By: Ed Kilgore
July 24, 2012
Cold hard facts of growing inequality
If you read my last post, I feel obliged to offer a mental palate-cleanser to get rid of the taste of Ari Fleischer's banal spin for his wealthy paymasters. Here's the New York Times' David Leonhardt's quick summary of the basic facts of growing income inequality in recent decades:
Since median inflation-adjusted family income peaked in 2000 at $64,232, it has fallen roughly 6 percent. You won't find another 12-year period with an income decline since the aftermath of the Depression.
This unhappy phenomenon has two major sources. First, economic growth in this country has been relatively slow in recent years, which means the total bounty that the American economy produces, to be shared by all of its citizens, has not been growing very rapidly. Even before the financial crisis began in 2008, economic growth in the decade that started in 2001 was on pace to be slower than growth in any decade since World War II.
Then of course came a deep recession that caused the economy to shrink.
In addition to the slow growth in overall size of the pie, the share that has been going to anyone but the richest Americans has been declining. The top-earning 1 percent of households now bring home about 20 percent of total income, up from less than 10 percent 40 years ago. The top-earning 1/10,000th of households -- each earning at least $7.8 million a year, many of them working in finance -- bring home almost 5 percent of income, up from 1 percent 40 years ago.
Add in the rising debts that preceded the Great Recession for so many middle-class families, and the depleted assets it produced (the subject of Phillip Longman's analysis in the July/August issue of the Washington Monthly), and you have a pretty accurate picture of the economic plight of working Americans at a moment when far too much of the national debate seems to assume that unemployment is the only real challenge--or as Fleischer insists, that we should be most worried about the sad plight of the overburdened wealthy.