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  • The Top 1% Control 42% of the Wealth - Servitude for the Rest of US! 20 comments
    Feb 26, 2010 6:09 PM

    Courtesty of My Budget 360:

    financial-wealth-united-statesMany Americans are not buying the recent stock market rally

    This is being reflected in multiple polls showing negative attitudes towards the economy and Wall Street.  Wall Street is so disconnected from the average American that they fail to see the 27 million unemployed and underemployed Americans that now have a harder time believing the gospel of financial engineering prosperity.  Americans have a reason to be dubious regarding the recovery because jobs are the main push for most Americans.  A recent study shows that over 70 percent of Americans derive their monthly income from an actual W-2 job.  In other words, working is the prime mover and source of their income.  Yet the financial elite have very little understanding of this concept.  Why?  42 percent of financial wealth is controlled by the top 1 percent.  We would need to go back to the Great Depression to see such lopsided data.

    Many Americans are still struggling at the depths of this recession.  We have 37 million Americans on food stamps and many wait until midnight of the last day of the month so checks can clear to buy food at Wal-Mart.  Do you think these people are starring at the stock market?  The overall data is much worse:


    Source:  William Domhoff

    If we break the data down further we will find that 93 percent of all financial wealth is controlled by the top 10 percent of the country.  That is why these people are cheering their one cent share increase while layoffs keep on improving the bottom line.  But what bottom line are we talking about here?  The Wall Street crowd would like you to believe that all is now good that the stock market has rallied 60+ percent.  Of course they are happy because they control most of this wealth.  Yet the typical American still has negative views on the economy because they actually have to work to earn a living:

    gallup-economics

    The above daily poll asks Americans about their view on the health of the economy.  Only 13 percent believe the economy is good or excellent.  Funny how that correlates with the top 10 percent who control 93 percent of wealth.  Many Americans were sold the illusion of the bubble.  They were sold on the idea that their homes were worth so much more than they really were.  And many used this phony wealth effect to go out and spend beyond their means.  They started spending as if they were part of this elite 10 percent crowd.  But once the tide rolled out, it was clear they were not.  And the horribly built bailouts demonstrate who is controlling our political system.  This was not the rule of a capitalist system but a corporate run government.

    Just think about the bailouts and which companies were saved.  We ended up bailing out the worst performing and troubled companies thus keeping alive companies that should have completely failed.  Did we bail out Google?  Proctor and Gamble?  Of course not.  These companies actually produce something that people want.  Banks and especially the Wall Street kind merely keep that 42 percent happy by making sure their stock values stay high so they can keep on making money while the average Americans is sold up the river.

    debtYet many were brought into the easy money fold by going into massive amounts of debt.  And who has most of the debt?  That is right, the average American:

     

    The bottom 90 percent have been saddled with 73 percent of all debt.  In other words much of their so-called wealth is connected to debt.  Debt is slavery for many especially with egregious credit card companies taking people out with absurd credit card tricks and scams.  Yet the corporate propaganda machine is strong and mighty.  Have you ever received an inheritance?  A large one?  Probably not because only 1.6% of all Americans receive an inheritance larger than $100,000.  If this is the case, why in the world do politicians worry so much about the tax impacts of this?  Because they want to keep the corporatocracy alive and well so their spawn can get a piece of their pie.  They give the illusion to average Americans that if you only work hard enough you too can join this elusive club of cronies.  The data shows otherwise.

    stock-marketsBut, if we start looking at investment assets, the true wealth in the country, we start realizing why Wall Street is all giddy about the recent stock market government induced rally.

    Of investment assets 90 percent of Americans own 12.2 percent.  The rest goes to the top 10 percent.  Welcome to the new serfdom.  The bailouts that went out to the filthy rich were more about protecting their tiny corner of the world than actually making the economy better.  That is why it is interesting to see companies fire people and Wall Street cheer for the increase in earnings per share.  Good for the few at the expense of the many.  Yet the propaganda out of Wall Street and our government is what is good for Wall Street is good for you.  Just like that 1.6% inheritance issue, the vast majority of Americans won’t deal with that and their primary concern is simply a job.  A job that has provided stagnant wages for a decade while the ultra wealth get richer and richer in a phony form of corporate socialism.

