Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth.
- 24 Comment
Many 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:
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.
Yet 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.
But 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:
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:
Now 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.
24 Comments on this post
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Mr. Bubbles said:
I agree that wealth is unbalanced but consider this: These companies are publicly traded. You, me or anyone can buy stocks. It may have been just as tempting for the rich to over leverage themselves on real-estate but many didn’t. This hints at the root cause of the financial strife for most. Lack of investing knowledge and lack of self discipline in saving. Hardly the fault of most since our entire society is based on the consumption mentality. Hell, they don’t even teach us how to do our taxes in school. We are not learning what we need to learn in school. Period.
December 27th, 2009 at 11:25 am -
bmolloy124 said:
Yes, but don’t you see, to complain about the elegance of a system where private individuals can profit at the expense of others, means you’re a “socialist.” Profit, no matter how outrageous, and at what expense to middle-America (make that America itself, minus the upper 2%) is “American.” Just ask Michael Medved or Rush Limbaugh! Any demand for equity or even a level playing field for the majority to compete or maybe just subsist, is communist.
Didn’t our forefathers fight, mentally and physically and in so many other ways, so that any one of us could own stuff we want, period.? A house or a castle or a house and four castles and another house and another castle, by goodness? If I cannot own a house, or maybe even a little island in the Pacific so far unnamed…or put the mortgage for my house and island in an off-shore account where the slings and arrows of outrageous taxes can’t find me… what am I, but a lesser patriot, a fraud, who would let altruism, that destroyer of all that is competitive and forthright, overwhelm my personal freedom(s)? What next? Pay taxes!!?!!
The “Market” is indifferent (albeit a tad rigged, but who’s counting?).
You and I are emotional…we’re animals with advanced brains. We THINK and we FEEL. This is not good for a robust market economy as anyone can tell. It causes….mmmm….
community (oh, maybe you think being a social animal is just fine—look at your domesticated dogs, and their ancestral fellows in the wild. Sure they worked together in teams and packs, giving and taking in a hierarchy that benefitted the species, but don’t let’s forget that’s just a ploy to stay alive! Underneath, it’s each dog wants the other dog’s cake and will eat him/her too!– Ayn Rand wouldn’t be fooled!)…
This human failing towards community..contingency, it causes analysis. Uncomfortable and anti-American questions come floating up —”How come the C.E.O. of the bank that stole my retirement is retiring with a bonus that exceeds in one year what I and everyone I know –alive or dead–could hope to make in one lifetime? This, as is obvious, is a most unpatriotic and, perhaps even “sour grapes” question for an AMERICAN to ask, or even consider.!Don’t go there, oh ye American. Instead, rely on your patriot elders, your Glenn Becks and Sean Hannity’s who, as they rake in millions from commercial sponsorship, the epitomy of our free democratic republic, continue with great passion, passion so overwhelming it decries question, substance, fact as you know it, and education (that final suppressor of free reign no matter what),
to live and breathe safe and secure in your house on your street, which though it may not be Wall Street, is, well, err..there….for now..December 28th, 2009 at 1:45 am -
steve bourg said:
You’ve made one mistake that FDR wanted you to make, the ‘hiding’ of the real FICA tax. Empoyer portion should be counted also, and 401(k) contribution doesn’t reduce it. So 100,000 gross pay is really 107650 gross pay, with 15,300 going to FICA. Wages are lower due to the ‘er portion. Maybe not 1 to 1 correspondence, but just about.
December 28th, 2009 at 5:40 am -
Drackrabbit said:
Looks like you people want some feedback. Well you have a lot of balls pretending your not the crust of this. Interesting you would use the word serfdom. Not really used in America. So my first guess would be that this has something to do with England. For a people that we supposedly have independence from. You sure do show up a lot.
So we appreciate your floating all of the commercial buildings. Love Sears. I just want to tell you how I appreciate your keeping companies around like oh J.C. Penny, Sears, Macys (oh no don’t close Macy’s. Gap. These stores haven’t been solvent for years. You keep pouring bad money after bad into them. I hope they suck you under. Though they probably won’t.
So you could call us serfs true. But we could call you really financially half witted. Propping up things so it all looks so good. I love watching you chase your tails. Your kind of like the Levite in the bible I guess. You know all about people. But you lack a lot of sense. So keep you little money sucking Disneyland open. We are just so clueless.
December 28th, 2009 at 6:31 am -
DownriverDem said:
And of course all the righties will blame Obama even though our economic down turn really started with the Republicans in the 1980s. No one will even bother to state the facts.
December 28th, 2009 at 7:47 am -
dimmu whorgir said:
Just shows, $100k ISN’T RICH people! It’s the old $20k of your Dad’s time.
