A friend of mine posted to Facebook this morning the following question: What if I’d rather be in the 1%?
It is an excellent question, and one that so far seems to have gone unasked as well as unanswered since the Wall Street protests started in September. (I can’t really call them the Occupy Wall Street protests anymore, since protests of this kind ahve since spread to numerous cities here and abroad.) The basic premise of the protests is that at a time when unemployment is high and staying that way, it is no longer acceptable that 1% of our population controls 40% of its wealth. That the Wall Street financiers who did so much to crash the world financial markets are part of this 1%, the logic is that the super-rich are to blame for the problems we all are experiencing. but, being so rich, they are insulated from the damage they have caused. Imagine Rich Uncle Pennybags riding through the worst part of Detroit in a bulletproof limo, and you get the idea.
There are a few problems with this very notion, however. The first of these is that it’s not like just a small cabal of financiers tanked an otherwise healthy financial situation. Plenty of economists and publications had been saying for years before the crash that things were unhealthy. The Economist routinely pointed out that the manner in which the American housing market was being used to prop up unsustainable levels of personal debt and spending was a very worrisome sign. and that there was so much cheap money here, there and everywhere was equally worrisome.
This does not excuse the geniuses who cooked up subprime mortgages and credit default swaps and every other excessively risky bit of financial chicanery that eventually brought the world’s economy to its knees. But there is a big difference between what happened to our economy as a whole and what happened to, say, AIG, where you really did have a small group of rogue operators in a system too big and fat and lazy to know what was happening (or have the fortitude to reign it in) that eventually caused a catastrophe. And given how loosely regulated our financial sector is, when you consider just how badly pear-shaped everything went in late 2008 and early 2009, substantial regulatory overhaul was inevitable. And deserved.
What Your Peers Are Reading
The problems the so-called 99% are decrying really have less to do with how Wall Street operates and the recent crash and more to do with a bigger problem of which Wall Street is merely a symptom. That problem is wealth inequality. By the end of 2001, only 1% of the American population owned 38% of the nation’s wealth. Conversely, 40% of the population – our poorest – owned less than 1% of the nation’s wealth. Somewhere in the remaining 59% were the various bands of the lower and middle classes.
In the decade that followed, according to a PBS report, that wealth inequality has concentrated further as people have fallen out of the middle class. At present, the top 20% of Americans hold 84% of our wealth. The next 20% control 11% of our wealth. The next 20% control 4% of it. The remaining 40% control 1%.
These are not pie-in-the-sky figures. These can be discovered easily by anyone who cares to do a little online research about wealth inequality in the United States. And it is easy to see why people get upset over this. It does seem deeply unfair, especially if you focus on the vacuous scions of huge fortunes such as Paris Hilton and Kim Kardashian, who were born super-rich and never really have had to work for their standard of living. More power to them, I suppose, but if they get branded as American nobility, and resented by some kid trying to get by on $18,500 a year, well, that comes with the territory, too.