    If you break down the data you realize that most Americans don’t have time to speculate in stock markets:

    incomedistribution

    Only 34% of U.S. households make more than $65,000 per year.  What is that after taxes?  Let us use a state like California for example:

    income

    family-budget-100kNow if we breakdown this data further you will realize that most of the money is consumed by cost of living necessities, not Wall Street speculation.  Just to show this example let us look at a family budget for someone in California making $100,000.

     

    Notice after running the budget we are in the hole for $1,000?  That is because of many costs that typical families have.  We can debate the merits of where they are spending money but the point is this; are these people really making beaucoup money from the stock market?  They are putting away $12,000 a year into their 401k.  As we have now found out, 8 percent a year is never guaranteed in the stock market although the corporate powers would like you to believe that so they can have other suckers to unload stocks onto.

    “Yet the median household income in the U.S. is $50,000 and not $100,000.  They have even less to invest.”

    They are more concerned on working to have a paycheck to pay for necessities.  They are more concerned about paying their house off by the time they retire and hopefully, have a little bit of retirement funds coming in.  The sad fact is most Americans rely on Social Security when they retire.  All those ads of unlimited golf and daily trips to Tahiti are propaganda of how Wall Street lives and they want to sell you the sizzle, and clearly not the steak.  They live their lives paper pushing and sucking the life out of the productive part of our economy.  The average American should now realize this since this financial crisis was primarily caused by them.  They are now on a massive campaign to blame Americans for this. This is hypocrisy to the next level. 

    Many Americans have paid for their mistake by losing their home through foreclosure.  We have 300,000 foreclosure filings a month.  Many have taken a hit to their overall stock portfolio (if they have one).  Yet the corporate cronies have protected their horrible economy crushing debts at the taxpayer expense.  Unlike you, many hold bonds on the companies and not common stock like many Americans.  Bondholders have been protected at all costs during this crisis.  Goldman Sachs through AIG received 100 cents on the dollar for their horrible bets.  The banks have unlimited back stops thanks to taxpayers.  This is how the top 1 percent rule the new feudal state.

    Welcome to the 2010 serfdom.  Time to wake up and restructure the system.  Many people are starting to wake up to this massive scam.

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Comments (20)
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  • The shark
    , contributor
    Comments (159) | Send Message
     
    Phil, whilst there is indeed some logic to your ideology - this is a phenomena / imbalance that has global ramifications. I would guess in terms of "developing" Global terms - less than 1% accounts for 42% of the real wealth. In most of the developing Global world socialism has been discounted in favour of Capitalism - even where Socialism / Dictatorships / Communism exists as the broader political / social ideology, the top earners / wealth holders apply Capitalism in managing their wealth.

     

    So, how do you propose protecting the Capitalists from Capitalism? Since they "control" everything worth "controlling" where is the incentive for anything to be changed materially? Any change would need revolution on a mass scale, WHICH history shows only creates more misery and greater consolidation of true wealth in fewer hands.

     

    Africa, Eastern Europe, parts of Asia are "real world" examples where ideology / political / social / economic change merely shifts the "wealth creation opportunity" from one set of "hands" to the "next". Such change has NEVER redistributed wealth more evenly - in most cases to the contrary.

     

    So whilst not disagreeing with you I do not see any real possibility for changing it.
    27 Feb 2010, 08:17 AM Reply Like
  • reefermac
    , contributor
    Comments (24) | Send Message
     
    Amen Brother... Amen.
    27 Feb 2010, 02:56 PM Reply Like
  • tweaks
    , contributor
    Comments (180) | Send Message
     
    >>Welcome to the 2010 serfdom. Time to wake up and restructure the >>system. Many people are starting to wake up to this massive scam.

     

    Phil, I read you every day, but I'm waiting for your solution. Have you ever dealt with a bureaucrat on Friday afternoon? We do NOT want these folks deciding healthcare decisions.

     

    Wanna tax them even more? Your chart didn't note that 95% (or so) of the income taxes are also paid by that small number of citizens.

     

    Would you espouse a serious return to the Consitution, perhaps, where the federal government is tightly constrained, rather than running rampant? It is the enormous power that the feds wield that have allowed this in the first place.

     

    A return to Libertarian principles, adhering to the 10th amendment, abolishing the income tax - these things will take away the power that you KNOW is abused by WHOEVER is in office today! We have to starve the beast.

