- 26 Oct 2018 05:09
#14957142
From Bill Mitchell's blog [an MMTer] of Wed. 10/24. It was published 9/13/18.
It clearly shows why the recovery [thru 2016] has not helped the mass of the American people any, and so, why they are mad as hell and went for Trump. He at least said he would help them. [The parts in brackets were added by me.]
[Quoted from the blog] "The Federal Reserve Bank conducts a three-yearly – Survey of Consumer Finances (SCF) – which provides a wealth of information about how US families are faring and sharing in the income and wealth generated by economic activity.
The most recent survey was 2016 and I have been analyzing the data that is publicly available.
The Federal Reserve, itself, has presented some of the evidence already in rather stark terms.
. . . . . . . . .
On September 13, 2018, they published their latest FEDS Notes – A Wealthless Recovery? Asset Ownership and the Uneven Recovery from the Great Recession – which analysed the impact of the GFC/2008 on American wealth holdings and the wealth dynamics since the recovery began.
It is harrowing reading.
We learn:
1. “Between 2007 and 2009, American households as a whole lost 20 percent of their wealth.”
2. “by late 2012, aggregate household net worth surpassed its previous 2007 peak, and continued to grow through 2016.”
3. But, “wealth is highly concentrated–as of 2016, 80 percent of aggregate wealth was held by only 10 percent of households”.
4. “In 2016–well into the recovery–wealth remained below 2007 levels for all three subgroups in the Bottom 90, but the Top 10 had more wealth than in 2007
They presented the following graph to summarise the results. The Percentiles are based on “usual family income”.
So the aggregate figures indicating net wealth is now higher than it was in 2007 are highly misleading.
That result arises because of the tremendous skew in the distribution and the fact that the top 10 per cent are 11 per cent wealthier than they were in 2007 in real terms, while the rest of the families are variously much poorer.
Unfortunately the graphs could not be cut and pasted here.
Please go to the link below to see the damning facts.
Their analysis provides an understanding of why the recovery has only been of benefit to the top 10 per cent.
We learn that:
1. Home ownership rates have declined for the bottom 90 percent after the crisis.
2. First home buyers in the bottom 90 per cent have declined sharply.
3. Credit is being denied to lower income groups while rents-to-income ratios rise.
4. The bottom 90 have also seen their share holdings decline and their pension fund wealth decline.
The Federal Reserve research also tells us that:
1. The ratio of average wealth held by the Top 10 to that held by the Bottom 30 has risen from 23 in 1995, to 45 in 2007, to 72 in 2016.
2. The ratio of average wealth held by the Top 10 to that held by the Middle 30 has risen from 12 in 1995, to 17 in 2007, to 30 in 2016.
3. The ratio of average wealth held by the Top 10 to that held by the Next 30 has risen from 6 in 1995, to 7 in 2007, to 10 in 2016.
In other words, there is massive wealth inequality and it has been getting worse, particularly at the polar ends of the distribution.
Here are some graphs I produced from the latest data.
The first shows real income trends in America – 2001-2016. The blue bars are the percentage growth in real family income from 2001 to 2016 (the entire sample). The red bars show the period since the GFC (2007-2016).
The results are rather stark.
There has been virtually no growth in real income for the Bottom 20 since the crisis and subsequent recovery.
For the 2nd to 4th quintile families, their real income has declined over the entire period and most of that is due to the GFC and the failure to share in the income growth in the recovery.
And the top-end-of-town has done particularly well, especially the Top 10.
Unfortunately the graphs could not be cut and pasted here.
Please go to the link below to see the damning facts.
Incomes flow into wealth.
The next graph show a variation on the first graph from the Federal Reserve FEDS Note. It show the percentage change in family real net worth (wealth) by income percentile group for two periods: (a) 2007-16 [note the change here, it's not 2001-16 any more]; and (b) 2010-16, the latter period being the recovery.