Working down that list, it’s easy to trim off $1000.
December 29th, 2009 at 2:18 pm -
Ellenor Rice said:
I think the budget is off a bit. $500 for groceries? I don’t think so. Try $750 to $900 and that’s not eating steak either. $500 for entertainment? Not at my house! We’re lucky if it’s $40 for the month. Vacation? I wish!
Still, the author has a point. Cost of living keeps going up and paychecks don’t.
December 29th, 2009 at 3:17 pm -
mmmmm said:
and “they” have if figured enough to have themselves protected enough that they can taunt you to “stop” it……..
December 30th, 2009 at 10:01 am -
econamike said:
I’ve been wondering about “WHY” the stock market is going up…
It’s not the “small investors” contributing to their 401Ks…
…and I don’t even think it’s the top 5% who own(ed) 75% of those stocks.
I think the stock market rise is “Bailout” money being used to “prop things up”.
The “little guy” lost his shirt in the market and now the “big boys” have to battle it out amongst themselves. It’s a game of chicken and the last one out loses. By the time this battle is over, the top 5% will be whittled down to a “top 1%” and “the bottom 80%” will grow to become “the bottom 95%”.
Since ex-Goldman employees are “running” many of the government programs, they will be the first ones “out” leaving the others scrambling for the exits. The biggest loser? The U.S. taxpayer and all that “stimulus” money.
December 30th, 2009 at 10:12 am -
Jason said:
I feel lucky. 2 jobs, 85K a year. No wife or kids. My only debt is a reasonable mortgage payment. Now if I can find a single girl with $ and no baggage I will be set.
Jason the Fed
December 30th, 2009 at 11:38 am -
Jim said:
It’s nice to see some are awake and some are waking up. Part of the enslavement scam was the so called enmancipation of women. Most find that after voluntarily accepting working careers they are now unable to opt out. They are enslaved to the same point of men, no choise because it now takes two bread winners to feed and house a family. This makes way for the perversion of our children under the guise of education, with cradle to the grave care by institutions. Paid for by the enslaved, to enrich the few.
December 31st, 2009 at 2:25 am -
radii said:
globalisation and offshoring of jobs really started in the early 80s – the white collar jobs were cut first (aerospace, defense, etc.) and then the blue collar jobs … it is all these international trade agreements: NAFTA CAFTA WTO etc etc – these are extragovernmental and yet our “sovereign” USA is bound by them and they are directly responsible for destroying the middle class, grossly enriching the top 1%, and have pit “Third World” workers directly in competition with 1st worlders … it is a travesty conservatives of earlier eras would have never tolerated (Teddy Roosevelt would’ve taken us to war before signing on to such a giveaway of America’s wealth and jobs!) … idiot Republicans and tea-baggers still don’t see – after 25+ years! – how their fealty to to their corrupt Party and “conservative” ideas has led them by the nose to a globalised corporate monster state with no borders
January 3rd, 2010 at 4:08 pm -
reverent1 said:
An interesting article, thou I doubt the mindless cattle or herds will notice. This is nothing new, it’s been done before, it worked before and it will keep on working as it is.
Do you intend for me and others to whine about it ? What good will it do ? The only real solution is to turn away from our lifestyle of sin and let our neighbor’s take notice. You do not need all of what is in that chart. Just as Rome was defeated not by military force but by non-compliance. That’s not to say I wish for you to not comply with this or that.. but comply with God and let everything else happen in stride. Set a greater example by serving god rather than your slave masters.
January 3rd, 2010 at 9:54 pm -
Steve said:
Just like poor kids play sports thinking they are going to make it to the Major Leagues, the middle class thinks it is going to get rich one day. That’s why they buy into huge tax reductions that yield them a small amount and why they believe the “death tax” is something they should worry about. The rich and their minions in the GOP have snookered them into believing this. Meanwhile the poor get poorer and the middle class makes less now than they did 20 years ago. Sad.
January 3rd, 2010 at 10:04 pm -
Nancy said:
I noticed that the monthly salary of someone earning $65,000 a year is $5416.67. That is more than what I earned in 2009 teaching three college classes as an adjunct instructor. Not per class–all three classes combined. After 13 years teaching experience and a master’s degree.
I have another job also, but still–adjunct instructors should make more money than that, right? And, of course, no benefits. And, best case scenario, teaching 12 classes per year (all we are allowed to teach, “to maintain quality instruction.”
January 4th, 2010 at 7:04 am -
Pacific Trident said:
Paying 36% of monthly take home on just mortgage? Rent. Downsize. Move out of the neightbourhood to a cheaper area.
