of the current distribution of wealth in America.  We see everything becoming politicized now, in turn causing increased polarization. One thing conservatives and socialists alike can agree on is the current system isn’t actually benefitting either of them. And they would be right. In fact, a recent study by Pew Research suggests that the past few decades have compounded this problem even more:

 

“The Great Recession of 2007-2009 triggered a sharp, prolonged decline in the wealth of American families, and an already large wealth gap between white households and black and Hispanic households widened further in its immediate aftermath. But the racial and ethnic wealth gap has evolved differently for families at different income levels, according to a new Pew Research Center analysis of data from the Federal Reserve Board’s Survey of Consumer Finances.

Among lower-income families, the gap between white households and their black and Hispanic counterparts shrank by about half from 2007 to 2016. But among middle-class families, it increased and shows no sign of retreating. (There are an insufficient number of observations in the SCF data to report on upper-income black and Hispanic families separately.)

Lower-income white families experienced greater losses in wealth during the recession than lower-income black and Hispanic families did. Prior to the recession in 2007, lower-income white families had 10 times as much median wealth as lower-income black families – $42,700 versus $4,300 (figures in 2016 dollars). Lower-income Hispanic families had a median net worth of $8,400, lagging white families by a ratio of five-to-one.” – Pew Research

For more information on how wealth is actually distributed in America, please watch the video below:

We actually live under crony corporatism or oligarchy rather than under actual free market capitalism according to an article by C.J. Polychroniou for Global Policy Journal:

One of the most striking features of our era is the widening gap between rich and poor. In fact, wealth inequality may be higher today than any other era, although we lack the data to draw meaningful comparisons with the distant past. Moreover, the gap between the haves and the have-nots seems to be growing, as the annual reports from the development charity Oxfam clearly indicate. What are the key reasons for the growing divide between rich and poor, especially when governments claim that there is a recovery underway since the 2008 global financial crisis? And what can be done to reorganize society so wealth is no longer concentrated into so few hands while millions of people live in extreme poverty or are barely subsisting? In the interview below, Thomas Weisskopf, emeritus professor of economics at the University of Michigan and a long-time member of the Democratic Socialists of America, offers his insights on the state of economic injustice.” – Global Policy Journal

So clearly the socialists agree that increasingly we are living under a form of neo-feudalism or serfdom. Hillsdale College brings us an excellent Lawrence H. White lecture on how we got to this point, featuring the brilliant economist Frederich Hayek’s ‘The Road to Serfdom.’  Please see the lecture below and watch the whole thing:

So, how would one define an oligarchy? Jeffrey Winter does a detailed analysis for Sign of The Times:

“Across all political spectrums, oligarchs are people (never corporations or other organizations) who command massive concentrations of material resources (that is, wealth) that can be deployed to defend or enhance their own property and interests, even if they don’t own those resources personally. Without this massive concentration of wealth, there are no oligarchs. 

In any society, of course, an extremely unequal wealth distribution provokes conflict. Oligarchy is the politics of the defense of this wealth, propagated by the richest members of society. 

Wealth defense can take many forms. In ancient Greece and Rome, the wealthiest citizens cooperated to run institutionalized states that defended their property rights. In Suharto’s Indonesia, a single oligarch led a despotic regime that mostly used state power to support other oligarchs. In medieval Europe, the rich built castles and raised private armies to defend themselves against each other and deter peasants tempted by their masters’ vaults. In all of these cases oligarchs are directly engaged in rule. They literally embody the law and play an active role in coercion as part of their wealth defense strategy. 

Contemporary America (along with other capitalist states) instead houses a kind of “civil oligarchy.” The big difference is that property rights are now guaranteed by the impersonal laws of an armed state. Even oligarchs, who can be disarmed for the first time in history and no longer need to rule directly, must submit to the rule of law for this modern “civil” arrangement to work. When oligarchs do enter government, it is more for vanity than to rule as or for oligarchs. Good examples are New York City Mayor Michael Bloomberg, former presidential candidate Ross Perot and former Massachusetts Governor Mitt Romney. 

Another feature of American oligarchy is that it allows oligarchs to hire skilled professionals, middle- and upper-class worker bees, to labor year-round as salaried, full-time political advocates and defenders of the oligarchy. Unlike those backing ordinary politicians, the oligarchs’ professional forces require no ideological invigoration to keep going. In other words, they function as a very well-paid mercenary army. 

Whatever views and interests may divide the very rich, they are united in being materially focused and materially empowered. The social and political tensions associated with extreme wealth bond oligarchs together even if they never meet, and sets in motion the complex dynamics of wealth defense. Oligarchs do overlap with each other in certain social circles that theorists of the elite worked hard to map. But such networks are not vital to their power and effectiveness. Oligarchic theory requires no conspiracies or backroom deals. It is the minions oligarchs hire who provide structure and continuity to America’s civil oligarchy. ” – Jeffrey A. Winters 

To learn more about how our system of checks and balances was thwarted, corrupted and replaced, please see the video below from Learn Liberty called ‘Why Government Fails’:

Fox News’ Steve Hilton took on the issue of wealth inequality in America in a segment on The Next Revolution with author Chris Arnade:

What are your thoughts about the so-called wealth divide in America?

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