The bottom three quintiles have gone backwards over the whole period although the recovery period has harmed the poorest American families the most.
Measured over the entire period (2007-16) the fourth quintile is poorer but it has offset some of that dent on its wealth during the recovery.
The top two quintiles haven’t missed a beat.
Unfortunately the graphs could not be cut and pasted here.
Please go to the link below to see the damning facts.
Conclusion
Going back to the original question, the conservative, wait-until-we-are-in-government approach gets the progressive side of politics no where. [This refers to the part I cut off to focus on the US and not the UK.]
The fact is that the income and wealth trends in the US, while probably more extreme than in other nations, are representative of what the neoliberal era (including the so-called Great Moderation era that mainstream economists love to promote as ‘stability’) has delivered for most families.
If you then marry those trends with trends in employment quality, pay, conditions etc and other things that impact on the quality of our daily lives, it is not hard to construct a narrative that this period of history is one of the all-time great hoists by the top-end-of-town.
Despite economic growth generating massive income gains, the benefits of that growth has been expropriated by the wealthiest and highest income earners.
In turn, they wield enormous political power with the riches they have accumulated and sucked out of the system.
Hardly any of them were brought to justice during the GFC even though it was obvious that corruption and criminality was part of the story.
And, while they harangue governments about handing out pittances to poor people via income support they have their very large hands out demanding public funding for their own activities [including bigger tax cuts].
And, if they cannot be bothered building things themselves, they demand governments hand over public health systems, public education, public transport, public energy generation, public water supplies – at rock bottom prices and then, further demand the public purse provide ample subsidies to them to continue to supply essential services.
And, when it all f&cks up, they demand bailouts.
If that is not enough for a progressive political party like the British Labour Party to present an Oppositional manifesto that takes these parasites on front and centre then I am at a loss to understand what they would be able to do when in office.
The public are ready for progressive leadership.
They know they are being dudded.
But then their political representatives and their smug advisors wander around the countryside telling them that they can only spend if the financial markets are happy with them." [/quote]
http://bilbo.economicoutlook.net/blog/? ... more-40679
.
It clearly shows why the recovery [thru 2016] has not helped the mass of the American people any, and so, why they are mad as hell and went for Trump. He at least said he would help them. [The parts in brackets were added by me.]
[Quoted from the blog] "The Federal Reserve Bank conducts a three-yearly – Survey of Consumer Finances (SCF) – which provides a wealth of information about how US families are faring and sharing in the income and wealth generated by economic activity.
The most recent survey was 2016 and I have been analyzing the data that is publicly available.
The Federal Reserve, itself, has presented some of the evidence already in rather stark terms.
. . . . . . . . .
On September 13, 2018, they published their latest FEDS Notes – A Wealthless Recovery? Asset Ownership and the Uneven Recovery from the Great Recession – which analysed the impact of the GFC/2008 on American wealth holdings and the wealth dynamics since the recovery began.
It is harrowing reading.
We learn:
1. “Between 2007 and 2009, American households as a whole lost 20 percent of their wealth.”
2. “by late 2012, aggregate household net worth surpassed its previous 2007 peak, and continued to grow through 2016.”
3. But, “wealth is highly concentrated–as of 2016, 80 percent of aggregate wealth was held by only 10 percent of households”.
4. “In 2016–well into the recovery–wealth remained below 2007 levels for all three subgroups in the Bottom 90, but the Top 10 had more wealth than in 2007
They presented the following graph to summarise the results. The Percentiles are based on “usual family income”.
So the aggregate figures indicating net wealth is now higher than it was in 2007 are highly misleading.
That result arises because of the tremendous skew in the distribution and the fact that the top 10 per cent are 11 per cent wealthier than they were in 2007 in real terms, while the rest of the families are variously much poorer.
Unfortunately the graphs could not be cut and pasted here.
Please go to the link below to see the damning facts.
Their analysis provides an understanding of why the recovery has only been of benefit to the top 10 per cent.
