Guest Post by Washingtonsblog
Worst Inequality In History Leads to Dynastic Wealth … And It Will Only Get Worse Unless We Change PolicyInequality in the U.S. is now the highest ever recorded in the country.
Inequality in America today is twice as bad as in ancient Rome, worse than it was in Tsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.
Economist and inequality expert Thomas Piketty notes that – according to an important measure – inequality in America today is the worst in world history:
For those who work for a living, the level of inequality in the U.S. – writes Piketty – is “… probably higher than in any other society at any time in the past, anywhere in the world …”In other words, there might have been some squalid country in the distant past where the disparity between people without any job and the king was higher than between a jobless American and the top fatcat in the U.S.
But the spread between the minimum wage American worker and the American oligarch is the greatest in world history.
Indeed, inequality in America has become so extreme that the “99% versus the 1%” meme is grossly inaccurate … because it’s really the .01% versus the 99.99%.
Paul Krugman notes:
A lot of what we know about inequality actually comes from [Piketty], because he’s been an invisible presence behind a lot. So when you talk about the 1 percent, you’re actually to a larger extent reflecting his prior work. But what he’s really done now is he said, “Even those of you who talk about the 1 percent, you don’t really get what’s going on. You’re living in the past. You’re living in the ’80s. You think that Gordon Gekko is the future.”In other words, we’re going from oligarchy to dynastic royalty.
And Gordon Gekko is a bad guy, he’s a predator. But he’s a self-made predator. And right now, what we’re really talking about is we’re talking about Gordon Gekko’s son or daughter. We’re talking about inherited wealth playing an ever-growing role. So he’s telling us that we are on the road not just to a highly unequal society, but to a society of an oligarchy. A society of inherited wealth, “patrimonial capitalism.”
So we are going probably, unless something gets better, we’re going to look back nostalgically on the early 21st century when you could still at least have the pretense that the wealthy actually earned their wealth. And, you know, by the year 2030, it’ll all be inherited.
Nobel prize winning economist Robert Shiller and Former Goldman Sachs managing director Nomi Prins also say that inequality may get much worse than it is now.
Postscript: Mainstream economists like Krugman – who long discounted the importance of inequality – now finally admit that runaway inequality destroys the economy.
Unfortunately (and ironically), the policies which they push are the very thing causing extreme inequality in the first place.