     

    Love ya, man, glad you are feeling better, but what would you have us do, exactly...
    27 Feb 2010, 08:03 PM Reply Like
  • dfbell
    , contributor
    Comments (1555) | Send Message
     
    tweaks, yeah but ... take away federal taxing and who will provide the safety net? No no, not gonna bring up healthcare or unemployment. How about something simple like the $1bil plus flood in Tennessee? Or how about Katrina? Should they have to fend for themselves?

     

    If you are comfortable with that, how about who would pay the $650b defense cost?

     

    I agree with most of your other points, but just dont see any practical way to eliminate fed tax. Reduce services, oh yes. Eliminate, not good.
    11 May 2010, 09:25 AM Reply Like
  • SeekingTruth
    , contributor
    Comments (1213) | Send Message
     
    Phil, I share your sentiment and if I daresay, your outrage.
    Just broadly speaking, 1% of 300 million Americans is 3 million people. Actual numbers for the voting share are less in reality of course.
    Yet 81 million people voted in 2004 to keep more of the same fair in force and in play for another four years at least.
    So, it is worth noting that the top 1% got a lot of help from people not in their financial league or category.
    It was like there were 78 million more of them than actually exist.
    Now that's leverage baby!
    PS: It also got us a new Supreme Court Chief Justice that later guaranteed that the status quo will be reinforced and maintained effectively forever, Cheers!
    27 Feb 2010, 10:03 PM Reply Like
  • Loverboy
    , contributor
    Comments (645) | Send Message
     
    i am waiting on the edge of my seat to hear a solution of any kind from this author...
    27 Feb 2010, 10:28 PM Reply Like
  • dfbell
    , contributor
    Comments (1555) | Send Message
     
    Loverboy, at least he is writing and making points and exploring the problem. Finding solutions is very difficult but step one is understanding you have the problem. What are your solutions?? Or are you waiting to be led?

     

    A couple of thoughts I have that make my republican and libertarian friends gringe (or barf):

     

    1. Tax long term cap gains as income
    2. Apply ss and medicare tax rates against all income
    3. Means test SS and medicare benefits
    4. Maximum annual mortgage interest tax deduction of $25000
    5. No charity deduction if income is over $1million. Additional tax (1-5%) on income over $1million if charity donations are not greater than 5%.

     

    Standing aside to let that sink in. Now everyone rush and click the thumbs down button and vote for the status quo. (grin)
    20 Mar 2010, 08:49 AM Reply Like
  • dfbell
    , contributor
    Comments (1555) | Send Message
     
    And so that you think I am not totally tax crazed, here are some fertile areas for savings:

     

    Guns, Butter or Piper?

     

    Three points:

     

    1. The US represents 48% of worldwide defense spending. That's right, we spend about as much ($650b) as the rest of the world combined. Is that really necessary?

     

    2. The US Navy costs about $160billion a year. We have the biggest navy. Our navy is as big as the next 13 navies combined, of which 11 are allies. Somalian Pirates are not one of the 13.

     

    3. The US has 23,000 nukes. The Russians are no longer a huge threat and 23,000 are more than enuf to wipe out the world many times over, let alone take care of Iran if we get that crazy. There are three major delivery methods: sub, silo, bomber. Each costs about $40 billion a year to maintain. Why not ask Defense Dept if they could do away with one? Keep two, any two you want.

     

    Yes, we could trade in a lot of guns for lower taxes or more butter. Or to pay the debt pirate.

     

    Something to think about.

     

    Disclosure: I am in the top 1.5%
    20 Mar 2010, 09:01 AM Reply Like
  • Loverboy
    , contributor
    Comments (645) | Send Message
     
    dfbell - "at least he is writing"... Actually the least he could do is not write this kind of unbalanced non-sense. I get the feeling you have some balance about you, and I happen to agree with your point #2 from the first comment. I also have plenty of Liberal friends, though I have yet to befriend a "rich liberal elite" - to much hypocrisy for my taste. The friends i have with money are conservative.

     

    I put forward plenty of solutions if you care to see my other comments, and I like you and in the top 5%, so I will try one more time to see the you side...

     

    Maybe the reason I can't stand liberals who have money is they shit on the means by which they made their money, and the biggest issue I take is they try and use the government as their "charity" and do good works thru that means... I see by some of your other comments you also want to see us not support free market charity.

