Average pre-tax incomes in 2006 jumped by about $60,000 (5.8 percent) for the top 1 percent of households, but just $430 (1.4 percent) for the bottom 90 percent, after adjusting for inflation, according to a new update in the groundbreaking series on income inequality by economists Thomas Piketty and Emmanuel Saez. Their analysis of newly released IRS data shows that in 2006, the shares of the nation’s income flowing to the top 1 percent and top 0.1 percent of households were higher than in any year since 1928.
Note that the latest data available is from 2006.
Notice the point (in the above chart) at which the top 1% began to earn a greater share of the total pie for the first time after the Great Depression… the early 1980′s. Know what else occurred in the early 1980′s? Financial professionals began to earn a SIZABLE relative share of national income while all other wages were stagnant.
Thus began a 25+ year run in which financial professionals and the powerful elite both had a huge incentive to keep the financial bubble going. The financial professionals earned their commission, while the elite had outsized gains on their capital. As the NY Times states:
The gains for the richest took place amid a booming economy, in which hedge funds and private equity firms blossomed and the subprime lending machine went into high gear.
In hindsight, it is not surprising to me that this level of income concentration was last seen right before the Great Depression (I assume financial professionals had an outsized share of income then as well). And even though much of this wealth was just saved by the trillions of taxpayer dollars used to keep the financial machine going, the 1-percenters are protecting this wealth at all costs. Truthdig details:
But what really makes the ultrawealthy so fortunate, what truly separates this moment from a run-of-the-mill Gilded Age, is the unprecedented protection
Gunmen have stormed American University of Afghanistan in Kabul on Wednesday night as witnesses said they heard gunfire and explosions ringing out. According to media reports, the attackers have infiltrated the educational institution. Teachers and hundreds of students are said to be sheltering inside the building.
American Univ. in Kabul is reportedly under attack -American teachers & hundreds of students are sheltering inside https://t.co/QJPc6jZzDt
I’m making my way through the Sanford C. Bernstein research piece that everyone is talking about today, in which the sell-side brokerage compares passive investing to a combination of Nihilism and Marxism. To be clear, the author does not make the case that passive is bad or active is better – he’s just saying that there are policy considerations that should be thought about before regulators and government officials proclaim the shift to low-cost passive as universally beneficial for society.
So far, it’s very thought-provoking. I’m not sure how much of it I agree or disagree with yet, I like to stew on these things a bit before reacting.
By The Foundation for Economic Education. Originally published at ValueWalk.
Russian Smugglers Renovate Road Neglected By The Government
Who will build the roads if not the government? As it turns out, even criminals will, if they need to.
The public- and profit-minded entrepreneurs of the black market in Belarussia have taken it upon themselves to improve business by upgrading their transportation routes. Smugglers adopted a gravel road from Minsk to Moscow, raised the road, widened it, and added more turning points to increase access for their heavy goods trucks (fruit weighs a lot). The secret project was quickly rewarded with heightened traffic and an eventual government takeover, complete with customs....
This morning's release of the July Existing-Home Sales decreased from the previous month to a seasonally adjusted annual rate of 5.39 million units from 5.57 million in June. The Investing.com consensus was for 5.51 million. The latest number represents a 3.2% decrease from the previous month and a 1.6% decrease year-over-year.
Here is an excerpt from today's report from the National Association of Realtors.
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months. "Severely restrained inventory and the tightening grip it's putting on affordability i...
With Folgers and Dunkin Donuts packaged coffee in its brand portfolio, the J.M. Smucker Company is both the biggest coffee roaster in the U.S. and one of the companies that is best-positioned to reap the profits from America’s caffeine addiction.
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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