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Wealth distribution

Tim Noah's been running a great series on the (already massive, and increasing) quantitative differences between the rich and the rest of us in Slate. I think these are probably the numbers to use (and over and over again, too):

People know we're living in a time of growing income inequality, Krugman told me, but "the ordinary person is not really aware of how big it is." The ignorance hypothesis gets a strong assist from a new paper for the journal Perspectives on Psychological Science: "Building a Better America—One Wealth Quintile at a Time." The authors are Michael I. Norton, a psychologist who teaches at Harvard Business School, and Dan Ariely, a behavioral economist (and blogger) at Duke. Norton and Ariely focus on the distribution of wealth, which is even more top-heavy than the distribution of income. The richest 1 percent account for 35 percent of the nation's net worth; subtract housing, and their share rises to 43 percent. The richest 20 percent (or "top quintile") account for 85 percent; subtract housing and their share rises to 93 percent. But when Norton and Ariely surveyed a group whose incomes, voting patterns, and geographic distribution approximated that of U.S. population, the respondents guessed that the top quintile accounted for only 59 percent of the nation's wealth.

"The top 1% own almost half the country when you leave out housing."

As for "ignorance," there's ignorance and then there's obfuscation, as Noah goes on to point out.

NOTE I suppose I'm trying to finesse a strategic debate -- 1% vs 20% -- with a choice of language. But it seems to me that one (and only one) reason for the success of the gay rights movement was "we are your sons and daughters, your aunts and uncles, your nieces and nephews, your sisters and brothers, your fathers and mothers." If the same argument is to be made in class terms, it makes sense to target as few families as possible, no?

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Submitted by Hugh on

Wealth inequality is the key to everything. We will not move forward as a country until that is addressed. The economy, unemployment, distressed homeowners, private debt, the declining middle class, increased poverty, the casino on Wall Street, the gutting of the real economy, bubbles, depleted state budgets, poor healthcare, poor education, the wars, deregulation, and a totally corrupt political system, all this flows from too few being allowed to steal too much.

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Submitted by Joe on

If you take a look at page 44 of the Levy Institute report linked to in Noah's piece, you can see the table where this data on wealth distribution apparently comes from.

I was actually surprised to see that from 1983 to 2007, the top 20% only went from owning 81% of everything to 85%. Yes, I know 4% is actually a large number. But I just expected it to be higher.

And then I remembered that 2007 was before this economic clusterf*ck even occurred. God only knows how much further up that number has climbed by now, and will continue to climb over the next few years.

P.S. One other way to put this is that between '83 and '07, the bottom 80% of the population went from owning 19% of the nation's wealth to 15% of the nation's wealth. That makes it sound a lot worse in my opinion, because it's shows an already small piece of pie getting smaller by about 1/4.

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Submitted by Joe on

Also, just wanted to mention that I think a good general practice is to observe how things change over time.

In other words, a single snapshot saying that the top 1% owns 35% of everything COULD be misleading IF the top 1% has essentially ALWAYS had around that share of the wealth.

In order to get a real sense of whether we're heading in the wrong direction, it's important to see how the data changes over long periods of time. And yes, we still do seem to be headed in a very bad direction.