     

    Personally I have taken the time to do some homework on which charity's I could get behind and ended up being treasurer on a non-profit that helps developmentally disabled get jobs.

     

    I have to take back that I have no wealthy liberal friends - I do have one and I remember arguing with her against socialized medicine, and ultimately when she realized she does nothing outside of her political beliefs to help the situation, she came around to say maybe I had a point. And furthermore, she is currently looking at ways she could help without supporting more govt bureaucracy.

     

    So answer me this - why is giving our government more money any kind of solution? and, how do you think when i give more to them, more will end up in the hands of the poor?
    20 Mar 2010, 11:39 AM Reply Like
  • dfbell
    , contributor
    Comments (1555) | Send Message
     
    Loverboy, sounds like we could agree on several things. Very good question on why to give the government all those extra taxes. Actually, I don't want them to keep that tax money or the savings from some aggressive defense cuts. I want that moola to be directly applied to the deficit. The SS/med savings of course go to the underfunded SS and medicare programs. The poor slops in the middle and lower classes are gonna have to pay off that debt someday soon.

     

    I am totally in favor of single-payor "government run" health insurance for a couple of reasons:

     

    1. It costs each health insurance paying family $1100+ a year for all those poor emergency room walkins (45million plus) who dont have insurance. Problems such as no primary care physician who would catch early diabetes and treat it before the poor guy heads to the emergency room because his feet hurt and he then needs massive care when they cut off his feet.

     

    2. The chant "dont get between me and my doctor" is bullshit. That is exactly what the private insurance companies do everyday. Ever get an MRI without the insurance company approving first? No.

     

    3. 45,000 people die each year because they dont have proper, timely medical treatment.

     

    4. The disingenuous republicans are never gonna do it. Reagan didn't do it, Bush didn't do it, Newt prevented Clinton from doing it, Bush2 didn't do it. Oh, but you say Bush2 did medicare drugs? Yeah, right - just forgot to fund it and that cost us $300B plus so far. (Good thing that came in well under the CBO cost estimate!) We need to start over with a blank piece of paper. Yeah right. They had their chance.

     

    5. Insurance companies are assholes. (grin)

     

    And while tuning up insurance, we should get our turn to screw the drug mfgs. (a) pay the same price as the rest of the world thru re-import or direct savings and (b) ban tv and print advertising; enuf of the singing nun peddling boniva. We and NZ (I think) are the only two countries that allow the druggies to advertise. I believe our druggies spend about $325B a year collectively on advertising and promotion. What a waste.

     

    The last thing I would push is for a mandatory Federal 2% staff count and salary$ cut each year for the next 10 years. No exempt depts or programs. Get to it however they want, but meet the goals on the overall Fed spending. Freeze contractor$ so that it cant be gamed. After 10 years there will be ~18% less people and dollar savings would be about $145B total. Apply it to the deficit.

     

    So that is what I would recommend.

     

    I think that is great work on the non-profit. Its so very important to take action rather than just snipe and rant.

     

    If you wish, drop me an email and let me know what the charity is.

     

    dave
    dfbell@mac.com
    20 Mar 2010, 07:06 PM Reply Like
  • Angry Taxpayer
    , contributor
    Comments (34) | Send Message
     
    For those of you looking for a solution: Game the game. Pull any money you have out of the banks. Save in the form of income producing assets (no, not stocks or cash but small businesses, farm land, etc) and invest in wealth preservation instruments like gold, antiques, artwork, etc. that can be passed down generation to generation. Pay as little in taxes and as late as is legally possible. Vote out all incumbents - don't leave them in office long enough to become corrupted. Exercise and stand up for your rights: own a gun, express your opinion, motivate and mobilize others. Educate yourself and others - home school where possible. Don't patronize those companies that are screwing you: Wal-mart, BofA, etc. Learn how to be self sufficient. Focus on things that matter: friends and family.
    28 Feb 2010, 10:39 AM Reply Like
  • Loverboy
    , contributor
    Comments (645) | Send Message
     
    I like that answer! however, i doubt the Author feels that way...
    2 Mar 2010, 11:38 PM Reply Like
  • tweaks
    , contributor
    Comments (180) | Send Message
     
    Update: I am in Terre Haute, Indiana, cleaning up my father's estate. As I drive through this dying area, I am struck by the economic miracle we have squandered by the policies of the last 50 years. Where there was once enough economic activity to support a large school and fire department, the school is now boarded up and broken down; the fire department closed.