$300/month for gasoline? Take the bus.
Work lunch? Brown bag it.
Dog/cat/hamster? get rid of it.
$60/month for haircuts? Supercuts.
Cable? Get a library card.Hmm thats about $2000 in savings there (half the mortgage by renting smaller, cut out half the gas, cut out property taxes b’cos of renting, cut out haircuts, cable, pets) and u still give to charity and entertain yourself as well as eat like you did before.
What we have here is a complete inability to budget. However blaming rich people seems rational. Not. See what rich people do is not live above their means and invest their savings. Its there in black and white in this article.
What poor people do is consume beyond their means and get stuck in the trap of debt. And its not a conspiracy, its simply nature. Dick Cheney does not roam the ghetto in the dark of night forcing people to leverage up at gun-point. There is no excuse for not being able to do simple math. I make 10, if I spend 11, and then do the same next month, well tuff nuggins on me.
January 4th, 2010 at 3:12 pm -
Scarlette said:
Pacific Trident is right.
Too many poseurs and Salahi-types in this country.
January 7th, 2010 at 2:56 pm -
Tristan said:
I think the first commentator, Mr. Bubbles, got it right: The root of the problem is lack of education. Hell, I went through Honors classes in HS, and completed 4 years of college, and I STILL didn’t know how to balance a checkbook, or how compound interest works. No wonder I easily got suckered into credit card debt.
So here’s the interesting question: How come we aint taught these things? Shouldn’t basic finances be a high priority standard, along with the Three Rs?
January 7th, 2010 at 2:58 pm -
JoeTaxpayer said:
You make an interesting argument, I’m just struggling to understand what you propose as a solution.
The $100K income family paying off a $350K mortgage? That’s out of balance right there.Here’s my take. Take 1000 people graduating from school, all starting with no assets, but no debt, and a $100K income (for example). In ten years time, the disparity of wealth will look just like the distribution you showed above. Some will rent and save. Some will buy a house larger than they could ever afford. Some will buy an appropriate sized house, and some of those will even pay it off in those ten years.
That budget needs to be cut so they live on $80,000 (which 99% of the world lives on less) and save 20% so they never take on high interest debt.
interesting article.
JoeJanuary 9th, 2010 at 3:43 pm -
RichDadWisdom.com said:
80/20 rule applies everywhere… except for this case, it is 99/1 rule.. just hope that we can be in the 1%!!!
January 15th, 2010 at 7:34 pm -
LVTfan (google it!) said:
There is a way out of this Gordian knot. Look into the ideas of Henry George. He saw the mechanism by which we enrich a particular class of folks through permitting them to reap what we all sow. We’re very nice that way, mostly because we don’t know any better.
And even our college-educated economics majors haven’t been exposed to the part of economics which is NOT dismal. I commend George’s ideas to your attention. If you’re looking for the solution.
January 18th, 2010 at 6:12 pm -
Gran Tobal said:
Great article. Certainly worth mentioning that people took out more mortgage than the could afford but this was by design. Goldman regulators at every level created and imploded this bubble. Once you understand that, the timing couldn’t be more suspect. The guys who repealed Glas Stegel came back in to manage the bailout. Yeah, I’m annoyed by the folks who bought into the scam at the end when there was no due diligence from the lenders but I’m equally annoyed by people who don’t get the rest of the picture. My boss got out from under a $775K mortgage, barely. She runs around saying that it’s all the fault of people who bought more house than they could afford. Completely asinine.
January 26th, 2010 at 2:31 pm -
kelly@TearingUpHouses said:
anyone has the ability to invest and make good decisions.
it’s as simple as that.
i started with nothing and i’m glad that i didn’t read this article when i did. good information to know, but not to live by.
kelly
January 27th, 2010 at 2:32 pm -
EM-Interf said:
Wow, some interesting comments on this data. I really do not think it is so simple to completely blame the poor (i.e. bottom 80% of pop.), nor to completely blame the rich (i.e. top 20%). However, these trends and numbers do indicate there is a possible unfair advantage or special information or special access that is not equally available to all for whatever reason.
The good thing for individuals and as a group is to continue with the questions and further analyze the alarming numbers.
I think to simply accept such disparities in wealth (i.e. status quo) would be a huge mistake. Likewise, it is a mistake to blame persons for doing “legitimate and ethical” wealth building.
Since I am a USA citizen and believer of democracy, I have a certain bias for the middle class. And, I really have great disgust for the societies and overall class considerations that thrive in places like China, Mexico, England, Japan, and India. I really think the way they focus on class, and heaping burdens on the poor and uneducated as highly unethical and borderline criminal.
January 28th, 2010 at 6:30 pm