We learn that:
1. Home ownership rates have declined for the bottom 90 percent after the crisis.
2. First home buyers in the bottom 90 per cent have declined sharply.
3. Credit is being denied to lower income groups while rents-to-income ratios rise.
4. The bottom 90 have also seen their share holdings decline and their pension fund wealth decline.
The Federal Reserve research also tells us that:
1. The ratio of average wealth held by the Top 10 to that held by the Bottom 30 has risen from 23 in 1995, to 45 in 2007, to 72 in 2016.
2. The ratio of average wealth held by the Top 10 to that held by the Middle 30 has risen from 12 in 1995, to 17 in 2007, to 30 in 2016.
3. The ratio of average wealth held by the Top 10 to that held by the Next 30 has risen from 6 in 1995, to 7 in 2007, to 10 in 2016.
In other words, there is massive wealth inequality and it has been getting worse, particularly at the polar ends of the distribution.
Here are some graphs I produced from the latest data.
The first shows real income trends in America – 2001-2016. The blue bars are the percentage growth in real family income from 2001 to 2016 (the entire sample). The red bars show the period since the GFC (2007-2016).
The results are rather stark.
There has been virtually no growth in real income for the Bottom 20 since the crisis and subsequent recovery.
For the 2nd to 4th quintile families, their real income has declined over the entire period and most of that is due to the GFC and the failure to share in the income growth in the recovery.
And the top-end-of-town has done particularly well, especially the Top 10.
Unfortunately the graphs could not be cut and pasted here.
Please go to the link below to see the damning facts.
Incomes flow into wealth.
The next graph show a variation on the first graph from the Federal Reserve FEDS Note. It show the percentage change in family real net worth (wealth) by income percentile group for two periods: (a) 2007-16 [note the change here, it's not 2001-16 any more]; and (b) 2010-16, the latter period being the recovery.
The bottom three quintiles have gone backwards over the whole period although the recovery period has harmed the poorest American families the most.
Measured over the entire period (2007-16) the fourth quintile is poorer but it has offset some of that dent on its wealth during the recovery.
The top two quintiles haven’t missed a beat.
Unfortunately the graphs could not be cut and pasted here.
Please go to the link below to see the damning facts.
Conclusion
Going back to the original question, the conservative, wait-until-we-are-in-government approach gets the progressive side of politics no where. [This refers to the part I cut off to focus on the US and not the UK.]
The fact is that the income and wealth trends in the US, while probably more extreme than in other nations, are representative of what the neoliberal era (including the so-called Great Moderation era that mainstream economists love to promote as ‘stability’) has delivered for most families.
If you then marry those trends with trends in employment quality, pay, conditions etc and other things that impact on the quality of our daily lives, it is not hard to construct a narrative that this period of history is one of the all-time great hoists by the top-end-of-town.
Despite economic growth generating massive income gains, the benefits of that growth has been expropriated by the wealthiest and highest income earners.
In turn, they wield enormous political power with the riches they have accumulated and sucked out of the system.
Hardly any of them were brought to justice during the GFC even though it was obvious that corruption and criminality was part of the story.
And, while they harangue governments about handing out pittances to poor people via income support they have their very large hands out demanding public funding for their own activities [including bigger tax cuts].
And, if they cannot be bothered building things themselves, they demand governments hand over public health systems, public education, public transport, public energy generation, public water supplies – at rock bottom prices and then, further demand the public purse provide ample subsidies to them to continue to supply essential services.
And, when it all f&cks up, they demand bailouts.
If that is not enough for a progressive political party like the British Labour Party to present an Oppositional manifesto that takes these parasites on front and centre then I am at a loss to understand what they would be able to do when in office.
The public are ready for progressive leadership.
They know they are being dudded.
But then their political representatives and their smug advisors wander around the countryside telling them that they can only spend if the financial markets are happy with them." [/quote]
http://bilbo.economicoutlook.net/blog/? ... more-40679
.
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