     

    Broken infrastructure, fallen down warehouses, unkempt and unkept roads and bridges - what we have wasted! I fully understand that much of this growth came at an unacceptable cost to the environment, but how horrible it is to now see these folks on welfare and food stamps.

     

    I'm just really sad right now, and wondering what we do to restore the engine of prosperity that made this country so great. The answer lies not with career politicians or bonus-oriented Harvard grads. That doesn't answer the question, does it?
    28 Feb 2010, 09:49 PM Reply Like
  • SeekingTruth
    , contributor
    Comments (1213) | Send Message
     
    Tweaks : First my condolences for your Father's passing.

     

    Yes, the damage is done, and most , but not all, is in plain sight.
    Two recent books which I have recently watched reviewed (and will read thoroughly):

     

    1.Bomb Power sub: The Modern Presidency and the National Security States by Garry Wills.

     

    2. No One Would Listen by Harry Markopolos

     

    These books address the issues that led to our current crisis and demise "in process". There are others , but these are the most recent and should be very good choices based on the reviews.
    One of the major lessons learned is that if we put scoundrels and crooks in charge of ourselves and our well being then undesirable things happen.
    It would take MILLIONS of people with the knowledge , insight, and willingness to take ACTION like that by Garry Wills and Harry Markopolos.
    They simply do not exist in that quantity.
    So what you see is what you get, but at least we can understand the process and events that got us where we are.
    1 Mar 2010, 04:18 PM Reply Like
  • tweaks
    , contributor
    Comments (180) | Send Message
     
    Thanks, I will look into those books!
    2 Mar 2010, 07:07 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9966) | Send Message
     
    Phil,
    A great article that points out some real issues.

     

    Perhaps the best initial solution is a third political party. Clearly both the Repubs. and Dems are both a large part of the problem and both parties are "in bed" with the crony capitalists and oligarchs. The Federal government simply wields so much power that until there is a new political party that will at least attempt to realistically address some of the issues, there probably is little hope.
    6 May 2010, 06:11 PM Reply Like
  • reefermac
    , contributor
    Comments (24) | Send Message
     
    I'd tend to agree with you in principle Untrusting Investor, unfortunately the UK is a great example of what would happen. Congress is already stalemated into accomplishing essentially nothing every year due to useless political affiliations. State Governments are even worse (I should know, I live in NY!)

     

    I think you're spot on with the assessment that the current political incarnation here in the States is broken, however adding a third 'group' of crooks to the table won't suddenly change the way Washington operates (just means they have to spread the money around more to buy the same amount of influence). In the end, the rich and powerful will still be able to buy their wishes, just as they do now. Only less and less will be accomplished, and a new scapegoat gets created (the very people bickering and grandstanding will complain about politics being the impasse).
    11 May 2010, 07:38 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9966) | Send Message
     
    Ok, that's certainly a possibility. Perhaps the only solution then is a French Revolution senario and that infamous guiollitine. Or maybe, we need to get a few Roman coliseums and a few lions and tigers. Probably could do a reality show or sell live tickets and raise a bundle to pay down the deficit with that option. Sure would get lots of spectators for the GS crowd and many even a standing room only for Congress and the Senate.
    11 May 2010, 10:57 PM Reply Like
  • pearliephd
    , contributor
    Comments (28) | Send Message
     
    dfbell--that is a good beginning! Let's build on each other's ideas.
    Yes mandate the gov't to reduce total budget and head count by 2% each year for ten. But not across the board; use discrimination. Let's cut defense spending more than other items. Cut off the gov'ts ease at going to war, sending troops across the world and giving money to favorite hack contractors like Haliburton. And so on.
    George W starts a war and cuts taxes, especially to the folks who have so much of the of the $. Yes let his tax cuts expire--that was class warfare. Your ideas on how to stem tax reductions by this top 1% is also a good start.
    Let's stop our rage--it keeps us from focusing on usefull solutions.
    11 Jun 2010, 10:49 PM Reply Like
  • Gregorian
    , contributor
    Comments (83) | Send Message
     
    Warren Buffett said "I pay too little tax. I can afford to pay more".

     

    I deeply respect that man.
    31 Jan 2011, 10:16 AM Reply Like
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